Biocardia, Inc. — 2016 Q2 10-Q summary
Entity note: The supplied filing is for Tiger X Medical, Inc., not BioCardia, Inc. This summary reflects the filing as provided. Reporting period ended June 30, 2016; financial statements are unaudited. Amounts below are in thousands of dollars unless stated otherwise.
Business context
Tiger X had discontinued its orthopedic medical-device operations and sold the related business assets. Through July 1, 2016, its continuing revenue came from royalties under an agreement with Arthrex. The company said it was evaluating uses for its cash and seeking a joint-venture partner or buyer for its remaining intellectual property.
Financial performance and position
- Q2 revenue: Royalty income was $142, up $17 (about 14%) from $125 in Q2 2015.
- Q2 earnings: Operating income was $74 versus $72; net income was $75 versus $73. General and administrative expense rose to $68 from $53, primarily due to legal and professional costs related to the Arthrex settlement and other legal matters. The filing displays basic and diluted earnings per share as “—”; it does not provide a clear per-share value.
- First-half results: Royalty income was $291 versus $261; operating income was $155 versus $147; net income was $157 versus $149. General and administrative expense was $136 versus $114.
- Cash and liquidity: Cash was $13.872 million at June 30, compared with $13.840 million at December 31, 2015. Operating cash flow for the first half was $32,000, down from $179,000 in the prior-year period, mainly because of a $142,000 royalty receivable. Management said cash was adequate for needs over the next twelve months and beyond.
- Debt and liabilities: No debt is reported. Total liabilities were zero at June 30, versus $10,000 at year-end 2015. Total assets were $14.023 million, and stockholders’ equity was $14.023 million.
- Cash-flow and balance-sheet risk: The company reported $13.650 million of bank balances above FDIC-insured limits at June 30.
Material changes and unusual items
On May 5, 2016, Tiger X agreed to accept $5,642,302 from Arthrex in full satisfaction of current and future amounts under the royalty agreement. The agreement became effective when payment was received on July 1, after quarter-end. The payment included $142,302 of royalties recognized in Q2; the remaining $5.5 million was recognized as revenue upon closing on July 1. The company stated it would have no further royalty income under that agreement. The post-quarter receipt is not included in June 30 cash.
Compared with the prior-year periods, royalty income and net income increased modestly, while general and administrative expenses also increased. No investing or financing cash flows were reported for either first-half period.
Outlook, risks, and contingencies
- The settlement ends the company’s recurring royalty stream from Arthrex; future operating revenue sources were not identified in the filing.
- Management was evaluating investment opportunities for its cash and options for its remaining intellectual property. No specific plans or financial guidance were provided.
- The filing notes that forward-looking statements are subject to risks and uncertainties and refers readers to the risk factors in the 2015 Form 10-K.
- The company reported no known material pending legal proceedings. Management concluded disclosure controls were effective as of June 30, 2016, and reported no material changes in internal control during the quarter.
Key facts for investors to verify
- Confirm the registrant’s identity: this supplied 10-Q names Tiger X Medical, Inc., despite the request metadata naming BioCardia, Inc.
- Review the Arthrex settlement agreement and verify receipt and accounting for the $5.642 million payment after quarter-end.
- Assess the effect of losing future Arthrex royalties and the company’s plans for cash and remaining intellectual property.
- Monitor cash deployment and the concentration of uninsured bank deposits.