Predictiv on Republic | Deal Review

Apr 12, 2021 4 min read
Predictiv on Republic | Deal Review

Company Overview & Business Model

Problem Addressed: 55M people die every year from a serious disease. But over 10% of serious diseases have a genetic component and could have been prevented. The problem is, we don’t have an efficient way to monitor genetic markers – we need a ‘minority report’ for health.

The Product: Using DNA Next Generation Sequencing, Predictiv evaluates the level of risk on 16K+ diseases, sequences 20K+ genes and analyzes 300+ drugs. All of that through an at-home test.

How Predictiv Makes Money: Predictiv costs $790 per unit, which includes Next Generation Sequencing and a consultation with a genetic counselor.

Customers: Both individuals and healthcare providers.

Invest in Predictiv
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Predictiv Business Structure

  • Form: Corporation
  • Jurisdiction of Incorporation/Organization: Delaware
  • Date of organization: July 29, 2020

The Deal Terms

  • Security: Crowd SAFE
  • Valuation Cap: $5,500,000
  • Discount Rate: 0%
  • Min. Offering Amount: $25,000
  • Max. Offering Amount: $1,070,000
  • Min. Investment: $100

The Team

Sajung Yun (CEO) is a scientist and adjunct professor at Johns Hopkins University in bioinformatics where he teaches a genome analysis class at the graduate school. After completing his Ph.D in Biomedical Sciences, Sajung joined the National Institutes of Health on a post-doctoral research fellowship for genetic engineering. During that time, he also earned an MBA at Johns Hopkins with an emphasis in healthcare management and entrepreneurship while studying clinical informatics. Sajung’s first startup was AI physician project. The second was a telemedicine project.

Sijung Yun is the technology cofounder of Predictiv. After he received his PhD in the field of biophysics from Boston University he worked for the NIH and the Johns Hopkins University. As a FAES (NIH graduate school) faculty, he taught bioinformatics to more than 1000 post doctoral students over the last 10 years in Bethesda, Maryland. Sijung has numerous publications such as microRNA analytics and next generation sequencing data preparation steps, and single-cell RNA sequencing analytics.

Predictiv Cap Table

The table below lists the beneficial owners of twenty percent (20%) or more of the Company’s outstanding voting equity securities, calculated on the basis of voting power:

Predictiv's Cap Table
(Source: Predictiv’s Form C)

Competition

The markets in which the company operates are highly competitive. Their product competes against similar products of many large and small companies, including well-known global competitors. Many alternatives exist today for genetic testing (such as 23andMe or Invitae). According to the company, none of them come close to the capabilities of Predictiv as it covers more than 1,000 times more diseases than competitors do.

Note: Although the company states that they are in final discussions for contracts covering 40,000 healthcare professionals and over 300 clinics, I suggest being very careful when you don't have any validation (no revenue/no real customers yet). Do you remember Theranos, the $9B blood-testing fraud?

Intellectual Property: The company has applied for two unpublished provisional patents with the names “Bioinformatics Pipeline” and “Predictiv AI Engine.”

How will Predictiv Use The Funds Raised On Republic?

Predictiv use of Republic campaign’s proceeds
(Source: Predictiv’s Form C)

Intermediary Fee: This fee will be paid directly to the intermediary for assisting in conducting this Offering.

Research & Development: These proceeds will be used for genomics research and integration, software solution, Infrastructure.

Sales & Partnerships: These proceeds will be used for sales, partnerships and business development.

Marketing & Communication: These proceeds will be used for website, social medias, communication campaign and staff.

Clinical & Operations: These proceeds will be used for clinical follow-up, operations, client support, and administrative tasks.

Debt

The company has the following debt outstanding.

Note: It looks like ZToMed is a company owned by Predictiv's Founder. If so, It never feels good to see that the founder lent money to the company instead of investing in it on the same terms as his potential investors. I'd love to know more from the founder.
Predictiv’s debt
(Source: Predictiv’s Form C)

Financials & Liquidity

As of February 28, 2021, the Company had an aggregate of $1,501.12 in cash and cash equivalents. According to predictiv's form C, the Company’s only significant expenses are $5,000 per month to each officer, and each has agreed to not receive such payments while the Company is unable to pay such amounts. The Company expects to be able to maintain operations for 12- 18 months.

Note: This feels a little bit strange to me. What about the 40,000 healthcare professionals they are contracting with? It looks like a huge number of potential clients to handle for just three people! No Sales team? And what about the money raised through Republic? Will they use it to pay themselves? I can't see this expenses disclosed in the use of proceeds section.
Predictiv’s Income Statement
(Source: Predictiv’s Form C)

Conclusion: Did I Invest?

I’m still in the process of writing a full deal report and decide whether or not I will invest in Predictiv. I will send my final investment decision on Saturday to subscribers of the Angel Notes newsletter (you can join through the form below). See you soon!

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