PART I. FINANCIAL INFORMATION

ITEM 1. UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

BioCardia, Inc.

Notes to Unaudited Condensed Consolidated Financial Statements

Lincoln Park Capital stock purchase agreement - On March 29, 2021, the Company andwe entered into a purchase agreement with Lincoln Park Capital Fund, LLC (Lincoln Park) entered into a purchase agreement (the Purchase(Purchase Agreement) and a registration rights agreement (the Registration(Registration Rights Agreement), pursuant to which the Company haswe have the right to sell to Lincoln Park shares of the Company’sour 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 in March 2021, 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(Initial Purchase) and the Companywe 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$2 million purchase. Thereafter, as often as every business day from and after 1 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 June 30, 2022, the CompanyMarch 31, 2023, we had not sold any common stock to Lincoln Park under the Purchase Agreement other than the Initial Purchase.

Cantor Fitzgerald Sales agreement -On April 12, 2022, the Companywe entered into a sales agreement (the Sales(Sales Agreement) with Cantor Fitzgerald & Co. (Cantor) as the sales agent, pursuant to which the Company we may offer and sell, from time to time, through Cantor, shares of its common stock having an aggregate offering price of up to $10.5 million (the ATM(ATM Offering). The Company is We are not obligated to sell any common stock shares pursuant to the Sales Agreement. Under the terms of the Sales Agreement, the Company willwe pay Cantor a commission of 3% of the aggregate proceeds from the sale of shares and reimburse certain legal fees. In April 2022, We filed a prospectus supplement under our existing registration statement covering the Companyoffer and sale of up to $10.5 million of common stock, of which approximately $8.5 million was still available for offer and sale as of March 31, 2023.

During the three months ended March 31, 2023, we sold 575,000106,241 shares of common stock under the ATM Offering at then-market prices for total gross proceeds of approximately $1.5 million,$244,000, with associatednet issuance costs of $232,000.$13,000.

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 six months ended June 30,March 31, 2023 and 2022and 2021 was recorded as follows (in thousands):

The following table summarizes the activity of stock options and related information:

Unrecognized share-based compensation for employee and nonemployee options granted through June 30, 2022 March 31, 2023 is approximately $2.5$1.8 million to be recognized over a remaining weighted average service period of 2.82.2 years.

Share-Based Compensation (RSUs)

The following summarizes the activity of non-vested RSUs:

RSUs vested and settled are converted into the Company’s common stock on a one-for-oneone-for-one basis. RSUs are generally subject to forfeiture if employment terminates prior to the release of vesting restrictions. Of the 69,828 RSUs outstanding on June 30, 2022, 67,094 RSUs are vested and have not been settled and 2,734 have not yet vested. The related compensation expense, which is based on the grant date fair value of the Company’sour 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 June 30, 2022 March 31, 2023 is approximately $55,000$1,000 to be recognized over a remaining weighted average service period of 0.20.1 years.

Basic net loss per share is calculated by dividing the net loss by the weighted average number of shares of common stock outstanding and fully vested restricted stock units. 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. Common stock equivalents are comprised of unvested restricted stock units, warrants to purchase common stock and options outstanding under the stock option plans. 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 the 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:

During the three and six months ended June 30,March 31, 2023 and 2022,and 2021, 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’sour net loss and a full valuation allowance on the resulting deferred tax assets.

As of June 30, 2022, the Company retainsMarch 31, 2023, we retain a full valuation allowance on itsour deferred tax assets in all jurisdictions. The realization of itsour deferred tax assets depends primarily on itsour ability to generate future taxable income which is uncertain. The Company does We do not believe that itsour deferred tax assets are realizable on a more-likely-than-notmore-likely-than-not basis; therefore, the net deferred tax assets have been fully offset by a valuation allowance.

On April 9, 2020, the Companywe entered into a Litigation Funding Agreement (the Funding(Funding Agreement) with BSLF, L.L.C. (the Funder)(Funder), an entity owned and controlled by Andrew Blank, Chair of BioCardia’s board of directors, for the purpose of funding the Company’sour 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,19-05645-VC, U.S.D.C., N. D. Cal (the Litigation). On April 12, 2021, all parties to the Litigation entered into a confidential settlement agreement and all claims were dismissed.

In March 2022, the Companywe entered into settlement agreements with itsour litigation service providers and the Funder to terminate the Funding Agreement and conclude on all remaining matters thereunder (the Litigation Funding Settlement). Under the terms of the confidential agreements, litigation and corporate counsel provided credits and refunds of legal fees, totaling $688,000, which offset the amounts owed to the Companyus by the Funder under the Funding Agreement, and provided up to $300,000 in future discounts on legal services. As a result of the Litigation Funding Settlement, the Company will remit the discounts, as received,services which are remitted to the Funder on a quarterly basis. As a result of the settlement, accounts payable was reduced by $523,000, the $562,000 receivable due from the related party was eliminated, and a $156,000 related party payable was included in accrued expenses and other current liabilities as of December 31, 2021. The Company remitted the $156,000 related party payable to the Funder on March 17, 2022. During the three and six months ended June 30,March 31, 2023, and 2022, the Companywe received discounts totaling $43,000$33,000 and $47,000,zero, respectively, with the total $47,000$33,000 and $18,000 recorded as a related party payable in accrued expenses and other current liabilities as of June 30, 2022.March 31, 2023 and December 31, 2022, respectively.

Contingencies - The Company We 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’sour business, financial position, results of operations, or cash flows.

Uncertainties - The results for the three and six months ended June 30, 2022 March 31, 2023 are not necessarily indicative of the results to be expected for the year ending December 31, 2022 2023 or for any other interim period or for any other future year, particularly in light of the novel coronavirus pandemic, or COVID-19,COVID-19 and its impact on domestic and global economies. Governmental and business reactions to the pandemic, and resulting economic disruptions, have the potential to materially impact our business and influence our business decisions. While the impact of the COVID-19 pandemicCOVID-19 did not have a material adverse effect on our financial position or results of operations for the periods presented, our future assessment of the governmental actions and similar actions that may be enacted in the future, and the widespread economic disruption arising from the pandemic, have the potential to materially impact our business and influence our business decisions. The extentmagnitude and duration of the pandemic is unknown,COVID-19 and therelated factors, could result in material impacts to our financial statements in future effects on our business are uncertain and difficult to predict. The Company is continuing to monitor the events and circumstances surrounding the COVID-19 pandemic, which may require adjustments to the Company’s estimates and assumptions in the future.reporting periods.

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 discussion 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 Quarterly Report that are not statements of historical fact may be deemed forward-looking statements. Terms such as “may,” “might,” “would,” “should,” “could,” “project,” “estimate,” “pro-forma,” “predict,” “potential,” “strategy,” “anticipate,” “attempt,” “develop,” “plan,” “help,” “believe,” “continue,” “intend,” “expect,” “future” and terms of similar import (including the negative of any of the foregoing) may be intended to identify forward-looking statements. However, not all forward-looking statements may contain one or more of these identifying terms. Forward-looking statements in this Quarterly 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. Our actual results may differ materially from those discussed below. 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, those listed in our Annual Report on Form 10-K for the year ended December 31, 2021.2022, which is incorporated by reference herein. Historical results are not necessarily indicative of future results. Except as required by law, we undertake no obligation to update publicly any forward-looking statements for any reason after the date of this Quarterly Report on Form 10-Q 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 the treatment of cardiovascular and pulmonary diseases with largesignificant unmet medical needs. We are committed to applying our expertiseadvancing two cell therapy platforms derived from bone marrow in the fields ofclinical trials today. Our CardiAMP® autologous and allogeneic cell-based therapies to improve the lives of patients with cardiovascular and pulmonary conditions. Our CardiAMPmononuclear cell therapy platform provides an autologous bone marrow derived cell therapy (using a patient’s own cells)is being advanced for the treatment of two clinical indications: ischemic heart failure that develops after a heart attack (BCDA-01)with reduced ejection fraction (HFrEF) and refractory angina resulting from chronic myocardial ischemia (BCDA-02)(CMI). Our neurokinin-1 receptor positive (NK1R+) allogeneic mesenchymal stem cell (MSC) therapy platform derived from donor cells and intended to be providedis being advanced as an “off the shelf,” is also being advancedshelf” cell therapy for two indications, heart failure (BCDA-03)clinical indications: the treatment of ischemic HFrEF and for the pulmonary indication of acute respiratory distress that has developed from COVID-19 (BCDA-04)syndrome (ARDS).

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, geneautologous CardiAMP and protein-based therapies, including our ownallogeneic NK1R+ cell therapies to treatintended for cardiac indications. The Helix system is CE marked in Europeindications of HFrEF and under investigational use in the United States.CMI are enabled by our Helix™ minimally invasive intramyocardial therapeutic delivery platform. We selectively partner this therapeutic delivery platform with firms developing other cell, geneothers seeking to develop biotherapeutic interventions for local delivery to the heart.

To date, we have devoted substantially all of our resources to research and protein therapies utilizing the Helixdevelopment efforts relating to our therapeutic candidates and other biotherapeutic delivery systems, that weincluding 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. We have developed.  

Our AVANCE™ product offering for transseptal cardiac procedures has begun early commercialization activities inalso generated modest revenues from sales of our approved products. We have funded our operations primarily through the United States through commission-only 1099 sales representatives. of equity and convertible debt securities, and certain government and private grants.

CardiAMP Autologous Cell Therapy for Ischemic Heart Failure and for Chronic Myocardial Ischemia (BCDA-02)

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 CardiAMPCell Therapy Heart Failure Trial is a Phase III, multi-center, randomized, double-blinded, sham-controlled study of up to 260 patients at up to 40 centers nationwide,in the United States and Canada, which includes a 10-patient roll-in cohort. The Phase III pivotal trial, which was granted Breakthrough designation by the U.S. Food and Drug Administration (FDA), is designed to provide the primary support for the safety and efficacy of the CardiAMP Cell Therapy System for the treatment of heart failure which develops after a patient has a heart attackwith HFrEF (BCDA-01). The primary endpoint is an outcomes composite score based on a three-tiered Finkelstein-Schoenfeld hierarchical analysis. The tiers, starting with the most serious events, would be (1) all-cause death, including cardiac death equivalents such as heart transplant or left ventricular assist device placement, ordered by time to event; (2) non-fatal Major Adverse Coronary and Cerebrovascular Events (MACCE), excluding those deemed procedure-related occurring within the first seven days post-procedure (heart failure hospitalization, stroke or myocardial infarction), ordered by time to event, and (3) change from baseline in 6MW at 12 months. Additional prespecified secondary hierarchical and nonhierarchical endpoints are also being assessed. This trial is active at 2620 clinical sites, including four sites in Canada and 114120 patients have been enrolled to date, with 10 additional control patients having crossed over to receive therapy.date.

In January 2022,Working with leading biostatistics and regulatory consultants, we submitted a supplement to the U.S. Food and Drug Administration (FDA) granted Breakthrough Device DesignationFDA in February 2023 with a proposed adaptive SAP for the CardiAMP Cell Therapy SystemHeart Failure trial. This was submitted as a Sprint Discussion under the Breakthrough designation guidance provided by the FDA. We met with the FDA CBER on March 29, 2023, documented the minutes of our discussion with the Agency and on April 26, 2023 submitted a detailed supplement for the treatmentimplementation of heart failure. This Breakthrough Device Program is designed to expedite FDA approval of certain novel devices or device-led combination products (i.e., products that combine drugs, devices or biological products) that have the potential to provide more effective treatment or diagnosis of life-threatening or irreversibly debilitating diseases or conditions. It is believed that the CardiAMP Cell Therapy System is the first cardiac cell therapy to receive an FDA Breakthrough designation.   adaptive statistical analysis plan.

We anticipate that the next DSMB meeting will be scheduled in June 2023 and will utilize an adaptive design should the FDA approve the supplement as expected. In February 2022,advance of the independent Data Safety Monitoring Board (DSMB) completed a prespecifiednext DSMB review, we anticipate all data review, including a risk-benefit assessment. Followingthat contributes to the review,primary efficacy endpoint in the study submission will have been monitored by our clinical staff, verifying all clinical data required for interpretation in the DSMB indicated that it had no significant safety concerns and recommended that the study continue as designed. The next prespecified formal DSMB review is scheduled for August 30, 2022, which will assess both safety and futility of the trial. The results from this review should be made available in the days following the review.

In February 2022, Health Canada, the country’s health services agency, sent BioCardia a No Objection Letter, allowing the CardiAMP Heart Failure Trial to expand into Canada. Four world-class Canadian clinical sites are currently working through the activation process to begin enrolling patientsShould this next DSMB review or another future DSMB review include an adaptive statistical analysis plan, it could result in the near future. The firstDSMB being able to recommend the trial enrollment be stopped early for anticipated success with fewer patients or that confirmation of these four new Canadian sites, the Ottawa Heart Institute is now actively enrolling instudy should continue as planned to the trial.next DSMB review. Should we meet the primary endpoint with fewer patients than currently planned, the FDA Breakthrough designation granted to this program may reduce the need to have a significant additional number of patients to demonstrate safety prior to market approval and allow BioCardia to obtain additional safety data after market approval.

Enrollment in the CardiAMP Heart Failure Trial remainsIn July 2022, we had our primary focus. We expect enrollment to improve in the months ahead due to:

The Company is actively pursuing approval for the CardiAMP Cell Therapy System for the treatment of ischemic heart failure based on existing data. After working with distinguished physician leaders, we are in Japanthe process of completing a formal submission towards approval in Japan. The submission has been submitted for translation into Japanese and had its second consultation with Japan’s Pharmaceuticalis expected to be submitted to Pharmaceuticals and Medical DeviceDevices Agency (PMDA) by our regulatory consultants in the second quarter of 2023.  There is potential for subsequent submissions and consultations with PMDA based on July 15, 2022.the outcome from the current submission.

The CardiAMP 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 the indication of chronic myocardial ischemia (BCDA-02). This therapeutic approach uses many of the same novel aspects as the CardiAMP Heart Failure Trial and is expected to leverage our experience and investment in the heart failure trial. The trial has been activated at two clinical sites and one patient hasthree patients have been treated. We are working to complete the roll-in cohort and work with the FDA to enhance the trial design before expanding this beyond four clinical centers.

The Department of Health &and Human Services Centers for Medicare &and Medicaid Services or CMS,(CMS) has designated that both of our CardiAMP pivotal trials qualify for Medicare national coverage.coverage at up to $20,000 per patient. The covered costs under Medicare 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 the CMS reimbursement policy and are similarly anticipated to cover these costs. This coverage significantly reduces our cost of conducting these pivotal trials. In May of 2022, the United States Center for Medicare and Medicaid Services (CMS) updated our recently issued reimbursement code (designated C9782) for the CardiAMP Cell Therapy procedures. The code is for a "blinded procedure for New York Heart Association (NYHA) Class II or III heart failure, or Canadian Cardiovascular Society (CCS) Class III or IV chronic refractory angina; transcatheter intramyocardial transplantation of autologous bone marrow cells (e.g., mononuclear) or placebo control, autologous bone marrow harvesting and preparation for transplantation, left heart catheterization including ventriculography, all laboratory services, and all imaging with or without guidance (e.g., transthoracic echocardiography, ultrasound, fluoroscopy), all device(s), performed in an approved Investigational Device Exemption (IDE) study.” They also assigned the code to an Ambulatory Payment Code level of up to $20,000.

This new CMS code and reimbursement level is available to submitting hospitals performing the CardiAMP cell therapy procedure beginning on April 1, 2022, enabling clear reimbursement for the study procedure for both the treatment and control arms of both pivotal cell therapy trials.

ALLOGENEICAllogeneic NK1R+ MSC Cell Therapy for Cardiac and Pulmonary Disease (BCDA-03 and BCDA-04)Platform

Our second therapeutic platform is our investigational culture expanded bone marrow derived allogeneic, Neurokinin-1 Receptor Positive mesenchymal stem cellsMesenchymal Stem Cells (NK1R+ MSC). for which the FDA approved two INDs in 2022. This “off the shelf” mesenchymal cell therapy is being advanced for cardiacischemic heart failure of HFrEF (BCDA-03) and pulmonary disease.  BioCardia’s establishedacute respiratory distress (BCDA-04). Variations of this allogeneic therapy may have the potential for numerous other therapeutic applications. These cells are compelling in part because they express the Neurkinin-1 receptor for the neuropeptide Substance P, an important neuropeptide associated with inflammation throughout the body and a primary mediator of inflammation in the airways. We manufacture these cells for clinical studies at its manufacturing facility in Sunnyvale which was certified ISO 7 cleanroom has been developed to manufacture its allogeneic NK1R+MSC investigational cell therapy products.for manufacturing in 2022. Clinical grade cells are available for both indications being pursued today.

We are workingAllogeneic NK1R+ MSC for Heart Failure and for Acute Respiratory Distress Syndrome

In December 2022, the FDA approved our Investigational New Drug (IND) application to secure FDA acceptance of an IND application forinitiate a first-in-human Phase I/II clinical trial to deliver these allogeneic cells for the treatment of HFrEF (BCDA-03). The trial is designed for patients with New York Heart Association Class II and III ischemic systolic heart failure. We have completed the manufacturing validation runs and stability testingfailure with ischemic HFrEF whose own cell composition makes them ineligible for the Chemistry Manufacturing and Controls section of the IND and preclinical pharmacology toxicology animal testing was initiated. These animal studiesCompany’s Phase III CardiAMP® Heart Failure Trial studying autologous cell therapy that has received FDA Breakthrough Device Designation. Efficiencies are expected in conducting this trial as patients who have been completedscreened but are ineligible for enrollment in the CardiAMP Heart Failure trial would likely be eligible for this allogeneic trial. Clinical grade allogeneic cells have been manufactured and we are awaiting formal results. Shouldready for use and the resultscells will be in line withdelivered by our previous results, weproprietary delivery system. We expect to submitbegin enrolling patients in the IND application promptly thereafter.second quarter of 2023.

In April 2022, the FDA approved the Company’s Investigational New Drug (IND) for a Phase I/II trial for the use of this allogeneic cell therapy for ARDSAcute Respiratory Distress Syndrome (ARDS) caused by COVID-19 (BCDA-04). This allowsFortunately, the number of patients with COVID-19 induced ARDS has decreased and the Company intends to initiatework with the FDA to modify its First-in-Human Phase I/II trial in adultinclusion criteria to include other patients recovering from Acute Respiratory Distress Syndrome (ARDS) duewith ARDS without requiring them to COVID-19, with trial initiation expected in 2022. have previously had COVID-19.

The first part of the clinical trial will evaluate increasing dosages of the NK1R+ MSCscells and the optimal dose will be taken to Phase II in a randomized study in adult patients recovering from ARDS due to COVID-19.ARDS. This therapy is intended to address the enormous unmet need of sustained local and systemic inflammation after a patient is taken off respirator support with goals of accelerating recovery, enhancing survival and reducing both relapse and rehospitalization. Clinical grade cells have been manufactured and are available for this study, but this trial initiation is expected to follow the initiation of the BCDA-03 trial of these allogeneic MSC for HFrEF.

Recent DevelopmentsHelix™ Biotherapeutic Delivery System

BioCardia’s Helix Biotherapeutic Delivery System (Helix) delivers therapeutics into the heart muscle with a penetrating helical needle from within the heart. It enables local delivery of cell and gene-based therapies, including our own cell therapies to treat cardiac cardiovascular indications. The Helix catheter is CE marked in Europe and is under investigational use in the United States. The Helix design has served as a platform for our development of a number of transendocardial delivery system that are not clinically available yet. These are guided to the heart using a number of navigation platforms we have also developed.

BioCardia selectively partners its Helix Biotherapeutic Delivery Systems and broader biotherapeutic delivery capabilities with firms developing other cell, gene, and protein therapeutic programs. These partnered programs provide additional data, intellectual property rights, and opportunities to participate in the development of combination products for the treatment of cardiac diseases.

COVID-19 UpdateConsiderations

As a result of the COVID-19 pandemic, we have experienced significant disruption to the Company’sour business and delays in the Company’sour development programs and regulatory and commercialization timelines, including adverse impact to our operations at certain clinical sites involved in our ongoing clinical studies. 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 continuing economic impact brought by, and the duration of, the COVID-19 pandemic is difficult to assess or predict, the impact of COVID-19 and related responses of governments, business and other institutions 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. In addition, a recession, market correction or depression resulting from the COVID-19 pandemic or the response to it could materially affect our business and the value of our common stock.

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 EUAVANCE steerable introducer 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:

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,autologous cell therapy trials in heart failure and further developchronic myocardial ischemia, and begin our autologous and allogeneic cell therapy candidates.trials in heart failure and acute respiratory distress syndrome. 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. There are also significant synergies between these 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 and cash equivalents. 

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 continue to remain highly 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 7 in our Annual Report on Form 10-K for the year ended December 31, 2021.2022, filed with the SEC on March 29, 2023, which is incorporated by reference herein. 

Results of Operations

Comparison of Three and Six Months Ended June 30,March 31, 2023 and 2022 and 2021

The following table summarizes our results of operations for the three and six months ended June 30,March 31, 2023 and 2022 and 2021 (in thousands): 

Revenue. Revenue increased to $974,000$64,000 in the second quarter of 2022three months ended March 31, 2023 as compared to $69,000$60,000 in the second quarter of 2021, and from $1,033,000 in the sixthree months ended June 30,March 31, 2022, as compared to $115,000 in the six months ended June 30, 2021, primarily due to the timing of revenue from new and existing collaborative partners coupled with the fulfilment of deliverables and completion of collaborative agreements due to the passage of time. The Company’s performance obligations were deemed to be fulfilled, and thus revenues were recognized.agreements. The amount and timing of collaboration revenues is largely dependent on our partners’ development activities and may be inconsistent and create significant quarter-to- quarterquarter-to-quarter variation in our revenues.

Research and Development Expenses. Research and development expenses decreased to $2,304,000 in the second quarter of 2022 as compared to $2,362,000 in the second quarter of 2021. Research and development expenses increased to $4,490,000$2,384,000 in the sixthree months ended June 30, 2022March 31, 2023 as compared to $4,203,000$2,186,000 in the sixthree months ended June 30, 2021March 31, 2022, primarily due to increasing expenses in support of the CardiAMP Heart Failure Trial.  

Selling, General and Administrative Expenses. Selling, general and administrative expenses decreased to $1,166,000$1,190,000 in the second quarter of 2022three months ended March 31, 2023 as compared to $1,196,000$1,201,000 in the second quarter of 2021. Selling, general and administrative expenses decreased to $2,367,000 in the sixthree months ended June 30, 2022 as compared to $2,373,000 in the six months ended June 30, 2021.March 31, 2022.

Liquidity and Capital Resources

We have incurred net losses each year since our inception and as of June 30, 2022,March 31, 2023, we had an accumulated deficit of approximately $134.5$144.1 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 June 30, 2022,March 31, 2023, we had cash and cash equivalents of approximately $8.6$4.9 million. 

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

Cash Flows from Operating Activities. The increasedecrease in overall spending for operating activities of approximately $0.8 million$353,000 in the sixthree months ended June 30, 2022March 31, 2023 compared to the sixthree months ended June 30, 2021March 31, 2022 related primarily to improved working capital management. Cash flow from operating activities for any period is subject to many variables including the timing of cash receipts, payments from collaboration partners.to suppliers, and vendor payment terms.

Cash Flows from Investing Activities. Net cash used in investing activities of $54,000$10,000 and $55,000$29,000 during the sixthree months ended June 30,March 31, 2023 and 2022 and 2021 respectively, consisted of purchases of property and equipment, primarily lab and office equipment.

Cash Flows from Financing Activities. Net cash provided by financing activities of approximately $1.4 million$64,000 during the first sixthree months ended June 30, 2022March 31, 2023 related primarily to proceeds from the sale of common stock in April 2022. Net cash provided by financing activities of approximately $1.9 million during the first six months ended June 30, 2021 related primarily to proceeds from the sale of common stock in in March 2021.stock. 

Lincoln Park Capital Stock Purchase Agreement

InOn March 29, 2021, we andentered into a purchase agreement with Lincoln Park Capital Fund, LLC (Lincoln Park) entered into a purchase agreement (the Purchase(Purchase Agreement) and a registration rights agreement (the Registration(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 soldin March, 2021, Lincoln Park purchased 373,832 shares of our common stock, at a price of $5.35 per share, pursuant to the Purchase Agreement for a total gross proceedspurchase price of $2 million (and(Initial Purchase) and we 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 initialincluded 5,000 commitment and 5,000 shares issued on a pro rata basis in respect of Lincoln Park’sfor the 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. We expect to use the proceeds from this agreement for general corporate purposes and working capital. purchase.

As of June 30, 2022, the CompanyMarch 31, 2023, we had not madesold any sales of common stock to Lincoln Park under the Purchase Agreement other than the Initial Purchase.

Cantor Fitzgerald ATM Offering

On April 12, 2022, we entered into a sales agreement (the Sales(Sales Agreement) with Cantor Fitzgerald & Co. (Cantor) as the sales agent, pursuant to which we may offer and sell, from time to time, through Cantor, shares of our common stock having an aggregate offering price of up to $10.5 million (the ATM(ATM Offering). We are not obligated to sell any common stock shares pursuant to the Sales Agreement. Under the terms of the Sales Agreement, we will pay Cantor a commission of 3% of the aggregate proceeds from the sale of shares and reimburse certain legal fees. In April 2022,We filed a prospectus supplement under our existing registration statement covering the offer and sale of up to $10.5 million of common stock, of which approximately $8.5 million was still available for offer and sale as of March 31, 2023.

During the three months ended March 31, 2023, we sold 575,000106,241 shares of common stock under the ATM Offering at then-market prices for total gross proceeds of approximately $1.5 million,$244,000, with associatednet issuance costs of $232,000.$13,000.

Future Funding Requirements

To date, we have generated modest revenues. 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 $8.6$4.9 million as of June 30, 2022March 31, 2023 are not sufficient to fund our planned expenditures and meet our obligations beyond the firstthird quarter of 2023. In order to continue development of our therapeutic candidates beyond the firstthird quarter of 2023, we plan to raise additional capital, potentially including non-dilutive collaboration and licensing arrangements, debt or equity financing, or a combination from these sources. 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:

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.

Our condensed consolidated financial statements as of June 30, 2022March 31, 2023 have been prepared on the basis that the Companywe will continue as a going concern, which contemplates the realization of assets and satisfaction of liabilities in the ordinary course of business. Due to the factors described above, there is substantial doubt about the Company’sour ability to continue as a going concern within one year after the date these financial statements are issued. Our ability to continue as a going concern will depend in a large part, on our ability to raise additional capital. If adequate funds are not available, we may be required to reduce operating expenses, delay or reduce the scope of our product development programs, obtain funds through arrangements with others that may require us to relinquish rights to certain of our technologies or products that we would otherwise seek to develop or commercialize ourselves, or cease operations. While we believe in the viability of our strategy to raise additional funds, there can be no assurances that we will be able to obtain additional capital on acceptable terms and in the amounts necessary to fully fund our operating needs.

The condensed consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty. If we are unable to continue as a going concern, we may be forced to liquidate assets. In such a scenario, the values received for assets in liquidation or dissolution could be significantly lower than the values reflected in our condensed consolidated financial statements. 

Off-Balance Sheet Arrangements

During the periods presented, we did not have, nor do we currently have, any off-balance sheet arrangements as defined under the rules of the Securities and Exchange Commission.

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 June 30, 2022.March 31, 2023.

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 June 30, 2022,March 31, 2023, 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 Quarterly Report on Form 10-Q, as of June 30, 2022,March 31, 2023, 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 June 30, 2022,March 31, 2023, 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 June 30, 2022March 31, 2023 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

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 does not believe that the Company is party to any current pending legal proceedings. There can be no assurance that existing or future legal proceedings arising in the ordinary course of business or otherwise will not have a material adverse effect on the Company’s business, financial position, results of operations, or cash flows.  

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, 2021,2022, which could materially affect our business, financial condition, or future results.results, are incorporated by reference herein. The risks described in this report, our Annual Report on Form 10-K for the year ended December 31, 2021,2022, 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

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.