Core Points - iSpecimen Inc. announced a public offering of approximately $5 million of common stock at a price of $3.00 per share [1] - The proceeds from the offering will be used for debt repayment, potential acquisitions, investments in businesses, products, technologies, and marketing services [1] - The offering is expected to close on October 31, 2024, subject to customary closing conditions [3] Company Overview - iSpecimen operates an online marketplace connecting scientists with healthcare specimen providers for medical research [5] - The company utilizes proprietary, cloud-based technology to facilitate the search for biospecimens across a network of hospitals, labs, biobanks, and blood centers [5]

WOBURN, Mass., Sept. 26, 2024 (GLOBE NEWSWIRE) -- iSpecimen Inc. (Nasdaq: ISPC) ("iSpecimen" or the "Company"), an online global marketplace that connects scientists requiring biospecimens for medical research with a network of healthcare specimen providers, announced today that it has secured a $1 million loan agreement and subsequently appointed three new members to its Board of Directors. On September 25, 2024, iSpecimen closed a $1 million loan agreement with a lender which carries an interest rate of 1 ...

Core Points - iSpecimen Inc. will implement a reverse stock split at a ratio of 1-for-20, effective September 13, 2024, with trading on a split-adjusted basis starting September 16, 2024 [1][4] - The reverse stock split was approved by stockholders on July 19, 2024, and the final ratio was determined by the Board of Directors on August 19, 2024 [2] - The reverse stock split aims to increase the per share trading price to attract institutional investors and comply with Nasdaq's minimum bid price requirement [4] Company Operations - iSpecimen operates an online marketplace connecting scientists with healthcare specimen providers for medical research [6] - The company utilizes proprietary cloud-based technology to facilitate the search for biospecimens across a network of hospitals, labs, and other healthcare organizations [6] Stockholder Information - Registered stockholders will receive information from Broadridge Corporate Issuer Solutions, LLC regarding the exchange of pre-split shares for post-split shares [5]

Financial Data and Key Metrics Changes - For Q2 2024, the company generated revenues of approximately $2.9 million, a 76% increase from approximately $1.6 million in Q2 2023 [5][12] - The average selling price per specimen increased by $137 or 39%, from $347 in Q2 2023 to $484 in Q2 2024 [12] - Cash burn decreased from approximately $7.1 million in the first half of 2023 to $2.9 million in the first half of 2024, representing a 59% reduction [5][21] - As of June 30, 2024, cash and available-for-sale securities totaled $2.1 million, down from approximately $5 million at the end of 2023 [20] Business Line Data and Key Metrics Changes - The specimen count increased by 1,236 specimens or 26%, from 4,682 in Q2 2023 to 5,918 in Q2 2024 [12] - For the first half of 2024, the average selling price per specimen increased by $119 or 34%, from $343 to $462 [12] - The Next Day Quote program accounted for 44% of quotes provided to customers in Q2 2024, up from 38% in Q4 2023 [10] Market Data and Key Metrics Changes - The company has reduced its supplier network from 240 to 105 suppliers, focusing on quality and capabilities [26][27] - The percentage of Next Day Quotes converted to purchase orders was 58% in Q2 2024, indicating strong demand and operational efficiency [10][25] Company Strategy and Development Direction - The company is strategically reducing operational expenditures and focusing on key market opportunities to set the stage for revenue growth [5][21] - The Next Day Quote program is a key initiative aimed at improving customer response times and increasing conversion rates [10][30] - The company plans to continue expanding its customer and supplier base to enhance revenue generation [22] Management's Comments on Operating Environment and Future Outlook - The current macro environment remains challenging for researchers, with careful investment in projects [24] - Management believes that operational advancements will significantly contribute to future growth [30] - The company is actively seeking additional working capital and plans to achieve a cash-positive position through various financing options [21][22] Other Important Information - The company has welcomed a new Senior Vice President of Sales and Business Development to strengthen its leadership team [6] - Cost of revenue increased by approximately 67% in Q2 2024, attributed to a rise in specimen count and average cost per specimen [13][14] Q&A Session Summary Question: Can you describe the macro environment and customer sentiments regarding funding? - Management noted that researchers are cautious with investments but continue to pursue projects, emphasizing the importance of timely responses [24] Question: What is the internal target for the conversion rate of Next Day Quotes? - Management has an internal goal higher than the 58% conversion rate but does not provide specific guidance [25] Question: Are the suppliers able to fulfill requests effectively? - The company has streamlined its supplier network, resulting in improved capabilities and responsiveness from suppliers [26][28] Question: What are the metrics for unique customers and registered users? - Management did not have the specific numbers available during the call but promised to follow up [29]

Core Viewpoint - iSpecimen Inc. reported a significant revenue increase of 76% year-over-year, reaching approximately $2.86 million for the second quarter of 2024, driven by operational improvements and strategic initiatives [1][2]. Financial Performance - Revenue for the second quarter of 2024 was approximately $2.86 million, up from approximately $1.63 million in the same quarter of 2023, primarily due to a 26% increase in specimen count and a 39% rise in average selling price per specimen [4][5]. - For the first half of 2024, total revenue was approximately $5.15 million, compared to approximately $4.58 million for the same period in 2023, attributed to a 34% increase in average selling price per specimen [5]. - The net loss for the second quarter of 2024 was approximately $2.11 million, an improvement from a net loss of approximately $3.50 million in the second quarter of 2023 [9]. Operational Highlights - The company achieved a conversion rate of 58% for its Next Day Quotes program, which significantly contributed to exceeding internal revenue goals for Q2 2024 [3]. - iSpecimen had over 105 unique supplier organizations under contract as of June 30, 2024, down from 243 suppliers at the end of 2023, indicating a focus on building a higher quality supplier network [3]. - The company hired Brielan Smiechowski as the new Senior Vice President of Sales & Business Development, bringing over 15 years of experience in life sciences and healthcare [2]. Cost Management - Cost of revenue for the second quarter of 2024 increased by approximately $570,000, or 67%, due to a 26% increase in the number of specimens accessioned and a 32% rise in average cost per specimen [6]. - General and administrative expenses decreased by approximately $703,000, or 40%, for the second quarter of 2024 compared to the same period in the prior year [8]. Cash Position - As of June 30, 2024, iSpecimen had approximately $2.15 million in cash and available-for-sale securities, a decrease from approximately $5.01 million as of December 31, 2023 [10].

Financial Performance - Revenue increased by approximately $1,239,000, or 76%, from approximately $1,625,000 for the three months ended June 30, 2023, to approximately $2,864,000 for the three months ended June 30, 2024 [114]. - Revenue for the six months ended June 30, 2024, increased by approximately $579,000, or 13%, from approximately $4,575,000 to approximately $5,154,000 [126]. - Specimen count increased by 1,236, or approximately 26%, from 4,682 specimens in the three months ended June 30, 2023, to 5,918 specimens in the three months ended June 30, 2024 [114]. - Average selling price per specimen increased by approximately $137, or 39%, from approximately $347 to approximately $484 during the same period [114]. Cost Management - Cost of revenue increased by approximately $570,000, or 67%, from approximately $854,000 to approximately $1,424,000 for the three months ended June 30, 2024 [115]. - Cost of revenue for the six months ended June 30, 2024, increased by approximately $423,000, or 21%, from approximately $2,001,000 to approximately $2,424,000 [127]. - Total technology expenditures decreased by approximately $951,000, or 47%, from approximately $2,035,000 to approximately $1,084,000 for the three months ended June 30, 2024 [116]. - Total technology expenditure for the six months ended June 30, 2024, decreased by approximately $2,137,000, or 48%, from approximately $4,409,000 to approximately $2,272,000 [128]. - General and administrative expenses decreased by approximately $703,000, or 40%, from approximately $1,758,000 to approximately $1,055,000 for the three months ended June 30, 2024 [122]. - General and administrative expenses decreased by approximately $311,000, or 9%, from approximately $3,470,000 for the six months ended June 30, 2023, to approximately $3,159,000 for the six months ended June 30, 2024 [135]. - Sales and marketing expenses increased by approximately $105,000, or 11%, from approximately $978,000 to approximately $1,083,000 for the three months ended June 30, 2024 [119]. - Sales and marketing expenses decreased by approximately $276,000, or 14%, from approximately $2,025,000 for the six months ended June 30, 2023, to approximately $1,749,000 for the six months ended June 30, 2024 [132]. - Supply development expenses decreased by approximately $280,000, or 45%, from approximately $615,000 for the six months ended June 30, 2023, to approximately $335,000 for the six months ended June 30, 2024 [133]. Operational Changes - The company closed a private placement offering on December 1, 2021, for gross proceeds of approximately $21 million, with net proceeds after expenses being significantly lower [94]. - As of June 30, 2024, the company issued 3,980,075 shares under an At the Market Offering Agreement, generating gross proceeds of approximately $1,494,000, with net proceeds of about $1,239,000 after offering costs [95]. - The company increased its allowance for doubtful accounts by $289,898 in 2023 due to liquidity issues among certain boutique life sciences customers [96]. - The company experienced a 45% reduction in compensation costs and a 66% reduction in technology costs by June 30, 2024, compared to January 1, 2023, due to workforce reductions [101]. - The company terminated over 100 supplier agreements as part of a supplier network refresh project, focusing on high-value suppliers that meet defined cost, quality, and speed requirements [101]. - The ongoing war between Russia and Ukraine initially impacted the company by approximately $1 million in purchase orders that could not be fulfilled due to supply network disruptions [99]. Cash Flow and Assets - Net cash flows used in operating activities improved by approximately $907,000, or 20%, from approximately $4,519,000 for the six months ended June 30, 2023, to approximately $3,612,000 for the six months ended June 30, 2024 [138]. - Net cash provided by investing activities was approximately $2,233,000 for the six months ended June 30, 2024, compared to a net cash used of approximately $8,856,000 for the six months ended June 30, 2023 [146]. - Net cash provided by financing activities increased significantly to approximately $1,187,000 for the six months ended June 30, 2024, from approximately $71,000 for the six months ended June 30, 2023 [147]. - As of June 30, 2024, total assets decreased by approximately $3,917,279, or 25%, to approximately $11,901,858 from approximately $15,819,137 as of December 31, 2023 [137]. Internal Controls and Compliance - As of June 30, 2024, the company's disclosure controls and procedures were deemed ineffective due to a material weakness in internal control over financial reporting [155]. - The company is implementing a remediation plan to address the identified material weakness, which includes engaging external tax advisors and implementing a sales tax software platform [156]. - The company has begun obtaining sales tax exemption letters and is actively collecting sales taxes from certain customers [156]. - Management has committed to enhancing internal controls and expects to successfully implement these processes, although the timeline for full remediation remains uncertain [156]. - There were no significant changes in the company's internal control over financial reporting during the six months ended June 30, 2024, except for the ongoing remediation efforts [157]. - The company reported the resignation of its Chief Information Officer, who also handled cybersecurity matters, with oversight now managed by the remaining members of the Risk Management Committee [161]. Strategic Initiatives - The company aims to leverage strategic business intelligence initiatives to better understand market needs and adjust its supplier network and marketing efforts accordingly [102]. - The company plans to reduce operational expenditures and streamline operations to improve financial position and ensure continued funding of operations [139]. - The company intends to rely on exemptions provided by the JOBS Act as an "emerging growth company" until it reaches total annual gross revenues of $1.235 billion or more, or until December 31, 2026 [153].

Exhibit 99.1 iSpecimen Reports First Quarter 2024 Results LEXINGTON, Mass., May 7, 2024 – iSpecimen Inc. (Nasdaq: ISPC) ("iSpecimen" or the "Company"), an online global marketplace that connects scientists requiring biospecimens for medical research with a network of healthcare specimen providers, today reported its financial and operating results for the three-month period ended March 31, 2024. "iSpecimen made tremendous progress during the first quarter advancing our most promising operational initiative, ...

[PART I - FINANCIAL INFORMATION](index=3&type=section&id=PART%20I%20-%20FINANCIAL%20INFORMATION) This section presents the company's unaudited financial statements, management's analysis, market risk, and internal control disclosures [Item 1. Financial Statements](index=3&type=section&id=Item%201.%20Financial%20Statements) This section presents iSpecimen Inc.'s unaudited condensed financial statements, including balance sheets, operations, equity, and cash flows [Condensed Balance Sheets](index=3&type=section&id=Condensed%20Balance%20Sheets) This section provides a comparative overview of the company's financial position at March 31, 2024, and December 31, 2023 Condensed Balance Sheet Data (March 31, 2024 vs. December 31, 2023) | Item | March 31, 2024 (Unaudited) | December 31, 2023 | | :-------------------------------- | :------------------------- | :------------------ | | Cash and cash equivalents | $2,089,891 | $2,343,666 | | Available-for-sale securities | $466,493 | $2,661,932 | | Total current assets | $5,285,951 | $8,238,603 | | Total assets | $12,513,901 | $15,819,137 | | Total current liabilities | $5,700,673 | $6,048,930 | | Total liabilities | $5,700,673 | $6,078,060 | | Total stockholders' equity | $6,813,228 | $9,741,077 | | Accumulated deficit | $(62,266,929) | $(59,364,812) | - Total assets decreased by approximately **$3.3 million (21%)** from December 31, 2023, to March 31, 2024[11](index=11&type=chunk) - Total stockholders' equity decreased by approximately **$2.9 million (30%)** from December 31, 2023, to March 31, 2024[11](index=11&type=chunk) [Unaudited Condensed Statements of Operations and Comprehensive Loss](index=4&type=section&id=Unaudited%20Condensed%20Statements%20of%20Operations%20and%20Comprehensive%20Loss) This section details the company's financial performance, including revenue, expenses, and net loss, for Q1 2024 and 2023 Condensed Statements of Operations and Comprehensive Loss (Three Months Ended March 31) | Item | 2024 | 2023 | | :------------------------------------ | :----------- | :----------- | | Revenue | $2,289,993 | $2,950,197 | | Total operating expenses | $5,290,513 | $5,492,620 | | Loss from operations | $(3,000,520) | $(2,542,423) | | Total other income, net | $98,403 | $110,611 | | Net loss | $(2,902,117) | $(2,431,812) | | Comprehensive loss | $(2,902,916) | $(2,412,969) | | Net loss per share - basic and diluted | $(0.32) | $(0.27) | | Weighted average shares outstanding | 9,132,460 | 8,980,898 | - Revenue decreased by **$660,204 (22%)** from Q1 2023 to Q1 2024[13](index=13&type=chunk) - Net loss increased by **$470,305 (19%)** from Q1 2023 to Q1 2024[13](index=13&type=chunk) [Unaudited Condensed Statements of Changes in Stockholders' Equity](index=5&type=section&id=Unaudited%20Condensed%20Statements%20of%20Changes%20in%20Stockholders'%20Equity) This section outlines changes in the company's stockholders' equity for the three months ended March 31, 2024 and 2023 - Total stockholders' equity decreased from **$9,741,077** at December 31, 2023, to **$6,813,228** at March 31, 2024[15](index=15&type=chunk) - Key changes in equity during Q1 2024 include a net loss of **$2,902,117**, stock-based compensation expense of **$45,871**, and offering costs of **$204,845** related to the At the Market Offering Agreement[15](index=15&type=chunk) - The company repurchased PIPE Warrants for **$52,500** during Q1 2024[15](index=15&type=chunk) [Unaudited Condensed Statements of Cash Flows](index=7&type=section&id=Unaudited%20Condensed%20Statements%20of%20Cash%20Flows) This section presents the company's cash flow activities from operations, investing, and financing for Q1 2024 and 2023 Condensed Statements of Cash Flows (Three Months Ended March 31) | Cash Flow Activity | 2024 | 2023 | | :------------------------------------ | :------------- | :-------------- | | Net cash used in operating activities | $(2,072,363) | $(2,825,577) | | Net cash provided by (used in) investing activities | $1,937,446 | $(8,788,215) | | Net cash used in financing activities | $(118,858) | $67,736 | | Net decreases in cash and cash equivalents | $(253,775) | $(11,546,056) | | Cash and cash equivalents at end of period | $2,089,891 | $3,762,654 | - Net cash used in operating activities decreased by **$753,214 (27%)** in Q1 2024 compared to Q1 2023[23](index=23&type=chunk) - Net cash provided by investing activities was **$1,937,446** in Q1 2024, a significant improvement from net cash used of **$8,788,215** in Q1 2023, primarily due to proceeds from maturities of available-for-sale securities[23](index=23&type=chunk) [Notes to Unaudited Condensed Financial Statements](index=8&type=section&id=Notes%20to%20Unaudited%20Condensed%20Financial%20Statements) This section provides detailed explanations of the company's business, accounting policies, financial instruments, and equity activities [1. Nature of Business and Basis of Presentation](index=8&type=section&id=1.%20NATURE%20OF%20BUSINESS%20AND%20BASIS%20OF%20PRESENTATION) This section describes iSpecimen Inc.'s operations, going concern considerations, and the impact of external events - iSpecimen Inc. operates a proprietary online marketplace platform connecting medical researchers with biospecimens and data from healthcare provider organizations[25](index=25&type=chunk) - The company faces going concern uncertainty due to recurring losses, negative working capital of **$414,722**, and an accumulated deficit of **$62,266,929** as of March 31, 2024[27](index=27&type=chunk) - Management's plan to mitigate going concern risk includes cost-cutting (**41% reduction in compensation**, **66% in technology costs** in Q1 2024 YoY), revenue enhancement projects, and potential equity/debt financing[28](index=28&type=chunk)[29](index=29&type=chunk)[32](index=32&type=chunk) - The company increased its allowance for doubtful accounts by **$197,924** in Q1 2024 due to liquidity issues or bankruptcies of certain life sciences customers[34](index=34&type=chunk) - The Russian-Ukrainian war negatively impacted operations in H1 2022, causing delays and affecting margins due to supply network disruptions[38](index=38&type=chunk) - As of March 31, 2024, most Ukrainian and accessible Russian supply sites reopened, but logistics remain challenging[41](index=41&type=chunk) [2. Summary of Significant Accounting Policies](index=10&type=section&id=2.%20SUMMARY%20OF%20SIGNIFICANT%20ACCOUNTING%20POLICIES) This section outlines the company's key accounting policies, including revenue recognition, doubtful accounts, and software capitalization - The company recognizes revenue over time, primarily when specimens are accessioned, as they generally have no alternative future use and the company has an enforceable right to payment[53](index=53&type=chunk) - iSpecimen acts as a principal in its revenue arrangements, managing the procurement process, taking possession of specimens, setting prices, and bearing customer credit risk[51](index=51&type=chunk) Revenue Breakdown (Three Months Ended March 31) | Category | 2024 | 2023 | | :------------------------ | :----------- | :----------- | | Specimens - contracts with customers | $2,136,100 | $2,712,376 | | Shipping and other | $153,893 | $237,821 | | Total Revenue | $2,289,993 | $2,950,197 | - The allowance for doubtful accounts increased from **$520,897** at December 31, 2023, to **$718,821** at March 31, 2024[57](index=57&type=chunk) - Internally developed software costs are capitalized during the application development stage and amortized over five years[59](index=59&type=chunk)[60](index=60&type=chunk) - Other intangible assets (sequenced data) are capitalized and amortized over five years to cost of revenue[62](index=62&type=chunk) - The company adopted ASU 2016-13 (Credit Losses) as of January 1, 2023, and ASU 2020-06 (Convertible Instruments) as of January 1, 2024, with no material impact on financial statements[73](index=73&type=chunk)[74](index=74&type=chunk) [3. Available-for-Sale Securities](index=14&type=section&id=3.%20AVAILABLE-FOR-SALE%20SECURITIES) This section details the company's available-for-sale securities, primarily U.S. Treasury Bills, and their fair value Available-for-Sale Securities (U.S. Treasury Bills) | Date | Amortized Cost | Fair Value | | :---------------- | :------------- | :----------- | | March 31, 2024 | $466,452 | $466,493 | | December 31, 2023 | $2,661,092 | $2,661,932 | - The fair value of available-for-sale securities decreased significantly from **$2,661,932** at December 31, 2023, to **$466,493** at March 31, 2024[75](index=75&type=chunk)[76](index=76&type=chunk) - The company recorded **$680** of realized losses in Q1 2024, compared to no realized gains or losses in Q1 2023[78](index=78&type=chunk) [4. Property and Equipment, Net](index=15&type=section&id=4.%20PROPERTY%20AND%20EQUIPMENT,%20NET) This section provides information on the company's property and equipment, including assets, depreciation, and net values Property and Equipment, Net | Item | March 31, 2024 | December 31, 2023 | | :----------------------------- | :------------- | :---------------- | | Total property and equipment | $581,654 | $572,518 | | Accumulated depreciation | $(460,781) | $(444,731) | | Total property and equipment, net | $120,873 | $127,787 | - Depreciation expense for property and equipment was **$16,050** in Q1 2024, down from **$38,589** in Q1 2023[79](index=79&type=chunk) [5. Internally Developed Software, Net](index=15&type=section&id=5.%20INTERNALLY%20DEVELOPED%20SOFTWARE,%20NET) This section details the capitalization and amortization of internally developed software costs - Capitalized internally developed software costs decreased significantly to **$275,486** in Q1 2024 from **$1,539,546** in Q1 2023[80](index=80&type=chunk) - Amortization expense for internally developed software increased to **$532,750** in Q1 2024 from **$433,326** in Q1 2023[80](index=80&type=chunk) [6. Other Intangible Assets, Net](index=15&type=section&id=6.%20OTHER%20INTANGIBLE%20ASSETS,%20NET) This section describes other intangible assets, specifically capitalized sequenced data, and their amortization - No FFPE blocks were sequenced and capitalized as other intangible assets in Q1 2024[81](index=81&type=chunk) - Amortization expense for capitalized sequenced data was **$47,889** in Q1 2024, with no expense recognized in Q1 2023 as sequencing had not commenced[81](index=81&type=chunk)[83](index=83&type=chunk) [7. Fair Value Measurements](index=16&type=section&id=7.%20FAIR%20VALUE%20MEASUREMENTS) This section presents the fair value measurements of the company's financial instruments Fair Value of Available-for-Sale Securities (Level 1) | Date | Fair Value | | :---------------- | :----------- | | March 31, 2024 | $466,493 | | December 31, 2023 | $2,661,932 | - All available-for-sale securities are classified as Level 1 investments, based on quoted prices in active markets[84](index=84&type=chunk) [8. Commitments and Contingencies](index=16&type=section&id=8.%20COMMITMENTS%20AND%20CONTINGENCIES) This section outlines the company's operating lease commitments, sales tax liabilities, and legal proceedings - The company renewed its operating lease for office space in Lexington, Massachusetts, extending it for 12 months from February 29, 2024, to February 28, 2025, with an early termination option by June 30, 2024[85](index=85&type=chunk) - Operating lease expense for Q1 2024 was **$43,251**[91](index=91&type=chunk) - As of March 31, 2024, the company accrued a sales tax liability of approximately **$710,000** and related interests/penalties of **$208,000**, due to past non-collection of sales tax[101](index=101&type=chunk) - Approximately **$412,000** of prior taxes have been recovered from customers[101](index=101&type=chunk) - No material litigation was outstanding against the company as of March 31, 2024[104](index=104&type=chunk) [9. Stockholders' Equity](index=19&type=section&id=9.%20STOCKHOLDERS'%20EQUITY) This section details changes in stockholders' equity, including common stock, ATM offerings, and warrant repurchases - The company has **200,000,000** authorized common shares and **50,000,000** authorized preferred shares[105](index=105&type=chunk) - Under an At the Market (ATM) Offering Agreement, the company issued **337,970 shares** of common stock for gross proceeds of approximately **$138,000** in Q1 2024, incurring **$205,000** in offering costs (net cost of **$67,000**)[106](index=106&type=chunk) - The company repurchased **1,312,500 PIPE Warrants** on February 13, 2024, for **$0.04 per share**, eliminating all related obligations[112](index=112&type=chunk) Warrant Activity Summary (Three Months Ended March 31, 2024) | Item | Warrants Outstanding | Weighted Average Exercise Price | | :-------------------------- | :------------------- | :------------------------------ | | Balance at December 31, 2023 | 1,415,000 | $12.77 | | Repurchased | (1,312,500) | — | | Balance at March 31, 2024 | 102,500 | $9.76 | [10. Stock-Based Compensation](index=20&type=section&id=10.%20STOCK-BASED%20COMPENSATION) This section provides information on the company's stock incentive plan, stock option grants, and RSU compensation - The 2021 Stock Incentive Plan was amended to increase authorized shares from **608,000** to **1,869,500**[115](index=115&type=chunk) - As of March 31, 2024, **1,320,028 shares** were available for future grants[115](index=115&type=chunk) - **80,340 stock options** were granted in Q1 2024, compared to **117,500** in Q1 2023[119](index=119&type=chunk) - The weighted average grant date fair value decreased from **$0.49** in Q1 2023 to **$0.12** in Q1 2024[120](index=120&type=chunk) Stock Options Compensation Expense (Three Months Ended March 31) | Operating Expense Category | 2024 | 2023 | | :------------------------- | :--------- | :--------- | | Technology | $1,545 | $2,631 | | Sales and marketing | $496 | $875 | | Supply development | $211 | $374 | | Fulfillment | $869 | $644 | | General and administrative | $16,319 | $28,540 | | Total stock options expense | $19,440 | $33,064 | - Total RSU compensation expense decreased from **$87,493** in Q1 2023 to **$74,485** in Q1 2024[123](index=123&type=chunk) - Unrecognized stock-based compensation expense for unvested RSUs was **$465,070** as of March 31, 2024, to be recognized over approximately **1.61 years**[123](index=123&type=chunk) [11. Income Taxes](index=23&type=section&id=11.%20INCOME%20TAXES) This section discusses the company's net operating loss carryforwards and the valuation allowance against deferred tax assets - As of March 31, 2024, the company had federal net operating loss carryforwards of approximately **$53.2 million** and state net operating loss carryforwards of approximately **$32.3 million**[124](index=124&type=chunk) - A full valuation allowance has been recorded against net deferred income tax assets due to a history of losses[124](index=124&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=24&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) This section provides management's analysis of financial condition and operational results, highlighting revenue decrease, increased net loss, and efforts to address liquidity [Overview](index=24&type=section&id=Overview) This section describes iSpecimen Inc.'s business model, proprietary online marketplace platform, and revenue generation strategy - iSpecimen Inc. operates a proprietary online marketplace platform, the iSpecimen Marketplace, to connect researchers with biospecimens and associated data, aiming to accelerate life science research[128](index=128&type=chunk) - The platform automates searching, selecting, and procuring specimens, leveraging de-identified data from healthcare providers[129](index=129&type=chunk) - It also orchestrates bioprocurement workflow for suppliers[131](index=131&type=chunk) - The company generates revenue by procuring and delivering specimens on a 'just in time' basis, avoiding inventory risks[134](index=134&type=chunk) [Private Placement Offering](index=26&type=section&id=Private%20Placement%20Of%20ering) This section details the company's private placement offering (PIPE) and the subsequent repurchase of PIPE Warrants - On December 1, 2021, the company closed a private placement offering (PIPE) for gross proceeds of approximately **$21 million**, issuing common stock and warrants[135](index=135&type=chunk) - All **1,312,500 PIPE Warrants** were repurchased on February 13, 2024[135](index=135&type=chunk) [At the Market Offering](index=26&type=section&id=At%20the%20Market%20Of%20ering) This section describes the company's At the Market (ATM) Offering Agreement and shares issued under it - On March 5, 2024, the company entered into an At the Market (ATM) Offering Agreement to sell up to **$1,500,000** of common stock[136](index=136&type=chunk) - In Q1 2024, **337,970 shares** were issued for gross proceeds of **$138,000**, with net costs of **$67,000** after offering expenses[136](index=136&type=chunk) [Impact of the Current Economy](index=26&type=section&id=Impact%20of%20the%20Current%20Economy) This section discusses the sensitivity of the company's financial performance to global economic conditions and mitigation strategies - The company's financial performance is sensitive to global economic conditions, impacting research spending[137](index=137&type=chunk) - An allowance for doubtful accounts increased by **$197,924** in Q1 2024 due to customer liquidity issues[137](index=137&type=chunk) - Mitigation strategies include reevaluating pricing, creating campaigns for high-demand items, enhancing internal communications, restructuring business lines, implementing next-day quotes, and reducing workforce expenditures[139](index=139&type=chunk) [Impact of the Russian-Ukrainian War on Our Operations](index=27&type=section&id=Impact%20of%20the%20Russian-Ukrainian%20War%20on%20Our%20Operations) This section describes the negative impact of the Russian-Ukrainian war on the company's operations and supply network - The war negatively impacted operations in H1 2022, disrupting a **$1 million supply network** in Ukraine and Russia, leading to fulfillment delays and reduced margins[141](index=141&type=chunk) - As of March 31, 2024, most supply sites in Ukraine and accessible Russian sites reopened, but logistics remain challenging[142](index=142&type=chunk) - The company's policy is to avoid sole sourcing from these countries due to ongoing uncertainty[142](index=142&type=chunk) [Known Trends, Demands, Commitments, Events or Uncertainties Impacting Our Business](index=27&type=section&id=Known%20Trends,%20Demands,%20Commitments,%20Events%20or%20Uncertainties%20Impactin g%20Our%20Business) This section outlines cost-cutting efforts, new revenue enhancement initiatives, operational improvements, and future technology investment plans - The company initiated cost-cutting efforts in 2023 and Q1 2024, resulting in an estimated **41% reduction in compensation costs** and **66% in technology costs** in Q1 2024 compared to Q1 2023[144](index=144&type=chunk) - A new revenue enhancement initiative focuses on identifying high-value cancer patients with specific mutations in FFPE blocks through sequencing, creating a virtual inventory and a database for subscription sales[145](index=145&type=chunk) - The iSpecimen Marketplace Onsite Program provides additional support to supplier partners, aiming to accelerate fulfillment and streamline sample management[146](index=146&type=chunk) - Operational process improvements, including a new line of business structure and a next-day quote system implemented in Q3 2023, have increased efficiency and conversion ratios[147](index=147&type=chunk)[148](index=148&type=chunk) - Technology investment will be significantly lower in 2024 compared to 2023, focusing on capital raising and revenue growth, building on past investments in search functionality, UI, automation, and matchmaking[149](index=149&type=chunk) [Components of Our Results of Operations](index=29&type=section&id=Components%20of%20Our%20Results%20of%20Operations) This section defines the various components of the company's results of operations, including revenue, cost of revenue, and operating expenses - Revenue is generated by procuring specimens for medical research customers using the iSpecimen Marketplace, with performance obligations satisfied when specimens are accessioned[151](index=151&type=chunk)[152](index=152&type=chunk) - Cost of revenue includes specimen purchase price, shipping, supply costs, payment processing, supplier support, and amortization of capitalized sequenced data[154](index=154&type=chunk) - Technology costs cover consulting, payroll for development, software licenses, data center costs, and amortization of internally developed software[155](index=155&type=chunk) - Sales and marketing expenses include payroll, commissions, advertising, and public relations[157](index=157&type=chunk) - Supply development costs are for personnel managing the supply network, travel, and regulatory compliance[158](index=158&type=chunk) - Fulfillment costs cover operations, customer service, order processing, and laboratory supplies[159](index=159&type=chunk) - General and administrative expenses include corporate function payroll, software licenses, facilities, legal, insurance, and other overheads[160](index=160&type=chunk) [Financial Operations Overview and Analysis for the Three Months Ended March 31, 2024 and 2023 (Unaudited)](index=31&type=section&id=Financial%20Operations%20Overview%20and%20Analysis%20for%20the%20Three%20Months%20Ended%20March%2031,%202024%20and%202023%20(Unaudited)) This section provides a detailed comparative analysis of the company's financial performance for Q1 2024 versus Q1 2023 Financial Performance Comparison (Three Months Ended March 31, 2024 vs. 2023) | Item | 2024 | 2023 | Change (Dollars) | Change (Percentage) | | :-------------------------- | :----------- | :----------- | :--------------- | :------------------ | | Revenue | $2,289,993 | $2,950,197 | $(660,204) | (22)% | | Cost of revenue | $1,000,006 | $1,146,912 | $(146,906) | (13)% | | Technology | $911,967 | $834,407 | $77,560 | 9% | | Sales and marketing | $665,941 | $962,169 | $(296,228) | (31)% | | Supply development | $197,839 | $275,246 | $(77,407) | (28)% | | Fulfillment | $410,854 | $455,531 | $(44,677) | (10)% | | General and administrative | $2,103,906 | $1,818,355 | $285,551 | 16% | | Loss from operations | $(3,000,520) | $(2,542,423) | $(458,097) | (18)% | | Net loss | $(2,902,117) | $(2,431,812) | $(470,305) | (19)% | - Revenue decreased by **22%** due to a **39% decrease** in specimen count (from **8,629** to **5,241**), partially offset by a **28% increase** in average selling price per specimen[163](index=163&type=chunk) - Cost of revenue decreased by **13%** due to fewer specimens, but average cost per specimen increased by **44%**[164](index=164&type=chunk) - Technology expenses increased by **9%** primarily due to higher amortization of internally developed software (**$99,000 increase**), despite decreases in headcount and payroll[165](index=165&type=chunk) - Sales and marketing expenses decreased by **31%** due to reductions in payroll (**$217,000**) and external marketing (**$95,000**)[166](index=166&type=chunk) - General and administrative expenses increased by **16%** due to higher professional fees (**$329,000**), taxes and insurance (**$267,000**), and bad debt expense (**$45,000**), partially offset by reduced compensation costs (**$250,000**)[169](index=169&type=chunk) [Liquidity and Capital Resources](index=32&type=section&id=Liquidity%20and%20Capital%20Resources) This section analyzes the company's liquidity position, capital resources, working capital, and going concern considerations Liquidity and Capital Resources Data | Item | March 31, 2024 | December 31, 2023 | Change (Dollars) | Change (Percentage) | | :-------------------------- | :------------- | :---------------- | :--------------- | :------------------ | | Cash and cash equivalents | $2,089,891 | $2,343,666 | $(253,775) | (11)% | | Available-for-sale securities | $466,493 | $2,661,932 | $(2,195,439) | (82)% | | Working capital | $(414,722) | $2,189,673 | $(2,604,395) | (119)% | | Total assets | $12,513,901 | $15,819,137 | $(3,305,236) | (21)% | | Total stockholders' equity | $6,813,228 | $9,741,077 | $(2,927,849) | (30)% | - Available cash and available-for-sale securities decreased by approximately **$2.45 million** to **$2.56 million** as of March 31, 2024[173](index=173&type=chunk) - The company had negative working capital of approximately **$415,000** and an accumulated deficit of approximately **$62.27 million** as of March 31, 2024[173](index=173&type=chunk) - These conditions raise substantial doubt about the company's ability to continue as a going concern for the next year, despite management's plans for revenue enhancement and cost reduction[176](index=176&type=chunk) - Net cash used in operating activities was **$2,072,363** in Q1 2024, an improvement from **$2,825,577** in Q1 2023[172](index=172&type=chunk)[177](index=177&type=chunk) - Net cash provided by investing activities was **$1,937,446** in Q1 2024, primarily from proceeds of available-for-sale securities maturities, a significant shift from cash used in Q1 2023[172](index=172&type=chunk)[181](index=181&type=chunk) - Net cash used in financing activities was **$118,858** in Q1 2024, mainly due to ATM offering costs and warrant repurchases, offset by ATM proceeds[172](index=172&type=chunk)[183](index=183&type=chunk) [Effects of Inflation and Supply Chain Shortages](index=34&type=section&id=Effects%20of%20Inflation%20and%20Supply%20Chain%20Shortages) This section discusses the impact of inflation and supply chain dynamics on the company's operations and costs - The company's operations are heavily reliant on specimen availability, often receiving more requests than it can fulfill[185](index=185&type=chunk) - Inflation has negatively affected employee salaries (a significant operating cost) and supply costs, but not the cost of specimens due to long-term contracts with revenue sharing plans[186](index=186&type=chunk)[187](index=187&type=chunk) [Critical Accounting Policies and Estimates](index=35&type=section&id=Critical%20Accounting%20Policies%20and%20Estimates) This section confirms no material changes in the company's critical accounting policies and procedures - There have been no material changes in the company's critical accounting policies and procedures during the three months ended March 31, 2024[189](index=189&type=chunk) [JOBS Act Transition Period](index=35&type=section&id=JOBS%20Act%20Transition%20Period) This section explains the company's election regarding the JOBS Act extended transition period for accounting standards - The company has elected not to 'opt out' of the extended transition period for complying with new or revised accounting standards under the JOBS Act, adopting standards at the same time as private companies[191](index=191&type=chunk) - As an 'emerging growth company,' iSpecimen intends to rely on certain exemptions, including not providing an auditor's attestation report on internal controls over financial reporting[192](index=192&type=chunk) [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=35&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) This section states that market risk disclosures are not applicable for iSpecimen Inc. as a smaller reporting company - Quantitative and Qualitative Disclosures About Market Risk are not applicable for smaller reporting companies[193](index=193&type=chunk) [Item 4. Controls and Procedures](index=35&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded that disclosure controls were ineffective due to a material weakness in sales tax processes, with a remediation plan underway [Evaluation of Disclosure Controls and Procedures](index=35&type=section&id=Evaluation%20of%20Disclosure%20Controls%20and%20Procedures) This section details management's conclusion on the ineffectiveness of disclosure controls and the identified material weakness - Management concluded that disclosure controls and procedures were not effective as of March 31, 2024[196](index=196&type=chunk) - A material weakness was identified: inadequate controls for maintaining appropriate documentation for customer tax-exempt status, calculating and collecting sales tax, and timely reporting and remitting sales tax obligations[196](index=196&type=chunk) - Despite the material weakness, management believes the unaudited condensed financial statements fairly present the financial position, results of operations, and cash flows[196](index=196&type=chunk) [Management's Plan for Remediation](index=37&type=section&id=Management's%20Plan%20for%20Remediation) This section outlines the company's plan to remediate the identified material weakness in sales tax controls - The remediation plan, initiated in Q2 2023 and ongoing, includes engaging external tax advisors to assess sales tax treatment for prior years[197](index=197&type=chunk)[200](index=200&type=chunk) - Steps include obtaining sales tax exemption letters or proof of use tax payments from customers and initiating collection efforts from non-exempt customers[200](index=200&type=chunk) - Implementation of a sales tax software platform for calculation, collection, and remittance of sales tax for future non-exempt sales, and assisting with Voluntary Disclosure Agreements (VDAs)[200](index=200&type=chunk) - Designing and implementing enhanced policies, procedures, and controls related to sales tax, and training appropriate personnel[200](index=200&type=chunk) [Changes in Internal Control Over Financial Reporting](index=37&type=section&id=Changes%20in%20Internal%20Control%20Over%20Financial%20Reporting) This section reports on the implementation of changes to internal controls to remediate the identified material weakness - The company is implementing changes to internal controls to remediate the identified material weakness[200](index=200&type=chunk) - Except for the noted remediation efforts, there were no other material changes in internal control over financial reporting during Q1 2024[200](index=200&type=chunk) [PART II – OTHER INFORMATION](index=38&type=section&id=PART%20II%20%E2%80%93%20OTHER%20INFORMATION) This section covers legal proceedings, risk factors, equity sales, defaults, mine safety, other information, and exhibits [Item 1. Legal Proceedings](index=38&type=section&id=Item%201.%20Legal%20Proceedings) This section states that there are no legal proceedings to report for the period - No legal proceedings were reported[202](index=202&type=chunk) [Item 1A. Risk Factors](index=38&type=section&id=Item%201A.%20Risk%20Factors) This section indicates no material changes to the risk factors previously disclosed in the company's Annual Report on Form 10-K - No material changes to risk factors previously disclosed in the Annual Report on Form 10-K[203](index=203&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=38&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) This section reports no unregistered sales of equity securities or use of proceeds to disclose for the period - No unregistered sales of equity securities and use of proceeds to report[204](index=204&type=chunk) [Item 3. Defaults Upon Senior Securities](index=38&type=section&id=Item%203.%20Defaults%20Upon%20Senior%20Securities) This section states that there were no defaults upon senior securities during the reporting period - No defaults upon senior securities to report[205](index=205&type=chunk) [Item 4. Mine Safety Disclosures](index=38&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) This section indicates that mine safety disclosures are not applicable to the company - Mine safety disclosures are not applicable[206](index=206&type=chunk) [Item 5. Other Information](index=38&type=section&id=Item%205.%20Other%20Information) This section states that there is no other information to report for the period - No other information to report[207](index=207&type=chunk) [Item 6. Exhibits](index=39&type=section&id=Item%206.%20Exhibits) This section lists the exhibits filed as part of the Quarterly Report, including warrant repurchase agreements and certifications - Exhibits include the Form of Warrant Repurchase and Termination Agreements and the At the Market Offering Agreement[210](index=210&type=chunk) - Certifications of the Principal Executive Officer and Principal Financial Officer are filed herewith[210](index=210&type=chunk) [SIGNATURES](index=40&type=section&id=SIGNATURES) The report is signed by Tracy Curley, CEO, CFO, and Treasurer of iSpecimen Inc. on May 7, 2024 - The report was signed by Tracy Curley, Chief Executive Officer, Chief Financial Officer, and Treasurer, on May 7, 2024[215](index=215&type=chunk)

Exhibit 99.1 iSpecimen Reports Full Year 2023 Results LEXINGTON, Mass., March 14 2024 – iSpecimen Inc. (Nasdaq: ISPC) ("iSpecimen" or the "Company"), an online global marketplace that connects scientists requiring biospecimens for medical research with a network of healthcare specimen providers, today reported its financial and operating results for the twelve-month period ended December 31, 2023. "Throughout 2023, we advanced our objective to reach profitability, focusing on right-sizing our business and i ...

Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-K ☒ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended December 31, 2023 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Commission file number: 001-40501 iSpecimen Inc. (Exact name of registrant as specified in its charter) (State or other jurisdiction of incorporation or ...