iSpecimen Inc 10-Q for FY2024 Q3

iSpecimen Inc. (ISPC)

10-Q 2024-11-07 For: 2024-09-30

Added on April 09, 2026

About this 10-Q

iSpecimen Inc filed this 10-Q on November 7, 2024, covering the quarter ended September 30, 2024 (FY2024 Q3).

Headline figures

Quarter ended September 30, 2024, as reported in this filing, compared with the same period a year earlier where the filing states it.

Revenue: $2.66M; down 4.2% from $2.78M a year earlier
Net loss: $1.44M; compared with a net loss of $2.11M a year earlier
Diluted EPS: -$2.10; compared with -$4.66 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 September 30, 2024 (Unaudited) and December 31, 2023	3
	Unaudited Condensed Statements of Operations and Comprehensive Loss for the Three and Nine Months Ended September 30, 2024 and 2023	4
	Unaudited Condensed Statements of Changes in Stockholders’ Equity for the Nine Months Ended September 30, 2024 and 2023	5
	Unaudited Condensed Statements of Cash Flows for the Nine Months Ended September 30, 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	25
ITEM 3.	Quantitative and Qualitative Disclosures About Market Risk	39
ITEM 4.	Controls and Procedures	39

PART II – OTHER INFORMATION
ITEM 1.	Legal Proceedings	41
ITEM 1A.	Risk Factors	41
ITEM 2.	Unregistered Sales of Equity Securities and Use of Proceeds	41
ITEM 3.	Defaults Upon Senior Securities	41
ITEM 4.	Mine Safety Disclosures	41
ITEM 5.	Other Information	42
ITEM 6.	Exhibits	43
SIGNATURES		44



	September 30, 2024		December 31, 2023
ASSETS	(Unaudited)
Current assets:
Cash and cash equivalents	$	1,751,854	$	2,343,666
Available-for-sale securities		—		2,661,932
Accounts receivable – unbilled		1,654,019		2,212,538
Accounts receivable, net of allowance for doubtful accounts of $639,116 and $520,897 at September 30, 2024 and December 31, 2023, respectively		974,383		728,388
Prepaid expenses and other current assets		277,579		292,079
Total current assets		4,657,835		8,238,603
Property and equipment, net		102,803		127,787
Internally developed software, net		5,357,188		6,323,034
Other intangible assets, net		764,589		908,255
Operating lease right-of-use asset		342,107		193,857
Security deposits		39,701		27,601
Total assets	$	11,264,223	$	15,819,137
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable	$	4,055,332	$	3,925,438
Accrued expenses		1,022,373		1,540,607
Senior note payable, net of debt discount		864,425		—
Operating lease current obligation		42,513		167,114
Deferred revenue		283,571		415,771
Total current liabilities		6,268,214		6,048,930
Operating lease long-term obligation		281,437		29,130
Total liabilities		6,549,651		6,078,060

Commitments and contingencies (See Note 9)

Stockholders’ equity
Common stock, $0.0001 par value, 200,000,000 shares authorized, 831,373 issued and 829,823 outstanding at September 30, 2024 and 455,719 issued and 454,169 outstanding at December 31, 2023		83		45
Additional paid-in capital		70,530,467		69,105,176
Treasury stock, 1,550 shares, at cost		(172)		(172)
Accumulated other comprehensive income		—		840
Accumulated deficit		(65,815,806)		(59,364,812)
Total stockholders’ equity		4,714,572		9,741,077
Total liabilities and stockholders’ equity	$	11,264,223	$	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 September 30,				Nine Months Ended September 30,
	2024		2023		2024		2023
Revenue	$	2,661,936	$	2,777,751	$	7,815,608	$	7,353,090
Operating expenses:
Cost of revenue		1,554,159		1,392,534		3,978,557		3,393,079
Technology		754,730		921,580		2,578,624		2,599,086
Sales and marketing		631,625		897,433		2,380,515		2,972,757
Supply development		84,972		186,176		420,322		801,038
Fulfillment		449,142		471,735		1,293,185		1,363,427
General and administrative		892,712		1,102,373		4,051,994		4,522,028
Total operating expenses		4,367,340		4,971,831		14,703,197		15,651,415

Loss from operations		(1,705,404)		(2,194,080)		(6,887,589)		(8,298,325)

Other income, net
Interest expense		(7,364)		(4,465)		(16,303)		(11,535)
Interest income		1,235		67,362		40,896		292,506
Other income (expense), net		271,680		20,082		412,002		(9,173)
Total other income, net		265,551		82,979		436,595		271,798

Net loss	$	(1,439,853)	$	(2,111,101)	$	(6,450,994)	$	(8,026,527)

Other comprehensive income (loss):
Net loss	$	(1,439,853)	$	(2,111,101)	$	(6,450,994)	$	(8,026,527)
Unrealized gain (loss) on available-for-sale securities		—		(47)		(840)		641
Total other comprehensive income (loss)		—		(47)		(840)		641
Comprehensive loss	$	(1,439,853)	$	(2,111,148)	$	(6,451,834)	$	(8,025,886)

Net loss per share - basic and diluted	$	(2.10)	$	(4.66)	$	(11.30)	$	(17.78)

Weighted average shares of common stock outstanding - basic and diluted		687,141		453,267		570,693		451,487


	Nine Months Ended September 30, 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	454,169	$	45	1,550	$	(172)	$	69,105,176	$	840	$	(59,364,812)	$	9,741,077
Stock-based compensation expense	—		—	—		—		45,871		—		—		45,871
Vesting of restricted stock	438		—	—		—		48,054		—		—		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	18,899		2	—		—		138,485		—		—		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	473,506	$	47	1,550	$	(172)	$	69,080,241	$	41	$	(62,266,929)	$	6,813,228
Stock-based compensation expense	—		—	—		—		34,834		—		—		34,834
Vesting of restricted stock	1,178		—	—		—		44,803		—		—		44,803
Issuance of common stock in connection with At The Market Offering Agreement	180,105		18	—		—		1,355,909		—		—		1,355,927
Offering costs in connection with At The Market Offering Agreement	—		—	—		—		(50,443)		—		—		(50,443)
Unrealized loss on available-for-sale securities	—		—	—		—		—		(41)		—		(41)
Net loss	—		—	—		—		—		—		(2,109,024)		(2,109,024)
Balance at June 30, 2024	654,789	$	65	1,550	$	(172)	$	70,465,344	$	—	$	(64,375,953)	$	6,089,284
Stock-based compensation expense	—		—	—		—		20,302		—		—		20,302
Vesting of restricted stock	296			—		—		44,839		—		—		44,839
Reverse stock split adjustment	174,738		18	—		—		(18)		—		—		—
Net loss	—		—	—		—		—		—		(1,439,853)		(1,439,853)
Balance at September 30, 2024	829,823	$	83	1,550	$	(172)	$	70,530,467	$	—	$	(65,815,806)	$	4,714,572


	Nine Months Ended September 30, 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	446,290	$	45	1,550	$	(172)	$	68,574,621	$	—	$	(48,265,324)	$	20,309,170
Stock-based compensation expense	—		—	—		—		54,608		—		—		54,608
Vesting of restricted stock	1,439		—	—		—		65,949		—		—		65,949
Issuance of common stock through exercise of stock options	3,387		—	—		—		67,736		—		—		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	451,116	$	45	1,550	$	(172)	$	68,762,914	$	18,843	$	(50,697,136)	$	18,084,494
Stock-based compensation expense	—		—	—		—		29,829		—		—		29,829
Vesting of restricted stock	1,890		—	—		—		94,868		—		—		94,868
Issuance of common stock through exercise of stock options	158		—	—		—		3,153		—		—		3,153
Unrealized loss on available-for-sale securities	—		—	—		—		—		(18,155)		—		(18,155)
Net loss	—		—	—		—		—		—		(3,483,614)		(3,483,614)
Balance at June 30, 2023	453,164	$	45	1,550	$	(172)	$	68,890,764	$	688	$	(54,180,750)	$	14,710,575
Stock-based compensation expense	—		—	—		—		49,394		—		—		49,394
Vesting of restricted stock	539		—	—		—		56,899		—		—		56,899
Unrealized loss on available-for-sale securities	—		—	—		—		—		(47)		—		(47)
Net loss	—		—	—		—		—		—		(2,111,101)		(2,111,101)
Balance at September 30, 2023	453,703	$	45	1,550	$	(172)	$	68,997,057	$	641	$	(56,291,851)	$	12,705,720


	2024	2023
Shares issuable upon vesting of RSUs	1,921	6,490
Shares issuable upon exercise of stock options	17,206	15,075
Shares issuable upon exercise of PIPE Warrant (defined below) to purchase common stock	—	65,625
Shares issuable upon exercise of Lender Warrant (defined below) to purchase common stock	625	625
Shares issuable upon exercise of Underwriter Warrant (defined below) to purchase common stock	4,500	4,500


	December 31, 2023
			Gross		Gross
	Amortized		unrealized		unrealized
	cost		gains		losses		Fair value
Available-for-sale securities:
U.S. Treasury Bills	$	2,661,092	$	36,138	$	(35,298)	$	2,661,932
Total Available-for-sale securities	$	2,661,092	$	36,138	$	(35,298)	$	2,661,932


	September 30,		December 31,
	2024		2023
Website	$	285,377	$	285,377
Computer equipment and purchased software		91,332		96,037
Equipment		19,291		35,449
Furniture and fixtures		26,982		87,184
Leasehold improvements		4,781		68,471
Total property and equipment		427,763		572,518
Accumulated depreciation		(324,960)		(444,731)
Total property and equipment, net	$	102,803	$	127,787


	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	$	120,099
Short-term lease expense		—
Total lease cost	$	120,099


2024 (excluding the nine months ended September 30, 2024)	$	18,184
2025		66,674
2026		76,372
2027		80,190
2028		84,200
Thereafter		73,675
Total future minimum lease payments		399,295
Less effect of discounting		(75,345)
Present value of future minimum lease payments	$	323,950


Non-cash operating lease expense (operating cash flow)	$	112,876
Change in operating lease liabilities (operating cash flow)	$	(108,420)


				Weighted
				Average
		Weighted		Remaining
	Warrants	Average		Contractual Term
	Outstanding	Exercise Price		in Years
Balance at December 31, 2023	70,750	$	255.30	3.47
Granted	—		—	—
Exercised	—		—	—
Repurchased	(65,625)		—	—
Balance at September 30, 2024	5,125	$	195.12	2.34


	2024	2023
Assumptions:
Risk-free interest rate	3.49% – 4.56%	3.75% – 4.52%
Expected term (in years)	0.27 – 4.00	0.61 – 4.00
Expected volatility	57.28% –58.71%	59.17% – 59.95%
Expected dividend yield	—	—


Assets
Operating lease right-of-use assets	$	342,107
Total lease assets	$	342,107

Liabilities
Current liabilities:
Operating lease liability – current portion	$	42,513
Non-current liabilities:
Operating lease liability – net of current portion		281,437
Total lease liability	$	323,950


Weighted average remaining lease term (in years) – operating lease			5.08
Weighted average discount rate – operating lease			8.00%


		Weighted
	RSUs	Average Grant
	Outstanding	Date Fair Value
Unvested Balance at December 31, 2023	5,630	$	113.09
Granted	—		—
Vested	(1,743)		117.80
Forfeited	(1,966)		110.04
Unvested Balance at September 30, 2024	1,921	$	111.14


		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	%


		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	%


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




No.	Description of Exhibit
3.1	Form of Certificate of Amendment to Fourth Amended and Restated Certificate of Incorporation (incorporated by reference to Exhibit 3.1 of the Company’s Current Report on Form 8-K filed with the SEC on September 11, 2024)
4.1	Senior Note, dated as of September 24, 2024 (incorporated by reference to Exhibit 4.1 of the Company’s Current Report on Form 8-K filed with the SEC on September 25, 2024)
10.1	Commercial Lease, dated July 2, 2024, between the Company and Cummings Properties, LLC (incorporated by reference to Exhibit 10.1 of the Company’s Current Report on Form 8-K filed with the SEC on July 3, 2024)
10.2	Notice of Lease Termination, dated June 28, 2024 (incorporated by reference to Exhibit 10.2 of the Company’s Current Report on Form 8-K filed with the SEC on July 3, 2024)
10.3	Note Purchase Agreement, dated as of September 19, 2024 (incorporated by reference to Exhibit 10.1 of the Company’s Current Report on Form 8-K filed with the SEC on September 25, 2024)
10.4	Form of Indemnification Agreement, by and between the Company and certain directors and executive officers (incorporated by reference to Exhibit 10.3 of the Company’s Form S-1/A (File No. 333-250198) filed with the SEC on December 31, 2020).
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: 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)


	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)