Filing Summary
Entity note: The request identifies Streamex Corp., but the supplied filing is BioSig Technologies, Inc.’s Form 10-Q. The filing covers the three months ended March 31, 2017; confirm the intended company and filing before relying on this summary.
Business context and reporting period
BioSig is a development-stage medical-device company developing the PURE EP System, intended to improve cardiac signal recording during electrophysiology studies and ablation procedures. It had no commercial products, customers, or revenue in the quarter. The unaudited statements are for Q1 2017, with operating results compared with Q1 2016 and balance-sheet amounts compared with December 31, 2016.
Financial performance and liquidity
| Metric | Q1 2017 / March 31, 2017 | Comparable period / prior balance |
|---|---|---|
| Revenue and cost of goods sold | $0 | $0 in Q1 2016 |
| Research and development expense | $1.34 million | $0.37 million in Q1 2016 |
| General and administrative expense | $1.56 million | $1.94 million in Q1 2016 |
| Total operating expenses / operating loss | $2.90 million | $2.31 million in Q1 2016 |
| Loss on fair-value changes in derivatives | $0.37 million | $0.27 million in Q1 2016 |
| Net loss | $3.27 million | $2.58 million in Q1 2016 |
| Net loss available to common shareholders | $3.30 million; $0.14 per share | $2.62 million; $0.15 per share |
| Cash and cash equivalents | $1.24 million | $1.06 million at December 31, 2016 |
| Operating cash used | $1.61 million | $1.17 million in Q1 2016 |
| Financing cash provided | $1.80 million | $0.35 million in Q1 2016 |
| Working capital | Deficit of $2.16 million | $0.44 million excluding warrant and derivative liabilities |
No revenue was recorded, so revenue-based margins are not meaningful. Current liabilities included $2.30 million of warrant liabilities and $0.30 million of derivative liabilities, both measured using Level 3 inputs. The company reported no convertible debentures outstanding and no cash interest or income-tax payments during the quarter. Stockholders’ deficit was $3.18 million.
Material changes and unusual items
- R&D expense rose 259%, mainly due to clinical studies and design work, additional personnel and outside design costs, and a $543,927 noncash charge for warrants issued to Mayo Foundation for acquired R&D.
- G&A expense declined 19.7%, primarily reflecting lower stock-based compensation and service-provider fees, partly offset by increased consulting and investor-relations fees.
- The company raised $1.80 million net through Q1 common-stock and warrant sales, issuing 1,322,929 shares in the quarter. Common shares outstanding increased to 24,405,863 from 22,588,184 at year-end.
- On March 15, 2017, BioSig entered an exclusive, ten-year Mayo Foundation know-how license, with royalties of 1% or 2% on defined net sales. It issued 630,000 warrants, and recorded their estimated $543,927 fair value as R&D expense.
- After quarter-end, BioSig reported $864,819 net proceeds from an equity-and-warrant sale in April, as well as additional shares issued for services.
Outlook, risks and contingencies
- Management said existing cash was expected to fund research, development, and other needs for at least four months from the filing’s assessment. It also estimated needing approximately $4 million in addition to cash on hand to fund the next 12 months.
- The filing states that substantial doubt exists about the company’s ability to continue as a going concern, citing recurring losses, operating cash outflows, and dependence on additional financing. Management expects losses and R&D expenses to continue.
- Management believed it could obtain FDA 510(k) marketing clearance and begin commercialization in the second half of 2017, but said timing depended principally on financing and regulatory approvals. This is an expectation, not a guarantee.
- Further equity or debt financing may dilute existing shareholders or carry senior rights. If financing is unavailable or unacceptable, the company may have to delay, reduce, or discontinue development or relinquish product rights.
- Disclosure controls and procedures were deemed ineffective as of March 31, 2017. Management reported no material change in internal control over financial reporting during the quarter.
- The filing reported no legal proceedings. It disclosed an accrued $13,333 arbitration-related settlement item within accounts payable and accrued expenses.
Important facts for investors to verify
- Confirm that the BioSig filing, rather than a Streamex Corp. filing, is the intended source.
- Check subsequent financing, cash runway, and whether the stated $4 million funding requirement was met.
- Verify FDA 510(k) progress and the timing and results of clinical, preclinical, and other development work.
- Review dilution exposure from outstanding options, warrants, convertible preferred stock, and related anti-dilution provisions.
- Assess the assumptions behind Level 3 warrant and derivative valuations and the resulting noncash fair-value losses.
- Review the remediation status of ineffective disclosure controls and the company’s going-concern disclosures.