iSpecimen Inc 10-Q for FY2021 Q2

iSpecimen Inc. (ISPC)

10-Q 2021-08-10 For: 2021-06-30

Added on April 09, 2026

About this 10-Q

iSpecimen Inc filed this 10-Q on August 10, 2021, covering the quarter ended June 30, 2021 (FY2021 Q2).

Headline figures

Quarter ended June 30, 2021, as reported in this filing, compared with the same period a year earlier where the filing states it.

Revenue: $2.9M; up 93.0% from $1.5M a year earlier
Net loss: $1.39M; compared with a net loss of $174.09K a year earlier

Search and read filings like this one from Claude or ChatGPT with the SEC filings MCP server →


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 June 30, 2021 (Unaudited) and December 31, 2020	3
	Unaudited Condensed Statements of Operations for the Three Months and Six Months Ended June 30, 2021 and 2020	4
	Unaudited Condensed Statements of Changes in Convertible Preferred Stock and Stockholders’ Equity (Deficit) for the Six Months Ended June 30, 2021 and 2020	5
	Unaudited Condensed Statements of Cash Flows for the Six Months Ended June 30, 2021 and 2020	6
	Notes to Unaudited Condensed Financial Statements	7
ITEM 2 .	Management’s Discussion and Analysis of Financial Condition and Results of Operations	24
ITEM 3 .	Quantitative and Qualitative Disclosures About Market Risk	38
ITEM 4 .	Controls and Procedures	38

PART II – OTHER INFORMATION
ITEM 1 .	Legal Proceedings	40
ITEM 1A .	Risk Factors	40
ITEM 2.	Unregistered Sales of Equity Securities and Use of Proceeds	40
ITEM 3.	Defaults Upon Senior Securities	40
ITEM 4.	Mine Safety Disclosures	41
ITEM 5.	Other Information	41
ITEM 6.	Exhibits	41

SIGNATURES		42


	June 30, 2021		December 31, 2020
ASSETS	(Unaudited)
Current assets:

Cash	$	13,184,310	$	695,909
Accounts receivable – unbilled		1,125,789		652,761
Accounts receivable, net of allowance for doubtful accounts of $147,714 and $108,096 at June 30, 2021 and December 31, 2020, respectively		1,987,112		1,526,392
Prepaid expenses and other current assets		442,089		417,929
Tax credit receivable, current portion		179,376		179,376
Total current assets		16,918,676		3,472,367
Property and equipment, net		55,879		75,589
Internally developed software, net		2,602,886		2,634,139
Security deposits		27,601		27,601
Total assets	$	19,605,042	$	6,209,696
LIABILITIES, CONVERTIBLE PREFERRED STOCK AND STOCKHOLDERS’ EQUITY (DEFICIT)
Current liabilities:
Accounts payable	$	3,233,231	$	1,792,432
Accrued expenses		1,879,812		810,910
Accrued interest		9,864		3,696,944
Convertible notes payable, related parties, net of unamortized debt discount and debt issuance costs		—		5,490,811
Derivative liability for embedded conversion features on convertible notes payable		—		2,373,000
Bridge notes payable, net of debt issuance costs		—		4,589,228
Bridge notes payable, related parties		—		1,905,000
Derivative liability for embedded conversion feature on bridge notes payable and bridge notes, related parties		—		—
Note payable, current portion		—		604,109
Deferred revenue		802,860		873,254
Total current liabilities		5,925,767		22,135,688
Note payable, net of current portion		—		178,899
Bridge notes payable, net of debt issuance costs		2,675,000		—
Bridge notes payable, related parties		325,000		—
Total liabilities		8,925,767		22,314,587
Commitments and contingencies
Series B convertible preferred stock, $0.0001 par value, 3,200,000 shares authorized, 0 and 572,465 shares issued and outstanding at June 30, 2021 and December 31, 2020, respectively		—		7,999,997
Series A-1 convertible preferred stock, $0.0001 par value, 556,550 shares authorized, 0 and 100,365 issued and outstanding at June 30, 2021 and December 31, 2020, respectively		—		561,041
Series A convertible preferred stock, $0.0001 par value, 3,427,871 shares authorized, 0 and 618,182 issued and outstanding at June 30, 2021 and December 31, 2020, respectively		—		2,612,038
Total convertible preferred stock		—		11,173,076
Stockholders’ equity (deficit)
Common stock, $0.0001 par value, 200,000,000 shares authorized, 6,596,729 issued, and 6,565,729 outstanding at June 30, 2021, and 16,000,000 shares authorized, 967,213 issued and 936,213 outstanding at December 31, 2020		657		94
Additional paid-in capital		45,094,782		1,779,698
Treasury stock, 31,000 shares at June 30, 2021 and December 31, 2020, at cost		(172)		(172)
Accumulated deficit		(34,415,992)		(29,057,587)
Total stockholders’ equity (deficit)		10,679,275		(27,277,967)
Total liabilities, convertible preferred stock and stockholders’ equity (deficit)	$	19,605,042	$	6,209,696


☒	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 June 30,				Six months ended June 30,
	2021		2020		2021		2020
Revenue	$	2,903,876	$	1,504,569	$	5,867,683	$	3,216,228
Operating expenses:
Cost of revenue		1,489,196		473,982		3,112,847		1,128,249
Technology		361,799		291,601		771,750		718,314
Sales and marketing		647,592		367,617		1,176,978		799,256
Supply development		100,693		147,588		212,269		262,193
Fulfillment		287,275		185,185		556,371		400,355
General and administrative		1,545,852		343,602		2,508,643		656,855
Total operating expenses		4,432,407		1,809,575		8,338,858		3,965,222
Loss from operations		(1,528,531)		(305,006)		(2,471,175)		(748,994)
Other income (expense), net
Interest expense		(1,133,479)		(459,005)		(1,986,407)		(1,048,220)
Change in fair value of derivative liability on convertible notes		(117,000)		583,000		(271,000)		(22,000)
Change in fair value of derivative liability on bridge notes and bridge notes,related parties		1,630,700		—		1,582,700		—
Gain (loss) on extinguishment of bridge notes and bridge notes, related parties		9,746		—		(2,740,425)		—
Loss on extinguishment of convertible notes and convertible notes, related parties		(260,185)		—		(260,185)		—
Gain on extinguishment of note payable		—		—		788,156		—
Other income (expense)		3,663		6,688		(69)		6,691
Interest income		172		86		—		309
Other income (expense), net		133,617		130,769		(2,887,230)		(1,063,220)

Net loss before benefit from income taxes		(1,394,914)		(174,237)		(5,358,405)		(1,812,214)
Benefit from income taxes		—		145		—		145

Net loss	$	(1,394,914)	$	(174,092)	$	(5,358,405)	$	(1,812,069)

Net loss per share
Basic and diluted	$	(0.87)	$	(0.19)	$	(4.21)	$	(1.94)

Weighted average common shares outstanding
Basic and diluted		1,611,774		936,213		1,273,993		936,213


																				Total
	Series B Convertible			Series A-1 Convertible			Series A Convertible									Additional				Stockholders'
	Preferred Stock			Preferred Stock			Preferred Stock			Common Stock			Treasury Stock			Paid-In		Accumulated		Equity
	Shares	Amount		Shares	Amount		Shares	Amount		Shares	Amount		Shares	Amount		Capital		Deficit		(Deficit)
Balance at December 31, 2020	572,465	$	7,999,997	100,365	$	561,041	618,182	$	2,612,038	936,213	$	94	31,000	$	(172)	$	1,779,698	$	(29,057,587)	$	(27,277,967)
Share-based compensation expense	—		—	—		—	—		—	—		—	—		—		22,036		—		22,036
Net loss	—		—	—		—	—		—	—		—	—		—		—		(3,963,491)		(3,963,491)
Balance at March 31, 2021 (unaudited)	572,465	$	7,999,997	100,365	$	561,041	618,182	$	2,612,038	936,213	$	94	31,000	$	(172)	$	1,801,734	$	(33,021,078)	$	(31,219,422)
Conversion of redeemable convertible preferred stock into common stock upon initial public offering	(572,465)		(7,999,997)	(100,365)		(561,041)	(618,182)		(2,612,038)	1,291,012		129	—		—		11,172,947		—		11,173,076
Conversion of principal and accrued interest of convertible notes and bridge notes into common stock upon initial public offering	—		—	—		—	—		—	2,049,043		205	—		—		16,392,139				16,392,344
Issuance of common stock in connection with public offering	—		—	—		—	—		—	2,250,000		225	—		—		17,999,775		—		18,000,000
Offering costs in connection with public offering	—		—	—		—	—		—	—		—	—		—		(2,339,816)		—		(2,339,816)
Issuance of common stock through exercise of stock options	—		—	—		—	—		—	39,461		4	—		—		39,629		—		39,633
Share-based compensation expense	—		—	—		—	—		—	—		—	—		—		28,374		—		28,374
Net loss	—		—	—		—	—		—	—		—	—		—		—		(1,394,914)		(1,394,914)
Balance at June 30, 2021 (unaudited)	—	$	—	—	$	—	—	$	—	6,565,729	$	657	31,000	$	(172)	$	45,094,782	$	(34,415,992)	$	10,679,275


	June 30,		December 31,
	2021		2020
	(unaudited)
Website	$	107,926	$	105,376
Computer equipment and purchased software		84,589		84,589
Equipment		35,449		35,449
Furniture and fixtures		87,184		87,184
Leasehold improvements		24,935		24,935
Total property and equipment		340,083		337,533
Accumulated depreciation		(284,204)		(261,944)
Total property and equipment, net	$	55,879	$	75,589


Derivative liability on the Convertible Notes reclassified to equity	$	2,644,000
Extinguishment of Convertible Notes principal		5,486,199
Accrued and unpaid interest on the Convertible Notes		1,257,066
Accumulated amortization on debt issuance costs		33,035
Loss on extinguishment of Convertible Notes		260,183
Write off of debt issuance costs		(27,571)
Derivative liability the Bridge Notes reclassified to equity		2,031,300
Extinguishment of Bridge Notes principal		4,000,000
Accrued and unpaid interest on the Bridge Notes		717,646
Gain on extinguishment of Bridge Notes		(9,514)
Total conversion of Convertible Notes and Bridge Notes into common stock	$	16,392,344


	Fair value at December 31, 2020
	Total		Level 1		Level 2		Level 3
Liabilities:
Derivative liability on convertible notes payable, related parties	$	2,373,000	$	—	$	—	$	2,373,000
Total liabilities	$	2,373,000	$	—	$	—	$	2,373,000


	2021		2020


Balance, beginning of period	$	2,373,000	$	2,214,000
Derivative liability on bridge notes payable and bridge notes payable, related parties		3,614,000		—
(Gain) loss included in earnings		(1,311,700)		22,000
Reclassification to equity in connection with debt conversion		(4,675,300)		—
Balance, end of period (unaudited)	$	—	$	2,236,000


Year Ending December 31,	Operating Leases
2021 (remaining)	$	80,706
2022		163,158
2023		165,254
2024		27,601
Total	$	436,719


	2021		2020
Assumptions:
Risk-free interest rate	0.47% – 0.66	%	1.35% – 1.41	%
Expected term (in years)	5.81 – 5.89		5.57 – 6.14
Expected volatility	49.83% – 49.98	%	43.11% – 43.91	%
Expected dividend yield	—	%	—	%


				Weighted Average
				Remaining
	Options	Weighted Average		Contractual Term	Aggregate
	Outstanding	Exercise Price		in Years	Intrinsic Value
Balance at December 31, 2020	251,847	$	1.00	8.06	$	89,100
Granted	14,515	$	3.83	9.52		—
Exercised	(39,461)	$	1.00	—		—
Cancelled/forfeited	(1,987)	$	1.00	—		—
Balance at June 30, 2021	224,914	$	1.18	7.85	$	1,392,403

Options exercisable at June 30, 2021	198,521	$	1.00	7.54	$	1,234,801


	Six months ended June 30,				Change
	2021		2020		Dollars		Percentage
Net cash flows (used in) provided by operating activities	$	(3,268,535)	$	55,681	$	(3,324,216)	(5970)	%

Net cash flows used in investing activities		(442,881)		(592,024)		149,143	(25)	%
Net cash flows provided by financing activities		16,199,817		1,783,008		14,416,809	809	%
Net increase in cash and cash equivalents	$	12,488,401	$	1,246,665	$	11,241,736

No.	Description of Exhibit
3.1	Fourth Amended and Restated Certificate of Incorporation. (1)
3.2	Second Amended and Restated Bylaws. (1)
10.1	Form of Indemnification Agreement, by and between iSpecimen Inc. and certain directors and executive officers. (2)
10.2	Form of Confidentiality, Non-Competition And Assignment Agreement, by and between iSpecimen Inc. and each of its employees. (2)
10.3	iSpecimen Inc. 2021 Stock Incentive Plan*
10.4	Employment Agreement by and between iSpecimen Inc. and Christopher Ianelli. (3)
10.5	Employment Agreement by and between iSpecimen Inc. and JillMullan. (3)
10.6	Employment Agreement by and between iSpecimen Inc. and Tracy Curley. (3)
10.7	Employment Agreement by and between iSpecimen Inc. and Benjamin Bielak. (3)
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 Pursuant to 18 U.S.C. Section 1350, as adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
32.2**	Certification of 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

	iSpecimen, Inc.

Date: August 10, 2021	By:	/s/ Christopher Ianelli
	Name:	Christopher Ianelli
	Title:	Chief Executive Officer and President (Principal Executive Officer)

Date: August 10, 2021	By:	/s/ Tracy Curley
	Name:	Tracy Curley
	Title:	Chief Financial Officer and Treasurer (Principal Financial and Accounting Officer)

		/s/ Christopher Ianelli
		Christopher Ianelli
		Chief Executive Officer and President
		(Principal Executive Officer)

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