PR Newswire | Aug 10, 2021 07:01AM EDT

08/10 06:00 CDT

iSpecimen Reports Second Quarter 2021 Financial Results-Delivered Revenue Growth of 93% Year-Over-Year--Successfully Completed IPO Raising Total Gross Proceeds of $20.7 Million- LEXINGTON, Mass., Aug. 10, 2021

LEXINGTON, Mass., Aug. 10, 2021 /PRNewswire/ -- iSpecimen Inc.(Nasdaq: ISPC) ("iSpecimen" or the "Company"), an online marketplace for human biospecimens, today reported its financial results for the three-month period ended June 30, 2021.

"During the second quarter of 2021, iSpecimen successfully completed its initial public offering and began trading on the Nasdaq Capital Market. This is both a significant milestone and the starting point of a new and exciting chapter for the Company," said Christopher Ianelli, MD, PhD, CEO and President of iSpecimen. "During the quarter, we continued to deliver exceptional financial and operating performance, posted revenue growth of 93% on a year-over-year basis and increased the number of registered research users on the iSpecimen Marketplace(tm) by 40% year-over-year to more than 3,800 users. With our enhanced capital position, iSpecimen is well-positioned to expand and scale its operations, with the goal of becoming the preeminent, online marketplace for human biospecimens."

"We continue to broaden our supply network and data assets while improving our technology platform, which should accelerate our sales and revenue momentum as more suppliers and customers embrace the iSpecimen Marketplace. Through our continued expansion, iSpecimen is disrupting the biospecimen procurement process, providing instant access to a vast repository of biospecimens and patient data from a global network of healthcare organizations, thereby empowering researchers to advance scientific discovery," concluded Dr. Ianelli.

Q2 2021 Financial & Operational Updates

* Revenue increased 93% to $2.9 million for the second quarter of 2021, compared to $1.5 million for the same period in 2020. * Cash and cash equivalents were $13.2 million as of June 30, 2021. * Unique supplier organizations under agreement were 190 as of June 30, 2021, an increase of 33 organizations year-over-year. * Unique customer organizations with purchases totaled 378 as of June 30, 2021, an increase of 74 new customer organizations year-over-year. * iSpecimen Marketplace had surpassed 3,800 registered research users as of June 30, 2021, up 40% year-over-year. * As of June 30, 2021, iSpecimen's received $8.8 million in purchase orders in 2021, up 31% year-over-year.

Recent Corporate Updates

* Closed its initial public offering ("IPO") of 2,250,000 shares of common stock at a public offering price of $8.00 per share on June 21, 2021, for aggregate proceeds of $18 million. On July 1, 2021, the Company sold an additional 337,500 shares of its common stock, pursuant to the underwriters' full exercise of the overallotment option, at a public offering price of $8.00 per share, for aggregate gross proceeds of $2.7 million. In total, the Company received approximately $18.2 million in net proceeds, after deducting for all underwriting discounts of approximately $1.9 million and other offering costs of approximately $0.6 million. In conjunction with its IPO, the Company began trading on the Nasdaq Capital Market under the ticker symbol "ISPC" on June 17, 2021. * In connection with the IPO, the Company eliminated approximately $29.0 million of liabilities and mezzanine classifications from the balance sheet, resulting in $3.0 million of bridge debt remaining outstanding. * Enhanced the Board of Directors with the appointments of John Brooks and Margaret Lawrence. * Mr. John Brooks currently serves as Managing Director of Healthcare Capital LLC, an investment company that advises early-stage life sciences companies. * Ms. Margaret Lawrence currently serves as a General Manager of Wayfair Professional, one of the world's largest online destinations for home goods.

Financial Results for the Second Quarter of 2021

Revenue for the second quarter of 2021 increased 93% to approximately $2.9 million, compared to approximately $1.5 million for the same period in 2020. The 93% year-over-year increase was primarily due to the success of iSpecimen's 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.

Cost of revenue was approximately $1.5 million for the second quarter of 2021, compared to approximately $0.5 million for the second quarter of 2020. This increase was attributable to an 8% increase in the number of specimens accessioned as well as a 191% increase in the average cost per specimen due to the specimen mix during the second quarter of 2021, compared to the prior year period. In addition to the increase in the average cost per specimen in 2021 being related to specimen mix, a significant project in 2020, which yielded a sizably lower than average cost per specimen, significantly impacted the magnitude of the year over year difference in the average cost per specimen.

General and administrative expenses were approximately $1.5 million for the second quarter of 2021, compared to approximately $0.3 million for the second quarter 2020. The increase was primarily attributable to an increase in costs related to becoming a public company including an increase in legal and accounting expenses, an increase of other general and administrative expenses across the board 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 for the chief financial officer. Additionally, the remaining increase is related to costs not expected to recur in the future, such as payroll expenses of approximately $0.5 million for a special IPO bonus provided to all employees and increased legal, accounting and consulting expenses of approximately $0.3 million that did not qualify as offering costs.

Net loss was approximately $1.4 million for the second quarter of 2021, compared to approximately $0.2 million for the same period in 2020. This was primarily due to higher operating expenses partially offset by an increase in revenue, all associated with the factors mentioned above.

Cash was approximately $13.2 million as of June 30, 2021.

Conference Call and Webcast Information

The Company will host a conference call and audio webcast today, Tuesday, August 10th at 8:30 a.m. Eastern Time featuring remarks by Christopher Ianelli, MD, PhD, CEO and President, Tracy Curley, CFO and Treasurer, and Jill Mullan, COO and Secretary.

Event: iSpecimen Second Quarter 2021 Results Conference Call

Date: Tuesday, August 10, 2021

Time: 8:30 a.m. Eastern Time

Live Call: +1-877-425-9470 (Toll Free) or + 1-201-389-0878 (International)

Webcast: http://public.viavid.com/index.php?id=145777

For interested individuals unable to join the conference call, a replay will be available through August 24, 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: 13721607. An archived version of the webcast will also be available on iSpecimen's Investor Relations site: https://ispecimen.irpass.com/.

About iSpecimeniSpecimen 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 StatementsThis 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 ContactKCSA Strategic CommunicationsAllison Soss / Scott EcksteiniSpecimen@kcsa.com

Media ContactKaitlynn CooneyFor iSpecimenkcooney@brodeur.com617.587.2811

iSpecimen Inc. Condensed Balance Sheets



June 30, 2021December 31, 2020

ASSETS (Unaudited)

Current assets:

Cash $13,184,310 $695,909

Accounts receivable - unbilled 1,125,789 652,761

Accounts receivable, net of allowance for doubtful accounts of $147,714 and $108,096 at 1,987,112 1,526,392 June 30, 2021 and December 31, 2020, respectively

Prepaid expenses and other current assets 442,089 417,929

Tax credit receivable, current portion 179,376 179,376

Total current assets 16,918,676 3,472,367

Property and equipment, net 55,879 75,589

Internally developed software, net 2,602,886 2,634,139

Security deposits 27,601 27,601

Total assets $19,605,042 $6,209,696



LIABILITIES, CONVERTIBLE PREFERRED STOCK AND STOCKHOLDERS' EQUITY (DEFICIT)

Current liabilities:

Accounts payable $3,233,231 $1,792,432

Accrued expenses 1,879,812 810,910

Accrued interest 9,864 3,696,944

Convertible notes payable, related parties, net of unamortized debt discount and debt issuance - 5,490,811 costs

Derivative liability for embedded conversion - 2,373,000 features on convertible notes payable

Bridge notes payable, net of debt issuance costs- 4,589,228

Bridge notes payable, related parties - 1,905,000

Derivative liability for embedded conversion feature on bridge notes payable and bridge - - notes, related parties

Note payable, current portion - 604,109

Deferred revenue 802,860 873,254

Total current liabilities 5,925,767 22,135,688

Note payable, net of current portion - 178,899

Bridge notes payable, net of debt issuance costs2,675,000 -

Bridge notes payable, related parties 325,000 -

Total liabilities 8,925,767 22,314,587



Commitments and contingencies



Series B convertible preferred stock, $0.0001 par value, 3,200,000 shares authorized, 0 and - 7,999,997 572,465 shares issued and outstanding at June 30, 2021 and December 31, 2020, respectively

Series A-1 convertible preferred stock, $0.0001 par value, 556,550 shares authorized, 0 and - 561,041 100,365 issued and outstanding at June 30, 2021 and December 31, 2020, respectively

Series A convertible preferred stock, $0.0001 par value, 3,427,871 shares authorized, 0 and - 2,612,038 618,182 issued and outstanding at June 30, 2021 and December 31, 2020, respectively

Total convertible preferred stock - 11,173,076



Stockholders' equity (deficit)

Common stock, $0.0001 par value, 200,000,000 shares authorized, 6,596,729 issued, and 6,565,729 outstanding at June 30, 2021, and 657 94 16,000,000 shares authorized, 967,213 issued and 936,213 outstanding at December 31, 2020

Additional paid-in capital 45,094,782 1,779,698

Treasury stock, 31,000 shares at June 30, 2021 (172) (172) and December 31, 2020, at cost

Accumulated deficit (34,415,992) (29,057,587)

Total stockholders' equity (deficit) 10,679,275 (27,277,967)

Total liabilities, convertible preferred stock $19,605,042 $6,209,696 and stockholders' equity (deficit)

iSpecimen Inc. Condensed Statements of Operations (Unaudited)



Three months ended June 30, Six months ended June 30,

2021 2020 2021 2020



Revenue $2,903,876 $1,504,569$5,867,683 $3,216,228

Operating expenses:

Cost of revenue 1,489,196 473,982 3,112,847 1,128,249

Technology 361,799 291,601 771,750 718,314

Sales and marketing 647,592 367,617 1,176,978 799,256

Supply development 100,693 147,588 212,269 262,193

Fulfillment 287,275 185,185 556,371 400,355

General and administrative 1,545,852 343,602 2,508,643 656,855

Total operating expenses 4,432,407 1,809,575 8,338,858 3,965,222

Loss from operations (1,528,531) (305,006) (2,471,175) (748,994)

Other income (expense), net

Interest expense (1,133,479) (459,005) (1,986,407) (1,048,220)

Change in fair value of derivative (117,000) 583,000 (271,000) (22,000) liability on convertible notes

Change in fair value of derivative liability on bridge notes and bridge 1,630,700 - 1,582,700 - notes, related parties

Gain (loss) on extinguishment of bridge 9,746 - (2,740,425) - notes and bridge notes, related parties

Loss on extinguishment of convertible notes and convertible notes, related (260,185) - (260,185) - parties

Gain on extinguishment of note payable - - 788,156 -

Other income (expense) 3,663 6,688 (69) 6,691

Interest income 172 86 - 309

Other income (expense), net 133,617 130,769 (2,887,230) (1,063,220)



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

Benefit from income taxes - 145 - 145



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



Net loss per share

Basic and diluted $(0.87) $(0.19) $(4.21) $(1.94)



Weighted average common shares outstanding

Basic and diluted 1,611,774 936,213 1,273,993 936,213

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SOURCE iSpecimen Inc.