Business Context and Reporting Period
This is Tiger X Medical, Inc.’s unaudited Form 10-Q for the quarter and six months ended June 30, 2015, filed August 12, 2015. The request identifies BioCardia, Inc., but the filing names Tiger X Medical, Inc. as the registrant; verify the issuer before attributing these results.
Tiger X had discontinued its orthopedic device operations and sold assets from its former business lines. Its continuing revenue was royalties from Arthrex under an agreement providing 5% of net sales of specified products for up to 20 years. The company also promoted former knee product lines and evaluated potential partners or buyers for remaining intellectual property, as well as uses for its cash.
Financial Results and Liquidity
Amounts below are in thousands of dollars, except per-share data.
| Metric | Q2 2015 | Q2 2014 | Six months 2015 | Six months 2014 |
|---|---|---|---|---|
| Royalty income | $125 | $105 | $261 | $203 |
| General and administrative expenses | $53 | $40 | $114 | $75 |
| Income from operations | $72 | $65 | $147 | $128 |
| Net income | $73 | $66 | $149 | $130 |
| Operating margin | 57.6% | 61.9% | 56.3% | 63.1% |
| Net cash provided by operating activities | Not presented by quarter | $179 | $106 |
- Royalty income increased 19% in Q2 and 29% for the first six months year over year. Management attributed the increase to higher Arthrex sales of the acquired product line.
- Net income rose 11% in Q2 and 15% for the six-month period. General and administrative expenses increased 33% and 52%, respectively, primarily due to higher professional expenses.
- At June 30, 2015, cash was $13.688 million, total assets were $13.697 million, total liabilities were $4,000, and stockholders’ equity was $13.693 million. The company reported no debt and no interest expense.
- Operating cash flow was $179,000, compared with $106,000 in the prior-year period. There were no investing or financing cash flows in either six-month period.
- The income statement reports basic and diluted net income per share as “$-”; the filing text does not provide a clear unrounded per-share value. No income tax provision was reported.
Changes, Outlook, and Risks
- Management expected royalties under the Arthrex agreement to remain the primary revenue source until the company found a joint-venture partner or buyer for its remaining intellectual property, or an investment opportunity for its cash.
- Management stated that cash was adequate to meet needs for the next 12 months and beyond. This is management’s assessment, not a guarantee of future funding needs or results.
- The filing disclosed that bank balances exceeded FDIC insurance limits by $13.446 million at June 30, 2015, creating significant uninsured-deposit exposure.
- Management cited increased professional expenses as the reason for higher G&A. The filing also notes that interim results are not necessarily indicative of full-year results and refers investors to the risk factors in the 2014 Form 10-K.
- There were no material pending legal proceedings disclosed. Management concluded disclosure controls were effective at June 30, 2015, and reported no material change in internal control over financial reporting during the quarter.
Key Facts for Investors to Verify
- Confirm whether Tiger X Medical, Inc., rather than BioCardia, Inc., is the intended issuer for this summary.
- Review the Arthrex royalty agreement, reported product sales trends, and the duration and terms of royalty payments.
- Assess the concentration of revenue in royalties and the company’s plans for its remaining intellectual property and substantial cash balance.
- Consider the uninsured bank-deposit exposure and verify the cash balance and any subsequent changes in cash deployment.
- Consult the 2014 Form 10-K for the risk factors referenced by management and check subsequent filings for developments after June 30, 2015.