BioCardia, Inc. - Quarter Report: 2014 March (Form 10-Q)
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended March 31, 2014
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from ________to _________
Commission file number: 0-21419
Tiger X Medical, Inc.
(Exact name of Registrant as Specified in its Charter)
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2934½ Beverly Glen Circle, Suite #203
Los Angeles, CA 90077
(Address of Principal Executive Offices including Zip Code)
(310) 987-7345
(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 reports), and (2) has been subject to such filing requirements for the past 90 days.
YES x NO ¨ Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted 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 and post such files). YES x NO ¨
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer or a smaller reporting company. See definitions of "large accelerated filer," "accelerated filer" and "smaller reporting company" in Rule 12b-2 of the Exchange Act. (Check one):
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Large accelerated filer ¨ |
Accelerated filer ¨ |
Non-accelerated filer ¨
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Smaller reporting company x |
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).
As of May 5, 2014, 230,293,141 shares of the issuer's common stock, par value of $0.001 per share, were outstanding.
TIGER X MEDICAL, INC.
Table of Contents Page PART I — FINANCIAL INFORMATION 1 Item 1. 1 1 2 3 4 Item 2. 7 Item 3. 9 Item 4. 10 PART II — OTHER INFORMATION 10 Item 1. 10 Item 2. 10 Item 3. 10 Item 4. 10 Item 5. 11 Item 6. 11 12 Exhibit Index i
PART I — FINANCIAL INFORMATION ITEM 1 — CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
The accompanying notes are an integral part of these condensed consolidated financial statements.
1
The accompanying notes are an integral part of these condensed consolidated financial statements.
2
The accompanying notes are an integral part of these condensed consolidated financial statements.
3
TIGER X MEDICAL, INC. NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Tiger X Medical, Inc. ("Tiger X" or the "Company"), formerly known as Cardo Medical, Inc., a corporation organized and existing
under and by the virtue of the General Corporation Law of the State of Delaware, previously operated as an orthopedic medical device
company specializing in designing, developing and marketing high performance reconstructive joint devices and spinal surgical devices.
During 2010, the Company discontinued its operations and sold the assets from its previous business lines during 2011. Beginning
on January 1, 2013, the Company became classified as a development stage entity. Our continuing operations include the collection
and management of our royalty income earned in connection with the Asset Purchase Agreement with Arthrex, Inc. ("Arthrex"). We
continue to advance and promote our former knee product lines through participation in mobile teaching labs, seminars and live
surgery. The Company is constantly evaluating opportunities for a suitable joint venture partner or buyer for the remaining intellectual
property owned by the Company. The Company is also evaluating investment opportunities and uses for its cash. Basis of Presentation The accompanying condensed consolidated balance sheet as of December 31, 2013, which has been derived from the
Company's audited financial statements as of that date, and the unaudited condensed consolidated financial information of the
Company as of March 31, 2014 and for the three months ended March 31, 2014 and 2013, has been prepared in accordance with
accounting principles generally accepted in the United States of America ("U.S. GAAP") for interim financial information and with the
instructions to Form 10-Q and Article 8-03 of Regulation S-X. In the opinion of management, such financial information includes all
adjustments considered necessary for a fair presentation of the Company's financial position at such date and the operating results and
cash flows for such periods. Operating results for the interim period ended March 31, 2014 are not necessarily indicative of the results
that may be expected for the entire year. Certain information and footnote disclosure normally included in financial statements in accordance with generally accepted
accounting principles have been omitted pursuant to the rules of the United States Securities and Exchange Commission ("SEC").
These unaudited financial statements should be read in conjunction with our audited financial statements and accompanying notes
included in the Company's Annual Report on Form 10-K for the year ended December 31, 2013 filed on March 24, 2014. Principles of Consolidation The condensed consolidated financial statements include the accounts of Tiger X Medical, Inc., Accelerated Innovation,
Inc. ("Accelerated"), Uni-Knee LLC ("Uni") and Cervical Xpand LLC ("Cervical"). All significant intercompany transactions have been
eliminated in consolidation. Royalty Agreement On January 24, 2011, the Company entered into an Asset Purchase Agreement with Arthrex (the agreement being the
"Arthrex Asset Purchase Agreement"), pursuant to which the Company agreed to sell the assets of the Reconstructive Division to
Arthrex. The Arthrex Asset Purchase Agreement also provides for the Company to receive royalty payments equal to 5% of net sales of
the Company's products made by Arthrex on a quarterly basis for a term up to and including the 20th anniversary of the closing date.
During the three months ended March 31, 2014 and 2013, the Company received total royalty payments of $98,000 and $38,000, respectively, from Arthrex.
4
These amounts are reflected as royalty income on the accompanying condensed consolidated statements of
operations. Use of Estimates Financial statements prepared in accordance with U.S. GAAP require management to make estimates and assumptions
that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenues
and expenses during the reporting period. Among other things, management makes estimates relating to share-based payments and
deferred income tax assets. Actual results could differ from those estimates. Revenue Recognition The Company's revenue consists of royalty income from Arthrex pursuant to the Arthrex Asset Purchase Agreement.
Royalty income is recognized as the amount becomes known and collectability is reasonably assured. Net Income (Loss) Per Share Basic net income (loss) per share is computed by using the weighted-average number of common shares outstanding
during the period. Diluted net income (loss) per share is computed giving effect to all dilutive potential common shares using various
methods such as the treasury stock or modified treasury stock method in the determination of diluted shares outstanding at each
reporting period. Dilutive potential common shares consist of incremental common shares issuable upon exercise of stock options or
warrants. No dilutive potential common shares are included in the computation of any diluted per share amount because their impact
was anti-dilutive. Income Taxes Income taxes are accounted for under the asset and liability method. Deferred tax assets and liabilities are recognized for
the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and
liabilities and their respective tax bases as well as operating loss and tax credit carryforwards. Deferred tax assets and liabilities are
measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected
to be recovered or settled. The likelihood of realizing the tax benefits related to a potential deferred tax asset is evaluated, and a
valuation allowance is recognized to reduce that deferred tax asset if it is more likely than not that all or some portion of the deferred tax
asset will not be realized. Deferred tax assets and liabilities are calculated at the beginning and end of the year; the change in the sum
of the deferred tax asset, valuation allowance and deferred tax liability during the year generally is recognized as a deferred tax
expense or benefit. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in operations in the period that
includes the enactment date. The Company evaluates the accounting for uncertainty in income tax recognized in its financial statements and determines whether
it is more likely than not that a tax position will be sustained upon examination by the appropriate taxing authorities before any part of
the benefit is recorded in its financial statements. For those tax positions where it is "not more likely than not" that a tax benefit will be
sustained, no tax benefit is recognized. Where applicable, associated interest and penalties are also recorded. The Company has not
accrued for any such uncertain tax positions as of March 31, 2014 (unaudited) or December 31, 2013. Concentration of Credit Risk The cash and cash equivalents held in the Company's business money market and other bank accounts are with local and
national banking institutions and subjected to FDIC insurance limits of $250,000 per banking institution. As of March 31, 2014, the
Company's balances in these bank accounts exceeded the insured amount by $13,076,000. 5
Recent Accounting Pronouncements There are no recently issued accounting pronouncements that the Company has yet to adopt that are expected to have a
material effect on its financial position, results of operations, or cash flows. NOTE 2 - SHARE BASED PAYMENT The Company has outstanding stock options issued to employees and Board members which are exercisable at $0.23 per
share. The options vest 20% each year over a five year period and expire after ten years. As of March 31, 2014, there were no
unvested options. Stock option compensation recognized for the three months ended March 31, 2014 and 2013 in the accompanying
condensed consolidated statements of operations amounted to $0 and $1,000, respectively. A summary of stock option activity as of March 31, 2014, and changes during the period then ended is presented
below. The Company had 575,613 warrants outstanding as of March 31, 2014 which entitle the holders to immediately
purchase one share of the Company's common stock at an exercise price of $0.44 per share. The warrants expire on November 13,
2014. NOTE 3 - STOCKHOLDERS' EQUITY Our authorized capital consists of 750,000,000 shares of common stock and 50,000,000 shares of preferred stock. Our
preferred stock may be designated into series pursuant to authority granted by our Certificate of Incorporation, and on approval from
our Board of Directors. As of March 31, 2014 and December 31, 2013, we did not have any preferred stock issued. 6
ITEM 2 - MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS The discussion and analysis of our financial condition and results of operations are based on our financial statements, which
we have prepared in accordance with accounting principles generally accepted in the United States of America. The preparation of
these condensed consolidated financial statements requires us to make estimates and assumptions that affect the reported amounts of
assets and liabilities and the disclosure of contingent assets and liabilities at the date of the condensed consolidated financial
statements, as well as the reported revenues and expenses during the reporting periods. On an ongoing basis, we evaluate estimates
and judgments, including those described in greater detail below. We base our estimates on historical experience and on various other
factors 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 readily apparent from other sources. Actual results may differ from these estimates
under different assumptions or conditions. As used in this "Management's Discussion and Analysis of Financial Condition and Results of Operation," except where the context
otherwise requires, the term "we," "us," "our" or "Tiger X" refers to the business of Tiger X Medical, Inc. The following discussion should be read together with the information contained in the unaudited condensed consolidated
financial statements and related notes included in Item 1, "Financial Statements," in this Form 10-Q. Overview Tiger X Medical, Inc. ("Tiger X" or the "Company"), formerly known as Cardo Medical, Inc., previously operated as an
orthopedic medical device company specializing in designing, developing and marketing high performance reconstructive joint devices
and spinal surgical devices. During 2010, the Company discontinued its operations and sold the assets from its previous business lines
during 2011. Beginning on January 1, 2013, the Company became classified as a development stage entity. Our continuing operations
include the collection and management of our royalty income earned in connection with the Asset Purchase Agreement with Arthrex.
We continue to advance and promote our former knee product lines through participation in mobile teaching labs, seminars and live
surgery. The Company is constantly evaluating opportunities for a suitable joint venture partner or buyer for the remaining intellectual
property owned by the Company. The Company is also evaluating investment opportunities and uses for its cash. We are headquartered in Los Angeles, California. Our common stock is quoted on the National Association of Securities Dealers,
Inc.'s, Over-the-Counter Bulletin Board, or the OTC Bulletin Board with a trading symbol of CDOM.OB. Critical Accounting Policies Use of Estimates Financial statements prepared in accordance with United States generally accepted accounting principles ("U.S. GAAP")
require management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the
financial statements and the reported amounts of revenues and expenses during the reporting period. Among other things,
management makes estimates relating to share-based payments, and deferred income tax assets. Given the short operating history of
Tiger X, actual results could differ from those estimates. 7
Royalty Agreement On January 24, 2011, the Company entered into an Asset Purchase Agreement with Arthrex (the agreement being the
"Arthrex Asset Purchase Agreement"), pursuant to which the Company agreed to sell the assets of the Reconstructive Division to
Arthrex. The Arthrex Asset Purchase Agreement also provides for the Company to receive royalty payments equal to 5% of net sales of
the Company's products made by Arthrex on a quarterly basis for a term up to and including the 20th anniversary of the closing date.
During the three months ended March 31, 2014 and 2013, the Company received total royalty payments of $98,000 and $38,000,
respectively, from Arthrex. These amounts are reflected as royalty income on the accompanying condensed consolidated statements of
operations. Revenue Recognition The Company's revenue consists of royalty income from Arthrex pursuant to the Arthrex Asset Purchase Agreement.
Revenue is recognized as the amount becomes known and collectability is reasonably assured. Recent Accounting Pronouncements There are no recently issued accounting pronouncements that we have yet to adopt that are expected to have a material
effect on our financial position, results of operations, or cash flows. Results of Operations for the Three Months Ended March 31, 2014 as Compared to the Three Months Ended March 31, 2013.
The following is a comparison of the condensed consolidated results of operations for Tiger X for the three months ended
March 31, 2014 and 2013. Royalty income Royalty income amounted to $98,000 for the quarter ended March 31, 2014 as compared to $38,000 for the quarter ended
March 31, 2013. Revenues represented royalties received from Arthrex in connection with the Arthrex Asset Purchase Agreement. The
increase during 2014 is the result of Arthrex's increased sales of the acquired product line. Until we find a joint venture partner or buyer
for our remaining intellectual property or find an investment opportunity for our existing cash, we expect our primary source of revenue
to be royalty payments under the Arthrex Asset Purchase Agreement. 8
General and Administrative Expenses General and administrative expenses for the quarter ended March 31, 2014 decreased by $29,000 as compared to the
same period in 2013 due primarily to increased business taxes paid during the quarter ended March 31, 2013. General and
administrative expenses primarily represent our continuing operating expenses, including business insurance expense and professional
fees such as legal, accounting and audit services. In the future, we expect our general and administrative expenses to remain at the same level as 2014. Interest Income Our interest income remained consistent for to the quarters ended March 31, 2014 and 2013 due to our cash levels
remaining consistent. We had no interest expense in 2014 or 2013, as there was no debt outstanding during this timeframe. Liquidity and Capital Resources Net cash provided by operating activities was $27,000 for the three months ended March 31, 2014 compared to net cash used
in operating activities of ($14,000) for the same period in 2013. The change between the 2013 first quarter and the 2014 first quarter
was primarily due to an increase in our royalty revenue for the quarter ended March 31, 2014 of $60,000 as compared to 2013. We had no cash flows from investing or financing activities during the three months ended March 31, 2014 or 2013. We believe our cash and cash equivalents as of March 31, 2014 are adequate to meet our cash needs for the next twelve months
and beyond. Forward-Looking Statements Some of the statements in this Quarterly Report on Form 10-Q are "forward-looking statements," as that term is defined in the
Private Securities Litigation Reform Act of 1995. Forward-looking statements may be identified by the use of words such as "may,"
"will," "should," "anticipate," "estimate," "expect," "plan," "believe," "predict," "potential," "project," "target," "forecast," "intend," "assume,"
"guide," "seek" and similar expressions. Forward-looking statements do not relate strictly to historical or current matters. Rather,
forward-looking statements are predictive in nature and may depend upon or refer to future events, activities or conditions. Although we
believe that these statements are based upon reasonable assumptions, we cannot provide any assurances regarding future results. We
undertake no obligation to revise or update any forward-looking statements, or to make any other forward-looking statements, whether
as a result of new information, future events or otherwise. Because forward-looking statements relate to matters that have not yet occurred, these statements are inherently subject to risks
and uncertainties. Many factors could cause our actual activities or results to differ materially from the activities and results anticipated
in forward-looking statements. Information regarding our risk factors appears in Part I, Item 1A, "Risk Factors," in our Annual Report on
Form 10-K for the year ended December 31, 2013 filed on March 24, 2014. ITEM 3 - QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK Not applicable for smaller reporting companies. 9
Evaluation of Disclosure Controls and Procedures We maintain disclosure controls and procedures as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange
Act of 1934, as amended, or the Exchange Act, that are designed to ensure that information required to be disclosed in our reports
under the Exchange Act, is recorded, processed, summarized and reported within the time periods specified in the Commission's rules
and forms, and that such information is accumulated and communicated to our management, including our principal executive officer
and our interim principal financial officer, as appropriate, to allow timely decisions regarding required disclosure. We carried out an evaluation under the supervision and with the participation of our management, including our principal executive
officer and interim principal financial officer, of the effectiveness of our disclosure controls and procedures (as defined in Rule 13a-15(e)
and 15d- 15(e) under the Exchange Act) as of the end of the period covered by this quarterly report. Based on this evaluation, our Chief
Executive Officer and interim Chief Financial Officer concluded that our disclosure controls and procedures were not effective as of
March 31, 2014. The determination that our disclosure controls and procedures were not effective as of March 31, 2014 is a result of: Changes in Internal Control Over Financial Reporting There were no changes in our internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) under the
Exchange Act) during the quarter ended March 31, 2014 that have materially affected, or are reasonably likely to materially affect, our
internal control over financial reporting. PART II - OTHER INFORMATION We know of no material, existing or pending legal proceeding against our Company, nor are we involved as a plaintiff in any
material proceeding or pending litigation. There are no proceedings in which any of our directors, officers or affiliates, or any registered
or beneficial shareholder, is an adverse party or has a material interest adverse to our interest. 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 10
None The following exhibits are filed as part of, or incorporated by reference into this Report: Exhibit Exhibit Title 31.1 Certification of Chief Executive Officer of Tiger X Medical, Inc., as adopted pursuant to Section 302 of the
Sarbanes-Oxley Act of 2002 * 31.2 Certification of Chief Financial Officer of Tiger X Medical, Inc., as adopted pursuant to Section 302 of the
Sarbanes-Oxley Act of 2002 * 32.1 Certification of Chief Executive Officer of Tiger X Medical, Inc. pursuant to 18 U.S.C. Section 1350, as adopted
pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 ** 32.2 Certification of Chief Financial Officer of Tiger X Medical, Inc. pursuant to 18 U.S.C. Section 1350, as adopted
pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 ** 101.INS* XBRL Instance Document 101.SCH* XBRL Taxonomy Extension Schema Document 101.CAL* XBRL Taxonomy Extension Calculation Linkbase Document 101.DEF* XBRL Taxonomy Extension Definition Linkbase Document 101.LAB* XBRL Taxonomy Extension Label Linkbase Document 101.PRE* XBRL Taxonomy Extension Presentation Linkbase Document * Filed herewith 11
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. TIGER X MEDICAL, INC. May 12, 2014 By: /s/ Andrew A. Brooks Andrew A. Brooks Chief Executive Officer and Interim Chief Financial Officer (Principal Financial and Accounting Officer) 12
INDEX TO EXHIBITS
YES ¨
NO x
Financial Statements
Condensed Consolidated Balance Sheets at March 31, 2014 (Unaudited) and
December 31, 2013
Condensed Consolidated Statements of
Operations (Unaudited) — Three Months Ended March 31, 2014 and 2013 and the period from January 1, 2013 to March 31, 2014
Condensed Consolidated Statements of Cash
Flows (Unaudited) — Three Months Ended March 31, 2014 and 2013 and the period from January 1, 2013 to March 31, 2014
Notes to Condensed Consolidated Financial Statements (Unaudited)
Management's Discussion and Analysis of Financial Condition and Results of Operations
Quantitative and Qualitative Disclosures About Market Risk
Controls and Procedures
Legal Proceedings
Exhibits
Signatures
March 31,
December 31,
2014
2013
(Unaudited)
Assets
Current assets
Cash
$
13,322
$
13,295
Prepaid expenses and other current assets
53
33
Total assets
$
13,375
$
13,328
Liabilities and Stockholders' Equity
Current liabilities
Accounts payable and accrued expenses
$
1
$
18
Total liabilities
1
18
Stockholders' equity
Common stock, $0.001 par value, 750,000,000 shares authorized,
230,293,141 shares issued and outstanding as of March 31, 2014 (unaudited) and December 31, 2013, respectively
December 31, 2013, respectively
230
230
Additional paid-in capital
25,768
25,768
Earnings accumulated during the development stage
83
19
Accumulated deficit
(12,707)
(12,707)
Total stockholders' equity
13,374
13,310
Total liabilities and stockholders' equity
$
13,375
$
13,328
For the Period from
Three Months Ended
January 1, 2013 to
March 31,
March 31,
2014
2013
2014
Royalty income
$
98
$
38
$
366
General and administrative expenses
35
64
294
Income (loss) from operations
63
(26)
72
Interest income
1
1
11
Income (loss) before income tax provision
64
(25)
83
Provision for income taxes
-
-
-
Net income (loss)
$
64
$
(25)
$
83
Net income (loss) per share:
Basic and Diluted
$
-
$
-
Weighted average shares outstanding:
Basic and diluted
230,293,141
230,293,141
For the Period from
Three Months Ended
January 1, 2013 to
March 31,
March 31,
2014
2013
2014
Cash flows from operating activities
Net income (loss)
$
64
$
(25)
$
83
Adjustments to reconcile net income to net cash provided by (used in) operating activities:
Stock option compensation
-
1
2
Changes in operating assets and liabilities:
Prepaid expenses and other current assets
(20)
12
(20)
Accounts payable and accrued expenses
(17)
(2)
(11)
Net cash provided by (used in) operating activities
27
(14)
54
Net change in cash
27
(14)
54
Cash, beginning of period
13,295
13,268
13,268
Cash, end of period
$
13,322
$
13,254
$
13,322
Supplemental disclosure of cash flow information:
Interest paid
$
-
$
-
$
-
Income taxes paid
$
-
$
26
$
26
(A Development Stage Company)
Notes to Condensed Consolidated Financial Statements
March 31, 2014
(Unaudited)
Weighted-
Weighted-
Average
Average
Remaining
Aggregate
Exercise
Contractual
Intrinsic
Options
Price
Life (Years)
Value
Outstanding at December 31, 2013
385,000
$
0.23
4.66
$
-
Granted
-
-
-
-
Exercised
-
-
-
-
Forfeited
-
-
-
-
Outstanding at March 31, 2014 (unaudited)
385,000
$
0.23
4.42
$
-
Vested and expected to vest
at March 31, 2014 (unaudited)
385,000
$
0.23
4.42
$
-
Exercisable at March 31, 2014 (unaudited)
385,000
$
0.23
4.42
$
-
Three Months Ended
March 31,
(In thousands)
2014
2013
$ Change
Royalty income
$
98
$
38
$
60
General and administrative expenses
35
64
(29)
Income (loss) from operations
63
(26)
89
Interest income
1
1
-
Income (loss) before income tax provision
64
(25)
89
Provision for income taxes
-
-
-
Net income (loss)
$
64
$
(25)
$
89
Number
(Principal Executive Officer)