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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
|
☒
|
QUARTERLY REPORT UNDER SECTION 13
OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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For the quarterly period ended September 30, 2022
OR
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☐
|
TRANSITION REPORT PURSUANT TO
SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
1934
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For the transition period from to
.
Commission file number: 001-36284
Biocept, Inc.
(Exact name of registrant as specified in its charter)
|
Delaware
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80-0943522
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(State or other jurisdiction of
incorporation or organization)
|
|
(I.R.S. Employer
Identification No.)
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9955 Mesa Rim Road, San Diego, California
(Address of principal executive offices)
92121
(Zip Code)
(858) 320-8200
(Registrant’s telephone number, including area code)
Not Applicable
(Former name, former address and former fiscal year, if changed
since last report)
Securities registered pursuant to Section 12(b) of the Act:
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|
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|
Title of each class
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Trading Symbol(s)
|
Name of each exchange on which registered
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Common Stock, par value $.0001 per share
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BIOC
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The Nasdaq Stock Market LLC
|
Indicate by check mark whether the registrant (1) has filed
all reports required to be filed by Section 13 or 15(d) of the
Securities Exchange Act of 1934 during the preceding 12 months (or
for such shorter period that the registrant was required to file
such reports), and (2) has been subject to such filing
requirements for the past 90 days. Yes ☒ No ☐
Indicate by check mark whether the registrant has submitted
electronically every Interactive Data File required to be submitted
pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter)
during the preceding 12 months (or for such shorter period that the
registrant was required to submit such
files). Yes ☒ No ☐
Indicate by check mark whether the registrant is a large
accelerated filer, an accelerated filer, a non-accelerated filer, a
smaller reporting company, or an emerging growth company. See the
definitions of “large accelerated filer,” “accelerated filer,”
“smaller reporting company” and “emerging growth company” in Rule
12b-2 of the Exchange Act.
|
Large accelerated filer
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|
☐
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Accelerated filer
|
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☐
|
|
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Non-accelerated filer
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|
☒
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Smaller reporting company
|
|
☒
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|
|
|
|
|
|
|
|
|
|
Emerging growth company
|
|
☐
|
If an emerging growth company, indicate by check mark if the
registrant has elected not to use the extended transition period
for complying with any new or revised financial accounting
standards provided pursuant to Section 13(a) of the Exchange Act.
☐
Indicate by check mark whether the registrant is a shell company
(as defined by Rule 12b-2 of the Exchange
Act). Yes ☐ No ☒
As of November 17, 2022, there were 17,058,770 shares of the
Registrant’s common stock outstanding.
BIOCEPT, INC.
FORM 10-Q
FOR THE QUARTERLY PERIOD ENDED
September 30, 2022
INDEX
2
IMPORTANT NOTE REGARDING
FORWARD-LOOKING STATEMENTS
This Quarterly Report on Form 10-Q, or Quarterly Report, contains
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. All statements
included or incorporated by reference in this Quarterly Report
other than statements of historical fact, are forward-looking
statements. You can identify these and other forward-looking
statements by the use of words such as “may,” “will,” “could,”
“anticipate,” “expect,” “intend,” “believe,” “continue,” “plan,”
“estimate,” “potentially,” “predict,” “should” or the negative of
such terms, or other comparable terminology. Forward-looking
statements also include the assumptions underlying or relating to
such statements.
Forward-looking statements may include, but are not limited to,
statements about:
|
|
•
|
the performance of our products,
assays and services;
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|
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•
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the ability of our products,
assays and services to become a key component of the standard of
care for personalized cancer treatment;
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|
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•
|
our ability to
generate revenue, grow our business and increase sales of our
products, assays and services;
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•
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our ability to
develop and commercialize new products, diagnostic assays, services
and enhance our current products, assays and services and future
products, assays, and services;
|
|
|
•
|
our plans to launch
a series of cancer diagnostic assays for different predictive
biomarkers;
|
|
|
•
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our ability to
effectively compete with other products, diagnostic assays, methods
and services that now exist or may hereafter be
developed;
|
|
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•
|
our ability to
expand our international business and commercialize our products
and assays in other countries;
|
|
|
•
|
market adoption of our products
and assays and our ability to successfully complete clinical
utility studies;
|
|
|
•
|
the potential for CNSide to be
included in NCCN guidelines;
|
|
|
•
|
our ability to
obtain coverage and adequate reimbursement from governmental and
other third-party payers for assays and services;
|
|
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•
|
our expectations
regarding our material cash requirements, contractual obligations
and commitments and the use of our existing cash;
|
|
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•
|
our ability to enter
into and leverage agreements with commercialization partners for
the sales, marketing and commercialization of our current products,
assays and services, and our planned future products, assays and
services;
|
|
|
•
|
our ability to
satisfy any applicable United States and international regulatory
requirements with respect to products, assays and
services;
|
|
|
•
|
our ability to
obtain or maintain patents or other appropriate protection for the
intellectual property utilized in our current and planned products,
assays and services;
|
|
|
•
|
potential effects of
the COVID-19 pandemic on our business;
|
|
|
•
|
our estimates
regarding the period of time for which our current capital
resources will be sufficient to fund our continued
operations;
|
|
|
•
|
our expectations and
estimates regarding our future use of cash, expenses and costs and
needs for additional financing; and
|
|
|
•
|
our ability to
maintain a strong internal control environment and remediate
internal control deficiencies.
|
3
Our actual results could differ materially from those anticipated
in these forward-looking statements as a result of various factors,
including those set forth in this report under the “Management’s
Discussion and Analysis” and “Risk Factors” headings, which include
but are not limited to the following factors:
|
|
•
|
we may be unable to
increase sales of our current products, assays and services or
successfully develop and commercialize other products, assays and
services;
|
|
|
•
|
we may be unable to
execute our sales and marketing strategy for our products and
diagnostic assays and may be unable to gain acceptance in the
market and generate sufficient revenue;
|
|
|
•
|
we may be unable to
develop products, assays and services to keep pace with rapid
advances in technology, medicine and science;
|
|
|
•
|
our current
products, assays and services and our planned future products,
assays and services may not continue to perform as
expected;
|
|
|
•
|
our sole laboratory
facility may become damaged or inoperable, or we may be required to
vacate the facility;
|
|
|
•
|
the impact of the
COVID-19 pandemic on our business;
|
|
|
•
|
the decline of our
RT-PCR COVID-19 testing business revenues;
|
|
|
•
|
we may be unable to
compete successfully with our competitors and increase or sustain
our revenues;
|
|
|
•
|
medical oncologists,
neuro-oncologists, surgical oncologists, urologists,
pulmonologists, pathologists and other physicians may decide not to
order our current or planned future assays, and laboratory supply
distributors and their customers may decide not to order our
current or planned future products;
|
|
|
•
|
we may be unable to
identify collaborators willing to work with us to conduct clinical
utility studies, or the results of those studies may not
demonstrate that an assay provides clinically meaningful
information and value;
|
|
|
•
|
we may lose key
members of our executive management team;
|
|
|
•
|
we may be unable to
retain and recruit personnel with the requisite technical
skills;
|
|
|
•
|
we may fail to
continue to attract, hire and retain a sufficient number of
qualified sales professionals;
|
|
|
•
|
we may experience
delays in transmitting claims to payers;
|
|
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•
|
we may encounter
manufacturing delays;
|
|
|
•
|
we may become
exposed to business, regulatory, political, operational, financial
and economic risks associated with doing business outside of the
United States;
|
|
|
•
|
general economic and
business conditions may have a negative impact on our
business;
|
|
|
•
|
our business may be
effected by healthcare policy changes;
|
|
|
•
|
hospitals or other
clients may not pay our invoices or third-party payers may not
provide coverage and reimbursement or may breach, rescind or modify
their contracts or reimbursement policies or delay
payments;
|
|
|
•
|
our products and
assays may not receive favorable treatment, clearance or marketing
authorization from the U.S. Food and Drug Administration, or
FDA;
|
|
|
•
|
the FDA may begin
requiring approval or clearance for our current products and assays
and our planned future products and assays;
|
4
|
|
•
|
we may become required to conduct
additional clinical studies or trials before continuing to offer
assays that we have developed or may develop as laboratory developed
tests;
|
|
|
•
|
we may be unable to
obtain and maintain effective patent and proprietary rights for our
products and services;
|
|
|
•
|
we may be unable to
protect our intellectual property throughout the world;
and
|
|
|
•
|
we may fail to
maintain proper and effective internal control over financial
reporting.
|
Moreover, we operate in an evolving environment. New risk factors
and uncertainties emerge from time to time, and it is not possible
for us to predict all risk factors and uncertainties, nor can we
assess the impact of all factors on our business or the extent to
which any factor, or combination of factors, may cause actual
results to differ materially from those contained in any
forward-looking statements. Readers are cautioned not to place
undue reliance on forward-looking statements. The forward-looking
statements speak only as of the date on which they are made, and we
undertake no obligation to update such statements to reflect events
that occur or circumstances that exist after the date on which they
are made except as required by law. Readers should, however, review
the factors and risks we describe in the reports we file from time
to time with the SEC. In addition, statements that “we believe” and
similar statements reflect our beliefs and opinions on the relevant
subject. These statements are based upon information available to
us as of the date the statement is made, and while we believe such
information forms a reasonable basis for such statements, such
information may be limited or incomplete, and our statements should
not be read to indicate that we have conducted an exhaustive
inquiry into, or review of, all potentially available relevant
information. These statements are inherently uncertain, and you are
cautioned not to unduly rely upon these statements.
5
PART I. FINANCIAL INFORMATION
Item 1.
Financial Statements
|
Biocept, Inc.
|
|
|
Condensed Balance Sheets
|
|
|
(In thousands, except share and per share data)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
December 31,
|
|
|
September 30,
|
|
|
|
|
2021
|
|
|
2022
|
|
|
Assets
|
|
|
|
|
|
(unaudited)
|
|
|
Current assets:
|
|
|
|
|
|
|
|
|
|
Cash
|
|
$
|
28,864
|
|
|
$
|
18,021
|
|
|
Accounts receivable
|
|
|
13,786
|
|
|
|
15,768
|
|
|
Inventories, net
|
|
|
2,651
|
|
|
|
1,897
|
|
|
Prepaid expenses and other current assets
|
|
|
391
|
|
|
|
949
|
|
|
Total current assets
|
|
|
45,692
|
|
|
|
36,635
|
|
|
Fixed assets, net
|
|
|
2,401
|
|
|
|
2,853
|
|
|
Lease right-of-use assets - operating
|
|
|
9,026
|
|
|
|
8,624
|
|
|
Lease right-of-use assets - finance
|
|
|
2,842
|
|
|
|
2,598
|
|
|
Other non-current assets
|
|
|
456
|
|
|
|
392
|
|
|
Total assets
|
|
$
|
60,417
|
|
|
$
|
51,102
|
|
|
|
|
|
|
|
|
|
|
|
|
Liabilities and
Stockholders' Equity
|
|
|
|
|
|
|
|
|
|
Current liabilities:
|
|
|
|
|
|
|
|
|
|
Accounts payable
|
|
$
|
7,246
|
|
|
$
|
3,040
|
|
|
Accrued liabilities
|
|
|
3,018
|
|
|
|
2,177
|
|
|
Current portion of lease liabilities - operating
|
|
|
426
|
|
|
|
494
|
|
|
Current portion of lease liabilities - finance
|
|
|
1,083
|
|
|
|
1,053
|
|
|
Supplier financing
|
|
|
-
|
|
|
|
384
|
|
|
Total current liabilities
|
|
|
11,773
|
|
|
|
7,148
|
|
|
Non-current portion of lease liabilities - operating
|
|
|
9,736
|
|
|
|
9,322
|
|
|
Non-current portion of lease liabilities - finance
|
|
|
1,428
|
|
|
|
1,009
|
|
|
Payor liability
|
|
|
-
|
|
|
|
6,105
|
|
|
Total liabilities
|
|
|
22,937
|
|
|
|
23,584
|
|
|
Commitments and contingencies (see Note 10)
|
|
|
|
|
|
|
|
|
|
Shareholders’ equity:
|
|
|
|
|
|
|
|
|
|
Preferred stock, $0.0001 par value, 5,000,000 shares authorized;
2,106 shares and 2,090 shares issued and outstanding at
December 31, 2021 and September 30, 2022, respectively.
|
|
|
—
|
|
|
|
—
|
|
|
Common stock, $0.0001 par value, 150,000,000 shares authorized;
16,849,805 shares and 17,058,770 shares issued and outstanding at
December 31, 2021 and September 30, 2022, respectively.
|
|
|
2
|
|
|
|
2
|
|
|
Additional paid-in capital
|
|
|
303,829
|
|
|
|
307,432
|
|
|
Accumulated deficit
|
|
|
(266,351
|
)
|
|
|
(279,916
|
)
|
|
Total shareholders’ equity
|
|
|
37,480
|
|
|
|
27,518
|
|
|
Total liabilities and shareholders’ equity
|
|
$
|
60,417
|
|
|
$
|
51,102
|
|
The accompanying notes are an integral part of these unaudited
condensed financial statements.
6
|
Biocept, Inc.
|
|
|
Condensed Statements of Operations
|
|
|
(In thousands, except shares and per share data)
|
|
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the Three Months Ended September 30,
|
|
|
For the Nine Months Ended September 30,
|
|
|
|
|
2021
|
|
|
2022
|
|
|
2021
|
|
|
2022
|
|
|
Net revenues
|
|
$
|
17,470
|
|
|
$
|
5,587
|
|
|
$
|
47,273
|
|
|
$
|
36,143
|
|
|
Costs and expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of revenues
|
|
|
11,265
|
|
|
|
5,776
|
|
|
|
27,733
|
|
|
|
24,133
|
|
|
Research and development expenses
|
|
|
1,303
|
|
|
|
1,366
|
|
|
|
3,483
|
|
|
|
4,945
|
|
|
General and administrative expenses
|
|
|
3,514
|
|
|
|
3,047
|
|
|
|
9,884
|
|
|
|
14,153
|
|
|
Sales and marketing expenses
|
|
|
1,938
|
|
|
|
975
|
|
|
|
5,806
|
|
|
|
6,292
|
|
|
Total costs and expenses
|
|
|
18,020
|
|
|
|
11,164
|
|
|
|
46,906
|
|
|
|
49,523
|
|
|
(Loss) income from operations
|
|
|
(550
|
)
|
|
|
(5,577
|
)
|
|
|
367
|
|
|
|
(13,380
|
)
|
|
Other (expense):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest expense, net
|
|
|
(75
|
)
|
|
|
(52
|
)
|
|
|
(220
|
)
|
|
|
(269
|
)
|
|
Other income, net
|
|
|
-
|
|
|
|
84
|
|
|
|
-
|
|
|
|
84
|
|
|
Total other (expense) income:
|
|
|
(75
|
)
|
|
|
32
|
|
|
|
(220
|
)
|
|
|
(185
|
)
|
|
(Loss) income before income taxes
|
|
|
(625
|
)
|
|
|
(5,545
|
)
|
|
|
147
|
|
|
|
(13,565
|
)
|
|
Income
tax expense
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
Net (loss) income
|
|
|
(625
|
)
|
|
|
(5,545
|
)
|
|
|
147
|
|
|
|
(13,565
|
)
|
|
Net (loss) income attributable to common shareholders
|
|
$
|
(625
|
)
|
|
$
|
(5,545
|
)
|
|
$
|
147
|
|
|
$
|
(13,565
|
)
|
|
Weighted-average shares outstanding used in computing net (loss)
income per share attributable to common shareholders:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
|
15,384,469
|
|
|
|
16,998,031
|
|
|
|
14,089,537
|
|
|
|
16,917,412
|
|
|
Diluted
|
|
|
15,384,469
|
|
|
|
16,998,031
|
|
|
|
14,330,477
|
|
|
|
16,917,412
|
|
|
Net (loss) income per common share:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
$
|
(0.04
|
)
|
|
$
|
(0.33
|
)
|
|
$
|
0.01
|
|
|
$
|
(0.80
|
)
|
|
Diluted
|
|
$
|
(0.04
|
)
|
|
$
|
(0.33
|
)
|
|
$
|
0.01
|
|
|
$
|
(0.80
|
)
|
The accompanying notes are an integral
part of these unaudited condensed financial statements.
7
|
Biocept, Inc.
|
|
|
Condensed Statements of Stockholders' Equity
|
|
|
(In thousands, except for shares)
|
|
|
(Unaudited)
|
|
|
|
|
Common Stock
|
|
|
Series A
Convertible
Preferred Stock
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Shares
|
|
|
Amount
|
|
|
Shares
|
|
|
Amount
|
|
|
Additional
Paid-in Capital
|
|
|
Accumulated
Deficit
|
|
|
Total
|
|
|
Balance at December 31, 2021
|
|
|
16,849,805
|
|
|
$
|
2
|
|
|
|
2,106
|
|
|
$
|
—
|
|
|
$
|
303,829
|
|
|
$
|
(266,351
|
)
|
|
$
|
37,480
|
|
|
Stock-based compensation expense
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
2,317
|
|
|
|
—
|
|
|
|
2,317
|
|
|
Shares issued upon conversion of preferred stock
|
|
|
356
|
|
|
|
—
|
|
|
|
(16
|
)
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
Net loss
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
(2,768
|
)
|
|
|
(2,768
|
)
|
|
Balance at March 31, 2022
|
|
|
16,850,161
|
|
|
$
|
2
|
|
|
|
2,090
|
|
|
$
|
—
|
|
|
$
|
306,146
|
|
|
$
|
(269,119
|
)
|
|
$
|
37,029
|
|
|
Stock-based compensation expense
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
585
|
|
|
|
—
|
|
|
|
585
|
|
|
Shares issued for ATM transaction, net of issuance costs
|
|
|
72,707
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
94
|
|
|
|
—
|
|
|
|
94
|
|
|
Net loss
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
(5,252
|
)
|
|
|
(5,252
|
)
|
|
Balance at June 30, 2022
|
|
|
16,922,868
|
|
|
$
|
2
|
|
|
|
2,090
|
|
|
$
|
—
|
|
|
$
|
306,825
|
|
|
$
|
(274,371
|
)
|
|
$
|
32,456
|
|
|
Stock-based compensation expense
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
462
|
|
|
|
—
|
|
|
|
462
|
|
|
Shares issued for ATM transaction, net of issuance costs
|
|
|
135,902
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
145
|
|
|
|
—
|
|
|
|
145
|
|
|
Net loss
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
(5,545
|
)
|
|
|
(5,545
|
)
|
|
Balance at September 30, 2022
|
|
|
17,058,770
|
|
|
$
|
2
|
|
|
|
2,090
|
|
|
$
|
—
|
|
|
$
|
307,432
|
|
|
$
|
(279,916
|
)
|
|
$
|
27,518
|
|
|
|
|
Common Stock
|
|
|
Series A
Convertible
Preferred Stock
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Shares
|
|
|
Amount
|
|
|
Shares
|
|
|
Amount
|
|
|
Additional
Paid-in Capital
|
|
|
Accumulated
Deficit
|
|
|
Total
|
|
|
Balance at December 31, 2020
|
|
|
13,397,041
|
|
|
$
|
1
|
|
|
|
2,111
|
|
|
$
|
—
|
|
|
$
|
287,218
|
|
|
$
|
(263,527
|
)
|
|
$
|
23,692
|
|
|
Stock-based compensation expense
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
460
|
|
|
|
—
|
|
|
|
460
|
|
|
Shares issued upon exercise of common stock warrants
|
|
|
5,304
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
19
|
|
|
|
—
|
|
|
|
19
|
|
|
Shares issued upon conversion of preferred stock
|
|
|
23
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
Shares issued upon exercise of options
|
|
|
194
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
1
|
|
|
|
—
|
|
|
|
1
|
|
|
Net income
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
2,599
|
|
|
|
2,599
|
|
|
Balance at March 31, 2021
|
|
|
13,402,562
|
|
|
$
|
1
|
|
|
|
2,111
|
|
|
$
|
—
|
|
|
$
|
287,698
|
|
|
$
|
(260,928
|
)
|
|
$
|
26,771
|
|
|
Stock-based compensation expense
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
494
|
|
|
|
—
|
|
|
|
494
|
|
|
Shares issued for ATM transaction, net of issuance costs
|
|
|
908,044
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
3,914
|
|
|
|
—
|
|
|
|
3,914
|
|
|
Net loss
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
(1,827
|
)
|
|
|
(1,827
|
)
|
|
Balance at June 30, 2021
|
|
|
14,310,606
|
|
|
$
|
1
|
|
|
|
2,111
|
|
|
$
|
—
|
|
|
$
|
292,106
|
|
|
$
|
(262,755
|
)
|
|
$
|
29,352
|
|
|
Stock-based compensation expense
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
700
|
|
|
|
—
|
|
|
|
700
|
|
|
Shares issued for ATM transaction, net of issuance costs
|
|
|
2,357,988
|
|
|
|
1
|
|
|
|
—
|
|
|
|
—
|
|
|
|
9,575
|
|
|
|
—
|
|
|
|
9,576
|
|
|
Shares issued upon exercise of options
|
|
|
343
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
1
|
|
|
|
—
|
|
|
|
1
|
|
|
Net loss
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
(625
|
)
|
|
|
(625
|
)
|
|
Balance at September 30, 2021
|
|
|
16,668,937
|
|
|
$
|
2
|
|
|
|
2,111
|
|
|
$
|
—
|
|
|
$
|
302,382
|
|
|
$
|
(263,380
|
)
|
|
$
|
39,004
|
|
The accompanying notes are an integral part of these unaudited
condensed financial statements.
8
|
Biocept, Inc.
|
|
|
Condensed Statements of Cash Flows
|
|
|
(in thousands)
|
|
|
(Unaudited)
|
|
|
|
|
For the Nine Months Ended September 30,
|
|
|
|
|
2021
|
|
|
2022
|
|
|
Cash Flows from Operating Activities
|
|
|
|
|
|
|
|
|
|
Net income (loss)
|
|
$
|
147
|
|
|
$
|
(13,565
|
)
|
|
Adjustments to reconcile net income (loss) to net cash provided by
(used in) operating activities:
|
|
|
|
|
|
|
|
|
|
Depreciation and amortization
|
|
|
1,082
|
|
|
|
1,217
|
|
|
Noncash operating lease expense
|
|
|
1,111
|
|
|
|
402
|
|
|
Stock-based compensation
|
|
|
1,655
|
|
|
|
3,364
|
|
|
Loss on disposal of fixed assets
|
|
|
4
|
|
|
|
9
|
|
|
Non-cash credit card rewards
|
|
|
-
|
|
|
|
79
|
|
|
Increase (decrease) in cash resulting from changes in:
|
|
|
|
|
|
|
|
|
|
Accounts receivable
|
|
|
(1,827
|
)
|
|
|
(1,982
|
)
|
|
Inventory
|
|
|
(969
|
)
|
|
|
754
|
|
|
Prepaid expenses and other current assets
|
|
|
2,087
|
|
|
|
286
|
|
|
Other non-current assets
|
|
|
(13
|
)
|
|
|
24
|
|
|
Accounts payable
|
|
|
(569
|
)
|
|
|
(4,553
|
)
|
|
Accrued liabilities
|
|
|
(582
|
)
|
|
|
(841
|
)
|
|
Operating lease liability
|
|
|
-
|
|
|
|
(346
|
)
|
|
Payor liability
|
|
|
-
|
|
|
|
6,105
|
|
|
Net
cash provided by (used in) operating activities
|
|
|
2,126
|
|
|
|
(9,047
|
)
|
|
Cash Flows from Investing Activities:
|
|
|
|
|
|
|
|
|
|
Purchases of fixed assets
|
|
|
(982
|
)
|
|
|
(671
|
)
|
|
Net
cash used in investing activities
|
|
|
(982
|
)
|
|
|
(671
|
)
|
|
Cash Flows from Financing Activities:
|
|
|
|
|
|
|
|
|
|
Net proceeds from issuance of common stock
|
|
|
13,489
|
|
|
|
239
|
|
|
Proceeds from exercise of common stock warrants
|
|
|
19
|
|
|
|
—
|
|
|
Proceeds from exercise of stock options
|
|
|
2
|
|
|
|
—
|
|
|
Payments on finance leases
|
|
|
(911
|
)
|
|
|
(825
|
)
|
|
Payments on supplier financing
|
|
|
(413
|
)
|
|
|
(539
|
)
|
|
Net
cash provided by (used in) financing activities
|
|
|
12,186
|
|
|
|
(1,125
|
)
|
|
Net increase (decrease) in cash
|
|
|
13,330
|
|
|
|
(10,843
|
)
|
|
Cash at Beginning of Period
|
|
|
14,368
|
|
|
|
28,864
|
|
|
Cash at End of Period
|
|
|
27,698
|
|
|
|
18,021
|
|
|
Supplemental Cash Flow Information:
|
|
|
|
|
|
|
|
|
|
Interest
|
|
$
|
219
|
|
|
$
|
269
|
|
|
|
|
For the Nine Months Ended September 30,
|
|
|
Non-cash Investing and Financing Activities
|
|
2021
|
|
|
2022
|
|
|
Financed insurance premiums
|
|
$
|
622
|
|
|
$
|
672
|
|
|
Fixed assets purchased through financed lease obligations
|
|
$
|
1,237
|
|
|
$
|
360
|
|
|
Fixed assets within accounts payable
|
|
$
|
147
|
|
|
$
|
318
|
|
The accompanying notes are an integral part of these unaudited
condensed financial statements.
9
BIOCEPT, INC.
NOTES TO CONDENSED FINANCIAL
STATEMENTS
(Unaudited)
1. The Company, Business Activities and Basis of Presentation
The Company and Business Activities
The Company was founded in California in May 1997 and is a
molecular oncology diagnostics company that develops and
commercializes proprietary clinical diagnostic laboratory assays
designed to identify rare tumor cells and cell-free tumor DNA from
blood and cerebrospinal fluid, or CSF. The identification of tumor
cells and cell-free tumor DNA in CSF has become the Company’s
principal development focus following its early commercial
expansion into CSF in 2020.
The Company operates a clinical laboratory that is CLIA-certified
(under the Clinical Laboratory Improvement Amendment of 1988) and
CAP-accredited (by the College of American Pathologists) and
manufactures proprietary microfluidic channels for cell enrichment
and extraction, as well as certain reagents that are used to
perform the Company’s diagnostic assays in a facility located in
San Diego, California. CLIA certification and CAP accreditation are
required before any clinical laboratory may perform testing on
human specimens for the purpose of obtaining information for the
diagnosis, prevention, treatment of disease, or assessment of
health. The assays the Company offers are classified as laboratory
developed tests (LDTs) under the CLIA regulations.
In July 2013, the Company effected a reincorporation to Delaware by
merging itself with and into Biocept, Inc., a Delaware corporation,
which had been formed to be and was a wholly owned subsidiary of
the Company since July 23, 2013.
In January 2020, the Company adapted and validated its proprietary
blood-based liquid biopsy technology for commercial and clinical
research use in CSF to identify tumor cells that have metastasized
to the central nervous system, or CNS, in patients with advanced
lung cancer or breast cancer. CNSide has been designed to improve
the clinical management of patients with suspected metastatic
cancer involving the CNS by enabling the quantitative analysis and
molecular characterization of tumor cells and cell-free tumor DNA
and RNA in the CSF. Since then, we have worked extensively
with leading neuro-oncologists and other cancer experts to further
define and characterize the use of this unique assay.
In June 2020, we launched a COVID-19 diagnostic (assay manufactured
by Thermo-Fisher) which broadened our assay menu to meet the
community testing needs due to the emergence of COVID-19.
Basis of Presentation
The accompanying unaudited condensed financial statements and notes
are prepared in accordance with accounting principles generally
accepted in the United States of America, or GAAP, and on the basis
that the Company will continue as a going concern (see Note 2). The
accompanying unaudited condensed financial statements and notes do
not include any adjustments to reflect the possible future effects
on the recoverability and classification of assets or the amounts
and classification of liabilities that may result from the possible
inability of the Company to continue as a going concern.
The unaudited condensed financial statements included in this Form
10-Q have been prepared in accordance with the U.S. Securities and
Exchange Commission, or SEC, instructions for Quarterly Reports on
Form 10-Q. Accordingly, the condensed financial statements are
unaudited and do not contain all the information required by GAAP
to be included in a full set of financial statements. The balance
sheet at December 31, 2021 has been derived from the audited
financial statements at that date but does not include all of the
information and footnotes required by GAAP for a complete set of
financial statements. The audited financial statements for the year
ended December 31, 2021, filed with the SEC with our Annual
Report on Form 10-K on April 5, 2022 include a summary of our
significant accounting policies and should be read in conjunction
with this Form 10-Q. In the opinion of management, all material
adjustments necessary to present fairly the results of operations
for such periods have been included in this Form 10-Q. All such
adjustments are of a normal recurring nature. The results of
operations for interim periods are not necessarily indicative of
the results of operations for the entire year.
Reclassification
The Company reclassified the change in inventory reserve for the
nine months ended September 30, 2021 of approximately $0.1
million within the condensed statement of cash flows to conform to
the current year presentation. The change in inventory reserve is
now included in the increase (decrease) in cash resulting from
changes in inventory within the cash flows from operating
activities. This reclassification had no effect on previously
reported cash flows from operating activities in the unaudited
condensed statement of cash flows.
10
Significant Accounting Policies
During the three and nine months ended September 30, 2022,
there were no changes to our significant accounting policies as
described in our Annual Report on Form 10-K for the fiscal year
ended December 31, 2021.
Revenue Recognition and Accounts Receivable
The Company's commercial revenues are generated from diagnostic
services provided to patient’s physicians and billed to third-party
insurance payers such as managed care organizations, Medicare and
Medicaid and patients for any deductibles, coinsurance or
copayments that may be due. The Company recognizes revenue in
accordance with ASC 606, Revenue from Contracts with Customers, or
ASC 606, which requires that an entity recognize revenue when it
transfers promised goods or services to customers in an amount that
reflects the consideration to which the entity expects to be
entitled to in exchange for those goods or services.
Contracts
For its commercial revenues, while the Company markets directly to
physicians and other healthcare providers, the Company provides
services that benefit the patient. Patients do not typically enter
into direct agreements with the Company; however, a pat