Business context and reporting period
Entity mismatch: The supplied filing is for Tiger X Medical, Inc., not BioCardia, Inc. It is a Form 10-Q for the quarter ended June 30, 2014, filed August 6, 2014.
Tiger X had discontinued its former orthopedic-device operations and sold those business assets. Its continuing revenue comes primarily from royalties under an agreement with Arthrex; it also promotes former knee product lines and evaluates opportunities for its remaining intellectual property and cash.
Financial results and position
| Metric (USD thousands, except per-share data) | Q2 2014 / June 30, 2014 | Comparable period / December 31, 2013 |
|---|---|---|
| Royalty income | 105 | 69 in Q2 2013 |
| General and administrative expenses | 40 | 63 in Q2 2013 |
| Operating income | 65 | 6 in Q2 2013 |
| Net income | 66 | 9 in Q2 2013 |
| Cash | 13,401 | 13,295 |
| Total liabilities | 1 | 18 |
| Stockholders’ equity | 13,440 | 13,310 |
For the six months ended June 30, royalty income was $203,000 versus $107,000 in 2013; net income was $130,000 versus a $16,000 loss. Operating cash flow was $106,000 versus $1,000. There were no investing or financing cash flows, no debt outstanding, and no interest expense. Income taxes were zero in both six-month periods. Basic and diluted earnings per share are shown as “$—”; the filing does not provide a clear numerical per-share value.
Material changes, outlook and risks
- Q2 royalty income increased $36,000 year over year; six-month royalty income increased $96,000. Management attributed the increase to higher Arthrex sales of the acquired product line.
- Lower G&A—down $23,000 for Q2 and $52,000 for six months—primarily reflected higher professional fees in 2013; the six-month comparison also reflected business taxes paid in 2013. Management expected G&A to remain at the 2014 level.
- Management said cash was adequate for needs over the next twelve months and beyond. No specific earnings or revenue guidance was provided; royalties were expected to remain the primary revenue source unless the company finds a partner, buyer, or investment opportunity.
- Cash held in bank accounts exceeded FDIC-insured limits by $13.154 million at June 30, 2014, creating bank-concentration risk.
- Management concluded disclosure controls and procedures were not effective, citing no full-time CFO since 2011, elimination of the internal accounting and finance department, and insufficient segregation of duties. No material changes to internal control over financial reporting were reported during the quarter.
- The filing reported no known material pending legal proceedings. Management cautioned that forward-looking statements are subject to risks and uncertainties and referred readers to the 2013 Form 10-K risk factors.
Important facts for investors to verify
- Confirm the intended issuer: this filing names Tiger X Medical, Inc., whereas the request identifies BioCardia, Inc.
- Review the Arthrex royalty agreement, sales trends, and the duration and terms of royalty payments.
- Assess cash concentration and the company’s plans for its remaining intellectual property and substantial cash balance.
- Consider the disclosed ineffective controls, limited finance staffing, and lack of segregation of duties.
- The filing reports 230,293,141 common shares outstanding at June 30 and August 6, 2014; it also reports 385,000 options and 575,613 warrants outstanding at June 30.