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, 2014—not a Streamex Corp. filing. BioSig was developing the PURE EP System, a medical-device platform for cardiac signal recording and analysis; it had no commercial product, customers, or revenue.
Financial performance and liquidity
| Metric | Three months ended June 30, 2014 | Six months ended June 30, 2014 |
|---|---|---|
| Revenue | $0 | $0 |
| Operating expenses | $588,529 | $1,316,680 |
| Net loss | $787,218 | $1,904,752 |
| Net loss available to common stockholders | $870,441 | $2,071,999 |
| Operating cash used | $962,384 |
Gross margin is not applicable because the company reported no revenue or cost of goods sold. Cash was $42,188 at June 30, down from $302,187 at December 31, 2013. Working capital deficit was $819,450. Financing activities provided $702,385 in the first half, including $732,666 in common-stock proceeds and $30,281 in net repayments of related-party advances. No cash was used for investing activities. Management said existing cash would not fund the next 12 months and estimated approximately $2 million of additional funding was needed.
Total assets were $105,291. Current liabilities were $883,444, including $552,087 of accounts payable and accrued expenses and $330,857 of preferred dividends payable. Series C preferred stock, classified outside equity, had a $2.781 million liquidation preference. The company reported no convertible debentures outstanding. Stockholders’ deficit was $3.544 million.
Changes versus prior comparable periods
- Second-quarter net loss improved to $787,218 from $1.839 million; first-half net loss improved to $1.905 million from $5.550 million.
- First-half operating expenses fell to $1.317 million from $4.554 million, with R&D down 54.2% and G&A down 73.3%. Management attributed reductions primarily to lower personnel, consulting, stock compensation, and professional-service costs, including funding constraints.
- First-half cash used in operations declined to $962,384 from $1.147 million. Cash nevertheless fell by $259,999 during the first half of 2014, compared with a $280,701 increase in the prior-year period.
- In June, all outstanding Series A and B preferred shares and accrued dividends converted into 1,071,719 common shares. The company also sold 337,468 common shares for $732,666 and issued warrants.
Outlook, risks, contingencies, and unusual items
- Management and the auditor identified substantial doubt about the company’s ability to continue as a going concern. Further financing was required; failure to obtain it could force delays, reductions, or termination of development and commercialization plans.
- Management expected continued operating losses and rising R&D costs, including clinical-trial expenses. It targeted prototype testing completion in Q3 2014, completion of animal and initial human studies by Q1 2015, and FDA 510(k) clearance in the second half of 2015. These were targets, dependent on financing and regulatory outcomes, not assured guidance.
- Series C preferred stock includes triggering events that may require redemption, potentially in cash or shares. The company warned it might not be able to meet a redemption demand; unpaid redemption amounts may bear interest.
- Former CEO David Drachman sought approximately $612,000 in salary, bonus, and severance, option vesting equivalent to 10% of common stock, and rights to a patent application. BioSig disputed the claims and counterclaimed over patent rights; an arbitration hearing was scheduled for September 2014. The filing also reports a $100,000 accrued arbitration-related settlement and $55,620 of registration-rights liquidated damages; the text does not clearly establish whether the settlement accrual relates to this dispute.
- After quarter-end, Gregory D. Cash became CEO under a three-year employment agreement with $275,000 annual base salary, subject to specified increases and bonuses. He received an option for 1,265,769 shares at $2.21, with vesting tied to time and milestones including financing, exchange listing, FDA clearance, and market capitalization.
- The Los Angeles office lease was extended for one year, with monthly payments of $6,530 beginning September 2014.
Important facts for investors to verify
- Confirm the issuer: the provided filing identifies BioSig Technologies, Inc., not Streamex Corp.
- Assess financing availability against the stated approximately $2 million 12-month funding need, minimal cash, and going-concern uncertainty.
- Review Series C redemption triggers, liquidation preference, accrued dividends, and potential dilution from conversion and warrants.
- Track product testing, clinical-study, and FDA milestones and whether management’s timelines remain achievable.
- Follow the former CEO arbitration, including potential monetary, equity, and patent-ownership exposure and the basis for the reported $100,000 accrual.