Filing summary
Entity discrepancy: The request identifies Streamex Corp., but the supplied Form 10-Q is for BioSig Technologies, Inc. Confirm the filing and issuer before relying on this summary.
Business context and reporting period
Unaudited quarterly report for the three and nine months ended September 30, 2017. BioSig is a development-stage medical-device company developing the PURE EP System for cardiac signal recording and analysis during electrophysiology procedures. It had no commercial product, customers, or revenue.
Financial results and liquidity
| Metric | Three months ended Sep. 30, 2017 | Nine months ended Sep. 30, 2017 |
|---|---|---|
| Revenue | $0 | $0 |
| Operating expenses | $1.91 million | $7.83 million |
| Net loss | $1.80 million | $8.15 million |
| Net loss available to common shareholders | $1.82 million | $8.22 million |
| Loss per common share, basic and diluted | $0.07 | $0.33 |
Gross margin and operating margin are not meaningful because the company reported no revenue. Nine-month operating cash use was $5.22 million, compared with $3.84 million in 2016. Financing provided $4.40 million, mainly from common-stock sales and subscriptions; cash declined by $821,610 to $234,285.
At September 30, current assets were $384,767 and current liabilities $4.22 million, producing a $3.84 million working-capital deficit. Excluding $2.53 million of warrant and derivative liabilities, the deficit was $1.31 million. Total assets were $423,106; stockholders’ deficit was $4.79 million. The filing reports no convertible debentures outstanding. Accounts payable and accrued expenses were $1.30 million, including $1.08 million of accrued research and development expenses.
Changes versus prior comparable periods
- Third-quarter R&D expense increased 100.6% to $1.12 million; nine-month R&D rose 77.7% to $3.80 million, reflecting personnel, design work, clinical studies, and $543,927 of acquired R&D associated with a Mayo Foundation license.
- G&A expense fell 20.7% for the quarter and 44.6% for the nine-month period, primarily because stock-based compensation and service-provider fees were lower. Nine-month stock-based compensation was $1.14 million versus $5.45 million in 2016.
- Nine-month net loss improved to $8.15 million from $10.21 million in 2016, while operating cash use increased. The 2017 loss included a $320,131 nine-month loss from changes in derivative fair value, versus $807,087 in 2016.
- Common shares outstanding increased to 26.41 million from 22.59 million at year-end 2016. The filing reports 28,313,748 shares outstanding as of November 9, 2017.
Outlook, risks, and unusual items
- Management reported substantial doubt about the company’s ability to continue as a going concern. It said September 30 cash was expected to fund research and development and other needs for at least four months, and estimated approximately $4 million of additional funding would be needed for the next 12 months.
- Management expects continued operating losses and rising R&D costs. Its stated target was FDA 510(k) clearance in the first half of 2018 and CE Mark submission in 2018; achieving milestones depends on financing and regulatory approvals.
- After quarter-end, the company disclosed approximately $2.85 million of financing in aggregate in its liquidity discussion. Subsequent-event disclosures detail an October common-stock financing and November common-stock and Series D preferred-stock financings; the disclosed transaction net proceeds total approximately $3.13 million. Reconcile the aggregate amounts and timing.
- Series D preferred stock issued after quarter-end carries a 9% cumulative dividend, a $1.50 conversion price, and full-ratchet anti-dilution terms; related warrants also include anti-dilution provisions. The existing Series C preferred stock has a 9% dividend and potential redemption or dividend-rate provisions upon specified triggering events.
- Warrant and derivative liabilities totaled $2.53 million and were valued using Level 3 inputs, including stock-price volatility. Fair-value changes may materially affect reported results.
- Management concluded disclosure controls and procedures were not effective as of September 30, 2017. No material change in internal control over financial reporting was reported during the quarter.
- The filing reports no legal proceedings and no off-balance-sheet arrangements. It describes a Mayo Foundation license with royalties of 1% or 2% of net sales of licensed products.
Most important facts to verify
- Confirm that this BioSig filing, rather than a Streamex Corp. filing, is the intended document.
- Verify post-quarter financing proceeds, transaction dates, and the difference between the stated approximately $2.85 million and the approximately $3.13 million net proceeds detailed in subsequent-event disclosures.
- Assess available cash, ongoing cash burn, and the timing and terms of additional financing needed to address the going-concern uncertainty.
- Track FDA 510(k) and CE Mark milestones, product development progress, and whether the PURE EP System can be commercialized as planned.
- Review dilution and potential liability exposure from preferred-stock conversion terms, warrants, dividends, and anti-dilution provisions.
- Understand the causes of ineffective disclosure controls and whether remediation has occurred.