Part I.	FINANCIAL INFORMATION	4
Item 1.	Unaudited Condensed Consolidated Financial Statements	4
	Condensed Consolidated Balance Sheets as of September 30, 2023 and December 31, 2022	4
	Condensed Consolidated Statements of Operations for the three and nine months ended September 30, 2023 and 2022	5
	Condensed Consolidated Statements of Stockholders’ Equity (Deficit) for the three and nine months ended September 30, 2023 and 2022	6
	Condensed Consolidated Statements of Cash Flows for the nine months ended September 30, 2023 and 2022	7
	Notes to Unaudited Condensed Consolidated Financial Statements	8
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	15
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	23
Item 4.	Controls and Procedures	23
Part II.	OTHER INFORMATION	24
Item 1.	Legal Proceedings	24
Item 1A.	Risk Factors	24
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	24
Item 3.	Defaults Upon Senior Securities	24
Item 4.	Mine Safety Disclosures	24
Item 5.	Other Information	24
Item 6.	Exhibits	25
EXHIBIT INDEX		25
SIGNATURES		26

 

FORWARD-LOOKING INFORMATION

 

This Quarterly Report on Form 10-Q, or report, contains forward-looking statements within the meaning of the U.S. federal securities laws that involve risks and uncertainties. Certain statements contained in this report are not purely historical including, without limitation, statements regarding our expectations, beliefs, intentions, anticipations, commitments or strategies regarding the future that are forward-looking. These statements include those discussed in Item 2, Management’s Discussion and Analysis of Financial Condition and Results of Operations, including “Critical Accounting Policies and Estimates,” “Results of Operations,” “Liquidity and Capital Resources,” and “Future Funding Requirements,” and elsewhere in this report.

 

In this report, the words “may,” “could,” “would,” “might,” “will,” “should,” “plan,” “forecast,” “anticipate,” “believe,” “expect,” “intend,” “estimate,” “predict,” “potential,” “continue,” “future,” “moving toward” or the negative of these terms or other similar expressions also identify forward-looking statements. Our actual results could differ materially from those forward-looking statements contained in this report as a result of a number of risk factors including, but not limited to, those listed in our Annual Report on Form 10-K for the year ended December 31, 2022, which is incorporated by reference herein, and elsewhere in this report. You should carefully consider these risks, in addition to the other information in this report and in our other filings with the SEC. All forward-looking statements and reasons why results may differ included in this report are made as of the date of this report, and we undertake no obligation to update any such forward-looking statement or reason why such results might differ after the date of this Quarterly Report on Form 10-Q, except as required by law.

 

 

PART I.

FINANCIAL INFORMATION

 

ITEM 1.

UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

 

BIOCARDIA, INC.

Condensed Consolidated Balance Sheets

(In thousands, except share and per share amounts)

 

 

See accompanying notes to the unaudited condensed consolidated financial statements.

 

 

BIOCARDIA, INC.

Condensed Consolidated Statements of Operations

(In thousands, except share and per share amounts)

(unaudited)

 

 

See accompanying notes to the unaudited condensed consolidated financial statements.

 

 

BIOCARDIA, INC.

Condensed Consolidated Statements of Stockholders’ Equity (Deficit)

(In thousands, except share amounts)

(unaudited)

 

 

See accompanying notes to the unaudited condensed consolidated financial statements.

 

 

BIOCARDIA, INC.

Condensed Consolidated Statements of Cash Flows

(In thousands)

(unaudited)

 

 

See accompanying notes to the unaudited condensed consolidated financial statements.

 

 

BioCardia, Inc.

Notes to Unaudited Condensed Consolidated Financial Statements

 

(1)	Summary of Business and Basis of Presentation

 

(a)

Description of Business

 

BioCardia, Inc. (we, us, our, BioCardia or the Company), is a clinical-stage company focused on developing cellular and cell-derived therapeutics for the treatment of cardiovascular and pulmonary diseases with significant unmet medical needs. We are advancing two cell therapy platforms derived from bone marrow in clinical trials today. Our CardiAMP® autologous mononuclear cell therapy platform is being advanced for two clinical indications: ischemic heart failure with reduced ejection fraction (HFrEF) and refractory angina resulting from chronic myocardial ischemia (CMI). Our neurokinin-1 receptor positive (NK1R+) allogeneic mesenchymal stem cell (MSC) therapy platform is being advanced as an “off the shelf” cell therapy for two clinical indications: the treatment of ischemic HFrEF and for acute respiratory distress syndrome (ARDS). Our autologous CardiAMP and our allogeneic NK1R+ cell therapies intended for cardiac indications of HFrEF and CMI are enabled by our Helix™ minimally invasive intramyocardial therapeutic delivery platform. We partner this therapeutic delivery platform selectively with others seeking to develop biotherapeutic interventions for local delivery to the heart. To date, we have devoted substantially all our resources to research and development efforts relating to our therapeutic candidates and biotherapeutic delivery systems including conducting clinical trials, developing manufacturing and sales capabilities, in-licensing related intellectual property, providing general and administrative support for these operations and protecting our intellectual property.

 

We manage our operations as a single segment for the purposes of assessing performance and making operating decisions.

 

(2)	Significant Accounting Policies

 

(a)

Basis of Preparation

 

 

The accompanying condensed consolidated balance sheets, statements of operations, stockholders’ equity (deficit), and cash flows as of September 30, 2023, and for the three and nine months ended September 30, 2023 and 2022 are unaudited. The condensed consolidated financial statements have been prepared in accordance with generally accepted accounting principles in the United States of America (U.S. GAAP) and applicable rules and regulations of the Securities and Exchange Commission (SEC) for interim financial information and on a basis consistent with the annual financial statements and, in the opinion of management, reflect all adjustments which include only normal recurring adjustments, necessary to present fairly our financial position as of September 30, 2023, results of operations for the three and nine months ended September 30, 2023 and 2022, and cash flows for the nine months ended September 30, 2023 and 2022. The results for the three and nine months ended September 30, 2023 are not necessarily indicative of the results to be expected for the year ended December 31, 2023 or for any other interim period or for any other future year.

 

These condensed consolidated financial statements should be read in conjunction with the audited financial statements and related notes included in our Annual Report on Form 10-K for the year ended December 31, 2022, filed with the SEC on March 29, 2023. 

 

(b)

Liquidity – Going Concern

 

We have incurred net losses and negative cash flows from operations since our inception and had an accumulated deficit of approximately $150.1 million as of September 30, 2023. Management expects operating losses and negative cash flows to continue through at least the next several years. We expect to incur increasing costs as we advance our trials and development activities. Therefore, absent additional funding, management believes cash and cash equivalents of $1.8 million as of September 30, 2023 are not sufficient to fund our planned expenditures and meet our obligations beyond January 2024. These factors raise substantial doubt about our ability to continue as a going concern beyond one year from the date these financial statements are issued. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.

 

 

Our ability to continue as a going concern and to continue further development of our therapeutic candidates beyond January 2024 will require us to raise additional capital. We plan to raise additional capital, potentially including debt and equity arrangements, to finance our future operations. The Company has also taken steps to reduce operating expenses to extend the cash runway. While we believe the plan to raise additional funds will alleviate the conditions that raise substantial doubt, the plan is not entirely within our control and cannot be assessed as being probable of occurring. If adequate funds are not available, we may be required to further reduce operating expenses, delay or reduce the scope of our product development programs, obtain funds through arrangements with others that may require us to relinquish rights to certain of our technologies or products that we would otherwise seek to develop or commercialize, or cease operations.

 

(c)

Use of Estimates

 

The preparation of the financial statements in accordance with U.S. GAAP requires management to make certain estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Actual results could differ materially from those estimates. Significant items subject to such estimates and assumptions include share-based compensation, the useful lives of property and equipment, right-of-use assets and related liabilities, incremental borrowing rate, allowances for doubtful accounts and sales returns, clinical accruals and assumptions used for revenue recognition.

 

(d)

Principles of Consolidation

 

The condensed consolidated financial statements include the accounts of the Company and its wholly-owned subsidiary, BioCardia Lifesciences, Inc. All intercompany accounts and transactions have been eliminated during the consolidation process.

 

(e)

Concentration of Credit Risk

 

Financial instruments that potentially subject us to a concentration of credit risk consist of cash and cash equivalents. Our cash at times exceeds federally insured limits of $250,000 per customer. On September 30, 2023, approximately 98% of our cash and cash equivalents were held by one financial institution and total amounts on deposit were approximately $1.6 million in excess of FDIC insurance limits. We have not recognized any losses from credit risks on such accounts since inception.

 

(f)

Changes to Significant Accounting Policies

 

Our significant accounting policies are described in Note 2 of the notes to the consolidated financial statements included in our Annual Report on Form 10-K for the year ended December 31, 2022, filed with the SEC on March 29, 2023. There have been no changes to those policies.

 

(g)

Recent Accounting Pronouncements

 

Recent accounting pronouncements issued by the Financial Accounting Standards Board (FASB), including its Emerging Issues Task Force, did not or are not believed by management to have a material impact on our financial statement presentation or disclosures.

 

(3)	Fair Value Measurement

 

The fair value of financial instruments reflects the amounts that we estimate to receive in connection with the sale of an asset or paid in connection with the transfer of a liability in an orderly transaction between market participants at the measurement date (exit price). We follow a fair value hierarchy that prioritizes the use of inputs used in valuation techniques into the following three levels:

 

Level 1 – quoted prices in active markets for identical assets and liabilities.

 

Level 2 – observable inputs other than quoted prices in active markets for identical assets and liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities.

 

Level 3 – unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities.

 

 

The following table sets forth the fair value of our financial assets measured on a recurring basis and indicates the fair value hierarchy utilized to determine such fair value (in thousands):

 

		As of September 30, 2023
		Level 1				Level 2				Level 3				Total
Assets:
Money market funds		$	2			$	—			$	—			$	2
Cash in savings account			—				—				—				1,610
Cash in checking account			—				—				—				223
Total cash and cash equivalents		$	2			$	—			$	—			$	1,835

 

		As of December 31, 2022
		Level 1				Level 2				Level 3				Total
Assets:
Money market funds		$	6,893			$	—			$	—			$	6,893
Cash in checking account			—				—				—				470
Total cash and cash equivalents		$	6,893			$	—			$	—			$	7,363

 

(4)	Property and Equipment, Net

 

Property and equipment, net consisted of the following (in thousands):

 

		September 30,				December 31,
		2023				2022
Computer equipment and software		$	161			$	161
Laboratory and manufacturing equipment			574				575
Furniture and fixtures			27				27
Leasehold improvements			26				26
Property and equipment, gross			788				789
Less accumulated depreciation			(674	)			(619	)
Property and equipment, net		$	114			$	170

 

Depreciation expense totaled $21,000 and $64,000 for the three and nine months ended September 30, 2023, respectively. Depreciation expense totaled $29,000 and $61,000 for the three and nine months ended September 30, 2022, respectively.

  

(5)	Operating Lease Right-of-Use Asset, Net

 

In December 2021, we entered into a lease related to a property lease for our laboratory and corporate offices, which expires in January 2027, with an option for us to extend a further 36 months after expiration. Our lease agreements do not contain any material residual guarantees or material restrictive covenants. We determine if an arrangement is a lease at inception by assessing whether it conveys the right to control the use of an identified asset for a period of time in exchange for consideration.

 

Right-of-use (ROU) assets and lease liabilities are recognized at the lease commencement date based on the present value of lease payments over the lease term. Our lease does not provide an implicit rate. We used an adjusted historical incremental borrowing rate, based on the information available at the approximate lease commencement date, to determine the present value of lease payments. Variable rent expense is made up of expenses for common area maintenance and shared utilities and were not included in the determination of the present value of lease payments. We have no finance leases.

 

Our lease expense was $121,000 and $362,000 for the three and nine months ended September 30, 2023, respectively. Our lease expense for the three and nine months ended September 30, 2022 was $121,000 and $362,000, respectively. The cash paid under the operating lease for base rent for the three and nine months ended September 30, 2023 was $117,000 and $353,000, respectively. The cash paid under the operating lease for base rent for the three and nine months ended September 30, 2022 was $114,000 and $287,000, respectively. On September 30, 2023, the weighted average remaining lease term was 3.59 years, and the weighted average discount rate was 10.74%.

 

 

Future minimum lease payments under the operating lease as of September 30, 2023 were as follows (in thousands):

 

Remainder of 2023		$	118
2024			485
2025			499
2026			514
2027			44
Total undiscounted lease payments		$	1,660
Less imputed interest			262
Total operating lease liabilities		$	1,398

 

(6)	Accrued Expenses and Other Current Liabilities

 

Accrued expenses and other current liabilities consisted of the following (in thousands):             

 

		September 30,				December 31,
		2023				2022
Accrued expenses		$	36			$	157
Accrued salaries and employee benefits			797				899
Accrued clinical trial costs			1,032				548
Grant liability			491				534
Customer deposits			90				90
Payable to related party			56				18
Total		$	2,502			$	2,246

 

(7)	Stockholders’ Equity

 

Warrants - Set forth below is a table of activity of warrants for common stock and the related weighted average exercise price per warrant.

 

		Number of				Weighted
		Common Stock				Average
		Warrants				Exercise Price
Balance as of December 31, 2022			2,424,724			$	6.36
Warrants for common stock sold			—				—
Warrants for common stock exercised			—				—
Balance as of September 30, 2023			2,424,724			$	6.36

 

June 2023 Financing - On June 21, 2023, we sold to certain existing investors and other institutional investors, as well as certain of our directors and officers, 1,133,141 shares of our common stock in a registered direct offering (the June 2023 Offering) at an offering price of $2.336 per share. Certain of our directors and executive officers purchased an aggregate of 203,337 of such shares. The gross proceeds of the June 2023 Offering were approximately $2.6 million, with associated issuance costs of approximately $194,000.

 

Cantor Fitzgerald Sales agreement - On April 12, 2022, we entered into a sales agreement (Sales Agreement) with Cantor Fitzgerald & Co. (Cantor) as the sales agent, pursuant to which we may offer and sell, from time to time, through Cantor, shares of common stock having an aggregate offering price of up to $10.5 million (ATM Offering). We are not obligated to sell any common stock shares pursuant to the Sales Agreement. Under the terms of the Sales Agreement, we pay Cantor a commission of 3% of the aggregate proceeds from the sale of shares and reimburse certain legal fees. The prospectus supplement covering the offer and sale of up to $10.5 million of common stock under the ATM Program, of which approximately $8.3 million was still available for offer and sale as of September 30, 2023, expired in conjunction with the expiration of the corresponding registration statement on October 20, 2023.

 

 

During the three and nine months ended September 30, 2023, we sold 33,282 and 168,122 shares of common stock under the ATM Offering at then-market prices for total gross proceeds of approximately $92,000 and $395,000, with net issuance costs of approximately $48,000 and $90,000, respectively. During the three months ended September 30, 2022, we sold 66,704 shares of common stock under the ATM Offering at then-market prices for total gross proceeds of $139,000, with a net refund of issuance costs of $1,000. During the nine months ended September 30, 2022, we sold 641,704 shares of common stock under the ATM Offering at then-market prices for total gross proceeds of approximately $1.7 million, with associated issuance costs of $231,000.

 

Lincoln Park Capital stock purchase agreement - On March 29, 2021, we entered into a purchase agreement with Lincoln Park Capital Fund, LLC (Lincoln Park) (Purchase Agreement) and a registration rights agreement (Registration Rights Agreement), pursuant to which we have the right to sell to Lincoln Park shares of our common stock having an aggregate value of up to $20 million, subject to certain limitations and conditions in the Purchase Agreement.

 

Pursuant to the Purchase Agreement in March 2021, Lincoln Park purchased 373,832 shares of common stock, at a price of $5.35 per share, for a total gross purchase price of $2 million (Initial Purchase) and we issued 80,000 shares of common stock as commitment shares, which included 5,000 commitment shares issued on a pro rata basis for the initial $2 million purchase.   

 

On June 30, 2023, we provided notice to Lincoln Park of our election to terminate the Purchase Agreement. Following such termination, which was effective July 3, 2023, we may not sell any further shares of our common stock under the Purchase Agreement. As of the effective date of termination of the Purchase Agreement, we had not sold any common stock to Lincoln Park under the Purchase Agreement other than the Initial Purchase.

 

(8)	Share-Based Compensation

 

The share-based compensation expense is recorded in research and development, and selling, general and administrative expenses based on the employee's or non-employee’s respective function. No share-based compensation was capitalized during the periods presented. Share-based compensation expense for the three and nine months ended September 30, 2023 and 2022 was recorded as follows (in thousands):

 

		Three months ended								Nine months ended
		September 30,								September 30,
		2023				2022				2023				2022
Research and development		$	118			$	132			$	391			$	389
Selling, general and administrative			133				148				455				514
Total share-based compensation		$	251			$	280			$	846			$	903

 

The following table summarizes the activity of stock options and related information:

 

		Options outstanding
		Number of shares				Weighted average exercise price				Weighted average remaining contractual term (years)				Aggregate intrinsic value (in thousands)
Balance, December 31, 2022			2,182,708			$	4.04				7.5			$	343
Stock options granted			543,513				1.69
Stock options exercised			(199	)			1.49
Stock options forfeited			(275,662	)			2.15
Stock options expired			(6,349	)			16.09
Balance, September 30, 2023			2,444,011			$	3.70				6.7			$	—
Exercisable, September 30, 2023			1,558,484			$	4.61				5.5			$	—

 

Unrecognized share-based compensation for employee and nonemployee options granted through September 30, 2023 is approximately $1.6 million to be recognized over a remaining weighted average service period of 2.5 years.

 

 

Share-Based Compensation (RSUs)

 

The following summarizes the activity of non-vested RSUs:

 

						Weighted
						average
						grant date
		Number of				fair value
		shares				per share
Balance, December 31, 2022			21,526			$	4.33
RSUs granted			331,552				1.70
RSUs released			(241,197	)			1.93
RSUs forfeited			(111,881	)			1.70
Balance, September 30, 2023			—			$	n/a

 

RSUs vested and settled are converted into our common stock on a one-for-one basis. RSUs are generally subject to forfeiture if employment terminates prior to the release of vesting restrictions. The related compensation expense, which is based on the grant date fair value of our common stock multiplied by the number of units granted, is recognized ratably over the period during which the vesting restrictions lapse. Unrecognized share-based compensation for employee and nonemployee RSUs granted through September 30, 2023 was $0.

 

(9)	Net Loss per Share

 

Basic net loss per share is calculated by dividing the net loss by the weighted average number of shares of common stock outstanding and fully vested restricted stock units. Diluted net loss per share is computed by dividing the net loss by the weighted-average number of common share equivalents outstanding for the period determined using the treasury-stock method. Common stock equivalents are comprised of unvested restricted stock units, warrants to purchase common stock and options outstanding under the stock option plans. For all periods presented, there is no difference in the number of shares used to calculate basic and diluted shares outstanding since the effects of potentially dilutive securities are antidilutive due to the net loss position.

 

The following outstanding common stock equivalents were excluded from the computation of diluted net loss per share for the periods presented because including them would have been antidilutive: 

 

		September 30,
		2023				2022
Stock options to purchase common stock			2,444,011				2,148,732
Unvested restricted stock units			—				2,734
Common stock warrants			2,424,724				2,424,724
Total			4,868,735				4,576,190

 

(10)	Income Taxes

 

During the three and nine months ended September 30, 2023 and 2022, there was no income tax expense or benefit for federal or state income taxes in the accompanying condensed consolidated statements of operations due to our net loss and a full valuation allowance on the resulting deferred tax assets.

 

As of September 30, 2023, we retain a full valuation allowance on our deferred tax assets in all jurisdictions. The realization of our deferred tax assets depends primarily on our ability to generate future taxable income which is uncertain. We do not believe that our deferred tax assets are realizable on a more-likely-than-not basis; therefore, the net deferred tax assets have been fully offset by a valuation allowance.   

 

(11)	Related Party Transactions

 

On April 9, 2020, we entered into a Litigation Funding Agreement (Funding Agreement) with BSLF, L.L.C. (Funder), an entity owned and controlled by Andrew Blank, Chair of BioCardia’s board of directors, for the purpose of funding our legal proceedings and any and all claims, actions and/or proceedings relating to or arising from the case captioned Boston Scientific Corp., et al., v. BioCardia Inc., Case No. 3:19-05645-VC, U.S.D.C., N. D. Cal (the Litigation). On April 12, 2021, all parties to the Litigation entered into a confidential settlement agreement and all claims were dismissed.

 

 

In March 2022, we entered into confidential settlement agreements with our litigation service providers and the Funder to terminate the Funding Agreement and conclude all remaining matters thereunder (the Litigation Funding Settlement). Under the terms of the Litigation Funding Settlement, litigation and corporate counsel provided credits and refunds of legal fees totaling $688,000, which offset the amounts owed to us by the Funder under the Funding Agreement, and provided up to $300,000 in future discounts on legal services. As a result of the Litigation Funding Settlement, we will remit the discounts, as received, to the Funder on a quarterly basis. During the three and nine months ended September 30, 2023, we received discounts totaling $57,000 and $110,000, respectively. During the three and nine months ended September 30, 2022, we received discounts totaling $14,000 and $61,000, respectively. As of September 30, 2023 and December 31, 2022, we recorded a related party payable for discounts owed to the Funder in accrued expenses and other current liabilities of $56,000 and $18,000, respectively. As of September 30, 2023, up to $112,000 of future potential discounts are due to the Funder.

 

(12)	Contingencies and Uncertainties

 

Contingencies - We may be subject to various claims, complaints, and legal actions that arise from time to time in the normal course of business. Management is not aware of any current legal or administrative proceedings that are likely to have an adverse effect on our business, financial position, results of operations, or cash flows.

 

Uncertainties - The results for the three and nine months ended September 30, 2023 are not necessarily indicative of the results to be expected for the year ending December 31, 2023 or for any other interim period or for any other future year, particularly in light of COVID-19 and its impact on domestic and global economies. Governmental and business reactions to the pandemic, and resulting economic disruptions, have the potential to materially impact our business and influence our business decisions. While the impact of COVID-19 did not have a material adverse effect on our financial position or results of operations for the periods presented, our future assessment of the magnitude and duration of COVID-19 and related factors, could result in material impacts to our financial statements in future reporting periods.

 

 

ITEM 2.

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

 

The following discussion of our financial condition and results of operations should be read in conjunction with our financial statements and related notes included elsewhere in this Quarterly Report on Form 10-Q. This discussion contains certain 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. Any and all statements contained in this Quarterly Report that are not statements of historical fact may be deemed forward-looking statements. Terms such as “may,” “might,” “would,” “should,” “could,” “project,” “estimate,” “pro-forma,” “predict,” “potential,” “strategy,” “anticipate,” “attempt,” “develop,” “plan,” “help,” “believe,” “continue,” “intend,” “expect,” “future” and terms of similar import (including the negative of any of the foregoing) may be intended to identify forward-looking statements. However, not all forward-looking statements may contain one or more of these identifying terms. Forward-looking statements in this Quarterly Report may include, without limitation, statements regarding (i) the plans and objectives of management for future operations, including plans or objectives relating to the development of our cell therapy systems and our clinical trials, (ii) a projection of income (including income/loss), earnings (including earnings/loss) per share, capital expenditures, dividends, capital structure or other financial items, (iii) our ability to raise additional capital, (iv) our future financial performance, including any such statement contained in a discussion and analysis of financial condition by management or in the results of operations included pursuant to the rules and regulations of the SEC and (v) the assumptions underlying or relating to any statement described in points (i) – (iv) above. Our actual results may differ materially from those discussed below. Factors that could cause or contribute to such differences include, but are not limited to, those identified below and elsewhere in this Quarterly Report on Form 10-Q, and those listed in our Annual Report on Form 10-K for the year ended December 31, 2022, which is incorporated by reference herein. Historical results are not necessarily indicative of future results. Except as required by law, we undertake no obligation to update publicly any forward-looking statements for any reason after the date of this Quarterly Report on Form 10-Q to conform these statements to actual results or to changes in our expectations.    

 

Overview

 

We are a clinical-stage company developing cellular and cell-derived therapeutics for the treatment of cardiovascular and pulmonary diseases with significant unmet medical needs. We are advancing two cell therapy platforms derived from bone marrow in clinical trials today. Our CardiAMP® autologous mononuclear cell therapy platform is being advanced for two clinical indications: ischemic heart failure with reduced ejection fraction (HFrEF) and refractory angina resulting from chronic myocardial ischemia (CMI). Our neurokinin-1 receptor positive (NK1R+) allogeneic mesenchymal stem cell (MSC) therapy platform is being advanced as an “off the shelf” cell therapy for two clinical indications: the treatment of ischemic HFrEF and for acute respiratory distress syndrome (ARDS).

 

Our autologous CardiAMP and our allogeneic NK1R+ cell therapies intended for cardiac indications of HFrEF and CMI are enabled by our Helix™ minimally invasive intramyocardial therapeutic delivery platform. We selectively partner this therapeutic delivery platform with others seeking to develop biotherapeutic interventions for local delivery to the heart.

 

To date, we have devoted substantially all of our resources to research and development efforts relating to our therapeutic candidates and biotherapeutic delivery systems, including conducting clinical trials, developing manufacturing and sales capabilities, in-licensing related intellectual property, providing general and administrative support for these operations and protecting our intellectual property. We have also generated modest revenues from sales of our approved products. We have funded our operations primarily through the sales of equity and convertible debt securities, and certain government and private grants.

 

CardiAMP Autologous Cell Therapy for Ischemic Heart Failure (BCDA-01) and for Chronic Myocardial Ischemia (BCDA-02)

 

The CardiAMP Heart Failure Trial is an ongoing randomized, double-blinded, controlled clinical trial in the United States that was approved for up to 260 patients at up to 40 clinical centers. On July 21, 2023, the study’s Data Safety Monitoring Board (DSMB) recommended that enrollment in the trial be paused “based on an analysis of trial data and the primary FS composite endpoint assessment, unrelated to any emergent safety events, and pending an outcome analysis of patients currently completing one year follow-up as well as the interim results of newly enrolled patients completing their imminently scheduled treatment.”  Further, the DSMB recommended “the blind not be broken to protect the integrity of the outcomes yet to be collected and to ensure the study may be restarted without compromise after completion of the one-year data analysis.”

 

The Company has determined that it would be difficult, if not impossible, to re-start the trial as currently designed after pausing and completing the one-year data analysis in the fourth quarter of 2024. The DSMB interim review was based on available data for 132 procedures involving 111 randomized patients and included a review of the first interim statistical analysis as described in the adaptive design statistical analysis plan.  During the third quarter of 2023, BioCardia worked with the study’s DSMB to unblind a small committee within the Company to review the closed session DSMB meeting report of interim study results to better understand the rationale behind their recommendation. After reviewing the interim dataset as presented to the DSMB, along with the finding that the primary endpoint at one year was unlikely to be met with the current study design, management agrees with the DSMB’s recommendation to follow patients through one-year follow-up, while maintaining the study double-blind in order to protect the integrity of the outcomes yet to be collected for the one-year data analysis anticipated late next year.

 

 

The pre-specified statistical analysis plan provided that the DSMB would utilize a composite endpoint that considered heart death equivalents, major adverse cardiac and cerebrovascular events (MACCE), and six-minute walk distance at 12 months. The pre-specified interim analysis did not impute data for patients who had not performed the six-minute walk, either because they were not yet at the one-year follow-up date or because of orthopedic or other health issues as will be done in the final statistical analysis per plan.  The pre-specified interim statistical analysis also did not include other endpoints that are part of the trial, including assessment of patient status using the New York Heart Association classification, quality of life as measured using the Minnesota Living with Heart Failure questionnaire, and heart function assessments such as left ventricular ejection fraction.

 

In the interim data from the July DSMB review, 102 randomized patients in the CardiAMP Cell Therapy trial followed for up to 24 months showed a 37% relative risk reduction of cardiac death equivalents and an 18% relative risk reduction in major adverse cardiac and cerebrovascular events (MACCE). In addition, the available interim data showed that for an important subset of patients who presented at the screening/baseline visit with higher levels of NT-proBNP, a well-established biomarker of increased heart failure and stress to the heart, the reduction in heart death equivalent and MACCE were even greater. In patients with NT-pro BNP levels greater than 500 pg/ml at baseline, an analysis of all available data up to two years shows improvements over controls including a 59% relative risk reduction in mortality and a 54% relative risk reduction of MACCE.  Further, all clinical outcomes included in this subset analysis favored cell therapy including: improved quality-of-life as measured using the Minnesota Living with Heart Failure Questionnaire, reduction of NT-proBNP levels, greater Six Minute Walk distance, and improved left ventricular ejection fraction, left ventricular end systolic volume and left ventricular end diastolic volume. Both the reduced heart death equivalents (p=.028) and improved quality of life as measured using the Minnesota Living with Heart Failure Questionnaire (p=0.016) demonstrated statistical significance favoring therapy.

 

On October 11, 2023, after an additional four patients were randomized subsequent to the DSMB review, the Company announced completion of enrollment in the CardiAMP Cell Therapy Heart Failure Trial and initiation of a discussion with the FDA on a second pivotal study protocol adapted for the responders in the initial trial with the objective of gaining FDA marketing approval. In the completed trial, 115 patients were randomized, with an additional 10 patients treated in the roll-in phase and 11 more crossed-over to receive therapy after completing two-year follow-up.

 

BioCardia has submitted a proposed CardiAMP Heart Failure II study protocol for FDA review, which includes an eligibility requirement that enrolled patients have an NT-proBNP at baseline greater than 500 pg/ml. The proposed primary endpoint is also modified from the primary endpoint in the currently ongoing study. The new endpoint proposed is a similar hierarchical composite endpoint consisting of all-cause death, the cardiac death equivalents of heart transplant and left ventricular assist device (LVAD) implantation, heart failure hospitalizations, worsening heart failure events treated as an outpatient, and change in quality-of-life with a follow-up duration ranging from a minimum of 12 to a maximum of 24 months. This new endpoint is similar to ongoing clinical studies of other therapies for this indication that also utilize NT-proBNP threshold study eligibility criterion. Statistical calculations for this clinical study design support that a modestly sized clinical trial of 150 patients, based on the interim results, would achieve 90% power (probability of success) if the data is representative of the population. Additional proposed modifications from the CardiAMP Cell Therapy Heart Failure Trial design include elements to simplify clinical site execution logistics and reduce the cost of performing the study. Should this study protocol be approved by the FDA and advanced by BioCardia, it may be possible to significantly offset clinical costs with the Medicare reimbursement of up to $20,000 now in place for both the control and treatment arms of this investigational therapeutic study.

 

In June 2023, we completed our submission of the CardiAMP Cell Therapy System to Japan’s Pharmaceutical and Medical Device Agency (PMDA) towards approval for the indication of ischemic heart failure with reduced ejection fraction (HFrEF) based on existing safety and efficacy data. In July, the formal consultation was reviewed and accepted by the PMDA for the consultation with some clarifying questions which have been addressed. In October, the Company provided an update at PMDA’s requests on the current Phase III study status in the United States, and our formal consultation is scheduled for November 21, 2023. Subsequent interactions and consultations with the PMDA are expected. The CardiAMP Cell Therapy System has potential to be the first minimally invasive catheter-based cell therapy available in Japan.

 

The CardiAMP Chronic Myocardial Ischemia Trial is a Phase III, multi-center, randomized, double-blinded, controlled study of up to 343 patients at up to 40 clinical sites. The Phase III pivotal trial is designed to provide the primary support for the safety and efficacy of the CardiAMP Cell Therapy System for the indication of chronic myocardial ischemia (BCDA-02). This therapeutic approach uses many of the same novel aspects as the CardiAMP Heart Failure Trial and is expected to leverage our experience and investment in the heart failure trial. The trial has been activated at two clinical sites and four patients have been treated. We are working to complete the roll-in cohort of five patients in the fourth quarter of 2023 and begin the randomized phase of the trial.

 

The Department of Health and Human Services Centers for Medicare and Medicaid Services (CMS) has designated that both of our CardiAMP pivotal trials qualify for Medicare national coverage at up to $20,000 per patient. The covered costs under Medicare include patient screening, the CardiAMP Cell Therapy System and procedure, and clinical follow-up at one and two years after the procedure. Private insurance plans covering 50 million insured Americans follow the CMS reimbursement policy and are similarly anticipated to cover these costs. This coverage significantly reduces our cost of conducting our trials.

 

 

Allogeneic MSC Cell Therapy Platform

 

Our second therapeutic platform is our investigational culture expanded bone marrow derived allogeneic, Neurokinin-1 Receptor Positive Mesenchymal Stem Cells (NK1R+ MSC) for which the FDA approved two INDs in 2022. This “off the shelf” cell therapy is being advanced for ischemic heart failure of HFrEF (BCDA-03) and acute respiratory distress (BCDA-04). Variations of this allogeneic therapy may have the potential for numerous other therapeutic applications. We manufacture these cells for clinical studies at our manufacturing facility in Sunnyvale which was certified for manufacturing in 2022. Clinical grade cells are available for both indications being pursued today.

 

CardiALLO Allogeneic MSC for Heart Failure

 

In December 2022, the FDA approved our Investigational New Drug (IND) application to initiate a first-in-human Phase I/II 69 patient clinical trial to deliver these allogeneic cells for the treatment of HFrEF (BCDA-03). The trial is designed for patients with New York Heart Association Class II and III ischemic heart failure with ischemic HFrEF whose own cell composition makes them ineligible for the Company’s Phase III CardiAMP® Heart Failure Trial studying autologous cell therapy. Efficiencies are expected in conducting this trial as patients who have been screened but are ineligible for enrollment in the CardiAMP Heart Failure trial would likely be eligible for this allogeneic trial. Clinical grade allogeneic cells have been manufactured and are ready for use and the cells will be delivered by our proprietary delivery system. Our first clinical center has finalized its clinical study agreement and received conditional IRB approval. Cellular preparation test runs at the clinical site and the site activation visit have been completed and we expect to begin enrolling patients in the fourth quarter of 2023.

 

We intend to fund later development through nondilutive grant applications and partnering.  We are preparing a grant application with the California Institute of Regenerative Medicine (CIRM) to support this Phase I/II clinical program based on the combination product candidate of the CardiALLO hMSC, developed and manufactured in our California facility and delivered with our Helix transendocardial biotherapeutic delivery system, also developed and manufactured in our California facility.  Success in this grant application has the potential to offset 70% of the costs of this therapeutic development program.

 

This study follows our three previous cosponsored clinical trials with MSCs in ischemic heart failure: the Transendocardial Autologous Cells (hMSC or hBMC) in Ischemic Heart Failure Trial (TAC-HFT, NCT00768066), the Percutaneous Stem Cell Injection Delivery Effects on Neomyogenesis Pilot Study (POSEIDON, NCT01087996), and the Transendocardial Stem Cell Injection Delivery Effects on Neomyogenesis Study (TRIDENT, NCT 02013674). In all three of these trials, with 93 patients treated with culture expanded MSCs using the Helix delivery system, there were no treatment emergent serious adverse events. Results showed compelling early signals for benefit that the CardiALLO trial is expected to build upon.

 

Recently reported large studies using MSC in heart failure by other groups have shown compelling benefits in patients who have evidence of inflammation before receiving treatment. There are active considerations of testing this hypothesis prospectively in the randomized stage of the CardiALLO study ahead.

 

Allogeneic MSC for Respiratory Disease

 

In April 2022, the FDA approved the Company’s Investigational New Drug (IND) for a Phase I/II trial for the use of this allogeneic cell therapy for Acute Respiratory Distress Syndrome (ARDS) caused by COVID-19 (BCDA-04). This allogeneic cell therapy trial has been deprioritized to focus current financial resources on other programs. This decision was based on the greatly reduced population of patients with acute respiratory distress secondary to COVID. When resources permit, we intend to expand the current indication to a broader ARDS population not requiring COVID as well as pursue other pulmonary indications.

 

Helix™ Biotherapeutic Delivery System

 

BioCardia’s Helix Biotherapeutic Delivery System (Helix) delivers therapeutics into the heart muscle with a penetrating helical needle from within the heart. It enables local delivery of cell and gene-based therapies, including BioCardia’s own cell therapies. It remains the safest, easiest to use, and most efficient means for the delivery of cells, genes, and proteins to the heart muscle. The delivery platform includes proprietary approved steerable guide systems, approved delivery catheters, and investigational imaging navigation.

 

Our Helix team has active discussions with current and prospective partners regarding programs utilizing the Helix platform. We expect to finalize up to two licensing and development relationships during the fourth quarter of this year. These relationships are intended to share the costs of ongoing maintenance of and advances in the valuable enabling platform, and for BioCardia shareholders to benefit from the future success of these partnered programs.

 

In September, CellProthera announced completion of enrollment in their Phase I/II cell therapy study in post-myocardial infarction.   We look forward to their results ahead.

 

COVID-19 Considerations

 

As a result of the COVID-19 pandemic, we have experienced significant disruption to our business and delays in our development programs and regulatory and commercialization timelines, including adverse impact to our operations at certain clinical sites involved in our ongoing clinical studies. The COVID-19 pandemic could continue to adversely affect our business, results of operations, financial condition and/or liquidity in the future. These adverse impacts could include delayed or slowed enrollment of our, or our collaborators’, planned or ongoing clinical trials, delayed or cancelled clinical site initiations, delayed regulatory review for regulatory approvals, delayed commercialization of one or more of our product candidates, if approved, and workforce shortages. Our production capabilities, or those of our partners or suppliers, and our supply chains could also be adversely impacted.

 

 

Additionally, while the potential continuing economic impact brought by, and the duration of, the COVID-19 pandemic is difficult to assess or predict, the impact of COVID-19 and related responses of governments, business and other institutions on the global financial markets may reduce the Company’s ability to access capital, which could negatively impact our liquidity and ability to raise the capital to complete our preclinical and clinical studies on a timely basis, or at all. In addition, a recession, market correction or depression resulting from the COVID-19 pandemic or the response to it could materially affect our business and the value of our common stock. 

 

Financial Overview

 

Revenue

 

We currently have a portfolio of enabling and delivery products, from which we have generated modest revenue. Net product revenues include commercial sales of our AVANCE steerable introducer and collaboration agreement revenues include revenue from partnering agreements with corporate and academic institutions. Under these partnering agreements, we provide our Helix biotherapeutic delivery system and customer training and support for use in preclinical and clinical studies.

 

Research and Development Expenses

 

Our research and development expenses consist primarily of:

 

•

salaries and related overhead expenses, which include share-based compensation and benefits for personnel in research and development functions;

 

•

fees paid to consultants and contract research organizations, or CROs, including in connection with our preclinical studies and clinical trials and other related clinical trial fees, such as for investigator grants, patient screening, laboratory work, clinical trial management and statistical compilation and analysis;

 

•

costs related to acquiring and manufacturing clinical trial materials;

 

•

costs related to compliance with regulatory requirements; and

 

•

payments related to licensed products and technologies.

 

We expense all research and development costs in the periods in which they are incurred. Costs for certain development activities are recognized based on an evaluation of the progress of completion of specific tasks using information and data provided to us by our vendors and clinical sites. Nonrefundable advance payments for goods or services to be received in future periods for use in research and development activities are deferred and capitalized. The capitalized amounts are then expensed as the related goods are delivered and the services are received. 

 

We plan to increase our research and development expenses for the foreseeable future as we continue the pivotal CardiAMP autologous cell therapy trials in heart failure and chronic myocardial ischemia, and begin our allogeneic cell therapy trials in heart failure and acute respiratory distress syndrome. We typically use our employee and infrastructure resources across multiple research and development programs, and accordingly, we have not historically allocated resources specifically to our individual programs. There are also significant synergies between these programs.

 

Selling, General and Administrative Expenses

 

Selling, general and administrative expenses consist primarily of salaries and related costs for employees in executive, finance and administration, sales, corporate development and administrative support functions, including share-based compensation expenses and benefits. Other selling, general and administrative expenses include sales commissions, rent, accounting and legal services, obtaining and maintaining patents, the cost of consultants, occupancy costs, insurance premiums and information systems costs.

 

Other Income (Expense)

 

Other income and expense consist primarily of interest income we earn on our cash and cash equivalents. 

 

 

Critical Accounting Policies and Estimates

 

Our management’s discussion and analysis of our financial condition and results of operations is based on our financial statements, which we have prepared in accordance with U.S. GAAP. The preparation of our financial statements requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities. We evaluate these estimates and judgments on an ongoing basis. We base our estimates on historical experience and on various judgements that we believe are reasonable under the circumstances, the results of which form the basis for making judgments about the carrying value of assets and liabilities that are not clear from other sources. Actual results may differ from these estimates under different assumptions or conditions. 

 

We define our critical accounting policies as those that require us to make subjective estimates and judgments about matters that are uncertain and are likely to have a material impact on our financial condition and results of operations as well as the specific manner in which we apply those principles. Our critical accounting policies are described in Item 7 in our Annual Report on Form 10-K for the year ended December 31, 2022, filed with the SEC on March 29, 2023, which is incorporated by reference herein. 

 

Results of Operations

 

Comparison of Three and Nine Months Ended September 30, 2023 and 2022

 

The following table shows our results of operations for the three and nine months ended September 30, 2023 and 2022 (in thousands): 

 

		Three months ended September 30,								Nine months ended September 30,
		2023				2022				2023				2022
Revenue:
Net product revenue		$	—			$	2			$	—			$	3
Collaboration agreement revenue			357				210				464				1,243
Total revenue			357				212				464				1,246
Costs and expenses:
Research and development			1,872				2,144				6,570				6,634
Selling, general and administrative			1,083				1,128				3,454				3,495
Total costs and expenses			2,955				3,272				10,024				10,129
Operating loss			(2,598	)			(3,060	)			(9,560	)			(8,883	)
Other income (expense):
Total other income, net			24				3				61				4
Net loss		$	(2,574	)		$	(3,057	)		$	(9,499	)		$	(8,879	)

 

Revenue. Revenue increased to $357,000 in the three months ended September 30, 2023 as compared to $212,000 in the three months ended September 30, 2022, and decreased to $464,000 in the nine months ended September 30, 2023 as compared to $1,246,000 in the nine months ended September 30, 2022 primarily due to the timing of revenue from new and existing collaborative partners coupled with the fulfilment of deliverables and completion of collaborative agreements. The amount and timing of collaboration revenues is largely dependent on our partners’ development activities and may be inconsistent and create significant quarter-to-quarter variation in our revenues.

 

Research and Development Expenses. Research and development expenses decreased to $1,872,000 in the three months ended September 30, 2023 as compared to $2,144,000 in the three months ended September 30, 2022, primarily due to recent pause of the CardiAMP Cell Therapy Heart Failure Trial and its subsequent completion of enrollment coupled with reduced personnel expenses in clinical and related supporting functions. Research and development expenses decreased moderately to $6,570,000 in the nine months ended September 30, 2023 as compared to $6,634,000 in the nine months ended September 30, 2022, due primarily to the changes discussed above.  

 

Selling, General and Administrative Expenses. Selling, general and administrative expenses decreased moderately to $1,083,000 in the three months ended September 30, 2023 as compared to $1,128,000 in three months ended September 30, 2022, and to $3,454,000 in the nine months ended September 30, 2023 as compared to $3,495,000 in the nine months ended September 30, 2022.

 

Liquidity and Capital Resources

 

We have incurred net losses each year since our inception and as of September 30, 2023, we had an accumulated deficit of approximately $150.1 million. We anticipate that we will continue to incur net losses for the next several years.

 

We have funded our operations principally through the sales of equity and convertible debt securities. As of September 30, 2023, we had cash and cash equivalents of approximately $1.8 million. 

 

 

The following table shows a summary of our cash flows for the periods indicated (in thousands): 

 

		Nine months ended September 30,
		2023				2022
Net cash provided by (used in):
Operating activities		$	(8,123	)		$	(7,564	)
Investing activities			(12	)			(68	)
Financing activities			2,607				1,427
Net decrease in cash and cash equivalents		$	(5,528	)		$	(6,205	)

 

Cash Flows from Operating Activities. Cash flow from operating activities for any period is subject to many variables including the timing of cash receipts, payments to suppliers, and vendor payment terms, and was relatively consistent during the periods presented.

 

Cash Flows from Investing Activities. Net cash used in investing activities of $12,000 and $68,000 during the nine months ended September 30, 2023 and 2022 respectively, consisted of purchases of property and equipment, primarily lab and office equipment.

 

Cash Flows from Financing Activities. Net cash provided by financing activities of $2,607,000 and $1,427,000 during the nine months ended September 30, 2023 and 2022, respectively, related primarily to proceeds from the sale of common stock. 

 

June 2023 Financing - On June 21, 2023, we sold to certain existing investors and other institutional investors, as well as certain of our directors and officers 1,133,141 shares of our common stock in a registered direct offering (the Offering) at an offering price of $2.336 per share. Certain of our directors and executive officers purchased an aggregate of 203,337 of such shares. The gross proceeds of the June 2023 Offering were approximately $2.6 million, with associated issuance costs of approximately $194,000.

 

Cantor Fitzgerald ATM Offering

 

On April 12, 2022, we entered into a sales agreement (the Sales Agreement) with Cantor Fitzgerald & Co. (Cantor) as the sales agent, pursuant to which we may offer and sell, from time to time, through Cantor, shares of common stock having an aggregate offering price of up to $10.5 million (the ATM Offering). We are not obligated to sell any common stock shares pursuant to the Sales Agreement. Under the terms of the Sales Agreement, we pay Cantor a commission of 3% of the aggregate proceeds from the sale of shares and reimburse certain legal fees. The prospectus supplement covering the ATM Offering expired in conjunction with the expiration of the corresponding registration statement on October 20, 2023. We may file a new prospectus supplement covering certain sales under the ATM Offering under our replacement registration statement on Form S-3, once effective, subject to applicable securities laws.

 

During the three and nine months ended September 30, 2023, we sold 33,282 and 168,122 shares of common stock under the ATM Offering at then-market prices for total gross proceeds of approximately $92,000 and $395,000, with net issuance costs of approximately $48,000 and $90,000, respectively. During the three months ended September 30, 2022, we sold 66,704 shares of common stock under the ATM Offering at then-market prices for total gross proceeds of $139,000, with a net refund of issuance costs of $1,000. During the nine months ended September 30, 2022, we sold 641,704 shares of common stock under the ATM Offering at then-market prices for total gross proceeds of approximately $1.7 million, with associated issuance costs of $231,000.

 

Lincoln Park Capital Stock Purchase Agreement

 

On March 29, 2021, we entered into a purchase agreement with Lincoln Park Capital Fund, LLC (Lincoln Park) (Purchase Agreement) and a registration rights agreement (Registration Rights Agreement), pursuant to which we have the right to sell to Lincoln Park shares of our common stock having an aggregate value of up to $20 million, subject to certain limitations and conditions in the Purchase Agreement.

 

Pursuant to the Purchase Agreement in March, 2021, Lincoln Park purchased 373,832 shares of common stock, at a price of $5.35 per share, for a total gross purchase price of $2 million (Initial Purchase) and we issued 80,000 shares of common stock as commitment shares, which included 5,000 commitment shares issued on a pro rata basis for the initial $2 million purchase.

 

On June 30, 2023, we provided notice to Lincoln Park of our election to terminate the Purchase Agreement. Following such termination, which was effective July 3, 2023, we may not sell any further shares of our common stock under the Purchase Agreement. As of the effective date of termination of the Purchase Agreement, we had not sold any common stock to Lincoln Park under the Purchase Agreement other than the Initial Purchase.

 

 

Future Funding Requirements

 

To date, we have generated modest revenues. We do not know when, or if, we will generate any revenue from our development stage biotherapeutic programs. We do not expect to generate any revenue from sales of our autologous and allogeneic cell therapy candidates unless and until we obtain regulatory approval. At the same time, we expect our expenses to increase in connection with our ongoing development activities, particularly as we continue the research, development and clinical trials of, and seek regulatory approval for, our therapeutic candidates. In addition, subject to obtaining regulatory approval for any of our therapeutic candidates and companion diagnostic, we expect to incur significant commercialization expenses for product sales, marketing, manufacturing and distribution. We anticipate that we will need additional funding in connection with our continuing operations.      

 

Based upon our current operating plan, we believe that the cash and cash equivalents of $1.8 million as of September 30, 2023 are not sufficient to fund our planned expenditures and meet our obligations beyond January 2024. In order to continue development of our therapeutic candidates beyond January 2024, we plan to raise additional capital, potentially including non-dilutive collaboration and licensing arrangements, debt or equity financing, or a combination from these sources. We have based our estimates on assumptions that may prove to be wrong, and we may use our available capital resources sooner than we currently expect. Because of the numerous risks and uncertainties associated with the development and commercialization of our therapeutic candidates, including the recent determination by the DSMB to pause our CardiAMP Cell Therapy Heart Failure Trial pending the one-year follow-up outcomes analysis for patients that have been treated and those that have been enrolled but not yet treated, we are unable to estimate the amounts of increased capital outlays and operating expenditures necessary to complete the development of our therapeutic candidates.

 

Our future capital requirements will depend on many factors, including:

 

•

the progress, costs, results and timing of our autologous CardiAMP Cell Therapy System and allogeneic Neurokinin-1 Receptor Positive clinical trials and related development programs;

 

•

FDA acceptance of our autologous CardiAMP Cell Therapy System and allogeneic Neurokinin-1 Receptor Positive therapies for heart failure and for other potential indications;

 

•

the outcome, costs and timing of seeking and obtaining FDA and any other regulatory approvals;

 

•

the costs associated with securing, establishing and maintaining commercialization and manufacturing capabilities;

 

•

the number and characteristics of product candidates that we pursue, including our product candidates in preclinical development;

 

•

the ability of our product candidates to progress through clinical development successfully;

 

•

our need to expand our research and development activities;

 

•

the costs of acquiring, licensing, or investing in businesses, products, product candidates and technologies;

 

•

our ability to maintain, expand and defend the scope of our intellectual property portfolio, including the amount and timing of any payments we may be required to make, or that we may receive, in connection with the licensing, filing, prosecution, defense and enforcement of any patents or other intellectual property rights;

 

•

the general and administrative expenses related to being a public company;

 

•

our need and ability to hire additional management and scientific, medical and sales personnel;

 

•

the effect of competing technological and market developments;

 

•

our need to implement additional internal systems and infrastructure, including financial and reporting systems; and

 

•

the cost of the impact from the COVID-19 pandemic.

 

 

Until such time that we can generate meaningful revenue from the sales of approved therapies and products, if ever, we expect to finance our operating activities through public or private equity or debt financings, government or other third-party funding, marketing and distribution arrangements, and other collaborations, strategic alliances and licensing arrangements or a combination of these approaches. To the extent that we raise additional capital through the sale of equity or convertible debt securities, the ownership interests of our common stockholders will be diluted, and the terms of these securities may include liquidation or other preferences that adversely affect the rights of our common stockholders. Debt financing, if available, may involve agreements that include conversion discounts or covenants limiting or restricting our ability to take specific actions, such as incurring debt, making capital expenditures or declaring dividends. If we raise additional funds through government or other third-party funding, marketing and distribution arrangements or other collaborations, or strategic alliances or licensing arrangements with third parties, we may have to relinquish valuable rights to our technologies, future revenue streams, research programs, products, or therapeutic candidates or to grant licenses on terms that may not be favorable to us.

 

We have prepared our condensed consolidated financial statements as of September 30, 2023 on the basis that we will continue as a going concern, which contemplates the realization of assets and satisfaction of liabilities in the ordinary course of business. Due to the factors described above, there is substantial doubt about our ability to continue as a going concern within one year after the date these financial statements are issued. Our ability to continue as a going concern will depend, in a large part, on our ability to raise additional capital. If adequate funds are not available, we may be required to further reduce operating expenses, delay or reduce the scope of our product development programs, obtain funds through arrangements with others that may require us to relinquish rights to certain of our technologies or products that we would otherwise seek to develop or commercialize ourselves, or cease operations. While we believe in the viability of our strategy to raise additional funds, there can be no assurances that we will be able to obtain additional capital on acceptable terms and in the amounts necessary to fully fund our operating needs.

 

The condensed consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty. If we are unable to continue as a going concern, we may be forced to liquidate assets. In such a scenario, the values received for assets in liquidation or dissolution could be significantly lower than the values reflected in our condensed consolidated financial statements. 

 

Off-Balance Sheet Arrangements

 

During the periods presented, we did not have, nor do we currently have, any off-balance sheet arrangements as defined under the rules of the Securities and Exchange Commission.

 

Recent Accounting Pronouncements

 

See Note 2 of our notes to the condensed consolidated financial statements included elsewhere in this Quarterly Report on Form 10-Q for information regarding recent accounting pronouncements that are of significance or potential significance to us.

 

 

ITEM 3.

QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

 

There have been no material changes in our market risks during the three months ended September 30, 2023.

 

Our exposure to market risk is currently limited to our cash and cash equivalents, all of which have maturities of less than three months. The goals of our investment policy are preservation of capital, maintenance of liquidity needs, and fiduciary control of cash and investments. We also seek to maximize income from our investments without assuming significant risk or departing from our investment policy. We currently do not hedge interest rate exposure. Because of the short-term nature of our cash equivalents, we do not believe that an increase in market rates would have a material negative impact on the value of our portfolio.

 

Interest Rate Risk

 

As of September 30, 2023, based on current interest rates and total borrowings outstanding, a hypothetical 100 basis point increase or decrease in interest rates would have an immaterial pre-tax impact on our results of operations.

 

Foreign Currency Exchange Risks

 

We are a U.S. entity and our functional currency is the U.S. dollar. The vast majority of our revenues were derived from sales in the United States. We have business transactions in foreign currencies; however, we believe we do not have significant exposure to risk from changes in foreign currency exchange rates at this time. We do not currently engage in hedging or similar transactions to reduce our foreign currency risks. We will continue to monitor and evaluate our internal processes relating to foreign currency exchange, including the potential use of hedging strategies.

 

 

ITEM 4.

CONTROLS AND PROCEDURES

 

Evaluation of Disclosure Controls and Procedures

 

In connection with the preparation of this Quarterly Report on Form 10-Q, as of September 30, 2023, an evaluation was performed under the supervision and with the participation of our management, including the Chief Executive Officer and Chief Financial Officer, of the effectiveness of the design and operation of our disclosure controls and procedures (as defined in Rule 13a-15(e) under the Exchange Act). Based on that evaluation, our Chief Executive Officer and our Chief Financial Officer have concluded that, as of September 30, 2023, our disclosure controls and procedures were, in design and operation, effective at a reasonable assurance level.

 

Changes in Internal Control over Financial Reporting

 

There were no changes to our internal control over financial reporting identified in connection with the evaluation required by rule 13a-15(d) and 15d-15(d) of the Exchange Act that occurred during the three months ended September 30, 2023 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

 

 

PART II. OTHER INFORMATION

 

ITEM 1.

LEGAL PROCEEDINGS

 

The Company may be subject to various claims, complaints, and legal actions that arise from time to time in the normal course of business. Management does not believe that the Company is party to any current pending legal proceedings. There can be no assurance that existing or future legal proceedings arising in the ordinary course of business or otherwise will not have a material adverse effect on the Company’s business, financial position, results of operations, or cash flows.

 

ITEM 1A.

RISK FACTORS

 

In addition to the other information set forth in this report, you should carefully consider the factors discussed below and in Part I, Item 1A. Risk Factors in our Annual Report on Form 10-K for the year ended December 31, 2022 and in Part II, Item 1A. Risk Factors on our other subsequent Quarterly Reports on Form 10-Q, which could materially affect our business, financial condition, or future results, are incorporated by reference herein. The risks described in this report, our Annual Report on Form 10-K for the year ended December 31, 2022, and our Quarterly Reports on Form 10-Q filed periodically with the SEC are not the only risks facing our Company. Additional risks and uncertainties not currently known to us or that we currently deem to be immaterial may also materially adversely affect our business, financial condition or future results.  

 

If we do not regain compliance with or continue to satisfy the Nasdaq continued listing requirements, our common stock could be delisted from the Nasdaq.

 

The listing of our common stock on the Nasdaq Global Market (“Nasdaq”) is contingent on our compliance with the Nasdaq’s conditions for continued listing. We are currently not in compliance with Nasdaq listing requirements, specifically those that require us to maintain a minimum market value of listed securities of at least $35.0 million and a minimum $1.00 per share closing bid price for our common stock, and must regain compliance with such requirements on or prior to March 4, 2024 and March 11, 2024, respectively. If we are unable to regain such compliance, we will cease to be eligible to trade on Nasdaq and will likely be delisted by Nasdaq.

 

If we were to fail to meet a Nasdaq listing requirement, we may be subject to delisting by the Nasdaq. In the event our common stock is no longer listed for trading on Nasdaq, our trading volume and share price may decrease and we may experience further difficulties in raising capital, which could materially affect our operations and financial results. Further, delisting from the Nasdaq could also have other negative effects, including potential loss of confidence by partners, lenders, suppliers and employees and could also trigger various defaults under our financing arrangements and other outstanding agreements. Finally, delisting could make it harder for us to raise capital and sell securities. You may experience future dilution as a result of future equity offerings. In order to raise additional capital, we may in the future offer additional shares of our common stock or other securities convertible into or exchangeable for our common stock.

 

ITEM 2.

UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

 

None.

 

ITEM 3.

DEFAULTS UPON SENIOR SECURITIES

 

None.

 

ITEM 4.

MINE SAFETY DISCLOSURES

 

Not applicable.

 

ITEM 5.

OTHER INFORMATION

 

None.

 

 

ITEM 6.

EXHIBIT INDEX

 

Exhibit Number	Exhibit Description
3.1(1)	Amended and Restated Certificate of Incorporation, as amended May 6, 2019
3.2(2)	Amended and Restated Bylaws
31.1*	Certification of Principal Executive Officer under Section 302 of the Sarbanes-Oxley Act of 2002.
31.2*	Certification of Principal Financial Officer under Section 302 of the Sarbanes-Oxley Act of 2002.
32.1**	Certification of Principal Executive Officer Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
32.2**	Certification of Principal Financial Officer Pursuant to Rule 13a-14(b) and Section 906 of the Sarbanes-Oxley Act of 2002.

 

101.INS+	Inline XBRL Instance Document
101.SCH+	Inline XBRL Taxonomy Extension Schema Document
101.CAL+	Inline XBRL Taxonomy Extension Calculation Linkbase Document
101.DEF+	Inline XBRL Taxonomy Extension Definition Linkbase Document
101.LAB+	Inline XBRL Taxonomy Extension Label Linkbase Document
101.PRE+	Inline XBRL Taxonomy Extension Presentation Linkbase Document
104	Cover Page Interactive Data File (formatted as inline XBRL with applicable taxonomy extension information contained in Exhibits 101)

 

*	Filed herewith.
**	Furnished herewith.
+	The financial information contained in these XBRL documents is unaudited and is furnished, not filed with the Securities and Exchange Commission.
(1)	Previously filed as Exhibit 3.1 to the Form 10-Q for the quarterly period ended June 30, 2019 filed by us on August 14, 2019.
(2)	Previously filed as Exhibit 3.2 to the Current Report on Form 8-K filed by us on May 1, 2023.

 

 

SIGNATURES

 

 

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

 

		BIOCARDIA, INC. (Registrant)
Date:	November 8, 2023	By:	/s/ Peter Altman
			Peter Altman
			President and Chief Executive Officer
			(Principal Executive Officer)
Date:	November 8, 2023	By:	/s/ David McClung
			David McClung
			Chief Financial Officer
			(Principal Financial and Accounting Officer)