美國
證券交易委員會
華盛頓特區20549
表格
（標記一）
根據1934年證券交易法第13或15(d)條規定的季度報告 |
截至季度末
根據1934年證券交易法第13或15(d)節的轉型報告書 |
從___到___的過渡期
委員會文件號。
(根據其章程規定的註冊人準確名稱)
| ||
（設立的州或其他司法管轄區） | （納稅人識別號碼） |
（總部地址） （郵政編碼）
(
（註冊人電話，包括區號）
馬薩諸塞州列剋星敦市貝德福街450號郵編02420
（前名稱、地址及財政年度，如果自上次報告以來有更改）
根據證券法第12(b)條註冊的證券：
每種類別的證券 |
| 交易標誌 |
| 名稱爲每個註冊的交易所: |
請在以下方框內打勾：(1) 在過去的12個月內(或者在註冊公司需要提交此類報告的較短時期內)，公司已經提交了根據證券交易法1934年第13或15(d)條規定需要提交的所有報告；以及 (2) 在過去的90天內，公司一直受到了此類報告提交的要求。☒
請勾選表示註冊公司是否在過去12個月（或更短的時間內）根據S-t規則405條的要求電子提交了所有需要提交的互動數據文件。 ☒
請勾選：該註冊商是否爲大型加速提交人，加速提交人、非加速提交人、小型報告公司或新興增長公司。請參閱證券交易所規則120億.2節中「大型加速提交人」、「加速提交人」、「小型報告公司」和「新興增長公司」的定義。
大型加速歸檔人 | ☐ | 加速報告人 | ☐ | |
☒ | 小型報告公司 | |||
新興成長公司 | ||||
如果是新興成長型企業，請勾選是否選擇不使用按照《證券交易法》第13(a)條規定的新或修訂財務會計準則的過渡期。
請用勾號表示註冊公司是否爲殼公司（按交易所法規120億.2條款定義）。是
截至2024年11月4日，有
第一部分 - 財務信息
項目1.基本報表
iSpecimen Inc.
精簡資產負債表
|
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2024年9月30日 | 2023年12月31日 | ||||||
資產 | （未經審計） | ||||||
流動資產： |
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|
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現金及現金等價物 | $ | | $ | | |||
可供出售證券 | — | | |||||
應收賬款-未開票 |
| |
| | |||
應收賬款，扣除 $ |
| |
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預付賬款和其他流動資產 |
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流動資產合計 |
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房地產及設備（淨額） |
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內部開發的軟件，淨的 |
| |
| | |||
其他無形資產淨額 | | | |||||
經營租賃資產使用權 | | | |||||
安防-半導體按金 |
| |
| | |||
總資產 | $ | | $ | | |||
負債和股東權益 |
|
|
|
| |||
流動負債: |
|
|
|
| |||
應付賬款 | $ | | $ | | |||
應計費用 |
| |
| | |||
優先票據應付款淨額，扣除債務折讓 | | — | |||||
經營租賃目前的義務 | |
| | ||||
遞延收入 |
| |
| | |||
總流動負債 |
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經營租賃長期負債 |
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總負債 |
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承諾和 contingencies（請參見注釋9） |
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股東權益 |
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普通股，每股面值爲 $0.0001； |
| |
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額外支付的資本 |
| |
| | |||
庫存股票， |
| ( |
| ( | |||
累計其他綜合收益 | — | | |||||
累計虧損 |
| ( |
| ( | |||
股東權益合計 |
| |
| | |||
負債和股東權益總額 | $ | | $ | | |||
請參閱這些未經審計的簡明財務報表附註。
反映了2024年9月13日進行的1比20的逆向股票拆分的追溯影響。
3
iSpecimen Inc.
捷報信用財務報表和全面損失
（未經審計）
截至9月30日，三個月的結束 | 截至9月30日的九個月 | ||||||||||||
| 2024 |
| 2023 |
| 2024 |
| 2023 | ||||||
營業收入 | $ | | $ | | $ | | $ | | |||||
營業費用: | |||||||||||||
收入成本 |
| |
| | | | |||||||
科技 |
| |
| | | | |||||||
銷售和營銷 |
| |
| | | | |||||||
供應鏈拓展 |
| |
| | | | |||||||
履行 |
| |
| | | | |||||||
一般和管理費用 |
| |
| | | | |||||||
總營業費用 |
| |
| | | | |||||||
經營虧損 |
| ( |
| ( | ( | ( | |||||||
其他收入，淨額 | |||||||||||||
利息支出 |
| ( | ( | ( | ( | ||||||||
利息收入 |
| | | | | ||||||||
其他收入（費用）淨額 |
| | | | ( | ||||||||
其他收入淨額 |
| |
| | | | |||||||
每股數據 | $ | ( | $ | ( | $ | ( | $ | ( | |||||
其他全面收益（損失）： | |||||||||||||
淨虧損 | $ | ( | $ | ( | $ | ( | $ | ( | |||||
未實現的可供出售證券收益（虧損） | — | ( | ( | | |||||||||
其他綜合收益（損失）總額 | — | ( | ( | | |||||||||
綜合損失 | $ | ( | $ | ( | $ | ( | $ | ( | |||||
基本和攤薄每股淨虧損 | $ | ( | $ | ( | $ | ( | $ | ( | |||||
普通股的加權平均股數——基本和稀釋 |
| | | | | ||||||||
請參閱這些未經審計的簡明財務報表附註。
反映了2024年9月13日進行的1股拆分倒掛股票的追溯影響。
4
iSpecimen Inc.
基本報表： 股東權益變動表
（未經審計）
2024年9月30日止九個月 | ||||||||||||||||||||||
累積 | ||||||||||||||||||||||
額外的 | 其他 | 總計 | ||||||||||||||||||||
普通股 | 庫存股 | 實收資本 | 綜合 | 累積 | 股東權益 | |||||||||||||||||
| 股份 |
| 金額 |
| 股份 |
| 金額 |
| 資本 |
| 收入 |
| $ |
| 股權 | |||||||
2023年12月31日結餘爲 |
| | $ | | | $ | ( | $ | | $ | | $ | ( | $ | | |||||||
股票補償費用 |
| — | — | — |
| — |
| |
| — |
| — |
| | ||||||||
受限股份的歸屬 | |
| — | — |
| — | | — | — | | ||||||||||||
回購 PIPE Warrants 可行使普通股購買權 | — |
| — | — |
| — | ( | — | — | ( | ||||||||||||
發行普通股與市場交易協議有關 | |
| | — |
| — | | — | — | | ||||||||||||
市場交易協議相關的發行成本 | — |
| — | — |
| — | ( | — | — | ( | ||||||||||||
可供出售證券未實現損失 | — | — | — | — | — | ( | — | ( | ||||||||||||||
淨損失 |
| — |
| — | — |
| — |
| — |
| — |
| ( |
| ( | |||||||
2024年3月31日結存餘額 | | $ | | | $ | ( | $ | | $ | | $ | ( | $ | | ||||||||
股票補償費用 | — | — | — |
| — |
| |
| — |
| — |
| | |||||||||
受限股份的歸屬 | |
| — | — |
| — | | — | — | | ||||||||||||
根據現時市場協議所發行的普通股 | |
| | — |
| — | | — | — | | ||||||||||||
根據現時市場協議所發行的股票相關費用 | — |
| — | — |
| — | ( | — | — | ( | ||||||||||||
可供出售證券的未實現損失 | — | — | — | — | — | ( | — | ( | ||||||||||||||
淨損失 | — |
| — | — |
| — |
| — |
| — |
| ( |
| ( | ||||||||
2024年6月30日餘額 |
| | $ | | | $ | ( | $ | | $ | — | $ | ( | $ | | |||||||
股票補償費用 | — | — | — |
| — |
| |
| — |
| — |
| | |||||||||
受限股份的歸屬 | |
| — |
| — | | — | — | | |||||||||||||
股票拆分調整 | | |||||||||||||||||||||
淨損失 | — |
| — | — |
| — |
| — |
| — |
| ( |
| ( | ||||||||
2024年9月30日的餘額 |
| | $ | | | $ | ( | $ | | $ | — | $ | ( | $ | | |||||||
請參閱這些未經審計的簡明財務報表附註。
反映了2024年9月13日進行的1比20的逆向股票拆分的追溯效應。
5
iSpecimen Inc.
股東權益變動表
（未經審計）
2023年9月30日止九個月 | ||||||||||||||||||||||
累積 | ||||||||||||||||||||||
額外的 | 其他 | 總計 | ||||||||||||||||||||
普通股 | 庫存股 | 已繳入 | 綜合 | 累積 | 股東的 | |||||||||||||||||
| 股份 |
| 金額 |
| 股份 |
| 金額 |
| 股本 |
| 收入 | 赤字 |
| 股權 | ||||||||
2022年12月31日結存餘額 | | $ | | | $ | ( | $ | | $ | — | $ | ( | $ | | ||||||||
股票補償費用 | — | — | — | — | | — | — | | ||||||||||||||
受限股份的歸屬 | | — | — | — | | — | — | | ||||||||||||||
通過行使股票期權發行普通股 | | — | — | — | | — | — | | ||||||||||||||
可供出售證券未實現收益 | — |
| — | — |
| — |
| — |
| | — | | ||||||||||
每股數據 | — |
| — | — |
| — |
| — |
| — | ( | ( | ||||||||||
2023年3月31日的餘額 |
| | $ | | | $ | ( | $ | | $ | | $ | ( | $ | | |||||||
股票補償費用 |
| — |
| — | — |
| — |
| | — | — |
| | |||||||||
受限股份的歸屬 | | — | — | — | | — | — | | ||||||||||||||
發行普通股以行使股票期權 | | — | — | — | | — | — | | ||||||||||||||
可供出售證券未實現損失 | — | — | — | — | — | ( | — | ( | ||||||||||||||
淨損失 |
| — |
| — | — |
| — |
| — | — | ( |
| ( | |||||||||
2023年6月30日的餘額 | | $ | | | $ | ( | $ | | $ | | $ | ( | $ | | ||||||||
股票補償費用 |
| — |
| — | — |
| — |
| | — | — |
| | |||||||||
受限股份的歸屬 | | — | — | — | | — | — | | ||||||||||||||
可供出售證券的未實現損失 | — | — | — | — | — | ( | — | ( | ||||||||||||||
淨損失 |
| — |
| — | — |
| — |
| — | — | ( |
| ( | |||||||||
2023年9月30日結餘 | | $ | | | $ | ( | $ | | $ | | $ | ( | $ | | ||||||||
請參閱附註以查看這些未經審計的簡明財務報表
反映了2024年9月13日進行的1股拆分倒掛股票的追溯影響。
6
iSpecimen Inc.
現金流量簡明報表
（未經審計）
截至9月30日的九個月 | |||||||
| 2024 |
| 2023 | ||||
經營活動產生的現金流量： | |||||||
每股數據 | $ | ( | $ | ( | |||
調整爲淨損失到經營活動現金流量淨使用： |
|
| |||||
股票補償費用 |
| |
| | |||
內部研發軟件的攤銷 |
| |
| | |||
其他無形資產攤銷 | | | |||||
固定資產折舊 |
| |
| | |||
壞賬費用 |
| |
| | |||
在應付高級票據上攤銷折價和債務發行成本 | | — | |||||
與可供出售證券溢價攤銷相關的非現金利息收入 | ( | ( | |||||
可供出售證券出售虧損 | | — | |||||
處置固定資產的損失 | | — | |||||
營運資產和負債的變動： |
|
| |||||
應收賬款-未開票 |
| |
| | |||
應收賬款 |
| ( |
| ( | |||
預付賬款和其他流動資產 |
| |
| ( | |||
經營租賃資產使用權 | | ( | |||||
安防-半導體按金 | ( | — | |||||
稅收信用應收款 | — | | |||||
應付賬款 |
| |
| ( | |||
應計費用 |
| ( |
| ( | |||
經營租賃負債 | ( | | |||||
遞延收入 |
| ( |
| ( | |||
經營活動使用的現金淨額 |
| ( |
| ( | |||
投資活動產生的現金流量： |
|
| |||||
內部研發軟件的資本化 |
| ( |
| ( | |||
其他無形資產的資本化 | — | ( | |||||
購置固定資產等資產支出 | ( | ( | |||||
購買包含在經營租賃權利資產中的租賃改良 | ( | — | |||||
可供出售證券的購買 | ( | ( | |||||
可供出售證券出售和到期收回的收益 | | | |||||
投資活動產生的淨現金流量： |
| |
| ( | |||
籌資活動產生的現金流量： |
|
|
|
| |||
來自發行應付高級票據的收益 | | — | |||||
行使股票期權所得 | — | | |||||
因《市場協議》發行普通股所得款項 | | — | |||||
與應付優先債務相關的債務發行成本支付 | ( | — | |||||
在市場發行協議發行普通股與發行相關的發行費用支付 | ( | — | |||||
回購PIPE股票購買認股權證 | ( | — | |||||
融資活動提供的淨現金流量 |
| |
| | |||
1,186,626 |
| ( |
| ( | |||
期初現金及現金等價物餘額 |
| |
| | |||
期末現金和現金等價物餘額 | $ | | $ | | |||
現金流量補充披露： | |||||||
支付的利息現金 | $ | | $ | | |||
非現金投資和籌資活動的補充披露: | |||||||
由獲得使用權資產而產生的租賃負債的非現金金額 | $ | | $ | | |||
由於租賃終止而產生的減少租賃負債和使用權資產的非現金調整 | $ | | $ | — | |||
股票發行費用包含在應付賬款和應計費用中 | $ | | $ | — | |||
請參閱這些未經審計的簡明財務報表附註。
7
1.業務性質和報告基礎
按照我們所處的風險和不確定性的假設，結果和在本招股書或在任何文檔中引用的前瞻性陳述中討論的事件可能不會發生。投資者應謹慎對待這些前瞻性陳述，它們僅在本招股書或在文檔中通過引用作爲參考，其僅在本招股書或在文檔中通過引用作爲參考的文件的日期發表時存在。我們沒有任何義務，並明確聲明不承擔任何義務，更新或更改任何前瞻性陳述，無論是基於新信息、未來事件或其他原因。我們或代表我們行事的任何人作出的所有後續前瞻性陳述，都受到本節中所包含或所提到的警示性聲明的明確限制。
iSpecimen公司成立於2009年，根據特拉華州的法律設立。該公司開發並推出了專有的在線市場平台，連接需要獲取受試者、樣本和數據的醫療研究人員與擁有這些資源的醫院、實驗室和其他機構。iSpecimen是一家以技術爲驅動的公司，致力於解決一個關鍵問題：如何連接需要人類生物流體、組織和活細胞（「生物標本」）進行研究的生命科學研究人員，與全球醫療服務提供機構中可獲得（但不易獲取）的生物標本。該公司的專有平台iSpecimen Marketplace平台旨在解決這一問題，並改變生物標本採購流程，加快醫學發現。該公司總部設在馬薩諸塞州的沃本，其主要市場是北美地區。該公司作爲一家
報告範圍
這些附註的未經審計的簡明財務報表已根據美國公認會計原則（「GAAP」）的規定編制，由金融會計準則委員會（「FASB」）會計準則編碼（「ASC」）確定爲臨時財務信息，根據《1933年證券法》修正案（「證券法」）第10條規則和法規及《輔導意見》的規定編制。在管理層意見中，這些未經審計的簡明財務報表反映了所有調整，包括爲期間的資產負債表和經營結果的公正陳述所必需的僅正常重複性調整。它們可能不包括完整財務報表所必需的所有信息和註釋。因此，應閱讀這些未經審計的簡明財務報表，並參考本公司於2023年12月31日年度報告中所包含的審計財務報表和附註。
重新分類
爲使公司去年金額符合本年度呈現，已對某些金額進行重新分類。
股票拆細
2023年10月9日，公司收到納斯達克的通知，稱其普通股未能在之前30個連續的營業日中維持每股最低$1.00的買盤價格，這是納斯達克證券交易所的上市規則要求。
2024年7月19日，公司股東通過了一項提案，以修正公司的第四次修訂的公司要案及章程（「公司章程」），實施公司已發行和流通股的逆向拆股，以及公司在庫藏中持有的任何普通股，比例爲1比- 1至段範圍內的比率，將由公司董事會決定。.
2024年8月19日，公司董事會批准了一比二十（1:）的逆向拆股，對公司已發行和流通股的普通股（「逆向拆股」）。2024年9月13日，公司向特拉華州州務卿提交了一份修正公司章程的證明書，以實施逆向拆股。逆向拆股於2024年9月13日生效，公司的普通股從2024年9月16日開始在納斯達克以調整後的基礎上交易。
2024年10月1日，公司收到了納斯達克的通知，工作人員已確定從
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除非另有說明，公司普通股、股份數據、每股數據和相關信息的參考均已根據1比-的反向股票拆分比率進行調整 ，就好像它們發生在呈現的最早期間的開始時。反向股票拆分將我們所發行的普通股和庫藏股票合併爲一股普通股，每股幣值不變，反向股票拆分相應地調整了，其他事項中也包括我們的權證和期權行使比例變爲公司的普通股。 股票轉讓比例
財務報表
公司自成立以來一直承擔持續虧損。截至2024年9月30日，公司的淨營運資本爲負$
公司未來的成功取決於其成功獲得額外的營運資本和/或最終實現盈利業務。截至2023年12月31日年度結束時， 公司從2023年1月1日至2024年9月30日開始採取措施，通過削減成本、對公司進行權益調整，減少員工數量，優化運營併合理配置資源，專注於關鍵市場機會。自2023年1月1日至2024年9月30日，員工數量的減少累計導致月度薪酬成本估計減少約
%
公司可能無法增加營業收入或控制營業費用，或者可能無法以商業上有利的條款籌集額外資本。公司若未能產生額外收入或掖住運營成本，將對公司業務、經營業績和財務狀況以及公司繼續作爲持續經營實體的能力造成負面影響。若公司未能產生足夠收入以提供適當水平的營運資本，其業務計劃將進一步縮減。
存在重大疑慮，質疑公司從未審核的簡表財務報表發佈之日起一年內能否作爲持續經營實體繼續存在的能力。管理層緩解重大疑慮條件的計劃包括增加額外收入，推遲某些項目和資本支出，並削減公司未來某些營業費用，以使公司作爲持續經營實體繼續存在。然而，並不能保證公司能夠成功完成以上任何一項選擇。因此，管理層的計劃不能被視爲可行，並且不能消除公司作爲持續經營實體的能力存在重大疑慮的情況。
附註的未經審計的簡明財務報表是根據持續經營假設編制的，假設資產的實現和債務的清償將在業務常規運營過程中完成。未經審計的簡明財務報表不包括任何與記錄的資產金額的回收和分類或可能由上述不確定性結果導致的金額和負債分類有關的調整。.
2.重要會計政策摘要
公司的重要會計政策和最新會計準則總結在公司截至2023年12月31日年度報告的附註2中。在截至2024年9月30日的九個月內，這些會計政策沒有重大變化。
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使用估計
按照美國通用會計準則編制公司的簡化財務報表需要管理層進行估計和假設，這些估計和假設影響了公司財務報表中報告的金額和相應註釋。在計算遞延稅稅收減值準備、營收確認、股票報酬、壞賬準備、應計費用和內部開發軟件以及序列化數據的有用壽命時，公司使用了某些估計。公司基於其認爲在當前環境下合理的歷史經驗和其他市場特定的或其他相關假設來進行估計。實際結果可能與這些估計有所不同。
投資
公司的投資被視爲可供出售的，並按公允價值計入。未實現的損益計入累計其他綜合損益中。證券的購買和銷售以成交日爲基礎反映。實現的收益或損失會從累計其他綜合損益中釋放出來，並在操作表中提到，釋放的收益呈現爲收入，或者在美國國債票據的溢價攤銷和折價攤銷中記錄爲利息費用或收入。
公司不斷監測其成本基礎和其投資的預計公允值之間的差異。公司的減值認定會計政策要求在確定公司將無法按照固定到期證券的合同條款收集到全部應付款項，或者預期在合理時間內不會出現股權證券的公允值回升時記錄非暫時性減值損失。根據衡量時間點的證券投資的公允價值或使用貼現現金流模型計算出的價值計算的減值損失的投資會計入減值損失。公司在評估其減值程度方面考慮了以下因素：公允價值的時間長度和程度低於成本，債權人的財務狀況和短期前景以及其需要出售投資的可能性較大。
公允價值衡量
公允價值指在計量日期，市場交易參與方之間進行有序交易時出售資產或轉讓負債所收到或支付的價格。爲增加公允價值衡量的可比性，以下層級按估值方法所用的輸入優先級制定了優先順序：
| ● | 一級-基於活躍市場上相同資產和負債的報價； |
| ● | 二級-基於除一級報價外的可觀察輸入，例如活躍市場上類似資產和負債的報價、非活躍市場上相同或類似資產和負債的報價，或者其他可觀察或可由可觀察市場數據支持的輸入。 三級-基於反映公司自身假設的不可觀察的輸入，這些假設與其他市場參與者所能合理獲得的假設一致。這些評估需要進行重大判斷。 |
| ● | 三級-基於反映公司自身假設的不可觀察的輸入，這些假設與其他市場參與者所能合理獲得的假設一致。這些評估需要進行重大判斷。 對於某些金融工具，包括現金及現金等價物、應收賬款和應付賬款，由於其短期性質，其賬面價值逼近2024年6月30日和2023年12月31日的公允價值。可供出售證券的公允價值和一級投資都應記錄在公允價值處。 |
對於包括現金及現金等價物、應收賬款和應付賬款在內的某些金融工具，截至2024年9月30日和2013年12月31日，因其短期性質，賬面金額與其公允值接近。可供出售證券按公允值記錄，並作爲一級投資。
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營業收入確認和應收賬款
公司使用以下五步方法認定收入：（1）確定與客戶的合同，（2）確定合同中的履行義務，（3）確定交易價格，（4）將交易價格分配給合同中的履行義務，（5）在公司滿足履行義務時認定收入。
公司通過使用其專有軟件iSpecimen Marketplace，從醫院、實驗室和其他供應網站採集各種樣本，來爲公司的客戶產生收益，以識別、定位和最終驗證符合公司客戶所要求的規格的所需樣本。公司的履行義務是在合同中以協議價格爲每個樣本的價格的「最大努力」基礎上爲公司客戶從供應商處採購滿足客戶規格的樣本。公司目前不向供應商或客戶收取專有軟件的使用費。每個客戶將與公司簽署物質和數據使用協議或同意在線購買條款，每個協議都包括樣本和數據使用、運輸條款、付款和取消條款。然後，這些客戶協議將被補充爲指定樣本要求的購買訂單，包括詳細的包含/排除標準、要收集的數量和定價。這些客戶協議共同代表了公司與其客戶之間的合同關係。通常，合同都有固定的單價。對於某些樣本訂單，根據項目設置要求，在履行訂單前可能需要收取可退款的客戶存款，這被視爲遞延收入。公司預計在未來的十二個月內將確認遞延收入爲收入。
樣本採集發生在公司網絡內的供應站點。收集是指樣本從病人或供體身上移除或採集的過程。樣本經常是爲特定的公司訂單而採集的。收集後，供應商將樣本分配給公司，並控制樣本。註冊是指已採集樣本及其相關數據在iSpecimen Marketplace中註冊並分配給特定的客戶訂單，這可能發生在樣本在供應商站點或在公司站點時，這是樣本控制權轉移給客戶的時刻。如果樣本必須在短時間內（採集後不到24小時）交付，或者將樣本發送給公司不切實際，則供應商可以將樣本發送給公司或直接發送給客戶。
作爲收入確認政策的一部分，公司已經評估了主要與代理考慮因素。公司得出結論認爲它在這個安排中的作用是作爲主要管理採購過程的開始和結束，並決定將使用哪些供應商來履行訂單，通常負責物理上擁有樣本，設置樣本價格，並承擔客戶信用風險。
公司隨着時間的推移確認收入，因爲公司創建了一項對於公司沒有替代用途的資產，並且有權要求追償到目前爲止完成的績效。在合同簽訂之初，公司在收到合同和相關訂單時審查訂單，以確定所訂購的樣本是否爲公司的替代用途。一般來說，訂購的樣本對公司沒有可替代的未來用途，與之相關的績效義務在相關樣本被註冊後得到滿足。對於沒有可替代未來用途的樣本，公司使用產出法來確認收入。產出是基於註冊樣本的數量計量的。在少數情況下，如果樣本具有可替代未來用途，則公司的績效義務將在出貨時得到滿足。
一般情況下，客戶在發送貨物時開具發票。根據所訂購樣本的數量，可能需要若干會計期間才能完全履行購買訂單。換句話說，可能會爲一個單一的採購訂單發出多份發票，反映樣本隨時間註冊。然而，樣本通常儘快在被註冊後發運。
一旦具有沒有可替代未來用途並且公司有權擁有現金的樣本被註冊，公司將將抵消收入記錄在應收賬款—未開票的帳戶中。一旦發運並開具發票，則將重新分類從應收賬款-未出票的帳戶中，將其轉移至應收賬款。
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客戶通常有14天時間對收到的樣本進行檢查，以確保符合購買訂單文檔中規定的規格。客戶有權收到替換樣本或獲得對該樣本支付的退款。公司沒有退貨津貼的記錄。當發生這種情況時，公司會向客戶給出退貨的信用。
以下表格總結了公司截至9月30日的三個月和九個月的營業收入：
截至2023年9月30日的三個月 | 截至2023年9月30日的九個月 | |||||||||||
| 2024 |
| 2023 |
| 2024 |
| 2023 | |||||
客戶的樣本合同 | $ | | $ | | $ | | $ | | ||||
運輸和其他 |
| |
| | | | ||||||
營業收入 | $ | | $ | | $ | | $ | | ||||
公司以發票金額扣除可疑帳戶準備金的方式覈銷應收賬款。公司定期評估其應收賬款，以判斷是否根據當前的預期信貸損失模型需要設立可疑帳戶準備金。當應收賬款被認定無法收回時將被沖銷，任何未來的收回將在收到時記錄爲收入。截至2024年9月30日和2023年12月31日，公司的可疑賬款準備金爲$
公司會在內部使用軟件項目的應用程序開發階段 ，對某些內部和外部產生的成本進行資本化處理，直至軟件準備好其預期的用途。軟件完成並投入運營時，該資產的攤銷即開始，攤銷費用計入營業費用。公司會按一定年限按直線法攤銷已完成的內部使用軟件。 軟件開發生命週期中計劃、培訓和後期實施階段所產生的成本被歸類爲技術成本，並在超支時作爲營業費用支出。
該公司從第三方測序儀器獲得從福爾馬林固定石蠟樣本（「FFPE」）中生成的數據，並將其許可給客戶以附加費用銷售FFPE樣本。序列數據也被組織成一個研究內容的數據庫，以訂閱模式出售。該公司已判斷序列數據是一種無形資產，並對採購序列數據的成本進行資本化處理。該資產按線性法攤銷到營收成本中的預期使用壽命上。支付給第三方測序儀器的成本是唯一被資本化的成本，所有其他相關成本均按超支作爲營業費用在營業過程中進行覈算。
公司經營活動過程中的固定資產和無形資產會進行減值測試，並會在情況表明資產的賬面價值不能恢復時扣減當季資產減值損失。固定資產和無形資產包括財產和設備、內部使用的軟件和其他無形資產。在2024年6月30日和2023年的六個月內，存在減值損失。
其他無形資產淨值
公司從第三方測序儀中獲取甲醛固定石蠟包埋（FFPE）塊的測序數據，該公司在銷售FFPE塊時以額外費用向客戶許可該測序儀。經過測序的數據還被整理成一個研究內容數據庫，可通過訂閱模式出售。公司已確定，測序數據是一種無形資產，並對獲取測序數據的成本進行資本化。測序數據按照預計使用壽命攤銷至營業成本。
長期資產的減值損失
營業費用
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債券發行成本
債務發行成本應淨額記錄並攤銷至相關債務的利息費用，在相關債務的期限內。
以股票爲基礎的補償
本公司會記錄授予僱員、非僱員和董事會成員之股票期權補償，每項獎勵的公平價值按期授予，並在必要的服務期間直線攤銷費用。一經放棄即予認可。
公司使用Black-Scholes-Merton stock option pricing模型來確定股票期權的公允價值。 使用Black-Scholes-Merton stock option pricing模型需要管理層根據預期的期權期限，與期權預期壽命一致的普通股預期波動率，無風險利率和普通股預期股利率類似的假定。 我們得出了結論，我們的歷史股票期權行使經驗不提供合理的基礎來估計預期期限。 因此，期權的預期期限是按照簡化的方法來確定的，即認購期內的認購區間的平均值以及合同期限。 由於缺乏公司特定的歷史和暴露波動性數據，預期波動性的估計主要是基於一組公開交易的相似公司的歷史波動性，這些公司具有與公司的股票獎勵具有類似企業價值和行業內的地位以及足夠的歷史股價信息，以滿足股票獎勵的預期壽命。通過收集包括公司自身在內的這些公司的股票每日收盤價，以計算歷史波動性數據。
無風險利率是參考與期權預期期限類似的剩餘到期日零息美國國債發行確定的。公司尚未向普通股股東支付現金股利，並且不預計支付現金股利。
公司的普通股公允價值等於指定授予日的收盤價。
限制性股票單位（「RSUs」）
公司從限制性股票單位中逐期按比例確認股票補償費用。限制性股票單位的公允價值被認爲是公司普通股授予日的收盤價。
普通股權
公司根據普通股認股權證作爲股權工具或負債，取決於認股權證協議的具體條款。如果：1）基礎股份被分類爲負債或2）實體可能在任何情況下根據現金或其他資產結算認股權證，則應將認股權證分類爲負債。公司將於授予日固定計量分類爲股權的非僱員股權報酬，被視爲報酬性。
每股淨虧損
基本每股淨虧損是通過將適用於普通股股東的淨虧損除以期間內持有的普通股平均加權股數進行計算，不考慮普通股等價物。稀釋每股淨虧損是通過調整期內流通的普通股等價物的加權平均股數，使用庫存法測定期內流通的稀釋效應進行計算的。因此，適用於普通股股東的基本和稀釋每股淨虧損在所有報告期內均相同。
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以下表格提供了截至9月30日有關公司普通股可在解禁和行權時發行的信息:
2024 |
| 2023 | ||
RSU解禁後可發行的股份 | | | ||
期權行權後發行的股份 | | | ||
可行使PIPE認股權（定義見下文）購買普通股的股份數 | — | | ||
可行使借款人認股權（定義見下文）購買普通股的股份數 | | | ||
可行使包銷商認股權（定義見下文）購買普通股的股份數 | | |
最近採用的會計準則
2020年8月，FASb發佈了ASU No. 2020-06，債務-帶換股和其他選擇(「主題470-20」)和企業原有權益的衍生工具和套期保值合同(「主題815-40」)：「有關可轉換證券和合同在實體自身產生的權益中的會計處理。」ASU 2020-06將通過減少可轉換債務工具和可轉換優先股的會計模型數量來簡化可轉換工具的會計處理方法。限制會計模型會導致一些嵌入的轉換特徵相對於當前GAAP中所述主機合同被視爲分開被認可的數量明顯減少。繼續受到分離模型適用的可轉債是(i) 這些具有未與主機合約明確關聯並滿足衍生物定義且不符合衍生物會計豁免範圍的嵌入式轉換特徵和(ii) 補償巨額的發行可轉債債券，其溢價被記爲股本溢價。ASU 2020-06還修改了衍生物對實體自身的權益的豁免範圍以減少基於形式的會計結論。ASU 2020-06將於2023年12月15日後的財政年度對公司有效。可提前採用，但不得早於2020年12月15日開始的財政年度，包括這些財政年度內的中間期間。公司目前正在評估採用ASU 2020-06可能對公司合併財務報表和相關披露產生的潛在影響。會計處理公司擁有權轉換性工具和合同的權益部分現行準則更新會計準則Codification中905「融資成本、股份和增加股份之債券問題」和815「衍生工具和衍生工具和盾構交易問題」的名稱。準則的主要修改內容包括：新準則通過減少要求嵌入式轉換特性單獨覈算的準則數量來簡化發行人的可轉換證券會計。 ASU 2020-06還簡化了實體必須執行的解決方案評估，以確定合同是否有資格獲得股權分類，並針對可轉換證券和每股收益(EPS)指南進行了有針對性的改進。 該更新將於2023年12月15日後開始的公司財年和報告期內生效。允許提前採用新的指南，但最早不得早於2020年12月15日後開始的公司財年和報告期內生效。實體可以選擇通過修正前轉換方法或完全回溯法變更新指南。公司於2024年1月1日起採用了這一新標準。 ASU 2020-06對公司的未經審計的簡明財務報表沒有實質性影響。
3.可供出售證券
公司的美國國債被分類爲可供出售證券，在2024年9月30日結束的九個月內全額到期。
2023年12月31日 | ||||||||||||
毛利 | 毛利 | |||||||||||
分期償還的 | 未實現的 | 未實現的 | ||||||||||
| cost |
| 收益 | 損失 | 公允價值 | |||||||
可供出售證券: | ||||||||||||
美國國債 | $ | | $ | | $ | ( | $ | | ||||
應計可供出售證券合計 | $ | | $ | | $ | ( | $ | | ||||
本公司在2022財年錄得的%s百萬美元商譽減值損失主要源於Nice Talent資產管理有限公司和FTFT Finance UK Limited（即Khyber Money Exchange Ltd.）的收購。商譽減值測試截止於2022年12月31日，比較報告單元（包括商譽）的賬面價值與其公允價值。如果賬面價值超過公允價值，則將報告單元的商譽所隱含的公允價值與商譽的賬面價值進行比較。如果商譽的賬面價值超過了隱含的公允價值，就應該認定一筆商譽減值損失。
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4.固定資產淨額
截至下表所示日期，資產和設備淨額包括以下項目：
2021年9月30日 | 運營租賃負債： | |||||
| 2024 |
| 2023 | |||
網站 | $ | | $ | | ||
計算機設備和購買的軟件 |
| |
| | ||
設備 |
| |
| | ||
2,551 |
| |
| | ||
租賃改良 |
| |
| | ||
總財產與設備 |
| |
| | ||
累計折舊 |
| ( |
| ( | ||
淨房地產和設備總資產 | $ | | $ | | ||
房地產和設備折舊費用爲 $
5.內部開發的軟件，淨額
在截至2024年9月30日和2023年分別爲九個月的期間，公司資本化了$
6. 其他無形資產，淨額
2024年9月30日止九個月內，公司沒有對任何FFPE塊進行排序，因此沒有將任何排序數據資本化爲其他無形資產。公司向客戶提供與排序的FFPE塊相關的排序數據，額外收取費用，隨所述FFPE塊的銷售一併提供。排序數據也被組織以形成可通過訂閱模式出售給公司客戶的研究內容數據庫。資本化的排序數據相關的攤銷費用爲$
7. 債務融資
2024年9月19日，公司與貸方簽訂了《票據購買協議》（以下簡稱「購買協議」）。根據購買協議的規定，貸方同意向公司提供一筆金額爲$的貸款
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以高達$金額的循環信用額度形式
截至2024年9月30日，票據的未償本金餘額爲 $
截至2024年9月30日止三個月期間的票據利息費用總計 $
與票據相關的債務發行成本總計 $
2024年10月31日，公司償還了未償餘額本金 $
8. 公允價值計量
截至2024年9月30日，公司沒有任何資產或負債按公允價值進行重複計量。以下表格列出了公司需要按公允價值在重複計量基礎上進行衡量的資產，並它們在公平價值等級內的分類情況，截至2023年12月31日：
2023年12月31日的公允價值 | ||||||||||||
| 總計 |
| 一級 |
| 二級 |
| 三級 | |||||
資產： | ||||||||||||
可供出售證券 | $ | | $ | | $ | — | $ | — | ||||
總資產 | $ | | $ | | $ | — | $ | — | ||||
9.承諾和 contingencies
租約
2024年7月2日，公司與馬薩諸塞州沃本的一處辦公空間（「沃本場地」）簽訂了一份新的經營租賃合同（「沃本租賃」），租期爲 兩個月，自2024年9月1日起開始，至2029年10月30日結束。 公司有一次性
使用權資產和負債在租賃開始日期根據租賃期內租金貼現值確認。ASC 842要求承租人使用租賃協議中規定的%貼現其房地產租賃負債。
公司的任何租賃都沒有重要的剩餘擔保，也沒有公司租賃協議中包含的重要限制或契約。
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Lease Costs
The table below presents certain information related to the lease costs for the Company’s operating lease for the nine months ended September 30, 2024:
Operating lease expense |
| $ | |
Short-term lease expense |
| — | |
Total lease cost | $ | |
Lease Position as of September 30, 2024
Right-of-use lease assets and lease liabilities for the Company’s operating lease as of September 30, 2024 were recorded in the balance sheet as follows:
Assets | |||
Operating lease right-of-use assets |
| $ | |
Total lease assets | $ | | |
Liabilities | |||
Current liabilities: | |||
Operating lease liability – current portion | $ | | |
Non-current liabilities: | |||
Operating lease liability – net of current portion | | ||
Total lease liability | $ | |
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Lease Terms and Discount Rate
The table below presents certain information related to the weighted average remaining lease term and the weighted average discount rate for the Company’s operating lease as of September 30, 2024:
Weighted average remaining lease term (in years) – operating lease | |||
Weighted average discount rate – operating lease |
|
Undiscounted Cash Flows
Future lease payments included in the measurement of lease liabilities on the balance sheet are as follows:
2024 (excluding the nine months ended September 30, 2024) |
| $ | |
2025 | | ||
2026 | | ||
2027 | | ||
2028 | | ||
Thereafter | | ||
Total future minimum lease payments | | ||
Less effect of discounting | ( | ||
Present value of future minimum lease payments | $ | |
Rent expense for the three months ended September 30, 2024 and 2023 amounted to $
Cash Flows
Supplemental cash flow information related to the operating lease for the nine months ended September 30, 2024 was as follows:
Non-cash operating lease expense (operating cash flow) |
| $ | |
Change in operating lease liabilities (operating cash flow) | $ | ( |
Sales Tax Payable
The majority of the Company’s customers are researchers, universities, hospitals, and not-for-profit entities that were believed by the Company to have a sales and use tax exemption that generally excludes them from paying sales taxes. The main types of specimens the Company sells are blood, blood plasma, human tissue, human parts, and human bodily fluids and only a few of these products are typically not taxable in some states regardless of the buyer’s tax exemption status. The Company historically has not collected sales tax in states where it had sales. Had the Company contemporaneously collected and remitted sales tax for all customers and in all jurisdictions where it would have been required, there would have been no material impact on the Company’s unaudited condensed financial statements.
As a result of an entity-wide risk assessment process that commenced in the second quarter of 2023, the Company engaged external tax consultant advisors to complement internal resources and efforts to provide support in assessing the appropriate sales tax treatment associated with the Company’s products for all prior years in which the Company had generated revenue, to assist with the facilitation and tracking of Voluntary Disclosure Agreements (“VDAs”) in jurisdictions where a potential tax liability may exist and to assist with
18
the implementation of a sales tax software platform solution for the calculation, communication, collection, and remittance of sales tax for all non-exempt future sales.
From the Company’s inception through the filing date of this Quarterly Report, the Company now believes that an obligation to collect and remit sales tax existed for certain of its sales of products to certain of its customers. The Company has analyzed its product sales, on an invoice-by-invoice and customer-by-customer basis, to determine which products are subject to sales tax in each jurisdiction, and determining which of its customers are exempt from sales tax, and which customers who were not exempt from sales tax have already paid compensating use tax to the appropriate jurisdiction. Part of this process includes requesting and obtaining exemption letters or representations from its customers or proof of payment of their compensating use tax. As the Company continues to make progress on this project, certain customers have notified the Company that they are not exempt from the payment of sales tax and have not remitted use tax and the Company has started to invoice such customers for past sales tax due.
As of December 31, 2023, the Company had established and accrued a reliable point estimate with a maximum potential of the sales tax liability of approximately $
In the nine months ended September 30, 2024, the Company received additional sales tax exemption letters or representations from customers. In addition to this, the Company received confirmation from certain tax jurisdictions in which it had previously accrued a potential tax liability that its specimens are exempt from tax in those jurisdictions, therefore, the Company reversed the accrued liability associated with those jurisdictions. The Company also registered in certain states and commenced the filing and remittance of sales taxes. These factors contributed to the reduction of the sales tax liability to approximately $
As of September 30, 2024, the Company had recovered approximately
Legal Proceedings
From time to time the Company is involved in litigation, claims, and other proceedings arising in the ordinary course of business. Such litigation and other proceedings may include, but are not limited to, actions relating to employment law and misclassification, intellectual property, commercial or contractual claims, or other consumer protection statutes. Litigation and other disputes are inherently unpredictable and subject to substantial uncertainties and unfavorable resolutions could occur. As of September 30, 2024, there was a legal dispute filed against the Company.
Resignation of Chief Information Officer and Filing of Demand for Arbitration
On July 25, 2024, Benjamin Bielak, the Company’s Chief Information Officer, until his resignation on July 14, 2024, initiated a Demand for Arbitration against the Company with the American Arbitration Association, pursuant to the dispute resolution provisions contained
19
in Mr. Bielak’s employment agreement. The terms and conditions of Mr. Bielak’s employment with the Company were governed by his employment agreement.
In his Demand for Arbitration Mr. Bielak claims that the Company failed to provide him with certain bonus payments allegedly due to him for work performed in 2023 and 2024. Mr. Bielak also claims that the Company failed to provide him with severance payments allegedly due pursuant to the provisions of his employment agreement. The total amount of Mr. Bielak’s claim for alleged damages is $
The Company believes that Mr. Bielak’s claims are without legal or factual basis, and intends to vigorously defend these claims. An arbitrator has been selected, however, a schedule for the arbitration is yet to be set as of November 7, 2024.
10.STOCKHOLDERS’ EQUITY
The Company’s authorized capital is
At the Market Offering
On March 5, 2024, the Company put in place an At the Market Offering Agreement (the “ATM Agreement”) which allowed the Company to issue and sell shares of its common stock, having an aggregate offering price of up to $
Stock Options
During the nine months ended September 30, 2023, the Company issued
Warrants
Underwriter Warrants
In connection with the Company's underwriting agreement with ThinkEquity, a division of Fordham Financial Management, Inc. (“ThinkEquity”) and the representative of the Company’s IPO underwriters, the Company entered into a warrant agreement to purchase up to
20
Lender Warrant
In connection with the loan agreement entered into with Western Alliance Bank (the “Lender”) on August 13, 2021, the Company issued a warrant (the “Lender Warrant”) to the Lender to purchase
PIPE Warrants
On December 1, 2021, the Company completed a private placement (the “PIPE”) in which the Company issued warrants (the “PIPE Warrants”) to purchase up to an aggregate of
On February 13, 2024, the Company entered into certain warrant repurchase and termination agreements with the holders of the PIPE Warrants to repurchase the PIPE Warrants for a purchase price equal to $
A summary of total warrant activity during the nine months ended September 30, 2024 is as follows:
Weighted | |||||||
Average | |||||||
Weighted | Remaining | ||||||
Warrants | Average | Contractual Term | |||||
| Outstanding |
| Exercise Price |
| in Years | ||
Balance at December 31, 2023 |
| | $ | |
| ||
Granted |
| — | — |
| — | ||
Exercised |
| — | — |
| — | ||
Repurchased |
| ( | — |
| — | ||
Balance at September 30, 2024 |
| | $ | |
| ||
11.STOCK-BASED COMPENSATION
Stock Incentive Plans
2021 Plan
In March 2021, the Company adopted the iSpecimen Inc. 2021 Stock Incentive Plan, which was subsequently amended in June 2021 and then on May 25, 2022 (the “2021 Plan”). The 2021 Plan was adopted to enhance the Company’s ability to attract, retain and motivate employees, officers, directors, consultants, and advisors by providing such persons with equity ownership opportunities and performance-based incentives. The 2021 Plan authorizes options, restricted stock, RSUs and other stock-based awards. The Company's board of directors, or any committee to which the board of directors delegates such authority, has the sole discretion in administering, interpreting, amending, or accelerating the 2021 Plan. Awards may be made under the 2021 Plan for up to
On May 24, 2023, at the Company’s annual meeting of stockholders, the stockholders approved an amendment to the 2021 Plan to increase the number of shares under the 2021 Plan from
21
During the nine months ended September 30, 2024 and 2023,
2013 Plan
The iSpecimen Inc. 2013 Stock Incentive Plan (the “2013 Plan”) was adopted on April 12, 2013 and subsequently amended on July 29, 2015. The aggregate number of shares of common stock that may be issued pursuant to the 2013 Plan was
Stock Options
During the nine months ended September 30, 2024 and 2023, the Company granted
| 2024 |
| 2023 | ||
Assumptions: |
|
|
|
| |
Risk-free interest rate |
| ||||
Expected term (in years) |
| ||||
Expected volatility |
| ||||
Expected dividend yield |
| — | — |
A summary of stock option activity under the 2021 Plan and 2013 Plan is as follows:
Weighted | ||||||||||
Average | ||||||||||
Weighted | Remaining |
| ||||||||
Options | Average | Contractual Term |
| Aggregate | ||||||
| Outstanding |
| Exercise Price |
| in Years |
| Intrinsic Value | |||
Balance at December 31, 2023 |
| | $ | |
| $ | — | |||
Granted |
| | | — | — | |||||
Exercised |
| — | — | — | — | |||||
Cancelled/forfeited |
| ( | | — | — | |||||
Balance at September 30, 2024 |
| | $ | |
| $ | — | |||
Options exercisable at September 30, 2024 |
| | $ | |
| $ | — | |||
The aggregate intrinsic value in the table above represents the difference between the Company's stock price as of the balance sheet date and the exercise price of each in-the-money option on the last day of the period.
22
The weighted average grant date fair value of stock options issued in the nine months ended September 30, 2024 and 2023 was $
Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||
Operating expenses: |
| 2024 | 2023 | 2024 |
| 2023 | ||||||
Technology | $ | | $ | — | $ | | $ | | ||||
Sales and marketing | | | | | ||||||||
Supply development |
| |
| — |
| |
| | ||||
Fulfillment | | | | | ||||||||
General and administrative | | | | | ||||||||
Total stock options expense | $ | | $ | | $ | | $ | | ||||
As of September 30, 2024 and 2023, a total of $
There were
Restricted Stock Units
A summary of RSUs activity under the 2021 Plan and 2013 Plan is as follows:
Weighted | |||||
RSUs | Average Grant | ||||
| Outstanding | Date Fair Value | |||
Unvested Balance at December 31, 2023 |
| | $ | | |
Granted |
| — | — | ||
Vested |
| ( | | ||
Forfeited |
| ( | | ||
Unvested Balance at September 30, 2024 |
| | $ | | |
The Company recorded RSUs compensation expense during the three and nine months ended September 30 as follows:
Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||
Operating expenses: | 2024 | 2023 | 2024 |
| 2023 | |||||||
Technology | $ | | $ | | $ | | $ | | ||||
Sales and marketing | | | | | ||||||||
Supply development |
| — |
| |
| |
| | ||||
Fulfillment | | | | | ||||||||
General and administrative | | | | | ||||||||
Total RSU expense | $ | | $ | | $ | | $ | | ||||
As of September 30, 2024 and 2023, the total unrecognized stock-based compensation expense related to unvested RSUs was $
23
12.INCOME TAXES
As of September 30, 2024 and December 31, 2023, the Company had federal net operating loss carryforwards of approximately $
Due to changes in ownership provisions of the Internal Revenue Code of 1986 (the “IRC”), the availability of the Company's net operating loss carryforwards may be subject to annual limitations under Section 382 of the IRC against taxable income in the future period, which could substantially limit the eventual utilization of such carryforwards.
13. SUBSEQUENT EVENT
Securities Offering on Form S-1 and Material Definitive Agreement
On October 29, 2024, the Company entered into a placement agency agreement (the “Placement Agency Agreement”) with WestPark Capital, Inc. (the “Placement Agent”), and a securities purchase agreement (the “Purchase Agreement”) with investors pursuant to which the Company agreed to issue and sell, in a “reasonable best efforts” public offering (the “Offering”) (i)
The Offering closed on October 31, 2024. The securities sold in the Offering were offered and sold pursuant to a registration statement on Form S-1 (File No. 333-282736), which was filed with the Securities and Exchange Commission (the “Commission”) on October 18, 2024, and subsequently declared effective by the Commission on October 29, 2024.
On October 31, 2024, the Company entered into an Investor Relations Agreement (the “IR Agreement”) with IR Agency LLC (the “Consultant”). Under the IR Agreement, the Consultant will provide marketing and advertising services to promote the Company to the financial community. In consideration for these services, the Company paid the Consultant a fee, for an initial term of one month, after which it may be extended by mutual agreement, of Two Million U.S. Dollars ($
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Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations
References in this report (the “Quarterly Report”) to “we,” “us” or the “Company” refer to iSpecimen Inc. The following discussion and analysis of the Company’s financial condition and results of operations should be read in conjunction with the unaudited condensed financial statements and the notes thereto contained elsewhere in this Quarterly Report. Certain information contained in the discussion and analysis set forth below includes forward-looking statements that involve risks and uncertainties.
Special Note Regarding Forward-Looking Statements
This Quarterly Report includes “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended (the “Securities Act”), and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), that are not historical facts and involve risks and uncertainties that could cause actual results to differ materially from those expected and projected. All statements, other than statements of historical fact included in this Quarterly Report including, without limitation, statements in this “Management’s Discussion and Analysis of Financial Condition and Results of Operations” regarding the Company’s financial position, business strategy and the plans and objectives of management for future operations, are forward-looking statements. Words such as “expect,” “believe,” “anticipate,” “intend,” “estimate,” “seek” and variations and similar words and expressions are intended to identify such forward-looking statements. Such forward-looking statements relate to future events or future performance, but reflect management’s current beliefs, based on information currently available. A number of factors could cause actual events, performance, or results to differ materially from the events, performance and results discussed in the forward-looking statements. For information identifying important factors that could cause actual results to differ materially from those anticipated in the forward-looking statements, please refer to the “Risk Factors” section of the Company’s Annual Report on Form 10-K filed with the U.S. Securities and Exchange Commission (the “SEC”) on March 13, 2024. The Company’s securities filings can be accessed on the EDGAR section of the SEC’s website at www.sec.gov. Except as expressly required by applicable securities law, the Company disclaims any intention or obligation to update or revise any forward-looking statements whether as a result of new information, future events or otherwise.
Overview
We were incorporated in 2009 under the laws of the state of Delaware. Our mission is to accelerate life science research and development via a single global marketplace platform, the iSpecimen Marketplace, which connects researchers to subjects, specimens, and associated data. We are headquartered in Lexington, Massachusetts. We operate as one operating and reporting segment.
In addition to creating a single global platform where both specimen providers and researchers can connect, the platform automates the process of searching for and selecting specimens for research. The platform taps into healthcare provider data to gain insights into the available samples in biobanks or laboratories, or to gain insights into the patient populations to support specimen collections directly from research subjects. The platform receives de-identified data from electronic medical records, laboratory information systems, and other healthcare data sources of available specimens and research subjects and harmonizes the data across all participating organizations.
Researchers can search this data using our intuitive, web-based user interface to obtain specimens more efficiently. They can instantly find the specific specimens they need for their studies, request quotes for these specimens or for custom collections directly from research subjects, place orders, and track and manage their specimens and associated data across projects.
Biospecimen providers also gain efficiencies using the iSpecimen Marketplace, not only because the platform provides instant access to a large researcher base, but because the technology orchestrates the bioprocurement workflow from specimen request to fulfillment. Specimen providers can access intuitive dashboards to view requests, create proposals, and track and manage their orders.
Finally, the platform helps with administrative and reporting functions for researchers, suppliers, and our internal personnel, including user and compliance management.
The iSpecimen Marketplace is composed of four major functional areas: search, workflow, data, and administrative reporting. As capital is made available to do so, we continue to invest in the evolution of these areas to improve engagement with the platform and liquidity across it. Our core business objective is to retain and grow both researcher and supplier usage of our platform to support biospecimen
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procurement, as well as to position our Company to explore other adjacent business opportunities that can benefit from the use of the iSpecimen Marketplace.
The iSpecimen Marketplace currently supports the supply chain management and bioprocurement process for specimens and associated data. We generate revenue by procuring various specimens from hospitals, laboratories, and other supply sites comprising our network, and delivering them to our medical research customers using our proprietary software to identify and locate the required specimens. Costs paid to acquire specimens from hospitals and laboratories generally vary depending upon the sample type, collection requirements, and data provided. We generally operate in a “just in time” fashion, meaning we procure specimens from our suppliers and distribute specimens to our customers after we obtain an order for specimens from a research client. Generally, we do not speculatively purchase and bank samples in anticipation of future, unspecified needs. We believe our approach offers many advantages over a more traditional inventory-based supplier business model where biorepositories take inventory risks, and where inventory turnover and cash conversion cycles can be lengthy.
Private Placement Offering
On December 1, 2021, we closed on a private placement offering (“PIPE”) for gross proceeds of approximately $21 million, before deducting approximately $1.4 million for underwriting discounts and commissions and estimated offering expenses, for (i) an aggregate of 87,500 shares of common stock and (ii) warrants, which are exercisable for an aggregate of up to 65,625 shares of common stock, all of which were repurchased by us on February 13, 2024, and are no longer outstanding.
At the Market Offering
On March 5, 2024, we entered into an At the Market Offering Agreement (the “ATM Agreement”) with Rodman & Renshaw LLC as agent (the “Sales Agent”) pursuant to which we may issue and sell shares of our common stock, having an aggregate offering price of up to $1,500,000 (the “ATM Shares”), from time to time through the Sales Agent (the “ATM Offering”). The ATM Shares, when issued, were registered pursuant to our shelf registration statement on Form S-3 (File No 333-265976), which became effective on July 12, 2022. We sold the ATM Shares, from time to time, pursuant to the ATM Agreement, in transactions that were “at the market offerings” as defined in Rule 415(a)(4) promulgated under the Securities Act. During the nine months ended September 30, 2024, we issued 199,004 shares of common stock for gross proceeds of approximately $1,494,000 under the ATM Agreement. In connection with the ATM Offering, we incurred offering costs of approximately $255,000, resulting in net proceeds of approximately $1,239,000.
Reverse Stock Split
On October 9, 2023, we received a notification from Nasdaq that our Common Stock failed to maintain a minimum bid price of $1.00 over the previous 30 consecutive business days as required by the Listing Rules of The Nasdaq Stock Market.
On July 19, 2024, our stockholders approved a proposal to amend our Fourth Amended and Restated Certificate of Incorporation to effect a reverse stock split of our issued and outstanding shares of common stock, as well as any shares of common stock held by the Company in treasury, at a ratio in the range from 1-for-10 to 1-for-20.
On August 19, 2024, our board of directors approved a one-for-twenty (1:20) reverse stock split of our issued and outstanding shares of common stock. On September 13, 2024, we filed with the Secretary of State of the State of Delaware a Certificate of Amendment to our Certificate of Incorporation to effect the Reverse Stock Split. The Reverse Stock Split became effective on September 13, 2024, and our common stock began trading on a split-adjusted basis on Nasdaq on September 16, 2024.
On October 1, 2024, we received a notification from Nasdaq that the Staff has determined that for the last 11 consecutive business days, from September 16, 2024 to September 30, 2024, the closing bid price of our Common Stock was $1.00 per share or greater. Accordingly, we regained compliance with Listing Rule 5559(a)(2).
Except as otherwise indicated, all references to our common stock, share data, per share data and related information have been adjusted for the Reverse Stock Split ratio of 1-for-20 as if they had occurred at the beginning of the earliest period presented. The Reverse Stock Split combined each 20 shares of our outstanding common stock and treasury shares into one share of common
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stock without any change in the par value per share, and the Reverse Stock Split correspondingly adjusted, among other things, the exercise rate of our warrants and options into our common stock. No fractional shares were issued in connection with the Reverse Stock Split, and any fractional shares resulting from the Reverse Stock Split were rounded up to the nearest whole share.
Debt Financing
On September 19, 2024, we entered into a Note Purchase Agreement with the Lender. Pursuant to the provisions of the Purchase Agreement, the Lender agreed to provide a loan to us in the amount of $1,000,000 and we agreed to issue to the Lender a promissory note in the principal amount of $1,000,000 payable within 12 months after the date of issuance, with interest accruing and payable at a rate of 18% per annum. The Purchase Agreement contains customary representations and warranties and obligates the Lender to provide an additional loan to us, in the form of a revolving line of credit of up to $1,000,000, upon our initial filing of a Registration Statement for an underwritten or best-efforts public offering for gross proceeds of at least $5,000,000. On September 25, 2024, we and the Lender closed the transactions described in the Purchase Agreement, the Lender provided funds to the Company in the net amount of $959,980 and we issued the Note to the Lender in the principal amount of $1,000,000. WestPark served as the placement agent in connection with the Loan and was paid a placement agent fee in the amount of $40,020 for its services.
On October 31, 2024, we paid off the outstanding principal balance of $1,000,000 and accrued interest of $18,000 on the Note.
Securities Offering on Form S-1
On October 29, 2024, we entered into a placement agency agreement (the “Placement Agency Agreement”) with WestPark Capital, Inc. (the “Placement Agent”), and a securities purchase agreement (the “Purchase Agreement”) with investors pursuant to which we agreed to issue and sell, in a “reasonable best efforts” public offering (the “Offering”) (i) 132,814 shares (the “Shares”) of our common stock, par value $0.0001 per share (the “Common Stock”) at an offering price of $2.999 per share, and (ii) pre-funded warrants to purchase up to 1,533,852 shares of Common Stock (the “Pre-Funded Warrants”) at an offering price of $3.00 per Share, less $0.0001 per Pre-Funded Warrant, for aggregate gross proceeds of $4,998,464 (or $4,999,998 assuming the full exercise of the Pre-Funded Warrants), before deducting placement agent fees and other offering expenses. As part of its compensation for acting as Placement Agent for the Offering, we paid the Placement Agent a cash fee of 4.0% of the aggregate gross proceeds plus reimbursement of certain expenses and legal fees. We intend to use the net proceeds of the offering for repayment of outstanding debt, potential acquisitions of assets or investments in businesses, products and technologies, and for marketing and advertising services. The remainder of the net proceeds will be used for working capital purposes.
The Offering closed on October 31, 2024. The securities sold in the Offering were offered and sold pursuant to a registration statement on Form S-1 (File No. 333-282736), which was filed with the Securities and Exchange Commission (the “Commission”) on October 18, 2024, and subsequently declared effective by the Commission on October 29, 2024.
Impact of the Current Economy
The Company’s financial performance is subject to global economic conditions and their impact on levels of spending by our customer research organizations, particularly discretionary spending for procurement of specimens used for research. Economic recessions may have adverse consequences across industries, including the health and biospecimen industries, which may adversely affect our business and financial condition. We increased our allowance for doubtful accounts in accounts receivables by $289,898 during the year ended December 31, 2023 due to certain boutique life sciences customers either lacking liquidity or having filed for bankruptcy. We have enhanced procedures related to our credit check process for new and existing customers to mitigate the risk to future collectability of receivables.
Changes in general market, economic and political conditions in domestic and foreign economies or financial markets, including fluctuation in stock markets resulting from, among other things, trends in the economy and inflation, as are being currently experienced, may result in a reduction in researchers’ demand for specimens due to the research organization’s inability to obtain funding.
To further address the current market conditions, we have taken steps, which include but are not limited to, reevaluating our pricing in order to be more competitive, creating campaigns to highlight and fast-track high demand items, enhancing internal team
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communications to accelerate the sales cycle, moving to a new line of business structure organized by our internal categorization of biospecimen suppliers capabilities to increase efficiency in operations, implementation of next day quotes to increase conversion ratios of quotes to purchase orders, and initiation of efforts to decrease expenditures through reductions in our workforce.
We believe that our business will continue to be resilient through a continued industry-wide economic slowdown in life science research, and that we will continue to work on improving our liquidity to address our financial obligations and alleviate possible adverse effects on our business, financial condition, results of operations or prospects.
Impact of the Russian-Ukrainian War on Our Operations
Our business was negatively impacted during the first half of 2022 by the ongoing war between Russia and Ukraine. At the start of the war, we had approximately $1 million of purchase orders that were slated to be fulfilled by our supply network in Ukraine and Russia. This supply network was shut down at the start of the war. Ukrainian suppliers were disabled due to war conditions and evacuations and some of our Russian suppliers were disabled by sanctions. While we mobilized to shift these purchase orders to other suppliers in the network, the process of specimen collections from other supply sites took time, which caused a delay in the fulfillment of such purchase orders. Alternate suppliers do not have the same favorable unit economics or specimen collection rates, and this also impacted our margins. Additionally, key resources were diverted from operations to resolving the re-fulfillment issues caused by the conflict.
As of September 30, 2024, our supply sites in Russia that had not been under sanctions were accessible and our supply sites in Ukraine were mostly reopened. However, logistics and transportation of specimens out of the country of Ukraine remains challenging and not as economically feasible as they were prior to the beginning of the war. Due to the uncertainty caused by the ongoing war, Ukrainian and Russian suppliers may again become inaccessible to us. Therefore, as long as the uncertainty continues, our policy is to ensure at a purchase order level that an order is not solely sourced from the two countries. The short and long-term implications of the war are difficult to predict as of the date of this Quarterly Report. The imposition of more sanctions and countersanctions may have an adverse effect on the economic markets generally and could impact our business and the businesses of our supply partners, especially those in Ukraine and Russia. Because of the highly uncertain and dynamic nature of these events, it is not currently possible to estimate the impact of the war on our business and the companies from which we obtain supplies and distribute specimens.
Known Trends, Demands, Commitments, Events or Uncertainties Impacting Our Business
Chief Executive Officer Initiatives
The Company’s mission remains to accelerate life sciences research and development, pursuant to a single global marketplace platform. Executive management of the Company continues to review the Company’s structure, processes, and resources to evaluate and identify areas for improvement, and has been focused on creating and ensuring a runway for growth and scale for the business.
Throughout the year ended December 31, 2023 through the nine months ended September 30, 2024, we have initiated efforts to decrease our capital and operational expenditures by cutting costs and right sizing the Company through reductions in our workforce while streamlining operations and rationalizing our resources to focus on key market opportunities. As a result, we began to experience significant decreases in expenditures starting in the second half of 2023. The reductions in workforce since January 1, 2023 through the end of September 30, 2024 has resulted in an estimated reduction in compensation costs of approximately 70% and technology costs of approximately 70% by the end of September 30, 2024 when compared to January 1, 2023.
During the year ended December 31, 2023, we performed operational process improvement activities to increase collaboration within and between departments. We moved to a line of business structure organized by our internal categorization of biospecimen suppliers’ capabilities, which has increased efficiency in our operations and throughout the Company. We continue to see benefits from this move.
We completed the implementation of a next day quote system in the third quarter of 2023 and we continue to see positive results in 2024, as evidenced by increased conversion ratios of quotes to purchase orders of 41%. Previously, it took an extended number of days to complete a feasibility study in order to provide a customer quote, which negatively impacted the time to convert a quote to a purchase order.
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While we are committed to developing our technology, we are investing at a significantly lower level in 2024 when compared to 2023 and prior years, while we focus on growing our revenues through key market opportunities and assessing our capital raise prospects. During the nine months ended September 30, 2024 and 2023, we capitalized approximately $588,000 and $3,501,000, respectively, of internally developed software costs. These investments have resulted in multiple process improvements, streamlining workflows and providing deeper insights into orders for all users of our marketplace.
We have shifted our focus from high volume to high value suppliers that meet our newly defined costs, quality and speed requirements. We established business criteria that focus on supplier capabilities and revenue growth strategies as well as technology criteria for integrating onto our iSpecimen Marketplace platform and participating with us. In the nine months ended September 30, 2024, we terminated 155 supplier agreements and are in the final stages of what we call our “supplier network refresh project”. This has resulted in fewer key suppliers, supported by our lean workforce and processes more effectively. We have been reengaging our suppliers in a more meaningful manner which assisted us in the implementation of our next day quote system. We now have a key supplier program whereby we proactively engage with the suppliers to promote our business through marketing campaigns and supplier organizations’ offerings.
Going forward, we will leverage the hard work detailed above to support a sales overhaul. As we wrap up several operationally focused projects, we will now be re-organizing the commercial end of the business. This starts with a new account-based sales approach and the introduction of an outbound sales team to ensure we are meeting our customers and prospects where they are. We are also bringing marketing and sales closer to enable the same efficiencies within the commercial organization, the same way that our line of business realignment brought to the operational side of the business this past year. This refined approach and tighter internal integration will continue to accelerate our next day quote program and deepen customer relationships for increased predictability.
Our strategic business intelligence initiatives have enabled us to understand our market and business better than ever before. We now have the capabilities to use data to know how and where to grow. We will continue adjusting the shape of the business toward our core competencies and the market. We can better use key insights from our sales data to understand market needs to assess areas where we lose deals today, through multiple lenses, in order to adjust our supplier network and marketing efforts accordingly. Conversely, this strategy will also allow us to assess areas where we win with an eye toward expanding deeper into those market niches or disease states.
Following the completion of our supplier network refresh efforts, we will have a better than ever understanding of our key supplier capabilities, specifically focused on their pricing, quality, and speed. Using this information and the outputs of our strategic business intelligence capabilities, we will continue to be able to increase the speed of an opportunity through our sales funnel and our conversion ratios, which we believe will continue to grow our revenue.
Components of Our Results of Operations
Revenue
We generate revenue by procuring various specimens from hospitals, laboratories, and other supply sites, for our medical research customers using our proprietary software, the iSpecimen Marketplace, to identify, locate, and ultimately validate the required specimens to our customers’ requested specifications. The Company’s performance obligation is to procure a specimen meeting the customer specification(s) from a supplier, on a “best efforts” basis, for our customer at the agreed price per specimen as indicated in the customer contract with the Company. We do not currently charge suppliers or customers for the use of our proprietary software. Each customer will execute a material and data use agreement with the Company or agree to online purchase terms, each of which includes terms such as specimen and data use, shipment terms, payment and cancellation terms. These are then supplemented by purchase orders that specify specimen requirements including detailed inclusion/exclusion criteria, quantities to be collected, and pricing. Collectively, these customer agreements represent the Company’s contracts with its customer. Generally, contracts have fixed unit pricing. For certain specimen orders, a refundable customer deposit may be required prior to order fulfillment depending on project set-up requirements, presented as deferred revenue. The Company expects to recognize the deferred revenue within the next twelve months.
We recognize revenue over time, as we have created an asset with no alternative use and we have an enforceable right to payment for performance completed to date. At contract inception, we review a contract and related order upon receipt to determine if the specimen ordered has an alternative use to us. Generally, specimens ordered do not have an alternative future use to us and our performance
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obligation is satisfied when the related specimens are accessioned. We use an output method to recognize revenue for specimens with no alternative future use. The output is measured based on the number of specimens accessioned.
Customers are typically invoiced upon shipment. Depending on the quantity of specimens ordered, it may take several accounting periods to completely fulfill a purchase order. In other words, there can be multiple invoices issued for a single purchase order, reflecting the specimens being accessioned over time. However, specimens are generally shipped as soon as possible after they have been accessioned.
Cost of Revenue
Cost of revenue primarily consists of the purchase price to acquire specimens from hospitals and laboratories, inbound and outbound shipping costs, supply costs related to samples, payment processing and related transaction costs, costs paid to the supply sites to support sample collections, amortization of capitalized sequenced data costs and other assets related to sequenced data. Shipping costs upon receipt of products from suppliers are recognized in cost of revenue.
Technology
Technology costs include consulting fees, payroll and related expenses for employees involved in the development and implementation of our technology, software license and system maintenance fees, outsourced data center costs, data management costs, amortization of internally developed software, and other expenses necessary to support technology initiatives. Collectively, these costs reflect the efforts we make to offer a wide variety of products and services to our customers. Technology and data costs are generally expensed as incurred.
A portion of technology costs are related to research and development. Costs incurred for research and development are expensed as incurred, except for software development costs that are eligible for capitalization. Research and development costs primarily include salaries and related expenses, in addition to the cost of external service providers.
Sales and Marketing
Sales and marketing costs primarily consist of payroll and related expenses for personnel engaged in marketing and selling activities, including salaries and sales commissions, travel expenses, public relations, and social media costs, ispecimen.com website development and maintenance costs, search engine optimization fees, advertising costs, direct marketing costs, trade shows and events fees, marketing and customer relationship management software, and other marketing-related costs.
Supply Development
We have agreements with supply partners that allow us to procure specimens from them and distribute these samples to customers. Supply development costs primarily include payroll and related expenses for personnel engaged in the development and management of this supply network, related travel expenses, regulatory compliance costs to support the network, and other supply development and management costs.
Fulfillment
Fulfillment costs primarily consist of those costs incurred in operating and staffing operations and customer service teams, including costs attributable to assess the feasibility of specimen requests, creating and managing orders, picking, packaging, and preparing customer orders for shipment, responding to inquiries from customers, and laboratory equipment and supplies.
General and Administrative
General and administrative expenses primarily consist of costs for corporate functions, including payroll and related expenses for human resources, legal, finance, and executive teams, associated software licenses, facilities, and equipment expenses, such as depreciation and amortization expense and rent, outside legal expenses, insurance costs, and other general and administrative costs.
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Financial Operations Overview and Analysis for the Three and Nine Months Ended September 30, 2024 and 2023 (Unaudited)
Comparison of the Three Months Ended September 30, 2024 and 2023
Three Months Ended September 30, | Change |
| ||||||||||
2024 | 2023 | Dollars | Percentage |
| ||||||||
Revenue |
| $ | 2,661,936 |
| $ | 2,777,751 |
| $ | (115,815) |
| (4) | % |
Operating expenses: | ||||||||||||
Cost of revenue |
| 1,554,159 |
| 1,392,534 |
| 161,625 |
| 12 | % | |||
Technology |
| 754,730 |
| 921,580 |
| (166,850) |
| (18) | % | |||
Sales and marketing |
| 631,625 |
| 897,433 |
| (265,808) |
| (30) | % | |||
Supply development |
| 84,972 |
| 186,176 |
| (101,204) |
| (54) | % | |||
Fulfillment |
| 449,142 |
| 471,735 |
| (22,593) |
| (5) | % | |||
General and administrative |
| 892,712 |
| 1,102,373 |
| (209,661) |
| (19) | % | |||
Total operating expenses |
| 4,367,340 |
| 4,971,831 |
| (604,491) |
| (12) | % | |||
Loss from operations |
| (1,705,404) |
| (2,194,080) |
| 488,676 |
| 22 | % | |||
Other income, net | ||||||||||||
Interest expense |
| (7,364) |
| (4,465) |
| (2,899) |
| (65) | % | |||
Interest income |
| 1,235 |
| 67,362 |
| (66,127) |
| (98) | % | |||
Other income (expense), net | 271,680 | 20,082 | 251,598 | 1,253 | % | |||||||
Total other income, net |
| 265,551 |
| 82,979 |
| 182,572 |
| 220 | % | |||
Net loss | $ | (1,439,853) | $ | (2,111,101) | 671,248 |
| 32 | % | ||||
Revenue
Revenue decreased by approximately $116,000, or 4%, from approximately $2,778,000 for the three months ended September 30, 2023 to approximately $2,662,000 for the three months ended September 30, 2024. This was primarily due to a decrease in average selling price per specimen of $203, or 39%, from approximately $518 in the three months ended September 30, 2023 to approximately $315 in the three months ended September 30, 2024. The decrease in the average selling price per specimen was offset by an increase of 3,094, or 58%, in specimen count from 5,367 specimens in the three months ended September 30, 2023 to 8,461 specimens in the three months ended September 30, 2024.
Cost of Revenue
Cost of revenue increased by approximately $162,000, or 12%, from approximately $1,393,000 for the three months ended September 30, 2023 to approximately $1,554,000 for the three months ended September 30, 2024, which was attributable to an approximately 58% increase in the number of specimens accessioned for the current period compared to the same period in the prior year, offset by an approximately $76, or 29%, decrease in the average cost per specimen.
Technology
Total technology expenditures decreased by approximately $796,000, or 47%, from approximately $1,691,000 for the three months ended September 30, 2023 to approximately $895,000 for the three months ended September 30, 2024. Technology expenditures are either capitalized as internally developed software or expensed in the period incurred.
Technology expenditures capitalized as internally developed software costs decreased by approximately $630,000, or 82%, from approximately $769,000 for the three months ended September 30, 2023 to approximately $140,000 for the three months ended September 30, 2024 due to reductions in workforce stemming from our decision to invest in the software at a significantly lower level in 2024 when compared to 2023 and prior years.
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Product development and technology expense that were not eligible for capitalization decreased by approximately $167,000, or 18%, from approximately $922,000 for the three months ended September 30, 2023 to approximately $755,000 for the three months ended September 30, 2024. The decrease was related to decreases in professional fees of approximately $88,000, decreases in headcount and payroll and related expenses of approximately $63,000, and amortization of internally developed software of approximately $16,000.
Sales and Marketing Expenses
Sales and marketing expenses decreased by approximately $266,000, or 30%, from approximately $898,000 for the three months ended September 30, 2023 to approximately $632,000 for the three months ended September 30, 2024. The decrease was primarily attributable to decreases in payroll and related expenses of approximately $205,000, external marketing expense of approximately $84,000, and general operating expenses related to sales and marketing of approximately $11,000, partially offset by an increase in advertising and promotions expense of approximately $34,000.
Supply Development
Supply development expenses decreased by approximately $101,000, or 54%, from approximately $186,000 for the three months ended September 30, 2023 to approximately $85,000 for the three months ended September 30, 2024. The decrease was primarily attributable to decreases in payroll and related expenses of approximately $62,000, professional fees of approximately $34,000, and general supply development expenses of approximately $5,000.
Fulfillment
Fulfillment costs decreased by approximately $23,000, or 5%, from approximately $472,000 for the three months ended September 30, 2023 to approximately $449,000 for the three months ended September 30, 2024. The decrease was primarily attributable to decreases in professional fees of approximately $99,000 and general operating expenses related to fulfillment of approximately $10,000, partially offset by an increase in payroll and related expenses of approximately $86,000 for personnel engaged in pre-sales feasibility assessments and order fulfillment.
General and Administrative Expenses
General and administrative expenses decreased by approximately $209,000, or 19%, from approximately $1,102,000 for the three months ended September 30, 2023 to approximately $893,000 for the three months ended September 30, 2024. The decrease was attributable to decreases in compensation costs of approximately $172,000, general operating expenses of approximately $71,000, professional fees of approximately $20,000, utilities and facilities expenses of approximately $16,000, and depreciation and amortization of approximately $7,000, partially offset by increases in taxes and insurance of approximately $57,000 and bad debt expense of approximately $20,000.
Other Income, net
Other income, net, increased by approximately $183,000, or 220%, from approximately $83,000 for the three months ended September 30, 2023 to approximately $266,000 for the three months ended September 30, 2024. The increase in other income, net, was attributable to an increase in other income of approximately $252,000 which mainly consisted of noncash effect of a reversal of sales tax liability recognized in the prior year, partially offset by a decrease in interest income of approximately $66,000 and an increase in interest expense of approximately $3,000.
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Comparison of the Nine Months Ended September 30, 2024 and 2023
Nine Months Ended September 30 | Change |
| ||||||||||
2024 | 2023 | Dollars | Percentage |
| ||||||||
Revenue |
| $ | 7,815,608 |
| $ | 7,353,090 |
| $ | 462,518 |
| 6 | % |
Operating expenses: | ||||||||||||
Cost of revenue |
| 3,978,557 |
| 3,393,079 |
| 585,478 |
| 17 | % | |||
Technology |
| 2,578,624 |
| 2,599,086 |
| (20,462) |
| (1) | % | |||
Sales and marketing |
| 2,380,515 |
| 2,972,757 |
| (592,242) |
| (20) | % | |||
Supply development |
| 420,322 |
| 801,038 |
| (380,716) |
| (48) | % | |||
Fulfillment |
| 1,293,185 |
| 1,363,427 |
| (70,242) |
| (5) | % | |||
General and administrative |
| 4,051,994 |
| 4,522,028 |
| (470,034) |
| (10) | % | |||
Total operating expenses |
| 14,703,197 |
| 15,651,415 |
| (948,218) |
| (6) | % | |||
Loss from operations |
| (6,887,589) |
| (8,298,325) |
| 1,410,736 |
| 17 | % | |||
Other income, net | ||||||||||||
Interest expense |
| (16,303) |
| (11,535) |
| (4,768) |
| (41) | % | |||
Interest income |
| 40,896 |
| 292,506 |
| (251,610) |
| (86) | % | |||
Other income (expense), net | 412,002 | (9,173) | 421,175 | 4,591 | % | |||||||
Total other income, net |
| 436,595 |
| 271,798 |
| 164,797 |
| 61 | % | |||
Net loss | $ | (6,450,994) | $ | (8,026,527) | 1,575,533 |
| 20 | % | ||||
Revenue
Revenue increased by approximately $463,000, or 6%, from approximately $7,353,000 for the nine months ended September 30, 2023 to approximately $7,816,000 for the nine months ended September 30, 2024. This was primarily due to an increase of 942, or 5% in specimen count from 18,678 specimens in the nine months ended September 30, 2023 to 19,620 specimens in the nine months ended September 30, 2024. The average selling price per specimen also increased by approximately $4, or 1%, from approximately $394 in the nine months ended September 30, 2023 to $398 in the nine months ended September 30, 2024.
Cost of Revenue
Cost of revenue increased by approximately $586,000, or 17%, from approximately $3,393,000 for the nine months ended September 30, 2023 to approximately $3,979,000 for the nine months ended September 30, 2024, which was attributable to a $21, or 12%, increase in the average cost per specimen and a 5% increase in the number of specimens accessioned during the nine months ended September 30, 2024 over the same period in the prior year.
Technology
Total technology expenditure decreased by approximately $2,933,000, or 48%, from approximately $6,100,000 for the nine months ended September 30, 2023 to approximately $3,167,000 for the nine months ended September 30, 2024. Technology expenditures are either capitalized as internally developed software or expensed in the period incurred.
Technology expenditures capitalized as internally developed software costs decreased by approximately $2,913,000, or 83%, from approximately $3,501,000 for the nine months ended September 30, 2023 to approximately $588,000 for the nine months ended September 30, 2024 due to reductions in workforce stemming from our decision to invest in the software at a significantly lower level in 2024 when compared to 2023 and prior years.
Product development and technology expense that were not eligible for capitalization decreased by approximately $20,000, or 1%, from approximately $2,599,000 for the nine months ended September 30, 2023 to approximately $2,579,000 for the nine months ended
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September 30, 2024. The period over period decrease was related to decreases in payroll and related expenses of approximately $136,000 and professional fees of approximately $9,000, partially offset by an increase in amortization of approximately $125,000.
Sales and Marketing Expenses
Sales and marketing expenses decreased approximately $592,000, or 20%, from approximately $2,973,000 for the nine months ended September 30, 2023 to approximately $2,381,000 for the nine months ended September 30, 2024. The period over period decrease was primarily attributable to decreases in payroll and related expenses of approximately $434,000, external marketing expense of approximately $275,000, and general operating expenses related to sales and marketing of approximately $53,000, which were partially offset by increases in advertising and promotions expense of approximately $170,000.
Supply Development
Supply development expenses decreased approximately $381,000, or 48%, from approximately $801,000 for the nine months ended September 30, 2023 to approximately $420,000 for the nine months ended September 30, 2024. The period over period decrease was primarily attributable to decreases in professional fees of approximately $218,000, payroll and related expenses of approximately $141,000, and general supply development expenses of approximately $22,000.
Fulfillment
Fulfillment costs decreased approximately $70,000, or 5%, from approximately $1,363,000 for the nine months ended September 30, 2023 to approximately $1,293,000 for the nine months ended September 30, 2024. The decrease was primarily attributable to decreases in professional fees of approximately $97,000 and general operating expenses related to fulfillment of approximately $34,000, which were partially offset by an increase in payroll and related expenses of approximately $61,000 for personnel engaged in pre-sales feasibility assessments and order fulfillment.
General and Administrative Expenses
General and administrative expenses decreased approximately $470,000, or 10%, from approximately $4,522,000 for the nine months ended September 30, 2023 to approximately $4,052,000 for the nine months ended September 30, 2024. The period over period decrease was attributable to decreases in compensation costs of approximately $470,000, general operating expenses of approximately $175,000, depreciation and amortization of approximately $51,000, bad debt expense of approximately $37,000, utilities and facilities expenses of approximately $26,000, which were partially offset by increases in taxes and insurance of approximately $148,000 and professional fees of approximately $141,000.
Other Income, net
Other income, net, increased by approximately $165,000, or 61%, from approximately $272,000 for the nine months ended September 30, 2023 to approximately $437,000 for the nine months ended September 30, 2024. The increase in other income, net, was attributable to an increase in other income (expense) of approximately $421,000 which mainly consisted of noncash effect of a reversal of sales tax liability recognized in the prior year, offset by a decrease in interest income of approximately $252,000 and an increase in interest expense of approximately $5,000.
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Liquidity and Capital Resources
Change | ||||||||||||
| September 30, 2024 |
| December 31, 2023 |
| Dollars |
| Percentage | |||||
(unaudited) | ||||||||||||
Balance Sheet Data: | ||||||||||||
Cash and cash equivalents | $ | 1,751,854 | $ | 2,343,666 | $ | (591,812) | (25) | % | ||||
Available-for-sale securities | — | 2,661,932 | (2,661,932) | (100) | % | |||||||
Working capital | (1,610,379) | 2,189,673 | (3,800,052) | (174) | % | |||||||
Total assets | 11,264,223 | 15,819,137 | (4,554,914) | (29) | % | |||||||
Total stockholders' equity | 4,714,572 | 9,741,077 | (5,026,505) | (52) | % | |||||||
Nine Months Ended September 30, | Change |
| |||||||||||
| 2024 |
| 2023 |
| Dollars |
| Percentage |
|
| ||||
Statement of Cash Flow Data: | |||||||||||||
Net cash flows used in operating activities | $ | (4,691,032) | $ | (6,152,691) | $ | 1,461,659 | 24 | % | |||||
Net cash flows provided by (used in) investing activities |
| 2,052,614 |
| (6,505,340) |
| 8,557,954 |
| 132 | % | ||||
Net cash flows provided by financing activities |
| 2,046,606 |
| 70,889 |
| 1,975,717 |
| 2,787 | % | ||||
Net decrease in cash and cash equivalents | $ | (591,812) | $ | (12,587,142) | $ | 11,995,330 | |||||||
Capital Resources
We have had recurring losses since inception. As of September 30, 2024, our available cash and cash equivalents and available-for-sale securities totaled approximately $1,752,000, which represented a decrease of approximately $3,254,000 from approximately $5,006,000, as of December 31, 2023. We had negative working capital of approximately $1,610,000, an accumulated deficit of approximately $65,816,000, cash and cash equivalents of approximately $1,752,000, and accounts payable and accrued expenses of approximately $5,078,000. Our continued viability is dependent on the ability to successfully obtain additional working capital and/or ultimately attain profitable operations. During the year ended December 31, 2023, we began initiating efforts to decrease our capital and operational expenditures by cutting costs and right sizing the Company through reductions in workforce while streamlining operations and rationalizing resources to focus on key market opportunities. The reduction in workforce since January 1, 2023 through September 30, 2024, cumulatively resulted in an estimated reduction in monthly compensation costs of approximately 70% and technology costs of approximately 70% by the end of September 30, 2024 when compared to January 1, 2023. While we plan to improve our sales and revenues, we are taking steps to significantly reduce and manage expenditures to improve our financial position and ensure continued funding of operations. However, as certain elements of our operating plan are not within our control, we are unable to assess their probability. In the nine months ended September 30, 2024, we engaged in raising capital through debt financing as discussed in Note 7 and subsequently, through public equity as discussed in Note 13.
We may be unsuccessful in increasing our revenues or contain our operating expenses, or we may be unable to raise additional capital on commercially favorable terms. Our failure to generate additional revenues or contain operating costs would have a negative impact on our business, results of operations and financial condition and our ability to continue as a going concern. If we do not generate enough revenue to provide an adequate level of working capital, our business plan will be scaled down further.
These conditions raise substantial doubt regarding our ability to continue as a going concern for a period of one year after the date of this Quarterly Report. Management’s plan to mitigate the conditions that raise substantial doubt includes generating additional revenues, deferring certain projects and capital expenditures and eliminating certain future operating expenses for us to continue as a going concern. However, there can be no assurance that we will be successful in completing any of these options. As a result, management’s plans cannot be considered probable and thus do not alleviate substantial doubt about our ability to continue as a going concern.
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Cash Flows
Operating Activities
For the nine months ended September 30, 2024, net cash used in operating activities was approximately $4,691,000, which consisted of a net loss of approximately $6,451,000 offset by non-cash charges of approximately $2,167,000, which included approximately $1,554,000 related to amortization of internally developed software, approximately $239,000 in stock-based compensation, approximately $206,000 in bad debt expense, approximately $144,000 related to amortization of other intangible assets, approximately $49,000 related to depreciation of property and equipment, approximately $4,000 related to amortization of discount and debt issuance costs on the senior note payable, and approximately $1,000 of losses from sales of available-for-sale securities, which were partially offset by approximately $29,000 of accretion of discount on available-for-sale securities.
Total changes in assets and liabilities of approximately $407,000 were attributable to an approximately $518,000 decrease in accrued expense, an approximately $452,000 increase in accounts receivable, an approximately $132,000 decrease in deferred revenue, an approximately $108,000 decrease in lease liability, and an approximately $12,000 increase in security deposits, offset by an approximately $558,000 decrease in accounts receivable-unbilled, an approximately $130,000 increase in accounts payable, an approximately $113,000 decrease in operating lease right-of-use asset, and an approximately $14,000 decrease in prepaid expenses and other current assets.
For the nine months ended September 30, 2023, net cash used in operating activities was approximately $6,153,000, which consisted of a net loss of approximately $8,027,000 offset by non-cash charges of approximately $1,982,000, which included approximately $1,436,000 related to amortization of internally developed software, approximately $352,000 in stock-based compensation, approximately $243,000 in bad debt expense, and approximately $99,000 related to depreciation of property and equipment, offset by $147,000 of accretion of discount on available-for-sale securities.
Total changes in assets and liabilities of approximately $108,000 were attributable to an approximately $503,000 decrease in accrued expenses, an approximately $351,000 increase in accounts receivable, an approximately $179,000 decrease in accounts payable, an approximately $85,000 decrease in deferred revenue, an approximately $49,000 increase in operating lease right-of-use asset, and an approximately $20,000 increase in prepaid expenses and other current assets, offset by an approximately $902,000 decrease in accounts receivable-unbilled, an approximately $129,000 decrease in tax credit receivable, and an approximately $48,000 increase in operating lease liability.
Investing Activities
Net cash provided by investing activities was approximately $2,053,000 for the nine months ended September 30, 2024, which consisted of approximately $3,150,000 of proceeds from sales and maturities of available-for-sale securities, which were offset by approximately $588,000 of capitalization of internally developed software, approximately $461,000 of purchases of available-for-sale securities, approximately $25,000 of purchase of leasehold improvements, and approximately $24,000 of purchase of property and equipment.
Net cash used in investing activities was approximately $6,505,000 for the nine months ended September 30, 2023, which consisted of approximately $10,143,000 of purchase of available-for-sale securities, approximately $3,693,000 of capitalization of internally developed software, and approximately $19,000 of purchase of property and equipment, offset by approximately $7,350,000 of proceeds from sale and maturities of available-for-sale securities.
Financing Activities
Net cash provided by financing activities was approximately $2,047,000 for the nine months ended September 30, 2024, which consisted of approximately $1,494,000 of proceeds received from the issuance of common stock in connection with the ATM Offering, and $1,000,000 of proceeds received from the issuance of the senior note payable, offset by approximately $255,000 for the payment of offering costs in connection with the issuance of common stock in connection with the ATM Offering, approximately $140,000 for the payment of debt issuance costs in connection with the senior note payable, and approximately $53,000 for the repurchase of common stock exercisable under PIPE Warrants.
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Net cash provided by financing activities was approximately $71,000 for the nine months ended September 30, 2023, due to proceeds received from the exercise of stock options.
Effects of Inflation and Supply Chain Shortages
Our operations are heavily reliant on specimen availability, and as a result, we often receive more requests than we can fulfill. While the Company is subject to these types of supply chain constraints that are specific to the specimen industry, we have not been materially affected by the more common supply chain issues currently affecting the economy, specifically surrounding transportation. Due to the small size of the packages that we ship, our carriers were able to continue making timely deliveries during the nine months ended September 30, 2024. However, there had been an increase in our shipping costs period over period during the nine months ended September 30, 2024.
We have experienced negative effects of inflation in certain areas of our business due to the high rates of inflation in the world’s current economy. This inflation is affecting employee salaries, which account for a significant portion of our operating costs. Additionally, the costs of supplies have been affected by inflation; however, these costs are not significant to the Company’s results.
Inflation has not had a significant impact on the cost of specimens due to our long-term contracts maintained with vendors, which include revenue sharing plans.
Critical Accounting Policies and Estimates
We have chosen accounting policies that we believe are appropriate to accurately and fairly report our operating results and financial condition in conformity with GAAP. We apply these accounting policies in a consistent manner. Our significant accounting policies are discussed in Note 2, “Summary of Significant Accounting Policies,” in our financial statements included in our Annual Report on Form 10-K for the year ended December 31, 2023.
The application of critical accounting policies requires that we make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues and expenses and related disclosures. These estimates and assumptions are based on historical experience and other market-specific or other relevant assumptions that we believe to be reasonable under the circumstances. We evaluate these estimates and assumptions on an ongoing basis. If actual results ultimately differ from previous estimates, the revisions are included in results of operations in the period in which the actual amounts become known. The critical accounting policies that involve the most significant management judgments and estimates used in preparation of our unaudited condensed financial statements or are the most sensitive to change from outside factors, are discussed in “Part II. Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations” contained in the Company’s Annual Report on Form 10-K for the year ended December 31, 2023. There have been no material changes in our critical accounting policies and procedures during the nine months ended September 30, 2024.
JOBS Act Transition Period
On April 5, 2012, the Jumpstart Our Business Startups Act of 2012 (the “JOBS Act”) was enacted. Section 107 of the JOBS Act provides that an “emerging growth company” can take advantage of the extended transition period provided in Section 7(a)(2)(B) of the Securities Act for complying with new or revised accounting standards. In other words, an “emerging growth company” can delay the adoption of certain accounting standards until those standards would otherwise apply to private companies.
We have elected not to “opt out” of such extended transition period, which means that when a standard is issued or revised and it has different application dates for public or private companies, we will adopt the new or revised standard at the time private companies adopt the new or revised standard and will do so until such time that we either (i) irrevocably elect to “opt out” of such extended transition period or (ii) no longer qualify as an emerging growth company.
We are in the process of evaluating the benefits of relying on other exemptions and reduced reporting requirements provided by the JOBS Act. Subject to certain conditions set forth in the JOBS Act, as an “emerging growth company,” we intend to rely on certain of these exemptions, including without limitation, (i) providing an auditor’s attestation report on our system of internal controls over financial reporting pursuant to Section 404(b) of the Sarbanes-Oxley Act of 2002 and (ii) complying with any requirement that may be
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adopted by the PCAOB regarding mandatory audit firm rotation or a supplement to the auditor’s report providing additional information about the audit and the financial statements, known as the auditor discussion and analysis. We will remain an “emerging growth company” until the earliest of (i) the last day of the fiscal year in which we have total annual gross revenues of $1.235 billion or more; (ii) December 31, 2026; (iii) the date on which we have issued more than $1 billion in nonconvertible debt during the previous three years; or (iv) the date on which we are deemed to be a large accelerated filer under the rules of the SEC.
Item 3. Quantitative and Qualitative Disclosures About Market Risk.
Not applicable for smaller reporting companies.
Item 4. Controls and Procedures.
Evaluation of Disclosure Controls and Procedures
Disclosure controls and procedures are designed to ensure that information required to be disclosed by us in our Exchange Act reports is recorded, processed, summarized, and reported within the time periods specified in the SEC’s rules and forms, and that such information is accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure.
Under the supervision and with the participation of our management, including our Chief Executive Officer and Chief Financial Officer, we conducted an evaluation of the effectiveness of our disclosure controls and procedures as of the end of the fiscal quarter ended September 30, 2024, as such term is defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act. These controls and procedures are designed to provide reasonable assurance that the information required to be disclosed in the reports that we file or submit under the Exchange Act is recorded, processed, summarized, and reported within the time periods specified in the SEC’s rules and forms and that such information is accumulated and communicated to our management, including our principal executive officer and principal financial and accounting officer, in a manner to allow timely decisions regarding required disclosures. Based on this evaluation, management has concluded that our disclosure controls and procedures were not effective as of September 30, 2024 due to the following material weakness in internal control over financial reporting:
| ● | The Company did not design and maintain adequate controls to maintain appropriate documentation for the tax-exempt status of its customers, calculate and collect sales tax at point of sale, and subsequently report and remit in a timely manner to the relevant tax jurisdictions sales tax obligations. |
Notwithstanding the existence of the material weakness described above, management believes that the unaudited condensed financial statements included in this Quarterly Report fairly present, in all material respects, our financial position, results of operations and cash flows as of and for the periods presented, in conformity with GAAP.
Management’s Plan for Remediation
The material weakness described above was identified as a result of an entity-wide risk assessment process that commenced in the quarter ended June 30, 2023. The Company is in the process of implementing a remediation plan to improve our internal control over financial reporting and to remediate the related control deficiencies that led to the material weakness. In response to these deficiencies, management, with the oversight of the Audit Committee of the Board of Directors, has identified and implemented steps to remediate the material weakness.
The Company began implementing the remediation plan during the second quarter of fiscal year 2023 and this remediation is ongoing as of the filing date of this Quarterly Report. The following remedial measures are designed to address the material weakness and to continue to improve our internal control over financial reporting.
| ● | We have engaged external tax advisors to complement internal resources and efforts and provide support in assessing the appropriate sales tax treatment associated with the Company’s products for all prior years in which the Company had generated revenue. |
| ● | We have obtained sales tax exemption letters, representation letters or proof of payments of compensating use tax from our customers and we have started a collection effort of these sales taxes from certain customers who have notified the Company that they do not have a sales tax exemption letter. |
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| ● | We have begun implementing a sales tax software platform solution for the calculation, collection, and remittance of sales tax for all non-exempt future sales, and assisting with the collection and tracking of VDAs received from states where a potential sales tax liability may exist. |
| ● | We have begun designing and implementing enhanced policies, procedures and controls related to the calculation, communication, collection, and remittance of sales tax to relevant jurisdictions. |
| ● | We have begun filing VDAs and/or registrations for sales and use taxes in certain states, and the filing and remittance of past due and current periodic sales and use taxes. |
| ● | We have begun training appropriate personnel in the effective design and execution of our enhanced policies, procedures, and controls, including the importance of the ongoing, consistent effective execution of such procedures and controls. |
We are committed to the remediation of the material weakness and expect to successfully implement enhanced control processes. However, as we continue to evaluate, and work to improve our internal control over financial reporting, management may determine that additional measures to address control deficiencies or modifications to the remediation plan are necessary. Therefore, we cannot assure you when we will be able to fully remediate such weakness, nor can we be certain that additional actions will not be required or what the costs may be of any such additional actions. Moreover, we cannot assure you that additional material weaknesses will not arise in the future.
Changes in Internal Control Over Financial Reporting
We are in the process of implementing certain changes to our internal controls to remediate the material weakness described above. Except as noted above, there were no changes in the Company’s internal control over financial reporting during the nine months ended September 30, 2024 that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.
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PART II - OTHER INFORMATION
Item 1. Legal Proceedings.
On July 25, 2024, Benjamin Bielak, the Company’s Chief Information Officer, until his resignation on July 14, 2024, initiated a Demand for Arbitration against the Company with the American Arbitration Association, pursuant to the dispute resolution provisions contained in Mr. Bielak’s employment agreement. The terms and conditions of Mr. Bielak’s employment with the Company were governed by his employment agreement.
In his Demand for Arbitration Mr. Bielak claims that the Company failed to provide him with certain bonus payments allegedly due to him for work performed in 2023 and 2024. Mr. Bielak also claims that the Company failed to provide him with severance payments allegedly due pursuant to the provisions of his employment agreement. The total amount of Mr. Bielak’s claim for alleged damages is $586,800 plus attorneys’ fees and interest.
The Company believes that Mr. Bielak’s claims are without legal or factual basis, and intends to vigorously defend these claims. An arbitrator has not yet been selected, and a schedule for the arbitration has not yet been set.
Item 1A. Risk Factors.
There have been no material changes with respect to risk factors previously disclosed in the Company’s Annual Report on Form 10-K for the year ended December 31, 2023, filed with the SEC on March 13, 2024.
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.
None.
Item 3. Defaults Upon Senior Securities.
None.
Item 4. Mine Safety Disclosures.
Not Applicable.
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Item 5. Other Information.
Board Committees
On July 25, 2024, Andrew L. Ross resigned as a director of the Company.
Pursuant to the Purchase Agreement, among other things, as a condition to Closing, three of the five directors serving on the board of directors of the Company (the “Board”) resigned from the Board and were replaced by three new directors designated by the Lender, which became effective immediately upon Closing on September 25, 2024. The Company received letters of resignation from each of Steven Gullans and Theresa Mock, each as a member of the Board, and from Elizabeth A. Graham, as a member and the chairperson of the Board, effective upon Closing.
Effective upon Closing on September 25, 2024, Richard Paolone, Avtar Dhaliwal and Katharyn (Katie) Field were each appointed to serve on the Board with Ms. Field appointed as the chairperson of the Board.
Also, effective upon Closing, each of Mr. Paolone and Ms. Field was appointed as a member of the Audit Committee of the Board, each of Mr. Paolone and Mr. Dhaliwal was appointed as a member of the Compensation Committee of the Board (the “Compensation Committee”), with Mr. Paolone appointed as Chair of the Compensation Committee, and each of Mr. Dhaliwal and Ms. Field was appointed as a member of the Nominating and Corporate Governance Committee of the Board (the “Nominating Committee”), with Mr. Dhaliwal appointed as Chair of the Nominating Committee.
The table below shows the approved composition of each standing committee of the Board of Directors:
Committee | Chair | Members |
Audit Committee | John L. Brooks III | John L. Brooks III, Katharyn Field and Richard Paolone |
Compensation Committee | Richard Paolone | Richard Paolone, Avtar Dhaliwal and John L. Brooks III |
Nominating and Corporate Governance Committee | Avtar Dhaliwal | Avtar Dhaliwal and Katharyn Field |
Trading Arrangements
During the quarterly period ended
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Item 6. Exhibits
The following exhibits are filed as part of, or incorporated by reference into, this Quarterly Report.
No. | Description of Exhibit |
3.1 | |
4.1 | |
10.1 | |
10.2 | |
10.3 | |
10.4 | |
31.1* | |
31.2* | |
32.1** | |
101.INS* | Inline XBRL Instance Document |
101.CAL* | Inline XBRL Taxonomy Extension Calculation Linkbase Document |
101.SCH* | Inline XBRL Taxonomy Extension Schema Document |
101.DEF* | Inline XBRL Taxonomy Extension Definition Linkbase Document |
101.LAB* | Inline XBRL Taxonomy Extension Labels Linkbase Document |
101.PRE* | Inline XBRL Taxonomy Extension Presentation Linkbase Document |
104* | Cover Page Interactive Data File––the cover page interactive data file does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document. |
| * | Filed herewith. |
** | Furnished. |
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
iSpecimen Inc. | ||
Date: November 7, 2024 | By: | /s/ Tracy Curley |
Name: | Tracy Curley | |
Title: | Chief Executive Officer, Chief Financial Officer and Treasurer (Principal Executive Officer and Principal Financial and Accounting Officer) | |
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