Business context and reporting period
The supplied filing is BioSig Technologies, Inc.’s unaudited Form 10-Q for the quarter and six months ended June 30, 2015; this does not match the request metadata identifying Streamex Corp. BioSig is a development-stage medical-device company developing its PURE EP cardiac recording system. It reported no commercial product or revenue.
Financial results and liquidity
| Metric | Three months ended June 30, 2015 | Six months ended June 30, 2015 |
|---|---|---|
| Revenue | $0 | $0 |
| Research and development expense | $328,498 | $630,577 |
| General and administrative expense | $4,099,080 | $6,845,933 |
| Net loss | $4,761,384 | $7,814,290 |
| Net loss available to common stockholders | $4,873,457 | $8,005,758 |
| Loss per common share, basic and diluted | $0.35 | $0.62 |
| Cash used in operating activities | Not presented for the quarter | $2,569,053 |
At June 30, cash was $1,197,239, total assets $1,391,043, and working capital deficit $4,345,653. Current liabilities included $4,056,531 of warrant liabilities and $897,961 of derivative liabilities; the company also reported $2,058,000 of Series C preferred stock outside equity. Management reported no convertible debentures outstanding. The filing does not present revenue-based margins because revenue was zero.
Changes versus prior comparable period
Second-quarter net loss available to common stockholders increased from $870,441 in 2014 to $4,873,457 in 2015; the six-month loss increased from $2,071,999 to $8,005,758. Operating expenses rose substantially, led by general and administrative expense, which management attributed mainly to stock-based compensation. Six-month stock-based compensation was $5,341,374 versus $556,332 a year earlier. R&D expense also increased as development activity, personnel, and consulting costs grew.
Six-month operating cash use rose from $962,384 to $2,569,053. Financing provided $3,538,094, including $3,042,213 from common-stock sales and $450,000 from Series C preferred stock issuance. Cash increased from $239,781 at year-end 2014 to $1,197,239 at June 30, 2015. Common shares outstanding increased to 14,499,535 from 11,179,266 at year-end.
Outlook, risks, and unusual items
Management said existing cash would not cover operating and capital needs and estimated that approximately $2 million of additional funding would be needed for the next 12 months. The filing states that recurring losses, negative operating cash flows, lack of revenue, and the need for additional financing raise substantial doubt about the company’s ability to continue as a going concern. If financing is unavailable, BioSig may need to delay or reduce development or seek partners on terms that could require relinquishing rights.
BioSig reported completing two preclinical studies of the PURE EP prototype in 2015 and planned further studies. Management anticipated FDA 510(k) marketing clearance in the first half of 2016, subject to financing, regulatory approvals, and other factors; this is a forward-looking target, not an assured outcome. The filing also reports a $198,563 gain from changes in fair value of embedded derivatives. Warrant and derivative valuations use Level 3 inputs and are sensitive to share price and volatility. Series C preferred stock has 9% cumulative dividends and redemption triggers that could create obligations the company may be unable to meet.
The filing describes the May 2015 preferred-stock issuance inconsistently as Series C in the financial-statement notes and as Series A in parts of MD&A and the other-information section; verify the correct security designation.
Important facts for investors to verify
- Confirm the issuer and filing identity: the supplied document is BioSig Technologies, Inc., not Streamex Corp.
- Assess the company’s ability to raise the estimated additional $2 million and its cash runway against ongoing operating cash use.
- Review dilution and potential obligations from preferred-stock conversion, cumulative dividends, warrants, and redemption provisions.
- Verify progress and timing of planned preclinical work and FDA 510(k) clearance; the stated first-half 2016 target is not guaranteed.
- Examine the assumptions behind the Level 3 warrant and derivative valuations and the reported fair-value gain.