iSpecimen Inc. (NASDAQ:ISPC) Q2 2023 Earnings Conference Call August 2, 2023 8:30 AM ET Company Participants Phil Carlson - Investor Relations, KCSA Strategic Communications Tracy Curley - Chief Executive Officer and Chief Financial Officer Eric Langlois - Chief Revenue Officer Evan Cox - Vice President of Product Management Conference Call Participants Operator Good day, everyone, and welcome to iSpecimen's Second Quarter 2023 Results Conference Call. At this time participants are in a listen-only mode. A ...

Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q (Mark One) ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the Quarterly Period Ended June 30, 2023 ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from ___ to ___ Commission File No. 001-40501 iSpecimen Inc. (Exact name of registrant as specified in its charter) (State or other jurisdiction of i ...

iSpecimen Inc. (NASDAQ:ISPC) Q1 2023 Results Conference Call May 4, 2023 8:30 AM ET Company Participants Tracy Curley - Chief Executive Officer Benjamin Beilak - Chief Information Officer Eric Langlois - Chief Revenue Officer Conference Call Participants Matt Hewitt - Craig Hallum Capital Group Operator Good morning, and welcome to iSpecimen First Quarter 2023 Earnings Conference Call [Operator Instructions]. Please note that this event is being recorded. I would now like to turn the conference over to Tra ...

Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q (Mark One) QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 ☒ For the Quarterly Period Ended March 31, 2023 ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from ___ to ___ Commission File No. 001-40501 iSpecimen Inc. (Exact name of registrant as specified in its charter) | Delaware | 27-0480143 | | --- ...

Financial Performance - The company reported net losses of $10,245,922 and $8,961,815 for the years ended December 31, 2022 and 2021, respectively, with an accumulated deficit of $48,265,324 as of December 31, 2022[101]. - Total revenue for the year ended December 31, 2022, was $10,402,303, a decrease of 6.6% from $11,135,303 in 2021[365]. - The net loss for 2022 was $10,245,922, compared to a net loss of $8,961,815 in 2021, reflecting a 14.3% increase in losses[365]. - The accumulated deficit increased to $48,265,324 in 2022, compared to $38,019,402 in 2021, indicating a 27% increase in accumulated losses[362]. - Cash and cash equivalents decreased to $15,308,710 as of December 31, 2022, down 44.8% from $27,738,979 in 2021[362]. - Total operating expenses increased to $20,588,385 in 2022, up 20.5% from $17,060,549 in 2021[365]. - The company reported a basic and diluted net loss per share of $1.16 for 2022, compared to $2.09 for 2021[365]. - The company experienced a net cash outflow from financing activities of $3,421,359 in 2022, compared to a net inflow of $38,749,397 in 2021, indicating a shift in financing strategy[372]. Business Strategy and Growth - The growth strategy includes expanding the iSpecimen Marketplace platform and entering new lines of business, which requires significant investment[109]. - The company anticipates continued losses for the foreseeable future, which are expected to increase as investments in business growth continue[102]. - The company is investing in capabilities to support customer self-service in the iSpecimen Marketplace, but the timeline for full development remains uncertain[138]. - The company may pursue acquisitions or strategic alliances to expand offerings, but lacks experience in integrating such acquisitions, which could disrupt operations[182]. Customer and Revenue Concentration - Two customers represented approximately 14% and 12% of the company's revenue in 2022, indicating significant revenue concentration[110]. - For the year ended December 31, 2022, two customers represented 14% and 12% of the company's revenues, indicating a reliance on a limited customer base[136]. - The company relies on a limited number of customers for a significant portion of revenue, which could affect operational stability if major customers reduce or cancel orders[136]. Operational Risks - The company faces risks related to the COVID-19 pandemic, which could continue to impact business operations[113]. - The ongoing war between Russia and Ukraine negatively impacted the company's business, with approximately $1 million in purchase orders affected due to supply network shutdowns[161]. - Cybersecurity threats pose significant risks, and while prior attacks have not materially impacted financial results, future incidents could have adverse effects[126]. - The company may encounter material weaknesses in internal controls over financial reporting, which could affect the accuracy of financial results[105]. Compliance and Regulatory Risks - Compliance with data protection regulations, including HIPAA and GDPR, is critical, and failure to comply could result in fines and penalties[191][192]. - The company is subject to extensive federal, state, and local laws regarding environmental, health, and safety regulations, which could result in fines and penalties if not complied with[195]. - The company must adhere to the U.S. Export Administration Regulations and other trade sanctions, with non-compliance potentially resulting in severe penalties[202]. - The company may incur significant costs in maintaining regulatory compliance, which could divert management's attention from core business operations[198]. Financial Position and Capital Needs - The company may require additional capital in the future to fund operations and business growth[106]. - The company has federal net operating loss carryforwards (NOLs) of approximately $40.8 million, with $13 million expiring through 2037 and $27.8 million that can be carried forward indefinitely[178]. - The company has no committed external source of funds and may need to raise additional capital sooner than expected[227]. - The company’s ability to raise additional funds through equity or debt financing may be limited, affecting technology development and commercialization efforts[228]. Market and Competitive Environment - Competition from larger biospecimen providers with greater resources may adversely affect the company's ability to grow and compete effectively[167]. - An economic downturn could adversely affect the demand for the company's products and services, impacting revenue and profitability[171]. - High inflation rates have negatively affected the company's operating costs, particularly in employee salaries and supplies[173]. Shareholder and Governance Issues - Approximately 41.5% of the outstanding common stock is controlled by officers, directors, and principal stockholders holding more than 5% each, which may affect corporate governance and shareholder interests[215]. - The company has limited insurance coverage, which may not cover claims by third parties against its officers and directors[235]. - The company’s bylaws may impose additional litigation costs on stockholders, potentially discouraging lawsuits[222]. Technology and Operational Challenges - The company relies on its technology platform, and any defects or performance issues could disrupt operations and harm reputation[121]. - The lengthy adoption cycle for technology solutions at healthcare provider supply partners can take up to 18 months, potentially hindering rapid scaling and revenue growth[148]. - The company relies on third-party shipping services for specimen distribution, and any disruptions could lead to lost revenue and customer satisfaction issues[160].

iSpecimen Inc. (NASDAQ:ISPC) Q4 2022 Earnings Call Transcript March 14, 2023 8:30 AM ET Company Participants Allison Soss - Investor Relations-KCSA Strategic Communications Tracy Curley - Chief Executive Officer Benjamin Bielak - Chief Information Officer Eric Langlois - Chief Revenue Officer Conference Call Participants Matt Hewitt - Craig-Hallum Capital Group Allen Klee - Maxim Group Operator Good day, everyone and welcome to iSpecimen's Full Year 2022 Conference Call. At this time, participants will be i ...

Financial Data and Key Metrics Changes - iSpecimen reported revenue of $2.6 million for Q3 2022, a decrease from $2.7 million in Q3 2021, primarily due to declining sales of COVID-19 specimens [29] - Non-COVID revenue reached $2.3 million, accounting for 88% of total revenue, marking a 26% increase compared to the same period last year [31] - For the nine-month period ended September 30, 2022, revenue was approximately $7.4 million, down from $8.6 million in the same period last year, attributed to the impact of the Russia-Ukraine war and declining COVID-19 specimen sales [32] Business Line Data and Key Metrics Changes - Specimens accession decreased by 11% to 4,750 in Q3 2022 compared to 5,300 in Q3 2021 [29] - The average selling price per specimen increased by approximately $32 or 6% compared to the same prior year's period [30] - For the nine-month period, non-COVID-19 related specimens accounted for approximately $6.5 million, a 7% increase compared to the same prior year's period [34] Market Data and Key Metrics Changes - The macroeconomic environment remains uncertain due to high interest rates and potential recession concerns, impacting specimen transactions [27] - The company is closely monitoring the market health, particularly among small biotech and pharma customers, who are preserving cash while continuing research [48] Company Strategy and Development Direction - The company is focused on reducing supplier concentration and increasing utilization of its supplier network to enhance match rates and market depth [13][16] - A significant initiative to reorganize the sales approach is underway, with a renewed focus on the sales funnel to scale in a post-COVID-19 environment [17] - The company plans to launch a data-as-a-service pilot, expected to validate new revenue streams [24] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's resilience through economic downturns and inflation impacts [28] - The company is excited about near and long-term prospects, actively pursuing multimillion-dollar business initiatives [11] - Management noted that while projects are smaller in value, customers are still engaging in research, indicating a cautious but ongoing commitment to their work [48] Other Important Information - The company increased cash spend for technology to approximately $1.2 million in Q3 2022, up from $592,000 in the same period last year, reflecting a commitment to technology investments [38] - General and administrative expenses rose to approximately $2.2 million in Q3 2022, primarily due to increased compensation and severance costs [44] Q&A Session Summary Question: Health of the biotech and pharma markets - Management noted that while projects are still being received, they are smaller in value as customers are preserving cash [48] Question: Ensuring no disruption during search capability enhancements - Management confirmed that enhancements are being tested in a separate environment to avoid disruption to ongoing business [49] Question: Biggest potential driver for growth and profitability - Management highlighted the revenue stream associated with data as a significant potential driver for growth, with a pilot expected by mid-next year [52]

PART I - FINANCIAL INFORMATION [Financial Statements](index=3&type=section&id=ITEM%201%20.%20Financial%20Statements) The financial statements for the period ended September 30, 2022, show a decrease in total assets to $27.9 million from $35.7 million, primarily due to a reduction in cash, and a net loss of $8.1 million, an increase from the prior year period [Condensed Balance Sheets](index=3&type=section&id=Condensed%20Balance%20Sheets) As of September 30, 2022, total assets decreased to $27.9 million from $35.7 million, driven by a drop in cash, while total stockholders' equity fell to $22.4 million due to accumulated deficits Condensed Balance Sheet Highlights (as of September 30, 2022 vs. December 31, 2021) | Balance Sheet Item | September 30, 2022 (Unaudited) | December 31, 2021 | | :--- | :--- | :--- | | **Assets** | | | | Cash | $20,657,719 | $27,738,979 | | Total current assets | $24,236,174 | $32,948,349 | | Total assets | $27,939,939 | $35,719,598 | | **Liabilities & Equity** | | | | Total current liabilities | $2,833,338 | $2,505,394 | | Total liabilities | $5,516,479 | $5,928,010 | | Accumulated deficit | $(46,105,643) | $(38,019,402) | | Total stockholders' equity | $22,423,460 | $29,791,588 | [Condensed Statements of Operations](index=4&type=section&id=Condensed%20Statements%20of%20Operations) For Q3 2022, revenue decreased 5% to $2.6 million, while operating expenses increased 36% to $5.7 million, resulting in a net loss of $3.1 million, nearly double the prior year Three Months Ended September 30, 2022 vs 2021 | Metric | Q3 2022 | Q3 2021 | | :--- | :--- | :--- | | Revenue | $2,583,412 | $2,718,534 | | Total operating expenses | $5,684,471 | $4,177,607 | | Loss from operations | $(3,101,059) | $(1,459,073) | | Net loss | $(3,095,690) | $(1,553,023) | | Net loss per share | $(0.35) | $(0.22) | Nine Months Ended September 30, 2022 vs 2021 | Metric | Nine Months 2022 | Nine Months 2021 | | :--- | :--- | :--- | | Revenue | $7,440,760 | $8,586,217 | | Total operating expenses | $15,485,214 | $12,516,465 | | Loss from operations | $(8,044,454) | $(3,930,248) | | Net loss | $(8,086,241) | $(6,911,428) | | Net loss per share | $(0.92) | $(2.17) | [Condensed Statements of Cash Flows](index=7&type=section&id=Condensed%20Statements%20of%20Cash%20Flows) For the nine months ended September 30, 2022, net cash used in operating activities was $5.6 million, with investing activities using $1.5 million, resulting in a net decrease in cash of $7.1 million Cash Flow Summary (Nine Months Ended September 30) | Cash Flow Activity | 2022 | 2021 | | :--- | :--- | :--- | | Net cash used in operating activities | $(5,610,366) | $(9,348,701) | | Net cash used in investing activities | $(1,549,281) | $(733,722) | | Net cash provided by financing activities | $78,387 | $19,177,246 | | **Net change in cash** | **$(7,081,260)** | **$9,094,823** | | Cash at end of period | $20,657,719 | $9,790,732 | [Notes to Unaudited Condensed Financial Statements](index=8&type=section&id=Notes%20to%20Unaudited%20Condensed%20Financial%20Statements) The notes detail the company's biospecimen marketplace business, significant events like CEO departure and term loan payoff, and impacts from the Russia-Ukraine war and COVID-19 - The company's business was negatively impacted in the first half of 2022 by the Russia-Ukraine war, which disrupted approximately **$1 million in purchase orders** from its supply network in that region[30](index=30&type=chunk) - The company recognized a severance expense of **$376,400** for the departing CEO, Dr. Christopher Ianelli, effective October 24, 2022[76](index=76&type=chunk) - On August 13, 2021, the company entered into a **$3.5 million term loan** with Western Alliance Bank, which was subsequently paid off on November 3, 2022[82](index=82&type=chunk)[120](index=120&type=chunk) - Management believes existing cash will be sufficient for operations for at least the next 12 months, alleviating substantial doubt about going concern raised in prior periods[24](index=24&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=21&type=section&id=ITEM%202%20.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses a 5% revenue decrease for Q3 2022, driven by a significant drop in COVID-19 related specimen demand, offset by non-COVID growth, and a sharp rise in operating expenses due to increased spending and a severance charge [Overview and Known Trends](index=21&type=section&id=Overview%20and%20Known%20Trends) The company operates the iSpecimen Marketplace, connecting researchers with human biospecimens, and faces trends including a 62% decline in COVID-19 related revenue and disruptions from the Russia-Ukraine war - The company's core business is the iSpecimen Marketplace, a platform that automates the process of searching for and procuring human biospecimens for research[124](index=124&type=chunk)[125](index=125&type=chunk) Revenue Trend: COVID-19 vs. Non-COVID-19 (Nine Months Ended Sep 30) | Revenue Type | 2022 | 2021 | Change | % Change | | :--- | :--- | :--- | :--- | :--- | | COVID-19 | $971,000 | $2,523,000 | $(1,552,000) | (62)% | | Non-COVID-19 | $6,470,000 | $6,063,000 | $407,000 | 6% | - Following management changes, the interim CEO is focused on improving execution, reviewing company structure, and green-lighting projects to accelerate technology development[142](index=142&type=chunk)[144](index=144&type=chunk) [Results of Operations](index=26&type=section&id=Results%20of%20Operations) For Q3 2022, revenue decreased 5% to $2.6 million due to lower COVID-19 demand, while operating expenses surged 36% from higher spending and a severance charge, leading to a doubled loss from operations - Q3 2022 revenue decreased by **5% YoY**, primarily due to a reduction in demand for COVID-19 specimens, with COVID-related revenue at **$322,000 (12% of total)**, down from **$923,000 (34% of total)** in Q3 2021[162](index=162&type=chunk) - Q3 2022 General and Administrative expenses increased by **37% YoY**, largely due to a **$376,000 severance charge** for the former CEO and a **$166,000 increase** in taxes and insurance[169](index=169&type=chunk) - For the nine months ended Sep 30, 2022, revenue decreased **13% YoY**, impacted by lower COVID-19 demand, supply network shutdowns in Ukraine/Russia, and smaller purchase order sizes due to recessionary effects[173](index=173&type=chunk) [Liquidity and Capital Resources](index=30&type=section&id=Liquidity%20and%20Capital%20Resources) As of September 30, 2022, cash decreased by $7.1 million to $20.7 million, driven by operating and investing activities, though management believes current cash is sufficient for the next 12 months Key Liquidity Metrics | Metric | September 30, 2022 | December 31, 2021 | | :--- | :--- | :--- | | Cash | $20,657,719 | $27,738,979 | | Working Capital | $21,402,836 | $30,442,955 | - For the nine months ended Sep 30, 2022, net cash used in operating activities was **$5.6 million**, net cash used in investing activities was **$1.5 million**, and net cash from financing was **$0.08 million**[183](index=183&type=chunk)[187](index=187&type=chunk)[189](index=189&type=chunk)[190](index=190&type=chunk) - Management believes its current cash and anticipated cash flow will be sufficient to meet working capital and capital expenditure needs for at least the next 12 months[185](index=185&type=chunk) [Non-GAAP Financial Measure](index=32&type=section&id=Non-GAAP%20Financial%20Measure) The company uses Adjusted EBITDA to evaluate core operating performance, reporting losses of $2.2 million and $6.1 million for the three and nine months ended September 30, 2022, respectively, significantly wider than prior year periods Reconciliation of Net Loss to Adjusted EBITDA | Period | Net Loss | Adjusted EBITDA | | :--- | :--- | :--- | | **Three Months Ended Sep 30, 2022** | $(3,095,690) | $(2,173,243) | | **Three Months Ended Sep 30, 2021** | $(1,553,023) | $(823,290) | | **Nine Months Ended Sep 30, 2022** | $(8,086,241) | $(6,124,463) | | **Nine Months Ended Sep 30, 2021** | $(6,911,428) | $(2,750,061) | [Quantitative and Qualitative Disclosures About Market Risk](index=36&type=section&id=ITEM%203%20.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) This section is not applicable as the company qualifies as a smaller reporting company - Not applicable for smaller reporting companies[223](index=223&type=chunk) [Controls and Procedures](index=37&type=section&id=ITEM%204%20.%20Controls%20and%20Procedures) Management, including the CEO and CFO, concluded that the company's disclosure controls and procedures were effective as of September 30, 2022, with no material changes in internal control over financial reporting during the quarter - Based on an evaluation as of September 30, 2022, the CEO and CFO concluded that the company's disclosure controls and procedures were effective[226](index=226&type=chunk) - No changes in internal control over financial reporting occurred during the nine months ended September 30, 2022, that materially affected, or are reasonably likely to materially affect, internal controls[227](index=227&type=chunk) PART II – OTHER INFORMATION [Legal Proceedings](index=38&type=section&id=ITEM%201%20.%20Legal%20Proceedings) The company reported no legal proceedings during the period - None[230](index=230&type=chunk) [Risk Factors](index=38&type=section&id=ITEM%201A%20.%20Risk%20Factors) There have been no material changes to the risk factors previously disclosed in the company's Form 10-K for the year ended December 31, 2021 - No material changes from the risk factors disclosed in the Form 10-K filed on March 22, 2022[231](index=231&type=chunk) [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) During the nine months ended September 30, 2022, the company granted an aggregate of 175,261 restricted stock units (RSUs) to employees under its 2021 Stock Incentive Plan - In the nine months ended September 30, 2022, the company granted **175,261 restricted stock units (RSUs)** to employees under the 2021 Stock Incentive Plan[232](index=232&type=chunk) [Other Part II Items](index=38&type=section&id=Other%20Part%20II%20Items) The company reported no defaults upon senior securities, no mine safety disclosures, and no other information requiring disclosure under Item 5 for the period - Item 3. Defaults Upon Senior Securities: None[234](index=234&type=chunk) - Item 4. Mine Safety Disclosures: Not Applicable[235](index=235&type=chunk) - Item 5. Other Information: None[236](index=236&type=chunk)

Financial Data and Key Metrics Changes - Revenue for Q2 2022 was $2.3 million, down from $2.9 million in Q2 2021, primarily due to a decline in COVID-19 specimen sales [23][24] - For the first half of 2022, revenue was approximately $4.9 million compared to $5.9 million in the same period last year, affected by the Russia-Ukraine war and reduced COVID-19 specimen sales [24][25] - Non-COVID-19 revenue increased by 8% year-over-year, accounting for 93% of total revenue in Q2 2022 [25] - Average selling price per specimen decreased by approximately $130 or 28% compared to the same prior year's period [26] Business Line Data and Key Metrics Changes - Specimens accessioned in Q2 2022 increased by 12% to 7,004 specimens compared to 6,266 in Q2 2021 [26] - Prospective collection comprised about 25% of revenue in Q2 2022, which is lower than typical levels [11][56] - The average cost per specimen decreased by 40% in Q2 2022, influenced by specimen mix [28] Market Data and Key Metrics Changes - The ongoing geopolitical unrest and economic environment have reduced visibility for the business, impacting order sizes and fulfillment velocity [7][15] - The average size of purchase orders has decreased by about 20% over the past six months due to economic slowdown [18] Company Strategy and Development Direction - The company is focused on enhancing the iSpecimen marketplace platform to better support research clients and healthcare providers [9][10] - A new sales team structure has been implemented to improve productivity and efficiency, allowing senior sales staff to focus on larger deals [14] - The company is expanding its global biospecimen supplier list, particularly in oncology and cardiovascular disease research [12] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the execution of their strategy and investments in technology and personnel to gain market share [21] - The impact of the Ukraine conflict is being managed cautiously, with a focus on diversifying supplier sources [15][42] - COVID-19 specimen sales are expected to continue declining, but the overall business is not dramatically affected at this time [20] Other Important Information - Cash balance as of June 30, 2022, was approximately $23.7 million, down from $27.7 million at the end of 2021 [34] - Increased cash spend for technology development was noted, with $807,000 spent in Q2 2022 compared to $351,000 in Q2 2021 [28][29] Q&A Session Summary Question: Areas of enhancement on the platform - The company is working on integrating a unified search for biospecimens and patients into one interface [37][38] Question: Geopolitical headwinds and economic impact - Management is cautious about the ongoing war in Ukraine and its impact on operations, with no specific dollar guidance provided [41][42] Question: Sustainability of gross margin - The company aims for margins in the 50% to 60% range, with current performance being better due to specific project mixes [44][46] Question: Details on the large purchase order - The order was from a new customer related to a long-term oncology project, showcasing the effectiveness of the new sales structure [48][50] Question: Pricing and margin differentials between prospective and remnant collections - Prospective collections are priced significantly higher than clinical remnants, impacting average selling prices [54][56]

Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q (Mark One) ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the Quarterly Period Ended June 30, 2022 ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from ___ to ___ Commission File No. 001-40501 iSpecimen Inc. (Exact name of Registrant as specified in its Charter) (State or other jurisdiction of i ...