iSpecimen Reports Third Quarter 2021 Financial Results

Rhea-AI Summary

iSpecimen reported strong financial results for Q3 2021, with revenue increasing by 21% to $2.7 million, driven by expanding sales efforts and a growing user base. The company's nine-month revenue surpassed $8.6 million, a 57% increase compared to 2020. Notably, unique suppliers increased to 197 and registered users in the marketplace grew 30% year-over-year. Despite increasing general and administrative expenses to $1.7 million, the net loss reduced to approximately $1.1 million. iSpecimen aims to broaden its offerings and enhance its technology moving forward.

Positive

• Revenue increased 21% to $2.7 million in Q3 2021.
• Nine-month revenue of $8.6 million, up 57% year-over-year.
• Unique supplier organizations increased to 197.
• Registered users in the marketplace grew 30% to approximately 4,900.
• Received $12.8 million in purchase orders year-to-date, up 30% year-over-year.

Negative

• General and administrative expenses rose to $1.7 million, increasing operational costs.
• Net loss remains significant at approximately $1.1 million.

LEXINGTON, Mass., Nov. 4, 2021 /PRNewswire/ -- iSpecimen Inc. (Nasdaq: ISPC) ("iSpecimen" or the "Company"), an online marketplace for human biospecimens, today reported its financial results for the three and nine-month periods ended September 30, 2021.

"In the third quarter of 2021, we continued to achieve strong growth in our core biospecimen business, while simultaneously expanding our market penetration through increased sales and marketing initiatives," said Christopher Ianelli, MD, PhD, CEO and President of iSpecimen. "These efforts contributed to nine-month 2021 revenue results that have already surpassed our full-year revenue for 2020. At the same time, we increased our number of supplier organizations under agreement to nearly 200 while growing our registered users on the iSpecimen Marketplace."

Dr. Ianelli added, "iSpecimen continues to execute its strategic initiatives to broaden our service offerings and expand our number of supplier organizations under agreement to grow our procurement reach and data assets. At the same time, we are assessing potential investments that can further enhance our technology and expand our capabilities. We believe these efforts will allow us to increase our value proposition for users and suppliers, increase our sales momentum and drive long-term revenue growth and shareholder value."

Q3 2021 Financial & Operational Highlights

• Revenue increased 21% to $2.7 million for the third quarter of 2021, compared to $2.3 million for the same period in 2020.
• Revenue increased 57% to $8.6 million for the first nine months of 2021, compared to $5.5 million for the same period in 2020.
• Unique supplier organizations under agreement were 197 as of September 30, 2021, up from 190 organizations at the end of the second quarter of 2021.
• Unique customer organizations with purchases totaled 398 as of September 30, 2021, an increase from 378 as of June 30, 2021.
• iSpecimen Marketplace had approximately 4,900 registered research and supplier users as of September 30, 2021, up 30% year-over-year.
• As of September 30, 2021, iSpecimen received $12.8 million in purchase orders year-to-date, up 30% year-over-year.

Recent Corporate Updates

• Launched an Enhanced Custom Biofluids Collection Service to offer U.S. researchers and life sciences organizations a new rapid delivery option. The new offering significantly improves specimen availability for organizations involved in cancer research and development including basic research, the development of new treatments, such as molecular and genomic-targeted therapies and immunotherapies, and the development of new diagnostic tests, including liquid biopsies.
• Expanded network with a new wave of suppliers to offer increasingly comprehensive selections of annotated cancer tissue, biofluids, and cells through iSpecimen Marketplace. In addition, launched a partnership with a new European healthcare organization offering 17 forms of biofluids, solid tissue, and stem and immune cells from cancer patients, as well as healthy controls. The specimens represent more than 30 categories of cancer.
• Enhanced global biospecimen supplier network to offer increasingly comprehensive selections of whole blood, plasma and other biofluids to help accelerate the development of liquid biopsies. In connection with the development of liquid biopsies, iSpecimen is working closely with another U.S.-based organization with numerous blood donation centers across the country and access to tens of thousands of donors registered to provide blood for research.
• Joined the Russell Microcap® Index in late September, as part of the 2021 Russell indexes reconstitution. Membership in the Russell Microcap® Index, which remains in place for one year, means automatic inclusion in the appropriate growth and value style indexes.
• Appointed Erik Uribe as Director of Global Implementations. Uribe joined from Discovery Life Sciences, where he led all global system implementation projects. Uribe will be responsible for advancing the development of the iSpecimen Marketplace™ and tightening its integration with customer and supplier workflows and systems to ensure a continuously streamlined experience

Financial Results for the Third Quarter of 2021

Revenue for the third quarter of 2021 increased 21% to $2.7 million, compared to approximately $2.3 million for the same period in 2020. This increase was primarily driven by the success of its maturing sales team, continued demand for specimens from patients with known COVID-19 test results, and an increasing demand for specimens in non-COVID-19 research areas. For the third quarter of 2021, COVID-19 related revenue accounted for approximately 34% of total revenue, compared to 63% for the third quarter of 2020. COVID-19 related revenue is expected to continue to decline, while being replaced by increased demand for specimens in non-COVID-19 research areas.

Cost of revenue was $0.9 million for the third quarter of 2021, consistent with the prior year. This was attributable to a 14% increase in the average cost per specimen impacted by the specimen mix, offset by a decrease of 12% in the number of specimens accessioned for the current period compared to the same period in 2020.

General and administrative expenses were $1.7 million for the third quarter of 2021, compared to $0.8 million for the third quarter of 2020. The year-over-year increase was primarily attributable to an increase in costs related to iSpecimen becoming a public company in the second quarter of this year, including increases in legal and accounting expenses, an increase in other general and administrative expenses related to amortization of internally developed software, associated software licenses, human resource related expenses, insurance costs and facility expenses, an increase in director and officer insurance, and an increase in payroll-related costs.

Net loss was approximately $1.1 million for the third quarter of 2021, compared to net loss of over $1.2 million for the same period in 2020.

Cash was approximately $9.8 million as of September 30, 2021.

Conference Call and Webcast Information

The Company will host a conference call and audio webcast today, Thursday, November 4^th at 8:30 a.m. Eastern Time featuring remarks by Christopher Ianelli, MD, PhD, CEO and President, Tracy Curley, CFO, and Jill Mullan, COO.

Event:	iSpecimen Third Quarter 2021 Results Conference Call
Date:	Thursday, November 4, 2021
Time:	8:30 a.m. Eastern Time
Live Call:	+1-855-327-6838 (Toll Free) or + 1-604-235-2082 (International)
Webcast:	https://themediaframe.com/mediaframe/webcast.html?webcastid=ReKRVin0

For interested individuals unable to join the conference call, a replay will be available through November 18, 2021, at +1-844-512-2921 (U.S. Toll Free) or +1-412-317-6671 (International). Participants must use the following code to access the replay of the call: 10016869. An archived version of the webcast will also be available on iSpecimen's Investor Relations site: https://ispecimen.irpass.com/.

About iSpecimen
iSpecimen offers an online marketplace for human biospecimens, connecting life scientists in commercial and non-profit organizations with healthcare providers that have access to patients and specimens needed for medical discovery. Proprietary, cloud-based technology enables scientists to intuitively search for specimens and patients across a federated partner network of hospitals, labs, biobanks, blood centers, and other healthcare organizations. For more information about iSpecimen, please visit www.ispecimen.com.

Forward Looking Statements
This press release may contain forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Such forward-looking statements are characterized by future or conditional verbs such as "may," "will," "expect," "intend," "anticipate," believe," "estimate" and "continue" or similar words. You should read statements that contain these words carefully because they discuss future expectations and plans, which contain projections of future results of operations or financial condition or state other forward-looking information.

Forward-looking statements are predictions, projections and other statements about future events that are based on current expectations and assumptions and, as a result, are subject to risks and uncertainties. Many factors could cause actual future events to differ materially from the forward-looking statements in this press release, including but not limited to the risks factors contained in the Company's filings with the Securities and Exchange Commission, which are available for review at www.sec.gov. Forward-looking statements speak only as of the date they are made. New risks and uncertainties arise over time, and it is not possible for the Company to predict those events or how they may affect the Company. If a change to the events and circumstances reflected in the Company's forward-looking statements occurs, the Company's business, financial condition and operating results may vary materially from those expressed in the Company's forward-looking statements.

Readers are cautioned not to put undue reliance on forward-looking statements, and the Company assumes no obligation and do not intend to update or revise these forward-looking statements, whether as a result of new information, future events or otherwise.

For further information, please contact:

Investor Contact
KCSA Strategic Communications
Allison Soss / Scott Eckstein
iSpecimen@kcsa.com

Media Contact
Kaitlynn Cooney
For iSpecimen
kcooney@brodeur.com 
617.587.2811

iSpecimen Inc.
CONDENSED BALANCE SHEETS
	September 30, 2021	December 31, 2020
ASSETS
Current assets:
Cash	$                  9,790,732	$                    695,909
Accounts receivable - unbilled	1,750,744	652,761
Accounts receivable, net of allowance for doubtful accounts of $141,952 and $108,096 at September 30, 2021 and December 31, 2020, respectively	2,718,682	1,526,392
Inventory	-	-
Prepaid expenses and other current assets	459,321	417,929
Tax credit receivable, current portion	179,376	179,376
Total current assets	14,898,855	3,472,367
Property and equipment, net	$                       44,749	75,589
Internally developed software, net	$                  2,650,867	2,634,139
Tax credit receivable, net of current portion	-	-
Security deposits	$                       27,601	27,601
Total assets	$                17,622,072	$                 6,209,696
LIABILITIES, CONVERTIBLE PREFERRED STOCK AND STOCKHOLDERS' EQUITY (DEFICIT)
Current liabilities:
Accounts payable	$                     351,424	$                 1,792,432
Accrued expenses	1,025,136	810,910
Accrued interest	7,510	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, non-current portion		-
Note payable, current portion	-	604,109
Deferred revenue	718,723	873,254
Total current liabilities	2,102,793	22,135,688
Note payable, net of current portion	-	178,899
Term loan	3,428,380	-
Total liabilities	5,531,173	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 September 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 September 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 September 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, 6,996,758 issued, and 6,965,758 outstanding at September 30, 2021, and 16,000,000 shares authorized, 967,213 issued and 936,213 outstanding at December 31, 2020	697	94
Additional paid-in capital	48,059,389	1,779,698
Treasury stock, 31,000 shares at September 30, 2021 and December 31, 2020, at cost	(172)	(172)
Accumulated deficit	(35,969,015)	(29,057,587)
Total stockholders' equity (deficit)	12,090,899	(27,277,967)
Total liabilities, convertible preferred stock and stockholders' equity (deficit)	$                17,622,072	$                 6,209,696

 

iSpecimen Inc.
CONDENSED STATEMENTS OF OPERATIONS
(Unaudited)
	Three months ended September 30,			Nine months ended September 30,
	2021		2020	2021	2020
Revenue	$  2,718,534		$  2,250,147	$  8,586,217	$  5,466,375
Operating expenses:
Cost of revenue	913,833		903,862	4,026,680	2,032,111
Technology	543,581		413,381	1,315,331	1,131,695
Sales and marketing	513,107		506,641	1,690,085	1,305,897
Supply development	171,595		133,007	383,864	395,200
Fulfillment	399,145		241,785	955,516	642,140
General and administrative	1,636,346		774,550	4,144,989	1,431,262
Total operating expenses	4,177,607		2,973,226	12,516,465	6,938,305
Loss from operations	(1,459,073)		(723,079)	(3,930,248)	(1,471,930)
Other expense, net
Interest expense	(75,922)		(469,477)	(2,062,548)	(1,517,697)
Change in fair value of derivative liability on convertible notes	-		(54,000)	(271,000)	(76,000)
Change in fair value of derivative liability on bridge notes and bridge notes, related parties	-		-	1,582,700	-
Gain (loss) on extinguishment of bridge notes and bridge notes, related parties	-		-	(2,740,425)	-
Loss on extinguishment of convertible notes and convertible notes, related parties	-		-	(260,185)	-
Gain on extinguishment of note payable	-		-	788,156	-
Other expense, net	(21,687)		-	(21,756)	6,691
Interest income	3,659		87	3,878	396
Other expense, net	(93,950)		(523,390)	(2,981,180)	(1,586,610)
Income (loss) before benefit from income taxes	(1,553,023)		(1,246,469)	(6,911,428)	(3,058,540)
Benefit from income taxes	-		-	-	-
Net income (loss)	$(1,553,023)		$(1,246,469)	$(6,911,428)	$(3,058,540)
Net income (loss) per share
Basic and diluted	$         (0.22)		$         (1.33)	$         (2.17)	$         (3.27)
Weighted average common shares outstanding
Basic and diluted	6,960,330		936,213	3,190,060	936,213

 

iSpecimen Inc.
CONDENSED STATEMENTS OF CHANGES IN CONVERTIBLE PREFERRED STOCK AND STOCKHOLDERS' DEFICIT
(Unaudited)
	Series B Convertible Preferred Stock		Series A-1 Convertible Preferred Stock		Series A Convertible Preferred Stock				Common Stock		Treasury Stock
	Shares	Amount	Shares	Amount	Shares	Amount			Shares	Amount	Shares	Amount	Additional Paid-In Capital	Accumulated Deficit	Total Stockholders' Equity (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
Issuance of common stock in connection with public offering over-allotment option exercise	-	-	-	-	-	-			337,500	34	-	-	2,497,467	-	2,497,501
Issuance of commoon stock in exchange for services	-	-	-	-	-	-			2,000	-	-	-	12,500	-	12,500
Issuance of common stock through exercise of stock options	-	-	-	-	-	-			4,761	-	-	-	4,761	-	4,761
Issuance of common stock through exercise of warrants	-	-	-	-	-	-			17,889	2	-	-	990	-	992
Vesting of restricted stock units	-	-	-	-	-	-			37,879	4			(4)		-
Share-based compensation expense	-	-	-	-	-	-			-	-	-	-	399,821	-	399,821
Issuance of warrants in connection with debt	-	-	-	-	-	-			-	-	-	-	49,072	-	49,072
Net loss	-	-	-	-	-	-			-	-	-	-	-	(1,553,023)	(1,553,023)
Balance at September 30, 2021 (unaudited)	-	$               -	-	$            -	-	$               -			6,965,758	$      697	31,000	$    (172)	$                          48,059,389	$             (35,969,015)	$                            12,090,899
	Series B Convertible Preferred Stock		Series A-1 Convertible Preferred Stock		Series A Convertible Preferred Stock				Common Stock		Treasury Stock
	Shares	Amount	Shares	Amount	Shares	Amount			Shares	Amount	Shares	Amount	Additional Paid-In Capital	Accumulated Deficit	Total Stockholders' Deficit
Balance at December 31, 2019	572,465	$7,999,997	100,365	$561,041	618,182	$2,612,038			936,213	$        94	31,000	$    (172)	$                            1,686,832	$             (24,405,503)	(22,718,749)
Share-based compensation expense	-	-	-	-	-	-			-	-	-	-	22,045	-	22,045
Net loss	-	-	-	-	-	-			-	-	-	-	-	(1,637,979)	(1,637,979)
Balance at March 31, 2020 (unaudited)	572,465	$7,999,997	100,365	$561,041	618,182	$2,612,038			936,213	$        94	31,000	$    (172)	$                            1,708,877	$             (26,043,482)	$                          (24,334,683)
Share-based compensation expense	-	-	-	-	-	-			-	-	-	-	29,287	-	29,287
Net loss	-	-	-	-	-	-			-	-	-	-	-	(174,092)	(174,092)
Balance at June 30, 2020 (unaudited)	572,465	$7,999,997	100,365	$561,041	618,182	$2,612,038			936,213	$        94	31,000	$    (172)	$                            1,738,164	$             (26,217,574)	$                          (24,479,488)
Share-based compensation expense													29,266		29,266
Net loss														(1,246,469)	(1,246,469)
Balance at September 30, 2020 (unaudited)	572,465	7,999,997	100,365	561,041	618,182	2,612,038			936,213	94	31,000	(172)	1,767,430	(27,464,043)	(25,696,691)

iSpecimen Inc.
CONDENSED STATEMENTS OF CASH FLOWS
(Unaudited)
	Nine months ended September 30,
	2021	2020
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss	$ (6,911,428)	$(3,058,540)
Adjustments to reconcile net loss to net cash used in operating activities:
Share-based compensation	450,231	80,598
Common shares issued in exchange for services	12,500	-
Amortization of internally developed software	714,444	599,425
Depreciation of property and equipment	33,390	33,563
Bad debt expense	33,856	-
Amortization of debt issuance costs on note payable	3,277	-
Amortization of discount and debt issuance costs on convertible notes	1,088	141,628
Amortization of discount on bridge notes	869,600	-
Change in fair value of derivative liabilities	(1,311,700)	76,000
Loss on extinguishment on bridge notes	2,740,425	-
Loss on extinguishment of convertible notes	260,185	-
Gain on extinguishment on note payable	(788,156)	-
Change in operating assets and liabilities:
Accounts receivable	(1,226,146)	(924,827)
Accounts receivable - unbilled	(1,097,983)	130,813
Inventory	-	-
Prepaid expenses and other current assets	(41,392)	(6,970)
Tax credit receivable	-	104,624
Accounts payable	(1,441,008)	474,263
Accrued expenses	214,226	129,644
Accrued interest	(1,709,575)	1,374,139
Deferred revenue	(154,531)	581,912
Net cash used in operating activities	(9,348,697)	(263,728)
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of property and equipment	(2,550)	(1,006)
Capitalization of internally developed software	(731,172)	(864,921)
Net cash used in investing activities	(733,722)	(865,927)
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from issuance of bridge notes payable	500,000	1,250,000
Proceeds from issuance of note payable	3,500,000	783,008
Proceeds from exercise of stock options	44,390	-
Proceeds from exercise of warrants	992	-
Proceeds from issuance of over-allotment shares of common stock , net of transaction costs of $202,499	2,497,501	-
Proceeds from issuance of common stock in connection with public offering	18,000,000	-
Payment of debt issuance costs in connection with note payable	(25,825)	-
Payment of offering costs in connection with the issuance of common stock in connection with public offering	(2,339,816)	-
Payment of principal to bridge note holders	(3,000,000)	-
Net cash provided by financing activities	19,177,242	2,033,008
Net increase  in cash	9,094,823	903,353
Cash at beginning of period	695,909	53,893
Cash at end of period	$  9,790,732	$     957,246
Supplemental disclosure of cash flow information:
Cash paid for interest	$  2,824,032	$                 -
Income taxes paid	$                 -	$                 -
Supplemental disclosure of non-cash investing and financing activities:
Conversion of redeemable convertible preferred stock into common stock	$11,173,076	$                 -
Conversion of convertible notes and accrued interest into common stock	$  6,748,729	$                 -
Conversion of bridge notes and accrued interest into common stock	$  4,717,646	$                 -
Issuance of common stock warrants as offering costs in connection with public offering of common stock	$     374,400	$                 -
Issuance of common stock warrants in connection with Term Loan	$       49,072	$                 -

 

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SOURCE iSpecimen Inc.

FAQ

What were iSpecimen's Q3 2021 earnings results?

iSpecimen reported a revenue increase of 21% to $2.7 million in Q3 2021, with a net loss of approximately $1.1 million.

How did iSpecimen's revenue in 2021 compare to 2020?

iSpecimen's nine-month revenue for 2021 reached $8.6 million, surpassing the full-year revenue of $5.5 million for 2020.

What is the outlook for iSpecimen's revenue growth?

iSpecimen is expanding its service offerings and supplier network to drive long-term revenue growth and shareholder value.

How many registered users does iSpecimen have as of September 30, 2021?

iSpecimen had approximately 4,900 registered users on its marketplace, a 30% increase year-over-year.

What percentage of iSpecimen's revenue in Q3 2021 was related to COVID-19?

Approximately 34% of total revenue in Q3 2021 was derived from COVID-19 related specimens.