SEC Filing | Biocept Inc.

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10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

☒ QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended June 30, 2023

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to .

Commission file number: 001-36284

Biocept, Inc.

(Exact name of registrant as specified in its charter)

Delaware

80-0943522

(State or other jurisdiction of
incorporation or organization)

(I.R.S. Employer
Identification No.)

9955 Mesa Rim Road, San Diego, California

(Address of principal executive offices)

92121

(Zip Code)

(858) 320-8200

(Registrant’s telephone number, including area code)

Not Applicable

(Former name, former address and former fiscal year, if changed since last report)

Securities registered pursuant to Section 12(b) of the Act:


Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock, par value $0.0001 per share	BIOC	The Nasdaq Stock Market LLC

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined by Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

As of August 8, 2023, there were 2,626,026 shares of the Registrant’s common stock outstanding.

BIOCEPT, INC.

FORM 10-Q

FOR THE QUARTERLY PERIOD ENDED

June 30, 2023

INDEX


		Page

IMPORTANT NOTE REGARDING FORWARD-LOOKING STATEMENTS		3

PART I.	FINANCIAL INFORMATION	5

Item 1.	Financial Statements	5

	Condensed Balance Sheets as of June 30, 2023 (Unaudited) and December 31, 2022	5

	Condensed Statements of Operations for the three and six months ended June 30, 2023 and 2022 (Unaudited)	6

	Condensed Statements of Stockholders’ Equity for the three and six months ended June 30, 2023 and 2022 (Unaudited)	7

	Condensed Statements of Cash Flows for the six months ended June 30, 2023 and 2022 (Unaudited)	8

	Notes to Condensed Financial Statements (Unaudited)	9

Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	21

Item 3.	Quantitative and Qualitative Disclosures about Market Risk	30

Item 4.	Controls and Procedures	30

PART II.	OTHER INFORMATION	33

Item 1.	Legal Proceedings	33

Item 1A.	Risk Factors	33

Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	64

Item 3.	Defaults Upon Senior Securities	64

Item 4.	Mine Safety Disclosures	64

Item 5.	Other Information	64

Item 6.	Exhibits	65

IMPORTANT NOTE REGARDING FORWARD-LOOKING STATEMENTS

This Quarterly Report on Form 10-Q, or Quarterly Report, contains 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. All statements included or incorporated by reference in this Quarterly Report other than statements of historical fact, are forward-looking statements. You can identify these and other forward-looking statements by the use of words such as “may,” “will,” “could,” “anticipate,” “expect,” “intend,” “believe,” “continue,” “plan,” “estimate,” “potentially,” “predict,” “should” or the negative of such terms, or other comparable terminology. Forward-looking statements also include the assumptions underlying or relating to such statements.

Forward-looking statements may include, but are not limited to, statements about:

•

the performance of our products, assays and services;

•

the ability of our products, assays and services to become a key component of the standard of care for personalized cancer treatment;

•

our ability to generate revenue, grow our business and increase sales of our products, assays and services;

•

our ability to develop and commercialize new products, diagnostic assays, services and enhance our current products, assays and services and future products, assays, and services;

•

our plans to launch a series of cancer diagnostic assays for different predictive biomarkers;

•

our ability to effectively compete with other products, diagnostic assays, methods and services that now exist or may hereafter be developed;

•

our ability to expand our international business and commercialize our products and assays in other countries;

•

market adoption of our products and assays and our ability to successfully complete clinical utility studies;

•

our FORESEE trial, including anticipated timelines for progressing and completing the trial;

•

the potential for CNSide to be included in NCCN guidelines;

•

our ability to obtain coverage and adequate reimbursement from governmental and other third-party payors for assays and services;

•

our expectations regarding our material cash requirements, contractual obligations and commitments and the use of our existing cash;

•

our ability to enter into and leverage agreements with commercialization partners for the sales, marketing and commercialization of our current products, assays and services, and our planned future products, assays and services;

•

our ability to satisfy any applicable United States and international regulatory requirements with respect to products, assays and services;

•

our ability to obtain or maintain patents or other appropriate protection for the intellectual property utilized in our current and planned products, assays and services;

•

potential effects of an epidemic or pandemic on our business;

•

our estimates regarding the period of time for which our current capital resources will be sufficient to fund our continued operations;

•

our expectations and estimates regarding our future use of cash, expenses and costs and needs for additional financing; and

•

our ability to maintain a strong internal control environment and remediate internal control deficiencies.

Our actual results could differ materially from those anticipated in these forward-looking statements as a result of various factors, including those set forth in this report under the “Management’s Discussion and Analysis” and “Risk Factors” headings.

Moreover, we operate in an evolving environment. New risk factors and uncertainties emerge from time to time, and it is not possible for us to predict all risk factors and uncertainties, nor can we assess the impact of all factors on our business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking statements. Readers are cautioned not to place undue reliance on forward-looking statements. The forward-looking statements speak only as of the date on which they are made, and we undertake no obligation to update such statements to reflect events that occur or circumstances that exist after the date on which they are made except as required by law. Readers should, however, review the factors and risks we describe in the reports we file from time to time with the SEC. In addition, statements that “we believe” and similar statements reflect our beliefs and opinions on the relevant subject. These statements are based upon information available to us as of the date the statement is made, and while we believe such information forms a reasonable basis for such statements, such information may be limited or incomplete, and our statements should not be read to indicate that we have conducted an exhaustive inquiry into, or review of, all potentially available relevant information. These statements are inherently uncertain, and you are cautioned not to unduly rely upon these statements.

PART I. FINANCIAL INFORMATION

Item 1. Financial Statements


Biocept, Inc.
Condensed Balance Sheets
(In thousands, except share and per share data)

	June 30,			December 31,
	2023			2022
Assets	(unaudited)
Current assets:
Cash	$	6,633		$	12,897
Accounts receivable		800			2,151
Inventories, net		551			757
Prepaid expenses and other current assets		876			538
Total current assets		8,860			16,343
Fixed assets, net		2,395			2,572
Lease right-of-use asset - operating		8,190			8,486
Lease right-of-use assets - finance		2,272			3,086
Other non-current assets		386			386
Total assets	$	22,103		$	30,873

Liabilities and Stockholders' Equity
Current liabilities:
Accounts payable	$	1,467		$	1,523
Accrued liabilities		1,529			2,249
Current portion of lease liability - operating		565			518
Current portion of lease liabilities - finance		815			1,099
Financed insurance premiums		526			117
Total current liabilities		4,902			5,506
Non-current portion of lease liability - operating		8,849			9,175
Non-current portion of lease liabilities - finance		836			1,200
Payor liability		6,149			6,132
Warrant liability		1,077			—
Total liabilities		21,813			22,013
Commitments and contingencies (see Note 11)
Stockholders’ equity:
Preferred stock, $0.0001 par value, 5,000,000 shares authorized; 2,090 shares issued and outstanding at June 30, 2023 and December 31, 2022		—			—
Common stock, $0.0001 par value, 150,000,000 shares authorized; 2,407,381 shares and 568,994 shares issued and outstanding at June 30, 2023 and December 31, 2022, respectively.		—			—
Additional paid-in capital		309,503			307,298
Accumulated deficit		(309,213	)		(298,438	)
Total stockholders’ equity		290			8,860
Total liabilities and stockholders’ equity	$	22,103		$	30,873

The accompanying notes are an integral part of these unaudited condensed financial statements.


Biocept, Inc.
Condensed Statements of Operations
(In thousands, except shares and per share data)
(Unaudited)

	For the Three Months Ended June 30,						For the Six Months Ended June 30,
	2023			2022			2023			2022
Net revenues	$	589		$	5,819		$	1,262		$	25,763
Costs and expenses:
Cost of revenues		2,550			8,023			5,578			18,357
Research and development expenses		409			1,729			1,449			3,574
General and administrative expenses		3,494			4,300			6,482			10,556
Sales and marketing expenses		250			1,656			965			5,314
Total costs and expenses		6,703			15,708			14,474			37,801
Loss from operations		(6,114	)		(9,889	)		(13,212	)		(12,038	)
Other income (expense):
Interest expense, net		(50	)		(155	)		(96	)		(217	)
Other income, net		91			—			91			—
Change in fair value of warrant liability		2,442			—			2,442			—
Total other income (expense):		2,483			(155	)		2,437			(217	)
Loss before income taxes		(3,631	)		(10,044	)		(10,775	)		(12,255	)
Income tax expense		—			—			—			—
Net loss		(3,631	)		(10,044	)		(10,775	)		(12,255	)
Net loss attributable to common stockholders	$	(3,631	)	$	(10,044	)	$	(10,775	)	$	(12,255	)
Weighted-average shares outstanding used in computing net loss per share attributable to common stockholders:
Basic		1,036,529			563,528			813,180			562,561
Diluted		1,036,529			563,528			813,180			562,561
Net loss per common share:
Basic	$	(3.50	)	$	(17.82	)	$	(13.25	)	$	(21.78	)
Diluted	$	(3.50	)	$	(17.82	)	$	(13.25	)	$	(21.78	)

The accompanying notes are an integral part of these unaudited condensed financial statements.


Biocept, Inc.
Condensed Statements of Stockholders' Equity
(In thousands, except for shares)
(Unaudited)
	Common Stock				Series A Convertible Preferred Stock
	Shares		Amount		Shares		Amount		Additional Paid-in Capital		Accumulated Deficit			Total
Balance at December 31, 2022		568,994	$	—		2,090	$	—	$	307,298	$	(298,438	)	$	8,860
Stock-based compensation expense		—		—		—		—		316		—			316
Shares issued for ATM transaction, net of issuance costs		23,903		—		—		—		396		—			396
Net loss		—		—		—		—		—		(7,144	)		(7,144	)
Balance at March 31, 2023		592,897	$	—		2,090	$	—	$	308,010	$	(305,582	)	$	2,428
Stock-based compensation expense		—		—		—		—		209		—			209
Shares issued for May 2023 financing transaction, net of issuance costs		1,176,470		—		—		—		484		—			484
Shares issued for exercise of May 2023 warrants		638,014		—		—		—		800		—			800
Net loss		—		—		—		—		—		(3,631	)		(3,631	)
Balance at June 30, 2023		2,407,381	$	—		2,090	$	—	$	309,503	$	(309,213	)	$	290


	Common Stock				Series A Convertible Preferred Stock
	Shares		Amount		Shares			Amount		Additional Paid-in Capital		Accumulated Deficit			Total
Balance at December 31, 2021		561,652	$	—		2,106		$	—	$	303,831	$	(266,351	)	$	37,480
Stock-based compensation expense		—		—		—			—		1,759		—			1,759
Shares issued upon conversion of preferred stock		12		—		(16	)		—		—		—			—
Net loss		—		—		—			—		—		(2,210	)		(2,210	)
Balance at March 31, 2022		561,664	$	—		2,090		$	—	$	305,590	$	(268,561	)	$	37,029
Stock-based compensation expense		—		—		—			—		585		—			585
Shares issued for ATM transaction, net of issuance costs		2,424		—		—			—		94		—			94
Net loss		—		—		—			—		—		(10,044	)		(10,044	)
Balance at June 30, 2022		564,088	$	—		2,090		$	—	$	306,269	$	(278,605	)	$	27,664

The accompanying notes are an integral part of these unaudited condensed financial statements.


Biocept, Inc.
Condensed Statements of Cash Flows
(in thousands)
(Unaudited)
	For the Six Months Ended June 30,
	2023			2022
Cash Flows from Operating Activities
Net loss	$	(10,775	)	$	(12,255	)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization		984			810
Noncash operating lease expense		296			268
Stock-based compensation		525			2,344
Loss on disposal of fixed assets		36			—
Gain on finance lease termination		(125	)		—
Other non-cash		2			—
Transaction costs allocated to warrants		505			—
Change in fair value of warrant liability		(2,442	)		—
Increase (decrease) in cash resulting from changes in:
Accounts receivable		1,351			1,203
Inventory		206			402
Prepaid expenses and other current assets		500			6
Other non-current assets		—			(41	)
Accounts payable		308