iSpecimen Inc.
For the period ended Dec 31, 2024. Filed Apr 14, 2025.
View on SEC.govAbout this filing
A company's yearly report to the SEC, with audited financial statements. It is the fullest account a company gives of its business, its finances and the risks it sees.
FY2024 · Filed Apr 14, 2025
ISPC$0.81+0.8%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-K
Period ended 2023-12-31; filed 2024-03-13.
0001558370-24-003129
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-K
Period ended 2024-12-31; filed 2025-04-14.
0001213900-25-031639
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 101 previous paragraphs and 111 current paragraphs.
59 unchanged; 28 reworded; 21 added; 10 removed; 4 previous and 3 current paragraphs rearranged.
Tables are not compared: 3 previous and 3 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (21)
Current report
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations
Current report
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.
Current report
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.
Current report
On August 19, 2024, the Board 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.
Current report
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).
Current report
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 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.
Current report
Debt Financing
Current report
On September 19, 2024, we entered into the 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 Capital, Inc. (“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.
Current report
On October 31, 2024, we paid off the outstanding principal balance of $1,000,000 and accrued interest of $18,000 on the Note.
Current report
Securities Offering on Form S-1
Current report
On October 29, 2024, we entered into a placement agency agreement (the “Placement Agency Agreement”) with WestPark. (the “Placement Agent”), and a securities purchase agreement (the “Securities 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.
Current report
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.
Current report
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 years ended December 31, 2024 and 2023, we capitalized approximately $653,000 and $3,767,000, 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.
Current report
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.
Current report
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.
Current report
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.
Current report
During 2024, the Company recognized its revenue when the related specimens are delivered.
Current report
Other Income, net
Current report
Cash Flows Operating
Current report
Activities
Current report
Net cash provided by financing activities was approximately $5,819,000 for the year ended December 31, 2024, which consisted of approximately $1,494,000 of proceeds from issuance of common stock in connection with at the market offering agreement, approximately $398,000 of proceeds from issuance of common stock in connection with Securities Purchase Agreement, approximately $4,600,000 of proceeds from pre-funded warrants, which were offset by approximately $255,000 of payment of offering costs in connection with the issuance of common stock in connection with at the market offering agreement, approximately $366,000 of payment of offering costs in connection with the issuance of common stock in connection with pre-funded warrants and common shares and approximately $53,000 of repurchase of common stock exercisable under PIPE warrants.
Removed paragraphs (10)
Previous report
Term Loan
Previous report
On August 13, 2021, we entered into a loan agreement (the “Term Loan”) and as a result, received proceeds of $3,500,000. This funding was used to settle the remaining balance of $3,000,000 on the then outstanding bridge notes, as amended (“the Bridge Notes”). On November 3, 2022, the Company settled in cash the remaining principal balance plus accrued and unpaid interest of the Term Loan in the amount of $3.4 million. Upon repayment of the Term Loan, the Loan Facility was terminated and the security interest in the assets of the Company was released. As of December 31, 2023, no Bridge Notes remained outstanding.
Previous report
resulting in an estimated reduction in monthly compensation costs of 29% and additional expenditure reductions estimated to be over 50% of monthly expenditures for the remainder of the year, after streamlining operations and rationalizing resources to focus on key market opportunities. As a result, we experienced a significant decrease in expenditures during the second half of 2023 compared to the first half of 2023.
Previous report
One of our key new revenue enhancement initiatives is to identify, through sequencing, high value cancer patients which possess specific mutations in donor Formalin-Fixed Paraffin-Embedded (“FFPE”) blocks. We have invested in active repetitive screening to create a virtual inventory of availability for our research customers in areas of high value. This initiative is extremely valuable, not only to our business, but we believe, for the entire industry. We have entered into contracts with qualified suppliers to provide specific high value FFPE blocks which, we believe, could result in significant revenue share options. The power of our supplier network makes this initiative possible and when paired with the search functionality of our proprietary iSpecimen Marketplace, it provides an easier solution than what currently exists in our industry. We formally launched this initiative towards the end of the third quarter of 2023 and have recognized a modest level of revenue since then. We now have opportunities and purchase orders, most of which are expected to be fulfilled in 2024. We own the data generated from sequencing of the FFPE blocks, and we are now creating a database of research content of our specific high value sequenced data that, we believe, will generate additional reiterative revenue by selling to researchers access to the database.
Previous report
Our iSpecimen Marketplace Onsite Program, which offers additional support to our biospecimen supplier partners, is underway and we have begun to appoint iSpecimen Marketplace Onsite coordinators, whose responsibility is to field all requests made by the supplier partner and submit proposals on behalf of the supplier partner, resulting in the acceleration of fulfillment with streamlined sample-related management and reduced strain on existing supplier staff and product pipelines.
Previous report
During the first half of 2023, technology projects were green-lighted to accelerate development timelines. We are committed to investing in and developing our technology. During the year ended December 31, 2023, we capitalized approximately $3,767,000 of internally developed software costs with plans to invest at significantly lower levels in 2024. These investments have already resulted in meaningful progress which includes an updated search functionality, improved user interface, increased automation, and an enhanced matchmaking function of the iSpecimen Marketplace platform. We anticipate that these investments will increase revenue opportunities and result in operational efficiencies, positively impacting our liquidity, capital resources and results of operations in the future.
Previous report
Other Income (Expense), net
Previous report
Cash Flows
Previous report
Operating Activities
Previous report
Net cash used in financing activities was approximately $3,421,000 for the year ended December 31, 2022, which consisted of $3,500,000 for the payoff of the Term Loan, which was offset by approximately $79,000 of proceeds from the exercise of stock options.
Reworded paragraphs (28)
Previous wording
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 that connects researchers to subjects, specimens, and associated data. We are headquartered in Lexington, Massachusetts. We operate as one operating and reporting segment.
Current wording
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 Woburn, Massachusetts. We operate as one operating and reporting segment.
Previous wording
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.
Current wording
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.
Previous wording
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 fulfilment. Specimen providers access intuitive dashboards to view requests, create proposals, and track and manage their orders.
Current wording
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.
Previous wording
The iSpecimen Marketplace is composed of four major functional areas: search, workflow, data, and administration and reporting. 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 procurement, as well as to position our Company to explore other adjacent business opportunities that can benefit from the use of the iSpecimen Marketplace.
Current wording
The iSpecimen Marketplace is composed of four major functional areas: search, workflow, data, and administration and 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 procurement, as well as to position our Company to explore other adjacent business opportunities that can benefit from the use of the iSpecimen Marketplace.
Previous wording
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 its medical research customers using its proprietary software to identify and locate the required specimens. Costs paid to acquire specimens from hospitals and laboratories generally varies 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.
Current wording
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.
Previous wording
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 1,749,999 shares of common stock and (ii) warrants, which are exercisable for an aggregate of up to 1,312,500 shares of common stock, all of which were subsequently repurchased by us on February 13, 2024, and are no longer outstanding.
Current wording
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.
Previous wording
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 Shares when issued will be registered pursuant to our shelf registration statement on Form S-3 (File No 333-265976), which became effective on July 12, 2022. We intend to sell Shares, from time to time, pursuant to the ATM Agreement, in transactions that are “at the market offerings” as defined in Rule 415(a)(4) promulgated under the Securities Act.
Current wording
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 Shares when issued will be 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 are “at the market offerings” as defined in Rule 415(a)(4) promulgated under the Securities Act. During the year ended December 31, 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.
Previous wording
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 as of December 31, 2023 due to certain boutique life sciences customers either lack liquidity or have filed for bankruptcy. We have enhanced procedures related to our credit check process for new and existing customers in fiscal year 2023 to mitigate the risk to future collectability of receivables.
Current wording
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 $99,536 as of December 31, 2024 due to certain customers either lack liquidity or have filed for bankruptcy. We have enhanced procedures related to our credit check process for new and existing customers in fiscal year 2024 to mitigate the risk to future collectability of receivables.
Previous wording
We have initiated efforts to decrease our capital and operational expenditures by cutting costs and right sizing the Company through reductions in our workforce. Throughout the year of 2023 and primarily on September 6, 2023, we executed a reduction in workforce,
Current wording
Throughout the years ended December 31, 2024 and 2023, 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 December 31, 2024 has resulted in an estimated reduction in compensation costs of approximately 146% and technology costs of approximately 64% during the year ended December 31, 2024 when compared to the year ended December 31, 2023.
Previous wording
During the year ended December 31, 2023, we have had ongoing operational process improvement activities to increase collaboration within and between departments. In the second quarter of 2023, 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. 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. We completed the implementation of a next day quote system in the third quarter and we have already started to see positive results, as evidenced by increased conversion ratios of quotes to purchase orders which has contributed to the increased revenue results for the second half of 2023.
Current wording
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.
Previous wording
During the year ended December 31, 2023, while still onboarding new suppliers, we shifted to the quality of our network. We have 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. 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.
Current wording
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 years ended December 31, 2024, we terminated 180 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 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.
Previous wording
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
Current wording
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.
Previous wording
Revenue decreased by approximately $474,000, or 5%, from approximately $10,402,000 for the year ended December 31, 2022 to approximately $9,928,000 for the year ended December 31, 2023. This was primarily due to a decrease of 2,938, or 11%, in specimen count from 27,503 specimens during the year ended December 31, 2022 to 24,565 specimens during the year ended December 31, 2023. The effect of the decrease in specimen count was partially offset by a change in the specimen mix which caused the average selling price per specimen to increase by $26, or 7%, from approximately $378 during the year ended December 31, 2022 to $404 during the year ended December 31, 2023.
Current wording
Revenue decreased by approximately $637,000, or 6%, from approximately $9,928,000 for the year ended December 31, 2023 to approximately $9,291,000 for the year ended December 31, 2024. This was primarily due to write off of unbilled revenue offset by increase in average selling price per specimen by $4, or 1%, from approximately $404 in the year ended December 31, 2023 to approximately $408 in the year ended December 31, 2024. The increase in the average selling price per specimen was offset by a decrease of 168, or 0.7%, in specimen count from 24,565 specimens during the year ended December 31, 2023 to 24,397 specimens during the year ended December 31, 2024.
Previous wording
Cost of revenue increased by approximately $63,000, or 1%, from approximately $4,757,000 for the year ended December 31, 2022 to approximately $4,820,000 for the year ended December 31, 2023. Although there was an 11% decrease in the number of specimens accessioned during the year ended December 31, 2023, over the same prior year period, the average cost per specimen increased by 13% from $173 for the year ended December 31, 2022 to $196 for the year ended December 31, 2023.
Current wording
Cost of revenue increased by approximately $482,000, or 10%, from approximately $4,820,000 for the year ended December 31, 2023 to approximately $5,303,000 for the year ended December 31, 2024. Although there was a 0.7% decrease in the number of specimens delivered during the year ended December 31, 2024, over the same prior year period, the average cost per specimen increased by 11% from $196 for the year ended December 31, 2023 to $217 for the year ended December 31, 2024.
Previous wording
Technology expenses increased by approximately $911,000, or 34%, from approximately $2,656,000 for the year ended December 31, 2022 to approximately $3,567,000 for the year ended December 31, 2023. The increase was related to increases in amortization expense of internally developed software of approximately $765,000, payroll and related expenses of approximately $81,000, and professional fees of approximately $67,000, which were partially offset by a decrease in general operating expenses of approximately $2,000.
Current wording
Technology expenses decreased by approximately $37,000, or 1%, from approximately $3,567,000 for the year ended December 31, 2023 to approximately $3,530,000 for the year ended December 31, 2024. The decrease was related to professional fees of approximately $2,040,000. which were partially offset by an increases in amortization expense of internally developed software of approximately $89,000 and payroll and related expenses of approximately $1,918,000.
Previous wording
Sales and marketing expenses increased by approximately $511,000, or 15%, from approximately $3,445,000 for the year ended December 31, 2022 to approximately $3,956,000 for the year ended December 31, 2023. The increase was primarily attributable to increases in payroll and related expenses of approximately $345,000, external marketing expense of approximately $201,000, and general operating expenses related to sales and marketing of approximately $6,000, which were partially offset by a decrease in advertising and promotions expense of approximately $41,000.
Current wording
Sales and marketing expenses increased by approximately $989,000, or 25%, from approximately $3,956,000 for the year ended December 31, 2023 to approximately $4,945,000 for the year ended December 31, 2024. The increase was primarily attributable to increases in external marketing expense of approximately $1,618,000 and advertising and promotions expense of approximately $201,000, which were partially offset by a decrease in payroll and related expenses of approximately $773,000 and general operating expenses related to sales and marketing of approximately $57,000.
Previous wording
Supply development expenses increased by approximately $229,000, or 29%, from approximately $801,000 for the year ended December 31, 2022 to approximately $1,030,000 for the year ended December 31, 2023. The increase was primarily attributable to an increase in professional fees of approximately $372,000, which was partially offset by decreases in payroll and related expenses of approximately $141,000 and general supply development expenses of approximately $2,000.
Current wording
Supply development expenses decreased by approximately $492,000, or 48%, from approximately $1,030,000 for the year ended December 31, 2023 to approximately $538,000 for the year ended December 31, 2024. The decrease was primarily attributable to a decrease in professional fees of approximately $278,000, payroll and related expenses of approximately $189,000 and general supply development expenses of approximately $25,000.
Previous wording
Fulfillment costs decreased by approximately $207,000, or 10%, from approximately $1,996,000 for the year ended December 31, 2022 to approximately $1,789,000 for the year ended December 31, 2023. The decrease was primarily attributable to a decrease in payroll and related expenses of approximately $369,000 for personnel engaged in pre-sales feasibility assessments and order fulfillment, which was partially offset by increases in professional fees of approximately $143,000 and general operating expenses related to fulfillment of approximately $19,000.
Current wording
Fulfillment costs decreased by approximately $153,000, or 9%, from approximately $1,789,000 for the year ended December 31, 2023 to approximately $1,636,000 for the year ended December 31, 2024. The decrease was primarily attributable to a decrease in professional fees of approximately $183,000 and general operating expenses related to fulfillment of approximately $39,000, which was partially offset by increases in payroll and related expenses of approximately $69,000 for personnel engaged in pre-sales feasibility assessments and order fulfillment.
Previous wording
General and administrative expenses decreased by approximately $998,000, or 14%, from approximately $6,933,000 for the year ended December 31, 2022 to approximately $5,935,000 for the year ended December 31, 2023. The decrease was attributable to decreases in severance costs of former executives of approximately $782,000, compensation costs of approximately $248,000, general operating expenses of approximately $156,000, professional fees of $69,000, and utilities and facilities expenses of approximately $47,000, which were partially offset by increases in bad debt expense of approximately $198,000, depreciation and amortization of approximately $95,000, and taxes and insurance of approximately $11,000.
Current wording
General and administrative expenses increased by approximately $132,000, or 2%, from approximately $5,935,000 for the year ended December 31, 2023 to approximately $6,067,000 for the year ended December 31, 2024. The increase was attributable to an increase in professional fees of $381,000, franchise tax of $511,000, doubtful account expense of approximately $401,000, and write-off of IDS $327,000, which were partially offset by decreases in compensation costs of approximately $570,000, general operating expenses of approximately $139,000, depreciation and amortization of approximately $52,000, utilities and facilities expenses of approximately $40,000 and taxes and insurance of approximately $687,000.
Previous wording
Other income (expense), net, increased by approximately $130,000, or 217%, from approximately $60,000 of other expense, net, for the year ended December 31, 2022 to approximately $70,000 of other income, net, for the year ended December 31, 2023. The increase in other income (expense), net, was attributable to a decrease in interest expense of $223,000 and an increase in interest income of approximately $170,000, partially offset by increases in interest and penalties on sales tax liability of approximately $215,000 and other expense of approximately $49,000.
Current wording
Other income, net, increased by approximately $160,000, or 230%, from approximately $70,000 for the year ended December 31, 2023 to approximately $230,000, for the year ended December 31, 2024. The increase in other income (expense), net, was attributable to an increase of other income of approximately $445,000 and decrease in interest and penalties on sales tax liability of approximately $168,000, partially offset by increase in interest expense of approximately $157,000, and a decrease in interest income of approximately $296,000.
Previous wording
We have had recurring losses since inception. As of December 31, 2023, our available cash and available-for-sale securities totaled approximately $5,006,000, which represented a decrease of approximately $10,303,000 from approximately $15,309,000, as of December 31, 2022. We had working capital of approximately $2,190,000, an accumulated deficit of approximately $59,365,000, cash and cash equivalents and short-term investments of approximately $5,006,000 and accounts payable and accrued expenses of approximately $5,466,000. Our continued viability is dependent on the ability to successfully obtain additional working capital and/or ultimately attain profitable operations. Throughout the year and primarily on September 6, 2023, we executed a reduction in workforce, resulting in an estimated reduction in monthly compensation costs of 29% and additional expenditures reductions estimated to be over 50% of monthly expenditures for the remainder of the year, after streamlining operations and rationalizing resources to focus on key market opportunities. We plan to add additional customers and suppliers to increase and add additional revenues through our new revenue enhancement projects as well as to 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. We may also seek to fund our operations through public equity or debt financing, as well as other sources, but we have not currently identified any specific source of financing except for the At the Market Offering Agreement (the “ATM Agreement”) that was subsequently put in place on March 5, 2024 which may allow us to 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. However, we may be unsuccessful in increasing our revenues from our new enhancement project 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.
Current wording
We have recurring losses since inception. As of December 31, 2024, our available cash and available-for-sale securities totaled approximately $1,878,000, which represented a decrease of approximately $465,000 from approximately $2,344,000, as of December 31, 2023. We had working capital deficit of approximately $2,182,000, an accumulated deficit of approximately $71,863,000, cash and cash equivalents of approximately $1,878,000 and accounts payable and accrued expenses of approximately $5,366,000. 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 December 31, 2024, cumulatively resulted in an estimated reduction in monthly compensation costs of approximately 146% and technology costs of approximately 64% during the year ended December 31, 2024 when compared to year ended December 31, 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 year ended December 31, 2024, we engaged in raising capital through debt financing as discussed in Note 7 and through public equity as discussed in Note 10.
Previous wording
For the year ended December 31, 2022, net cash used in operating activities was approximately $5,818,000, which consisted of a net loss of approximately $10,246,000 offset by non-cash charges of approximately $2,074,000 which included approximately $1,183,000 related to amortization of internally developed software, approximately $679,000 in stock-based compensation, approximately $107,000 in bad debt expense, approximately $22,000 related to depreciation of property and equipment, approximately $77,000 of amortization of debt issuance costs on the Term Loan, and approximately $6,000 of proceeds from issuance of common stock in exchange for services.
Current wording
For the year ended December 31, 2024, net cash used in operating activities was approximately $8,264,000, which consisted of a net loss of approximately $12,498,000 offset by non-cash charges of approximately $3,549,000, which included approximately $2,037,000 related to amortization of internally developed software, approximately $250,000 in stock-based compensation, approximately $706,000 in bad debt expense, approximately $66,000 related to depreciation of property and equipment, approximately $700 for loss from sales of available-for-sale securities, approximately $60 for loss on disposal of property and equipment, approximately $327,000 of write-off of internally developed software, an approximately $1,188,000 increase in write-off of accounts receivable-unbilled and approximately $192,000 related to amortization of other intangible assets, which were offset by approximately $29,000 of accretion of discount on available-for-sale securities.
Previous wording
Total changes in assets and liabilities of approximately $2,354,000 were primarily driven by an approximately $1,298,000 decrease in accounts receivable, an approximately $148,000 decrease in operating lease right-of-use asset, an approximately $27,000 decrease in prepaid expenses and other current assets, an approximately $1,626,000 increase in accounts payable, an approximately $521,000 increase in accrued expenses, offset by an approximately $589,000 increase in accounts receivable-unbilled, an approximately $522,000 decrease in deferred revenue, an approximately $147,000 decrease in operating lease liability and an approximately $8,000 decrease in accrued interest.
Current wording
Total changes in assets and liabilities of approximately $503,000 were attributable to an approximately $272,000 increase in accounts payable, an approximately $506,000 increase in accounts receivable - unbilled, an approximately $127,000 decrease in operating lease right-of-use asset, and an approximately $27,000 decrease in prepaid expenses, approximately $16,000 decrease in security deposit, offset by an approximately $903,000 increase in accounts receivable, an approximately $372,000 decrease in accrued expenses, an approximately $120,000 decrease in operating lease liability, and an approximately $55,000 decrease in deferred revenue.
Previous wording
Total changes in assets and liabilities of approximately $2,589,000 were attributable to an approximately $1,466,000 increase in accounts payable, an approximately $564,000 decrease in accounts receivable, an approximately $283,000 increase in deferred revenue, an approximately $157,000 increase in operating lease right-of-use asset, an approximately $141,000 decrease in tax credit receivable, an approximately $115,000 decrease in accounts receivable-unbilled, an approximately $9,000 increase in accrued expenses, and an
Current wording
Total changes in assets and liabilities of approximately $2,589,000 were attributable to an approximately $1,466,000 increase in accounts payable, an approximately $564,000 decrease in accounts receivable, an approximately $283,000 increase in deferred revenue, an approximately $157,000 increase in operating lease right-of-use asset, an approximately $141,000 decrease in tax credit receivable, an approximately $115,000 decrease in accounts receivable - unbilled, an approximately $9,000 increase in accrued expenses, and an approximately $8,000 decrease in prepaid expenses and other current assets, offset by an approximately $156,000 decrease in operating lease liability.
Previous wording
During the year ended December 31, 2023, we invested approximately $3.8 million of cash in further developing our iSpecimen Marketplace technology with plans to invest at a lower level in 2024. We intend to continue to use our existing cash to grow our supply network, increase our marketing and sales presence, scale our operations, and for working capital and general corporate purposes.
Current wording
During the year ended December 31, 2024, we invested approximately $653,000 in further developing our iSpecimen Marketplace technology with plans to invest at a much lower level in 2025, in comparison to the cash invested during the year ended December 31, 2023 of approximately $3,767,000. We intend to continue to use our existing cash to grow our supply network, increase our marketing and sales presence, scale our operations, and for working capital and general corporate purposes.
Previous wording
Net cash used in investing activities was approximately $7,228,000 and $3,191,000 for the years ended December 31, 2023 and 2022, respectively. Net cash used in investing activities for the year ended December 31, 2023 consisted of approximately $13,040,000 of purchases of available-for-sale securities, approximately $3,767,000 of capitalization of internally developed software, approximately $958,000 of capitalization of other intangible assets and approximately $19,000 of purchases of property and equipment, which were offset by $10,556,000 of proceeds from sale and maturities of available-for-sale securities.
Current wording
Net cash used in investing activities was approximately $7,228,000 for the year ended December 31, 2023. Net cash used in investing activities for the year ended December 31, 2023 consisted of approximately $13,040,000 of purchases of available-for-sale securities, approximately $3,767,000 of capitalization of internally developed software, approximately $958,000 of capitalization of other intangible assets and approximately $19,000 of purchases of property and equipment, which were offset by $10,556,000 of proceeds from sale and maturities of available-for-sale securities.
Previous wording
We capitalize certain internal and external costs incurred during the application development stage of internal use software projects until the software is ready for its intended use. Amortization of the asset commences when the software is complete and placed into service and is recorded in operating expenses. We amortize completed internal-use software over its estimated useful life of five years on a straight-line basis. Costs incurred during the planning, training and post-implementation stages of the software development life cycle are classified as technology and expensed to operations as incurred. Costs that do not meet the capitalization criteria are expensed as incurred. We performed an impairment analysis of our internally developed software as of the measurement date of December 31, 2023 and concluded that the net book value of the asset is recoverable. There has been no material changes to our estimates as of December 31, 2023.
Current wording
We capitalize certain internal and external costs incurred during the application development stage of internal use software projects until the software is ready for its intended use. Amortization of the asset commences when the software is complete and placed into service and is recorded in operating expenses. We amortize completed internal-use software over its estimated useful life of five years on a straight-line basis. Costs incurred during the planning, training and post-implementation stages of the software development life cycle are classified as technology and expensed to operations as incurred. Costs that do not meet the capitalization criteria are expensed as incurred. We performed an impairment analysis of our internally developed software as of the measurement date of December 31, 2024 and concluded that a small portion the net book value of the asset is not recoverable. During the year ended December 31, 2024, such portion were written off and reduced the net book value estimates by $327,000.
Previous wording
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 and (ii) complying with any requirement that may be 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 thefiscal 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.
Current wording
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 and (ii) complying with any requirement that may be 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.
Rearranged current paragraphs (3)
Current report — wording carried from elsewhere
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.
Current report — wording carried from elsewhere
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.
Current report — wording carried from elsewhere
Net cash provided by investing activities was approximately $1,980,000 and net cash used in investing activities was approximately $7,228,000 for the years ended December 31, 2024 and 2023, respectively. Net cash provided by investing activities for the year ended December 31, 2024 consisted of approximately $3,150,000 of proceeds from sale and maturities of available-for-sale securities, which were offset by approximately $461,000 of purchases of available-for-sale securities, approximately $653,000 of capitalization of internally developed software, approximately $25,000 of purchases of leasehold improvements and approximately $32,000 of purchases of property and equipment.
Rearranged previous paragraphs (4)
Previous report — wording carried elsewhere
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
Previous report — wording carried elsewhere
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.
Previous report — wording carried elsewhere
approximately $8,000 decrease in prepaid expenses and other current assets, offset by an approximately $156,000 decrease in operating lease liability.
Previous report — wording carried elsewhere
Net cash used in investing activities for the year ended December 31, 2022 consisted of approximately $2,976,000 of capitalization of internally developed software and approximately $216,000 for purchase of property and equipment.