Indicate by check whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes [[X ] No ~~[X]~~[ ]

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes [X] No [ ]

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act. (Check one):

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. [ ]

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes [ ] No [X]

The number of shares of Predictive common stock outstanding as of ~~February 13,~~November 14, 2019 was ~~248,846,403.~~282,988,933.

QUARTERLY REPORT ON FORM 10-Q FOR THE QUARTER ENDED ~~DECEMBER 31, 2018~~SEPTEMBER 30, 2019



		December 31, 2018	June 30, 2018			As of
		Unaudited	Audited			September 30,		June 30,
						2019		2019
ASSETS	ASSETS			ASSETS
Current assets:	Current assets:			Current assets:
	Cash	$ 2,559,929	$ 1,206,139	Cash	$	841,843	$	1,618,244
	Accounts receivable	740,455	719,068	Accounts receivable, net of allowance for doubtful accounts of $724,215 and $687,064		355,068		1,250,476
	Inventory	3,912,445	3,791,374	Due from equity method investee		-		184,443
	Other current assets	47,124	17,551	Inventory		6,362,229		5,775,185
				Other current assets		192,696		103,080
Total current assets	Total current assets	7,259,953	5,734,132	Total current assets		7,751,836		8,931,428
Fixed assets, net of depreciation	Fixed assets, net of depreciation	2,470,604	773,870	Fixed assets, net of depreciation		6,485,678		6,974,441
Operating lease right of use assets				Operating lease right of use assets		489,520		-
License agreements, net of amortization	License agreements, net of amortization	16,500,222	20,962,620	License agreements, net of amortization		17,562,918		18,062,315
Patents, net of amortization	Patents, net of amortization	7,519,514	7,761,187	Patents, net of amortization		6,659,314		6,850,490
Trade secrets, net of amortization	Trade secrets, net of amortization	42,689,862	8,096,311	Trade secrets, net of amortization		43,821,752		45,336,335
Other intangible assets, net of amortization				Other intangible assets, net of amortization		360,728		383,931
Equity method investments	Equity method investments	43,239,947	45,564,845	Equity method investments		51,578,419		51,717,719
Goodwill				Goodwill		5,254,451		5,254,451
Other long-term assets	Other long-term assets	18,569	12,000	Other long-term assets		31,120		67,075
Total assets	Total assets	$ 119,698,671	88,904,965	Total assets	$	139,995,736	$	143,578,185
LIABILITIES AND SHAREHOLDERS' EQUITY
LIABILITIES AND STOCKHOLDERS' EQUITY				LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:	Current liabilities:			Current liabilities:
Accounts payable	Accounts payable	$ 2,668,145	$ 1,322,149	Accounts payable	$	3,295,029	$	4,943,178
Accrued liabilities	Accrued liabilities	1,049,220	1,034,905	Accrued liabilities		1,905,734		1,857,771
Deferred revenue				Deferred revenue		529,870		469,376
Operating lease liability, current portion				Operating lease liability, current portion		387,819		-
Finance lease liability, current portion				Finance lease liability, current portion		643,235		504,488
Subscription payable, current portion				Subscription payable, current portion		1,800,000		6,300,000
Total current liabilities				Total current liabilities		8,561,687		14,074,813
Operating lease liability				Operating lease liability		103,748		-
Finance lease liability				Finance lease liability		1,347,945		1,511,554
Subscription payable	Subscription payable	3,600,000	4,409,390	Subscription payable		8,056,610		4,040,610
Total current liabilities		7,317,365	6,766,444
Long-term subscription payable		8,740,610	10,965,610
Notes payable				Notes payable		6,500,000		400,000
Deferred tax liabilities				Deferred tax liabilities		5,791,224		11,014,745
Total liabilities	Total liabilities	16,057,975	17,732,054	Total liabilities		30,361,214		31,041,722

Shareholders' equity:
Common stock, par value $0.001, 248,846,403, and 224,496,093 shares issued
and outstanding at December 31, 2018 and June 30, 2018;
900,000,000 shares authorized		248,846	224,496
Stockholders' equity:				Stockholders' equity:
Common stock, par value $0.001, 282,985,560 and 273,761,955				Common stock, par value $0.001, 282,985,560 and 273,761,955
shares issued and outstanding at September 30, 2019 and				shares issued and outstanding at September 30, 2019 and
June 30, 2019; 900,000,000 shares authorized				June 30, 2019; 900,000,000 shares authorized		282,986		273,762
Additional paid-in capital	Additional paid-in capital	144,543,434	108,072,429	Additional paid-in capital		158,590,206		153,604,830
Common stock subscriptions receivable		-	(1,025,000)
Accumulated deficit	Accumulated deficit	(40,970,309)	(35,978,862)	Accumulated deficit		(48,967,456)		(41,102,849)
Total controlling interest	Total controlling interest	103,821,971	71,293,063	Total controlling interest		109,905,736		112,775,743
Non-controlling interest	Non-controlling interest	(181,275)	(120,152)	Non-controlling interest		(271,214)		(239,280)
Total shareholders' equity		103,640,696	71,172,911
Total liabilities and shareholders' equity		$ 119,698,671	$ 88,904,965
Total stockholders' equity				Total stockholders' equity		109,634,522		112,536,463
Total liabilities and stockholders' equity				Total liabilities and stockholders' equity	$	139,995,736	$	143,578,185

Three months ended December 31,

Six months ended December 31,

2018

2017

2018

2017

Revenue

$
10,687,036
$
3,378,526
$
18,750,838
$
5,413,934

Cost of goods sold

3,059,136
904,384
5,925,871
1,759,549

Gross profit

7,627,900
2,474,142
12,824,967
3,654,385

Operating expenses:

Sales and marketing

3,431,157
953,232
5,853,876
1,584,819

General administrative

2,520,281
1,116,273
5,079,761
5,788,466

Research and product development

1,759,560
37,380
2,364,950
49,880

Amortization and depreciation expense

1,992,534
850,116
3,664,964
1,948,681

Total operating expenses

9,703,532
2,957,001
16,963,551
9,371,846

Operating profit (loss)

(2,075,632)
(482,859)
(4,138,584)
(5,717,461)

Other income, net

(599,627)
106,568
(913,986)
212,286

Loss before income taxes

(2,675,259)
(376,921)
(5,052,570)
(5,513,927)

Provision for (benefit from) income taxes

-
-
-
-

Net loss

$
(2,675,259)
$
(376,921)
$
(5,052,570)
$
(5,513,927)

Net loss non-controlling interest
(33,454) (628) (61,123) (8,752)

Net loss controlling interest $ (2,641,850) $ (375,663) $ (4,991,447) $ (5,505,175)

Basic weighted average shares outstanding

230,111,417
203,135,262
230,111,417
203,135,262

Basic loss per share

(0.012)
(0.002)
(0.022)
(0.027)

Comprehensive loss:

Net loss

(2,641,805)
(375,663)
(4,991,447)
(5,505,175)

Unrealized gain (loss) on available-for-sale securities, net of tax

-
-
-
-

Change in foreign currency translation adjustment

-
-
-
-

Comprehensive loss

$
(2,641,805)
$
(375,663)
$
(4,991,447)
$
(5,505,175)


	Six months ended December 31,				Three months ended September 30,
	2018		2017		2019		2018
Cash flows from operating activities:
Net loss		$ (5,052,570)		$ (5,513,927)	$	(7,896,541)	$	(2,032,051)
Adjustments to reconcile net loss to net cash provided (used) in operating activities:
Depreciation and amortization		3,663,973		1,948,681		2,610,245		1,664,730
Stock, options and/or warrants exchanged for service		1,308,318		4,133,966
Change in equity method investment		914,898		-
Provision for bad debts						37,154		-
Share based compensation						4,994,600		960,080
Deferred income taxes						(5,223,521)		(612,452)
Non-cash lease expense						91,054		-
Losses on equity method investment						139,300		314,782
Changes in operating assets and liabilities:
Accounts receivable		(29,650)		(339,003)		858,700		(834,767)
Inventory		(121,072)		(1,156,446)		(587,044)		407,719
Prepaid expenses		(21,309)		(65,333)		(89,616)		(80,200)
Other assets		(6,569)		66,665		35,955		(24,500)
Accounts Payable		1,345,996		739,042
Accounts payable						(1,240,467)		1,176,451
Accrued liabilities		14,315		(712,934)		47,960		(330,315)
Net cash provided (used) in operating activities		2,016,330		(899,289)
Operating lease liability						(89,456)		-
Deferred revenue						60,494		-
Net cash provided by (used in) operating activities						(6,251,183)		609,477

Cash flows from investing activities:
Purchases of property and equipment		(1,204,756)		-		(300,805)		(526,507)
Proceeds from sale of equipment		-		249,674
Capitalization of patent application costs		(140,675)		(302)
Net cash provided (used) by investing activities		(1,345,431)		249,372
Cash acquired from acquisitions, net						-		799,980
Cash payments on equity method investee stock subscription						(300,000)		(1,216,634)
Capitalization of patent acquisition costs						-		(140,675)
Net cash used in investing activities						(600,805)		(1,083,836)

Cash flows from financing activities:
Cash proceeds from stock subscriptions		1,025,000		514,050		-		325,000
Proceeds from acquisitions		799,980		-
Cash payments for subscription payable		(1,142,089)		-
Net cash provided in financing activities		682,891		514,050
Proceeds from issuance of promissory notes						6,100,000		-
Principal payments on finance leases						(24,413)		-
Net cash provided by financing activities						6,075,587		325,000

Net increase (decrease) in cash and cash equivalents		1,353,790		(135,869)
Net decrease in cash and cash equivalents						(776,401)		(149,359)
Cash and cash equivalents at the beginning of the period		$ 1,206,139		$ 968,202	$	1,618,244	$	1,206,139
Cash and cash equivalents at the end of the period		$ 2,559,929		$ 832,333	$	841,843	$	1,056,780

Predictive Technology Group, Inc., together with its subsidiaries (collectively, “PTG” or the “Company”), develops and commercializes discoveries and technologies involved in novel molecular diagnostic, ~~and pharmaceutical therapeutic/Human Cells, Tissues~~therapeutic, and Human Cellular and Tissue-Based Products (“HCT/Ps”). The Company uses this information as the cornerstone in the development of new diagnostics that assess a person’s risk of disease and develop pharmaceutical therapeutics and HCT/Ps ~~designed~~for use by healthcare professionals to ~~effectively prevent and treat the disease.~~improve outcomes in their patients. The Company’s corporate headquarters are located in Salt Lake City, Utah.

~~In accordance with ASC 280-10-50, Segment Reporting, operating~~Operating segments are identified as components of an enterprise about which separate discrete financial information is available for evaluation by the chief operating decision-maker (CODM) in making decisions regarding resource allocation and assessing performance. The Company operates in two reportable ~~segments:~~segments, which are differentiated by product. The HCT/~~Ps and diagnostics and therapeutics. Predictive Biotech’s HCT/Ps are processed in our FDA registered lab. Our~~P segment offers minimally manipulated tissue products ~~are~~intended for homologous use, prepared utilizing proprietary extraction methods that reduce the loss of important scaffolding, growth ~~factor~~factors and ~~general cytokines~~cytokines. The Company’s Diagnostics and ~~are intended for homologous use. Predictive Technology's diagnostics and therapeutics~~Therapeutics segment uses data analytics for disease identification and subsequent therapeutic intervention through ~~unique~~ novel gene-based diagnostics, ~~biotechnology treatments~~ and companion therapeutics. Lastly, the “Unallocated Corporate” column in the table below represents those headquarters activities that do not qualify as operating segments and which are not allocated to operating segments in information provided to the CODM. We currently sell our products exclusively in the United States.

During the fourth quarter of 2019, we realigned our segment reporting to separately present headquarters costs in information available to the CODM. The presentation of the comparative information has been recast to conform to the 2019 presentation.

3 months ended December 31,

6 months ended December 31,

Year Ended June 30,

2018

2018

2018
Segment revenues

HCT/Ps

$      10,687,037

$       18,750,838

$    16,624,336

Diagnostics and therapeutics
                       -

                         -

                      -

Total consolidated revenues
$      10,687,037

$       18,750,838

$    16,624,336

Segment operating income (loss)

HCT/Ps

$        2,059,400

$         2,732,404

$     (5,821,549)

Diagnostics and therapeutics
         (4,135,032)

          (6,870,988)

        (6,503,628)

Total consolidated operating income (loss)
$      (2,075,632)

$       (4,138,584)

$   (12,325,177)

Reconciliation of segment operating income

to income before income taxes

Segment operating income
$      (2,075,632)

$       (4,138,584)

$   (12,325,177)

Equity method gain/(loss)
            (600,116)

             (914,898)

           (899,950)

Impairment charges
                       -

                         -

                      -

Interest income / (expense)
                     489

                      912

            199,953

Segment income before income taxes
$      (2,675,259)

$       (5,052,570)

$   (13,025,174)

Segment revenue and operating income (loss)were as follows during the periods presented:

3 months ended December 31,

6 months ended December 31,

Year Ended June 30,
Capital assets, net
2018

2018

2018

HCT/Ps

$        1,417,153

$         1,417,153

$         438,277

Diagnostics and therapeutics
           1,053,451

            1,053,451

            335,592

Total capital assets, net
$        2,470,604

$         2,470,604

$         773,869

Depreciation expense

HCT/Ps

$             66,970

$            103,992

$           82,306

Diagnostics and therapeutics
                58,910

               105,021

              68,339

Total depreciation expense
$           125,880

$            209,013

$         150,645

Intangible and equity method investment assets, net

HCT/Ps

$        6,939,097

$         6,939,097

$      8,096,311

Diagnostics and therapeutics
       103,010,447

        103,010,447

       74,288,652

Total intangible and equity method investment assets, net
$    109,949,544

$     109,949,544

$    82,384,963

Amortization expense

HCT/Ps

$           704,446

$         1,408,892

$      2,817,786

Diagnostics and therapeutics
           1,162,208

            2,041,599

         1,605,103

Total amortization expense
$        1,866,654

$         3,450,491

$      4,422,889

Warrants and options expense (non-cash)

HCT/Ps

$           319,689

$            375,438

$      8,216,888

Diagnostics and therapeutics
              336,442

               932,880

         2,310,539

Total warrants and options expense (non-cash)
$           656,131

$         1,308,318

$    10,527,427

~~This summary~~The accompanying consolidated financial statements have been prepared by Predictive Technology Group, Inc. (the “Company” or “Predictive”) in accordance with U.S. generally accepted accounting principles (“GAAP”) for financial information and pursuant to the applicable rules and regulations of ~~significant accounting policies~~the Securities and Exchange Commission (“SEC”). The consolidated financial statements include the accounts of the Company ~~is presented~~and its wholly owned subsidiaries. All intercompany accounts and transactions have been eliminated in consolidation. In the opinion of management, the accompanying financial statements contain all adjustments (consisting of normal and recurring accruals) necessary to ~~assist~~present fairly all financial statements in ~~understanding~~accordance with U.S. GAAP.

The condensed consolidated financial statements herein should be read in conjunction with the ~~financial statements. The~~Company’s audited consolidated financial statements and notes ~~are representations of~~thereto for the fiscal year ended June 30, 2019, included in the Company’s ~~management, which is responsible~~Annual Report on Form 10-K for ~~their integrity and objectivity.~~ the fiscal year ended June 30, 2019. Operating results for the three months ended September 30, 2019 may not necessarily be indicative of results to be expected for any other interim period or for the full fiscal year.

The Company operates on a fiscal year basis with the fiscal year ending on June 30.

These consolidated financial statements include the financial statements of Predictive Technology Group, Inc. and its wholly owned subsidiaries. All inter-company accounts and transactions have been eliminated in consolidation. ~~Certain prior year amounts have been reclassified to conform to the current year presentation.~~

The Company considers all highly-liquid investments with a maturity of three months or less, when purchased, to be cash equivalents. The Company places its temporary cash investments with high-quality financial institutions. Accounts at each institution are insured by the Federal Deposit Insurance Corporation (“FDIC”) up to $250,000. At December 31, 2018 and June 30, 2018, the Company had $2,059,929 and $956,139 in excess of the FDIC insured limit.

~~These~~The accompanying financial statements ~~were~~have been prepared ~~on a going concern basis. The going concern basis assumes~~under the assumption that the Company will continue ~~in operation for~~to operate as a going concern, which contemplates the ~~foreseeable future and will be able to realize its~~realization of assets and ~~discharge its~~the settlement of liabilities ~~and commitments~~ in the normal course of business. The condensed consolidated financial statements do not include any adjustments to reflect the possible future effects on the recoverability and classification of assets or the amounts of liabilities that may result from any inability of the Company to continue as a going concern.

~~Predictive Biotech, Inc. (“Predictive Biotech”), a subsidiary~~The Company believes that its existing cash and cash equivalents of ~~PTG, began~~$841,843 at September 30, 2019, expected revenues and borrowings under our Revolving Loan Agreement are sufficient to fund operations ~~during~~as currently planned through at least one year from the ~~fiscal year ended June 30, 2017. Since inception~~date of ~~operations, revenues have exceeded~~the issuance of these financial statements. However, the Company cannot predict, with certainty, the outcome of its actions to grow revenues. The Company has based this belief on assumptions and estimates that may prove to be incorrect, and the Company could spend its available financial resources less or more rapidly than currently expected. The Company may continue to require additional sources of cash for general corporate purposes, which may include operating expenses, working capital to improve and promote its commercially available products, advance product candidates, general capital expenditures and satisfaction of debt obligations. Management may seek additional capital through debt financings, collaborative or other funding arrangements with partners, or through other sources of financing. Should the Company seek additional financing from outside sources, the Company may not be able to raise such ~~excess contributes~~financing on terms acceptable to the ~~overall operations~~Company or at all. If the Company is unable to raise additional capital when required or on acceptable terms, this could have a material adverse effect on liquidity and could raise substantial doubt about the Company’s ability to continue as a going concern. In such a case, the Company may be required to scale back or to discontinue the promotion of ~~PTG.~~currently available products, scale back or discontinue the advancement of product candidates, reduce headcount, file for bankruptcy, reorganize, merge with another entity, or cease operations.

In addition, PTG has raised sufficient capital through stock subscriptions to fund its obligations under its licenses and other agreements for the development of molecular diagnostics products under license in Predictive Therapeutics, LLC (“Predictive Therapeutics”), a subsidiary of PTG. It is anticipated that the initial sale of such products will take place in the first half of calendar year 2019 and accelerating through the second half of calendar 2019.

~~Accounts~~Trade accounts receivable are primarily comprised of amounts due from sales of the Company’s HCT/P products and are recorded at the invoiced amount. AtThe allowance for doubtful accounts is based on the ~~present time most sales are through credit cards, however from time to time, credit is granted to customers on a short-term basis without requiring collateral, and as such, these~~Company’s best estimate of the amount of probable losses in the Company’s existing accounts receivable, ~~do not bear interest, although a finance charge may be applied~~which is based on historical write-off experience, customer creditworthiness, facts and circumstances specific to ~~such receivables that~~outstanding balances, and payment terms. Account balances are ~~past due.~~charged against the allowance after all means of collection have been exhausted and the potential for recovery is considered remote. The Company ~~has in place~~does not have any off-balance-sheet credit ~~policies~~exposure related to its customers and ~~procedures and approval process for sales returns and credit memos.~~does not require collateral.

Inventories consist primarily of HCT/Ps produced by Predictive ~~Biotech.~~Biotech and laboratory supplies used in genetic testing performed by Predictive Labs. We value inventory at the lower of cost or net realizable value. We determine the cost of inventory using the ~~standard-cost~~standard cost method, which approximates actual cost based on a first-in, first-out method. All other costs, including administrative costs, are expensed as incurred.

We analyze our inventory levels at least annually and write down inventory that has a cost basis in excess of its expected net realizable value, or that is considered in excess of normal operating levels, as determined by management. We also reserve for the quantity of quarantined (WIP) inventory that is not expected to pass quality control based on historical averages. The related costs are recognized as cost of goods sold in the ~~Consolidated Statements~~consolidated statements of ~~Operations.~~operations.

Stock subscriptions are recorded as contra-equity on the day the subscription agreement is signed and accepted by the Company. ~~All~~As of September 30, 2019 and June 30, 2019, all stock subscribed ~~as of the date of these financial statements~~ has been ~~collected. The stock is not issued until subscriptions are collected.~~fully paid.

Amounts paid in advance for expenses are accounted for as prepaid expenses and classified as current assets if such amounts are to be recognized as expense ~~with~~within one year from the ~~current period.~~balance sheet date.

Lab equipment, furniture and computer equipment are stated at cost less accumulated depreciation. Depreciation ~~and amortization are~~is computed using the straight-line method based on the lesser of estimated useful lives of the related assets or the underlying lease ~~terms.~~term. Lab equipment items have depreciable lives of 5 years, furniture items have depreciable lives of 5 to 7 years, and computer equipment items have depreciable lives of 3 years. ~~Repairs~~Repair and maintenance costs are charged to expense as incurred. Amortization of assets recorded under finance leases is included in depreciation expense.

The Company reviews property and equipment for impairment. Long-lived assets are reviewed for impairment whenever events or changes in circumstances indicate the carrying amount of an asset may not be recoverable. Recoverability of these assets is measured by comparison of their carrying amounts to future undiscounted cash flows the assets are expected to generate. If property and equipment are considered to be impaired, the impairment to be recognized equals the amount by which the carrying value of the assets exceeds its fair market value.

We have entered into operating and finance lease agreements primarily for office and laboratory facilities and laboratory equipment located in Salt Lake City, Utah with lease periods expiring between 2020 and 2022.

We determine if an arrangement is a lease at inception. For all classes of underlying assets, we elect not to recognize right of use assets or lease liabilities when a lease has a lease term of 12 months or less at the commencement date and does not include an option to purchase the underlying asset that we are reasonably certain to exercise. Operating lease assets and liabilities are included on our consolidated balance sheet beginning July 1, 2019. Finance lease assets are included in property and equipment, net.

Operating lease assets and liabilities are recognized at the present value of the future lease payments at the lease commencement date. The interest rate used to determine the present value of the future lease payments is our incremental borrowing rate, because the interest rate implicit in most of our leases is not readily determinable. Our incremental borrowing rate is estimated to approximate the interest rate on a collateralized basis with similar terms and payments, and in economic environments where the leased asset is located. Operating lease assets also include any prepaid lease payments and lease incentives. Our lease terms include periods under options to extend or terminate the lease when it is reasonably certain that we will exercise that option. We generally use the base, non-cancelable, lease term when determining the lease assets and liabilities. Operating lease expense is recognized on a straight-line basis over the lease term.

Our lease agreements generally contain lease and non-lease components. Non-lease components primarily include payments for maintenance and utilities. We combine fixed payments for non-lease components with our lease payments and account for them together as a single lease component which increases the amount of our lease assets and liabilities.

Intangible and other long-lived assets are comprised of acquired patents, licenses, trade secrets and other intellectual property. Acquired intangible assets are recorded at fair value and amortized over the shorter of the contractual life or the estimated useful life.

The Company reviews definite-lived intangible assets for impairment. Long-lived assets ~~such as property, equipment, and definite-lived~~are reviewed for impairment whenever events or changes in circumstances indicate the carrying amount of an asset may not be recoverable. Recoverability of these assets is measured by comparison of their carrying amounts to future undiscounted cash flows the assets are expected to generate. If identifiable intangibles are considered to be impaired, the impairment to be recognized equals the amount by which the carrying value of the assets exceeds its fair market value.

Indefinite-lived intangible assets not subject to ~~depreciation and~~ amortization ~~as well as acquisition costs of subsidiaries,~~ are reviewed for impairment annually, typically at the ~~end~~beginning of the fourth fiscal ~~year,~~quarter, or whenever events or changes in circumstances indicate that the carrying value of an asset may not be recoverable. Such events and circumstances may include sweeping regulatory changes, shifts in market demand that would negatively impact revenue, ~~restrictions to capital markets,~~ overall industry deterioration, dramatic increase in the number of competitors, rapidly increasing costs related to production inputs, significant changes in Company management or Company strategy, ~~and/~~or significant litigation. The Company first ~~will assess~~assesses qualitative factors above to determine whether it is necessary to perform the ~~two-step~~quantitative impairment test to identify any impairment loss.

Certain of the Company’s patents are currently subject to litigation (see Note 14) to determine whether the ~~estimates~~seller of ~~future cash flows~~the patents had satisfactory title to the patents that ~~determine fair value. The Company~~were then ~~compared fair~~sold to the Company. These patents have a carrying value ~~to carrying value. Other than what~~of $6,659,314 on our consolidated balance sheet as of September 30, 2019. While the litigation is ~~recorded~~in its early stages and may reach a broad range of possible outcomes, we have determined that it is at least reasonably possible that the patents may become impaired in the ~~financial statements seen above, there are no additional asset groups in which~~near term depending on the ~~fair value is less than or close to carrying value.~~ information gained during the legal discovery process and the outcome of the litigation.

~~In May 2014, the Financial Accounting Standards Board (FASB) issued the converged standard on~~

We derive our revenue ~~recognition with the objective~~primarily from sales of ~~providing a single, comprehensive model for all~~HCT/P products to clinicians. The majority of our contracts with customers have a single performance obligation, and all of our contracts with customers have a duration of less than one year. Revenue is recognized when control of the product passes to ~~improve comparability~~the customer, typically upon confirmation of delivery of the product to the customer. As our products must remain frozen during transit, we typically ship our products overnight. Revenue is recognized in the financial statements of companies reporting using International Financial Reporting Standards and U.S. GAAP. The standard contains principles that an entity must apply to determine the measurement of revenue and timing of when it is recognized. The underlying principle is that an entity must recognize revenue to depict the transfer of goods or services to customers at an amount that reflects the ~~entity expects~~expected consideration to be ~~entitled to~~received in exchange for ~~those~~such goods or services. An entity can apply the revenue standard retrospectively to each prior reporting period presented (full retrospective method) or retrospectively with the cumulative effect of initially applying the standard recognized at the date of initial application in retained earnings (modified retrospective method).

The standard was effective for the Company beginning July 1, 2018. The Company elected to adopt the standard using the modified retrospective approach. This approach was adopted because the Company believes the new Standard has very little impact on revenue recognition for the current products sold.

~~The Company generates revenue by selling Human Cell and Tissue Products (HC/TP’s) to clinics and doctors. Revenue from these sales~~As such, customer orders are recorded atas deferred revenue prior to delivery of products or services ordered.

Generally, we require authorization from a credit card or verification of receipt of payment before we ship products to customers. From time to time we grant credit to our customers with normal credit terms (typically 30 days). We do not recognize assets associated with costs to obtain or fulfill a contract with a customer, as the ~~invoiced amount net of~~amortization period for any ~~discounts~~such costs if capitalized would be one year or ~~contractual allowances. The Company has determined that~~less.

Shipping and handling is considered a fulfillment activity, as it takes place prior to the ~~shipment~~customer obtaining control of the product, ~~indicates transfer of control for revenue recognition purposes.~~

~~We have evaluated each of the five steps in Topic 606, which are as follows:~~

~~4) Allocate the transaction price~~and fees charged to ~~the performance obligations; and~~

Our conclusion is that we have identified similar performance obligations under ASC Topic 606 as compared with deliverables and separate units of account previously identified under the old standard. As a result, the timing of our revenue appears to remain the same in comparison to the prior revenue recognition guidance.

~~We sell our products through a direct sales force and through distribution in the U.S. Revenues from these~~ customers are recognized when all the following steps identified above have occurred. These criteria are generally satisfied at the time of shipment when risk of loss and title passes to the customer. We reserve for sales returns, including returns related to defective products, as a reduction in net sales, based on our historical experience. These reserves are recorded as a reduction in net sales and are not considered material to our consolidated statements of income for 6 months ended December 31, 2018 and for the year ended June 30, 2018.

The Company also has significant experience with historical discount patterns and uses this experience to finalize transaction prices. In accordance with ASU 2016-12, the Company would elect to exclude from the measurement of transaction price, all taxes assessed by a governmental authority that are both imposed on and concurrent with a specific revenue-producing transaction and collected by the Company from a customer for e.g. sales tax, value added tax etc. However, as our business is thus far not with the end consumer, the collection of taxes is unnecessary.

The Company has also elected to apply the practical expedient for not adjusting revenue recognized for the effects of the time value of money. This practical expedient has been elected because the Company collects cash directly from customers immediately adjacent to shipment.

There are also certain considerations related to internal control over financial reporting that are associated with implementing Topic 606. We are currently evaluating our control framework for revenue recognition and identifying any changes that may need to be made in response to the new guidance. Disclosure requirements under the new guidance in Topic 606 have been significantly expanded in comparison to the disclosure requirements under the current guidance.

~~We bill our customers for shipping and handling charges, which~~ are included in net ~~sales for the applicable period, and the corresponding shipping~~revenue upon completion of our performance obligation. Shipping and handling ~~expense is reported~~expenses are included in cost of sales. We present revenue net of sales taxes, discounts, and expected returns.

We recognize a contract liability when customer payment precedes the completion of our performance obligations.

The following table provides information about deferred revenue from contracts with customers, including significant changes in deferred revenue balances during the period (in thousands).

The Company maintains product liability insurance and has not experienced any related claims from its ~~products~~product offerings. The Company also offers a warranty to customers providing that its products will be delivered free of any ~~materials~~material defects. There have been no material costs incurred since inception based on estimated return rates. The Company reviews the adequacy of its ~~recorded~~ accrual on a quarterly basis.

In order to determine the Company’s quarterly provision for income taxes, the Company uses an estimated annual effective tax rate that is based on expected annual income and applicable federal and state tax rates. Deferred tax assets and liabilities are recorded to reflect the future tax consequences attributable to the effects of differences between the carrying amounts of existing assets and liabilities for financial reporting and for income tax purposes. Deferred taxes are calculated by applying enacted statutory tax rates and tax laws to future years in which temporary differences are expected to reverse. The impact on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that the rate change is enacted.

Comprehensive loss is comprised of net loss and other comprehensive loss. Other comprehensive loss is equal to net loss for the three months ended September 30, 2019 and 2018.

The fair value of a financial instrument is the amount that could be received upon the sale of an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Financial assets are marked to bid prices and financial liabilities are marked to offer prices. Fair value measurements do not include transaction costs. A fair value hierarchy is used to prioritize the quality and reliability of the information used to determine fair values. Categorization within the fair value hierarchy is based on the lowest level of input that is significant to the fair value measurement. The fair value hierarchy is defined in the following three categories:

Level 1: Quoted market prices in active markets for identical assets or liabilities.

Level 2: Observable market-based inputs or inputs that are corroborated by market data.

During the three months ended September 30, 2019 and 2018, we did not have any remeasurements of non-financial assets measured at fair value on a non-recurring basis subsequent to their initial recognition.

The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of sales and expenses during the reporting periods. Key estimates in the accompanying unaudited condensed consolidated financial statements include, among others, revenue recognition, allowances for doubtful accounts and product returns, provisions for obsolete inventory, valuation of long-lived assets, and deferred income tax asset valuation allowances. Actual results could differ materially from these estimates.

In June 2016, the FASB issued ASU 2016-13, “Financial Instruments – Credit Losses (Topic 326)” which introduces new guidance for the accounting for credit losses on instruments within its scope. The new guidance introduces an approach based on expected losses to estimate credit losses on certain types of financial instruments. For trade receivables, the Company will be required to use a forward-looking expected loss model rather than the incurred loss model for recognizing credit losses which reflects losses that are probable. The guidance is effective for fiscal years beginning after December 15, 2019, including interim periods within those years. Early application of the guidance is permitted for all entities for fiscal years beginning after December 15, 2018, including the interim periods within those fiscal years. Application of the amendments is through a cumulative-effect adjustment to retained earnings as of the effective date. The Company is currently evaluating the impact of this update on the consolidated financial statements.

In February 2016, the FASB ~~issued ASU~~established Topic 842, Leases, by issuing Accounting Standards Update (ASU) No. 2016-02,~~Leases (Topic 842)~~ ~~(“ASU 2016-02”),~~ which ~~modified lease accounting for both~~requires lessees to recognize leases on the balance sheet and lessors to increase transparency and comparability by recognizing lease assets and lease liabilities by lessees for those leases classified as operating leases under previous accounting standards and disclosingdisclose key information about leasing arrangements. Topic 842 was subsequently amended by ASU ~~2016-02 will be~~No. 2018-01, Land Easement Practical Expedient for Transition to Topic 842; ASU No. 2018-10, Codification Improvements to Topic 842, Leases; and ASU No. 2018-11, Targeted Improvements. The new standard establishes a right-of-use model (ROU) that requires a lessee to recognize a ROU asset and lease liability on the balance sheet for all leases with a term longer than 12 months. Leases are classified as finance or operating, with classification affecting the pattern and classification of expense recognition in the income statement.

The new standard was effective for us on July 1, 2019. A modified retrospective transition approach is required, applying the new standard to all leases existing at the date of initial application. An entity may choose to use either (1) its effective date or (2) the beginning of the earliest comparative period presented in the financial statements as its date of initial application. If an entity chooses the second option, the transition requirements for existing leases also apply to leases entered into between the date of initial application and the effective date. The entity must also recast its comparative period financial statements and provide the disclosures required by the new standard for the comparative periods. We used the effective date as our date of initial application. Consequently, financial information was not updated, and the disclosures required under the new standard were not provided for dates and periods before July 1, 2019.

The new standard provides a number of optional practical expedients in transition. We elected the ‘package of practical expedients’, which permits us not to reassess under the new standard our prior conclusions about lease identification, lease classification and initial direct costs. We elected all of the new standard’s available transition practical expedients that are applicable.

The new standard also provides practical expedients for an entity’s ongoing accounting. We elected the short-term lease recognition exemption for all leases that qualify. This means, for those leases that qualify, we will not recognize ROU assets or lease liabilities, and this includes not recognizing ROU assets or lease liabilities for existing short-term leases of those assets in transition. We also elected the practical expedient to not separate lease and non-lease components for all of our leases, other than for leases of real estate.

NOTE 2 CORRECTION OF PREVIOUSLY-ISSUED UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Subsequent to the issuance of the Company's condensed consolidated financial statements for the three months ended September 30, 2018, the Company ~~beginning July 1, 2019 and early adoption is permitted. We are currently evaluating~~discovered (i) an error in the ~~timing of its adoption and~~Company's accounting for income taxes, primarily with regard to the impact of ~~adopting~~income taxes on the ~~new lease standard on~~Company's accounting for business combinations and asset acquisitions, and (ii) a clerical error in the calculation of volatility used as an input to the Black-Scholes model used to value the warrants issued as consideration for the acquisition of certain intellectual property. As a result, the Company has corrected the accompanying condensed consolidated statement of operations and comprehensive loss and the statement of stockholders' equity for the three months ended September 30, 2018 from amounts previously reported to (i) record a benefit from income taxes of $612,452, (ii) record $273,900 in share based compensation expense , and (iii) reduce amortization expense related to intangible assets by $6,708.

Additionally, the Company identified the following errors in the calculation of weighted average shares outstanding underlying the calculation of earnings per share for the three months ended September 30, 2018. Common shares in the amount of 23,127,666 issued prior to the 2017 fiscal year were thought to have been cancelled, when in fact they remain legally outstanding. The weighted average shares outstanding used to calculate earnings per share were also calculated incorrectly, such that the total corrected weighted average shares outstanding increased by 30,813,446. The error did not affect reported earnings per share in any period.

The condensed consolidated statement of cash flows for the three months ended September 30, 2018 has also been corrected for the adjustments to the condensed consolidated statement of operations discussed above, to have reported net loss agree to the net loss shown in operating cash flows, and to correct the presentation of certain investing and financing activities as follows. First, amounts related to the acquisition of InceptionDX, LLC improperly included noncash activity, and have been corrected in investing activities to show only the cash received as a result of the acquisition. Non-cash consideration paid for InceptionDX, LLC has been separately disclosed in the corrected table of supplemental cash flow disclosures. Second, $1,216,634 of cash paid under our subscription payable previously incorrectly included in financing activities has been reclassified to investing activities.

In addition to the impact of the corrections described above, the condensed consolidated statement of operations for the three months ended September 30, 2018 includes certain insignificant corrections in presentation that were made to conform to the fiscal 2019 annual financial statements.

~~In January 2017,~~The following tables present the ~~FASB issued ASU No. 2017-01,~~ ~~Business Combinations (Topic 805): Clarifying the Definition of a Business~~, which provides guidance to entities to assist with evaluating when a set of transferred assets and activities is a business and provides a screen to determine when a set is not a business. Under the new guidance, when substantially alleffects of the fair value of gross assets acquired (or disposed of) is concentrated in a single identifiable asset, or group of similar assets, the assets acquired would not represent a business. Also, to be considered a business, an acquisition would have to include an input and a substantive process that together significantly contributecorrections to the ~~ability to produce outputs. The new standard is effective for fiscal years,~~condensed consolidated statements of operations and ~~interim periods within those fiscal years, beginning after December 15, 2017,~~comprehensive loss and should be applied on a prospective basis to any transactions occurring within the period of adoption. Early adoption is permitted for interim or annual periods in which the financial statements have not been issued. We do not presently anticipate that the adoption of ASU 2017-01 will have a material impact on our consolidated financial statements.

~~In October 2016, the FASB issued ASU No. 2016-16,~~ ~~Income Taxes (Topic 740): Intra-Entity Transfers of Assets Other than Inventory~~, which requires the recognition of the income tax consequences of an intra-entity transfer of an asset, other than inventory, when the transfer occurs. ASU 2016-16 will be effective for us beginning on July 1, 2018. We are currently evaluating the impact of adopting ASU 2016-16 on our consolidated financial statements.

~~In August 2016, the FASB issued ASU No. 2016-15,~~ ~~Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments~~~~, which addresses eight specific cash flow issues with the objective of reducing the existing diversity in practice in how certain cash receipts and cash payments are presented and classified in~~ the statement of cash flows. ASU 2016-15 will be effective for us beginning on July 1, 2018 with early adoption permitted. We do not presently anticipate that the adoption of ASU 2016-15 will have a material impact on our consolidated financial statements.

~~In January 2016, the FASB issued ASU No. 2016-01,~~ ~~Financial Instruments - Overall: Recognition and Measurement of Financial Assets and Financial Liabilities,~~ which amends the guidance regarding the classification and measurement of financial instruments. Changes to the current guidance primarily affect the accounting for equity investments, financial liabilities under the fair value option, and the presentation and disclosure requirements for financial instruments. In addition, ASU 2016-01 clarifies guidance related to the valuation allowance assessment when recognizing deferred tax assets resulting from unrealized losses on available-for-sale debt securities. ASU 2016-01 will be effective for us beginning on July 1, 2018. Early adoption is not permitted exceptflows for the ~~provision to record fair value changes for financial liabilities under the fair value option resulting from instrument-specific credit risk in other comprehensive income. Upon adoption~~three months ended September 30, 2018.

Unaudited consolidated statement of ~~ASU 2016-01, an entity should apply the amendments by means~~operations

Unaudited consolidated statement of a cumulative-effect adjustment to the balance sheet at the beginning of the first reporting period in which the guidance is effective. We do not presently anticipate that the adoption of ASU 2016-01 will have a material impact on our financial statements.

~~In November 2015, the FASB issued ASU 2015-17,~~ ~~Income Taxes (Topic 740): Balance Sheet Classification of Deferred Taxes~~, which will require all deferred tax assets and deferred tax liabilities to be presented as noncurrent within a classified balance sheet. ASU 2015-17 was effective for us as of July 1, 2017. ASU 2015-17 may be applied either prospectively to all deferred tax assets and liabilities or retrospectively to all periods presented. We have elected not to early adopt ASU 2015-17. We do not anticipate that the adoption of ASU 2015-17 will have a material impact on our financial statements.

~~In May 2014, the FASB issued ASU 2014-09,~~ ~~Revenue from Contracts with Customers (Topic 606)~~, to update the financial reporting requirements for revenue recognition. Topic 606 outlines a single comprehensive model for entities to use in accounting for revenue arising from contracts with customers and supersedes most current revenue recognition guidance, including industry-specific guidance. The guidance is based on the principle that an entity should recognize revenue to depict the transfer of goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. The guidance also requires additional disclosure about the nature, amount, timing and uncertainty of revenue and cash flows arising from customer contracts, including significant judgments and changes in judgments and assets recognized from costs incurred to fulfill a contract. This guidance is effective for us beginning on July 1, 2018, and entities have the option of using either a full retrospective or a modified retrospective approach for the adoption of the new standard. We have evaluated the adoption of this standard on a retrospective basis and believe it will have no material impact to what has been reported. Therefore, the Company will adopt this standard on a modified retrospective basis.


	Three months ended September 30, 2018
			(As reported)	(Adjustment)		(Restated)
Cash flows from operating activities:
Net loss	$	(2,389,580)		$ 357,529	$ (2,032,051)
Adjustments to reconcile net loss to net cash provided by operating activities:
Depreciation and amortization			1,671,438	(6,708)		1,664,730
Share based compensation			698,449	261,631		960,080
Deferred income taxes			-	(612,452)		(612,452)
Losses on equity method investment			314,782	-		314,782
Changes in operating assets and liabilities:
Accounts receivable			(834,767)	-		(834,767)
Inventory			407,719	-		407,719
Prepaid expenses			(80,200)	-		(80,200)
Other assets			(24,500)	-		(24,500)
Accounts payable			1,176,451	-		1,176,451
Accrued liabilities			(330,315)	-		(330,315)
Net cash provided by operating activities			609,477	-		609,477

Cash flows from investing activities:
Purchases of property and equipment			(1,226,507)	700,000		(526,507)
Cash acquired from acquisitions, net			-	799,980		799,980
Common stock issued for acquisition			14,260,000	(14,260,000)		-
Acquisition of InceptionDX, LLC			(12,320,020)	12,320,020		-
Acquisition of Minority Interests			(440,000)	440,000		-
Cash payments on stock subscription			-	(1,216,634)		(1,216,634)
Capitalization of patent acquisition costs			(140,675)	-		(140,675)
Net cash provided by (used in) investing activities			132,798	(1,216,634)		(1,083,836)

Cash flows from financing activities:
Cash proceeds from stock subscriptions			325,000	-		325,000
Cash payments on stock subscription			(1,216,634)	1,216,634		-
Net cash provided by (used in) financing activities			(891,634)	1,216,634		325,000

Net decrease in cash and cash equivalents			(149,359)	-		(149,359)
Cash and cash equivalents at the beginning of the period	$		1,206,139	-		$ 1,206,139
Cash and cash equivalents at the end of the period	$		1,056,780	$ -		$ 1,056,780

NOTE 23 BUSINESS COMBINATIONS AND ~~EQUITY METHOD INVESTMENTS~~ASSET ACQUISITIONS

On April 15, 2015, Global Enterprises Group, Inc. (“GLHO”) acquired 100% of Predictive Therapeutics, LLC. After the acquisition, GLHO changed its name to Predictive Technology Group, Inc. On October 31, 2015, the initial agreement was modified to make certain technical corrections and adjustments for contingencies which were not met at that date. The Company issued a total of 131,058,458 shares of common stock in this transaction. Under this merger agreement, there was a change in control which has been treated for accounting purposes as a reverse recapitalization.

On November 6, 2015, the Company announced the acquisition of LifeCode Genetics, Inc. (“LifeCode”) as its wholly owned subsidiary. LifeCode holds a strategic equity investment of 10.169% in Juneau Biosciences, LLC (“Juneau”). In addition to the development of an assay and related services for the prognosis and monitoring of endometriosis in the infertility market which the Company has licensed, Juneau is developing technologies for the diagnosis of other women’s health issues.

~~The Company issued 6,561,870 common shares to acquire LifeCode and has recorded the acquisition as a Portfolio Investment with a valuation set at $16,404,675.~~

A share exchange agreement was entered into on September 22, 2015 that required the Company to issue to LifeCode former shareholders to meet the terms of the exchange agreement an additional 5,718,372 shares. Using the OTC value (defined as the share price listed on the date of the transaction in the over-the-counter dealer markets and networks) for the additional shares issued results in an increase of value to $30,700,605, an increase of $14,295,930. A valuation performed by an external outside valuation expert supports a September 22, 2015 value of $16,520,150 resulting in a day one impairment of $14,180,455.

~~The fair value of the purchase consideration issued to the sellers of LifeCode was allocated to the units of equity acquired.~~

~~Juneau reports to its members on a calendar year basis and LifeCode records its distributable share of such reported income using the equity method.~~

SEC Rule 4-08(g) of Regulation S-X requires a registrant to disclose, in the notes to its financial statements, summarized balance sheet and income statement information of all investees on an aggregate basis, if deemed significant. See such summaries below. The numbers presented in the schedules below related to Juneau are audited for the fiscal year ended June 30, 2017, and are unaudited for the year ended June 30, 2018.

Juneau Bioscience, LLC
Consolidated Balance Sheets

December 31,

2018

2017
Assets

Unaudited

Audited

Current assets

Cash

148,527

$                40,077

Total current assets

                 148,527

                    40,077

Other long-term assets
         27,159,139

                 152,824
Total assets

$          27,307,666

$             192,901

Liabilities and member's equity

Current liabilities

Accounts payable
$                   2,243

$                23,786

Accrued liabilities
            1,255,674

            5,744,449

Total current liabilities
            1,257,917

            5,768,235

Long-term Liabilities

            1,398,968

            1,303,074

Member's equity

Additional paid-in capital
         57,902,036

         22,196,288

Accumulated deficit
       (33,251,255)

       (29,074,696)

Total member's equity
         24,650,781

          (6,878,408)

Total liabilities and member's equity
$     27,307,666

$             192,901

Juneau Bioscience, LLC
Consolidated Statements of Operations

Years ended December 31,

2018

2017

Unaudited

Audited
Revenue from operations (net)
$        2,554,037

$        2,443,677

Gross profit from operations
            2,554,037

            2,443,677

Operating expenses

General and administrative
            4,973,927

            2,489,421

Total operating expense
            4,973,927

            2,489,421

Loss from operations

          (2,419,890)

                  (45,744)

Other income (expense)

Other income (expense)
                              66

                           396

Net income / (loss)

$      (2,419,824)

$              (45,348)

On March 28, 2016, the Company announced the acquisition of ReNovo Biotech, Inc. as its wholly owned subsidiary. The acquisition provides the Company access to ReNovo Biotech’s cellular, tissue, biomaterial and regenerative medicine products and product candidates. This subsidiary is operated under the name Predictive Biotech, Inc. The Company issued 9,500,000 common shares to effect the acquisition which is recorded at a cost of $14,087,000.

The purchase price was allocated to “trade secrets” including protocols to develop an amniotic allografts and umbilical cord allograft line of products in accordance with the provisions of ASC 805,~~Business Combinations~~~~. Such trade secrets were determined to be recognizable apart from any form of goodwill and are “technology-based”.~~

~~Aggregate amortization expense for the 6 months ended December 31, 2018 and December 31, 2017, was approximately and $1,408,893 and $1,700,233 respectively.~~

~~Estimated amortization expense for the developed technology consists of the following as of December 31, 2018:~~

On August 22, 2018, the Company entered into an agreement captioned “Securities Purchase Agreement” with the members of Inception DX, LLC (“Inception”), a Utah limited liability company. Under the terms of the agreement, the Company acquired Inception for 15,500,000 shares of common stock. Inception owns laboratory equipment, partial interest in database records for over 31,900,000 individuals for use in genetics research, 400,000 units in Juneau Biosciences, LLC, initial CLIA registration, CLIA lab protocols, and other assets. Once the CLIA registration is completed, Inception will be used as a ~~CLIA~~CLIA-certified laboratory by Predictive Technology Group, Inc. and its affiliates.

The stock issued was for cash, laboratory equipment, membership units in Juneau Biosciences, LLC ~~units “Juneau~~(“Juneau units”), and trade secrets related to the DNA database and protocols related to a future ~~laboratory~~ use as a CLIA ~~lab. The cash was valued at face value.~~laboratory. The Juneau units ~~was~~were valued based on the ~~valued~~value assigned when the Company entered into a subscription to purchase units of Juneau ($1.10 per unit). The ~~laboratory~~ equipment ~~was valued at market value as it had not been used and the Company is aware of the approximate market purchase price. It~~ will be ~~classified as equipment with a 5-year life.~~depreciated over 5 years. The proprietary data, DNA library, protocols, research and methods are classified as a trade ~~secret~~secrets in our industry. ~~Therefore,~~The Company will amortize the ~~Company determined to allocate the remaining value~~trade secrets over an estimated useful life of ~~the assets purchased as a trade secret with a 15-year life.~~15 years.

The stock price on ~~8/22/~~August 22, 2018 was ~~$0.92/share. Indicating~~$0.92 per share, indicating a purchase price of $14,260,000 requiring allocation:

The financial statements presented above reflect the increase of this minority interest investment. The 400,000 units acquired in this acquisition increased our ownership less than 1%, and as such, the Company has not acquired more than 50% of Juneau, in total, as of September 30, 2018. The $440,000 allocated to Investment in Minority Interest is offset by our estimated share of the loss in Juneau’s operations for the quarter ended September 30, 2018.

On August 22, 2018, the Company entered into an agreement captioned “Asset Purchase Agreement” (the “Purchase Agreement”) with Taueret Laboratories, LLC and its members. Under the terms of the Purchase Agreement, the Company issued warrants exercisable for 16,500,000 shares of the Company’s common stock. The warrants were exercisable at fair market value of the Company’s common stock on the closing date. In consideration for the warrants, the Company acquired (i) approximately 1,000 degenerative disc disease related DNA samples, related family records, relevant clinical records (including approximately 600 affected probands) and 800 ancestry matched control samples, (ii) whole exome sequencing data on approximately 300 degenerative disc disease samples, over 800 local controls, and published reference populations, together with initial analysis of the markers, (iii) project plan, study paperwork, promotional study and materials used in the research study, (iv) exclusive use of a DNA biobank that has a collection of over 300,000 samples for multiple diseases that the Company may target, (v) the remaining interest in database records for over 31,900,000 individuals for use in genetics research, and (vi) other assets.

The warrants issued are for proprietary data and methods that are otherwise a trade secret in our industry. Therefore, the Company determined to classify the assets purchased as trade secrets with a 15-year life. The Company used a Black Scholes calculation to determine valuation of the warrants ~~to assign~~of $13,860,000. As the purchase ~~price~~ of ~~$15,160,386.~~the trade secrets with common stock warrants resulted in a difference between book and tax basis in the trade secrets, the carrying amount of the trade secrets was increased to $18,480,000 to reflect the deferred tax liability of $4,620,000 assumed in the transaction.

The fair value of the warrants was determined using the following inputs to the Black Scholes model:

Expected volatility was calculated from the historical volatility of the Company’s common stock.

On December 19, 2018 the Company executed a merger with the ~~members~~shareholders of Regenerative Medical Technologies, Inc. (“RMT”), a Utah corporation. The Company acquired RMT for 10,000,000 shares of common stock. RMT holds various assets including (i) models, methods and protocols for collection of birthing tissue and DNA samples, (ii) patient registry models, methods and protocols to collect clinical outcomes and electronic medical records, and (iii) designs and methodologies relating to many initiatives that are complementary to anticipated product offerings and ongoing research, and (iv) other assets.

The fair value of consideration paid was determined based on our stock price of $0.92 on ~~12/19/2018 indicated~~the date of acquisition. In addition, the Company recognized a deferred tax liability of $3,066,667 related to the differences between book and tax basis arising from the acquisition, resulting in a total purchase price of ~~$9,200,000 requiring allocation.~~$12,266,667. The Company determined that the assets acquired qualify for treatment as trade secrets within industry. The trade secrets will be amortized over an estimated useful life of 10 years.

On March 22, 2019, the Company completed the acquisition of Taueret Laboratories, LLC (“Taueret”) pursuant to the Securities Purchase Agreement (as amended, the “Purchase Agreement”), dated January 1, 2019. Pursuant to the terms of the Purchase Agreement, the Company acquired all of the outstanding units of Taueret. The Company and its affiliates plan to use Taueret’s CLIA-certified laboratory to perform diagnostic testing services.

The Purchase Agreement also specifies that the Company may, at its sole discretion, put certain patents related to the diagnosis and treatment of Preeclampsia (the “Preeclampsia IP”) back to the members of Taueret at any time prior to December 31, 2020 (the “Preeclampsia Option”). On December 31, 2020, an additional payment of $8,547,000 in ~~industry,~~cash will become due if the Company has not exercised the Preeclampsia Option. After considering the relevant accounting guidance, we determined that the Preeclampsia Option was not part of the business combination with Taueret, because the Preeclampsia Option was included in the Purchase Agreement primarily to benefit the acquirer.

The Company acquired Taueret and the Preeclampsia Option for total consideration of $931,817, net of cash acquired of $85,964. The consideration was paid as 552,995 shares of the Company’s common stock. The common stock was valued at the closing price on the date of the closing of the merger, adjusted for a 20% discount for lack of marketability related to a contractually stipulated lockup provision with a period of one year. The consideration was allocated between the business combination and the Preeclampsia Option on a relative fair value basis with $917,511 allocated to the business combination and $100,000allocated to the Preeclampsia Option. The Preeclampsia Option was recorded in intangible assets and will be amortized on a straight-line basis over the period the option is exercisable.

Total consideration transferred was allocated to tangible and intangible assets acquired and liabilities assumed based on their fair values as of the acquisition date.

Management estimated the fair value of tangible and intangible assets and liabilities in accordance with the applicable accounting guidance for business combinations and utilized the services of third-party valuation consultants. These amounts are provisional and may be adjusted during the measurement period, which expires no later than one year from the acquisition date, if new information is obtained that, if known, would have affected the amounts recognized as of the acquisition date.

The Company acquired intangible assets that consisted of an internally developed laboratory information management system which had an estimated fair value of $239,000, CLIA regulatory licenses with a fair value of $295,000, and customer relationships with a fair value of $16,000. The fair value of the software was determined using the replacement cost method. The fair value of the CLIA licenses were estimated using the excess earnings method. The estimated net cash flows were discounted using a discount rate of 22%, which is based on the estimated internal rate of return for the acquisition and represents the rate that market participants might use to value the intangible assets. The projected cash flows were based on key assumptions such as estimates of revenues and operating profits. The Company will amortize the intangible assets on a straight-line basis over their estimated useful lives of 15 years for the CLIA license and 5 years for the software and customer relationships. This amortization is deductible for income tax purposes.

Any excess of fair value of acquired net assets over the purchase price (negative goodwill) has been recognized as a gain in the period the acquisition was ~~allocated~~completed. We have reassessed whether all acquired assets and assumed liabilities have been identified and recognized and performed remeasurements to verify that the consideration paid, assets acquired, and liabilities assumed have been properly valued. The remaining excess has been recognized as ~~such.~~a gain in other income and expense in the consolidated statement of operations. The ~~Company believes~~bargain purchase gain partly resulted from the ~~trade secrets in this combination will be used over a period of 15 years, and as such will amortize over that period.~~

~~Aggregate amortization expense for the 6 months ended December 31, 2018 and December 31, 2017, was approximately and $27,586, and $0 respectively.~~

~~Estimated amortization expense for the assets consists~~allocation of the ~~following as~~total consideration between the business combination and the Preeclampsia Option. We also believe we were able to negotiate a bargain price due to the desire of ~~December 31, 2018:~~

the sellers to induce the Company to purchase the Preeclampsia Option contemporaneously with the business combination.

Year Ending June 30

2019

$
   331,032
2020

   613,333
2021

   613,333
2022

613,333
2023

613,333
Thereafter

6,415,635


		Period ended	Year ended		As of		As of
		December 31,	June 30,		September 30,		June 30,
		2018	2018		2019		2019
Finished goods	Finished goods	$ 2,166,644	$ 1,621,745	$	1,401,177	$	918,199
Work-in-process	Work-in-process	1,722,420	2,148,989		4,551,264		4,485,349
Shipping supplies		23,382	20,640
Raw materials and supplies					409,788		371,637
Total inventory on hand	Total inventory on hand	$ 3,912,445	$ 3,791,374	$	6,362,229	$	5,775,185

Depreciation expense for the three-month periods ended September 30, 2019 and 2018 was $381,886and $83,133, respectively.

~~Predictive Technology Group, Inc. through its subsidiary Predictive Therapeutics, LLC has a number~~Intangible assets primarily consist of amortizable purchased licenses, patents, and ~~license agreements categorized under “Intellectual Property”~~trade secrets. The following summarizes the amounts reported as intangible assets:

Estimated future amortization expense related to intangible assets consists of the following as of September 30, 2019:

Total amortization expense for the three months ended September 30, 2019 and ~~“Licenses Agreements.”~~2018 was $2,228,359 and $1,582,589respectively.

~~Subsequently, on~~On December 28, 2016, Predictive Therapeutics and Juneau amended and restated the license agreement dated July 9, 2015. ~~The amended license fees associated with this agreement required minimum monthly payments of $100,000 through April~~

2017. Beginning in May 2017, minimum monthly payments of $120,000 were required through August 2017, and subsequent payments of $500,000 for the next four consecutive months. The term of the license is for a term ending at the last expired claim of the licensed patents. In the event of a default, either party may terminate the agreement (i) thirty days after the party who is in material breach receives notice of the breach from the non-breaching party where (ii) the breaching party fails to cure the breach during said thirty-day period. Additionally, the Company issued additional warrants and stock for the license (see Note 7) in order to finalize a subscription agreement. This amounted to $18,159,211, in total value, issued in March of 2018.

An additional license fee of $2,000,000 is due and payable once the Company has received profits of $25,000,000 related to the intellectual property licensed under the agreement.

Upon first commercial sale of the licensed assay, the Company will issue to Juneau common shares with a market value of $2,500,000. ~~Net~~Juneau is entitled to a royalty equal to 50% of net sales, ~~once commercially available, are split evenly by~~adjusted to exclude certain costs and fees, and subject to certain minimums.

In March of 2018, the Company’s licenses with Juneau were amended to reduce the royalty rate and expand the scope of the licenses to include the entire field of endometriosis and pelvic pain. The Company issued 1,000,000 shares of common stock and 14,000,000 warrants with an exercise price of $0.80 per share as consideration.

In December of 2018 the Company and Juneau ~~after deducting~~agreed to renegotiate the ~~cost~~price paid for the license. The warrants issued initially for this license agreement were cancelled, and new warrants were issued with an increased exercise price of $0.90 per share, resulting in a decrease in the value assigned to the license agreement of $4,449,211. The replacement of the ~~lab test fees, subject~~warrants resulted in an additional deferred tax liability of $290,263, resulting in a net decrease in the carrying value of the licenses of $4,158,948. There was an associated adjustment to ~~certain minimums.~~amortization expense. The fair value of the replacement warrants were determined using the following inputs to the Black Scholes model:

In addition to the license for the commercialization of assays and related services for the prognosis and monitoring of endometriosis in the infertility market, the Company ~~has~~ entered into a license agreement with Juneau to use the assay as a companion diagnostic test asin conjunction with endometriosis therapeutics that may be developed from intellectual property owned by the ~~rationale for on-label endometriosis therapeutic patents. This license agreement was amended~~Company and ~~restated on December 28, 2016.~~

The agreement initially required a $250,000 license fee which was paid during 2013 and 2014. A subsequent milestone payment of 250,000 shares of Company stock was due to Juneau on October 19, 2016 and was previously issued.Juneau. Once FDA approval is granted on any companion diagnostic test, a final milestone payment of $250,000 is due.

The agreement requires a 2% royalty ~~for~~to be paid to Juneau on the sale of patented therapeutic products specifically covered by the agreement.

The Company ~~has elected to capitalize the periodic payments when paid, through the development stage, and~~ amortizes the licenses ~~using~~over the ~~expected~~ life of the underlying patents.

In December of 2018 the Company and Juneau agreed that, due to extenuating circumstances, they renegotiated the price paid for the license. The warrants issued initially for this license agreement were cancelled, and a new round of warrants was issued with a higher strike price. Based on the issue date in December, and using the Company's market price of stock for valuation, there was a decrease in the value assigned to the license agreement of approximately $3.5M. There was an associated adjustment to amortization expense.

Amortization expense for 6 months ended December 31, 2018 and December 31, 2017, was approximately and $986,749 and $65,966 respectively. We did not record any impairment charges during the 6 months ended December 31, 2018 and December 31, 2017.

~~Estimated amortization expense for the developed technology consists of the following as of December 31, 2018:~~

Patents were acquired by Predictive Therapeutics, LLC on September 22, 2015 by issuing 541,325 Class A Units of Predictive Therapeutics and have no contingencies or royalty obligations. These patents were recorded on Predictive Therapeutics, LLC’s books at a purchase price of $9,750,000.

Amortization expense for the 6 months ended December 31, 2018 and December 31, 2017 was approximately $382,348 and $158,723, respectively. We did not record any impairment charges during these periods.

~~Estimated amortization expense for the developed technology consists of the following as of December 31, 2018:~~

ASC Topic 810 requires the primary beneficiary of a Variable Interest Entity (“VIE”) to consolidate the entity and also requires majority and significant variable interest investors to provide certain disclosures. A VIE is an entity in which the equity investors do not have a controlling interest or in which the equity investment at risk is insufficient to finance the entity’s activities without receiving financial support from the other parties.

In evaluating whether the Company has the power to direct the activities of a VIE that most significantly impact its economic performance, we consider the purpose for which the VIE was created, the importance of each of the activities in which it is engaged and our decision-making role, if any, in those activities that significantly determine the entity’s economic performance as compared to other economic interest holders. This evaluation requires consideration of all facts and circumstances relevant to decision-making that affects the entity’s future performance and the exercise of professional judgment in deciding which decision-making rights are most important.

In determining whether the Company has the right to receive benefits or the obligation to absorb losses that could potentially be significant to the VIE, we evaluate all of our economic interests in the entity, regardless of form (debt, equity, management and servicing fees, and other contractual arrangements). This evaluation considers all relevant factors of the entity’s design, including: the entity’s capital structure, contractual rights to earnings (losses), subordination of our interests relative to those of other investors, contingent payments, as well as other contractual arrangements that have the potential to be economically significant. The evaluation of each of these factors in reaching a conclusion about the potential significance of our economic interests is a matter that requires the exercise of professional judgment.

The ~~Company has license agreements with Juneau as described in note 5. The Company owns approximately 49.6% ownership of Juneau. This ownership percentage includes the interest of approximately 10%~~Company’s investment in Juneau ~~units through its wholly owned subsidiary, LifeCode.~~

~~On August 3, 2017,~~is accounted for under the ~~Company entered into an unsecured loan agreement where it lent Juneau~~equity method. The following table summarizes the principal amount of $300,000. The loan is convertible into Class A Units of Juneau at the rate of $1.00 per unit. On August 8, 2017, an additional loan was made to Juneau to renegotiate a debt Juneau owed to a third party. On December 31, 2017, principal and accrued interest in the aggregate amount of $3,685,308 was owed on the notes referenced above. Effective December 31, 2017, the Company exercised its right to convert the amounts owed on the notes into Class A Units and Juneau issued 3,685,308 Class A Units to the Company upon conversion of all amounts owed on said notes.investment:

In December 2017, the Company and Juneau reached verbal agreement on ~~many~~a stock subscription arrangement. The Company agreed to purchase 15,681,818 Class A Units of ~~the terms described below.~~Juneau at a price of $1.10 per unit. In early 2018, the terms were finalized and memorialized in a subscription agreement executed by the Company and Juneau. ~~The~~Under the terms of the agreement (as amended), the subscription ~~agreement was subsequently amended and restated on two occasions. The latest amendment occurred on August 22, 2018. The subscription agreement, as amended, provides:~~

~~For a subscription in the total amount of 15,681,818 Class A Units at a price of $1.10 per unit.~~

~~The third tranche is $15,000,000 and will~~ be paid in ~~monthly~~ installments ~~totaling $4,409,390 in fiscal 2019, installments of $7,200,000 in fiscal 2020 and installments of $3,390,610 in fiscal~~through September 30, 2021.

The Company has the option to cancel the subscription. If this option is exercised, any units of Juneau issued to the Company but not paid will be cancelled. The agreement includes certain restrictions on the use of funds provided under the subscription agreement and grants the Company the right to ~~stop funding at any time.~~

Ifappoint a minority of Juneau’s Board of Managers. Should the Company ~~stops funding the investment, any securities that are~~elect not ~~paid for will be returned~~ to ~~Juneau for cancellation.~~

~~There is a use of proceeds associated with the funding as well as oversight of operating budgets and expenditures.~~

~~The Juneau board was expanded by three members and the vacancies were filled by nominees of the Company.~~

The Company’s licenses with Juneau were amended to reduce the royalty rate and expand the scope of the licenses to include the entire field of endometriosis and pelvic pain in consideration for the issuance of 1,000,000 shares of the Company’s common stock and warrants exercisable for 14 million shares of common stock at $.80 per share.

~~The Company granted Juneau piggy-back registration rights with respect to the common stock issued to Juneau and issuable to Juneau upon exercise of the warrant.~~

~~The subscription contemplates the possible acquisition of Juneau by the Company on terms to be subsequently agreed.~~

~~If the Company does not~~ fund the entire subscription, ~~then~~Juneau’s obligations to the ~~ongoing obligations of Juneau~~Company that doare not ~~relate~~related to the license agreements (see Note 6) will terminate.

On ~~October 8, 2018~~September 25, 2019, the Company and Juneau ~~agreed that,~~executed an amendment to the subscription agreement. The amendment changed the schedule of payments due under the subscription agreement to ~~extenuating circumstances, it was determined to decrease~~purchase units of Juneau. In addition, a receivable due from Juneau in the amount of ~~units subscribed~~$184,443 was applied to the subscription payable balance. The schedule of payments as of September 30, 2019 under the amended agreement is as follows:

Summarized financial information for the Company’s equity method investee as of and for its fiscal year end is presented in the aforementioned amendment. The Company agreed to subscribe to 14,000,000 units at a purchase price of $1.10 per unit, a decrease in the subscription of 1,681,818 units. As mentioned in Note 5, the warrants associated with this agreement for the licenses were negotiated separately at a later date.following tables:

Juneau regularly seeks, and has received, investments from private investors and holds debt from other creditors. Juneau’s management and a majority of the Juneau board of managers are independent of the Company. The Company owns less than 50% of the outstanding equity of Juneau. Accordingly, Management has concluded that the Company is not the primary beneficiary of Juneau and accordingly, does not hold a significant variable interest in Juneau sufficient to require consolidation.

~~The Company continues to reevaluate this business relationship to determine whether it may be subject to the VIE model.~~

From June to September 2019, the Company issued unsecured promissory notes to an accredited investor in the total amount of $2,900,000. The promissory notes bear 12% simple interest and mature on the two year anniversary of each note. The notes may be repaid at any time.

In September 2019, the Company and the accredited investor entered into a Revolving Loan Agreement whereby the accredited investor agreed to lend the Company up to an additional $3,000,000. Amounts drawn under the revolving loan will be charged interest at a rate of 12% and may be repaid at any time. There was no balance drawn under the Revolving Loan Agreement as of September 30, 2019. All amounts outstanding under the revolving loan are due upon the expiration of the revolving loan facility on September 30, 2021.

In September 2019, the Company issued unsecured promissory notes to a second accredited investor in the amount of $3,600,000. The promissory notes bear 12% simple interest and mature on the two year anniversary of the notes. The notes may be repaid at any time.

Promissory notes with a face value of $400,000 mature during the fiscal year ended June 30, 2021. Promissory notes with a face value of $6,100,000 mature during the fiscal year ended June 30, 2022.

The fair value of the Company’s outstanding debt obligations as of September 30, 2019 was $6,500,000 which was determined based on a discounted cash flow model using an estimated market rate of interest of 12%, which is classified as Level 2 within the fair value hierarchy.

~~The components of~~In order to determine the Company’s quarterly provision for income taxes, ~~for~~ the ~~quarter ended December 31, 2018~~Company used an estimated annual effective tax rate that is based on expected annual income and applicable federal and state tax rates. The Tax Cuts and Jobs Act reduced the federal corporate tax rate to 21% in the fiscal year ended June 30, ~~2018, consisted~~2019. Section 15 of the ~~following:~~

~~At December 31, 2018 and~~Internal Revenue Code Stipulates that the Company’s fiscal year ended June 30, ~~2018,~~2019, had a blended corporate tax rate of 28%, which is based on the ~~Company had net operating loss carry-forwards~~applicable tax rates before and after the Tax Act and the number of ~~approximately $157,412 and $718,557, respectively, which will expire~~days in the year. For the fiscal years ~~2035-2037.~~ending after June 30, 2019, the Company’s federal corporate tax rate is 21%. Certain significant or unusual items are separately recognized in the quarter during which they occur and can be a source of variability in the effective tax rate from quarter to quarter.

~~We are subject~~The Company recognized income tax benefits of $5,208,418 and $612,452 for the three-month periods ended September 30, 2019 and 2018, respectively. The Company’s recognized effective tax rate differs from the U.S. federal statutory rate for the three months ended September 30, 2019 primarily due to state income taxes, inshare based compensation and excess tax benefits arising from the ~~United States. Significant judgment is required in determining our provision~~exercise of commons stock warrants during the period. The Company’s recognized effective tax rate differs from the U.S. federal statutory rate for the three months ended September 30, 2018 primarily due to state income taxes and recording the related assets and liabilities. In the ordinary course of our business, there are many transactions and calculations where the ultimate tax determination is uncertain. In our opinion, we have made adequate provisions for income taxes for all years subject to audit.

Although we believe our estimates are reasonable, the final outcomes of these matters may be different from those which we have reflected in our historical income tax provisions and accruals. Such differences could have a material effect on our income tax provision and operating results in the period in which we make such determination.share based compensation.

~~As of December 31, 2018, and June 30, 2018, the~~The Company ~~had 248,846,403 and 224,496,403 shares~~has issued ~~and outstanding or pending issuance under contractual obligation.~~

~~The company issued 10,000,000 shares of its~~various warrants exercisable for our common stock ~~on December 19, 2018~~outside of the 2015 Stock Option Plan (see Note 13). The warrants were issued to ~~acquire Regenerative Medical Technologies, Inc., see note 2.~~ raise capital, as compensation for acquisitions of intellectual property, and as compensation for services.

~~The company issued 15,500,000 shares of its common stock on July 22, 2018 to acquire Inception Dx Laboratories, see note 2.~~

~~On August 7, 2018 the Company issued 50,000 shares of common stock for services related to the HCT/P business.~~

~~On August 30, 2018,~~In September 2019, the Company entered into an agreement ~~captioned Consulting Agreement~~ with ~~Avira Financial, LLC whereby Avira will be performing various business~~a consultant for research and development ~~marketing and consulting services for the Company.~~services. In consideration for these services, the Company granted ~~warrants~~options to ~~Avira~~the consultant exercisable for ~~5,250,000~~1,250,000 shares of the Company’s common stock with a strike price equal to the closing price of the Company’s common stock on the date of grant. ~~Warrants~~Options to acquire ~~250,000~~625,000 shares vested upon ~~issuance~~issuance. Of the remaining options, 375,000 vest on March 1, 2020 and ~~the remainder of the warrants~~225,000 vest ~~over a three year period, subject to accelerated vesting upon the occurrence of certain events.~~on September 1, 2020. The warrants expire ~~on the earlier of (i) the five year anniversary of~~ten years from the date of ~~issuance or (ii) the date the Consulting Agreement is terminated.~~issuance.

On July 16, 2019 and August ~~30, 2018,~~1, 2019, a total of 11,000,000 common stock warrants issued to FlagshipSailsRx, LLC, our former sales and marketing contractor, were exercised pursuant to a cashless exercise feature. The cashless exercise resulted in the ~~Company authorized the grant~~issuance of ~~stock options exercisable for 15,840,000~~9,172,157 shares of common stock ~~to employees. All options are exercisable at~~and the ~~closing price~~cancellation of 1,827,843 warrants as consideration for the ~~Company’s common stock on the date of grant. As of December 31, 2018, 1,990,000 options had been granted from this authorization.~~exercise price.

The following is a summary of warrant activity from ~~July 2016~~June 30, 2019 through ~~December 2018:~~September 30, 2019:

Weighted Average

Number of

Weighted Average

Remaining

Warrants

Exercise Price

Contractual Life
Warrants:

Outstanding June 30, 2018
    42,268,520

$0.50

    4.1

Granted

    35,750,000

                              0.91

  4.8

Exercised

      -

       -

  -

Forfeited/Cancelled
  (14,000,000)

                              0.80

  4.5

Outstanding December 31, 2018
    64,018,520

                              0.73

  4.4

The Company recognizes expense for warrants issued for services that are subject to graded vesting on a straight-line basis. As Share based compensation expense related to warrants issued for services for the three months ended September 30, 2019 and 2018 was $1,890,213 and $586,444, respectively.

As of September 30, 2019, unrecognized compensation cost related to warrants issued for services was $5,371,927 and is expected to be recognized over a weighted average period of 1.51 years.

The computation of weighted average shares outstanding and the basic and diluted earnings per common share for the following periods consisted of the following:

AsPotentially dilutive securities that would be excluded from the ~~Company is in a loss position, any~~ calculation ~~with dilutive effects would reduce the~~of diluted net loss per common share ~~amount, and,~~because to include them would be anti-dilutive are as ~~such, the Company will not perform the calculation.~~follows:

In 2015, a Stock Option Plan was adopted to advance the interests of the Company and its shareholders by helping the Company obtain and retain the services of employees, officers, consultants, independent contractors and directors, upon whose judgment, initiative and efforts the Company is substantially dependent, and to provide those persons with further incentives to advance the interests of the Company.

Eligible participants include employees, officers, certain consultants, or directors of the Company or its subsidiaries.

The number of shares, terms, and vesting periods are determined by the Company’s Board ~~may designate any Option granted hereunder either as~~of Directors or a committee thereof on an ~~Incentive Stock Option (ISO) or as a Non-statutory Stock Option (NSO).~~award-by-award basis. Awards provided under the Plan generally vest in three equal annual installments. The ~~Board may grant ISOs only to persons who are employees~~maximum term of options issued under the ~~Company and/or its subsidiaries.~~

plan is 10 years from the date of grant. The aggregate number of shares of Option Stock that may be issued pursuant to the exercise of Options granted under this Plan will not exceed fifteen percent (15%) of the total outstanding shares of the Company's common stock. The Company settles exercises of stock ~~par value $.001 per share.~~option awards by issuing new shares. Forfeitures are recognized as they occur.

A summary of option activity is as follows for the ~~fiscal period~~three months ended ~~December 31,~~September 30, 2019:

Share based compensation expense related to options issued under the 2015 Plan for the three months ended September 30, 2019 and 2018 was $3,104,387 and ~~the fiscal year ended June 30, 2018:~~$380,742, respectively.

The ~~following table summarizes information about~~Company recognizes expense for awards subject to graded vesting on a straight-line basis. As of September 30, 2019, there was $28,671,765of total unrecognized share-based compensation expense related to stock options ~~outstanding at December 31, 2018:~~issued under the 2015 Stock Option Plan that will be recognized over a weighted-average period of 2.64 years.

The Company has commitments under license agreements which are described in ~~note 4.~~Note 5.

Operating leases primarily relate to the Company’s leases of laboratory and office space expiring in December 2020. The Company also has short term “month to month” leases of office space.

In March 2019, the Company entered into finance leases of laboratory equipment. The validation process for the leased equipment was completed and payments commenced in October 2019. The lease ~~office~~expires in September 2022, at which time the Company has the option to purchase the leased equipment for one dollar.

The table below presents the future minimum lease payments under operating and ~~research space under month-to-month leasing arrangements. Therefore, we do not believe we have any material leasing commitments.~~finance leases:

Lease expense under operating leases was ~~$159,079 and $116,912~~$51,777for the three months ended September 30, 2018.

In March 2019, in connection with the lease of laboratory equipment described above, the Company agreed to purchase a fixed quantity of the consumables used by the equipment for a total of $1,386,710. The Company is obligated to pay for the ~~6 months ended December 31, 2018 and~~consumables in twelve fixed monthly installments beginning in October 2019. At September 30, 2019, the Company had taken delivery of consumables worth $500,502. The amount due for goods that have been delivered is included in accrued liabilities on the consolidated balance sheet. Remaining payments due under the purchase commitment total $1,040,233 during the year ~~ended~~ending June 30, 2020 and $346,477 during the year ending June 30, 2021.

On or about July 13, 2018, ~~respectively.~~ RTJ, LLC and two of its principals filed a lawsuit against Predictive Therapeutics LLC, Predictive Biotech, Inc., both subsidiaries of Predictive Technology Group, Inc., and Jack Turner, Jr., an employee of Predictive Biotech, Inc. The plaintiffs had acted in a distributor capacity. The relationship was terminated. Plaintiffs are alleging breach of contract, promissory estoppel, unjust enrichment, fraud, breach of fiduciary duty, defamation, false light, and tortious interference. Based on the information available to us, we do not believe any of the RTJ proceedings will have a material adverse effect on our business, results of operations, financial position or liquidity. Further, we deny the allegations in the complaint, have not discovered any evidence of wrongdoing with respect to the allegations and will vigorously defend against these allegations.

On or about May 1, 2019, Surgenex, LLC and one of its principals filed a lawsuit against Predictive Therapeutics LLC, Predictive Biotech, Inc., both subsidiaries of Predictive Technology Group, Inc., and Doug Schmid, an employee of Predictive Biotech, Inc. In 2014 Surgenex contracted with Utah Cord Bank, Inc., a former employer of Doug Schmid, to assist Surgenex in the doing work relating to allograft tissue. Schmid was later hired by Predictive Biotech, Inc. In connection with Schmid’s employment with Predictive Biotech, Surgenex has filed a lawsuit alleging unjust enrichment, conspiracy, conversion, tortious interference with contractual and business relations, violations of trade secrets act, and other claims. Based on the information available to us, we do not believe the Surgenex proceedings will have a material adverse effect on our business, results of operations, financial position or liquidity. Further, we deny the allegations in the complaint, have not discovered any evidence of wrongdoing with respect to the allegations and will vigorously defend against these allegations.

On or about July 12, 2019, Predictive Technology Group, Inc. and Predictive Therapeutics, LLC, a subsidiary of Predictive Technology Group, Inc. filed a lawsuit against Michael Schramm. Schramm had previously acted as our patent agent. While acting as our patent agent, Schramm entered into an agreement to sell us certain patents and patent applications in consideration for equity securities. Schramm represented that he owned all right, title and interest in and to the intellectual property. We were subsequently advised by the patent counsel who replaced Schramm that Schramm’s representation was false. The Company raised these concerns with Schramm, who did not provide satisfactory evidence addressing the concerns of our current patent counsel. We sued Schramm for breach of contract, conversion and on other legal theories and are seeking, among other things, rescission of the purchase and sale transaction. Schramm filed a counterclaim against us and Bradley C. Robinson, our Chief Executive Officer and Transfer Online, Inc., our transfer agent. Schramm is alleging he did not make any false representations. He is alleging, among other things, that various parties involved in the transaction committed breach of contract, conversion, violations of Nevada state law for failure to transfer securities, breach of fiduciary duty, tortious interference, and civil conspiracy. Based on the information available to us, we do not believe the Schramm proceedings will have a material adverse effect on our business, results of operations, financial position or liquidity. Further, we deny the allegations in the counterclaim, have not discovered any evidence of wrongdoing with respect to the allegations in the counterclaim and will vigorously prosecute our claims against Schramm.

As of September 30, 2019, we did not record a liability related to these matters as it was determined that an unfavorable resolution is either not currently probable or that an amount or relevant range is not reasonably estimable, or both. However, litigation is inherently unpredictable and it is possible that losses may occur. Any unfavorable resolution of any of these matters could materially affect our consolidated financial position, cash flows, or results of operations. All legal costs associated with litigation are expensed as incurred.

Management has evaluated subsequent events through ~~February~~November 14, 2019, the date on which the financial statements were available to be issued.

On October 10, 2019, substantially all of the Company’s operating leases of office and laboratory space were amended to extend the expiration dates of the leases to September 30, 2021. The Company also leased an additional 6,711 square feet of office and storage space that is expected to commence on November 1, 2019 and expire on September 30, 2021. Minimum payments due under the amended lease agreements are presented in the table below.

In October and November 2019, the Company borrowed $220,000 pursuant to the Revolving Loan Agreement (see Note 9).

In October and November 2019, the Company issued additional unsecured promissory notes to accredited investors in the amount of $2,050,000. The promissory notes bear 12% simple interest and mature on the two year anniversary of the notes. The Notes may be repaid at any time.

Item 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following discussion and analysis should be read in conjunction with the audited Consolidated Financial Statements and accompanying notes thereto included in the Company’s Annual Report on Form 10-K as of and for the fiscal year ended June 30, 2019. Unless otherwise noted, all of the financial information in this Report is consolidated financial information for the Company.

Predictive Technology Group, Inc., a Salt Lake City, UT life sciences company, is a leader in the use of data analytics for disease identification and subsequent therapeutic intervention through unique novel gene-based diagnostics, biotechnology treatments and companion therapeutics. Through its’ wholly-owned subsidiaries, Predictive Biotech, Predictive Laboratories, and Predictive Therapeutics, the company focuses on clinical categories such as: Endometriosis, Degenerative Disc Disease and Human Cell and Tissue Products (“HCT/P”). In addition to Predictive Biotech’s efforts to advance regenerative medicine, Predictive Laboratories is committed to assisting women in overcoming the devastating consequences of endometriosis via appropriate early-stage diagnosis and subsequent treatment. During the three months ended September 30, 2019 we reported total revenues of $8,259,257 and net loss of $7,864,607 resulting in a $0.03 loss per share. During the three months ended September 30, 2018 we reported total revenues of $8,063,802 and net loss of $2,004,382 resulting in a $0.01 loss per share.

Our business units have been aligned with how the Chief Operating Decision Maker reviews performance and makes decisions in managing the Company. The business units have been aggregated into two reportable segments: Human Cell and Tissues Products (HCT/Ps) and diagnostics and therapeutics. Predictive Biotech’s HCT/Ps are processed in our FDA registered lab. Our minimally manipulated tissue products are prepared utilizing proprietary extraction methods that reduce the loss of important scaffolding, growth factor and general cytokines and are intended for homologous use. Predictive Laboratory’s diagnostics and therapeutics uses data analytics for disease identification and subsequent therapeutic intervention through unique novel gene-based diagnostics, biotechnology treatments and companion therapeutics.

On October 16, 2019, Kenneth Ward, M.D., Chief executive officer of Juneau Biosciences; Rakesh Chettier M.S., director of biostatistics of Predictive Laboratories; and Hans Albertsen, Ph.D., chief scientific officer of Juneau Biosciences, received the 2019 Endometriosis Special Interest Group (EndoSIG) Prize Paper in the “Best in Clinical/Population Science” category at the American Society for Reproductive Medicine (ASRM) 2019 Scientific Congress & Expo in Philadelphia. The scientific breakthroughs reported in these award-winning discoveries provide us with insights into new non-hormonal therapies. The team’s research is based on the genetic markers of endometriosis discovered by Juneau and Predictive scientists in recent years, and uncovers molecular pathways involved in the pathogenesis of endometriosis-induced lesions in women at risk for the disease. Dr. Ward, a board-certified physician in obstetrics and gynecology, perinatology, clinical genetics and molecular genetics, presented two scientific papers at the Annual ASRM meeting: a poster entitled, “Endometriosis risk allele in WNT4 may interact with rare mutations in HDAC2 gene” and an oral abstract entitled, “Somatic cancer driver mutations in endometriosis lesions contribute to secondary cancer risk.”

On October 14, 2019, we launched the full U.S. market availability of ARTguide™ to evaluate the risk for endometriosis and other genetic causes of infertility in women. Endometriosis can be a debilitating disease for many women as it can cause severe pelvic pain, inflammation, adhesions to the fallopian tubes and uterus, and often, infertility. ARTguide can predict a patient’s risk of endometriosis early on so that women have a better understanding of their barriers to conception, and therefore their physician can create a more personalized infertility treatment plan. ARTguide is appropriate for all women considering use of ART to overcome difficulty conceiving or carrying a pregnancy.

On October 15, 2019, we entered into an agreement with CLSA Capital Markets Limited, a CITIC Securities Company, to provide introductions to potential strategic partners and regulatory guidance to support the launch of our proprietary genetic-based products into China’s (PRC) rapidly growing markets for women’s health and fertility. We anticipate introducing ARTguide™ among other fertility diagnostics to the Chinese market. In 2016 the National Health and Family Planning Commission of the PRC reported that 40 million Chinese couples were experiencing fertility issues. Similarly, the American Society for Reproductive Medicine (ASRM) reported in 2017 that an estimated 25% of Chinese women of childbearing age struggled with infertility issues. In 2018 the European Society of Human Reproduction and Embryology estimated that approximately 800,000 assisted reproductive technology (ART) cycles, such as in vitro fertilization (IVF), were being performed in China annually. Chinese women are driving the fertility markets both in China and medical tourism industries overseas. The global IVF market is expected to grow at an annual rate of 10.2% and to reach $36.2 billion by 2026. The U.S. Center for Disease Control reported that of the patients who sought fertility care in 2017, 284,385 ART cycles were performed resulting in 78,052 live born infants with ART accounting for 1.7% of all infants born in the U.S. annually.

In October 2019, we launched FertilityDX™, a comprehensive genetic testing service that identifies barriers to healthy pregnancy and birth, allowing doctors to tailor fertility treatments. The objective of FertilityDX™ is to provide couples considering assisted reproductive technologies (ART) with an understanding of the genetic and medical obstacles that may be affecting their fertility and provide doctors with genetically relevant information to help their patients have a healthy baby. FertilityDX™ provides information by evaluating three key areas: contributors to (or causes of) infertility, risks of pregnancy complications, and risks for serious genetic conditions in offspring. The test will be launched in select fertility clinics across the United States.

In August 2019, we collected over 2,500 DNA samples along with comprehensive medical records since acquiring our CLIA operations in March 2019. We broadened our research initiatives by acquiring new sample collections in chronic pain, pregnancy complications, autism, and both female and male infertility. Personalized medicine and the development of new therapeutics are expected to play a critical role in human health. Access to high-quality biospecimens from our biobank will be important for furthering our biomedical and translational research, and ultimately its development of personalized molecular diagnostics and clinical therapies. Current sample collection efforts are designed to strategically augment our existing library of over 300,000 DNA samples that we believe will produce valuable insights into future research and development projects.

On August 9, 2019, we launched PGxPLUS+™, a pharmacogenomic test panel being marketed to pain clinics for patients with chronic pain. PGxPLUS+™ evaluates genetic factors that play a major role in an individual’s response to medications. In parallel, we reached a milestone of enrolling 350 patients with chronic pain into an Investigational Review Board-approved clinical study aimed at providing additional insight into the mechanisms of chronic pain and responses to pain therapies. We are approaching chronic pain and the opioid crisis on multiple fronts. We have developed and in-licensed important prognostic DNA tests and novel treatments for osteoarthritis, lumbar disc disease, endometriosis, and other conditions causing chronic pain. In 2016, the Institute of Medicine estimated that up to one-third of the U.S. population lives with ongoing pain. Chronic pain is often triggered by one of these common conditions, and over time can develop into a chronic pain syndrome, which is a disease itself. The PGxPLUS+™ test evaluates 112 genetic variants across 38 genes that affect the metabolism of over 150 common medications, including pain medications. More than 90% of the population has one or more gene variants that affect the efficacy or safety of prescription drugs. Variation in drug metabolism is largely determined by an individual’s genetic profile, blood levels of a drug may vary up to 1,000-fold in similar patients taking identical doses of the same drug. Pharmacogenomics is the study of the role of our genome in drug responses.

On August 6, 2019, we appointed E. Robert Wassman, M.D. as Co-Laboratory Director of Predictive Laboratories. Dr. Wassman has been pioneering the introduction of genetic testing and personalized medicine for over 35 years. Throughout his career, he has focused on the translation and delivery of cutting-edge diagnostic technology to clinical services in the areas of reproductive medicine, rare cell/non-invasive diagnostics, and next-generation DNA sequencing. He brings expertise in reproductive genetics, cancer and companion diagnostics, and neurodevelopmental disabilities including autism. Dr. Wassman is a graduate of Yale University and Albany Medical College and he is Board Certified in Pediatrics and Medical Genetics.

On July 29, 2019, we entered into an agreement with the Preeclampsia Foundation to expand the study of genetic factors associated with preeclampsia. The study will advance the Preeclampsia Foundation’s database of collected preeclampsia medical information and will be utilized by Predictive Laboratories to develop a proprietary test for the early detection of women at risk for preeclampsia. Preeclampsia affects 5-8%, or approximately 300,000, pregnancies every year in the United States, sometimes causing severe adverse maternal and fetal outcomes, including organ failure, massive blood loss, permanent disability or even death. Globally, preeclampsia is a leading cause of pregnancy complications, preterm births and related disabilities. The deaths of approximately 76,000 mothers and 500,000 babies annually are attributable to preeclampsia. Healthcare providers, even in medically advanced countries, are hampered by imprecise diagnostic tools. The Preeclampsia Registry, a key program of the Preeclampsia Foundation’s research mission, is a patient registry that collects paired medical information and biological samples. Using established Institutional Review Board-approved protocols, we and the Preeclampsia Foundation will request samples from more than 2,500 existing and new registry participants for sequencing analysis. We have been granted a period of exclusive access to research data resulting from these new samples enrolled in the Preeclampsia Registry, after which samples and sequencing data will be available to other investigators for future research. This collaboration complements and extends our ongoing preeclampsia research initiatives. Over 20,000 DNA samples from our biorepository relating to preeclampsia and associated obstetric syndromes are being analyzed.

Results of Operations for the Three months Ended September 30, 2019 and 2018

The increase in revenue for the three months ended September 30, 2019 is primarily due to growth in sales volume of HCT/P products compared to the three months ended September 30, 2018.

Revenues in our diagnostics and therapeutics segment were not material for the periods shown.

Cost of goods sold for the three months ended September 30, 2019 increased to $7.2 million from $3.0 million for the three months ended September 30, 2018. The increase is primarily due to $1.8 million in scrap expense and $1.2 million in increased inventory reserves related to HCT/P product that did not pass quality control, or that is not expected to pass quality control. The increase in quality control failure rates above normal levels was primarily due to a component supplied by a specific vendor. The remaining increase is due to increased share-based compensation cost of $0.4 million, increased personnel costs of $0.5 million, and increased facility costs of $0.2 million.

Cost of sales in our diagnostics and therapeutics segment was not material for the periods shown.

Selling and marketing expenses for the three months ended September 30, 2019 increased to $3.2 million from $2.4 million for the three months ended September 30, 2018. The increase is due to increases in personnel costs of $0.8 million and share-based compensation expense of $0.3 million, offset by a decrease in commissions expense of $0.5 million.

Substantially all of our selling and marketing expenses were incurred in the HCT/P segment.

General and administrative expenses for the three months ended September 30, 2019 increased to $6.4 million from $2.7 million for the three months ended September 30, 2018. Approximately $2.3 million of the increase is due to increased share-based compensation expenses. Personnel costs increased by $0.6 million. Legal, consulting, and investor relations increased by $0.9 million, primarily due to filing of the Company’s registration statement on Form 10 and subsequently increased compliance costs.

Research and development expenses for the three months ended September 30, 2019 increased to $2.3 million from $0.6 million for the three months ended September 30, 2018. The increase was primarily driven by an increase of $1.0 million in share based compensation expense, with the remainder primarily due to increased materials usage.

Depreciation and amortization expense increased compared to the same period in the prior fiscal year primarily due to an increase in our intangible asset portfolio arising from the business combinations and asset acquisitions described in Note 3 to the accompanying consolidated financial statements. Capital expenditures to acquire property, plant, and equipment in connection with our laboratory expansion also contributed to the increase.

Other loss for the three months ended September 30, 2019 decreased to $0.2 million from $0.3 million for the three months ended September 30, 2018. The decrease was primarily driven by decreased loss on equity method investment of $0.2 million, offset by an increase in interest expense of $0.1 million.

We believe that our existing capital resources, including borrowings under our revolving loan agreement, and the cash to be generated from future sales will be sufficient to meet our projected operating requirements for the foreseeable future. However, our available capital resources may be consumed more rapidly than currently expected and we may need or want to raise additional financing. We may not be able to secure such financing in a timely manner or on favorable terms, if at all. Without additional funds, we may be forced to delay, scale back or eliminate some of our sales and marketing efforts, research and development activities, or other operations and potentially delay development of our diagnostic tests or other products in an effort to provide sufficient funds to continue our operations. If any of these events occurs, our ability to achieve our development and commercialization goals would be adversely affected.

Our capital deployment strategy focuses on use of resources in two key areas: research and development, and the commercialization of our HCT/Ps and diagnostic products. We believe that research and development provides the best return on invested capital. We also allocate capital for acquisitions that support our business strategy.

The increase in cash used in operating activities for the three months ended September 30, 2019 compared to the three months ended September 30, 2018 was primarily due to a $5.9 million increase in net loss.

The decrease in cash used in investing activities for the three months ended September 30, 2019 compared to the three months ended September 30, 2018 was primarily due to a decrease in cash paid on our subscription payable of $0.9 million and a decrease in capital expenditures of $0.2 million. These changes were partly offset by a decrease of $0.8 million in cash received from the acquisition of InceptionDX, LLC, which was completed during the three months ended September 30, 2018.

The increase in cash provided by financing activities for the three months ended September 30, 2019 compared to the three months ended September 30, 2018 was primarily due to the receipt of $6.1 million in proceeds from the issuance of promissory notes.

We do not believe that inflation has had a material impact on our business, sales, or operating results during the periods presented.

We currently do not have any off-balance sheet arrangements or financing activities with special-purpose entities.

Critical accounting policies are those policies which are both important to the presentation of a company’s financial condition and results and require management’s most difficult, subjective or complex judgments, often as a result of the need to make estimates about the effect of matters that are inherently uncertain. There have been no recent significant changes to our accounting policies during the three months ended September 30, 2019, other than the adoption of ASU 2016-02 discussed in detail in Footnote 1 to the accompanying unaudited condensed consolidated financial statements. For a further discussion of our critical accounting policies, see our Annual Report on Form 10-K for the fiscal year ended June 30, 2019.

The Securities and Exchange Commission encourages companies to disclose forward-looking information so that investors can better understand a company’s future prospects and make informed investment decisions. This ~~report~~Quarterly Report on Form 10-Q ~~includes~~contains such “forward-looking statements” within the meaning of ~~Section 27A of~~ the Private Securities Litigation Reform Act of ~~1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”).~~ 1995.

All statements in this report, other than statements of historical fact, are forward-looking statements for purposes of these provisions, including any projections of earnings, revenues or other financial items, any statements of the plans and objectives of management for future operations, any statements concerning proposed new products or services, any statements regarding future economic conditions or performance, and any statements of assumptions underlying any of the foregoing. All forward-looking statements included in this report are made as of the date hereof and are based on information available to us as of such date. We assume no obligation to update any forward-looking statement. In some cases, forward-looking statements can be identified by the use of terminology such as “may,” “will,” “expects,” “plans,” “anticipates,” “intends,” “believes,” “estimates,” “potential,” or “continue,” or the negative thereof or other comparable terminology. Although we believe that the expectations reflected in the forward-looking statements contained herein are based upon reasonable assumptions at the time made, there can be no assurance that any such expectations or any forward-looking statement will prove to be correct. Our actual results will vary, and may vary materially, from those projected or assumed in the forward-looking statements. Future financial condition and results of operations, as well as any forward-looking statements, are subject to inherent risks and uncertainties, many of which we cannot predict with accuracy and some of which we might not anticipate, including, without limitation, product recalls and product liability claims; infringement of our technology or assertion that our technology infringes the rights of other parties; termination of supplier relationships, or failure of suppliers to perform; inability to successfully manage growth; delays in obtaining regulatory approvals or the failure to maintain such approvals; concentration of our revenue among a few customers, products or procedures; development of new products and technology that could render our products obsolete; market acceptance of new products; introduction of products in a timely fashion; price and product competition, availability of labor and materials, cost increases, and fluctuations in and obsolescence of inventory; volatility of the market price of our common stock; foreign currency fluctuations; changes in key personnel; work stoppage or transportation risks; integration of business acquisitions; and other factors referred to in our reports filed with the SEC, including our Registration Statement on Form 10. All subsequent forward-looking statements attributable to us or persons acting on our behalf are expressly qualified in their entirety by these cautionary statements. Additional factors that may have a direct bearing on our operating results are discussed in Item 1A “Risk Factors” in our Registration Statement on Form 10.

~~We develop~~ In light of these assumptions, risks and ~~commercialize discoveries~~uncertainties, the results and ~~technologies involved in novel molecular diagnostic, regenerative medicine products and HCT/Ps. We use this information as the cornerstone~~events discussed in the ~~development of new diagnostics that assess a person’s risk of disease and pharmaceutical therapeutics and HCT/Ps designed~~forward-looking statements contained in this Quarterly Report or in any document incorporated by reference might not occur. Stockholders are cautioned not to ~~effectively prevent and treat~~place undue reliance on the ~~disease.~~

In accordance with ASC 280-10-50, Segment Reporting, operating segments are identified as components of an enterprise about which separate discrete financial information is available for evaluation by the chief operating decision-maker in making decisions regarding resource allocation and assessing performance. We operate in two reportable segments: HCT/Ps and diagnostics and therapeutics. Our HCT/Ps are processed in our FDA registered lab. Our minimally manipulated tissue products are prepared utilizing proprietary extraction methods that reduce the loss of important scaffolding, growth factor and general cytokines and are intended for homologous use. Our diagnostics and therapeutics uses data analytics for disease identification and subsequent therapeutic intervention through unique novel gene-based diagnostics, biotechnology treatments and companion therapeutics.

~~Our discussion and analysis of our results of operations and financial position are based upon our consolidated financial~~forward-looking statements, which have been prepared in conformity with U.S. generally accepted accounting principles. We review the accounting policies used in reporting our financial results on a regular basis. The preparation of these financial statements requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. We evaluate our assumptions and estimates on an ongoing basis and may employ outside experts to assist in our evaluations. We believe that the estimates we use are reasonable; however, actual results could differ from those estimates. We believe the following critical accounting policies identify our most critical accounting policies, which are the policies that are both important to the representation of our financial condition and results and require our most difficult, subjective or complex judgments, often as a result of the need to make estimates about the effect of matters that are inherently uncertain.

The financial statements were prepared on a going concern basis. The going concern basis assumes that we will continue in operation for the foreseeable future and will be able to realize its assets and discharge its liabilities and commitments in the normal course of business.

Predictive Biotech, Inc., a wholly owned subsidiary, began operations during the fiscal year ended June 30, 2017. Since inception of operations, revenues have exceeded cash expenses and such excess contributes to the overall operations of PTG.

In addition, we have raised sufficient capital through stock subscriptions to fund our obligations under our licenses and other agreements for the development of molecular diagnostics products under an exclusive license. It is anticipated that the initial sale of such products will take place in the first half of calendar year 2019 and accelerating through the second half of calendar 2019.

Accounts receivable are recorded at the invoiced amount. At the present time most sales are through credit cards, however from time to time, credit is granted to customers on a short-term basis without requiring collateral, and as such, these accounts receivable, do not bear interest, although a finance charge may be applied to such receivables that are past due. The Company has in place credit policies and procedures and approval process for sales returns and credit memos.

Inventories consist primarily of HCT/Ps we produce. We value inventory at the lower of cost or net realizable value. We determine the cost of inventory using the standard-cost method, which approximates actual cost based on a first-in, first-out method. All other costs, including administrative costs are expensed as incurred.

We analyze our inventory levels annually and write down inventory that has a cost basis in excess of its expected net realizable value, or that is considered in excess of normal operating levels, as determined by management. The related costs are recognized as cost of goods sold in the Consolidated Statements of Operations.

~~Stock subscriptions are recorded as contra-equity on the day the subscription agreement is signed and accepted. All stock subscribed~~speak only as of the date of ~~the financial statements has been collected. The stock is not issued until subscriptions are collected.~~

~~Amounts paid in advance for expenses are accounted for as prepaid expenses and classified as current assets if such amounts are to be recognized as expense with the current period.~~

Lab equipment, furniture and computer equipment are stated at cost less accumulated depreciation. Depreciation and amortization are computed using the straight-line method based on the lesser of estimated useful lives of the related assets or lease terms. Lab equipment items have depreciable lives of five years, furniture items have depreciable lives of 5 to 7 years, and computer equipment items have depreciable lives of 3 years. Repairs and maintenance costs are charged to expense as incurred.

Long-lived assets, such as property, equipment, and definite-lived intangibles subject to depreciation and amortization, as well as acquisition costs of subsidiaries, are reviewed for impairment annually, typically at the end of the fiscal year, or whenever events or changes in circumstances indicate that the carrying value of an asset may not be recoverable. Such events and circumstances may include sweeping regulatory changes, shifts in market demand that would negatively impact revenue, restrictions to capital markets, overall industry deterioration, dramatic increase in the number of competitors, rapidly increasing costs related to production inputs, significant changes in Company management or Company strategy, and/or significant litigation. The Company first will assess qualitative factors above to determine whether it is necessary to perform the two-step impairment test to identify any impairment loss.

Recoverability of assets to be held and used is measured by a comparison of the carrying amount of an asset or asset group to estimated future undiscounted net cash flows, or fair value, of the related asset or group of assets over their remaining lives. The Company used a qualified, independent, and certified third-party valuation expert to determine the estimates of future cash flows that determine fair value. The Company then compared fair value to carrying value. Other than what is recorded in the financial statements seen above, there are no additional asset groups in which the fair value is less than or close to carrying value.

In May 2014, the Financial Accounting Standards Board (FASB) issued the converged standard on revenue recognition with the objective of providing a single, comprehensive model for all contracts with customers to improve comparability in the financial statements of companies reporting using International Financial Reporting Standards and U.S. GAAP. The standard contains principles that an entity must apply to determine the measurement of revenue and timing of when it is recognized. The underlying principle is that an entity must recognize revenue to depict the transfer of goods or services to customers at an amount that the entity expects to be entitled to in exchange for those goods or services. An entity can apply the revenue standard retrospectively to each prior reporting period presented (full retrospective method) or retrospectively with the cumulative effect of initially applying the standard recognized at the date of initial application in retained earnings (modified retrospective method).

The Company generates revenue by selling Human Cell and Tissue Products (HC/TP’s) to clinics and doctors. Revenue from these sales are recorded at the invoiced amount net of any discounts or contractual allowances. The Company has determined that the shipment of the product indicates transfer of control for revenue recognition purposes.

this Quarterly Report. We ~~have evaluated each of the five steps in Topic 606, which are as follows:~~

We sell our products through a direct sales force and through distribution in the U.S. Revenues from these customers are recognized when all the five steps identified above have occurred. These criteria are generally satisfied at the time of shipment when risk of loss and title passes to the customer. We reserve for sales returns, including returns related to defective products, as a reduction in net sales, based on our historical experience. These reserves are recorded as a reduction in net sales and are not ~~considered material to our consolidated statements of income for 6 months ended December 31, 2018~~under any obligation, and ~~for the year ended June 30, 2018.~~

There are also certain considerations related to internal control over financial reporting that are associated with implementing Topic 606. We are currently evaluating our control framework for revenue recognition and identifyingwe expressly disclaim any changes that may need to be made in response to the new guidance. Disclosure requirements under the new guidance in Topic 606 have been significantly expanded in comparison to the disclosure requirements under the current guidance.

~~We bill our customers for shipping and handling charges, which are included in net sales for the applicable period, and the corresponding shipping and handling expense is reported in cost of sales.~~

We maintain product liability insurance and has not experienced any related claims from its products offerings. We also offer a warranty to customers providing that its products will be delivered free of any materials defects. There have been no material costs incurred since inception based on estimated return rates. We review the adequacy of its recorded accrual on a quarterly basis.

Deferred tax assets and liabilities are recorded to reflect the future tax consequences attributable to the effects of differences between the carrying amounts of existing assets and liabilities for financial reporting and for income tax purposes. Deferred taxes are calculated by applying enacted statutory tax rates and tax laws to future years in which temporary differences are expected to reverse. The impact on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that the rate change is enacted.

~~Level 1: Quoted market prices in active markets for identical assets or liabilities.~~

~~Level 2: Observable market-based inputs or inputs that are corroborated by market data.~~

The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of sales and expenses during the reporting periods. Key estimates in the accompanying consolidated financial statements include, among others, revenue recognition, allowances for doubtful accounts and product returns, provisions for obsolete inventory, valuation of long-lived assets, and deferred income tax asset valuation allowances. Actual results could differ materially from these estimates.

~~In February 2016, the FASB issued ASU No. 2016-02,~~ ~~Leases (Topic 842)~~ (“ASU 2016-02”), which modified lease accounting for both lessees and lessors to increase transparency and comparability by recognizing lease assets and lease liabilities by lessees for those leases classified as operating leases under previous accounting standards and disclosing key information about leasing arrangements. ASU 2016-02 will be effective for the Company beginning July 1, 2019 and early adoption is permitted. We are currently evaluating the timing of its adoption and the impact of adopting the new lease standard on our consolidated financial statements.

~~In January 2017, the FASB issued ASU No. 2017-01,~~ ~~Business Combinations (Topic 805): Clarifying the Definition of a Business~~, which provides guidance to entities to assist with evaluating when a set of transferred assets and activities is a business and provides a screen to determine when a set is not a business. Under the new guidance, when substantially all of the fair value of gross assets acquired (or disposed of) is concentrated in a single identifiable asset, or group of similar assets, the assets acquired would not represent a business. Also, to be considered a business, an acquisition would have to include an input and a substantive process that together significantly contribute to the ability to produce outputs. The new standard is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2017, and should be applied on a prospective basis to any transactions occurring within the period of adoption. Early adoption is permitted for interim or annual periods in which the financial statements have not been issued. We do not presently anticipate that the adoption of ASU 2017-01 will have a material impact on our consolidated financial statements.

~~In August 2016, the FASB issued ASU No. 2016-15,~~ ~~Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments~~, which addresses eight specific cash flow issues with the objective of reducing the existing diversity in practice in how certain cash receipts and cash payments are presented and classified in the statement of cash flows. ASU 2016-15 will be effective for us beginning on July 1, 2018 with early adoption permitted. We do not presently anticipate that the adoption of ASU 2016-15 will have a material impact on our consolidated financial statements.

~~In January 2016, the FASB issued ASU No. 2016-01,~~ ~~Financial Instruments - Overall: Recognition and Measurement of Financial Assets and Financial Liabilities,~~ ~~which amends the guidance regarding the classification and measurement of financial~~

instruments. Changes to the current guidance primarily affect the accounting for equity investments, financial liabilities under the fair value option, and the presentation and disclosure requirements for financial instruments. In addition, ASU 2016-01 clarifies guidance related to the valuation allowance assessment when recognizing deferred tax assets resulting from unrealized losses on available-for-sale debt securities. ASU 2016-01 will be effective for us beginning on July 1, 2018. Early adoption is not permitted except for the provision to record fair value changes for financial liabilities under the fair value option resulting from instrument-specific credit risk in other comprehensive income. Upon adoption of ASU 2016-01, an entity should apply the amendments by means of a cumulative-effect adjustment to the balance sheet at the beginning of the first reporting period in which the guidance is effective. We do not presently anticipate that the adoption of ASU 2016-01 will have a material impact on our financial statements.

~~In May 2014, the FASB issued ASU 2014-09,~~ ~~Revenue from Contracts with Customers (Topic 606)~~,obligation, to update the financial reporting requirements for revenue recognition. Topic 606 outlines a single comprehensive model for entities to use in accounting for revenue arising from contracts with customers and supersedes most current revenue recognition guidance, including industry-specific guidance. The guidance is based on the principle that an entity should recognize revenue to depict the transfer of goods or ~~services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. The guidance also~~

requires additional disclosure about the nature, amount, timing and uncertainty of revenue and cash flows arising from customer contracts, including significant judgments and changes in judgments and assets recognized from costs incurred to fulfill a contract. This guidance is effective for us beginning on July 1, 2018, and entities have the option of using either a full retrospective or a modified retrospective approach for the adoption of the new standard. We have evaluated the adoption of this standard on a retrospective basis and believe it will have no material impact to what has been reported. Therefore, the Company will adopt this standard on a modified retrospective basis.

~~The Company issued 6,561,870 common shares to acquire LifeCode and has recorded the acquisition as a Portfolio Investment with a valuation set at $16,404,675.~~

~~The fair value of the purchase consideration issued to the sellers of LifeCode was allocated to the units of equity acquired.~~

~~Juneau reports to its members on a calendar year basis and LifeCode records its distributable share of such reported income using the equity method.~~

Juneau Bioscience, LLC
Consolidated Balance Sheets

December 31,

2018

2017
Assets

Unaudited

Audited

Current assets

Cash

148,527

$                40,077

Total current assets

  148,527

  40,077

Other long-term assets
27,159,139

152,824
Total assets

$     27,307,666

$             192,901

Liabilities and member's equity

Current liabilities

Accounts payable
$                   2,243

$                23,786

Accrued liabilities
    1,255,674

            5,744,449

Total current liabilities
  1,257,917

            5,768,235

Long-term Liabilities

            1,398,968

            1,303,074

Member's equity

Additional paid-in capital
57,902,036

         22,196,288

Accumulated deficit
   (33,251,255)

       (29,074,696)

Total member's equity
  24,650,781

     (6,878,408)

Total liabilities and member's equity
$     27,307,666

$             192,901

~~Aggregate amortization expense for the 6 months ended December 31, 2018 and December 31, 2017, was approximately and $1,408,893 and $1,700,233 respectively.~~

~~Estimated amortization expense for the developed technology consists of the following as of December 31, 2018:~~

On August 22, 2018, the Company entered into an agreement captioned “Securities Purchase Agreement” with the members of Inception DX, LLC (“Inception”), a Utah limited liability company. Under the terms of the agreement, the Company acquired Inception for 15,500,000 shares of common stock. Inception owns laboratory equipment, partial interest in database records for over 31,900,000 individuals for use in genetics research, 400,000 units in Juneau Biosciences, LLC, initial CLIA registration, CLIA lab protocols, and other assets. Once the CLIA registration is completed, Inception will be used as a CLIA laboratory by Predictive Technology Group, Inc. and its affiliates.

The stock issued was for cash, laboratory equipment, Juneau Biosciences, LLC units “Juneau units”, and trade secrets related to the DNA database and protocols related to a future laboratory use as a CLIA lab. The cash was valued at face value. The Juneau units was based on the valued assigned when the Company entered into a subscription to purchase units of Juneau ($1.10 per unit). The laboratory equipment was valued at market value as it had not been used and the Company is aware of the approximate market purchase price. It will be classified as equipment with a 5-year life. The proprietary data, DNA library, protocols, research and methods are classified as a trade secret in our industry. Therefore, the Company determined to allocate the remaining value of the assets purchased as a trade secret with a 15-year life.

~~The stock price on 8/22/2018 was $0.92/share. Indicating a purchase price of $14,260,000 requiring allocation:~~

degenerative disc disease related DNA samples, related family records, relevant clinical records (including approximately 600 affected probands) and 800 ancestry matched control samples, (ii) whole exome sequencing data on approximately 300 degenerative disc disease samples, over 800 local controls, and published reference populations, together with initial analysis of the markers, (iii) project plan, study paperwork, promotional study and materials used in the research study, (iv) exclusive use of a DNA biobank that has collection over 300,000 samples for multiple diseases that the Company may target, (v) the remaining interest in database records for over 31,900,000 individuals for use in genetics research, and (vi) other assets.

On December 19, 2018 the Company executed a merger with the members of Regenerative Medical Technologies, Inc. (“RMT”), a Utah corporation. The Company acquired RMT for 10,000,000 shares of common stock. RMT holds various assets including (i) models, methods and protocols for collection birthing tissue and DNA samples, (ii) patient registry models, methods and protocols to collect clinical outcomes and electronic medical records, and (iii) designs and methodologies relating to many initiatives that are complementary to anticipated product offerings and ongoing research, and (iv) other assets.

The stock price on 12/19/2018 indicated a purchase price of $9,200,000 requiring allocation. The Company determined that the assets acquired qualify for treatment as trade secrets within in industry, and the purchase price was allocated as such. The Company believes the trade secrets in this combination will be used over a period of 15 years, and as such will amortize over that period.

~~Aggregate amortization expense for the 6 months ended December 31, 2018 and December 31, 2017, was approximately and $27,586, and $0 respectively.~~

~~Estimated amortization expense for the assets consists of the following as of December 31, 2018:~~

~~Consolidated Results and Non-Segmented Items – Fiscal 2018 vs. Fiscal 2017~~

~~Revenues from operations (net) for fiscal 2018 totaled $16,624,336 compared to $2,585,362 for fiscal 2017. The increase of $14,038,974 is~~ a result of ~~an expansion of our sales force and distribution networks leading to increased sales of our HCT/Ps.~~

Cost of goods sold (“COGS”) includes expenses associated with acquisition and processing, manufacture (including material and direct labor), property and equipment depreciation, shipping, and other direct expenses relating to our HCT/Ps. Our gross profit during 2018 was $12,653,081 compared to $1,834,057 for fiscal 2017. The increased gross profit resulted from increased sales and efficiencies introduced into our manufacturing processes.

Sales and marketing expenses were $12,680,741 for fiscal 2018 compared to $1,897,543 for fiscal 2017. The increased sales and marketing expenses resulted from corresponding increases in sales, as well as $7.5M in warrants issued to sales management as they met predetermined milestones based on revenue growth.

Research and development expenses were $1,896,092 for fiscal 2018 compared to $84,729 for fiscal 2017. The increased research and development expenses resulted from increased focus on product development, streamlining manufacturing methods and additional proprietary research and development work primarily relating to our HCT/Ps.

General and Administrative expenses for fiscal 2018 were $5,827,891 compared to $946,754 for fiscal 2017. The increased general and administrative expenses resulted from increased management headcount and warrants issued for consulting relating to all business entities.

Amortization and depreciation expenses for fiscal 2018 were $4,573,534 compared to $3,693,579 for fiscal 2017. The reason for the increase in amortization and depreciation expenses relate primarily to the expense of costs relating to our acquisitions

On August 1, 2016, the Company entered into agreements to acquire convertible, unsecured notes receivable from Juneau from existing noteholders in exchange for stock of the Company. The collection of amounts owed on said notes receivable is subject to a subordination agreement with a third-party creditor of Juneau that is owed the principal amount of $700,000 plus accrued interest on an obligation that comes due July 31, 2018. In anticipation of this event, on June 15, 2017, an amendment was also made to the restated agreement to subordinate the debt Juneau owes to PTG. The face amount of the notes acquired was $2,870,380 and 5,740,760 shares of common stock were issued. The notes bear interest payable in Juneau units at 12% and are convertible into Class A Units of Juneau at the rate of $1.00 per unit. Principal and accrued interest are due in a single installment on August 1, 2018. Upon further review using the OTC value at the date of closure, it was determined that a price per share of .78 cents was approximate market value. Therefore, the value of the shares given should be $4,473,774, an increase of $1,603,394. This discount at the date of the share transfers is then considered an impairment loss on the date of the acquisition of the notes. There was no corresponding impairment loss in fiscal 2018.

~~Consolidated Results and Non-Segmented Items – Three and six months ended December 31. 2018 compared to three and six months ended December 31, 2017~~

Revenues from operations (net) for three and six months ended December 31, 2018 totaled $10,687,037 and $18,750,838, respectively, compared to $3,378,526 and $5,413,934 for the three and six months ended December 31, 2017. The increase of $7,308,511 and $13,336,904, respectively, is a result of an expansion of our sales force and distribution networks leading to increased sales of our HCT/Ps.

Cost of goods sold (“COGS”) includes expenses associated with acquisition and processing, manufacture (including material and direct labor), property and equipment depreciation, shipping, and other direct expenses relating to our HCT/Ps. Our gross profit for three and six months ended December 31, 2018 was $7,627,901 and $12,824,967, respectively, compared to $2,474,142 and $3,654,385 for the three and six months ended December 31, 2017. The increased gross profit resulted from increased sales and efficiencies introduced into our manufacturing processes.

Sales and marketing expenses for three and six months ended December 31, 2018 was $3,431,157 and $5,853,876, respectively, compared to $953,231 and $1,584,819, respectively, for the three and six months ended December 31, 2017. The increased sales and marketing expenses resulted from corresponding increases in sales and an increase in the number of distributors.

Research and development expenses for three and six months ended December 31, 2018 was $1,759,560 and $2,364,950, respectively, compared to $37,380 and $49,880, respectively, for the three and six months ended December 31, 2017. The increased research and development expenses resulted from increased focus on product development, streamlining manufacturing methods and additional proprietary research and development work relating to our HCT/Ps. Additionally, we have invested significant amounts in lab readiness in anticipation of the sale of diagnostic products.

General and Administrative expenses for three and six months ended December 31, 2018 was $2,520,281 and $5,079,761, respectively, compared to $1,116,273 and $5,788,466 for three and six months ended December 31, 2017. The changes in general and administrative expenses resulted from increased management headcount in fiscal 2018, and stock options issued for consulting services relating to all business entities in fiscal 2017.

Amortization and depreciation expenses for three and six months ended December 31, 2018 was $1,992,534 and $3,664,964, respectively, compared to $850,116 and $1,948,681, respectively, for the three and six months ended December 31, 2017. The reason for the increase in amortization and depreciation expenses relate primarily to the expense of costs relating to our acquisitions.

~~Substantially all of the revenues, COGS, sales and marketing expenses, and impairment loss related to the HCT/Ps business. During this period the molecular diagnostic~~new information, future events or ~~therapeutics products were under development and none had launched. Approximately $1,366,028 and $946,754 of the general and administrative expenses are~~otherwise. All subsequent forward-looking statements attributable the HCT/Ps business during fiscal 2018 and fiscal 2017, respectively, approximately $2,900,092 and $2,820,681 of the amortization and depreciation expenses are attributable the HCT/Ps during fiscal 2018 and fiscal 2017, approximately $8,216,888 and $1,116,586 of the warrants and option expenses are attributable the HCT/Ps during fiscal 2018 and fiscal 2017, and the remaining portion of said expenses are attributable to the diagnostic and therapeutic segment.

Cash and cash equivalents as of December 31, 2018, June 30, 2018, and June 30, 2017 were $2,559,929, $1,206,139, and $968,202, respectively. Our working capital deficit was $57,412, $1,032,312 and $82,338 as of December 31, 2018, June 30, 2018 and June 30, 2017, respectively.

Net cash flows provided by operating activities was $2,016,330 for the six months ended December 31, 2018, an increase of $2,915,621 for the six months ended December 31, 2017. The increase in the comparative six month periods is due to increasing sales. Net cash flows used by operating activities in fiscal 2018 was $288,999, a decrease of $1,175,597 from $886,599 provided by operating activities in fiscal 2017. The decrease in fiscal 2018 was primarily due to an increase in net loss, and in increase in our inventory balance.

Net cash flows used by investing activities was $1,345,431 for the six months ended December 31, 2018, an increase of $1,594,803 from the six months ended December 31, 2017. The increase in the comparative six month periods is due to costs associated with software projects and lab expansion. Net cash flows used by investing activities was $4,049,157 in fiscal 2018, an increase of $1,989,672 from $2,059,486 used in investing activities in fiscal 2017. The increase in fiscal 2018 was due primarily to cash paid for equity method investments, namely Juneau Biosciences, LLC.

Net cash flows provided by financing activities was $682,891 for the six months ended December 31, 2018, an increase of $168,842 for the six months ended December 31, 2017. The increase in the comparative six month period is due to payments from common stock subscriptions wound down in current period, cash from an acquisition, and the Company began payments for an equity subscription payable in the current period. Net cash flows provided by financing activities was $4,576,093 in fiscal 2018, an increase of $2,439,512 from $2,136,581 provided by financing activities in fiscal 2017. The increase in fiscal 2018 was due to cash payments for stock, stock subscriptions, and for stock subscriptions with attached warrants.

We believe we have sufficient funds to execute our business plan. However, our business plans may change or unforeseen events may occur which affect the amount of funds required. If additional funds are not obtained if and when required, the lack thereof may have a material adverse effect on the Company and could require us to cease operations. Further, there is no assurance that future funding will be available or that any future funding will be on terms which are favorable to us or to any person acting on our ~~current stockholders..~~behalf are expressly qualified in their entirety by the cautionary statements contained or referred to in this section.

~~An evaluation of the effectiveness of our~~We maintain disclosure controls and procedures ~~(as defined in~~(Disclosure Controls) within the meaning of Rules 13a-15(e) and 15d-15(e) of the Securities Exchange ~~Act)~~Act of 1934, as amended, or the Exchange Act. Our Disclosure Controls are designed to ensure that information required to be disclosed by us in the reports we file or submit under the Exchange Act, such as this Quarterly Report on Form 10-Q, is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission’s rules and forms. Our Disclosure Controls are also designed to ensure that such information is accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure. In designing and evaluating our Disclosure Controls, management recognized that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of ~~December 31, 2018~~achieving the desired control objectives, and management necessarily applied its judgment in evaluating and implementing possible controls and procedures.

As of the end of the period covered by this Quarterly Report on Form 10-Q, we evaluated the effectiveness of the design and operation of our Disclosure Controls, which was ~~performed~~done under the supervision and with the participation of our management, including our Chief Executive Officer and our ~~Principal~~Chief Financial ~~and Accounting~~ Officer. Based ~~upon this~~on the evaluation of our Disclosure Controls, our Chief Executive Officer and ~~Senior Vice President of Finance~~Chief Financial Officer have concluded that, as of ~~the end of the period covered by this Quarterly Report,~~September 30, 2019, our ~~disclosure controls and procedures~~Disclosure Controls were not effective atdue to a ~~reasonable assurance level as of December 31, 2018.~~

~~There has been no change~~material weakness in the ~~Company's~~Company’s internal control over financial reporting as disclosed below.

Based on our prior assessment as of ~~December 31, 2018,~~June 30, 2019, management concluded that our internal control over financial reporting was not effective due to a material weakness related to insufficient controls over the accounting for the income tax effects of business combinations and asset acquisitions. A “material weakness” is a deficiency, or a combination of deficiencies, in Internal Control over Financial Reporting ("ICFR"), such that there is a reasonable possibility that a material misstatement of our annual or interim financial statements will not be prevented or detected on a timely basis. Such material weakness has not yet been remediated as of September 30, 2019.

We plan to enhance existing controls by improving their design and to design and implement new controls applicable to our income tax accounting, to ensure that our income tax balances are accurately calculated and appropriately reflected in our financial statements on a timely basis. Specifically, we will add incremental controls to determine the income tax effects of unique transactions. We have engaged third party income tax experts to assist in the preparation of our income tax provisions. We believe that improving the design of existing controls, adding incremental controls to determine the tax effects of unique transactions, and engaging third party tax specialists will be sufficient to remediate the identified material weakness and strengthen our internal control over financial reporting; however, there can be no guarantee that such remediation will be sufficient. We will continue to monitor the effectiveness of our controls and will make any further changes management determines appropriate.

Except as described above, there were no changes in our internal control over financial reporting that occurred during the three months ended September 30, 2019, that have materially affected, or isare reasonably likely to materially affect, ~~the Company's~~our internal control over financial reporting.

On or about July 13, 2018, RTJ, LLC and two of its principals filed a lawsuit against Predictive Therapeutics LLC, Predictive Biotech, Inc., both subsidiaries of Predictive Technology Group, Inc., and Jack Turner, Jr., an employee of Predictive Biotech, Inc. The plaintiffs had acted in a distributor capacity. The relationship was terminated. Plaintiffs are alleging breach of contract, promissory estoppel, unjust enrichment, fraud, breach of fiduciary duty, defamation, false light, and tortious interference. Based on the information available to us, we do not believe any of the RTJ proceedings will have a material adverse effect on our business, results of operations, financial position or liquidity. Further, we deny the allegations in the complaint, have not discovered any evidence of wrongdoing with respect to the allegations and will vigorously defend against these allegations.

On or about May 1, 2019, Surgenex, LLC and one of its principals filed a lawsuit against Predictive Therapeutics LLC, Predictive Biotech, Inc., both subsidiaries of Predictive Technology Group, Inc., and Doug Schmid, an employee of Predictive Biotech, Inc. In 2014, Surgenex contracted with Utah Cord Bank, Inc., a former employer of Doug Schmid, to assist Surgenex in the doing work relating to allograft tissue. Schmid was later hired by Predictive Biotech, Inc. In connection with Schmid’s employment with Predictive Biotech, Surgenex has filed a lawsuit alleging unjust enrichment, conspiracy, conversion, tortious interference with contractual and business relations, violations of trade secrets act, and other claims. Based on the information available to us, we do not believe the Surgenex proceedings will have a material adverse effect on our business, results of operations, financial position or liquidity. Further, we deny the allegations in the complaint, have not discovered any evidence of wrongdoing with respect to the allegations and will vigorously defend against these allegations.

As ~~this claim~~of September 30, 2019, we did not record a liability related to these matters as it was determined that an unfavorable resolution is ~~neither~~either not currently probable ~~nor~~or that an amount or relevant range is not reasonably estimable, ~~we expect no material~~or both. However, litigation is inherently unpredictable and it is possible that losses may occur. Any unfavorable resolution of any of these matters could materially affect our consolidated financial ~~impact~~position, cash flows, or results of operations. All legal costs associated with litigation are expensed as ~~a result of this Action.~~ incurred.

There have been no material changes to the risk factors included in our ~~Registration Statement~~Annual Report on ~~our~~ Form ~~10.~~10-K for the fiscal year ended June 30, 2019.

~~(a) The~~During the three months ended September 30, 2019, the Company issued ~~10,000,000~~(or is obligated to issue) the following shares:

1) In September 2019, the Company entered into an agreement with a consultant for research and development services. In consideration for these services, the Company granted options to the consultant exercisable for 1,250,000 shares of ~~its~~the Company’s common stock ~~to RMT, LLC in connection with the merger of Regenerative Medical Technologies, Inc.~~ with a ~~wholly owned subsidiary~~strike price equal to the closing price of the Company in December 2018. These securities are deemed "restricted securities" within the meaning of that term as defined in Rule 144 of the Securities Act and have been issued pursuant to the "private placement" exemption under Section 4(a)(2) of the Securities Act. No underwriter was involved with this transaction and no commissions were paid. The counterparty had access to informationCompany’s common stock on the ~~Company necessary~~date of grant. Options to ~~make an informed investment decision. We have been informed that all~~acquire 625,000 shares vested upon issuance. Of the ~~counterparty was able to bear~~remaining options, 375,000 vest on March 1, 2020 and 225,000 vest on September 1, 2020. The warrants expire ten years from the ~~economic risk~~date of its investment and was aware that the securities were not registered under the Securities Act and cannot be re-offered or re-sold unless they are registered or are qualified for sale pursuant to an exemption from registration. The transfer agent and registrar of the Company were instructed to mark "stop transfer" on its ledger regarding these shares. The securities were acquired for the counterparty’s own account and not with the view to, or for resale in connection with any distribution. A legend was placed on the certificates issued stating that the securities have not been registered under the Securities Act and cannot be sold or otherwise transferred without an effective registration or an exemption there from.issuance.

~~ITEM~~Item 3. ~~DEFAULTS UPON SENIOR SECURITIES~~Defaults Upon Senior Securities

Pursuant to the requirements of the Securities and Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

I, Bradley C. Robinson, certify, to my best knowledge and belief, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that the Quarterly Report of Predictive Technology Group, Inc., on Form 10-Q for the quarter ended September 30, 2019 fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934 and that information contained in such Quarterly Report on Form 10-Q fairly presents, in all material respects, the financial condition and results of operations of Predictive Technology Group, Inc.

I, Simon Brewer, certify, to my best knowledge and belief, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that the Quarterly Report of Predictive Technology Group, Inc. on Form 10-Q for the quarter ended September 30, 2019, fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934 and that information contained in such Quarterly Report on Form 10-Q fairly presents, in all material respects, the financial condition and results of operations of Predictive Technology Group, Inc.


(Mark ~~One~~One) [X]
~~[X]~~	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934

	For the quarterly period ended ~~December 31, 2018~~September 30, 2019

	Or

[ ]	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

	For the transition period _______ to _______



Nevada		90-1139372
(State or other jurisdiction of incorporation or organization)		(I.R.S. employer identification number)

2735 Parleys Way, Suite 205, Salt Lake City, Utah		84109
(Address of principal executive offices)		(Zip Code)



Larger Accelerated Filer [ ]	Accelerated Filer [ ]
Non-Accelerated Filer [ ] (Do not check if a smaller reporting company)	Smaller Reporting Company [X]
Emerging growth company ~~[X]~~[ ]



	PART I - FINANCIAL INFORMATION

Item 1.	Financial Statements	32

	Unaudited Condensed Consolidated Balance Sheets as of ~~December 31, 2018~~September 30, 2019 and June 30, ~~2018~~2019	32

	Unaudited Condensed Consolidated Statements of Operations and Comprehensive ~~Income (Loss)~~Loss for the three ~~and six~~ months ended ~~December 31,~~September 30, 2019 and 2018 ~~and 2017~~	43

	Unaudited Condensed Consolidated Statements of Cash Flows for the ~~six~~three months ended ~~December 31,~~September 30, 2019 and 2018 ~~and 2017~~	54

	Unaudited Condensed Consolidated Statements of Stockholders’ Equity for the three months ended September 30, 2019 and 2018	6

	Unaudited Notes to Condensed Consolidated Financial Statements	6 7

Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	2234

Item 3.	Quantitative and Qualitative Disclosures About Market Risk	3441

Item 4.	Controls and Procedures	3441

	PART II - OTHER INFORMATION	42

Item 1.	Legal Proceedings	3443

Item 1A.	Risk Factors	3443

Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	3543

Item 3.	Defaults Upon Senior Securities	3543

Item 4.	Mine Safety Disclosures	3543

Item 5.	Other Information	3543

Item 6.	Exhibits	3644


	Three months ended September 30,
	2019		2018
Revenue	$	8,259,257	$	8,063,802
Cost of goods sold, exclusive of depreciation & amortization shown below:		7,181,991		3,048,556

Operating expenses:
Selling and marketing		3,151,971		2,407,436
General and administrative		6,378,877		2,666,147
Research and development		1,828,350		606,085
Depreciation and amortization		2,610,245		1,665,722
Total operating expenses		13,969,443		7,345,390

Operating loss		(12,892,177)		(2,330,144)

Total other loss		(212,782)		(314,359)

Loss before income taxes		(13,104,959)		(2,644,503)

Benefit from income taxes		5,208,418		612,452

Net loss & comprehensive loss	$	(7,896,541)	$	(2,032,051)

Net loss non-controlling interest		(31,934)		(27,669)

Net loss attributable to common shareholders	$	(7,864,607)	$	(2,004,382)

Weighted average common shares outstanding, basic & diluted		281,027,491		254,067,547

Basic & diluted loss per share attributable to common shareholders	$	(0.03)	$	(0.01)


	Three months ended December 31,				Six months ended December 31,
	2018		2017		2018		2017
Revenue	$	10,687,036	$	3,378,526	$	18,750,838	$	5,413,934
Cost of goods sold		3,059,136		904,384		5,925,871		1,759,549
Gross profit		7,627,900		2,474,142		12,824,967		3,654,385

Operating expenses:
Sales and marketing		3,431,157		953,232		5,853,876		1,584,819
General administrative		2,520,281		1,116,273		5,079,761		5,788,466
Research and product development		1,759,560		37,380		2,364,950		49,880
Amortization and depreciation expense		1,992,534		850,116		3,664,964		1,948,681
Total operating expenses		9,703,532		2,957,001		16,963,551		9,371,846

Operating profit (loss)		(2,075,632)		(482,859)		(4,138,584)		(5,717,461)

Other income, net		(599,627)		106,568		(913,986)		212,286

Loss before income taxes		(2,675,259)		(376,921)		(5,052,570)		(5,513,927)

Provision for (benefit from) income taxes		-		-		-		-

Net loss	$	(2,675,259)	$	(376,921)	$	(5,052,570)	$	(5,513,927)

Net loss non-controlling interest		(33,454)		(628)		(61,123)		(8,752)

Net loss controlling interest	$	(2,641,850)	$	(375,663)	$	(4,991,447)	$	(5,505,175)

Basic weighted average shares outstanding		230,111,417		203,135,262		230,111,417		203,135,262

Basic loss per share		(0.012)		(0.002)		(0.022)		(0.027)

Comprehensive loss:
Net loss		(2,641,805)		(375,663)		(4,991,447)		(5,505,175)
Unrealized gain (loss) on available-for-sale securities, net of tax		-		-		-		-
Change in foreign currency translation adjustment		-		-		-		-
Comprehensive loss	$	(2,641,805)	$	(375,663)	$	(4,991,447)	$	(5,505,175)


	Common Stock
	Shares		Amount		Additional Paid in Capital		Subscription Receivable		Non-Controlling Interest		Accumulated Deficit		Stockholders’ Equity
BALANCES AT JUNE 30, 2018	247,624,069	$	247,624	$	108,049,300	$	(1,025,000)	$	(120,152)	$	(25,813,957)	$	81,337,815
Common stock issued for acquisition of InceptionDX, LLC	15,500,000		15,500		14,244,500		-		-		-		14,260,000
Common stock issued for services	50,000		50		43,450		-		-		-		43,500
Common stock cancelled	(1,200,000)		(1,200)		1,200		-		-		-		-
Warrants issued for trade secrets	-		-		13,860,000		-		-		-		13,860,000
Cash received from common stock subscriptions	-		-				325,000		-		-		325,000
Share based compensation	-		-		928,846		-		-		-		928,846
Net loss	-		-				-		(27,669)		(2,004,382)		(2,032,051)
BALANCES AT SEPTEMBER 30, 2018	261,974,069	$	261,974	$	137,127,296	$	(700,000)	$	(147,821)	$	(27,818,339)	$	108,723,110

	Common Stock
	Shares		Amount		Additional Paid in Capital		Subscription Receivable		Non-Controlling Interest		Accumulated Deficit		Stockholders Equity
BALANCES AT JUNE 30, 2019	273,761,955	$	273,762	$	153,604,830	$	-	$	(239,280)	$	(41,102,849)	$	112,536,463
Share based compensation	-		-		4,994,600		-		-		-		4,994,600
Cashless exercise of warrants	9,223,605		9,224		(9,224)		-		-		-		-
Net loss	-		-		-		-		(31,934)		(7,864,607)		(7,896,541)
BALANCES AT SEPTEMBER 30, 2019	282,985,560	$	282,986	$	158,590,206	$	-	$	(271,214)	$	(48,967,456)	$	109,634,522


			3 months ended December 31,	6 months ended December 31,	Year Ended June 30,
			2018	2018	2018
Segment revenues
	HCT/Ps		$ 10,687,037	$ 18,750,838	$ 16,624,336
	Diagnostics and therapeutics		-	-	-
		Total consolidated revenues	$ 10,687,037	$ 18,750,838	$ 16,624,336

Segment operating income (loss)
	HCT/Ps		$ 2,059,400	$ 2,732,404	$ (5,821,549)
	Diagnostics and therapeutics		(4,135,032)	(6,870,988)	(6,503,628)
		Total consolidated operating income (loss)	$ (2,075,632)	$ (4,138,584)	$ (12,325,177)

Reconciliation of segment operating income
	to income before income taxes
	Segment operating income		$ (2,075,632)	$ (4,138,584)	$ (12,325,177)
	Equity method gain/(loss)		(600,116)	(914,898)	(899,950)
	Impairment charges		-	-	-
	Interest income / (expense)		489	912	199,953
		Segment income before income taxes	$ (2,675,259)	$ (5,052,570)	$ (13,025,174)


	HCT/Ps		Diagnostics & Therapeutics			Unallocated Corporate	Total
Three months ended September 30, 2019
Revenues	$	8,184,631	$	74,626	$	-	$	8,259,257
Depreciation and amortization		898,944		1,631,308		79,993		2,610,245
Share based compensation		1,671,456		450,101		2,873,043		4,994,600
Segment operating loss		(6,543,985)		(3,228,651)		(3,119,541)		(12,892,177)
Three months ended September 30, 2018
Revenues	$	8,063,802	$	-	$	-	$	8,063,802
Depreciation and amortization		741,468		831,523		92,731		1,665,722
Share based compensation		77,649		-		882,431		960,080
Segment operating loss		(330,842)		(966,542)		(1,032,760)		(2,330,144)


			Three months ended
			September 30,
	2019			2018
Total operating loss for reportable segments	$	(9,772,636)		$	(1,297,384)
Unallocated amounts:
Unallocated Corporate		(3,119,541)			(1,032,760)
Other loss		(212,782)			(314,359)
Loss before income taxes	$	(13,104,959)		$	(2,644,503)



		As of September		As of June 30,
Total Assets		30, 2019		2019
HCT/Ps	$	14,781,848	$	21,052,082
Diagnostics and therapeutics		118,743,502		120,665,445
Unallocated corporate		6,470,386		1,860,658
Total Assets	$	139,995,736	$	143,578,185


		Amount
Deferred revenue at June 30, 2019	$	469,376
Increase due to deferral of revenue at period end		529,870
Decrease due to beginning contract liabilities recognized as revenue		(469,376)
Deferred revenue at September 30, 2019	$	529,870


Juneau Bioscience, LLC
Consolidated Balance Sheets

			December 31,
			2018	2017
Assets			Unaudited	Audited
	Current assets
		Cash	148,527	$ 40,077
	Total current assets		148,527	40,077
	Other long-term assets		27,159,139	152,824
Total assets			$ 27,307,666	$ 192,901

Liabilities and member's equity
	Current liabilities
		Accounts payable	$ 2,243	$ 23,786
		Accrued liabilities	1,255,674	5,744,449
	Total current liabilities		1,257,917	5,768,235
	Long-term Liabilities		1,398,968	1,303,074
	Member's equity
		Additional paid-in capital	57,902,036	22,196,288
		Accumulated deficit	(33,251,255)	(29,074,696)
	Total member's equity		24,650,781	(6,878,408)

Total liabilities and member's equity			$ 27,307,666	$ 192,901


Juneau Bioscience, LLC
Consolidated Statements of Operations


			Years ended December 31,
			2018	2017
			Unaudited	Audited
Revenue from operations (net)			$ 2,554,037	$ 2,443,677
	Gross profit from operations		2,554,037	2,443,677

Operating expenses
	General and administrative		4,973,927	2,489,421
		Total operating expense	4,973,927	2,489,421
	Loss from operations		(2,419,890)	(45,744)

Other income (expense)
		Other income (expense)	66	396
	Net income / (loss)		$ (2,419,824)	$ (45,348)


Assets:		Amount
Cash	$	799,980
Lab equipment		1,177,750
Investment in non-controlling interest		440,000
Trade secrets		11,842,270
Total purchase price	$	14,260,000


Risk-free interest rate		2.7%
Expected dividend yield		0%
Expected life (in years)		5.0
Expected volatility		150%



Assets:	Fair Value
Current assets	$	663,262
Laboratory equipment	190,397
Software	239,000
Intangible Assets	311,000
Total assets acquired	1,403,659
Liabilities:
Accrued liabilities	(68,181)
Capital lease obligation	(54,291)
Total liabilities assumed	(122,472)
Bargain purchase gain	(363,676)
Total fair value of purchase price	$	917,511
Consideration allocated to Preeclampsia Option		100,000
Total consideration	$	1,017,511
Less: Cash acquired		(85,694)
Total consideration transferred	$	931,817


Year Ending June 30
2019	$	331,032
2020		613,333
2021		613,333
2022		613,333
2023		613,333
Thereafter		6,415,635


	Carrying Amount		Accumulated Amortization			Net	Weighted Average Remaining Amortization Period (Years)
At September 30, 2019:
Licenses	$	21,337,981	$	(3,775,063)	$	17,562,918	8.8
Patents		9,750,000		(3,090,686)		6,659,314	8.8
Trade Secrets		56,675,936		(12,854,184)		43,821,752	8.7
Other		411,000		(50,272)		360,728	10.7
Goodwill		5,254,451		N/A		5,254,451	N/A
Total intangible assets	$	93,429,368	$	(19,770,205)	$	73,659,163	8.7


Year Ending June 30
2019	$	1,892,330
2020		1,723,941
2021		1,723,941
2022		1,723,941
2023		1,723,941
Thereafter		8,717,835


Year Ending June 30
2019	$	764,696
2020		764,696
2021		794,696
2022			794,696
2023			794,696
Thereafter			3,791,659



	As of September 30, 2019		As of June 30, 2019

Carrying amount	$	51,578,419	$	51,717,719

Ownership percentage		48.3%		48.4%


Juneau Biosciences, LLC		Year ended December 31, 2018		Year ended December 31, 2017
		Audited		Audited
Revenue (related party)	$	2,554,037	$	2,443,677
Gross profit		2,554,037		2,443,677
Loss from operations		(2,419,890)		(45,744)
Net loss		(2,419,824)		(45,398)
Net loss attributable to Predictive Technology Group, Inc.		(1,200,238)		(22,054)


		Dec 31,	June 30,
		2018	2018
Deferred tax assets:
	Net operating loss carry-forwards	$ 55,560	$ 28,831
	Depreciation and Amortization	(136,638)	(63,551)
	Other	34,071	11,374
	R&D Credit	198,367	276,012
	Valuation Allowance	(151,360)	(252,666)
	Net Deferred Taxes	$ -	$ -


					Weighted Average
			Number of	Weighted Average	Remaining
			Warrants	Exercise Price	Contractual Life
Warrants:
	Outstanding June 30, 2018		42,268,520	$0.50	4.1
		Granted	35,750,000	0.91	4.8
		Exercised	-	-	-
		Forfeited/Cancelled	(14,000,000)	0.80	4.5
	Outstanding December 31, 2018		64,018,520	0.73	4.4


		Number of Warrants		Weighted Average Exercise Price	Weighted Average Remaining Contractual Life (Years)
Warrant:
Outstanding June 30, 2019		68,253,520	$	0.78	3.6
	Granted	1,250,000		1.73	10.0
	Exercised	(9,223,605)		0.50	3.0
	Forfeited/ Cancelled	(1,836,395)		0.50	2.9
Outstanding September 30, 2019		58,443,520	$	0.85	3.6


			Weighted
		Net	Average Shares	Per Share
		Loss	Outstanding	Amount
Three months ended December 31, 2017
	Basic EPS and diluted	(376,291)	203,135,262	(0.002)

Three months ended December 31, 2018
	Basic EPS and diluted	(2,675,259)	230,111,417	(0.012)



	As of September 30,
	2019	2018
Warrants for common stock	58,443,520	63,603,520
Options for common stock	25,012,750	4,828,250
	83,456,270	68,431,770


		Number of shares		Weighted average exercise price
Options outstanding at June 30, 2019		24,407,750	$	1.74
Options granted		605,000		2.10
Less:
	Options exercised	-		-
	Options canceled or expired	-		-
Options outstanding at end of period		25,012,750	$	1.75


		December 31, 2018		June 30, 2018
		Number of shares	Weighted average exercise price	Number of shares	Weighted average exercise price
Options outstanding at beginning of period		4,938,500	$ 0.78	300,000	$ 1.00
Options granted		1,845,000	0.92	4,638,500	0.77
Less:
	Options exercised	-		-	-
	Options canceled or expired	-		-	-
Options outstanding at end of period		6,783,500	$ 0.82	4,938,500	$ 0.78
Options exercisable at end of period		-		-	-
Options vested and expected to vest		3,083,570	0.79	2,495,250	0.70
Weighted average fair value of options granted during the period		$ 1,730,701		$ 3,436,010


	Options outstanding			Options exercisable
Range of Exercise prices	Number outstanding at December 31, 2018	Weighted average remaining contractual life (years)	Weighted average exercise price	Number exercisable at December 31, 2018	Weighted average exercise price
0.50 - 0.80	2,850,000	5.40	0.64	-	-
0.88 - 1.23	3,933,500	5.81	0.93	-	-

As of December 31, 2018 there was no unrecognized share-based compensation expense related to stock options.


Year Ending June 30,		Operating		Finance		Total
2020	$	313,213	$	589,635	$	902,848
2021		210,855		748,361		959,216
2022		-		740,797		740,797
2023		-		167,719		167,719
2024		-		-		-
Total cash payments		524,068		2,246,512		2,770,580
Less: Imputed interest		(32,501)		(255,332)		(287,833)
Total lease liability	$	491,567	$	1,991,180	$	2,482,747


			Three months ended September 30, 2019
Lease cost
Finance lease cost
	Amortization of right of use assets	$	24,413
	Interest on lease liabilities		4,413
Operating lease cost			104,404
Short-term lease cost			64,337
Total lease cost		$	197,567

Cash paid for amounts included in the measurement of
lease liabilities
	Operating cash flows from finance leases	$	4,413
	Operating cash flows from operating leases		102,357
	Financing cash flows from finance leases		24,413

Weighted average remaining lease term — finance leases (Years)			2.94
Weighted average remaining lease term — operating leases (Years)			1.25
Weighted average discount rate — finance leases			8.11%
Weighted average discount rate — operating leases			9.69%




			Years ended June 30,
			2018		2017
Segment revenues
	HCT/Ps		$ 16,624,336		$ 2,585,362
	Diagnostics and therapeutics		-		-
		Total consolidated revenues	$ 16,624,336		$ 2,585,362

Segment operating income (loss)
	HCT/Ps		$ (5,821,549)		$ (3,220,478)
	Diagnostics and therapeutics		(6,503,628)		(1,568,070)
		Total consolidated operating income (loss)	$ (12,325,177)		$ (4,788,548)

Reconciliation of segment operating income
	to income before income taxes
	Segment operating income		$ (12,325,177)		$ (4,788,548)
	Equity method gain/(loss)		(899,950)		(128,594)
	Impairment charges		-		(1,603,394)
	Interest income / (expense)		199,953		315,742
		Income before income taxes	$ (13,025,174)		$ (6,204,794)


				Years ended June 30,
Capital assets, net				2018		2017
	HCT/Ps			$ 438,277		$ 73,143
	Diagnostics and therapeutics			335,592		445,791
		Total capital assets, net		$ 773,870		$ 518,934

Depreciation expense
	HCT/Ps			$ 82,306		$ 2,895
	Diagnostics and therapeutics			68,339		1,677
		Total depreciation expense		$ 150,645		$ 4,572

Intangible and equity method investment assets, net
	HCT/Ps			$ 8,096,311		$ 10,914,097
	Diagnostics and therapeutics			74,288,652		26,968,113
		Total intangible and equity method investment assets, net		$ 82,384,963		$ 37,882,210

Amortization expense
	HCT/Ps			$ 2,817,786		$ 2,817,786
	Diagnostics and therapeutics			1,605,103		871,221
		Total amortization expense		$ 4,422,889		$ 3,689,007

Warrants and options expense (non-cash)
	HCT/Ps			$ 8,216,888		$ 1,116,586
	Diagnostics and therapeutics			2,310,539		105,338
		Total warrants and options expense (non-cash)		$ 10,527,427		$ 1,221,924



Exhibit No.		~~Title~~Identification of ~~Document~~Exhibit
~~2.1~~		~~Securities Purchase Agreement, by and between the Company and Taueret Laboratories, LLC and its equity holders, effective January 1, 2019 (filed herewith)~~

~~2.2~~		~~Amendment No. 1 to the Securities Purchase Agreement, by and between the Company and Taueret Laboratories, LLC and its equity holders, effective February 11, 2019 (filed herewith)~~

~~10.1~~		~~Employment Agreement with Bradley Robinson (filed herewith)~~

~~10.2~~		~~Employment Agreement with Paul Evans (filed herewith)~~

~~10.3~~		~~Employment Agreement with Simon Brewer (filed herewith)~~

~~10.4~~		~~Employment Agreement with Eric Olson (filed herewith)~~

~~10.5~~		~~Amendment No. 1 to the Amended and Restated Subscription Agreement between the Company and Juneau Biosciences, LLC, effective January 1, 2019 (filed herewith)~~

31.1		Section 302 Certification of Chief Executive Officer (filed herewith)

31.2		Section 302 Certification of Principal Financial Officer (filed herewith)

32.1		Section 906 Certification of Chief Executive Officer (filed herewith)

32.2		Section 906 Certification of Principal Financial Officer (filed herewith)
101		XBRL Interactive Data Tags