BioSig Technologies, Inc. — Form 10-Q summary
Reporting period: Quarter and six months ended June 30, 2019. The supplied filing identifies the registrant as BioSig Technologies, Inc. (NASDAQ: BSGM), not Streamex Corp.; verify that this is the intended filing.
Business context
BioSig is a pre-commercial medical-device company developing the PURE EP System for acquiring and processing cardiac signals during electrophysiology procedures. The system received FDA 510(k) clearance in August 2018. The company reported no revenue or cost of goods sold and had no paying customers during the periods presented.
Financial performance and liquidity
| Metric | Q2 2019 | Q2 2018 | Six months 2019 | Six months 2018 |
|---|---|---|---|---|
| Revenue | $0 | $0 | $0 | $0 |
| Operating expenses | $7.99 million | $5.77 million | $13.86 million | $8.40 million |
| Net loss | $7.95 million | $5.77 million | $13.82 million | $8.40 million |
| Net loss per common share | $0.38 | $0.44 | $0.72 | $0.70 |
For the first half of 2019, research and development expense was $3.31 million, up 43%, and general and administrative expense was $10.54 million, up 73%, year over year. Management attributed the increases mainly to research and design work, staffing and performance pay, commercialization efforts, and service-provider costs. Quarterly operating margins are not meaningful because the company had no revenue.
Cash used in operations was $7.64 million in the first half, compared with $4.80 million in the prior-year period. Investing activities used $0.16 million; financing activities provided $13.68 million, including $8.62 million from common-stock sales and $5.06 million from warrant and option exercises. Cash at June 30 was $10.33 million, versus $4.45 million at December 31, 2018. Working capital was $9.23 million.
Total liabilities were $1.88 million, including $0.82 million of lease liabilities; the filing reports no convertible debentures outstanding. The balance sheet also showed $0.22 million of Series C preferred stock. Common shares outstanding increased from 16.87 million at year-end to 21.15 million at June 30; 21.75 million were outstanding at July 31.
Changes, outlook and risks
- Net loss available to common shareholders increased to $13.83 million for the first half from $8.99 million. Operating cash use also increased year over year.
- Cash improved substantially from year-end following equity sales and exercises of warrants and options, but the company continues to incur losses and depend on external financing.
- Management disclosed substantial doubt about the company’s ability to continue as a going concern. It said available funds were expected to cover research, development and other needs for at least 10 months, while estimating an additional approximately $4 million would be needed for the next 12 months. Management also stated existing cash would not be sufficient to fund operating and capital requirements.
- Management expects continued operating losses and higher R&D and general and administrative expenses. If financing is unavailable or unacceptable, the company may need to delay or reduce programs or seek partners on terms that could require relinquishing rights.
- Management reported initial patient-case evaluations at clinical sites with improved signal detection and fidelity versus existing recording devices; further external evaluations were planned. ISO certification was targeted for Q4 2019 and CE Mark for Q1 2020; these were expectations, not reported outcomes.
- Subsequent to quarter-end, BioSig reported warrant exercises yielding $1.14 million in July, along with additional share issuances for services and vested awards and grants of options.
- The company adopted lease accounting Topic 842, recognizing right-of-use assets and lease liabilities. At June 30, right-of-use assets net were $0.81 million and lease liabilities totaled $0.82 million.
Investor verification priorities
- Confirm that BioSig Technologies, Inc. (BSGM), rather than Streamex Corp., is the intended issuer and filing.
- Assess cash runway and financing needs against the going-concern disclosure, cash burn, and management’s stated additional funding estimate.
- Verify commercialization progress, customer adoption, clinical evaluation results, and the status of ISO certification and CE Mark expectations.
- Review equity dilution, including 2019 share issuances, outstanding options and warrants, and the July 2019 financing proceeds.
- Evaluate the sustainability of rising operating expenses, including stock-based compensation and commercialization-related costs.