10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549 

FORM 10-Q

 (Mark One)

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended September 30, 2019

or

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

Commission file number: 0-21419

BioCardia, Inc.

(Exact name of registrant as specified in its charter)

Delaware	23-2753988
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification Number)

125 Shoreway Road, Suite B 

San Carlos, California 94070

(Address of principal executive offices including zip code)

(650) 226-0120

(Registrant’s telephone number, including area code)

N/A

(Former name, former address and former fiscal year, if changed since last report)

1

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 such reports), and (2) has been subject to such filing requirements for the past 90 days.    Yes  ☒    No  ☐  

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted 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 such files).    Yes  ☒    No  ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer	☐	Accelerated filer	☐
Non-accelerated filer	☒	Smaller reporting company	☒
		Emerging growth company	☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).    Yes  ☐    No  ☒

Securities registered pursuant to Section 12(b) of the Act:

Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock, par value $0.001 Warrant to Purchase Common Stock	BCDA BCDAW	The Nasdaq Capital Market The Nasdaq Capital Market

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date.

There were 6,825,183 shares of the registrant’s Common Stock issued and outstanding as of November 12, 2019.

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Part I.	FINANCIAL INFORMATION	4
Item 1.	Unaudited Condensed Consolidated Financial Statements	4
	Condensed Consolidated Balance Sheets as of September 30, 2019 and December 31, 2018	4
	Condensed Consolidated Statements of Operations for the three and nine months ended September 30, 2019 and 2018	5
	Condensed Consolidated Statements of Shareholders’ Equity (Deficit) for the three and nine months ended September 30, 2019 and 2018	6
	Condensed Consolidated Statements of Cash Flows for the nine months ended September 30, 2019 and 2018	7
	Notes to Unaudited Condensed Consolidated Financial Statements	8
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	17
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	24
Item 4.	Controls and Procedures	25
Part II.	OTHER INFORMATION	25
Item 1.	Legal Proceedings	25
Item 1A.	Risk Factors	26
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	27
Item 3.	Defaults Upon Senior Securities	27
Item 4.	Mine Safety Disclosures	27
Item 5.	Other Information	27
Item 6.	Exhibits	27
EXHIBIT INDEX		27
SIGNATURES		28

FORWARD-LOOKING INFORMATION

This Quarterly Report on Form 10-Q, or report, contains forward-looking statements within the meaning of the U.S. federal securities laws that involve risks and uncertainties. Certain statements contained in this report are not purely historical including, without limitation, statements regarding our expectations, beliefs, intentions, anticipations, commitments or strategies regarding the future that are forward-looking. These statements include those discussed in Item 2, Management’s Discussion and Analysis of Financial Condition and Results of Operations, including “Critical Accounting Policies and Estimates,” “Results of Operations,” “Liquidity and Capital Resources,” and “Future Funding Requirements,” and elsewhere in this report.

In this report, the words “may,” “could,” “would,” “might,” “will,” “should,” “plan,” “ forecast,” “anticipate,” “believe,” “expect,” “intend,” “estimate,” “predict,” “potential,” “continue,” “future,” “moving toward” or the negative of these terms or other similar expressions also identify forward-looking statements. Our actual results could differ materially from those forward-looking statements contained in this report as a result of a number of risk factors including, but not limited to, those listed in our Quarterly Report on Form 10-Q for the quarter ended June 30, 2019, and elsewhere in this report. You should carefully consider these risks, in addition to the other information in this report and in our other filings with the SEC. All forward-looking statements and reasons why results may differ included in this report are made as of the date of this report, and we undertake no obligation to update any such forward-looking statement or reason why such results might differ after the date of this Quarterly Report on Form 10-Q, except as required by law.

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PART I. FINANCIAL INFORMATION

ITEM 1. UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

BIOCARDIA, INC.

Condensed Consolidated Balance Sheets

(In thousands, except share and per share amounts)

	September 30,			December 31,
	2019			2018
	(unaudited)
Assets
Current assets:
Cash and cash equivalents	$	8,910		$	5,358
Accounts receivable, net of allowance for doubtful accounts of $14 and $9 at September 30, 2019 and December 31, 2018		103			274
Inventory		45			141
Prepaid expenses and other current assets		179			445
Total current assets		9,237			6,218
Property and equipment, net		210			145
Operating lease right-of-use asset, net		1,180			—
Other assets		54			54
Total assets	$	10,681		$	6,417
Liabilities and Stockholders’ Equity
Current liabilities:
Accounts payable	$	1,112		$	743
Accrued expenses and other current liabilities		2,424			1,805
Operating lease liability - current		508			—
Total current liabilities		4,044			2,548
Operating lease liability - noncurrent		752			—
Deferred revenue - noncurrent		691			—
Deferred rent		—			77
Total liabilities		5,487			2,625
Stockholders’ equity:
Preferred stock, $0.001 par value, 25,000,000 shares authorized as of September 30, 2019 and December 31, 2018; no shares issued and outstanding as of September 30, 2019 and December 31, 2018		—			—
Common stock, $0.001 par value, 100,000,000 shares authorized as of September 30, 2019 and December 31, 2018; 6,825,183 and 4,845,697 shares issued and outstanding as of September 30, 2019 and December 31, 2018		46			43
Additional paid-in capital		102,716			90,110
Accumulated deficit		(97,568	)		(86,361	)
Total stockholders’ equity		5,194			3,792
Total liabilities and stockholders’ equity	$	10,681		$	6,417

See accompanying notes to condensed consolidated financial statements.

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BIOCARDIA, INC.

Condensed Consolidated Statements of Operations

(In thousands, except share and per share amounts)

(unaudited)

	Three months ended September 30,						Nine months ended September 30,
	2019			2018			2019			2018
Revenue:
Net product revenue	$	1		$	52		$	139		$	223
Collaboration agreement revenue		193			32			356			299
Total revenue		194			84			495			522
Costs and expenses:
Cost of goods sold		24			109			321			401
Research and development		2,007			2,262			6,392			6,248
Selling, general and administrative		1,390			1,283			4,460			4,315
Total costs and expenses		3,421			3,654			11,173			10,964
Operating loss		(3,227	)		(3,570	)		(10,678	)		(10,442	)
Other income (expense):
Interest income		17			29			53			100
Gain on change in fair value of redemption feature embedded in convertible notes		52			—			52			—
Interest expense		(112	)		—			(112	)		—
Loss on extinguishment of convertible notes		(521	)		—			(521	)		—
Other expense		(1	)		(3	)		(2	)		(3	)
Total other income (expense)		(565	)		26			(530	)		97
Net loss	$	(3,792	)	$	(3,544	)	$	(11,208	)	$	(10,345	)
Net loss per share, basic and diluted	$	(0.63	)	$	(0.83	)	$	(2.13	)	$	(2.43	)
Weighted-average shares used in computing net loss per share, basic and diluted		6,030,662			4,253,100			5,263,058			4,250,509

See accompanying notes to condensed consolidated financial statements.

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BIOCARDIA, INC.

Condensed Consolidated Statements of Stockholders’ Equity (Deficit)

(In thousands, except share amounts)

(unaudited)

	Common stock					Additional		Accumulated
	Shares			Cost		paid in capital		deficit			Total
Balance at December 31, 2018		4,845,697		$	43	$	90,110	$	(86,361	)	$	3,792
Restricted stock units vested and issued		2,268			1		—		—			1
Share-based compensation		—			—		690		—			690
Net loss		—			—		—		(3,665	)		(3,665	)
Balance at March 31, 2019		4,847,965		$	44	$	90,800	$	(90,026	)	$	818
Reverse stock split fractional share true up		(494	)		—		—		—			—
Share-based compensation		—			—		696		—			696
Net loss		—			—		—		(3,750	)		(3,750	)
Balance at June 30, 2019		4,847,471		$	44	$	91,496	$	(93,776	)	$	(2,236	)
Restricted stock units vested and issued		25,158			—		—		—			—
Issuance of stock and warrants, net of issuance costs		1,741,667			2		9,258		—			9,260
Issuance of stock and warrants from conversion of convertible notes		210,887			—		1,206		—			1,206
Share-based compensation		—			—		756		—			756
Net loss		—			—		—		(3,792	)		(3,792	)
Balance at September 30, 2019		6,825,183		$	46	$	102,716	$	(97,568	)	$	5,194

Balance at December 31, 2017	4,246,519	$	38	$	83,537	$	(72,450	)	$	11,125
Adjustments to opening balance for change in accounting principle	—		—		—		46			46
Restricted stock units vested and issued	2,271		—		—		—			—
Exercise of stock options	237		—		5		—			5
Share-based compensation	—		—		615		—			615
Net loss	—		—		—		(3,584	)		(3,584	)
Balance at March 31, 2018	4,249,027	$	38	$	84,157	$	(75,988	)	$	8,207
Adjustments to opening balance for change in accounting principle	—		—		—		30			30
Restricted stock units vested and issued	4,073		—		—		—			—
Share-based compensation	—		—		738		—			738
Net loss	—		—		—		(3,217	)		(3,217	)
Balance at June 30, 2018	4,253,100	$	38	$	84,895	$	(79,175	)	$	5,758
Adjustments to opening balance for change in accounting principle	—		—		—		—			—
Restricted stock units vested and issued	—		—		—		—			—
Share-based compensation	—		—		730		—			730
Net loss	—		—		—		(3,544	)		(3,544	)
Balance at September 30, 2018	4,253,100	$	38	$	85,625	$	(82,719	)	$	2,944

See accompanying notes to condensed consolidated financial statements.

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BIOCARDIA, INC.

Condensed Consolidated Statements of Cash Flows

(In thousands)

(unaudited)

	Nine months ended September 30,
	2019			2018
Operating activities:
Net loss	$	(11,208	)	$	(10,345	)
Adjustments to reconcile net loss to net cash used in operating activities:
Write-off of inventory		54			—
Depreciation		78			66
Amortization of right-of-use asset		325			—
Share-based compensation		2,142			2,083
Amortization of debt discount on convertible shareholder notes		112			—
Change in fair value of redemption feature embedded in convertible notes		(52	)		—
Loss on extinguishment of convertible notes		521			—
Changes in operating assets and liabilities:
Accounts receivable		171			(75	)
Inventory		43			57
Prepaid expenses and other current assets		265			116
Accounts payable		372			200
Accrued expenses and other current liabilities		687			141
Deferred revenue		691			(65	)
Deferred rent		—			(1	)
Operating lease liability - noncurrent		(390	)		—
Net cash used in operating activities		(6,189	)		(7,823	)
Investing activities:
Purchase of property and equipment		(144	)		(51	)
Net cash used in investing activities		(144	)		(51	)
Financing activities:
Proceeds from sale of stock and warrants, net of issuance costs		9,260			—
Proceeds from issuance of convertible loan payable		625			—
Proceeds from the exercise of common stock options		—			5
Net cash provided by financing activities		9,885			5
Net change in cash and cash equivalents		3,552			(7,869	)
Cash and cash equivalents at beginning of period		5,358			12,689
Cash and cash equivalents at end of period	$	8,910		$	4,820
Supplemental disclosure for noncash investing and financing activities:
Conversion of interest payable to stock and warrants	$	8			—

See accompanying notes to condensed consolidated financial statements.

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(1) Summary of Business and Basis of Presentation

(a)	Description of Business
	BioCardia, Inc., (BioCardia or the Company), is a clinical-stage regenerative medicine company developing novel therapeutics for cardiovascular diseases with large unmet medical needs. The Company’s lead therapeutic candidate is the CardiAMP® cell therapy system and its second therapeutic candidate is the CardiALLO™ cell therapy system. To date, the Company has devoted substantially all its resources to research and development efforts relating to its therapeutic candidates and biotherapeutic delivery systems including conducting clinical trials, developing manufacturing and sales capabilities, in-licensing related intellectual property, providing general and administrative support for these operations and protecting its intellectual property.
	BioCardia also has three enabling device product lines: (1) the CardiAMP cell processing system; (2) the Helix™ biotherapeutic delivery system, or Helix; and (3) the Morph® steerable guide and sheath catheter portfolio, including the new AVANCE™ steerable introducer family. The Company manages its operations as a single segment for the purposes of assessing performance and making operating decisions.

(2) Significant Accounting Policies

(a)	Basis of Preparation
	The accompanying condensed consolidated balance sheets, statements of operations, shareholders equity, and cash flows as of September 30, 2019 and for the three and nine months ended September 30, 2019 and 2018 are unaudited. The condensed consolidated financial statements have been prepared in accordance with generally accepted accounting principles in the United States of America (U.S. GAAP) and applicable rules and regulations of the Securities and Exchange Commission (SEC) for interim financial information and on a basis consistent with the annual financial statements and, in the opinion of management, reflect all adjustments which include only normal recurring adjustments, necessary to present fairly its financial position as of September 30, 2019, results of operations for the three and nine months ended September 30, 2019 and 2018, and cash flows for the nine months ended September 30, 2019 and 2018. The results for the nine months ended September 30, 2019 are not necessarily indicative of the results to be expected for the year ending December 31, 2019 or for any other interim period or for any other future year. Certain changes in the prior period consolidated balance sheet have been made to conform to the current period presentation. Changes to reduce the December 31, 2018 accounts payable and increase the accrued expenses and other current liabilities accounts were made in the amount of $277,000. These changes had no effect on the Consolidated Statement of Operations or cash flow.
	These condensed consolidated financial statements should be read in conjunction with the audited financial statements and related notes included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2018, filed with the SEC on April 2, 2019.

(b)	Liquidity
	The Company has incurred net losses and negative cash flows from operations since its inception and had an accumulated deficit of $97.6 million as of September 30, 2019. Management expects operating losses and negative cash flows to continue through the next several years. These factors raise substantial doubt about the Company’s ability to continue as a going concern beyond one year from the date these financial statements are issued. Based on management’s current plans, management believes cash and cash equivalents of $8,910,000 as of September 30, 2019, will not be sufficient to fund the Company for one year from the date these financial statements are issued. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.
	If adequate funds are not available, BioCardia may be required to reduce operating expenses, delay or reduce the scope of its product development programs, obtain funds through arrangements with others that may require it to relinquish rights to certain of its technologies or products that the Company would otherwise seek to develop or commercialize itself, or cease operations. While the Company believes it has a viable strategy to raise additional funds, there can be no assurances that it will be able to obtain additional capital on acceptable terms and in the amounts necessary to fully fund its operating needs.

8

(c)

Use of Estimates

The preparation of the financial statements in accordance with U.S. GAAP requires management to make certain estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Actual results could differ materially from those estimates. Significant items subject to such estimates and assumptions include share-based compensation, the useful lives of property and equipment, allowances for doubtful accounts and sales returns, incremental borrowing rate, and inventory valuation.

(d)	Principles of Consolidation
	The condensed consolidated financial statements include the accounts of the Company and its wholly-owned subsidiary. All intercompany accounts and transactions have been eliminated during the consolidation process.

(e)

Changes to Significant Accounting Policies

The Company’s significant accounting policies are described in Note 2 of the notes to the consolidated financial statements included in its Annual Report on Form 10-K filed for the year ended December 31, 2018. Apart from the adoption of ASU No. 2018-07, Compensation–Stock Compensation (Topic 718): Improvements to Nonemployee Share-based Payment Accounting on January 1, 2019, which led to an amended stock-based compensation policy, and the adoption of ASU No. 2016-02, Leases (Topic 842), which led to an amended lease policy as described in the following paragraphs, there have been no changes to those policies. Measurement of nonemployee awards - The measurement of equity-classified nonemployee awards is fixed at the grant date, and the Company may use the expected term to measure nonemployee options or elect to use the contractual term as the expected term, on an award-by-award basis. This differs from the guidance in ASC 505-50 that requires the use of the contractual term. Forfeitures of nonemployee awards will be recognized as they occur.   Operating lease right-of-use asset and liabilities - The Company will determine if an arrangement is a lease at the inception of the arrangement. All leases are assessed for classification as an operating lease or finance lease. The Company will recognize a lease liability and a ROU asset for all leases, including operating leases, with a term greater than 12 months. ROU assets represent the Company's right to use an underlying asset for the lease term and lease liabilities represent its obligation to make lease payments arising from the lease.   The Company’s lease liabilities are recognized at the applicable lease commencement date based on the present value of the lease payments required to be paid over the lease term. Variable lease payments are expensed as incurred and are not included the computation of the lease liability. The lease liability discount rate is generally the Company’s incremental borrowing rate unless the lessor’s rate implicit in the lease is readily determinable, in which case the lessor’s implicit rate is used.   The Company's ROU assets are also recognized at the applicable lease commencement date. The ROU asset equals the carrying amount of the related lease liability, adjusted for any lease payments made prior to lease commencement and lease incentives provided by the lessor, if any. The Company amortizes a right-of-use (ROU) asset, and the periodic amortization is the difference between the straight-line total lease cost for the period (including amortization of initial direct costs) and the periodic accretion of the lease liability using the effective interest method.   The Company’s lease terms may include options to extend or terminate the lease when it is reasonably certain that it will exercise any such options. Operating lease cost for lease payments is recognized on a straight-line basis over the lease term. The Company’s lease contracts often include lease and non-lease components. The Company has elected the practical expedient offered by the standard to not separate lease from non-lease components and accounts for them as a single lease component. The Company has elected not to recognize ROU assets and lease liabilities for leases with a term of twelve months or less. Lease cost for short-term leases is recognized on a straight-line basis over the lease term.

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(f) Recently Adopted Accounting Pronouncement   In February 2016, the FASB amended its guidance related to lease accounting. The amended guidance required lessees to recognize a majority of their leases on the balance sheet as a ROU asset and a lease liability. In July 2018, the FASB issued ASU No. 2018-11, Leases (Topic 842): Targeted Improvements, or ASU No. 2018-11. In issuing ASU No. 2018-11, the FASB is permitting another transition method for ASU 2016-02, which allows the transition to the new lease standard by recognizing a cumulative-effect adjustment to the opening balance of retained earnings in the period of adoption. The Company elected this available transition method.

The Company adopted the new standard using the cumulative-effect method on January 1, 2019. The Company's adoption included lease codification improvements that were issued by the FASB through March 2019.

The FASB made available several practical expedients in adopting the amended lease accounting guidance. The Company elected the package of practical expedients permitted under the transition guidance, which among other things, allowed registrants to carry forward historical lease classification, its assessment on whether a contract is or contains a lease, and its initial direct costs for any leases that exist prior to adoption of the new standard. BioCardia also elected to keep leases with an initial term of 12 months or less off the consolidated balance sheet, and to recognize the associated lease payments in the statements of operations on a straight-line basis over the lease term.

The most significant impact was the recognition of ROU assets and related lease liabilities for operating leases on the condensed consolidated balance sheet. The Company recognized ROU assets and related lease liabilities of $1,505,000 and $1,593,000 respectively, related to operating lease commitments, as of January 1, 2019. The operating lease ROU asset represents the lease liability, plus any lease payments made at or before the commencement date, less any lease incentives received. The amended guidance did not have a material impact on the Company's cash flows or results of operations. See Note 6 of the condensed consolidated financial statements.

In June 2018, the FASB issued ASU No. 2018-07, Stock Compensation (Topic 718): Improvements to Nonemployee Share-Based Payment Accounting. ASU 2018-07 is intended to reduce the cost and complexity and to improve financial reporting for nonemployee share-based payments. ASU 2018-07 expands the scope of Topic 718, Compensation-Stock Compensation (which currently only includes share-based payments to employees) to include share-based payments issued to nonemployees for goods or services. Consequently, the accounting for share-based payments to nonemployees and employees will be substantially aligned. No longer will nonemployee awards be marked-to-market every reporting period, nor will the expected term be required to be the contractual term. However, forfeitures will continue to be recognized when incurred. ASU 2018-07 supersedes Subtopic 505-50, Equity-Based Payments to Non-Employees. The Company adopted ASU 2018-07 effective January 1, 2019 using the cumulative-effect method for equity-classified nonemployee awards which have not been settled as of the adoption date. The cumulative effect did not have a material impact on the condensed consolidated balance sheet, statement of operations or statement of cash flows.

(g)	Recently Issued Accounting Pronouncements
	Recent accounting pronouncements issued by the FASB, including its Emerging Issues Task Force did not or are not believed by management to have a material impact on the Company’s financial statement presentation or disclosures.

(3)     Fair Value Measurement

The fair value of financial instruments reflects the amounts that the Company estimates to receive in connection with the sale of an asset or paid in connection with the transfer of a liability in an orderly transaction between market participants at the measurement date (exit price). The Company follows a fair value hierarchy that prioritizes the use of inputs used in valuation techniques into the following three levels:

Level 1 – quoted prices in active markets for identical assets and liabilities

Level 2 – observable inputs other than quoted prices in active markets for identical assets and liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities

Level 3 – unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities.

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The following table sets forth the fair value of its financial assets measured on a recurring basis as of September 30, 2019 and December 31, 2018 and indicates the fair value hierarchy utilized to determine such fair value (in thousands):

	As of September 30, 2019
	Level 1		Level 2		Level 3		Total
Assets:
Money market funds	$	8,910	$	—	$	—	$	8,910

	As of December 31, 2018
	Level 1		Level 2		Level 3		Total
Assets:
Money market funds	$	5,358	$	—	$	—	$	5,358

(4)     Inventories

Inventories are stated at the lower of cost or net realizable value using the average cost method. Inventories consisted of the following (in thousands): 

	September 30,		December 31,
	2019		2018
Raw materials	$	—	$	79
Work in process		45		39
Finished goods		—		23
Total	$	45	$	141

Write downs for excess or expired inventory are based on management’s estimates of forecasted usage of inventories and are included in cost of goods sold. A significant change in the timing or level of demand for certain products as compared to forecasted amounts may result in recording additional write downs for excess or expired inventory in the future. Charges to cost of goods sold for inventory write-downs, reserve adjustments, scrap, shrinkage and expired inventories totaled approximately $0, and $80,000 for the three and nine months ended September 30, 2019, respectively. Charges to cost of goods sold for inventory write-downs, reserve adjustments, scrap, shrinkage and expired inventories totaled approximately $13,000, and $15,000 for the three and nine months ended September 30, 2018, respectively. 

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(5)     Property and Equipment, Net

Property and equipment, net consisted of the following (in thousands):

	September 30,			December 31,
	2019			2018
Computer equipment and software	$	127			119
Laboratory and manufacturing equipment		550			481
Furniture and fixtures		55			55
Leasehold improvements		332			332
Construction in progress		69			3
Property and equipment, gross		1,133			990
Less accumulated depreciation		(923	)		(845	)
Property and equipment, net	$	210			145

Depreciation expense totaled approximately $29,000 and $78,000 for the three and nine months ended September 30, 2019, respectively. Depreciation expense totaled approximately $22,000 and $66,000 for the three and nine months ended September 30, 2018, respectively.

(6)     Operating Lease Right-of-Use Asset, Net               

The Company adopted the new lease standard on January 1, 2019 using the cumulative-effect method. Prior periods were not retrospectively adjusted and continue to be reported under the accounting standards in effect for those periods.

The Company determines if an arrangement is a lease at inception by assessing whether it conveys the right to control the use of an identified asset for a period of time in exchange for consideration. The Company’s operating lease is primarily related to a property lease for its laboratory and corporate offices. BioCardia’s lease agreement does not contain any material residual guarantees or material restrictive covenants, nor does it contain an additional lease extension.

ROU assets and lease liabilities are recognized at the lease commencement date based on the present value of lease payments over the lease term. The Company’s lease does not provide an implicit rate. The Company used an adjusted historical incremental borrowing rate, based on the information available at the approximate lease commencement date, to determine the present value of lease payments. The net lease asset was adjusted for deferred rent, lease incentives, and prepaid rent. Variable rent expense is made up of expenses for common area maintenance and shared utilities and were not included in the determination of the present value of lease payments. The Company has no finance leases. The new lease standard did not materially impact its condensed consolidated statements of operations.

The components of lease expense for the three and nine months ended September 30, 2019 was as follows (in thousands, except years and percentages):

	Three months ended September 30,		Nine months ended September 30,
	2019		2019
Straight-line rent expense recognized for operating lease	$	150	$	450
Variable rent expense recognized for operating lease		63		202
Total rent expense	$	213	$	652
Weighted average remaining lease term (in years)				2.25
Weighted average discount rate				12.05	%

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Supplemental cash flow information related to the operating lease was as follows (in thousands):

	Three months ended September 30,		Nine months ended September 30,
	2019		2019
Cash paid for amounts included in the measurement of lease liabilities	$	153	$	459
Cash Lease Expense (imputed interest expense component of net income)		39		126

Future minimum lease payments under the operating lease as of September 30, 2019 are as follows (in thousands):

	Operating Lease
	September 30, 2019
Remainder of 2019	$	153
Years ending December 31,
2020		630
2021		649
Total undiscounted lease payments		1,432
Less imputed interest		172
Total operating lease liabilities	$	1,260

Prior to the Company’s adoption of the new lease standard, future minimum lease payments as of December 31, 2018, which were undiscounted, were as follows (in thousands):

Years ending December 31,
2019	$	612
2020		630
2021		649
Total	$	1,891

(7)     Accrued Expenses and Other Current Liabilities

Accrued expenses and other current liabilities consisted of the following (in thousands):

	September 30,		December 31,
	2019		2018
Accrued expenses	$	102	$	127
Accrued salaries and employee benefits		496		368
Accrued director compensation		555		277
Accrued clinical trial costs		382		276
Grant liability		637		645
Customer deposits		252		112
Total	$	2,424	$	1,805

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(8)     Stockholders’ Equity

Public Offering on Form S-1 Registration Statement - In April 2019, the Company submitted a Form S-1 Registration Statement (S-1) to the Securities and Exchange Commission (SEC), which was subsequently amended. On August 2, 2019, the Company entered into an underwriting agreement with Maxim Group LLC, as representative of the several underwriters named therein, relating to a firm commitment underwritten public offering pursuant to the S-1, of 1,666,667 units consisting of one share of common stock, par value of $0.001 per share, and a warrant to purchase one share of common stock. The offering price to the public was $6.00 per unit. The warrants, which are equity classified, are immediately exercisable for shares of common stock at a price of $6.30 per share and expire five years from the date of issuance. In addition, the underwriters were granted 11,958 warrants exercisable at a per warrant exercise price of $6.60 as part of their compensation. The underwriters were granted a 45-day option to purchase up to 250,000 additional shares of common stock, and/or 250,000 additional warrants to cover over-allotments, if any. The closing of the offering occurred on August 6, 2019. After deducting underwriting discounts and commissions and estimated offering expenses payable by the Company, BioCardia realized net proceeds of approximately $8.84 million. On September 4, 2019, the underwriters exercised the over-allotment and purchased 75,000 shares of common stock and 250,000 warrants for net proceeds of approximately $420,000, after deducting underwriting discounts of approximately $32,000.

Up List to Nasdaq - On August 2, 2019 the Company’s common stock and warrants to purchase common stock began trading on the Nasdaq Capital Market. Previously the common stock was quoted on the OTCQB Marketplace (OTCQB) under the symbol, “BCDA”.  “BCDA” and “BCDAW” are the trading symbols for the Company’s common stock and warrants to purchase common stock, respectively, on the Nasdaq Capital Market.

Convertible Note Financing - On July 5, 2019, BioCardia entered into a note purchase agreement pursuant to which the Company issued on such date $625,000 in aggregate principal amount of convertible promissory notes to accredited investors, a portion of which were certain of the Company’s officers and directors and a principal stockholder (or their respective affiliates). The notes accrued 14.0% simple interest and mature six months from the issue date, on January 5, 2020. If at any time prior to the maturity date, the Company closes a public stock offering for the purpose of raising capital in which the Company’s common stock is listed or quoted on the New York Stock Exchange, the Nasdaq Global Select Market, the Nasdaq Global Market or the Nasdaq Capital Market, the outstanding principle and interest would automatically convert into the securities offered in the financing at a unit price equal to a 50% discount to the qualified financing price. The convertible notes conversion features were determined to be an embedded derivative requiring bifurcation and separate accounting at estimated fair value. The fair value of the derivative was treated as a discount on the notes, which is subject to accretion over the term of the note. The change in fair value of the derivative liability was approximately $52,000. The loss on extinguishment of the convertible notes approximated $521,000. Interest expense on the notes for the three and nine months ended September 31, 2019, totaled $112,000 and included $104,000 of accretion of the discount.

Upon the closing of the Company’s public offering of units on August 6, 2019 the unpaid principal and interest on the convertible notes totaling approximately $633,000, converted into 210,887 units, each unit consisting of one share of common stock and a warrant to purchase one share of common stock, at a conversion price of $3.00 per unit. Holders of the convertible notes had the option of converting the notes into units of one share of common stock and a warrant at a unit price of $8.00 prior to the automatic conversion in the Company’s public offering. The warrants have the same terms, including exercise price and expiration date, as the warrants issued in the public offering.

Reverse Stock Split - On June 6, 2019 the Company effected a 1-for-9 reverse stock split of the Company’s common stock. Neither the par value nor the authorized number of shares was adjusted as a result of the reverse stock split. All issued and outstanding common stock, warrants, stock options, restricted stock units and per share amounts contained in the accompanying consolidated financial statements and notes to the consolidated financial statements have been retroactively adjusted to give effect to the reverse stock split for all periods presented.

Warrants for Common Stock - On December 24, 2018, the Company issued 296,296 warrants (as adjusted for the reverse stock split described above) to purchase the Company’s common stock in connection with the sale of an aggregate of 592,592 shares (as adjusted) of the Company’s common stock at a purchase price of $6.75 per share (as adjusted) for aggregate proceeds of $3.8 million, net of $200,000 in expenses. The warrants are exercisable immediately for cash and, since six months have passed, are also exercisable on a cashless basis until an effective registration statement has been filed registering the resale of the shares issuable upon exercise of the warrants. Warrants can be settled in unregistered shares. The warrants have an exercise price of $6.75 per share and will expire on December 24, 2023. The issued warrants are standalone financial instruments and were equity classified in accordance with US GAAP. Set forth below is a table of activity of warrants for common stock and the related weighted average exercise price per warrant.

	Number of Common Stock Warrants		Weighted Average Exercise Price
Balance, December 31, 2018		296,296	$	6.75
Warrants for common stock sold		2,139,512	$	6.30
Warrants for common stock exercised		-
Balance, September 30,2018		2,435,808	$	6.36

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 (9)    Share-Based Compensation              

The share-based compensation expense is recorded in cost of goods sold, 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 nine months ended September 30, 2019 and 2018 was recorded as follows (in thousands):

	Three months ended September 30,				Nine months ended September 30,
	2019		2018		2019		2018
Cost of goods sold	$	38	$	39	$	130	$	105
Research and development		293		250		787		711
Selling, general and administrative		425		441		1,224		1,267
Share-based compensation expense	$	756	$	730	$	2,142	$	2,083

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

	Options outstanding
	Number of shares			Weighted average exercise price
Balance, December 31, 2018		608,485		$	25.16
Stock options granted		254,785			5.28
Stock options exercised		—			-
Stock options canceled		(15,122	)		14.16
Balance, September 30, 2019		848,148		$	18.90
Exercisable and vested, September 30, 2019		390,199		$	24.17

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Unrecognized share-based compensation for employee and nonemployee options granted through September 30, 2019 is approximately $4.0 million to be recognized over a remaining weighted average service period of 2.3 years.

Share-Based Compensation (RSUs)

The following summarizes the activity of non-vested RSUs:  

				Weighted
				average
				grant date
	Number of			fair value
	Shares			per share
Balance, December 31, 2018		29,694		$	25.56
RSUs granted		34,713		$	4.75
RSUs vested		(2,272	)	$	99.36
RSUs forfeited		-			-
Balance, September 30, 2019		62,135		$	10.55

Unrecognized share-based compensation for RSUs granted through September 30, 2019 is approximately $230,000 to be recognized over a remaining weighted average service period of 0.3 years.

(10)   Net Loss per Share

Basic net loss per share is computed by dividing net loss by the weighted-average number of common shares outstanding for the period. 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. 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 its 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:

	September 30,
	2019		2018
Stock options to purchase common stock		848,148		616,567
Unvested restricted stock units		62,135		29,706
Common stock warrants		2,435,808		-
Total		3,346,091		646,273

(11)   Income Taxes

During the three and nine months ended September 30, 2019 and 2018, there was no income tax expense or benefit for federal or state income taxes in the accompanying condensed consolidated statement of operations due to the Company’s net loss and a full valuation allowance on the resulting deferred tax assets.

As of September 30, 2019, the Company retains a full valuation allowance on its deferred tax assets in all jurisdictions. The realization of its deferred tax assets depends primarily on its ability to generate future taxable income which is uncertain. The Company does not believe that its deferred tax assets are realizable on a more-likely-than-not basis; therefore, the net deferred tax assets have been fully offset by a valuation allowance. 

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(12)   Related Party Transactions

BioCardia, Inc. (the “Company”) and OPKO Health, Inc. (“OPKO”) previously entered into a consulting agreement dated August 19, 2016, between the Company and OPKO (the “Consulting Agreement”). The chairman and chief executive officer of OPKO is a beneficial owner of more than 5% of the outstanding shares of the Company’s common stock.

Pursuant to the terms of the Consulting Agreement, OPKO was to provide advisory services to the Company in support of strategic transactions, financings and other matters as agreed between the parties from time to time. Also, in August 2016, the Company granted OPKO a ten-year option to purchase 46,553 shares of common stock, with a 4-year vesting period and an exercise price of $16.20 per share, to OPKO as consideration for consulting services to be provided under the Consulting Agreement. The term of the Consulting Agreement was initially for 4 years and was to have been automatically renewed for successive one-year periods.

Effective August 29, 2019, the Company and OPKO mutually agreed to terminate the Consulting Agreement without penalty or payment of any kind as the services under the Consulting Agreement were no longer necessary. In connection with the termination of the Consulting Agreement, OPKO’s option grant was amended such that it is unaffected by the termination of the Consulting Agreement and will continue to vest and remain outstanding for the remainder of its ten-year term unless earlier exercised. As a result of this modification of the option grant, all future unrecognized stock-based compensation expense was accelerated and recognized in August 2019. BioCardia recorded approximately $116,000 and $160,000 as share-based compensation expense related to the OPKO stock option in selling, general and administrative expense during the three and nine months ended September 30, 2019, respectively. BioCardia recorded approximately $59,000 and $121,000 as share-based compensation expense related to the OPKO stock option in selling, general and administrative expense during the three and nine months ended September 30, 2018, respectively.

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 Annual 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 and those listed in our Annual Report on Form 10-K. 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.

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Overview

We are a clinical-stage regenerative medicine company developing novel therapeutics for cardiovascular diseases with large unmet medical needs. Our lead therapeutic candidate is the investigational CardiAMP Cell Therapy System, which provides an autologous bone marrow derived cell therapy (using a patient’s own cells) for the treatment of two clinical indications: heart failure that develops after a heart attack and chronic myocardial ischemia.

To date, we have devoted substantially all our resources to research and development efforts relating to our therapeutic candidates and biotherapeutic delivery systems, including 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 also generated modest revenues from sales of our approved products. We have funded our operations primarily through the sales of equity and convertible debt securities, and certain government and private grants.

We have incurred net losses in each year since our inception. Our net losses were approximately $3.8 million and $3.5 million for the three months ended September 30, 2019 and 2018, respectively. As of September 30, 2019, we had an accumulated deficit of approximately $97.6 million. Substantially all our net losses have resulted from costs incurred in connection with our research and development programs, clinical trials, intellectual property matters, building our manufacturing and sales capabilities, and from general and administrative costs associated with our operations. As discussed in more detail under “Liquidity and Capital Resources”, there is substantial doubt about our ability to continue as a going concern within one year after the date this Quarterly Report on Form 10-Q is filed with the SEC, and we plan to raise additional capital, potentially including debt and equity arrangements, to finance our future operations. There can be no assurances as to the availability of capital or the terms on which capital will be available, if at all.

CardiAMP Cell Therapy System

The CardiAMP Heart Failure Trial is a Phase III, multi-center, randomized, double-blinded, sham-controlled study of up to 260 patients at 40 centers nationwide, which includes a 10-patient roll-in cohort. The Phase III pivotal trial is designed to provide the primary support for the safety and efficacy of the CardiAMP Cell Therapy System. The trial’s primary endpoint is a clinical composite of six minute walk distance and major adverse cardiac and cerebrovascular events. Based on the results achieved in the Phase II trial, our Phase III pivotal trial is designed to have more than 95% probability of achieving a positive result with statistical significance.

The ongoing CardiAMP Heart Failure Trial is enrolling today at 24 clinical sites. The independent Data Safety Monitoring Board (DSMB) completed a prespecified data review in September 2019, which included the safety follow-up results on 35 patients at and all additional data available on the 50 patients randomized in the trial as of August 31, 2019. The DSMB indicated there were no safety concerns with the study results and recommended that the trial continue as planned.

Because there have been no safety concerns in the CardiAMP Heart Failure Trial, enrollment remains our primary focus and challenge. The trial investigators have enrolled 58 patients to date. We anticipate a DSMB interim readout from the trial in the fourth quarter of 2020 on 60 patients at one year follow-up that will include all patients enrolled at that time point.  This fourth quarter of 2020 event is anticipated to be the first randomized efficacy data set including the primary endpoint reviewed by the DSMB. 

We have recently addressed two barriers for patients to participate in the trial. The first of these is that the patients in the trial are all interested in receiving therapy and less interested in being in the control arm that does not have a path to receive therapy. Secondly, the requirement for patient out of pocket copays in our Medicare reimbursed trial appears to be a barrier to patient enrollment. To address these barriers to patient participation, we submitted an Investigational Device Exemption (IDE) supplement to the FDA with changes to enable patients in the control arm to “Cross Over” to therapy after certain follow-up visits in the trial have been completed, which assures the trial control arm patients early access to therapy if the trial meets its primary endpoint and is deemed appropriate for the patients by their physicians, and to enable BioCardia to cover the costs of all patient co-pays so that participation in the investigational trial is free for insured patients. The FDA has recently approved this IDE supplement. These changes, coupled with site specific plans intended to further accelerate enrollment, are being actively rolled out. We need a significant uptick in the rate of enrollment to complete this phase of the trial in 2020. We expect to have more clarity on target trial completion once these initiatives are in place.

The FDA has approved a second IDE for the randomized controlled pivotal trial of the CardiAMP Cell Therapy System in patients with refractory chronic myocardial ischemia for up to 343 patients at up to 40 clinical sites in the United States. 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. We anticipate that many of the investigators and sites will be the same for both the heart failure and chronic myocardial ischemia indications. This trial has not yet been initiated as we are sensitive to efforts that could impact the ongoing heart failure program, although it is expected this second pivotal trial will benefit significantly from all of the experience we have gained from the heart failure program.

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The Department of Health & Human Services Centers for Medicare & Medicaid Services, or CMS, has designated that both the CardiAMP Heart Failure Trial and the CardiAMP Chronic Myocardial Ischemia Trial qualify for Medicare national coverage. Covered costs 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 this CMS reimbursement policy and are similarly anticipated to cover these costs.  This coverage significantly reduces the Company’s cost of conducting these pivotal trials.  

CardiALLO Cell Therapy System

Our second therapeutic candidate is the CardiALLO Cell Therapy System, an investigational culture expanded bone marrow derived “off the shelf” mesenchymal stem cell therapy. CardiALLO cell therapy cells are expanded from Neurokinin-1 receptor positive bone marrow cells. While these cells are being advanced to treat heart failure, they have potential for numerous therapeutic applications as these are anticipated to be the cells that respond to the release of Substance P. Substance P (“SP”) is a neuropeptide released from sensory nerves and is associated with the inflammatory processes and pain. SP is believed to be a key first responder to most noxious/extreme stimuli (stressors), i.e., those with a potential to compromise biological integrity. SP is thus regarded as an immediate defense, stress, repair survival system. The endogenous receptor for SP is the Neurokinin-1 receptor, which is distributed over cytoplasmic membranes of many cell types (for example neurons, glia, endothelia of capillaries and lymphatics, fibroblasts, stem cells, and white blood cells) in many tissues and organs. SP amplifies or excites most cellular processes. Elevation of serum, plasma, or tissue SP and/or its receptor Neurokinin-1 has been associated with many diseases: sickle cell crisis, inflammatory bowel disease, major depression and related disorders, fibromyalgia rheumatological, and infections such as HIV/AIDS and respiratory syncytial virus, as well as in cancer.

Our CardiALLO Neurokinin-1 positive derived cells are believed to be an important subset of the cells that we have delivered in our previous preclinical and clinical mesenchymal stem cell studies. We believe this therapy presents the advantages of an "off the shelf" therapy that does not require tissue harvesting or cell processing. We have completed manufacturing validation runs of these cells at BioCardia to support future clinical studies. We are working to obtain FDA acceptance of an Investigational New Drug (“IND”) application for the Phase I/II trial for CardiALLO Cell Therapy System for the treatment of ischemic systolic heart failure in the second quarter of 2020.

The subset of patients we are targeting initially for the CardiALLO Heart Failure Trial are those that have been excluded from our ongoing CardiAMP Heart Failure Trial due to their lower cell potency assay scores. If the CardiAMP trial is successful there is the potential for the CardiALLO therapy indication to be designated as an orphan indication.

Helix™ Biotherapeutic Delivery System

BioCardia’s Helix Biotherapeutic Delivery System or “Helix” is believed to be the leading percutaneous catheter delivery system for cardiovascular regenerative medicine. It enables investigational studies of local delivery of cell and gene-based therapies, including CardiAMP and CardiALLO cell therapies to treat cardiovascular indications. Helix is in use or has potential to be used to treat many cardiac diseases including heart failure with reduced ejection fraction, heart failure with preserved ejection fraction, obstructive hypertrophic cardiomyopathy, myocardial infarction, chronic myocardial ischemia, and cardiac conduction disorders. The Helix’s small hollow, distal helical needle is advanced, similar to an angioplasty catheter, and is passed over the aortic arch and across the aortic valve through the Company’s Morph guide catheter or “Morph”. The Helix is then advanced from within the Morph, and its helical needle is rotated into the heart tissue to provide active fixation during therapeutic delivery, similar to the active fixation electrodes used in cardiac pacing. This fixation to the beating heart wall provides for stability and control during the delivery procedure. It uses simplified fluoroscopic imaging, crosses the aortic arch and valve over a guide wire, and provides the operator with three degrees of freedom to maximize operator control. The Helix is approved in Europe with CE Mark and is under investigational use in the United States and is being used in pre-clinical and clinical investigations of cell, gene, and protein therapies.

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Morph Deflectable Guide and Sheaths Product

BioCardia’s Morph catheter is designed to enable physicians to navigate through tortuous anatomy, customize the shape of the catheter to the patient's anatomy and their clinical needs during the procedure, and to have stellar back up support once positioned. Morph catheters enable all Helix procedures and have been commercially available to treat more than ten thousand patients. A number of Morph guides and sheaths are approved for commercial sale in the United States, including the Morph AVANCE™ which received FDA clearance in May 2019 and was first used commercially in September 2019. Certain Morph catheter systems are approved in Europe with CE Mark.

Financial Overview

Revenue

We currently have a portfolio of enabling and delivery products, from which we have generated modest revenue.

Cost of Goods Sold

Cost of goods sold includes the costs of raw materials and components, manufacturing personnel and facility costs and other indirect and overhead costs associated with manufacturing our enabling and delivery products.

Research and Development Expenses

Our research and development expenses consist primarily of:

• salaries and related overhead expenses, which include share-based compensation and benefits for personnel in research and development functions;

• fees paid to consultants and contract research organizations, or CROs, including in connection with our preclinical studies and clinical trials and other related clinical trial fees, such as for investigator grants, patient screening, laboratory work, clinical trial management and statistical compilation and analysis;

• costs related to acquiring and manufacturing clinical trial materials;

• costs related to compliance with regulatory requirements; and

• payments related to licensed products and technologies.

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, further develop the CardiAMP and CardiALLO Cell Therapy Systems, and subject to the availability of additional funding, develop other therapeutic candidates for additional indications. 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.

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.

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Other Income (Expense)

Other income and expense consist primarily of interest income we earn on our cash, cash equivalents and investments as well as net expenses incurred accounting for the derivative liabilities. We recorded a gain on the change in fair value of the derivative liabilities of approximately $52,000, a loss on extinguishment of convertible notes for approximately $521,000 as well as recognized interest expense of approximately $112,000, which included accretion of the debt discount of approximately $104,000.

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 generally accepted accounting principles in the United States. 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. 

Apart from the adoption of ASU No. 2018-07, Compensation–Stock Compensation (Topic 718): Improvements to Nonemployee Share-based Payment Accounting on January 1, 2019, which led to an amended stock-based compensation policy (see Note 2 of our Condensed Consolidated Financial Statements), there have been no changes in our critical accounting estimates or accounting policies described in “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in our Annual Report on Form 10-K.

Results of Operations

Comparison of Three and Nine Months Ended September 30, 2019 and 2018

The following table summarizes our results of operations for the three and nine months ended September 30, 2019 and 2018 (in thousands):

	Three months ended September 30,						Nine months ended September 30,
	2019			2018			2019			2018
Revenue:
Net product revenue	$	1		$	52		$	139		$	223
Collaboration agreement revenue		193			32			356			299
Total revenue		194			84			495			522
Costs and expenses:
Cost of goods sold		24			109			321			401
Research and development		2,007			2,262			6,392			6,248
Selling, general and administrative		1,390			1,283			4,460			4,315
Total costs and expenses		3,421			3,654			11,173			10,964
Operating loss		(3,227	)		(3,570	)		(10,678	)		(10,442	)
Other income (expense):
Interest income		17			29			53			100
Gain on change in fair value of redemption feature embedded in convertible notes		52			-			52			-
Interest expense		(112	)		-			(112	)		-
Loss on extinguishment of convertible notes		(521	)		-			(521	)		-
Other expense		(1	)		(3	)		(2	)		(3	)
Total other income (expense)		(565	)		26			(530	)		97
Net loss	$	(3,792	)	$	(3,544	)	$	(11,208	)	$	(10,345	)

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Revenue.    Revenue increased to $194,000 in the third quarter of 2019 as compared to $84,000 in the third quarter of 2018.  These changes are primarily due to growing partnering activities under programs with our collaborative partners. Revenues decreased to $495,000 in the nine months ended September 30, 2019 as compared to $522,000 in the nine months ended September 30, 2018.  This decrease was caused by reduced volumes of commercial catheter sales, partially offset by growth in in partnering activities under programs with our collaborative partners. We expect revenues to continue to increase in the fourth quarter of 2019 and modestly year over year.

Cost of Goods Sold.    Cost of goods sold decreased by approximately $85,000 and $80,000, respectively, during the three and nine months ended September 30, 2019 compared to the three and nine months ended September 30, 2018, primarily due to the decrease in net product sales volumes partially offset by an increase in inventory reserves in 2019 for raw materials related to the planned transition to the new Morph AVANCE™ product family. We expect cost of goods sold to continue to decrease in the fourth quarter of 2019 as compared to the fourth quarter of 2018 and decrease moderately year over year.

Research and Development Expenses.   Research and development expenses decreased by approximately $255,000 and increased by $144,000, respectively, during the three months and nine months ended September 30, 2019 compared to the three and nine months ended September 30, 2018. Discretionary research and development expenses in the three months ended September 30, 2019 were reduced, where this could be done without adversely impacting the projects, until the successful financing event occurred in the quarter. Clinical trial activities for the nine months ended September 30, 2019 were overall higher than those in the same period of 2018 because the number of sites and patients treated increased year over year. We expect research and development expenses to increase modestly as we advance the CardiAMP Heart Failure Trial and we further develop the CardiAMP and CardiALLO platforms.

Selling, General and Administrative Expenses.   Selling, general and administrative expenses for the three and nine months ended September 30, 2019 increased by approximately $107,000 and $145,000, respectively, compared to the three and nine months ended September 30, 2018, primarily due to expenses associated with the reverse stock split, the up listing to the Nasdaq Capital Market and additional staffing and consultants for finance and administrative operations. We expect selling, general and administrative expenses to be relatively consistent in the fourth quarter of 2019 with  the fourth quarter of 2018 and increase modestly year over year.

Other income and expense.    Other income and expense consists primarily of interest income we earn on our cash, cash equivalents and investments as well as net expenses incurred accounting for the derivative liabilities. We recorded a gain on the change in fair value of the derivative liabilities of approximately $52,000, a loss on extinguishment of convertible notes for approximately $521,000 and recognized interest expense of approximately $112,000 on the convertible notes, which included accretion of the debt discount of approximately $104,000 for the three and nine months ended September 30, 2019.

Liquidity and Capital Resources

We have incurred net losses each year since our inception and as of September 30, 2019, we had an accumulated deficit of approximately $97.6 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 well as the cash acquired through our reverse merger transaction that was completed on October 24, 2016, $3.8 million raised from the sale of unregistered securities on December 24, 2018, the $625,000 raised from convertible notes that converted in July 2019 and the $9.27 million in net proceeds raised from the sale of common stock and warrants in August and September 2019. As of September 30, 2019, we had cash and cash equivalents of approximately $8.9 million. 

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

	Nine Months Ending September 30, 2019
	2019			2018
Net cash provided by (used in):
Operating activities	$	(6,189	)		(7,823	)
Investing activities		(144	)		(51	)
Financing activities		9,885			5
Net decrease in cash and cash equivalents	$	(3,552	)	$	(7,869	)

Cash Flows from Operating Activities. The decrease in overall spending for operating activities of $1.6 million in the nine months ended September 30, 2019 compared to the nine months ended September 30, 2018 related primarily to increases in noncurrent customer deposits and deferred revenue, and board cash compensation that was deferred during the nine months ended September 30, 2019 coupled with 2018 management bonuses settled in equity in 2019 instead of cash. We expect spending to increase modestly as we advance the CardiAMP Heart Failure Trial, further develop the CardiAMP and CardiALLO cell therapy systems and continue to strengthen and enhance the supporting organization.

Cash Flows from Investing Activities. Net cash used in investing activities of $144,000 during the nine months ended September 30, 2019 consisted primarily of purchases of lab equipment and clean room environmental systems. Net cash used in investing activities of $51,000 during the nine months ended September 30, 2018 consisted primarily of purchases of lab equipment.

Cash Flows from Financing Activities. Net cash provided by financing activities during the nine months ended September 30, 2019 consisted of proceeds from the sales of stock and warrants in August and September 2019 and proceeds from convertible notes received in July 2019 that converted in August 2019. Net cash provided by financing activities of $5,000 during the nine months ended September 30, 2018 consisted of the proceeds from the exercise of stock options. 

22

Future Funding Requirements

To date, we have generated modest revenue from sales of our approved products. 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 CardiAMP or CardiALLO therapeutic 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 $8.9 million as of September 30, 2019 is not sufficient to fund our operations for one year from the date these financial statements are issued. In order to continue to further the development of our lead therapeutic candidates, the CardiAMP Cell Therapy System, and our second therapeutic candidate, the CardiALLO Cell Therapy System, beyond one year from the date these financial statements are issued, we will need to raise additional capital. We plan to raise additional capital, potentially including debt and equity arrangements as well as selling off rights to certain non-core assets, to finance our future operations, but there can be no assurances as to the availability of capital or the terms on which capital will be available, if at all. 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:

• the progress, costs, results and timing of our CardiAMP and CardiALLO clinical trials and related development programs;

• FDA acceptance of our CardiAMP and CardiALLO therapies for heart failure and for other potential indications;

• the outcome, costs and timing of seeking and obtaining FDA and any other regulatory approvals;

• the costs associated with securing, establishing and maintaining commercialization and manufacturing capabilities;

• the number and characteristics of product candidates that we pursue, including our product candidates in preclinical development;

• the ability of our product candidates to progress through clinical development successfully;

• our need to expand our research and development activities;

• the costs of acquiring, licensing or investing in businesses, products, product candidates and technologies;

• our ability to maintain, expand and defend the scope of our intellectual property portfolio, including the amount and timing of any payments we may be required to make, or that we may receive, in connection with the licensing, filing, prosecution, defense and enforcement of any patents or other intellectual property rights;

• the general and administrative expenses related to being a public company;

• our need and ability to hire additional management and scientific, medical and sales personnel;

• the effect of competing technological and market developments; and

• our need to implement additional internal systems and infrastructure, including financial and reporting systems.

23

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 stock holders will be diluted, and the terms of these securities may include liquidation or other preferences that adversely affect the rights of our common stock holders. 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 and for the nine months ended September 30, 2019 have been prepared on the basis that we 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 our 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 we have a viable 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 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 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 quarter ended September 30, 2019.

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.

24

Interest Rate Risk

As of September 30, 2019, 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 September 30, 2019, 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 September 30, 2019, our disclosure controls and procedures were, in design and operation, not effective at a reasonable assurance level as a result of the material weakness described below.

Material Weakness

We identified the following material weakness in our internal control over financial reporting as of September 30, 2019:

We lacked consistent processes to appropriately perform effective and timely review of the accounting for and disclosure of non-routine transactions. Therefore, there was a risk that a potential material misstatement of the financial statements would occur without being prevented or detected on a timely basis.

We have taken certain steps to remediate this material weakness, including increasing the utilization of external technical accounting resources and designing and implementing improved processes and internal controls. However, our efforts to remediate this material weakness may not be effective or prevent any future material weakness or significant deficiency in our internal control over financial reporting. If our efforts are not successful, or other material weaknesses or control deficiencies occur in the future, we may be unable to report our financial results accurately on a timely basis, which could cause our reported financial results to be materially misstated and result in the loss of investor confidence and cause the market price of our common stock to decline.

Changes in Internal Control over Financial Reporting

Other than the material weakness described in this Item 4, 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 quarter ended September 30, 2019 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

We 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 we are a party to any material legal proceedings, except as described below. We currently do not expect the proceedings described below to have a material adverse effect on our business, financial position, results of operations, or cash flows at this time. Regardless of the outcome, proceedings such as these can have an adverse impact on us because of defense and settlement costs, diversion of management resources, and other factors. There can be no assurance that existing or future legal proceedings arising in the ordinary course of business or otherwise will not become material or have a material adverse effect on our business, financial position, results of operations, or cash flows.

On April 9, 2019, BioCardia sent a letter to Ms. Surbhi Sarna, nVision Medical and Boston Scientific based on BioCardia’s discovery in January 2019 that Ms. Sarna had assigned to a company she founded, nVision Medical, a patent and patent applications she had filed while a BioCardia employee. nVision subsequently was acquired by Boston Scientific. BioCardia made various claims, including that the patent and patent application rightfully belonged to BioCardia pursuant to Ms. Sarna’s invention assignment agreement, that the proceeds from the sale of nVision to Boston Scientific rightfully belonged to BioCardia because they were the direct result of Ms. Sarna’s breach of her obligation to assign to BioCardia the patent and patent applications, and correction of inventorship on the patents and patent applications.

25

Correspondence was exchanged and possible ways to resolve BioCardia’s claims were discussed among the parties over the next few months. When it appeared that negotiations had been unsuccessful, BioCardia filed a request for arbitration against Ms. Sarna on August 6, 2019, as required by Ms. Sarna’s invention assignment agreement. On September 6, 2019, Boston Scientific Corporation, Boston Scientific Scimed Inc, and Fortis Advisors LL (the “Boston Scientific Parties”) filed a complaint against BioCardia in the United States District Court Northern District of California, Case no. 3:19-05645-VC, seeking declarations that the claims made in BioCardia’s correspondence were without basis (the “Federal Action”). Ms. Sarna filed an action in San Mateo Superior Court later that month seeking to enjoin the arbitration BioCardia initiated, and instead to require litigation of BioCardia’s claims against Ms. Sarna in state court. All parties subsequently agreed that BioCardia would withdraw its demand for arbitration, Ms. Sarna would withdraw her complaint seeking to enjoin that arbitration, and the parties would litigate all of their disputes in the Federal Action.

Pursuant to that agreement, on October 31, 2019, BioCardia filed a counterclaim in the Federal Action against the Boston Scientific Parties and Ms. Sarna for breach of contract, misappropriation of trade secrets and correction of inventorship on the patents naming Ms. Sarna as an inventor. BioCardia seeks imposition of constructive trusts both on the patents naming Ms. Sarna as an inventor and the proceeds received from the sale of nVision to Boston Scientific, as well as damages, including unjust enrichment damages measured by the proceeds received from the sale of nVision to Boston Scientific.

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 Quarterly Report on Form 10-Q for the quarter ended June 30, 2019, which could materially affect our business, financial condition, or future results. The risks described in this report and our Quarterly Report on Form 10-Q for the quarter ended June 30, 2019 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.  

26

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

On July 5, 2019, the Company issued $625,000 in convertible notes with an interest rate of 14.0% per year, a portion of which were issued to certain of our officers and directors and a principal stockholder (or their respective affiliates). At the closing of the Company’s public offering of units on August 6, 2019, the unpaid principal and interest converted into 210,887 units, each unit consisting of one share of common stock and a warrant to purchase one share of common stock at a conversion price of $3.00 per unit. The warrants have the same terms, including exercise price and expiration date, as the warrants issued in the public offering.

The issuance of the above notes was made in reliance on the exemption provided by Section 4(a)(2) of the Securities Act for the offer and sale of securities not involving a public offering. The recipients of securities in each of these transactions acquired the securities for investment only and not with a view to or for sale in connection with any distribution thereof, and appropriate legends were affixed to the securities issued in these transactions. The recipient of the securities was an accredited investor within the meaning of Rule 501 of Regulation D under the Securities Act.

The shares issued upon conversion of the notes were issued pursuant to an exemption from registration provided by section 3(a)(9) of the Securities Act of 1933, as amended, for the shares were exchanged or issued in a transaction where no commissions or other remuneration was paid or given directly or indirectly for soliciting such exchange or issuances.

ITEM 3. DEFAULTS UPON SENIOR SECURITIES

None.

ITEM 4. MINE SAFETY DISCLOSURES

Not applicable.

ITEM 5. OTHER INFORMATION

None.

ITEM 6. EXHIBIT INDEX

Exhibit Number	Exhibit Description
3.1(1)	Amended and Restated Certificate of Incorporation, as amended May 6, 2019
3.2(2)	Amended and Restated Bylaws
31.1*	Certification of Principal Executive Officer under Section 302 of the Sarbanes-Oxley Act of 2002.
31.2*	Certification of Principal Financial Officer under Section 302 of the Sarbanes-Oxley Act of 2002.
32.1**	Certification of Principal Executive Officer Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
32.2**	Certification of Principal Financial Officer Pursuant to Rule 13a-14(b) and 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.
**	Furnished herewith.
+	The financial information contained in these XBRL documents is unaudited and is furnished, not filed with the Securities and Exchange Commission.
(1)	Previously filed as Exhibit 3.1 of the Form 10-Q for the quarterly period ended June 30, 2019 filed by us on August 14, 2019.
(2)	Previously filed as Exhibit 3.2 to the Current Report on Form 8-K filed by us on April 11, 2017.

27

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.

	BIOCARDIA, INC. (Registrant)
Date:     November 19, 2019	By:	/s/ Peter Altman
		Peter Altman
		President and Chief Executive Officer
		(Principal Executive Officer)
Date:     November 19, 2019	By:	/s/ David McClung
		David McClung
		Chief Financial Officer
		(Principal Financial and Accounting Officer)

28

EX-31.1

Exhibit 31.1

Certification of Principal Executive Officer

Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

I, Peter Altman, certify that:

1.         I have reviewed this Quarterly Report on Form 10-Q of BioCardia, Inc.;

2.        Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.         Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.        The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d) Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and

5.          The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

Date: November 19, 2019

/s/ Peter Altman

Name: Peter Altman

Title: President and Chief Executive Officer

(Principal Executive Officer)

EX-31.2

Exhibit 31.2

Certification of Principal Financial Officer

Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

I, David McClung, certify that:

1.         I have reviewed this Quarterly Report on Form 10-Q of BioCardia, Inc.;

2.        Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.         Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.        The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a)	Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
(b)	Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
(c)	Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
(d)	Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and

5.          The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

Date: November 19, 2019

/s/ David McClung

Name: David McClung

Title: Chief Financial Officer

(Principal Financial Officer)

EX-32.1

Exhibit 32.1

Certification of Principal Executive Officer

Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

Pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, I, Peter Altman, the President and Chief Executive Officer of BioCardia, Inc. (the "Company"), hereby certify, that, to my knowledge:

1.      The Quarterly Report on Form 10-Q for the period ended September 30, 2019 (the "Report") of the Company fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

2.      The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Date: November 19, 2019

/s/ Peter Altman

Name: Peter Altman

Title: President and Chief Executive Officer

(Principal Executive Officer)

EX-32.2

Exhibit 32.2

Certification of Principal Financial Officer

Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

Pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, I, David McClung, the Chief Financial Officer of BioCardia, Inc. (the “Company”), hereby certify, that, to my knowledge:

1.       The Quarterly Report on Form 10-Q for the period ended September 30, 2019 (the “Report”) of the Company fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

2.       The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Date: November 19, 2019

/s/ David McClung

Name: David McClung

Title: Chief Financial Officer

(Principal Financial Officer)

XML

Note 7 - Accrued Expenses and Other Current Liabilities

9 Months Ended

Sep. 30, 2019

Notes to Financial Statements

Accrued Liabilities and Other Current Liabilities Disclosure [Text Block]

(

7

)     Accrued Expenses and Other Current Liabilities

Accrued expenses and other current liabilities consisted of the following (in thousands):

	September 30,		December 31,
	2019		2018
Accrued expenses	$	102	$	127
Accrued salaries and employee benefits		496		368
Accrued director compensation		555		277
Accrued clinical trial costs		382		276
Grant liability		637		645
Customer deposits		252		112
Total	$	2,424	$	1,805

XML

Note 11 - Income Taxes

9 Months Ended

Sep. 30, 2019

Notes to Financial Statements

Income Tax Disclosure [Text Block]

(

11

)   Income Taxes

During the

three

and

nine

months ended

September 30, 2019

and

2018,

there was

no

income tax expense or benefit for federal or state income taxes in the accompanying condensed consolidated statement of operations due to the Company’s net loss and a full valuation allowance on the resulting deferred tax assets.

As of

September 30, 2019,

the Company retains a full valuation allowance on its deferred tax assets in all jurisdictions. The realization of its deferred tax assets depends primarily on its ability to generate future taxable income which is uncertain. The Company does

not

believe that its deferred tax assets are realizable on a more-likely-than-

not

basis; therefore, the net deferred tax assets have been fully offset by a valuation allowance. 

XML

Note 7 - Accrued Expenses and Other Current Liabilities - Summary of Accrued Expenses and Other Current Liabilities (Details) - USD ($) $ in Thousands	Sep. 30, 2019	Dec. 31, 2018
Accrued expenses	$ 102	$ 127
Accrued salaries and employee benefits	496	368
Accrued director compensation	555	277
Accrued clinical trial costs	382	276
Grant liability	637	645
Customer deposits	252	112
Total	$ 2,424	$ 1,805

XML

Note 6 - Operating Lease Right-of-use Asset, Net - Impact of New Lease Standard (Details) $ in Thousands	3 Months Ended	9 Months Ended
	Sep. 30, 2019 USD ($)	Sep. 30, 2019 USD ($)
Straight-line rent expense recognized for operating lease	$ 150	$ 450
Variable rent expense recognized for operating lease	63	202
Total rent expense	$ 213	$ 652
Weighted average remaining lease term (in years) (Year)	2 years 91 days	2 years 91 days
Weighted average discount rate	12.05%	12.05%

XML

Note 4 - Inventories (Details Textual) - USD ($)	3 Months Ended		9 Months Ended
	Sep. 30, 2019	Sep. 30, 2018	Sep. 30, 2019	Sep. 30, 2018
Inventory Write-down			$ 54,000
Cost of Goods Sold [Member]
Inventory Write-down	$ 0	$ 13,000	$ 80,000	$ 15,000

XML

Condensed Consolidated Statements of Operations (Unaudited) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2019	Sep. 30, 2018	Sep. 30, 2019	Sep. 30, 2018
Revenue:
Total revenue	$ 194	$ 84	$ 495	$ 522
Costs and expenses:
Cost of goods sold	24	109	321	401
Research and development	2,007	2,262	6,392	6,248
Selling, general and administrative	1,390	1,283	4,460	4,315
Total costs and expenses	3,421	3,654	11,173	10,964
Operating loss	(3,227)	(3,570)	(10,678)	(10,442)
Other income (expense):
Interest income	17	29	53	100
Gain on change in fair value of redemption feature embedded in convertible notes	52		52
Interest expense	(112)		(112)
Loss on extinguishment of convertible notes	(521)		(521)
Other expense	(1)	(3)	(2)	(3)
Total other income (expense)	(565)	26	(530)	97
Net loss	$ (3,792)	$ (3,544)	$ (11,208)	$ (10,345)
Net loss per share, basic and diluted (in dollars per share)	$ (0.63)	$ (0.83)	$ (2.13)	$ (2.43)
Weighted-average shares used in computing net loss per share, basic and diluted (in shares)	6,030,662	4,253,100	5,263,058	4,250,509
Product [Member]
Revenue:
Total revenue	$ 1	$ 52	$ 139	$ 223
Collaboration Agreement [Member]
Revenue:
Total revenue	$ 193	$ 32	$ 356	$ 299

XML

Note 2 - Significant Accounting Policies

9 Months Ended

Sep. 30, 2019

Notes to Financial Statements

Significant Accounting Policies [Text Block]

( 2 ) Significant Accounting Policies

(a)	Basis of Preparation
	The accompanying condensed consolidated balance sheets, statements of operations, shareholders equity, and cash flows as of September 30, 2019 and for the three and nine months ended September 30, 2019 and 2018 are unaudited. The condensed consolidated financial statements have been prepared in accordance with generally accepted accounting principles in the United States of America (U.S. GAAP) and applicable rules and regulations of the Securities and Exchange Commission (SEC) for interim financial information and on a basis consistent with the annual financial statements and, in the opinion of management, reflect all adjustments which include only normal recurring adjustments, necessary to present fairly its financial position as of September 30, 2019, results of operations for the three and nine months ended September 30, 2019 and 2018, and cash flows for the nine months ended September 30, 2019 and 2018. The results for the nine months ended September 30, 2019 are not necessarily indicative of the results to be expected for the year ending December 31, 2019 or for any other interim period or for any other future year. Certain changes in the prior period consolidated balance sheet have been made to conform to the current period presentation. Changes to reduce the December 31, 2018 accounts payable and increase the accrued expenses and other current liabilities accounts were made in the amount of $277,000. These changes had no effect on the Consolidated Statement of Operations or cash flow.
	These condensed consolidated financial statements should be read in conjunction with the audited financial statements and related notes included in the Company’s Annual Report on Form 10 -K for the year ended December 31, 2018, filed with the SEC on April 2, 2019.

(b)	Liquidity
	The Company has incurred net losses and negative cash flows from operations since its inception and had an accumulated deficit of $97.6  million as of September 30, 2019. Management expects operating losses and negative cash flows to continue through the next several years. These factors raise substantial doubt about the Company’s ability to continue as a going concern beyond one year from the date these financial statements are issued. Based on management’s current plans, management believes cash and cash equivalents of $8,910,000 as of September 30, 2019, will not be sufficient to fund the Company for one year from the date these financial statements are issued. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.
	If adequate funds are not available, BioCardia may be required to reduce operating expenses, delay or reduce the scope of its product development programs, obtain funds through arrangements with others that may require it to relinquish rights to certain of its technologies or products that the Company would otherwise seek to develop or commercialize itself, or cease operations. While the Company believes it has a viable strategy to raise additional funds, there can be no assurances that it will be able to obtain additional capital on acceptable terms and in the amounts necessary to fully fund its operating needs.

(c)

Use of Estimates

The preparation of the financial statements in accordance with U.S. GAAP requires management to make certain estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Actual results could differ materially from those estimates. Significant items subject to such estimates and assumptions include share-based compensation, the useful lives of property and equipment, allowances for doubtful accounts and sales returns, incremental borrowing rate, and inventory valuation.

(d)	Principles of Consolidation
	The condensed consolidated financial statements include the accounts of the Company and its wholly-owned subsidiary. All intercompany accounts and transactions have been eliminated during the consolidation process.

(e)

Changes to Significant Accounting Policies

The Company’s significant accounting policies are described in Note 2 of the notes to the consolidated financial statements included in its Annual Report on Form 10 -K filed for the year ended December 31, 2018. Apart from the adoption of ASU  No.   2018 - 07,  Compensation–Stock Compensation (Topic 718 ): Improvements to Nonemployee Share-based Payment Accounting on January 1, 2019, which led to an amended stock-based compensation policy, and the adoption of ASU No. 2016 - 02, Leases (Topic 842 ), which led to an amended lease policy as described in the following paragraphs, there have been no changes to those policies. Measurement of nonemployee awards - The measurement of equity-classified nonemployee awards is fixed at the grant date, and the Company may use the expected term to measure nonemployee options or elect to use the contractual term as the expected term, on an award-by-award basis. This differs from the guidance in ASC 505 - 50 that requires the use of the contractual term. Forfeitures of nonemployee awards will be recognized as they occur.   Operating lease right-of-use asset and liabilities - The Company will determine if an arrangement is a lease at the inception of the arrangement. All leases are assessed for classification as an operating lease or finance lease. The Company will recognize a lease liability and a ROU asset for all leases, including operating leases, with a term greater than 12 months. ROU assets represent the Company's right to use an underlying asset for the lease term and lease liabilities represent its obligation to make lease payments arising from the lease.   The Company’s lease liabilities are recognized at the applicable lease commencement date based on the present value of the lease payments required to be paid over the lease term. Variable lease payments are expensed as incurred and are not included the computation of the lease liability. The lease liability discount rate is generally the Company’s incremental borrowing rate unless the lessor’s rate implicit in the lease is readily determinable, in which case the lessor’s implicit rate is used.   The Company's ROU assets are also recognized at the applicable lease commencement date. The ROU asset equals the carrying amount of the related lease liability, adjusted for any lease payments made prior to lease commencement and lease incentives provided by the lessor, if any. The Company amortizes a right-of-use (ROU) asset, and the periodic amortization is the difference between the straight-line total lease cost for the period (including amortization of initial direct costs) and the periodic accretion of the lease liability using the effective interest method.   The Company’s lease terms may include options to extend or terminate the lease when it is reasonably certain that it will exercise any such options. Operating lease cost for lease payments is recognized on a straight-line basis over the lease term. The Company’s lease contracts often include lease and non-lease components. The Company has elected the practical expedient offered by the standard to not separate lease from non-lease components and accounts for them as a single lease component. The Company has elected not to recognize ROU assets and lease liabilities for leases with a term of twelve months or less. Lease cost for short-term leases is recognized on a straight-line basis over the lease term.

(f) Recently Adopted Accounting Pronouncement   In February 2016, the FASB amended its guidance related to lease accounting. The amended guidance required lessees to recognize a majority of their leases on the balance sheet as a ROU asset and a lease liability. In July 2018, the FASB issued ASU No. 2018 - 11, Leases (Topic 842 ): Targeted Improvements, or ASU No. 2018 - 11. In issuing ASU No. 2018 - 11, the FASB is permitting another transition method for ASU 2016 - 02, which allows the transition to the new lease standard by recognizing a cumulative-effect adjustment to the opening balance of retained earnings in the period of adoption. The Company elected this available transition method.

The Company adopted the new standard using the cumulative-effect method on

January 1, 2019.

The Company's adoption included lease codification improvements that were issued by the FASB through

March 2019.

The FASB made available several practical expedients in adopting the amended lease accounting guidance. The Company elected the package of practical expedients permitted under the transition guidance, which among other things, allowed registrants to carry forward historical lease classification, its assessment on whether a contract is or contains a lease, and its initial direct costs for any leases that exist prior to adoption of the new standard. BioCardia also elected to keep leases with an initial term of

12

months or less off the consolidated balance sheet, and to recognize the associated lease payments in the statements of operations on a straight-line basis over the lease term.

The most significant impact was the recognition of ROU assets and related lease liabilities for operating leases on the condensed consolidated balance sheet. The Company recognized ROU assets and related lease liabilities of

$1,505,000

and

$1,593,000

respectively, related to operating lease commitments, as of

January 1, 2019.

The operating lease ROU asset represents the lease liability, plus any lease payments made at or before the commencement date, less any lease incentives received. The amended guidance did

not

have a material impact on the Company's cash flows or results of operations. See Note

6

of the condensed consolidated financial statements.

In

June 2018,

the FASB issued ASU

No.

2018

-

07,

Stock Compensation (Topic

718

): Improvements to Nonemployee Share-Based Payment Accounting. ASU

2018

-

07

is intended to reduce the cost and complexity and to improve financial reporting for nonemployee share-based payments. ASU

2018

-

07

expands the scope of Topic

718,

Compensation-Stock Compensation (which currently only includes share-based payments to employees) to include share-based payments issued to nonemployees for goods or services. Consequently, the accounting for share-based payments to nonemployees and employees will be substantially aligned.

No

longer will nonemployee awards be marked-to-market every reporting period, nor will the expected term be required to be the contractual term. However, forfeitures will continue to be recognized when incurred. ASU

2018

-

07

supersedes Subtopic

505

-

50,

Equity-Based Payments to Non-Employees. The Company adopted ASU

2018

-

07

effective

January 1, 2019

using the cumulative-effect method for equity-classified nonemployee awards which have

not

been settled as of the adoption date. The cumulative effect did

not

have a material impact on the condensed consolidated balance sheet, statement of operations or statement of cash flows.

(g)	Recently Issued Accounting Pronouncements
	Recent accounting pronouncements issued by the FASB, including its Emerging Issues Task Force did not or are not believed by management to have a material impact on the Company’s financial statement presentation or disclosures.

XML

Note 9 - Share-based Compensation - Summary of Non-vested RSUs (Details) - Restricted Stock Units (RSUs) [Member]	9 Months Ended
	Sep. 30, 2019 $ / shares shares
Balance, December 31, 2018 (in shares) | shares	29,694
Balance, December 31, 2018 (in dollars per share) | $ / shares	$ 25.56
RSUs granted, shares (in shares) | shares	34,713
RSUs granted, weighted average grant date fair value per share (in dollars per share) | $ / shares	$ 4.75
RSUs vested, shares (in shares) | shares	(2,272)
RSUs vested, weighted average grant date fair value per share (in dollars per share) | $ / shares	$ 99.36
RSUs forfeited, shares (in shares) | shares
RSUs forfeited, weighted average grant date fair value per share (in dollars per share) | $ / shares
Balance, September 30, 2019 (in shares) | shares	62,135
Balance, September 30, 2019 (in dollars per share) | $ / shares	$ 10.55

XML

Note 8 - Stockholders' Equity - Warrants (Details)	9 Months Ended
	Sep. 30, 2019 $ / shares shares
Balance, December 31, 2018 (in shares) | shares	296,296
Balance, December 31, 2018 (in dollars per share) | $ / shares	$ 6.75
Warrants for common stock sold (in shares) | shares	2,139,512
Warrants for common stock sold (in dollars per share) | $ / shares	$ 6.30
Balance, September 30,2018 (in shares) | shares	2,435,808
Balance, September 30,2018 (in dollars per share) | $ / shares	$ 6.36

XML

Note 4 - Inventories (Tables)

9 Months Ended

Sep. 30, 2019

Notes Tables

Schedule of Inventory, Current [Table Text Block]

	September 30,		December 31,
	2019		2018
Raw materials	$	—	$	79
Work in process		45		39
Finished goods		—		23
Total	$	45	$	141

XML

Note 8 - Stockholders' Equity (Tables)

9 Months Ended

Sep. 30, 2019

Notes Tables

Schedule of Stockholders' Equity Note, Warrants or Rights [Table Text Block]

	Number of Common Stock Warrants		Weighted Average Exercise Price
Balance, December 31, 2018		296,296	$	6.75
Warrants for common stock sold		2,139,512	$	6.30
Warrants for common stock exercised		-
Balance, September 30,2018		2,435,808	$	6.36

XML

Note 3 - Fair Value Measurements - Fair Value of Assets Measured on a Recurring Basis (Details) - Fair Value, Recurring [Member] - USD ($) $ in Thousands	Sep. 30, 2019	Dec. 31, 2018
Money market funds	$ 8,910	$ 5,358
Fair Value, Inputs, Level 1 [Member]
Money market funds	8,910	5,358
Fair Value, Inputs, Level 2 [Member]
Money market funds
Fair Value, Inputs, Level 3 [Member]
Money market funds

XML

Note 3 - Fair Value Measurement

9 Months Ended

Sep. 30, 2019

Notes to Financial Statements

Fair Value Disclosures [Text Block]

(

3

)     Fair Value Measurement

The fair value of financial instruments reflects the amounts that the Company estimates to receive in connection with the sale of an asset or paid in connection with the transfer of a liability in an orderly transaction between market participants at the measurement date (exit price). The Company follows a fair value hierarchy that prioritizes the use of inputs used in valuation techniques into the following

three

 levels:

Level 

1

– quoted prices in active markets for identical assets and liabilities

Level 

2

– observable inputs other than quoted prices in active markets for identical assets and liabilities; quoted prices in markets that are

not

active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities

Level 

3

– unobservable inputs that are supported by little or

no

market activity and that are significant to the fair value of the assets or liabilities.

The following table sets forth the fair value of its financial assets measured on a recurring basis as of

September 30, 2019

and

December 31, 2018

and indicates the fair value hierarchy utilized to determine such fair value (in thousands):

	As of September 30, 2019
	Level 1		Level 2		Level 3		Total
Assets:
Money market funds	$	8,910	$	—	$	—	$	8,910

	As of December 31, 2018
	Level 1		Level 2		Level 3		Total
Assets:
Money market funds	$	5,358	$	—	$	—	$	5,358

XML

Note 10 - Net Loss Per Share - Anti-dilutive Securities (Details) - shares	9 Months Ended
	Sep. 30, 2019	Sep. 30, 2018
Antidilutive securities (in shares)	3,346,091	646,273
Share-based Payment Arrangement, Option [Member]
Antidilutive securities (in shares)	848,148	616,567
Restricted Stock Units (RSUs) [Member]
Antidilutive securities (in shares)	62,135	29,706
Warrant [Member]
Antidilutive securities (in shares)	2,435,808

XML

Note 9 - Share-based Compensation (Details Textual) - USD ($)	3 Months Ended		9 Months Ended
	Sep. 30, 2019	Sep. 30, 2018	Sep. 30, 2019	Sep. 30, 2018
Share-based Payment Arrangement, Amount Capitalized	$ 0	$ 0	$ 0	$ 0
Non-employee Directors and Employees [Member]
Share-based Payment Arrangement, Nonvested Award, Excluding Option, Cost Not yet Recognized, Amount	4,000,000		$ 4,000,000
Share-based Payment Arrangement, Nonvested Award, Cost Not yet Recognized, Period for Recognition			2 years 109 days
Restricted Stock Units (RSUs) [Member]
Share-based Payment Arrangement, Nonvested Award, Excluding Option, Cost Not yet Recognized, Amount	$ 230,000		$ 230,000
Share-based Payment Arrangement, Nonvested Award, Cost Not yet Recognized, Period for Recognition			109 days

XML

Condensed Consolidated Statements of Stockholders' (Deficit) Equity (Unaudited) - USD ($) $ in Thousands	Common Stock [Member]	Additional Paid-in Capital [Member]	Retained Earnings [Member]	Total
Balance (in shares) at Dec. 31, 2017	4,246,519
Balance at Dec. 31, 2017	$ 38	$ 83,537	$ (72,450)	$ 11,125
Restricted stock units vested and issued (in shares)	2,271
Restricted stock units vested and issued
Share-based compensation		615		615
Net loss			(3,584)	(3,584)
Adjustments to opening balance for change in accounting principle			46	46
Exercise of stock options (in shares)	237
Exercise of stock options		5		5
Balance (in shares) at Mar. 31, 2018	4,249,027
Balance at Mar. 31, 2018	$ 38	84,157	(75,988)	8,207
Balance (in shares) at Dec. 31, 2017	4,246,519
Balance at Dec. 31, 2017	$ 38	83,537	(72,450)	11,125
Net loss				(10,345)
Balance (in shares) at Sep. 30, 2018	4,253,100
Balance at Sep. 30, 2018	$ 38	85,625	(82,719)	2,944
Balance (in shares) at Mar. 31, 2018	4,249,027
Balance at Mar. 31, 2018	$ 38	84,157	(75,988)	8,207
Restricted stock units vested and issued (in shares)	4,073
Restricted stock units vested and issued
Share-based compensation		738		738
Net loss			(3,217)	(3,217)
Adjustments to opening balance for change in accounting principle			30	30
Balance (in shares) at Jun. 30, 2018	4,253,100
Balance at Jun. 30, 2018	$ 38	84,895	(79,175)	5,758
Restricted stock units vested and issued
Share-based compensation		730		730
Net loss			(3,544)	(3,544)
Balance (in shares) at Sep. 30, 2018	4,253,100
Balance at Sep. 30, 2018	$ 38	85,625	(82,719)	2,944
Balance (in shares) at Dec. 31, 2018	4,845,697
Balance at Dec. 31, 2018	$ 43	90,110	(86,361)	3,792
Restricted stock units vested and issued (in shares)	2,268
Restricted stock units vested and issued	$ 1			1
Share-based compensation		690		690
Net loss			(3,665)	(3,665)
Balance (in shares) at Mar. 31, 2019	4,847,965
Balance at Mar. 31, 2019	$ 44	90,800	(90,026)	818
Balance (in shares) at Dec. 31, 2018	4,845,697
Balance at Dec. 31, 2018	$ 43	90,110	(86,361)	3,792
Net loss				$ (11,208)
Exercise of stock options (in shares)
Balance (in shares) at Sep. 30, 2019	6,825,183
Balance at Sep. 30, 2019	$ 46	102,716	(97,568)	$ 5,194
Balance (in shares) at Mar. 31, 2019	4,847,965
Balance at Mar. 31, 2019	$ 44	90,800	(90,026)	818
Share-based compensation		696		696
Net loss			(3,750)	(3,750)
Reverse stock split fractional share true up (in shares)	(494)
Balance (in shares) at Jun. 30, 2019	4,847,471
Balance at Jun. 30, 2019	$ 44	91,496	(93,776)	(2,236)
Restricted stock units vested and issued (in shares)	25,158
Restricted stock units vested and issued
Share-based compensation		756		756
Net loss			(3,792)	(3,792)
Issuance of stock and warrants, net of issuance costs (in shares)	1,741,667
Issuance of stock and warrants, net of issuance costs	$ 2	9,258		9,260
Issuance of stock and warrants from conversion of convertible notes (in shares)	210,887
Issuance of stock and warrants from conversion of convertible notes		1,206		1,206
Balance (in shares) at Sep. 30, 2019	6,825,183
Balance at Sep. 30, 2019	$ 46	$ 102,716	$ (97,568)	$ 5,194

XML

Document And Entity Information - shares	9 Months Ended
	Sep. 30, 2019	Nov. 12, 2019
Document Information [Line Items]
Entity Registrant Name	BioCardia, Inc.
Entity Central Index Key	0000925741
Trading Symbol	bcda
Current Fiscal Year End Date	--12-31
Entity Filer Category	Non-accelerated Filer
Entity Current Reporting Status	Yes
Entity Emerging Growth Company	false
Entity Small Business	true
Entity Common Stock, Shares Outstanding (in shares)		6,825,183
Entity Shell Company	false
Document Type	10-Q
Document Period End Date	Sep. 30, 2019
Document Fiscal Year Focus	2019
Document Fiscal Period Focus	Q3
Amendment Flag	false
Title of 12(b) Security	Common Stock, par value $0.001

XML

Note 2 - Significant Accounting Policies (Details Textual) - USD ($)	Sep. 30, 2019	Jan. 01, 2019	Dec. 31, 2018	Sep. 30, 2018	Dec. 31, 2017
Accounts Payable, Current, Total	$ 1,112,000		$ 743,000
Retained Earnings (Accumulated Deficit), Ending Balance	(97,568,000)		(86,361,000)
Cash and Cash Equivalents, at Carrying Value, Ending Balance	8,910,000		5,358,000	$ 4,820,000	$ 12,689,000
Operating Lease, Right-of-Use Asset	1,180,000	$ 1,505,000
Operating Lease, Liability, Total	1,260,000	$ 1,593,000
Accrued Liabilities and Other Liabilities, Current	$ 2,424,000		1,805,000
Restatement Adjustment [Member]
Accounts Payable, Current, Total			(277,000)
Accrued Liabilities and Other Liabilities, Current			$ 277,000

XML

Note 3 - Fair Value Measurement (Tables)

9 Months Ended

Sep. 30, 2019

Notes Tables

Schedule of Fair Value, Assets and Liabilities Measured on Recurring Basis [Table Text Block]

	As of September 30, 2019
	Level 1		Level 2		Level 3		Total
Assets:
Money market funds	$	8,910	$	—	$	—	$	8,910

	As of December 31, 2018
	Level 1		Level 2		Level 3		Total
Assets:
Money market funds	$	5,358	$	—	$	—	$	5,358

XML

Note 7 - Accrued Expenses and Other Current Liabilities (Tables)	9 Months Ended
	Sep. 30, 2019
Notes Tables
Schedule of Accrued Liabilities and Other Current Liabilities [Table Text Block]	<div style="display: inline; font-family: times new roman; font-size: 10pt"><table border="0" cellpadding="0" cellspacing="0" style="margin-right: 5%; margin-left: 5%; font-size: 10pt; font-family: "Times New Roman", Times, serif; text-indent: 0px; min-; min-width: 700px;"> <tr style="vertical-align: bottom;"> <td style="font-family: "Times New Roman", Times, serif; font-size: 10pt;"> </td> <td style="font-family: "Times New Roman", Times, serif; font-size: 10pt;"> </td> <td colspan="2" style="text-align: center; font-family: "Times New Roman", Times, serif; font-size: 10pt; margin-left: 0pt;"> <div style=" font-family:'Times New Roman', Times, serif;font-size:10pt;margin:0pt;text-align:center;"><div style="display: inline; font-weight: bold;"><div style="display: inline; font-weight: bold;">September 30,</div></div></div> </td> <td style="font-family: "Times New Roman", Times, serif; font-size: 10pt;"> </td> <td style="font-family: "Times New Roman", Times, serif; font-size: 10pt;"> </td> <td colspan="2" style="text-align: center; font-family: "Times New Roman", Times, serif; font-size: 10pt; margin-left: 0pt;"> <div style=" font-family:'Times New Roman', Times, serif;font-size:10pt;margin:0pt;text-align:center;"><div style="display: inline; font-weight: bold;"><div style="display: inline; font-weight: bold;">December 31,</div></div></div> </td> <td style="font-family: "Times New Roman", Times, serif; font-size: 10pt;"> </td> </tr> <tr style="vertical-align: bottom;"> <td style="font-family: "Times New Roman", Times, serif; font-size: 10pt;"> </td> <td style="font-family: "Times New Roman", Times, serif; font-size: 10pt;"> </td> <td colspan="2" style="text-align: center; font-family: "Times New Roman", Times, serif; font-size: 10pt; margin-left: 0pt; border-bottom: 1px solid rgb(0, 0, 0);"> <div style=" font-family:'Times New Roman', Times, serif;font-size:10pt;margin:0pt;text-align:center;"><div style="display: inline; font-weight: bold;"><div style="display: inline; font-weight: bold;">2019</div></div></div> </td> <td style="font-family: "Times New Roman", Times, serif; font-size: 10pt; padding-bottom: 1px;"> </td> <td style="font-family: "Times New Roman", Times, serif; font-size: 10pt;"> </td> <td colspan="2" style="text-align: center; font-family: "Times New Roman", Times, serif; font-size: 10pt; margin-left: 0pt; border-bottom: 1px solid rgb(0, 0, 0);"> <div style=" font-family:'Times New Roman', Times, serif;font-size:10pt;margin:0pt;text-align:center;"><div style="display: inline; font-weight: bold;"><div style="display: inline; font-weight: bold;">2018</div></div></div> </td> <td style="font-family: "Times New Roman", Times, serif; font-size: 10pt; padding-bottom: 1px;"> </td> </tr> <tr style="vertical-align: bottom;"> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> </tr> <tr style="vertical-align: bottom; background-color: rgb(204, 238, 255);"> <td style="font-family: "Times New Roman", Times, serif; font-size: 10pt; width: 66%;"> <div style=" font-family: "Times New Roman", Times, serif; font-size: 10pt; margin-top: 0pt; margin-bottom: 0pt;">Accrued expenses</div> </td> <td style="width: 1%; font-family: "Times New Roman", Times, serif; font-size: 10pt;"> </td> <td style="width: 1%; font-family: "Times New Roman", Times, serif; font-size: 10pt; margin-left: 0pt;">$</td> <td style="width: 14%; text-align: right; font-family: "Times New Roman", Times, serif; font-size: 10pt; margin-left: 0pt;"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">102</div></td> <td nowrap="nowrap" style="width: 1%; font-family: "Times New Roman", Times, serif; font-size: 10pt; margin-left: 0pt;"> </td> <td style="width: 1%; font-family: "Times New Roman", Times, serif; font-size: 10pt;"> </td> <td style="width: 1%; font-family: "Times New Roman", Times, serif; font-size: 10pt; margin-left: 0pt;">$</td> <td style="width: 14%; text-align: right; font-family: "Times New Roman", Times, serif; font-size: 10pt; margin-left: 0pt;"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">127</div></td> <td nowrap="nowrap" style="width: 1%; font-family: "Times New Roman", Times, serif; font-size: 10pt; margin-left: 0pt;"> </td> </tr> <tr style="vertical-align: bottom; background-color: rgb(255, 255, 255);"> <td style="font-family: "Times New Roman", Times, serif; font-size: 10pt;"> <div style=" font-family: "Times New Roman", Times, serif; font-size: 10pt; margin-top: 0pt; margin-bottom: 0pt;">Accrued salaries and employee benefits</div> </td> <td style="width: 1%; font-family: "Times New Roman", Times, serif; font-size: 10pt;"> </td> <td style="width: 1%; font-family: "Times New Roman", Times, serif; font-size: 10pt;"> </td> <td style="width: 14%; text-align: right; font-family: "Times New Roman", Times, serif; font-size: 10pt; margin-left: 0pt;"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">496</div></td> <td nowrap="nowrap" style="width: 1%; font-family: "Times New Roman", Times, serif; font-size: 10pt; margin-left: 0pt;"> </td> <td style="width: 1%; font-family: "Times New Roman", Times, serif; font-size: 10pt;"> </td> <td style="width: 1%; font-family: "Times New Roman", Times, serif; font-size: 10pt;"> </td> <td style="width: 14%; text-align: right; font-family: "Times New Roman", Times, serif; font-size: 10pt; margin-left: 0pt;"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">368</div></td> <td nowrap="nowrap" style="width: 1%; font-family: "Times New Roman", Times, serif; font-size: 10pt; margin-left: 0pt;"> </td> </tr> <tr style="vertical-align: bottom; background-color: rgb(204, 238, 255);"> <td style="font-family: "Times New Roman", Times, serif; font-size: 10pt;"> <div style=" font-family: "Times New Roman", Times, serif; font-size: 10pt; margin-top: 0pt; margin-bottom: 0pt;">Accrued director compensation</div> </td> <td style="width: 1%; font-family: "Times New Roman", Times, serif; font-size: 10pt;"> </td> <td style="width: 1%; font-family: "Times New Roman", Times, serif; font-size: 10pt;"> </td> <td style="width: 14%; text-align: right; font-family: "Times New Roman", Times, serif; font-size: 10pt; margin-left: 0pt;"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">555</div></td> <td nowrap="nowrap" style="width: 1%; font-family: "Times New Roman", Times, serif; font-size: 10pt; margin-left: 0pt;"> </td> <td style="width: 1%; font-family: "Times New Roman", Times, serif; font-size: 10pt;"> </td> <td style="width: 1%; font-family: "Times New Roman", Times, serif; font-size: 10pt;"> </td> <td style="width: 14%; text-align: right; font-family: "Times New Roman", Times, serif; font-size: 10pt; margin-left: 0pt;"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">277</div></td> <td nowrap="nowrap" style="width: 1%; font-family: "Times New Roman", Times, serif; font-size: 10pt; margin-left: 0pt;"> </td> </tr> <tr style="vertical-align: bottom; background-color: rgb(255, 255, 255);"> <td style="font-family: "Times New Roman", Times, serif; font-size: 10pt;"> <div style=" font-family: "Times New Roman", Times, serif; font-size: 10pt; margin-top: 0pt; margin-bottom: 0pt;">Accrued clinical trial costs</div> </td> <td style="width: 1%; font-family: "Times New Roman", Times, serif; font-size: 10pt;"> </td> <td style="width: 1%; font-family: "Times New Roman", Times, serif; font-size: 10pt;"> </td> <td style="width: 14%; text-align: right; font-family: "Times New Roman", Times, serif; font-size: 10pt; margin-left: 0pt;"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">382</div></td> <td nowrap="nowrap" style="width: 1%; font-family: "Times New Roman", Times, serif; font-size: 10pt; margin-left: 0pt;"> </td> <td style="width: 1%; font-family: "Times New Roman", Times, serif; font-size: 10pt;"> </td> <td style="width: 1%; font-family: "Times New Roman", Times, serif; font-size: 10pt;"> </td> <td style="width: 14%; text-align: right; font-family: "Times New Roman", Times, serif; font-size: 10pt; margin-left: 0pt;"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">276</div></td> <td nowrap="nowrap" style="width: 1%; font-family: "Times New Roman", Times, serif; font-size: 10pt; margin-left: 0pt;"> </td> </tr> <tr style="vertical-align: bottom; background-color: rgb(204, 238, 255);"> <td style="font-family: "Times New Roman", Times, serif; font-size: 10pt;"> <div style=" font-family: "Times New Roman", Times, serif; font-size: 10pt; margin-top: 0pt; margin-bottom: 0pt;">Grant liability</div> </td> <td style="width: 1%; font-family: "Times New Roman", Times, serif; font-size: 10pt;"> </td> <td style="width: 1%; font-family: "Times New Roman", Times, serif; font-size: 10pt;"> </td> <td style="width: 14%; text-align: right; font-family: "Times New Roman", Times, serif; font-size: 10pt; margin-left: 0pt;"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">637</div></td> <td nowrap="nowrap" style="width: 1%; font-family: "Times New Roman", Times, serif; font-size: 10pt; margin-left: 0pt;"> </td> <td style="width: 1%; font-family: "Times New Roman", Times, serif; font-size: 10pt;"> </td> <td style="width: 1%; font-family: "Times New Roman", Times, serif; font-size: 10pt;"> </td> <td style="width: 14%; text-align: right; font-family: "Times New Roman", Times, serif; font-size: 10pt; margin-left: 0pt;"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">645</div></td> <td nowrap="nowrap" style="width: 1%; font-family: "Times New Roman", Times, serif; font-size: 10pt; margin-left: 0pt;"> </td> </tr> <tr style="vertical-align: bottom; background-color: rgb(255, 255, 255);"> <td style="font-family: "Times New Roman", Times, serif; font-size: 10pt;"> <div style=" font-family: "Times New Roman", Times, serif; font-size: 10pt; margin-top: 0pt; margin-bottom: 0pt;">Customer deposits</div> </td> <td style="width: 1%; font-family: "Times New Roman", Times, serif; font-size: 10pt;"> </td> <td style="width: 1%; font-family: "Times New Roman", Times, serif; font-size: 10pt; border-bottom: 1px solid rgb(0, 0, 0);"> </td> <td style="width: 14%; text-align: right; font-family: "Times New Roman", Times, serif; font-size: 10pt; margin-left: 0pt; border-bottom: 1px solid rgb(0, 0, 0);"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">252</div></td> <td nowrap="nowrap" style="width: 1%; font-family: "Times New Roman", Times, serif; font-size: 10pt; padding-bottom: 1px; margin-left: 0pt;"> </td> <td style="width: 1%; font-family: "Times New Roman", Times, serif; font-size: 10pt;"> </td> <td style="width: 1%; font-family: "Times New Roman", Times, serif; font-size: 10pt; border-bottom: 1px solid rgb(0, 0, 0);"> </td> <td style="width: 14%; text-align: right; font-family: "Times New Roman", Times, serif; font-size: 10pt; margin-left: 0pt; border-bottom: 1px solid rgb(0, 0, 0);"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">112</div></td> <td nowrap="nowrap" style="width: 1%; font-family: "Times New Roman", Times, serif; font-size: 10pt; padding-bottom: 1px; margin-left: 0pt;"> </td> </tr> <tr style="vertical-align: bottom; background-color: rgb(204, 238, 255);"> <td style="font-family: "Times New Roman", Times, serif; font-size: 10pt;"> <div style=" font-family: "Times New Roman", Times, serif; font-size: 10pt; margin-top: 0pt; margin-bottom: 0pt;">Total</div> </td> <td style="width: 1%; font-family: "Times New Roman", Times, serif; font-size: 10pt;"> </td> <td style="width: 1%; font-family: "Times New Roman", Times, serif; font-size: 10pt; margin-left: 0pt; border-bottom: 3px double rgb(0, 0, 0);">$</td> <td style="width: 14%; text-align: right; font-family: "Times New Roman", Times, serif; font-size: 10pt; margin-left: 0pt; border-bottom: 3px double rgb(0, 0, 0);"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">2,424</div></td> <td nowrap="nowrap" style="width: 1%; font-family: "Times New Roman", Times, serif; font-size: 10pt; padding-bottom: 3px; margin-left: 0pt;"> </td> <td style="width: 1%; font-family: "Times New Roman", Times, serif; font-size: 10pt;"> </td> <td style="width: 1%; font-family: "Times New Roman", Times, serif; font-size: 10pt; margin-left: 0pt; border-bottom: 3px double rgb(0, 0, 0);">$</td> <td style="width: 14%; text-align: right; font-family: "Times New Roman", Times, serif; font-size: 10pt; margin-left: 0pt; border-bottom: 3px double rgb(0, 0, 0);"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">1,805</div></td> <td nowrap="nowrap" style="width: 1%; font-family: "Times New Roman", Times, serif; font-size: 10pt; padding-bottom: 3px; margin-left: 0pt;"> </td> </tr> </table></div>

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Note 6 - Operating Lease Right-of-use Asset, Net

9 Months Ended

Sep. 30, 2019

Notes to Financial Statements

Lessee, Operating Leases [Text Block]

(

6

)     Operating Lease Right-of-Use Asset, Net               

The Company adopted the new lease standard on

January 1, 2019

using the cumulative-effect method. Prior periods were

not

retrospectively adjusted and continue to be reported under the accounting standards in effect for those periods.

The Company determines if an arrangement is a lease at inception by assessing whether it conveys the right to control the use of an identified asset for a period of time in exchange for consideration. The Company’s operating lease is primarily related to a property lease for its laboratory and corporate offices. BioCardia’s lease agreement does

not

contain any material residual guarantees or material restrictive covenants, nor does it contain an additional lease extension.

ROU assets and lease liabilities are recognized at the lease commencement date based on the present value of lease payments over the lease term. The Company’s lease does

not

provide an implicit rate. The Company used an adjusted historical incremental borrowing rate, based on the information available at the approximate lease commencement date, to determine the present value of lease payments. The net lease asset was adjusted for deferred rent, lease incentives, and prepaid rent. Variable rent expense is made up of expenses for common area maintenance and shared utilities and were

not

included in the determination of the present value of lease payments. The Company has

no

finance leases. The new lease standard did

not

materially impact its condensed consolidated statements of operations.

The components of lease expense for the

three

and

nine

months ended

September 30, 2019

was as follows (in thousands, except years and percentages):

	Three months ended September 30,		Nine months ended September 30,
	2019		2019
Straight-line rent expense recognized for operating lease	$	150	$	450
Variable rent expense recognized for operating lease		63		202
Total rent expense	$	213	$	652
Weighted average remaining lease term (in years)				2.25
Weighted average discount rate				12.05	%

Supplemental cash flow information related to the operating lease was as follows (in thousands):

	Three months ended September 30,		Nine months ended September 30,
	2019		2019
Cash paid for amounts included in the measurement of lease liabilities	$	153	$	459
Cash Lease Expense (imputed interest expense component of net income)		39		126

Future minimum lease payments under the operating lease as of

September 30, 2019

are as follows (in thousands):

	Operating Lease
	September 30, 2019
Remainder of 2019	$	153
Years ending December 31,
2020		630
2021		649
Total undiscounted lease payments		1,432
Less imputed interest		172
Total operating lease liabilities	$	1,260

Prior to the Company’s adoption of the new lease standard, future minimum lease payments as of

December 

31,

2018,

which were undiscounted, were as follows (in thousands):

Years ending December 31,
2019	$	612
2020		630
2021		649
Total	$	1,891

XML

Note 10 - Net Loss Per Share

9 Months Ended

Sep. 30, 2019

Notes to Financial Statements

Earnings Per Share [Text Block]

(

10

)  

Net Loss per Share

Basic net loss per share is computed by dividing net loss by the weighted-average number of common shares outstanding for the period. 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. 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 its 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:

	September 30,
	2019		2018
Stock options to purchase common stock		848,148		616,567
Unvested restricted stock units		62,135		29,706
Common stock warrants		2,435,808		-
Total		3,346,091		646,273

XML

Note 6 - Operating Lease Right-of-use Asset, Net - Supplement Cash Flow Information (Details) - USD ($) $ in Thousands	3 Months Ended	9 Months Ended
	Sep. 30, 2019	Sep. 30, 2019
Cash paid for amounts included in the measurement of lease liabilities	$ 153	$ 459
Cash Lease Expense (imputed interest expense component of net income)	$ 39	$ 126

XML

Note 4 - Inventories - Summary of Inventories (Details) - USD ($) $ in Thousands	Sep. 30, 2019	Dec. 31, 2018
Raw materials		$ 79
Work in process	45	39
Finished goods		23
Total	$ 45	$ 141

XML

Note 8 - Stockholders' Equity (Details Textual)								3 Months Ended	9 Months Ended
	Sep. 04, 2019 USD ($) shares	Aug. 06, 2019 USD ($) $ / shares shares	Aug. 06, 2019 USD ($) $ / shares shares	Aug. 02, 2019 $ / shares shares	Jul. 05, 2019 USD ($) shares	Jun. 06, 2019	Dec. 24, 2018 USD ($) $ / shares shares	Sep. 30, 2019 USD ($) $ / shares shares	Sep. 30, 2019 USD ($) $ / shares shares	Sep. 30, 2018 USD ($)	Aug. 05, 2019 $ / shares	Dec. 31, 2018 $ / shares shares
Common Stock, Par or Stated Value Per Share | $ / shares								$ 0.001	$ 0.001			$ 0.001
Class of Warrant or Right, Exercise Price of Warrants or Rights | $ / shares							$ 6.75	$ 6.36	$ 6.36			$ 6.75
Class of Warrant or Right, Number of Securities Called by Warrants or Rights							296,296
Class of Warrant or Right, Issued During Period									2,139,512
Common Stock, Shares, Issued, Total							592,592	6,825,183	6,825,183			4,845,697
Sale of Stock, Price Per Share | $ / shares							$ 6.75
Proceeds from Issuance of Common Stock and Warrants | $							$ 3,800,000		$ 9,260,000
Payments of Stock Issuance Costs | $							$ 200,000
Reverse Stock Split [Member]
Stockholders' Equity Note, Stock Split, Conversion Ratio						9
Conversion of Convertible Notes to Units [Member]
Debt Conversion, Original Debt, Amount | $			$ 633,000		$ 52,000
Debt Conversion, Converted Instrument, Shares Issued			210,887		521,000
Interest Expense, Debt, Total | $								$ 112,000
Amortization of Debt Discount (Premium) | $								$ 104,000
Convertible Promissory Note [Member]
Proceeds from Convertible Debt | $					$ 625,000
Debt Instrument, Interest Rate, Stated Percentage					14.00%
Debt Conversion, Original Debt, Discount of Securities Offered					50.00%
Underwriters [Member]
Proceeds from Issuance or Sale of Equity, Total | $	$ 420,000
Stock Issued During Period, Shares, New Issues	75,000
Class of Warrant or Right, Issued During Period	250,000
Underwriting Discounts and Commissions | $	$ 32,000
Warrants Issued to Underwriters [Member]
Class of Warrant or Right, Exercise Price of Warrants or Rights | $ / shares				$ 6.60
Class of Warrant or Right, Number of Securities Called by Warrants or Rights				11,958
Public Offering [Member]
Number of Units Offered to Sale				1,666,667
Number of Common Stock in Each Unit				1
Common Stock, Par or Stated Value Per Share | $ / shares				$ 0.001
Number of Common Stock Called by Each Unit				1
Unit Offering Price | $ / shares				$ 6
Class of Warrant or Right, Exercise Price of Warrants or Rights | $ / shares				$ 6.30
Warrants and Rights Outstanding, Term				5 years
Underwriters, Additional Common Shares Authorized to Purchase				250,000
Underwriters, Additional Warrants Authorized to Purchase				250,000
Proceeds from Issuance or Sale of Equity, Total | $		$ 8,840,000
Number of Warrants in Each Unit				1
Private Placement Unit [Member]
Number of Common Stock in Each Unit		1	1
Number of Common Stock Called by Each Unit		1	1
Debt Instrument, Convertible, Conversion Price | $ / shares		$ 3	$ 3								$ 8
Number of Warrants in Each Unit		1	1

XML

Note 12 - Related Party Transactions (Details Textual) - USD ($)	1 Months Ended	3 Months Ended		9 Months Ended
	Aug. 31, 2016	Sep. 30, 2019	Sep. 30, 2018	Sep. 30, 2019	Sep. 30, 2018	Dec. 31, 2018	Aug. 19, 2016
Share-based Compensation Arrangement by Share-based Payment Award, Options, Grants in Period, Gross				254,785
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Weighted Average Exercise Price, Ending Balance		$ 18.90		$ 18.90		$ 25.16
Share-based Payment Arrangement, Noncash Expense, Total				$ 2,142,000	$ 2,083,000
Chairman and Chief Executive Officer of OPKO [Member]
Related Party, Ownership Percentage							5.00%
Chairman and Chief Executive Officer of OPKO [Member] | OPKO [Member]
Share-based Payment Arrangement, Noncash Expense, Total		$ 116,000	$ 59,000	$ 160,000	$ 121,000
OPKO [Member] | Consulting Services [Member]
Share-based Compensation Arrangement by Share-based Payment Award, Options, Grants in Period, Gross	46,553
Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting Period	4 years
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Weighted Average Exercise Price, Ending Balance	$ 16.20
Consulting Agreement, Term	4 years
Consulting Agreement, Term, Length of Automatic Renewal Periods	1 year

XML

Note 9 - Share-based Compensation - Stock Option Activity (Details)	9 Months Ended
	Sep. 30, 2019 $ / shares shares
Stock options outstanding, beginning of period (in shares) | shares	608,485
Balance, weighted average exercise price, beginning of period (in dollars per share) | $ / shares	$ 25.16
Stock options granted (in shares) | shares	254,785
Stock options granted, weighted average exercise price (in dollars per share) | $ / shares	$ 5.28
Stock options exercised (in shares) | shares
Stock options exercised, weighted average exercise price (in dollars per share) | $ / shares
Stock options canceled (in shares) | shares	(15,122)
Stock options canceled, weighted average exercise price (in dollars per share) | $ / shares	$ 14.16
Balance, September 30, 2019 (in shares) | shares	848,148
Balance, September 30, 2019 (in dollars per share) | $ / shares	$ 18.90
Exercisable and vested (in shares) | shares	390,199
Exercisable and vested, weighted average exercise price (in dollars per share) | $ / shares	$ 24.17

XML

Note 1 - Summary of Business and Basis of Presentation

9 Months Ended

Sep. 30, 2019

Notes to Financial Statements

Business Description and Basis of Presentation [Text Block]

( 1 ) Summary of Business and Basis of Presentation

(a)	Description of Business
	BioCardia, Inc., (BioCardia or the Company), is a clinical-stage regenerative medicine company developing novel therapeutics for cardiovascular diseases with large unmet medical needs. The Company’s lead therapeutic candidate is the CardiAMP® cell therapy system and its second therapeutic candidate is the CardiALLO™ cell therapy system. To date, the Company has devoted substantially all its resources to research and development efforts relating to its therapeutic candidates and biotherapeutic delivery systems including conducting clinical trials, developing manufacturing and sales capabilities, in-licensing related intellectual property, providing general and administrative support for these operations and protecting its intellectual property.
	BioCardia also has three enabling device product lines: ( 1 ) the CardiAMP cell processing system; ( 2 ) the Helix ™ biotherapeutic delivery system, or Helix; and ( 3 ) the Morph® steerable guide and sheath catheter portfolio, including the new AVANCE ™ steerable introducer family. The Company manages its operations as a single segment for the purposes of assessing performance and making operating decisions.

XML

Condensed Consolidated Balance Sheets (Current Period Unaudited) (Parentheticals) - USD ($) $ in Thousands	Sep. 30, 2019	Dec. 31, 2018
Allowance for doubtful accounts	$ 14	$ 9
Preferred stock, par value (in dollars per share)	$ 0.001	$ 0.001
Preferred stock, shares authorized (in shares)	25,000,000	25,000,000
Preferred stock, shares issued (in shares)	0	0
Preferred stock, shares outstanding (in shares)	0	0
Common stock, par value (in dollars per share)	$ 0.001	$ 0.001
Common stock, shares authorized (in shares)	100,000,000	100,000,000
Common stock, shares issued (in shares)	6,825,183	4,845,697
Common stock, shares outstanding (in shares)	6,825,183	4,845,697

XML

Note 5 - Property and Equipment, Net (Tables)

9 Months Ended

Sep. 30, 2019

Notes Tables

Property, Plant and Equipment [Table Text Block]

	September 30,			December 31,
	2019			2018
Computer equipment and software	$	127			119
Laboratory and manufacturing equipment		550			481
Furniture and fixtures		55			55
Leasehold improvements		332			332
Construction in progress		69			3
Property and equipment, gross		1,133			990
Less accumulated depreciation		(923	)		(845	)
Property and equipment, net	$	210			145

XML

Note 9 - Share-based Compensation (Tables)

9 Months Ended

Sep. 30, 2019

Notes Tables

Schedule of Share-based Compensation, Expense [Table Text Block]

	Three months ended September 30,				Nine months ended September 30,
	2019		2018		2019		2018
Cost of goods sold	$	38	$	39	$	130	$	105
Research and development		293		250		787		711
Selling, general and administrative		425		441		1,224		1,267
Share-based compensation expense	$	756	$	730	$	2,142	$	2,083

Share-based Payment Arrangement, Option, Activity [Table Text Block]

	Options outstanding
	Number of shares			Weighted average exercise price
Balance, December 31, 2018		608,485		$	25.16
Stock options granted		254,785			5.28
Stock options exercised		—			-
Stock options canceled		(15,122	)		14.16
Balance, September 30, 2019		848,148		$	18.90
Exercisable and vested, September 30, 2019		390,199		$	24.17

Schedule of Nonvested Restricted Stock Units Activity [Table Text Block]

				Weighted
				average
				grant date
	Number of			fair value
	S hares			per share
Balance, December 31, 2018		29,694		$	25.56
RSUs granted		34,713		$	4.75
RSUs vested		(2,272	)	$	99.36
RSUs forfeited		-			-
Balance, September 30, 2019		62,135		$	10.55

XML

Note 6 - Operating Lease Right-of-use Asset, Net - Future Minimum Lease Payments (Details) $ in Thousands	Dec. 31, 2018 USD ($)
2019	$ 612
2020	630
2021	649
Total	$ 1,891

XML

Note 5 - Property and Equipment, Net - Summary of Property and Equipment, Net (Details) - USD ($) $ in Thousands	Sep. 30, 2019	Dec. 31, 2018
Property and equipment, gross	$ 1,133	$ 990
Less accumulated depreciation	(923)	(845)
Property and equipment, net	210	145
Computer Equipment and Software [Member]
Property and equipment, gross	127	119
Laboratory and Manufacturing Equipment [Member]
Property and equipment, gross	550	481
Furniture and Fixtures [Member]
Property and equipment, gross	55	55
Leasehold Improvements [Member]
Property and equipment, gross	332	332
Construction in Progress [Member]
Property and equipment, gross	$ 69	$ 3

XML

Note 4 - Inventories

9 Months Ended

Sep. 30, 2019

Notes to Financial Statements

Inventory Disclosure [Text Block]

(

4

)     Inventories

Inventories are stated at the lower of cost or net realizable value using the average cost method. Inventories consisted of the following (in thousands): 

	September 30,		December 31,
	2019		2018
Raw materials	$	—	$	79
Work in process		45		39
Finished goods		—		23
Total	$	45	$	141

Write downs for excess or expired inventory are based on management’s estimates of forecasted usage of inventories and are included in cost of goods sold. A significant change in the timing or level of demand for certain products as compared to forecasted amounts

may

result in recording additional write downs for excess or expired inventory in the future. Charges to cost of goods sold for inventory write-downs, reserve adjustments, scrap, shrinkage and expired inventories totaled approximately

$0,

and

$80,000

for the

three

and

nine

months ended

September 30, 2019,

respectively. Charges to cost of goods sold for inventory write-downs, reserve adjustments, scrap, shrinkage and expired inventories totaled approximately

$13,000,

and

$15,000

for the

three

and

nine

months ended

September 30, 2018,

respectively. 

XML

Note 8 - Stockholders' Equity

9 Months Ended

Sep. 30, 2019

Notes to Financial Statements

Stockholders' Equity Note Disclosure [Text Block]

(

8

)    

Stockholders’ Equity

Public Offering on Form S-

1

Registration Statement

- In

April 2019,

the Company submitted a Form S-

1

Registration Statement (S-

1

) to the Securities and Exchange Commission (SEC), which was subsequently amended. On

August 2, 2019,

the Company entered into an underwriting agreement with Maxim Group LLC, as representative of the several underwriters named therein, relating to a firm commitment underwritten public offering pursuant to the S-

1,

of

1,666,667

units consisting of

one

share of common stock, par value of

$0.001

per share, and a warrant to purchase

one

share of common stock. The offering price to the public was

$6.00

per unit. The warrants, which are equity classified, are immediately exercisable for shares of common stock at a price of

$6.30

per share and expire

five

years from the date of issuance. In addition, the underwriters were granted

11,958

warrants exercisable at a per warrant exercise price of

$6.60

as part of their compensation. The underwriters were granted a

45

-day option to purchase up to

250,000

additional shares of common stock, and/or

250,000

additional warrants to cover over-allotments, if any. The closing of the offering occurred on

August 6, 2019.

After deducting underwriting discounts and commissions and estimated offering expenses payable by the Company, BioCardia realized net proceeds of approximately

$8.84

million. On

September 4, 2019,

the underwriters exercised the over-allotment and purchased

75,000

shares of common stock and

250,000

warrants for net proceeds of approximately

$420,000,

after deducting underwriting discounts of approximately

$32,000.

Up List to Nasdaq

- On

August 2, 2019

the Company’s common stock and warrants to purchase common stock began trading on the Nasdaq Capital Market. Previously the common stock was quoted on the OTCQB Marketplace (OTCQB) under the symbol, “BCDA”.  “BCDA” and “BCDAW” are the trading symbols for the Company’s common stock and warrants to purchase common stock, respectively, on the Nasdaq Capital Market.

Convertible Note Financing

- On

July 5, 2019,

BioCardia entered into a note purchase agreement pursuant to which the Company issued on such date

$625,000

in aggregate principal amount of convertible promissory notes to accredited investors, a portion of which were certain of the Company’s officers and directors and a principal stockholder (or their respective affiliates). The notes accrued

14.0%

simple interest and mature

six

months from the issue date, on

January 5, 2020.

If at any time prior to the maturity date, the Company closes a public stock offering for the purpose of raising capital in which the Company’s common stock is listed or quoted on the New York Stock Exchange, the Nasdaq Global Select Market, the Nasdaq Global Market or the Nasdaq Capital Market, the outstanding principle and interest would automatically convert into the securities offered in the financing at a unit price equal to a

50%

discount to the qualified financing price. The convertible notes conversion features were determined to be an embedded derivative requiring bifurcation and separate accounting at estimated fair value. The fair value of the derivative was treated as a discount on the notes, which is subject to accretion over the term of the note. The change in fair value of the derivative liability was approximately

$52,000.

The loss on extinguishment of the convertible notes approximated

$521,000.

Interest expense on the notes for the

three

and

nine

months ended

September

31,

2019,

totaled

$112,000

and included

$104,000

of accretion of the discount.

Upon the closing of the Company’s public offering of units on

August 6, 2019

the unpaid principal and interest on the convertible notes totaling approximately

$633,000,

converted into

210,887

units, each unit consisting of

one

share of common stock and a warrant to purchase

one

share of common stock, at a conversion price of

$3.00

per unit. Holders of the convertible notes had the option of converting the notes into units of

one

share of common stock and a warrant at a unit price of

$8.00

prior to the automatic conversion in the Company’s public offering. The warrants have the same terms, including exercise price and expiration date, as the warrants issued in the public offering.

Reverse Stock Split

- On

June 6, 2019

the Company effected a

1

-for-

9

reverse stock split of the Company’s common stock. Neither the par value nor the authorized number of shares was adjusted as a result of the reverse stock split. All issued and outstanding common stock, warrants, stock options, restricted stock units and per share amounts contained in the accompanying consolidated financial statements and notes to the consolidated financial statements have been retroactively adjusted to give effect to the reverse stock split for all periods presented.

Warrants for Common Stock

- On

December 24, 2018,

the Company issued

296,296

warrants (as adjusted for the reverse stock split described above) to purchase the Company’s common stock in connection with the sale of an aggregate of

592,592

shares (as adjusted) of the Company’s common stock at a purchase price of

$6.75

per share (as adjusted) for aggregate proceeds of

$3.8

million, net of

$200,000

in expenses. The warrants are exercisable immediately for cash and, since

six

months have passed, are also exercisable on a cashless basis until an effective registration statement has been filed registering the resale of the shares issuable upon exercise of the warrants. Warrants can be settled in unregistered shares. The warrants have an exercise price of

$6.75

per share and will expire on

December 24, 2023.

The issued warrants are standalone financial instruments and were equity classified in accordance with US GAAP. Set forth below is a table of activity of warrants for common stock and the related weighted average exercise price per warrant.

	Number of Common Stock Warrants		Weighted Average Exercise Price
Balance, December 31, 2018		296,296	$	6.75
Warrants for common stock sold		2,139,512	$	6.30
Warrants for common stock exercised		-
Balance, September 30,2018		2,435,808	$	6.36

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Note 12 - Related Party Transactions

9 Months Ended

Sep. 30, 2019

Notes to Financial Statements

Related Party Transactions Disclosure [Text Block]

(

12

)   Related Party Transactions

BioCardia, Inc. (the “Company”) and OPKO Health, Inc. (“OPKO”) previously entered into a consulting agreement dated

August 19, 2016,

between the Company and OPKO (the “Consulting Agreement”). The chairman and chief executive officer of OPKO is a beneficial owner of more than

5%

of the outstanding shares of the Company’s common stock.

Pursuant to the terms of the Consulting Agreement, OPKO was to provide advisory services to the Company in support of strategic transactions, financings and other matters as agreed between the parties from time to time. Also, in

August 2016,

the Company granted OPKO a

ten

-year option to purchase

46,553

shares of common stock, with a

4

-year vesting period and an exercise price of

$16.20

per share, to OPKO as consideration for consulting services to be provided under the Consulting Agreement. The term of the Consulting Agreement was initially for

4

years and was to have been automatically renewed for successive

one

-year periods.

Effective

August 29, 2019,

the Company and OPKO mutually agreed to terminate the Consulting Agreement without penalty or payment of any kind as the services under the Consulting Agreement were

no

longer necessary. In connection with the termination of the Consulting Agreement, OPKO’s option grant was amended such that it is unaffected by the termination of the Consulting Agreement and will continue to vest and remain outstanding for the remainder of its

ten

-year term unless earlier exercised. As a result of this modification of the option grant, all future unrecognized stock-based compensation expense was accelerated and recognized in

August 2019.

BioCardia recorded approximately

$116,000

and

$160,000

as share-based compensation expense related to the OPKO stock option in selling, general and administrative expense during the

three

and

nine

months ended

September 30, 2019,

respectively. BioCardia recorded approximately

$59,000

and

$121,000

as share-based compensation expense related to the OPKO stock option in selling, general and administrative expense during the

three

and

nine

months ended

September 30, 2018,

respectively.

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Note 6 - Operating Lease Right-of-use Asset, Net - Future Minimum Lease Payments Under Operating Lease (Details) - USD ($)	Sep. 30, 2019	Jan. 01, 2019
Remainder of 2019	$ 153,000
2020	630,000
2021	649,000
Total undiscounted lease payments	1,432,000
Less imputed interest	172,000
Total operating lease liabilities	$ 1,260,000	$ 1,593,000

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Note 5 - Property and Equipment, Net (Details Textual) - USD ($)	3 Months Ended		9 Months Ended
	Sep. 30, 2019	Sep. 30, 2018	Sep. 30, 2019	Sep. 30, 2018
Depreciation, Total	$ 29,000	$ 22,000	$ 78,000	$ 66,000

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Significant Accounting Policies (Policies)

9 Months Ended

Sep. 30, 2019

Accounting Policies [Abstract]

Basis of Accounting, Policy [Policy Text Block]

(a)	Basis of Preparation
	The accompanying condensed consolidated balance sheets, statements of operations, shareholders equity, and cash flows as of September 30, 2019 and for the three and nine months ended September 30, 2019 and 2018 are unaudited. The condensed consolidated financial statements have been prepared in accordance with generally accepted accounting principles in the United States of America (U.S. GAAP) and applicable rules and regulations of the Securities and Exchange Commission (SEC) for interim financial information and on a basis consistent with the annual financial statements and, in the opinion of management, reflect all adjustments which include only normal recurring adjustments, necessary to present fairly its financial position as of September 30, 2019, results of operations for the three and nine months ended September 30, 2019 and 2018, and cash flows for the nine months ended September 30, 2019 and 2018. The results for the nine months ended September 30, 2019 are not necessarily indicative of the results to be expected for the year ending December 31, 2019 or for any other interim period or for any other future year. Certain changes in the prior period consolidated balance sheet have been made to conform to the current period presentation. Changes to reduce the December 31, 2018 accounts payable and increase the accrued expenses and other current liabilities accounts were made in the amount of $277,000. These changes had no effect on the Consolidated Statement of Operations or cash flow.
	These condensed consolidated financial statements should be read in conjunction with the audited financial statements and related notes included in the Company’s Annual Report on Form 10 -K for the year ended December 31, 2018, filed with the SEC on April 2, 2019.

Going Concern and Liquidity [Policy Text Block]

(b)	Liquidity
	The Company has incurred net losses and negative cash flows from operations since its inception and had an accumulated deficit of $97.6  million as of September 30, 2019. Management expects operating losses and negative cash flows to continue through the next several years. These factors raise substantial doubt about the Company’s ability to continue as a going concern beyond one year from the date these financial statements are issued. Based on management’s current plans, management believes cash and cash equivalents of $8,910,000 as of September 30, 2019, will not be sufficient to fund the Company for one year from the date these financial statements are issued. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.
	If adequate funds are not available, BioCardia may be required to reduce operating expenses, delay or reduce the scope of its product development programs, obtain funds through arrangements with others that may require it to relinquish rights to certain of its technologies or products that the Company would otherwise seek to develop or commercialize itself, or cease operations. While the Company believes it has a viable strategy to raise additional funds, there can be no assurances that it will be able to obtain additional capital on acceptable terms and in the amounts necessary to fully fund its operating needs.

Use of Estimates, Policy [Policy Text Block]

(c)

Use of Estimates

The preparation of the financial statements in accordance with U.S. GAAP requires management to make certain estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Actual results could differ materially from those estimates. Significant items subject to such estimates and assumptions include share-based compensation, the useful lives of property and equipment, allowances for doubtful accounts and sales returns, incremental borrowing rate, and inventory valuation.

Consolidation, Policy [Policy Text Block]

(d)	Principles of Consolidation
	The condensed consolidated financial statements include the accounts of the Company and its wholly-owned subsidiary. All intercompany accounts and transactions have been eliminated during the consolidation process.

Change to Significant Accounting Policies [Policy Text Block]

(e)

Changes to Significant Accounting Policies

The Company’s significant accounting policies are described in Note 2 of the notes to the consolidated financial statements included in its Annual Report on Form 10 -K filed for the year ended December 31, 2018. Apart from the adoption of ASU  No.   2018 - 07,  Compensation–Stock Compensation (Topic 718 ): Improvements to Nonemployee Share-based Payment Accounting on January 1, 2019, which led to an amended stock-based compensation policy, and the adoption of ASU No. 2016 - 02, Leases (Topic 842 ), which led to an amended lease policy as described in the following paragraphs, there have been no changes to those policies. Measurement of nonemployee awards - The measurement of equity-classified nonemployee awards is fixed at the grant date, and the Company may use the expected term to measure nonemployee options or elect to use the contractual term as the expected term, on an award-by-award basis. This differs from the guidance in ASC 505 - 50 that requires the use of the contractual term. Forfeitures of nonemployee awards will be recognized as they occur.   Operating lease right-of-use asset and liabilities - The Company will determine if an arrangement is a lease at the inception of the arrangement. All leases are assessed for classification as an operating lease or finance lease. The Company will recognize a lease liability and a ROU asset for all leases, including operating leases, with a term greater than 12 months. ROU assets represent the Company's right to use an underlying asset for the lease term and lease liabilities represent its obligation to make lease payments arising from the lease.   The Company’s lease liabilities are recognized at the applicable lease commencement date based on the present value of the lease payments required to be paid over the lease term. Variable lease payments are expensed as incurred and are not included the computation of the lease liability. The lease liability discount rate is generally the Company’s incremental borrowing rate unless the lessor’s rate implicit in the lease is readily determinable, in which case the lessor’s implicit rate is used.   The Company's ROU assets are also recognized at the applicable lease commencement date. The ROU asset equals the carrying amount of the related lease liability, adjusted for any lease payments made prior to lease commencement and lease incentives provided by the lessor, if any. The Company amortizes a right-of-use (ROU) asset, and the periodic amortization is the difference between the straight-line total lease cost for the period (including amortization of initial direct costs) and the periodic accretion of the lease liability using the effective interest method.   The Company’s lease terms may include options to extend or terminate the lease when it is reasonably certain that it will exercise any such options. Operating lease cost for lease payments is recognized on a straight-line basis over the lease term. The Company’s lease contracts often include lease and non-lease components. The Company has elected the practical expedient offered by the standard to not separate lease from non-lease components and accounts for them as a single lease component. The Company has elected not to recognize ROU assets and lease liabilities for leases with a term of twelve months or less. Lease cost for short-term leases is recognized on a straight-line basis over the lease term.

New Accounting Pronouncements, Policy [Policy Text Block]

(f) Recently Adopted Accounting Pronouncement   In February 2016, the FASB amended its guidance related to lease accounting. The amended guidance required lessees to recognize a majority of their leases on the balance sheet as a ROU asset and a lease liability. In July 2018, the FASB issued ASU No. 2018 - 11, Leases (Topic 842 ): Targeted Improvements, or ASU No. 2018 - 11. In issuing ASU No. 2018 - 11, the FASB is permitting another transition method for ASU 2016 - 02, which allows the transition to the new lease standard by recognizing a cumulative-effect adjustment to the opening balance of retained earnings in the period of adoption. The Company elected this available transition method.

The Company adopted the new standard using the cumulative-effect method on

January 1, 2019.

The Company's adoption included lease codification improvements that were issued by the FASB through

March 2019.

The FASB made available several practical expedients in adopting the amended lease accounting guidance. The Company elected the package of practical expedients permitted under the transition guidance, which among other things, allowed registrants to carry forward historical lease classification, its assessment on whether a contract is or contains a lease, and its initial direct costs for any leases that exist prior to adoption of the new standard. BioCardia also elected to keep leases with an initial term of

12

months or less off the consolidated balance sheet, and to recognize the associated lease payments in the statements of operations on a straight-line basis over the lease term.

The most significant impact was the recognition of ROU assets and related lease liabilities for operating leases on the condensed consolidated balance sheet. The Company recognized ROU assets and related lease liabilities of

$1,505,000

and

$1,593,000

respectively, related to operating lease commitments, as of

January 1, 2019.

The operating lease ROU asset represents the lease liability, plus any lease payments made at or before the commencement date, less any lease incentives received. The amended guidance did

not

have a material impact on the Company's cash flows or results of operations. See Note

6

of the condensed consolidated financial statements.

In

June 2018,

the FASB issued ASU

No.

2018

-

07,

Stock Compensation (Topic

718

): Improvements to Nonemployee Share-Based Payment Accounting. ASU

2018

-

07

is intended to reduce the cost and complexity and to improve financial reporting for nonemployee share-based payments. ASU

2018

-

07

expands the scope of Topic

718,

Compensation-Stock Compensation (which currently only includes share-based payments to employees) to include share-based payments issued to nonemployees for goods or services. Consequently, the accounting for share-based payments to nonemployees and employees will be substantially aligned.

No

longer will nonemployee awards be marked-to-market every reporting period, nor will the expected term be required to be the contractual term. However, forfeitures will continue to be recognized when incurred. ASU

2018

-

07

supersedes Subtopic

505

-

50,

Equity-Based Payments to Non-Employees. The Company adopted ASU

2018

-

07

effective

January 1, 2019

using the cumulative-effect method for equity-classified nonemployee awards which have

not

been settled as of the adoption date. The cumulative effect did

not

have a material impact on the condensed consolidated balance sheet, statement of operations or statement of cash flows.

(g)	Recently Issued Accounting Pronouncements
	Recent accounting pronouncements issued by the FASB, including its Emerging Issues Task Force did not or are not believed by management to have a material impact on the Company’s financial statement presentation or disclosures.

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Note 5 - Property and Equipment, Net

9 Months Ended

Sep. 30, 2019

Notes to Financial Statements

Property, Plant and Equipment Disclosure [Text Block]

(

5

)     Property and Equipment, Net

Property and equipment, net consisted of the following (in thousands):

	September 30,			December 31,
	2019			2018
Computer equipment and software	$	127			119
Laboratory and manufacturing equipment		550			481
Furniture and fixtures		55			55
Leasehold improvements		332			332
Construction in progress		69			3
Property and equipment, gross		1,133			990
Less accumulated depreciation		(923	)		(845	)
Property and equipment, net	$	210			145

Depreciation expense totaled approximately

$29,000

and

$78,000

for the

three

and

nine

months ended

September 30, 2019,

respectively. Depreciation expense totaled approximately

$22,000

and

$66,000

for the

three

and

nine

months ended

September 30, 2018,

respectively.

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Note 9 - Share-based Compensation

9 Months Ended

Sep. 30, 2019

Notes to Financial Statements

Share-based Payment Arrangement [Text Block]

 

(

9

)   

Share-Based Compensation

The share-based compensation expense is recorded in cost of goods sold, 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

nine

months ended

September 30, 2019

and

2018

was recorded as follows (in thousands):

	Three months ended September 30,				Nine months ended September 30,
	2019		2018		2019		2018
Cost of goods sold	$	38	$	39	$	130	$	105
Research and development		293		250		787		711
Selling, general and administrative		425		441		1,224		1,267
Share-based compensation expense	$	756	$	730	$	2,142	$	2,083

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

	Options outstanding
	Number of shares			Weighted average exercise price
Balance, December 31, 2018		608,485		$	25.16
Stock options granted		254,785			5.28
Stock options exercised		—			-
Stock options canceled		(15,122	)		14.16
Balance, September 30, 2019		848,148		$	18.90
Exercisable and vested, September 30, 2019		390,199		$	24.17

Unrecognized share-based compensation for employee and nonemployee options granted through

September 30, 2019

is approximately

$4.0

million to be recognized over a remaining weighted average service period of

2.3

years.

Share-Based Compensation (RSUs)

The following summarizes the activity of non-vested RSUs:  

				Weighted
				average
				grant date
	Number of			fair value
	S hares			per share
Balance, December 31, 2018		29,694		$	25.56
RSUs granted		34,713		$	4.75
RSUs vested		(2,272	)	$	99.36
RSUs forfeited		-			-
Balance, September 30, 2019		62,135		$	10.55

Unrecognized share-based compensation for RSUs granted through

September 30, 2019

is approximately

$230,000

to be recognized over a remaining weighted average service period of

0.3

years.

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Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($)	9 Months Ended
	Sep. 30, 2019	Sep. 30, 2018
Operating activities:
Net loss	$ (11,208,000)	$ (10,345,000)
Adjustments to reconcile net loss to net cash used in operating activities:
Write-off of inventory	54,000
Depreciation	78,000	66,000
Amortization of right-of-use asset	325,000
Share-based compensation	2,142,000	2,083,000
Amortization of debt discount on convertible shareholder notes	112,000
Change in fair value of redemption feature embedded in convertible notes	(52,000)
Loss on extinguishment of convertible notes	521,000
Changes in operating assets and liabilities:
Accounts receivable	171,000	(75,000)
Inventory	43,000	57,000
Prepaid expenses and other current assets	265,000	116,000
Accounts payable	372,000	200,000
Accrued expenses and other current liabilities	687,000	141,000
Deferred revenue	691,000	(65,000)
Deferred rent		(1,000)
Operating lease liability - noncurrent	(390,000)
Net cash used in operating activities	(6,189,000)	(7,823,000)
Investing activities:
Purchase of property and equipment	(144,000)	(51,000)
Net cash used in investing activities	(144,000)	(51,000)
Financing activities:
Proceeds from sale of stock and warrants, net of issuance costs	9,260,000
Proceeds from issuance of convertible loan payable	625,000
Proceeds from the exercise of common stock options		5,000
Net cash provided by financing activities	9,885,000	5,000
Net change in cash and cash equivalents	3,552,000	(7,869,000)
Cash and cash equivalents at beginning of period	5,358,000	12,689,000
Cash and cash equivalents at end of period	8,910,000	4,820,000
Supplemental disclosure for noncash investing and financing activities:
Conversion of interest payable to stock and warrants	$ 8,000

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Condensed Consolidated Balance Sheets (Current Period Unaudited) - USD ($)	Sep. 30, 2019	Dec. 31, 2018
Current assets:
Cash and cash equivalents	$ 8,910,000	$ 5,358,000
Accounts receivable, net of allowance for doubtful accounts of $14 and $9 at September 30, 2019 and December 31, 2018	103,000	274,000
Inventory	45,000	141,000
Prepaid expenses and other current assets	179,000	445,000
Total current assets	9,237,000	6,218,000
Property and equipment, net	210,000	145,000
Operating lease right-of-use asset, net	1,180,000
Other assets	54,000	54,000
Total assets	10,681,000	6,417,000
Current liabilities:
Accounts payable	1,112,000	743,000
Accrued expenses and other current liabilities	2,424,000	1,805,000
Operating lease liability - current	508,000
Total current liabilities	4,044,000	2,548,000
Operating lease liability - noncurrent	752,000
Deferred revenue - noncurrent	691,000
Deferred rent		77,000
Total liabilities	5,487,000	2,625,000
Stockholders’ equity:
Preferred stock, $0.001 par value, 25,000,000 shares authorized as of September 30, 2019 and December 31, 2018; no shares issued and outstanding as of September 30, 2019 and December 31, 2018
Common stock, $0.001 par value, 100,000,000 shares authorized as of September 30, 2019 and December 31, 2018; 6,825,183 and 4,845,697 shares issued and outstanding as of September 30, 2019 and December 31, 2018	46,000	43,000
Additional paid-in capital	102,716,000	90,110,000
Accumulated deficit	(97,568,000)	(86,361,000)
Total stockholders’ equity	5,194,000	3,792,000
Total liabilities and stockholders’ equity	$ 10,681,000	$ 6,417,000

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Note 11 - Income Taxes (Details Textual) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2019	Sep. 30, 2018	Sep. 30, 2019	Sep. 30, 2018
Income Tax Expense (Benefit), Total	$ 0	$ 0	$ 0	$ 0
Deferred Tax Liabilities, Net, Total	$ 0		$ 0

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Note 9 - Share-based Compensation - Share-based Compensation Expense (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2019	Sep. 30, 2018	Sep. 30, 2019	Sep. 30, 2018
Share-based compensation expense	$ 756	$ 730	$ 2,142	$ 2,083
Cost of Goods Sold [Member]
Share-based compensation expense	38	39	130	105
Research and Development Expense [Member]
Share-based compensation expense	293	250	787	711
Selling, General and Administrative Expenses [Member]
Share-based compensation expense	$ 425	$ 441	$ 1,224	$ 1,267

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Note 6 - Operating Lease Right-of-use Asset, Net (Tables)

9 Months Ended

Sep. 30, 2019

Notes Tables

Lease, Cost [Table Text Block]

	Three months ended September 30,		Nine months ended September 30,
	2019		2019
Straight-line rent expense recognized for operating lease	$	150	$	450
Variable rent expense recognized for operating lease		63		202
Total rent expense	$	213	$	652
Weighted average remaining lease term (in years)				2.25
Weighted average discount rate				12.05	%

Schedule of Operating Leases Cash Flow Information [Table Text Block]

	Three months ended September 30,		Nine months ended September 30,
	2019		2019
Cash paid for amounts included in the measurement of lease liabilities	$	153	$	459
Cash Lease Expense (imputed interest expense component of net income)		39		126

Lessee, Operating Lease, Liability, Maturity [Table Text Block]

	Operating Lease
	September 30, 2019
Remainder of 2019	$	153
Years ending December 31,
2020		630
2021		649
Total undiscounted lease payments		1,432
Less imputed interest		172
Total operating lease liabilities	$	1,260

Lessee, Operating Lease, Disclosure [Table Text Block]

Years ending December 31,
2019	$	612
2020		630
2021		649
Total	$	1,891

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Note 10 - Net Loss Per Share (Tables)

9 Months Ended

Sep. 30, 2019

Notes Tables

Schedule of Antidilutive Securities Excluded from Computation of Earnings Per Share [Table Text Block]

	September 30,
	2019		2018
Stock options to purchase common stock		848,148		616,567
Unvested restricted stock units		62,135		29,706
Common stock warrants		2,435,808		-
Total		3,346,091		646,273