bcda20210930

bcda20210930_10q.htm

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)

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

For the quarterly period ended September 30, 2021

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

Commission file number: 001-38999

BioCardia, Inc.

(Exact name of registrant as specified in its charter)

Delaware

23-2753988

(State or other jurisdiction of

incorporation or organization)

(I.R.S. Employer

Identification Number)

125 Shoreway Road, Suite B

San Carlos, California 94070

(Address of principal executive offices including zip code)

(650) 226-0120

(Registrant’s telephone number, including area code)

N/A

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

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, 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.

Large accelerated filer	☐	Accelerated filer	☐

Non-accelerated filer	☒	Smaller reporting company	☒

		Emerging growth company	☐

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 in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

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 $0.001

Warrant to Purchase Common Stock

BCDA

BCDAW

The Nasdaq Capital Market

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date.

There were 16,871,265 shares of the registrant’s Common Stock issued and outstanding as of November 1, 2021.

Part I.	FINANCIAL INFORMATION	4

Item 1.	Unaudited Condensed Consolidated Financial Statements	4
	Condensed Consolidated Balance Sheets as of September 30, 2021 and December 31, 2020	4
	Condensed Consolidated Statements of Operations for the three and nine months ended September 30, 2021 and 2020	5
	Condensed Consolidated Statements of Stockholders’ Equity for the three and nine months ended September 30, 2021 and 2020	6
	Condensed Consolidated Statements of Cash Flows for the nine months ended September 30, 2021 and 2020	7
	Notes to Unaudited Condensed Consolidated Financial Statements	8
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	16
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	22
Item 4.	Controls and Procedures	22

Part II.	OTHER INFORMATION	23

Item 1.	Legal Proceedings	23
Item 1A.	Risk Factors	23
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	23
Item 3.	Defaults Upon Senior Securities	23
Item 4.	Mine Safety Disclosures	23
Item 5.	Other Information	23
Item 6.	Exhibits	23

EXHIBIT INDEX		23
SIGNATURES		24

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)

	September 30,			December 31,
Assets	2021			2020
	(unaudited)
Current assets:
Cash and cash equivalents	$	15,888		$	21,407
Accounts receivable, net of allowance for doubtful accounts of $15 and $16 as of September 30, 2021 and December 31, 2020		198			232
Prepaid expenses and other current assets		358			401
Other receivable due from related party		562			618
Total current assets		17,006			22,658
Property and equipment, net		175			145
Operating lease right-of-use asset, net		149			567
Other assets		—			54
Total assets	$	17,330		$	23,424
Liabilities and Stockholders’ Equity
Current liabilities:
Accounts payable	$	846		$	746
Accrued expenses and other current liabilities		2,025			2,205
Deferred revenue		886			683
Operating lease liability - current		161			614
Total liabilities		3,918			4,248
Commitments and contingencies (Notes 2, 5 and 12)
Stockholders’ equity:
Preferred stock, $0.001 par value, 25,000,000 shares authorized as of September 30, 2021 and December 31, 2020; no shares issued and outstanding as of September 30, 2021 and December 31, 2020		—			—
Common stock, $0.001 par value, 100,000,000 shares authorized as of September 30, 2021 and December 31, 2020; 16,871,265 and 16,297,381 shares issued and outstanding as of September 30, 2021 and December 31, 2020		17			16
Additional paid-in capital		138,631			135,234
Accumulated deficit		(125,236	)		(116,074	)
Total stockholders’ equity		13,412			19,176
Total liabilities and stockholders’ equity	$	17,330		$	23,424

See accompanying notes to condensed consolidated financial statements.

BIOCARDIA, INC.

Condensed Consolidated Statements of Operations

(In thousands, except share and per share amounts)

(unaudited)

	Three months ended September 30,						Nine months ended September 30,
	2021			2020			2021			2020
Revenue:
Net product revenue	$	1		$	8		$	1		$	13
Collaboration agreement revenue		820			26			935			86
Total revenue		821			34			936			99
Costs and expenses:
Cost of goods sold		—			—			—			4
Research and development		2,240			2,474			6,443			7,484
Selling, general and administrative		1,289			1,408			3,662			4,642
Total costs and expenses		3,529			3,882			10,105			12,130
Operating loss		(2,708	)		(3,848	)		(9,169	)		(12,031	)
Other income (expense):
Interest income		2			1			8			19
Other expense		—			(1	)		(1	)		(3	)
Total other income (expense), net		2			—			7			16
Net loss	$	(2,706	)	$	(3,848	)	$	(9,162	)	$	(12,015	)

Net loss per share, basic and diluted	$	(0.16	)	$	(0.30	)	$	(0.54	)	$	(1.33	)

Weighted-average shares used in computing net loss per share, basic and diluted		17,066,068			12,618,285			16,867,652			9,059,433

See accompanying notes to condensed consolidated financial statements.

BIOCARDIA, INC.

Condensed Consolidated Statements of Stockholders’ Equity

(In thousands, except share amounts)

(unaudited)

	Common stock				Additional			Accumulated
	Shares		Cost		paid-in capital			deficit			Total
Balance at December 31, 2020		16,297,381	$	16	$	135,234		$	(116,074	)	$	19,176
Restricted stock units vested and issued		40,100		—		—			—			—
Sale of common stock		453,832		1		1,933			—			1,934
Exercise of common stock options		1,580		—		5			—			5
Share-based compensation		—		—		416			—			416
Net loss		—		—		—			(2,969	)		(2,969	)
Balance at March 31, 2021		16,792,893	$	17	$	137,588		$	(119,043	)	$	18,562
Share-based compensation		—		—		384			—			384
Restricted stock units vested and issued		78,372		—		—			—			—
Restricted stock units issued to settle management bonus obligations		—		—		214			—			214
Net loss		—		—		—			(3,487	)		(3,487	)
Balance at June 30, 2021		16,871,265	$	17	$	138,186		$	(122,530	)	$	15,673
Share-based compensation		—		—		437			—			437
Refund of issuance costs on sale of common stock		—		—		8			—			8
Net loss		—		—		—			(2,706	)		(2,706	)
Balance at September 30, 2021		16,871,265	$	17	$	138,631		$	(125,236	)	$	13,412


Balance at December 31, 2019		6,825,183	$	7	$	103,433		$	(101,070	)	$	2,370
Restricted stock units vested and issued		23,172		—		—			—			—
Share-based compensation		—		—		941			—			941
Net loss		—		—		—			(4,594	)		(4,594	)
Balance at March 31, 2020		6,848,355	$	7	$	104,374		$	(105,664	)	$	(1,283	)
Sale of common stock, net of issuance costs of $1.16 million		5,476,190		5		10,335			—			10,340
Restricted stock units vested and issued		71,624		—		—			—			—
Restricted stock units issued to settle board compensation obligations		—		—		613			—			613
Restricted stock units issued to settle management bonus obligations		—		—		391			—			391
Stock grants to former directors		29,625		—		148			—			148
Share-based compensation		—		—		655			—			655
Net loss		—		—		—			(3,573	)		(3,573	)
Balance at June 30, 2020		12,425,794	$	12	$	116,516		$	(109,237	)	$	7,291
Restricted stock units vested and issued		3,000		—		—			—			—
Issuance costs from sale of common stock in prior quarter		—		—		(67	)		—			(67	)
Share-based compensation		—		—		737			—			737
Net loss		—		—		—			(3,848	)		(3,848	)
Balance at September 30, 2020		12,428,794	$	12	$	117,186		$	(113,085	)	$	4,113

See accompanying notes to condensed consolidated financial statements.

BIOCARDIA, INC.

Condensed Consolidated Statements of Cash Flows

(In thousands)

(unaudited)

	Nine months ended September 30,
	2021			2020
Operating activities:
Net loss	$	(9,162	)	$	(12,015	)
Adjustments to reconcile net loss to net cash used in operating activities:
Write-off of inventory		—			3
Depreciation		45			52
Reduction in the carrying amount of right-of-use assets		418			368
Non-cash board compensation expense		—			115
Share-based compensation		1,237			2,333
Changes in operating assets and liabilities:
Accounts receivable		34			(157	)
Inventory		—			1
Prepaid expenses and other current assets		97			510
Other receivable due from related party		56			(762	)
Accounts payable		100			294
Accrued liabilities and other current liabilities		34			715
Deferred revenue		203			(8	)
Operating lease liability - current		(453	)		64
Operating lease liability - noncurrent		—			(453	)
Net cash used in operating activities		(7,391	)		(8,940	)
Investing activities:
Purchase of property and equipment		(75	)		(32	)
Net cash used in investing activities		(75	)		(32	)
Financing activities:
Proceeds from sales of common stock		2,001			11,500
Issuance costs of sale of common stock		(59	)		(1,227	)
Proceeds from note payable		—			506
Proceeds from exercise of common stock options		5			—
Net cash provided by financing activities		1,947			10,779
Net change in cash and cash equivalents		(5,519	)		1,807
Cash and cash equivalents at beginning of period		21,407			5,585
Cash and cash equivalents at end of period	$	15,888		$	7,392
Supplemental disclosure for noncash investing and financing activities:
Issuance of restricted stock units in lieu of cash bonus obligations	$	393		$	391
Issuance of restricted stock units in lieu of board cash compensation obligations		—			613
Issuance of common stock in lieu of board cash compensation obligations		—			148
Non-cash interest expense accretion to loan payable		—			2

See accompanying notes to 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. The Company’s lead therapeutic candidate is the CardiAMP® Cell Therapy System, which provides an autologous bone marrow derived cell therapy for treatment in two clinical indications: ischemic heart failure and refractory angina resulting from chronic myocardial ischemia. The Company’s second therapeutic platform is an investigational bone marrow derived allogeneic “off the shelf” Neurokinin-1 Receptor Positive mesenchymal stem cell therapy for the treatment of cardiac and pulmonary disease. 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.

		BioCardia also has three enabling device product lines: (1) the CardiAMP cell processing system; (2) the Helix biotherapeutic delivery system, or Helix; and (3) the Morph vascular access product line, or Morph. 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, and cash flows as of September 30, 2021 and for the three and nine months ended September 30, 2021 and 2020 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 its financial position as of September 30, 2021, results of operations for the three and nine months ended September 30, 2021 and 2020, and cash flows for the nine months ended September 30, 2021 and 2020. The results for the three and nine months ended September 30, 2021 are not necessarily indicative of the results to be expected for the year ended December 31, 2021 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 the Company’s Annual Report on Form 10-K for the year ended December 31, 2020, filed with the SEC on March 30, 2021.

	*(b)*	*Liquidity and Other Risks and Uncertainties*

		Liquidity - We have incurred net losses and negative cash flows from operations since our inception and had an accumulated deficit of $125.2 million as of September 30, 2021. Management expects operating losses and negative cash flows to continue through at least the next several years. The Company expects to incur increasing costs as it advances its trials and development activities. Management believes cash and cash equivalents of $15.9 million as of September 30, 2021 are sufficient to fund the Company’s planned expenditures and meet its obligations for at least 12 months following the filing of this form 10-Q.

	*(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, derivative instruments, clinical accruals, inventory valuation, 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)*	*Changes to Significant Accounting Policies*

		The Company’s significant accounting policies are described in Note 2 of the notes to the consolidated financial statements included in its Annual Report on Form 10-K filed March 30, 2021 for the year ended December 31, 2020. There have been no changes to those policies.

	*(f)*	*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 the Company’s financial statement presentation or disclosures.

(3)

Fair Value Measurement

		The fair value of financial instruments reflects the amounts that the Company estimates 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). The Company follows 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 shows the fair value of its financial assets measured on a recurring basis as of September 30, 2021 and December 31, 2020 and indicates the fair value hierarchy utilized to determine such fair value (in thousands):

	As of September 30, 2021

	Level 1		Level 2		Level 3		Total
Assets:
Money market funds	$	15,746	$	—	$	—	$	15,746
Cash in checking account		—		—		—		142
Total cash and cash equivalents	$	15,746	$	—	$	—	$	15,888

	As of December 31, 2020
	Level 1		Level 2		Level 3		Total
Assets:
Money market funds	$	20,662	$	—	$	—	$	20,662
Cash in checking account		—		—		—		745
Total cash and cash equivalents	$	20,662	$	—	$	—	$	21,407

(4)

Property and Equipment, Net

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

	September 30,			December 31,
	2021			2020
Computer equipment and software	$	188		$	159
Laboratory and manufacturing equipment		574			550
Furniture and fixtures		59			59
Leasehold improvements		332			332
Construction in progress		92			70
Property and equipment, gross		1,245			1,170
Less accumulated depreciation		(1,070	)		(1,025	)
Property and equipment, net	$	175		$	145

Depreciation expense totaled $15,000 and $45,000 for the three and nine months ended September 30, 2021, respectively. Depreciation expense totaled $15,000 and $52,000 for the three and nine months ended September 30, 2020, respectively.

(5)

Operating Lease Right-of-Use Asset, Net

		The Company’s operating lease is a property lease for its laboratory and corporate offices. BioCardia’s lease agreement does not contain any material residual guarantees or material restrictive covenants, nor does it contain an additional lease extension. The Company determines 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. The Company’s lease does not provide an implicit rate. The Company 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. The Company has no finance leases.

		The lease expense for the three and nine months ended September 30, 2021 was $150,000 and $451,000, respectively. The lease expense for the three and nine months ended September 30, 2020 was $150,000 and 451,000, respectively. The cash paid under the operating lease during the three and nine months ended September 30, 2021 was $162,000 and $486,000, respectively. The cash paid under the operating lease during the three and nine months ended September 30, 2020 was $158,000 and $473,000, respectively. On September 30, 2021, the weighted average remaining lease term was 0.25 years, and the weighted average discount rate was 12.05%.

Future minimum lease payments under the operating lease as of September 30, 2021 are as follows (in thousands):

	Operating Lease September 30, 2021
Remainder of 2021
Total undiscounted lease payments	$	162
Less imputed interest		1
Total operating lease liabilities	$	161

(6)

Accrued Expenses and Other Current Liabilities

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

	September 30,		December 31,
	2021		2020
Accrued expenses	$	79	$	87
Accrued salaries and employee benefits		900		961
Accrued clinical trial costs		350		452
Grant liability		600		615
Customer deposits		96		90
Total	$	2,025	$	2,205

(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, December 31, 2020		2,424,724	$	6.36
Warrants for common stock sold		—		—
Warrants for common stock exercised		—		—
Balance, September 30, 2021		2,424,724	$	6.36

Lincoln Park Capital stock purchase agreement - On March 29, 2021, the Company and Lincoln Park Capital Fund, LLC (Lincoln Park) entered into a purchase agreement (the Purchase Agreement) and a registration rights agreement (the Registration Rights Agreement), pursuant to which the Company has the right to sell to Lincoln Park shares of the Company’s common stock having an aggregate value of up to $20 million, subject to certain limitations and conditions set forth in the Purchase Agreement (the Offering). As consideration for entering into the Purchase Agreement, the Company agreed to issue to Lincoln Park 75,000 shares of common stock as commitment shares. In addition, the Company agreed to issue to Lincoln Park up to an aggregate of 50,000 additional shares of common stock as a further commitment fee based on a pro-rata percentage of the $20 million of common stock issued to Lincoln Park under the Purchase Agreement.

Pursuant to the Purchase Agreement, 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 (the Initial Purchase) and the Company 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. Thereafter, as often as every business day from and after one business day following the date of the Initial Purchase and over the 36-month term of the Purchase Agreement the Company has the right, from time to time, at its sole discretion and subject to certain conditions, to direct Lincoln Park to purchase up to 100,000 shares of common stock, with such amount increasing as the closing price of the common stock increases; provided Lincoln Park’s obligation under any single such purchase will not exceed $2 million, unless the Company and Lincoln Park mutually agree to increase the maximum amount of such single purchase (each, a Regular Purchase). If the Company directs Lincoln Park to purchase the maximum number of shares of common stock it then may sell in a Regular Purchase, then in addition to such Regular Purchase, and subject to certain conditions and limitations in the Purchase Agreement, the Company may direct Lincoln Park in an Accelerated Purchase to purchase an additional amount of common stock that may not exceed the lesser of (i) 300% of the number of shares purchased pursuant to the corresponding Regular Purchase in multiple Accelerated Purchases on the same trading day or (ii) 30% of the total number of shares of the Company’s common stock traded during a specified period on the applicable purchase date as set forth in the Purchase Agreement. Under certain circumstances and in accordance with the Purchase Agreement, the Company may direct Lincoln Park to purchase shares in multiple Accelerated Purchases on the same trading day.

The Company controls the timing and amount of any sales of its common stock to Lincoln Park. There is no upper limit on the price per share that Lincoln Park must pay for its common stock under the Purchase Agreement. In no event may the Company issue or sell to Lincoln Park under the Purchase Agreement shares of the Company’s common stock in excess of 3,266,177 shares (including the commitment shares), which represents 19.99% of the shares of our common stock outstanding immediately prior to the execution of the Purchase Agreement (the Exchange Cap), unless (i) the Company obtains stockholder approval to issue shares of its common stock in excess of the Exchange Cap or (ii) the average price of all applicable sales of the Company’s common stock to Lincoln Park under the Purchase Agreement equals or exceeds $4.2736 per share. In all instances, the Company may not sell shares of its common stock to Lincoln Park under the purchase agreement if it would result in Lincoln Park beneficially owning more than 9.99% of its common stock.

The Purchase Agreement does not limit the Company’s ability to raise capital from other sources at the Company’s sole discretion, except that during the 36 months after the date of the Purchase Agreement (subject to certain exceptions) the Company may not enter into any agreement to effect the issuance of its common stock or common stock equivalents in any “equity line of credit” or other similar continuous offering in which the Company may offer, issue or sell common stock or common stock equivalents at a future determined price, other than in connection with common stock issued pursuant to an “at-the-market offering” by the Company exclusively through a registered broker-dealer acting as agent of the Company pursuant to a written agreement between the Company and the registered broker-dealer. The Company has the right to terminate the Purchase Agreement at any time, at no cost to the Company.

As of September 30, 2021, the Company 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, 2021 and 2020 was recorded as follows (in thousands):

	Three months ended				Nine months ended
	September 30,				September 30,
	2021		2020		2021		2020
Research and development	$	196	$	357	$	613	$	1,088
Selling, general and administrative		241		380		624		1,245
Total share-based compensation	$	437	$	737	$	1,237	$	2,333

On January 29, 2020 (the repricing date), the Company’s Board of Directors repriced certain previously granted and still outstanding vested and unvested stock option awards held by employees, executives and certain service providers of the Company; as a result, the exercise price was lowered to $5.32 per share. No other terms of the repriced stock options were modified, and the repriced stock options will continue to vest according to their original vesting schedules and will retain their original expiration dates. As a result of the repricing, 515,036 vested and unvested stock options outstanding with original exercise prices ranging from $10.05 to $97.21, were repriced.

The repricing on January 29, 2020 resulted in incremental stock-based compensation expense of $569,000, of which $412,000 related to vested employee stock option awards and was expensed on the repricing date, and $157,000 related to unvested stock option awards is being amortized on a straight-line basis over the approximately three year remaining weighted average vesting period of those awards.

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, 2020		1,114,306		$	5.89		7.5	$	177.1
Stock options granted		772,435			3.56
Stock options exercised		(1,580	)		2.49
Stock options forfeited		(200,970	)		4.71
Stock options expired		(125	)		5.32
Balance, September 30, 2021		1,684,066		$	4.97		8.1	$	118.9
Exercisable, September 30, 2021		691,317		$	6.91		6.4	$	34.9

Unrecognized share-based compensation for employee and nonemployee options granted through September 30, 2021 is approximately $3.0 million to be recognized over a remaining weighted average service period of 2.9 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, 2020		224,311		$	4.12
RSUs granted		131,375			3.61
RSUs released		(118,472	)		3.73
RSUs forfeited		(36,943	)		3.49
Balance, September 30, 2021		200,271		$	4.13

Of the 200,271 RSUs outstanding on September 30, 2021, 194,803 RSUs are vested and have not been settled and 5,468 have not yet vested. The related compensation expense, which is based on the grant date fair value of the Company’s 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, 2021 is $64,000 to be recognized over a remaining weighted average service period of 0.5 years.

(9)

Net Loss per Share

Basic net loss per share is computed by dividing net loss by the weighted-average number of common shares outstanding for the period. 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. 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 its 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,
	2021		2020

Stock options to purchase common stock		1,684,066		1,078,813
Unvested restricted stock units		5,468		8,200
Common stock warrants		2,424,724		2,435,807
Total		4,114,258		3,522,820

(10)

Income Taxes

During the three and nine months ended September 30, 2021 and 2020, there was no income tax expense or benefit for federal or state income taxes in the accompanying condensed consolidated statements of operations due to the Company’s net loss and a full valuation allowance on the resulting deferred tax assets.

As of September 30, 2021, the Company retains a full valuation allowance on its deferred tax assets in all jurisdictions. The realization of its deferred tax assets depends primarily on its ability to generate future taxable income which is uncertain. The Company does not believe that its 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, the Company entered into a Litigation Funding Agreement (the Funding Agreement) with BSLF, L.L.C. (the Funder), an entity owned and controlled by Andrew Blank, Chair of BioCardia’s board of directors, for the purpose of funding the Company’s 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). BioCardia sought imposition of constructive trusts both on the patents naming Ms. Surbhi Sarna as an inventor and the proceeds received from the sale of nVision to Boston Scientific, as well as damages, including unjust enrichment damages measured by the proceeds received from the sale of nVision to Boston Scientific.

Under the terms of the Funding Agreement, the Funder agreed to fund the legal fees and costs incurred by the Company in connection with the Litigation on and after March 1, 2020 on a non-recourse basis. The Company agreed to repay the Funder from any proceeds arising from the Litigation (the Litigation Proceeds), (i) any taxes paid by or imposed upon Funder (other than taxes imposed upon Funder as a consequence of Funder’s income) with respect to the claims, the litigation proceeds or as a consequence of any settlement in connection with the Litigation, if any, plus (ii) an amount, without reduction, set-off or counterclaim, equal to the amount actually paid by the Funder pursuant to the Funding Agreement (the Actual Funding Amount) plus (iii) the greater of:

(a) 50% of the remaining Litigation Proceeds, up to three times the Actual Funding Amount; or

(b) 30% of the remaining Litigation Proceeds.

Although the Company is required under the terms of the Funding Agreement to consult with the Funder regarding any settlement in connection with the Litigation and to allow Funder to participate in any real-time settlement negotiations, the Company has the sole and exclusive right to settle on whatever terms it deems acceptable.

On April 12, 2021, all parties to the Litigation entered into a confidential settlement agreement. All claims in the Litigation have been dismissed. The settlement did not result in any material benefit or liability to the Company. The receivable outstanding under this agreement amounted to $562,000 as of September 30, 2021. The Company expects to terminate the Funding Agreement once all remaining matters thereunder are concluded.

(12)

Contingencies and Uncertainties

Contingencies - 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 is not aware of any current legal or administrative proceedings that are likely to have an adverse effect on the Company’s business, financial position, results of operations, or cash flows.

Uncertainties – The results for the three and nine months ended September 30, 2021 are not necessarily indicative of the results to be expected for the year ending December 31, 2021 or for any other interim period or for any other future year, particularly in light of the novel coronavirus pandemic, or COVID-19, and its impact on domestic and global economies. To limit the spread of COVID-19, governments have taken various actions including the issuance of stay-at-home orders, social distancing guidelines, and other restrictions and mandates causing some businesses to suspend operations and/or experience a reduction in demand for many products from direct or ultimate customers. Accordingly, businesses have adjusted, reduced or suspended operating activities and are continuing to adapt to these changing actions and guidelines.to have an adverse effect on the Company’s business, financial position, results of operations, or cash flows.

While the direct effects of the virus and these responses on our workforce have largely been mitigated, the overall impact of the pandemic has resulted in significant disruption to the Company’s business and in delays in the Company’s development programs and regulatory and commercial timelines. These factors may continue to affect the Company’s options and those of third parties on which the Company relies, including causing disruptions in the supply of the Company’s product candidates and the conduct of current and planned preclinical and clinical studies. BioCardia may need to limit operations and may experience workforce shortages. Additionally, while the potential economic impact brought by, and the duration of the pandemic is difficult to assess or predict, the impact on the global financial markets may reduce the Company’s ability to access capital, which could negatively impact the Company’s liquidity and ability to raise capital to complete its preclinical and clinical studies on a timely basis, or at all.

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 “Report”).

Forward-looking Statements

This Report 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 Report that are not statements of historical fact may be deemed forward-looking statements. Terms such as “may,” “might,” “will,” “would,” “should,” “could,” “project,” “estimate,” “pro-forma,” “predict,” “potential,” “strategy,” ”forecast,” “anticipate,” “attempt,” “develop,” “plan,” “help,” “believe,” “continue,” “intend,” “expect,” “future” and terms of similar import (including the negative of any of the foregoing) may identify forward-looking statements. However, not all forward-looking statements may contain one or more of these identifying terms. Forward-looking statements in this 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 (vi) the assumptions underlying or relating to any statement described in points (i) – (iv) above. Historical results are not necessarily indicative of future results. Our actual results may differ materially from those discussed in this Report. 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, 2020, filed with the SEC on March 30, 2021. You should carefully consider these risks, in addition to other information in this report and in our other filings with 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 except as required by law, we undertake no obligation to update publicly any forward-looking statements for any reason after the date of this Report to conform these statements to actual results or to changes in our expectations.

Overview

We are a clinical-stage company focused on developing cellular and cell derived therapeutics for cardiovascular and pulmonary diseases with large unmet medical needs. We are committed to applying our expertise in the fields of autologous and allogeneic cell-based therapies to improve the lives of patients with cardiovascular and pulmonary conditions. Our CardiAMP cell therapy platform provides an autologous bone marrow derived cell therapy (using a patient’s own cells) for the treatment of two clinical indications: heart failure that develops after a heart attack (BCDA-01) and chronic myocardial ischemia (BCDA-02). Our allogeneic mesenchymal stem cell therapy platform, derived from donor cells and intended to be provided “off the shelf,” is also being advanced for two indications, heart failure (BCDA-03) and for the pulmonary indication of acute respiratory distress that has developed from COVID-19 (BCDA-04).

Our Helix™ Biotherapeutic Delivery System platform, or Helix, delivers therapeutics into the heart muscle with a helical needle from within the heart. It enables local delivery of cell, gene and protein-based therapies, including our own cell therapies to treat cardiac indications. The Helix system is CE marked in Europe and under investigational use in the United States. We selectively partner with firms developing other cell, gene and protein therapies utilizing the Helix and other biotherapeutic delivery systems that we have developed.

Our AVANCE™ product offering for transseptal cardiac procedures has begun early commercialization activities in the United States through commission-only 1099 sales representatives.

Coronavirus Considerations

The novel coronavirus (COVID-19) pandemic has resulted in significant disruption to the Company’s business and in delays in the Company’s development programs and regulatory and commercialization timelines, including adversely impacting operations at certain clinical sites involved in our ongoing clinical studies. It is possible that 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 economic impact brought by, and the duration of, the COVID-19 pandemic is difficult to assess or predict, the impact of COVID-19 on the global financial markets may reduce the Company’s ability to access capital, which could negatively impact the Company’s liquidity and ability to raise the capital to complete its preclinical and clinical studies on a timely basis, or at all.

The impact of the COVID-19 pandemic remains fluid and continues to evolve. The extent to which the COVID-19 pandemic continues to impact the Company’s results will depend on future developments, which are highly uncertain and cannot be predicted, including the severity of COVID-19 and its mutations, the progress made on administering the vaccines or other emerging treatments, the continuing impact on local and global economic conditions, workforce capacity and the ongoing government responses, including stay-at-home orders and other restrictions and mandates that may be imposed.

CardiAMP Cell Therapy for Heart Failure and Chronic Myocardial Ischemia

The Company’s lead platform, CardiAMP cell therapy, is an autologous cell therapy being advanced for two indications in pivotal clinical trials: heart failure and chronic myocardial ischemia. The therapy uses a patient’s own cells in a minimally invasive, catheter-procedure to potentially stimulate the body’s natural healing response. The therapy incorporates a pre-procedural screening assay to identify those patients who are likely responders to the therapy. Patients eligible to undergo the cell therapy procedure receive cells delivered using our Helix Biotherapeutic Delivery System platform and are usually able to be discharged from the hospital the morning after the study procedure.

The CardiAMP Cell Therapy Heart Failure Trial is a Phase III, multi-center, randomized, double-blinded, sham-controlled study of up to 260 patients at 40 centers nationwide, which includes a 10-patient roll-in cohort. The Phase III pivotal trial is designed to provide the primary support for the safety and efficacy of the CardiAMP Cell Therapy System for heart failure which develops after a patient has a heart attack (BCDA-01). A protocol amendment approved by the FDA allows patients in the trial who were initially randomly assigned to the control arm and who did not receive therapy to elect to cross-over and receive the investigational autologous CardiAMP Cell Therapy after completing two-year follow-up. The trial is active at 24 clinical sites and 106 patients have been enrolled to date, with 3 additional control patients having crossed over to receive therapy. The independent Data Safety Monitoring Board (DSMB) completed a prespecified data review in June 2021, including all data for the 97 patients enrolled that had reached their one-year follow-up at that date. The DSMB performed a risk-benefit review, indicated it had no safety concerns, and recommended in writing that the study continue as planned. The next DSMB review is anticipated in early February 2022.

The CardiAMP Cell Therapy 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 patients with no option chronic myocardial ischemia with refractory angina (BCDA-02). These patients experience frequent angina (chest pain) attacks that are uncontrolled by optimal drug therapy but 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. The Company intends to introduce an adaptive statistical analysis plan with an initial assessment for efficacy when 100 patients reach their primary endpoint, although aspects of this statistical analysis plan remain the subject of study considerations with the FDA. In Q3 2021, the FDA approved a supplement to this study, which harmonizes the protocol with that of the CardiAMP Cell Therapy Heart Failure Study to incorporate the extensive experience in this parallel trial. The trial has been activated and one patient has been treated.

The Department of Health & Human Services Centers for Medicare & Medicaid Services, or CMS, has designated that both CardiAMP Cell Therapy pivotal trials qualify for Medicare national coverage. Covered costs 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 CMS reimbursement policy and are similarly anticipated to cover these costs. This coverage significantly reduces our cost of conducting these pivotal trials.

ALLOGENEIC Cell Therapy for Cardiac and Pulmonary Disease

Our second therapeutic platform is our investigational culture expanded bone marrow derived allogeneic, Neurokinin-1 Receptor Positive Mesenchymal Stem Cells (NK1R+ MSC). This “off the shelf” therapy is being advanced for cardiac and pulmonary disease.

We are actively working to secure FDA acceptance of an Investigational New Drug (IND) application for a Phase I/II trial to deliver these allogeneic cells for the treatment of ischemic systolic heart failure (BCDA-03). We have completed the manufacturing validation runs and stability testing for the Chemistry Manufacturing and Controls section of the BCDA-03 IND and are working to complete the preclinical pharmacology toxicology animal testing. Animal studies are being initiated. Should the results be in line with our previous work, we expect IND submission will follow soon after the results are obtained.

The Company also intends to submit an IND for the use of its allogeneic cell therapy for Acute Respiratory Distress Syndrome (ARDS) caused by COVID-19 (BCDA-04). Based on clinical reports on COVID-19, pulmonary complications lead to long term respiratory inflammatory problems. We have completed the manufacturing validation runs and stability testing for the Chemistry Manufacturing and Controls section of the BCDA-04 IND. We are working to complete the preclinical pharmacology toxicology animal testing for the IND submission. For BCDA-04, all animals have reached their endpoints and results are expected soon. Should the results be as anticipated, we expect IND submission will follow soon afterwards.

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 Morph vascular access system in the US and EU 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, but are not limited to 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 Heart Failure Trial, advance the pivotal CardiAMP Chronic Myocardial Ischemia Trial, and further develop our autologous and allogeneic cell therapy candidates. 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.

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, cash equivalents and investments.

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.

The full extent to which the ongoing COVID-19 pandemic will directly or indirectly impact our business, results of operations and financial condition, including revenues, expenses, reserves and allowances, manufacturing, clinical trials and research and development will depend on future developments that remain uncertain at this time. As events continue to evolve and additional information becomes available, our estimates may change materially in future periods.

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 2 in our Annual Report on Form 10-K for the year ended December 31, 2020.

Results of Operations

Comparison of Three and Nine Months Ended September 30, 2021 and 2020

The following table summarizes our results of operations for the three and nine months ended September 30, 2021 and 2020 (in thousands):

	Three months ended September 30,						Nine months ended September 30,
	2021			2020			2021			2020
Revenue:
Net product revenue	$	1		$	8		$	1		$	13
Collaboration agreement revenue		820			26			935			86
Total revenue		821			34			936			99
Costs and expenses:
Cost of goods sold		—			—			—			4
Research and development		2,240			2,474			6,443			7,484
Selling, general and administrative		1,289			1,408			3,662			4,642
Total costs and expenses		3,529			3,882			10,105			12,130
Operating loss		(2,708	)		(3,848	)		(9,169	)		(12,031	)
Other income (expense):
Interest income		2			1			8			19
Other expense		—			(1	)		(1	)		(3	)
Total other income (expense)		2			—			7			16
Net loss	$	(2,706	)	$	(3,848	)	$	(9,162	)	$	(12,015	)

Revenue. Revenue increased to $821,000 in the three months ended September 30, 2021 as compared to $34,000 in the three months ended September 30, 2020, and to $936,000 in the nine months ended September 30, 2021 as compared to $99,000 in the nine months ended September 30, 2020, primarily due to increased collaboration activity with corporate partners. The amount and timing of collaboration revenues largely depends on our partners activities and may be inconsistent and create significant quarter-to-quarter variation.

Research and Development Expenses. Research and development expenses decreased by $234,000 during the three months ended September 30, 2021 compared to the three months ended September 30, 2020, and by $1,041,000 during the nine months ended September 30, 2021 compared to the nine months ended September 30, 2020, primarily due to reduced clinical service provider costs as we staff more work with internal personnel, coupled with lower stock compensation expense.

Selling, General and Administrative Expenses. Selling, general and administrative expenses for the three months ended September 30, 2021 decreased by $119,000 compared to the three months ended September 30, 2020, and by $980,000 during the nine months ended September 30, 2021 compared to the nine months ended September 30, 2020, primarily due to lower compensation expense, including stock compensation, coupled with reduced professional service fees.

Liquidity and Capital Resources

We have incurred net losses each year since our inception and as of September 30, 2021, we had an accumulated deficit of approximately $125.2 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, 2021, we had cash and cash equivalents of approximately $15.9 million.

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

	Nine months ended September 30,
	2021			2020
Net cash provided by (used in):
Operating activities	$	(7,391	)	$	(8,940	)
Investing activities		(75	)		(32	)
Financing activities		1,947			10,779
Net increase (decrease) in cash and cash equivalents	$	(5,519	)	$	1,807

Cash Flows from Operating Activities. The decrease in overall spending for operating activities of approximately $1.5 million through the nine months ended September 30, 2021 compared to the nine months ended September 30, 2020 related primarily to the timing of advance payments from collaboration partners coupled with decreases in payments to third parties for professional fees. We expect net cash used in operating activities to decrease year over year in 2021 as compared to 2020 as a result of these factors.

Cash Flows from Investing Activities. Net cash used in investing activities of $75,000 and $32,000 during the nine months ended September 30, 2021 and 2020, respectively consists of purchases of property and equipment, primarily lab and office equipment.

Cash Flows from Financing Activities. Net cash provided by financing activities of $1.9 million during the nine months ended September 30, 2021 consisted of gross proceeds from the sale of common stock in March 2021 less issuance costs. Net cash provided by financing activities of approximately $10.8 million during the nine months ended September 30, 2020 consisted of $11.5 million in gross proceeds from the sale of common stock in June 2020 less issuance costs of $1.2 million and $506,000 proceeds from a Note under the Paycheck Protection Program (the PPP) of the Coronavirus Aid, Relief, and Economic Security Act (CARES Act) administered by the U.S. Small Business Administration.

Lincoln Park Capital Stock Purchase Agreement

In March 2021, we and Lincoln Park Capital Fund, LLC (Lincoln Park) entered into a purchase agreement (the Purchase Agreement) and a registration rights agreement (the 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 set forth in the Purchase Agreement. Pursuant to the terms of the Purchase Agreement, at the time we signed the Purchase Agreement, we sold 373,832 shares of our common stock at a price of $5.35 per share pursuant to the Purchase Agreement for gross proceeds of $2 million (and issued 80,000 shares of common stock to Lincoln Park as consideration for its commitment to purchase shares of our common stock, which consisted of 75,000 shares for Lincoln Park’s initial commitment and 5,000 shares issued on a pro rata basis in respect of Lincoln Park’s initial purchase of 373,832 shares). Thereafter, as often as every business day from and after one business day following the date of the Initial Purchase and over the 36-month term of the Purchase Agreement, we have the right, from time to time, at our sole discretion and subject to certain conditions, to direct Lincoln Park to purchase up to 100,000 shares of common stock, with such amount increasing as the closing sale price of the common stock increases; provided Lincoln Park’s obligation under any single such purchase will not exceed $2 million, unless we and Lincoln Park mutually agree to increase the maximum amount of such single purchase (each, a Regular Purchase). If we direct Lincoln Park to purchase the maximum number of shares of common stock it then may sell in a Regular Purchase, then in addition to such Regular Purchase, and subject to certain conditions and limitations in the Purchase Agreement, we may direct Lincoln Park in an Accelerated Purchase to purchase an additional amount of common stock that may not exceed the lesser of (i) 300% of the number of shares purchased pursuant to the corresponding Regular Purchase or (ii) 30% of the total number of shares of our common stock traded during a specified period on the applicable purchase date as set forth in the Purchase Agreement. Under certain circumstances and in accordance with the Purchase Agreement, we may direct Lincoln Park to purchase shares in multiple Accelerated Purchases on the same trading day. As of September 30, 2021, the Company had not made any sales of common stock to Lincoln Park under the Purchase Agreement other than the Initial Purchase.

Future Funding Requirements

To date, we have generated modest revenue from sales of our approved products. 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 $15.9 million as of September 30, 2021 are sufficient to fund our operations for at least the next 12 months from the date of this filing. 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 clinical trials and related development programs;

•

FDA acceptance of our autologous and allogeneic therapies for heart failure and other 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 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.

Recent Accounting Pronouncements

See Note 2 of our notes to condensed consolidated financial statements 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, 2021.

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, 2021, 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 Report, as of September 30, 2021, 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, 2021, 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, 2021 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

As previously reported, BioCardia and its wholly-owned subsidiary BioCardia Lifesciences, Inc. were party to several related legal proceedings (the Litigation) in Federal Court in San Francisco. The various counterparties were Boston Scientific Corporation, Boston Scientific Scimed Inc., Fortis Advisors LLC, Ms. Surbhi Sarna and nVision Medical Corporation. All parties to the Litigation entered into a confidential settlement agreement on March 12, 2021. All claims in the Litigation were then dismissed. The settlement did not result in any material benefit or liability to BioCardia and BioCardia Lifesciences, Inc.

ITEM 1A. RISK FACTORS

In addition to 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, 2020, which could materially affect our business, financial condition, or future results. The risks described in this Quarterly Report on Form 10-Q, our Annual Report on Form 10-K for the year ended December 31, 2020, 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 also may materially adversely affect our business, financial condition or future results.

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+ 104	Inline XBRL Taxonomy Extension Presentation Linkbase Document Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 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 April 11, 2017.

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 10, 2021	By:	/s/ Peter Altman
		Peter Altman
		President and Chief Executive Officer
		(Principal Executive Officer)


Date: November 10, 2021	By:	/s/ David McClung
		David McClung
		Chief Financial Officer
		(Principal Financial and Accounting Officer)

SEC Form 10-Q filed by BioCardia, Inc.