# BioCardia, Inc.: Form 10-Q for the period ended Sep 30, 2024

- Company: [BioCardia, Inc.](/companies/bcda.md) (CIK 925741)
- Form: 10-Q
- Filed: 2024-11-13
- Accepted by EDGAR: Nov 13, 2024, 21:05 ET
- Period: 2024-09-30
- Accession: 0001437749-24-034896
- Inline XBRL: yes
- Main document: https://www.sec.gov/Archives/edgar/data/925741/000143774924034896/bcda20240930_10q.htm
- All documents and exhibits: https://www.sec.gov/Archives/edgar/data/925741/000143774924034896/

## Figures reported in this filing

Standardized XBRL line items for the period ended 2024-09-30.

| Line item | Period | Value | XBRL concept |
| --- | --- | ---: | --- |
| Revenue | 3 months, 2024-07-01 to 2024-09-30 | $0 | us-gaap:RevenueFromContractWithCustomerIncludingAssessedTax |
| Revenue | 9 months, 2024-01-01 to 2024-09-30 | $58.0k | us-gaap:RevenueFromContractWithCustomerIncludingAssessedTax |
| Research and development | 3 months, 2024-07-01 to 2024-09-30 | $931.0k | us-gaap:ResearchAndDevelopmentExpense |
| Research and development | 9 months, 2024-01-01 to 2024-09-30 | $3.0m | us-gaap:ResearchAndDevelopmentExpense |
| Selling, general and administrative | 3 months, 2024-07-01 to 2024-09-30 | $825.0k | us-gaap:SellingGeneralAndAdministrativeExpense |
| Selling, general and administrative | 9 months, 2024-01-01 to 2024-09-30 | $2.8m | us-gaap:SellingGeneralAndAdministrativeExpense |
| Operating income | 3 months, 2024-07-01 to 2024-09-30 | −$1.8m | us-gaap:OperatingIncomeLoss |
| Operating income | 9 months, 2024-01-01 to 2024-09-30 | −$5.7m | us-gaap:OperatingIncomeLoss |
| Income tax | 3 months, 2024-07-01 to 2024-09-30 | $0 | us-gaap:IncomeTaxExpenseBenefit |
| Income tax | 9 months, 2024-01-01 to 2024-09-30 | $0 | us-gaap:IncomeTaxExpenseBenefit |
| Net income | 3 months, 2024-07-01 to 2024-09-30 | −$1.7m | us-gaap:NetIncomeLoss |
| Net income | 9 months, 2024-01-01 to 2024-09-30 | −$5.7m | us-gaap:NetIncomeLoss |
| Basic EPS | 3 months, 2024-07-01 to 2024-09-30 | −$0.61 | us-gaap:EarningsPerShareBasic |
| Basic EPS | 9 months, 2024-01-01 to 2024-09-30 | −$2.65 | us-gaap:EarningsPerShareBasic |
| Operating cash flow | 9 months, 2024-01-01 to 2024-09-30 | −$5.5m | us-gaap:NetCashProvidedByUsedInOperatingActivities |
| Capital expenditure | 9 months, 2024-01-01 to 2024-09-30 | $5.0k | us-gaap:PaymentsToAcquirePropertyPlantAndEquipment |
| Cash and equivalents | at 2024-09-30 | $4.9m | us-gaap:CashAndCashEquivalentsAtCarryingValue |
| Current assets | at 2024-09-30 | $5.1m | us-gaap:AssetsCurrent |
| Total assets | at 2024-09-30 | $6.3m | us-gaap:Assets |
| Current liabilities | at 2024-09-30 | $2.8m | us-gaap:LiabilitiesCurrent |
| Total liabilities | at 2024-09-30 | $3.5m | us-gaap:Liabilities |
| Shareholders' equity | at 2024-09-30 | $2.8m | us-gaap:StockholdersEquity |

## Management's discussion and analysis

As filed, 33,799 characters.

*You should read the following discussion and analysis of our financial condition and results of operations together with our unaudited condensed consolidated financial statements and the related notes included elsewhere in this Quarterly Report on Form 10-Q. Some of the information contained in this discussion and analysis or set forth elsewhere in this Form 10-Q, including information with respect to our plans and strategy for our business and related financing, includes forward-looking statements that involve risks and uncertainties. As a result of many factors, including those factors set forth in the sections titled “Risk Factors” and “Cautionary Note Regarding Forward-Looking Statements” in this Form 10-Q, our actual results could differ materially from the results described in or implied by the forward-looking statements contained in the following discussion and analysis.*

### 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. Our CardiAMP® autologous mononuclear cell therapy platform is being advanced clinically for two cardiac clinical indications based on the mechanism of action of treating microvascular dysfunction demonstrated by these cells in preclinical studies of enhanced microvascular density and reduced fibrosis: ischemic heart failure with reduced ejection fraction (HFrEF) and refractory angina resulting from chronic myocardial ischemia (CMI). Our allogeneic mesenchymal stem cell (MSC) therapy platform is being advanced clinically as an “off the shelf” cell therapy based on the immunomodulatory mechanism of action for the treatment of ischemic inflammatory HFrEF. Our program for these same cells in acute respiratory distress syndrome has had its investigational new drug (IND) approved by FDA, but we have not yet advanced this program in the clinic.

Our therapeutic candidates intended for cardiac indications are enabled by our Helix™ transendocardial biotherapeutic delivery system, which enables minimally invasive catheter-based intramyocardial therapeutic delivery. We partner this therapeutic delivery platform and provide development services selectively 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)

### The CardiAMP Cell Therapy Heart Failure Trial

The CardiAMP Heart Failure Trial is a randomized, double-blinded, placebo procedure controlled, multi-center pivotal clinical trial for the treatment of heart failure of reduced ejection fraction (HFrEF). The trial is assessing the safety and effectiveness of the CardiAMP Cell Therapy System for the treatment HFrEF, an investigational device system that has received Breakthrough Device Designation from the FDA. The CardiAMP autologous cell therapy is delivered during a standard minimally invasive catheter-based procedure. Patients are typically discharged after an overnight stay. The cell therapy is designed to promote microvascular repair through enhanced capillary density and reduced fibrosis, both of which have been demonstrated in small and large animal models of disease.

The study enrolled 115 advanced heart failure patients on guideline directed medical therapy, in addition to a 10-patient roll-in cohort. The last protocol specified follow-up visit was completed in October 2024. Close out visits and data monitoring with source data verification to prepare for data lock are expected to be completed in the fourth quarter of 2024. Final data transfer to the independent Statistical Data Analysis Core at the University of Wisconsin is expected soon thereafter for top line data release in the first quarter of 2025.

We have submitted the Annual Report for the CardiAMP Heart Failure Trial to FDA, which details our plans for completing patient follow-up and we intend to request a meeting with FDA to discuss the results with respect to approvability of the CardiAMP Cell Therapy System. We also completed a supplementary submission to Japan Pharmaceutical and Medical Device Agency (PMDA) providing answers to PMDA’s previous responses on the approvability of the CardiAMP Cell Therapy System based on U.S. data and requested a consultation. This PMDA consultation is scheduled to take place in late November as preparation for a subsequent clinical consultation after results from the CardiAMP Heart Failure Trial are available. Should results meet expectations, there is potential for approval based on this and previous clinical data.

### CardiAMP Confirmatory Phase III Trial in Ischemic HFrEF: The CardiAMP Cell Therapy Heart Failure II Trial

The CardiAMP Cell Therapy Heart Failure II Trial is a Phase III, multi-center, randomized, double-blinded, sham-controlled study of up to 250 patients with NTproBNP levels \>500 pg/ml at up to 40 centers in the United States. This confirmatory trial focuses on patients in active heart failure who demonstrated the greatest benefits in the interim results of the CardiAMP Heart Failure I Trial. In the interim results with 90% of the follow-up data available, this subgroup of patients showed strong signals of benefit, with 86% relative risk reduction in mortality and the primary outcome measure approaching statistical significance at two years.

The primary endpoint in the CardiAMP Heart Failure II Trial is an outcomes composite score based on a three-tiered Finkelstein-Schoenfeld hierarchical analysis. The tiers, starting with the most serious events, would be (1) all-cause death, including cardiac death equivalents such as heart transplant or left ventricular assist device placement, ordered by time to event; (2) non-fatal Major Adverse Coronary and Cerebrovascular Events (MACCE), excluding those deemed procedure-related occurring within the first seven days post-procedure (heart failure hospitalization, stroke or myocardial infarction), ordered by time to event, and (3) change from baseline in quality of life at a minimum of 12 months and a maximum of 24 months.

In August 2024, the FDA approved a protocol amendment for the this trial, which allows patients who would have previously been excluded from treatment to receive additional cell deliveries to achieve the same target minimum dosage utilizing a treatment plan informed by the preprocedural CardiAMP Cell Population Analysis (CPA). The CPA approach was developed to select patients most likely to respond to therapy based on their therapeutic cell composition at screening. Utilizing available clinical results allowed us to refine the algorithm in the CardiAMP Heart Failure II Trial and develop a personalized treatment plan for patients below the CPA acceptance criteria. Such treatment plans adjust the number of dosing aliquots for patients with lower concentrations of important specified cells. Combined, the algorithm modifications and development of the treatment plan approach are expected to increase the number of patients eligible for the trial.

This trial also includes a 30-day window after patient consent and before baseline measures. This is intended to address the Hawthorne effect, where patient behavior changes can occur after they are under closer observation of their care providers. We have multiple consented patients in the screening queue and many sites that are at various stages of the onboarding process.

### CardiAMP Autologous Cell Therapy for Chronic Myocardial Ischemia (BCDA-02)

CardiAMP Cell Therapy system, under a second FDA approved investigational device exemption, is being studied in a second related clinical indication of chronic myocardial ischemia with refractory angina. This study is based on the strength of our Phase I and II ischemic heart failure trial data and previous clinical data on CD34+ mononuclear cells in this indication.

The CardiAMP Cell Therapy Chronic Myocardial Ischemia Trial is a Phase III, multi-center, randomized, double-blinded, placebo-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 patients with no option chronic myocardial ischemia with refractory angina (BCDA-02). These patients experience frequent angina (i.e., chest pain) attacks that are uncontrolled by optimal drug therapy, and these patients are not suitable candidates for stent placement or bypass surgery, leaving them few therapeutic options. Our therapeutic approach uses many of the same novel aspects used in the CardiAMP Heart Failure Trial and is expected to leverage our experience and investment in the heart failure trial.

Results from the open label roll-in cohort of patients having chronic myocardial ischemia with refractory angina showed an average 107 second increase in exercise tolerance and an 82% average reduction in angina episodes at the primary six-month follow-up endpoint compared to before receiving the study treatment. The last consented patient in the roll-in cohort was treated in August 2024, and we expect top line results of this cohort at the six-month primary endpoint in Q1 2025.

### CardiALLO Allogeneic MSC for Ischemic Heart Failure with HFrEF (BCDA-03)

The FDA approved investigational new drug application (IND) for a Phase I/II trial to deliver our allogeneic MSC for the treatment of HFrEF includes a 3+3 roll-in dose escalation cohort followed by a 60-patient randomized double-blind controlled study and utilizes the Finkelstein Schoenfeld three tier primary composite endpoint of mortality, MACCE, and functional capacity as measured by six-minute walk distance. The low dose cohort of 20 million cells is expected to be completed in the fourth quarter of 2024. There have been no treatment-emergent adverse events, arrhythmias, rejection, or allergic response, consistent with our presentation at the Technology and Heart Failure Therapeutics meeting in March 2024.

We intend to fund later development through nondilutive grant applications and partnering. Phase II development is anticipated to be advanced in both the United States and Japan and would also enroll in approximately one year.

***Helix™ Biotherapeutic Delivery System***

The Helix transendocardial biotherapeutic delivery system is a therapeutic-enabling platform for minimally invasive targeted delivery of biologic agents to the heart. Helix empowers a seamless transition from bench to commercialization for partners. Our biotherapeutic delivery partnerships are expected to enhance future treatment options for millions of people suffering from heart disease, offset the costs of biotherapeutic delivery for our own programs, and provide our investors with meaningful revenue sharing should our partnering efforts contribute to successful therapeutic development.

In March 2024, we announced a biotherapeutic delivery partnership with StemCardia through a Phase I/II Clinical Study. Under the partnership, BioCardia is the exclusive biotherapeutic delivery partner for StemCardia’s cell therapy candidate through studies expected to result in FDA approval of an IND and the anticipated Phase I/II clinical development to follow. In July 2024, with our partner CellProthera, we jointly announced success from the collaborative Phase II trial of ProtheraCytes in the Excellent cell therapy study in post-myocardial infarction as well as plans to continue the relationship into a Phase III trial.

***Morph® Access Innovations***

All procedures using our Helix transendocardial delivery system include the use of a Morph steerable introducer. We are actively transitioning all procedures using our Helix transendocardial delivery system to our new FDA cleared Morph DNA platform. We received FDA market clearance of an 8 French equivalent for transseptal cardiac procedures, under the name AVANCE. One of the device’s features is that its tendons are designed to enable deflection rotation around the catheter shaft, providing uniform bending in all directions and a substantial reduction of what is called catheter “whip.” This is designed to enhance physician control for many procedures.

In July 2024, we completed our planned submission to the FDA for clearance of a Morph-DNA product family across a range of diameters and lengths. This product family was designed for the treatment of aorto-ostial disease, including renal procedures, superior femoral artery procedures, below the knee procedures and mesenteric artery procedures. The FDA approved this product family for market release in August 2024. We expect that first commercial devices in 45 cm and 70 cm 8 French configurations will be available in November 2024 with additional models to be available in January 2025.

### Financial Overview

### Revenue

Our primary revenues are derived from our biotherapeutic delivery partnering agreements. Under these partnering agreements, we provide extensive support and our Helix biotherapeutic delivery system from the research bench to commercialization for partners. We also have begun commercializing our FDA cleared AVANCE and Morph DNA steerable introducer products.

### 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;

17

- 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 as we continue the pivotal CardiAMP autologous cell therapy trials in heart failure and chronic myocardial ischemia, and in our CardiALLO allogeneic cell therapy trial in heart failure. 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, 2023, filed with the SEC on March 27, 2024, which is incorporated by reference herein.

### Results of Operations

#### Comparison of Three and Nine Months Ended September 30, 2024 and 2023

The following table shows our results of operations for the three and nine months ended September 30, 2024 and 2023 (in thousands):

| Revenue: | Three months ended September 30, 2024 | 2023 | Nine months ended September 30, 2024 | 2023 |
| --- | ---: | ---: | ---: | ---: |
| Collaboration agreement revenue | $— | $357 | $58 | $464 |
| Costs and expenses: |  |  |  |  |
| Research and development | 931 | 1,872 | 2,972 | 6,570 |
| Selling, general and administrative | 825 | 1,083 | 2,766 | 3,454 |
| Total costs and expenses | 1,756 | 2,955 | 5,738 | 10,024 |
| Operating loss | (1,756) | (2,598) | (5,680) | (9,560) |
| Other income (expense): |  |  |  |  |
| Total other income, net | 19 | 24 | 30 | 61 |
| Net loss | $(1,737) | $(2,574) | $(5,650) | $(9,499) |

*Revenue.* Revenue was $0 in the three months ended September 30, 2024 as compared to $357,000 in the three months ended September 30, 2023, and decreased to $58,000 in the nine months ended September 30, 2024 as compared to $464,000 in the nine months ended September 30, 2023. The amount and timing of collaboration revenues is largely dependent on our partners’ development activities and may be inconsistent and create significant variation in our revenues.

*Research and Development Expenses.* Research and development expenses decreased to $931,000 in the three months ended September 30, 2024 as compared to approximately $1.9 million in the three months ended September 30, 2023, and decreased to approximately $3.0 million in the nine months ended September 30, 2024 as compared to approximately $6.6 million in the nine months ended September 30, 2023, primarily due to reduced personnel costs and clinical expenses following the completion of enrollment in the CardiAMP Cell Therapy Heart Failure Trial in the second half of 2023.

*Selling, General and Administrative Expenses.* Selling, general and administrative expenses decreased to $825,000 in the three months ended September 30, 2024 as compared to approximately $1.1 million in the three months ended September 30, 2023, and decreased to approximately $2.8 million in the nine months ended September 30, 2024 as compared to approximately $3.5 million in the nine months ended September 30, 2023, primarily due to realignment of personnel roles and cost reductions following completion of enrollment in the CardiAMP Cell Therapy Heart Failure Trial.

### Liquidity and Capital Resources

We have incurred net losses each year since our inception and as of September 30, 2024, we had an accumulated deficit of approximately $157.8 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, 2024, we had cash and cash equivalents of approximately $4.9 million.

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

| Net cash provided by (used in): | Nine months ended September 30, 2024 | 2023 |
| --- | ---: | ---: |
| Operating activities | $(5,453) | $(8,123) |
| Investing activities | (5) | (12) |
| Financing activities | 9,285 | 2,607 |
| Net increase (decrease) in cash and cash equivalents | $3,827 | $(5,528) |

*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. Cash flow used in operating activities decreased from approximately $8.1 million during the nine months ended September 30, 2023 to approximately $5.5 million during the nine months ended September 30, 2024, due primarily to reductions in research and development expense following completion of enrollment in the CardiAMP Cell Therapy Heart Failure Trial in the second half of 2023.

*Cash Flows from Investing Activities*. Net cash used in investing activities of $5,000 and $12,000 during the nine months ended September 30, 2024 and 2023, respectively, consisted of purchases of property and equipment.

*Cash Flows from Financing Activities*. Net cash provided by financing activities of approximately $9.3 million and approximately $2.6 million during the nine months ended September 30, 2024 and 2023, respectively, related primarily to proceeds from the sale of common stock and warrants.

*September 2024 Financing -* On August 29, 2024, we entered into securities purchase agreements (the Purchase Agreements) with certain purchasers, pursuant to which we agreed to issue, and sell and the purchasers, in the aggregate, to buy, in a public offering (the Registered Offering) (i) 1,377,990 shares of our common stock, $0.001 par value per share (the Common Stock), and accompanying warrants to purchase up to 1,377,990 shares of Common Stock (the Common Warrants), at an offering price of $3.00 per share of Common Stock and accompanying Common Warrant, and (ii) pre-funded warrants (the “Pre-Funded Warrants” and, together with the Common Warrants, the “Warrants”) to purchase up to 1,022,010 shares of Common Stock and accompanying Common Warrants to purchase up to 1,022,010 shares of Common Stock, at an offering price of $2.999 per Pre-Funded Warrant and accompanying Common Warrant. Certain of the Company’s directors and executive officers purchased an aggregate of 211,000 shares of Common Stock and accompanying Common Warrants. The Registered Offering closed on September 3, 2024, with the Company issuing 2,400,000 shares of Common Stock, including the exercise of the Pre-Funded Warrants, and Common Warrants to purchase 2,400,000 shares of Common Stock. Each Common Warrant is exercisable at a price per share of $3.00 and expires on September 3, 2029. The gross proceeds of the Registered Offering were $7.2 million, with associated issuance costs of $926,000.

*February 2024 Financing –* On February 13, 2024, we sold to certain qualified institutional buyers and institutional accredited investors, as well as Peter Altman, our President and Chief Executive Officer, (i) an aggregate of 134,199 shares of our common stock at an offering price of $6.50 per share and (ii) warrants to purchase an aggregate of 67,104 shares of common stock in a private placement, which warrants were immediately exercisable upon issuance at $6.60 per warrant share (the February 2024 Private Placement). Of such securities, Dr. Altman agreed to purchase (i) 7,207 shares of our common stock and (ii) warrants to purchase 3,603 shares of our common stock. The gross proceeds of the February 2024 Private Placement were $875,000 with associated issuance costs of $43,000.

#### ATM Offerings

On April 12, 2022, we entered into a sales agreement (Cantor 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). Under the terms of the Cantor Sales Agreement, Cantor was paid a commission of 3% of the aggregate proceeds from the sale of shares and reimbursed certain legal fees. The prospectus supplement expired in conjunction with the expiration of the corresponding registration statement on October 20, 2023. On June 20, 2023, we agreed with Cantor to indefinitely suspend sales under the ATM Offering, and on November 14, 2023, we agreed to terminate the Cantor Sales Agreement.

On December 6, 2023, we entered into an At-The-Market Offering Agreement (the HCW Sales Agreement) with H.C. Wainwright & Co., LLC (HCW). Under the HCW Sales Agreement, we may offer and sell our common stock, from time to time having an aggregate offering price of up to $2.75 million during the term of the HCW Sales Agreement through or to HCW as sales agent or principal (the HCW ATM Offering and, together with the Cantor ATM Offering, the ATM Offerings). Pursuant to the terms of the HCW Sales Agreement, we have agreed to pay HCW a commission equal to 3.0% of the gross proceeds from the sales of shares.

During the three months ended September 30, 2024 and 2023, we sold 0 and 2,219 shares of common stock under the ATM Offerings at then-market prices for total gross proceeds of $0 and $93,000, with associated issuance costs of $0 and $48,000, respectively. During the nine months ended September 30, 2024 and 2023, we sold 412,239 and 11,209 shares of common stock under the ATM Offerings at then-market prices for total gross proceeds of approximately $2.4 million and $395,000, respectively, with associated issuance costs of $103,000 and $90,000, respectively.

### 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 approximately $4.9 million as of September 30, 2024 are not sufficient to fund our planned expenditures and meet our obligations beyond the second quarter of 2025. In order to continue development of our therapeutic candidates beyond the second quarter of 2025, 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 may be unsuccessful in raising funds from any or all such sources, and to the extent we raise any funds, they may be on highly dilutive terms. 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, 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; and
- our need to implement additional internal systems and infrastructure, including financial and reporting systems.

Until such time that we can generate meaningful revenue from our recurring revenue biotherapeutic delivering partnering business model and/or 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 are able to raise additional capital through the sale of equity or convertible debt securities, the ownership interests of our existing common stockholders may be highly diluted, and the terms of these securities may include liquidation or other preferences that adversely affect the rights of our existing 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, 2024 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.

## Market risk

As filed, 1,617 characters.

There have been no material changes in our market risks during the three months ended September 30, 2024.

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, 2024, 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.

## Controls and procedures

As filed, 1,128 characters.

### Evaluation of Disclosure Controls and Procedures

In connection with the preparation of this Quarterly Report on Form 10-Q, as of September 30, 2024, 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, 2024, 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, 2024 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

## Risk factors

As filed, 7,754 characters.

In addition to the risk described below and the other information set forth in this report, you should carefully consider the factors discussed in Part I, Item 1A. Risk Factors in our Annual Report on Form 10-K for the year ended December 31, 2023, 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, 2023, 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.

***We have a history of operating losses, and we may not be able to achieve or sustain profitability.***

We are a clinical-stage regenerative medicine company and we have not yet generated a profit. We have incurred net losses during each of our fiscal years since our inception. Our net loss for the year ended December 31, 2023 was $11.6 million and our accumulated deficit totaled $152.2 million as of December 31, 2023. We do not know whether or when we will become profitable, if ever. We currently expect operating losses and negative cash flows to continue for at least the next several years.

To date, our only approved or cleared products are our Morph universal deflectable guide catheters and Morph AccessPro sheaths, in the United States and Europe; our AVANCE™ steerable introducer and our Morph DNA deflectable guides in the United States only. Our limited commercialization experience and number of approved products makes it difficult to evaluate our current business and predict our future prospects. Our short commercialization experience and limited number of approved products also makes it difficult for us to forecast our future financial performance and growth and such forecasts are limited and subject to a number of uncertainties, including our ability to successfully complete our Phase III pivotal trials in heart failure and chronic myocardial ischemia and obtain FDA approval for, and then successfully commercialize, the CardiAMP Cell Therapy System.

Our ability to generate sufficient revenue to achieve profitability depends on our ability, either alone or with strategic collaboration partners, to successfully complete the development of, and obtain the regulatory approvals necessary to commercialize our therapeutic candidates. We do not anticipate generating revenues from sales of our cell therapy systems or any other biotherapeutic candidates within the next few years, and we may never generate sales of these products.

We anticipate that our expenses will increase in the future as we continue to incur significant research and development and other expenses related to our ongoing operations, seek regulatory approvals for our therapeutic candidates, scale-up manufacturing capabilities and hire additional personnel to support the development of our therapeutic candidates and commercialization efforts. Biopharmaceutical product development is a highly speculative undertaking and involves a substantial degree of risk. To achieve and maintain profitability, we must successfully develop our therapeutic candidates, obtain regulatory approvals and manufacture, market and sell those products for which we obtain regulatory approvals. If we obtain regulatory approval to market a product candidate, our future revenue will depend upon the size of any markets in which our therapeutic candidates may receive approval, and our ability to achieve sufficient market acceptance, pricing, reimbursement from third-party payors and adequate market share for our therapeutic candidates in those markets. We may not succeed in these activities, and we may never generate revenue from product sales that is significant enough to achieve profitability. Our failure to become or remain profitable would depress our market value and could impair our ability to raise capital, expand our business, discover or develop other product candidates or continue our operations. A decline in the value of our company could cause you to lose part or all of your investment.

Our audited consolidated financial statements as of and for the year ended December 31, 2023 have been prepared on the basis that we will continue as a going concern, which contemplates the realization of assets and satisfaction of liabilities in the normal course of business. We have incurred significant losses since our inception and we expect that we will continue to incur losses as we aim to successfully execute our business plan and will be dependent on additional public or private financings, collaborations or licensing arrangements with strategic partners, or additional credit lines or other debt financing sources to fund continuing operations. Absent additional funding, management believes cash and cash equivalents of approximately $4.9 million as of September 30, 2024 are not sufficient to fund our planned expenditures and meet our obligations through the second quarter of 2025. As noted below, we may need to obtain additional funding from equity or debt financings, which may be highly dilutive to our existing stockholders and may require us to agree to burdensome covenants, grant security interests in our assets, enter into collaboration and licensing arrangements that require us to relinquish commercial rights, or grant licenses on terms that are not favorable. For example, in September 2024, we completed the Registered Offering, pursuant to which we issued 2,400,000 shares of common stock, including the shares issued upon the exercise of pre-funded warrants, and common warrants to purchase 2,400,000 shares of common stock. No assurance can be given at this time as to whether we will be able to achieve our fundraising objectives, regardless of the terms. If adequate funds are not available, the Company may be required to reduce operating expenses, delay or reduce the scope of its product development programs, obtain funds through arrangements with others that may require the Company to relinquish rights to certain of its technologies or products that the Company would otherwise seek to develop or commercialize itself, or cease operations.

***Our failure to meet the continued listing requirements of the Nasdaq could result in a de-listing of our common stock.***

The listing of our common stock on the Nasdaq is contingent on our compliance with the Nasdaq’s conditions for continued listing. We were previously not in compliance with the Nasdaq listing requirements, specifically the requirement to maintain a minimum market value of listed securities of at least $35.0 million (MVLS Requirements), and the Nasdaq listing requirement to maintain a minimum $1.00 per share closing bid price for our common stock (Minimum Bid Price Requirement). Although we have regained compliance with the Minimum Bid Price Requirement and the MVLS requirement, a future failure to maintain compliance with the Nasdaq’s continued listing requirements could result in our being subject to delisting by the Nasdaq. In the event our securities are no longer listed for trading on Nasdaq, our trading volume and security 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.

Filed Nov 13, 2024.
Source: SEC EDGAR, the filing index for accession 0001437749-24-034896. Last ingested by Listed: Oct 24, 2026, 15:00 ET. No prices; not investment advice.