iSpecimen Inc 10-Q for FY2024 Q1

iSpecimen Inc. (ISPC)

10-Q 2024-05-07 For: 2024-03-31

Added on April 09, 2026

About this 10-Q

iSpecimen Inc filed this 10-Q on May 7, 2024, covering the quarter ended March 31, 2024 (FY2024 Q1).

Headline figures

Quarter ended March 31, 2024, as reported in this filing, compared with the same period a year earlier where the filing states it.

Revenue: $2.29M; down 22.4% from $2.95M a year earlier
Net loss: $2.9M; compared with a net loss of $2.43M a year earlier
Diluted EPS: -$0.32; compared with -$0.27 a year earlier

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Delaware		27-0480143
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)

Title of Each Class		Trading Symbol(s)		Name of Each Exchange on Which Registered
Common Stock, par value $0.0001 per share		ISPC		The Nasdaq Stock Market LLC

Large accelerated filer	☐	Accelerated filer	☐
Non-accelerated filer	☒	Smaller reporting company	☒
		Emerging growth company	☒

		Page
PART I - FINANCIAL INFORMATION
ITEM 1.	Financial Statements
	Condensed Balance Sheets as of March 31, 2024 (Unaudited) and December 31, 2023	3
	Unaudited Condensed Statements of Operations and Comprehensive Loss for the Three Months Ended March 31, 2024 and 2023	4
	Unaudited Condensed Statements of Changes in Stockholders’ Equity for the Three Months Ended March 31, 2024 and 2023	5
	Unaudited Condensed Statements of Cash Flows for the Three Months Ended March 31, 2024 and 2023	7
	Notes to Unaudited Condensed Financial Statements	8
ITEM 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	23
ITEM 3.	Quantitative and Qualitative Disclosures About Market Risk	32
ITEM 4.	Controls and Procedures	32

PART II – OTHER INFORMATION
ITEM 1.	Legal Proceedings	34
ITEM 1A.	Risk Factors	34
ITEM 2.	Unregistered Sales of Equity Securities and Use of Proceeds	34
ITEM 3.	Defaults Upon Senior Securities	34
ITEM 4.	Mine Safety Disclosures	34
ITEM 5.	Other Information	34
ITEM 6.	Exhibits	35
SIGNATURES		36



	March 31, 2024		December 31, 2023
ASSETS	(Unaudited)
Current assets:
Cash and cash equivalents	$	2,089,891	$	2,343,666
Available-for-sale securities		466,493		2,661,932
Accounts receivable – unbilled		1,978,144		2,212,538
Accounts receivable, net of allowance for doubtful accounts of $718,821 and $520,897 at March 31, 2024 and December 31, 2023, respectively		437,424		728,388
Prepaid expenses and other current assets		313,999		292,079
Total current assets		5,285,951		8,238,603
Property and equipment, net		120,873		127,787
Internally developed software, net		6,065,770		6,323,034
Other intangible assets, net		860,366		908,255
Operating lease right-of-use asset		153,340		193,857
Security deposits		27,601		27,601
Total assets	$	12,513,901	$	15,819,137
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable	$	3,560,474	$	3,925,438
Accrued expenses		1,710,815		1,540,607
Operating lease current obligation		156,703		167,114
Deferred revenue		272,681		415,771
Total current liabilities		5,700,673		6,048,930
Operating lease long-term obligation		—		29,130
Total liabilities		5,700,673		6,078,060

Commitments and contingencies (See Note 8)

Stockholders’ equity
Common stock, $0.0001 par value, 200,000,000 shares authorized, 9,501,112 issued and 9,470,112 outstanding at March 31, 2024 and 9,114,371 issued and 9,083,371 outstanding at December 31, 2023		947		908
Additional paid-in capital		69,079,341		69,104,313
Treasury stock, 31,000 shares at March 31, 2024 and December 31, 2023, at cost		(172)		(172)
Accumulated other comprehensive income		41		840
Accumulated deficit		(62,266,929)		(59,364,812)
Total stockholders’ equity		6,813,228		9,741,077
Total liabilities and stockholders’ equity	$	12,513,901	$	15,819,137


☒	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934


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


	Three Months Ended March 31,
	2024		2023
Revenue	$	2,289,993	$	2,950,197
Operating expenses:
Cost of revenue		1,000,006		1,146,912
Technology		911,967		834,407
Sales and marketing		665,941		962,169
Supply development		197,839		275,246
Fulfillment		410,854		455,531
General and administrative		2,103,906		1,818,355
Total operating expenses		5,290,513		5,492,620

Loss from operations		(3,000,520)		(2,542,423)

Other income, net
Interest expense		(4,465)		(3,535)
Interest income		30,498		114,263
Other income (expense), net		72,370		(117)
Total other income, net		98,403		110,611

Net loss	$	(2,902,117)	$	(2,431,812)

Other comprehensive income (loss):
Net loss	$	(2,902,117)	$	(2,431,812)
Unrealized gain (loss) on available-for-sale securities		(799)		18,843
Total other comprehensive income (loss)		(799)		18,843
Comprehensive loss	$	(2,902,916)	$	(2,412,969)

Net loss per share - basic and diluted	$	(0.32)	$	(0.27)

Weighted average shares of common stock outstanding - basic and diluted		9,132,460		8,980,898


	Three Months Ended March 31, 2024
									Accumulated
							Additional		Other				Total
	Common Stock			Treasury Stock			Paid-In		Comprehensive		Accumulated		Stockholders'
	Shares	Amount		Shares	Amount		Capital		Income		Deficit		Equity
Balance at December 31, 2023	9,083,371	$	908	31,000	$	(172)	$	69,104,313	$	840	$	(59,364,812)	$	9,741,077
Stock-based compensation expense	—		—	—		—		45,871		—		—		45,871
Vesting of restricted stock	8,771		1	—		—		48,053		—		—		48,054
Repurchase of common stock purchase warrants exercisable under PIPE Warrants	—		—	—		—		(52,500)		—		—		(52,500)
Issuance of common stock in connection with At the Market Offering Agreement	377,970		38	—		—		138,449		—		—		138,487
Offering costs in connection with At the Market Offering Agreement	—		—	—		—		(204,845)		—		—		(204,845)
Unrealized loss on available-for-sale securities	—		—	—		—		—		(799)		—		(799)
Net loss	—		—	—		—		—		—		(2,902,117)		(2,902,117)
Balance at March 31, 2024	9,470,112	$	947	31,000	$	(172)	$	69,079,341	$	41	$	(62,266,929)	$	6,813,228


	Three Months Ended March 31, 2023
									Accumulated
							Additional		Other				Total
	Common Stock			Treasury Stock			Paid-In		Comprehensive		Accumulated		Stockholders’
	Shares	Amount		Shares	Amount		Capital		Income		Deficit		Equity
Balance at December 31, 2022	8,925,808	$	892	31,000	$	(172)	$	68,573,774	$	—	$	(48,265,324)	$	20,309,170
Stock-based compensation expense	—		—	—		—		54,608		—		—		54,608
Vesting of restricted stock	28,776		3	—		—		65,946		—		—		65,949
Issuance of common stock through exercise of stock options	67,736		7	—		—		67,729		—		—		67,736
Unrealized gain on available-for-sale securities	—		—	—		—		—		18,843		—		18,843
Net loss	—		—	—		—		—		—		(2,431,812)		(2,431,812)
Balance at March 31, 2023	9,022,320	$	902	31,000	$	(172)	$	68,762,057	$	18,843	$	(50,697,136)	$	18,084,494


	2024		2023
Specimens - contracts with customers	$	2,136,100	$	2,712,376
Shipping and other		153,893		237,821
Revenue	$	2,289,993	$	2,950,197


	2024	2023
Shares issuable upon vesting of RSUs	96,788	216,058
Shares issuable upon exercise of stock options	350,062	330,788
Shares issuable upon exercise of PIPE Warrant (defined below) to purchase common stock	—	1,312,500
Shares issuable upon exercise of Lender Warrant (defined below) to purchase common stock	12,500	12,500
Shares issuable upon exercise of Underwriter Warrant (defined below) to purchase common stock	90,000	90,000


	March 31, 2024
			Gross		Gross
	Amortized		unrealized		unrealized
	cost		gains		losses		Fair value
Available-for-sale securities:
U.S. Treasury Bills	$	466,452	$	37,249	$	(37,208)	$	466,493
Total Available-for-sale securities	$	466,452	$	37,249	$	(37,208)	$	466,493


	March 31,		December 31,
	2024		2023
Website	$	285,377	$	285,377
Computer equipment and purchased software		105,173		96,037
Equipment		35,449		35,449
Furniture and fixtures		87,184		87,184
Leasehold improvements		68,471		68,471
Total property and equipment		581,654		572,518
Accumulated depreciation		(460,781)		(444,731)
Total property and equipment, net	$	120,873	$	127,787


	Fair Value at March 31, 2024
	Total		Level 1		Level 2		Level 3
Assets:
Available-for-sale securities	$	466,493	$	466,493	$	—	$	—
Total Assets	$	466,493	$	466,493	$	—	$	—


2024 (excluding the three months ended March 31, 2024)	$	132,064
2025		29,348
Total future minimum lease payments		161,412
Less effect of discounting		(4,709)
Present value of future minimum lease payments	$	156,703


Non-cash operating lease expense (operating cash flow)	$	40,517
Change in operating lease liabilities (operating cash flow)	$	(39,541)


				Weighted
				Average
		Weighted		Remaining
	Warrants	Average		Contractual Term
	Outstanding	Exercise Price		in Years
Balance at December 31, 2023	1,415,000	$	12.77	3.47
Granted	—		—	—
Exercised	—		—	—
Repurchased	(1,312,500)		—	—
Balance at March 31, 2024	102,500	$	9.76	2.84


	2024	2023
Assumptions:
Risk-free interest rate	3.93% – 4.26%	3.85% – 3.94%
Expected term (in years)	0.78 – 4.00	0.99 – 4.00
Expected volatility	58.24% –58.71%	59.95% – 59.95%
Expected dividend yield	—	—


	Fair Value at December 31, 2023
	Total		Level 1		Level 2		Level 3
Assets:
Available-for-sale securities	$	2,661,932	$	2,661,932	$	—	$	—
Total Assets	$	2,661,932	$	2,661,932	$	—	$	—


Operating lease expense	$	43,251
Short-term lease expense		—
Total lease cost	$	43,251


Assets
Operating lease right-of-use assets	$	153,340
Total lease assets	$	153,340

Liabilities
Current liabilities:
Operating lease liability – current portion	$	156,703
Non-current liabilities:
Operating lease liability – net of current portion		—
Total lease liability	$	156,703


Weighted average remaining lease term (in years) – operating lease			0.92
Weighted average discount rate – operating lease			5.96%


		Weighted
	RSUs	Average Grant
	Outstanding	Date Fair Value
Unvested Balance at December 31, 2023	116,357	$	5.67
Granted	—		—
Vested	(8,771)		5.55
Forfeited	(10,798)		4.85
Unvested Balance at March 31, 2024	96,788	$	5.78


		Three Months Ended March 31,			Change
	2024		2023		Dollars		Percentage
Revenue	$	2,289,993	$	2,950,197	$	(660,204)	(22)	%
Operating expenses:
Cost of revenue		1,000,006		1,146,912		(146,906)	(13)	%
Technology		911,967		834,407		77,560	9	%
Sales and marketing		665,941		962,169		(296,228)	(31)	%
Supply development		197,839		275,246		(77,407)	(28)	%
Fulfillment		410,854		455,531		(44,677)	(10)	%
General and administrative		2,103,906		1,818,355		285,551	16	%
Total operating expenses		5,290,513		5,492,620		(202,107)	(4)	%
Loss from operations		(3,000,520)		(2,542,423)		(458,097)	(18)	%
Other income, net
Interest expense		(4,465)		(3,535)		(930)	(26)	%
Interest income		30,498		114,263		(83,765)	(73)	%
Other income (expense), net		72,370		(117)		72,487	61,955	%
Total other income, net		98,403		110,611		(12,208)	(11)	%
Net loss	$	(2,902,117)	$	(2,431,812)		(470,305)	(19)	%




No.	Description of Exhibit
10.1	Form of Warrant Repurchase and Termination Agreements between the Company and certain Warrant Holders (incorporated by reference to Exhibit 10.1 of the Company’s Current Report on Form 8-K filed with the SEC on February 15, 2024)
10.2	At the Market Offering Agreement, dated March 5, 2024, between the Company and Rodman & Renshaw LLC (incorporated by reference to Exhibit 10.1 of the Company’s Current Report on Form 8-K filed with the SEC on March 5, 2024)
31.1*	Certification of Principal Executive Officer Pursuant to Securities Exchange Act Rules 13a-14(a) and 15(d)-14(a), as adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
31.2*	Certification of Principal Financial Officer Pursuant to Securities Exchange Act Rules 13a-14(a) and 15(d)-14(a), as adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
32.1**	Certification of Principal Executive Officer and Principal Financial Officer Pursuant to 18 U.S.C. Section 1350, as adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
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.

	iSpecimen Inc.


Date: May 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)


	1.	I have reviewed this Quarterly Report on Form 10-Q of iSpecimen Inc.;


	2.	Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;


	3.	Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the period presented in this report;


	4.	I am responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the registrant and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:


	a)	Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under my supervision, to ensure that material information relating to the registrant, is made known to us by others within those entities, particularly during the period in which this report is being prepared;


	b)	Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;


	c)	Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report my conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and


	d)	Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and


	5.	I have disclosed, based on my most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):


	a)	All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and


	b)	Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.


	/s/ Tracy Curley
	Tracy Curley
	Chief Financial Officer and Treasurer
	(Principal Accounting and Financial Officer)