WOBURN, MA - iSpecimen Inc., a provider of commercial physical and biological research services, announced today that it has regained compliance with Nasdaq's minimum bid price requirement. The company also disclosed that its former Chief Information Officer, Benjamin Bielak, has filed a Demand for Arbitration seeking alleged unpaid bonuses and severance totaling $586,800.
On Monday, iSpecimen received a notice from the Listing Qualifications Department of The Nasdaq Stock Market confirming that the company's common stock had maintained a closing bid price of $1.00 per share or greater from September 16, 2024, to September 30, 2024. This development marks the company's return to compliance with the Nasdaq Listing Rule 5550(a)(2), which pertains to the minimum bid price of listed securities.
The company had previously been notified of its non-compliance with this requirement on October 9, 2023, and was initially given until April 8, 2024, to meet the standard. After failing to do so within the initial 180-day period, Nasdaq granted iSpecimen an additional 180 days, extending the deadline to October 7, 2024. The company has now successfully met the requirement within this second compliance period.
In a separate event, Benjamin Bielak, who served as the Chief Information Officer until his resignation on July 14, 2024, has initiated arbitration proceedings against iSpecimen. He claims the company owes him bonus payments for work performed in 2023 and 2024, as well as severance payments under the terms of his employment agreement. The total amount of the claim is $586,800, in addition to attorneys' fees and interest.
iSpecimen has expressed its belief that the claims are without merit and has stated its intention to vigorously defend against them. As of the filing date, no arbitrator has been appointed, and no schedule has been established for the arbitration proceedings.
In other recent news, iSpecimen Inc. has secured a $1 million loan, facilitated by Westpark Capital, Inc., and introduced three new members to its board - Richard Paolone, Avtar Dhaliwal, and Katie Field. This followed the resignation of several board members and executives, including Andrew L. Ross and Benjamin Bielak.
The company also reported a decrease in Q1 2024 revenue, falling to $2.3 million from $3 million in Q1 2023, due to a 39% decrease in specimen count. Despite this, iSpecimen managed to reduce its quarterly cash burn through strategic spending cuts and the successful implementation of the Next-Day Quotes Program.
iSpecimen has also announced a 1-for-20 reverse stock split, aiming to comply with Nasdaq's minimum bid price requirement. In addition, the company has relocated to a new office space in Woburn, MA, marking a significant change in its physical footprint. The company ended the quarter with approximately $2.6 million in cash and cash equivalents. These are some of the recent developments within iSpecimen Inc.
All these changes come as iSpecimen focuses on technological advancements and improving the quality of its supplier network by ending contracts with lower-performing suppliers. Furthermore, the company has established a pipeline of new business opportunities worth approximately $1.5 million, indicating potential for future growth.
InvestingPro Insights
Recent data from InvestingPro sheds additional light on iSpecimen Inc.'s financial situation, providing context to the company's recent Nasdaq compliance and legal challenges. Despite regaining compliance with Nasdaq's minimum bid price requirement, iSpecimen's stock has taken a significant hit, with a one-year price total return of -62.33% as of the latest data. This decline is reflected in the company's market capitalization, which currently stands at a modest $3.34 million.
InvestingPro Tips highlight that iSpecimen is quickly burning through cash and is not profitable over the last twelve months. This financial strain could potentially impact the company's ability to handle unexpected expenses, such as the potential $586,800 claim from its former CIO. On a positive note, iSpecimen holds more cash than debt on its balance sheet, which may provide some financial flexibility as it navigates these challenges.
For investors seeking a deeper understanding of iSpecimen's financial health and market position, InvestingPro offers 7 additional tips not mentioned here. These insights could prove valuable in assessing the company's future prospects in light of its recent regulatory compliance and ongoing legal dispute.
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