UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
(Mark One)
| QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the quarterly period ended
| | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the transition period from to
Commission file number:
(Exact name of registrant as specified in its charter)
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Securities registered pursuant to Section 12(b) of the Act:
Title of each class | Trading Symbol(s) | Name of each exchange on which registered |
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Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
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If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐
As of August 13, 2023, there were
TABLE OF CONTENTS
PART I. FINANCIAL INFORMATION |
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ITEM 1. |
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Condensed consolidated balance sheets as of June 30, 2023 (unaudited) and December 31, 2022 |
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Notes to condensed consolidated financial statements (unaudited) |
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8-29 |
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ITEM 2. |
Management’s Discussion and Analysis of Financial Condition and Results of Operations |
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30-38 |
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ITEM 3. |
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ITEM 4. |
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PART II. OTHER INFORMATION |
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ITEM 1. |
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ITEM 1A. |
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ITEM 2. |
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ITEM 3. |
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ITEM 4. |
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ITEM 5. |
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ITEM 6. |
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44 |
PART I – FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
BIOSIG TECHNOLOGIES, INC. |
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CONDENSED CONSOLIDATED BALANCE SHEETS |
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(In Thousands, Except Par Value and Share Amounts) |
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June 30, |
December 31, |
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2023 |
2022 |
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(unaudited) |
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ASSETS |
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Current assets: |
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Cash |
$ | $ | ||||||
Accounts receivable |
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Employee advance |
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Inventory, short term |
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Net investment in leases, short term |
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Prepaid expenses and vendor deposits |
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Total current assets |
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Property and equipment, net |
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Right-to-use assets, net |
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Other assets: |
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Inventory, long term |
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Net investment in leases, long term |
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Patents, net |
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Other assets |
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Total assets |
$ | $ | ||||||
LIABILITIES AND EQUITY |
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Current liabilities: |
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Accounts payable and accrued expenses, including $ |
$ | $ | ||||||
Deferred revenue, short term |
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Dividends payable |
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Lease liability, short term |
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Total current liabilities |
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Lease liability, long term |
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Total long term liabilities |
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Total liabilities |
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Commitments and contingencies (Note 11) |
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Series C 9% Convertible Preferred Stock, $0.001 par value, $1,000 stated value, authorized 4,200 shares, |
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Equity: |
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Preferred stock, $ |
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Common stock, $ |
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Additional paid in capital |
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Accumulated deficit |
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Total stockholders' equity attributable to BioSig Technologies, Inc. |
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Non controlling interest |
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Total equity |
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Total liabilities and equity |
$ | $ |
The accompanying notes are an integral part of these unaudited Condensed Consolidated Financial Statements.
BIOSIG TECHNOLOGIES, INC. |
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CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS |
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(In Thousands, Except Par Value and Share Amounts) |
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(unaudited) |
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Three months ended June 30, |
Six months ended June 30, |
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2023 |
2022 |
2023 |
2022 |
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Revenue: |
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Service |
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Total revenue |
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Operating expenses: |
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Research and development |
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General and administrative |
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Depreciation and amortization |
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Total operating expenses |
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Loss from operations |
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Other income (expense): |
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Interest income, net |
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Other income (expense), net: |
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Loss before income taxes |
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Income taxes (benefit) |
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Net loss |
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Non-controlling interest |
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Net loss attributable to BioSig Technologies, Inc. |
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Preferred stock dividend |
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Preferred stock deemed dividend |
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NET LOSS ATTRIBUTABLE TO COMMON SHAREHOLDERS |
$ | ( |
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Net loss per common share, basic and diluted |
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Weighted average number of common shares outstanding, basic and diluted |
The accompanying notes are an integral part of these unaudited Condensed Consolidated Financial Statements.
BIOSIG TECHNOLOGIES, INC. |
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CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY |
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THREE AND SIX MONTHS ENDED JUNE 30, 2023 |
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(In Thousands, Except Par Value and Share Amounts) |
Additional |
Non- | |||||||||||||||||||||||
Common stock |
Paid in |
Accumulated |
controlling |
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Shares |
Amount |
Capital |
Deficit |
Interest |
Total |
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Balance, December 31, 2022 |
$ | $ | $ | ( |
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Common stock issued for services |
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Common stock issued in settlement of accounts payable |
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Sale of common stock and warrants, net transactional costs of $ |
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Stock based compensation |
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Preferred stock dividend |
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Net loss |
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Balance, March 31, 2023 (unaudited) |
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Common stock issued for services |
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Sale of common stock and warrants, net transactional costs of $ |
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Sale of subsidiary stock |
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Common stock issued for exercise of warrants cashlessly |
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Stock based compensation |
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Preferred stock dividend |
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Net loss |
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Balance, June 30, 2023 (unaudited) |
$ | $ | $ | ( |
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* - less than $1
The accompanying notes are an integral part of these unaudited Condensed Consolidated Financial Statements.
BIOSIG TECHNOLOGIES, INC. |
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CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY |
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THREE AND SIX MONTHS ENDED JUNE 30, 2022 |
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(In Thousands, Except Par Value and Share Amounts) |
Additional |
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Common stock |
Paid in |
Accumulated |
controlling |
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Shares |
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Capital |
Deficit |
Interest |
Total |
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Balance, December 31, 2021 |
$ | $ | $ | ( |
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Common stock issued for services |
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Change in fair value of modified options |
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Sale of common stock and warrants, net transactional costs of $ |
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Stock based compensation |
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Preferred stock dividend |
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Net loss |
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Balance, March 31, 2022 (unaudited) |
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Common stock issued for services |
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Sale of common stock under At-the-market offering, net of transaction expenses of $ |
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Sale of common stock, net of transactional costs of $ |
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Issuance of subsidiary stock in settlement of debt to parent |
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Stock based compensation |
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Accretion of deemed preferred stock dividend |
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Deemed preferred stock dividend |
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Preferred stock dividend |
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Net loss |
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Balance, June 30, 2022 (unaudited) |
$ | $ | $ | ( |
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* - less than $1
The accompanying notes are an integral part of these unaudited Condensed Consolidated Financial Statements.
BIOSIG TECHNOLOGIES, INC. |
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CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS |
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(In Thousands, Except Par Value and Share Amounts) |
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(unaudited) |
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Six months ended June 30, |
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2023 |
2022 |
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CASH FLOWS FROM OPERATING ACTIVITIES: |
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Net loss |
$ | ( |
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Adjustments to reconcile net loss to cash used in operating activities: |
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Depreciation and amortization |
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Non-cash lease expense |
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Non-cash inventory writedown |
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Equity based compensation |
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Change in fair value of modified options |
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Changes in operating assets and liabilities: |
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Accounts receivable |
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Lease receivables |
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Employee advances |
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Inventory |
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Prepaid expenses and other |
( |
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Deferred revenue |
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Accounts payable and accrued expenses |
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Operating lease liabilities |
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Net cash used in operating activities |
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CASH FLOWS FROM INVESTING ACTIVITIES: |
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Purchase of property and equipment |
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Net cash used in investing activity |
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CASH FLOWS FROM FINANCING ACTIVITIES: |
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Proceeds from sale of common stock and warrants, net of issuance costs |
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Proceeds from sale of common stock under a At-the-market offering, net of issuance costs |
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Proceeds from the sale of subsidiary stock to non-controlling interest, net of issuance costs |
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Net cash provided by financing activities |
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Net increase (decrease) in cash and cash equivalents |
( |
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Cash, beginning of the period |
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Cash, end of the period |
$ | $ | ||||||
Supplemental disclosures of cash flow information: |
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Cash paid during the period for interest |
$ | $ | ||||||
Cash paid during the period for income taxes |
$ | $ | ||||||
Non cash investing and financing activities: |
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Common stock issued in settlement of debt |
$ | $ | ||||||
Dividend payable on preferred stock charged to additional paid in capital |
$ | $ | ||||||
Series C convertible preferred stock deemed dividend |
$ | $ | ||||||
Record right-to-use assets and related lease liability |
$ | $ |
The accompanying notes are an integral part of these unaudited Condensed Consolidated Financial Statements.
BIOSIG TECHNOLOGIES, INC.
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
JUNE 30, 2023
(unaudited)
NOTE 1 – NATURE OF OPERATIONS AND BASIS OF PRESENTATION
Business and organization
BioSig Technologies, Inc. (“BioSig” or the “Company”) was initially incorporated on February 24, 2009 under the laws of the State of Nevada and subsequently re-incorporated in the state of Delaware in 2011. The Company is principally devoted to improving the standard care in electrophysiology with our PURE EP Platform’s enhanced signal acquisition, digital signal processing, and analysis during ablation of cardiac arrhythmias. The Company has generated minimal revenue to date and consequently its operations are subject to all risks inherent in business enterprises in early commercialization stage.
On November 7, 2018, the Company formed a subsidiary under the laws of the State of Delaware originally under the name of NeuroClear Technologies, Inc. which was renamed to ViralClear Pharmaceuticals, Inc. (“ViralClear”) in March 2020. The subsidiary was established to pursue additional applications of the PURE EP™ signal processing technology outside of cardiac electrophysiology, and subsequently in 2020, was repurposed to develop merimepodib, a broad-spectrum anti-viral agent that showed potential for the treatment of COVID-19. Since late 2020, ViralClear has been realigned with its original objective of pursuing additional applications of the PURE EP™ signal processing technology outside of cardiac electrophysiology.
As of June 30, 2023, the Company had a majority interest in ViralClear of
On July 2, 2020, the Company formed an additional subsidiary, NeuroClear Technologies, Inc., a Delaware corporation, which was renamed to BioSig AI Sciences, Inc. (“BioSig AI”) on May 31, 2023. The subsidiary was established to pursue clinical needs of cardiac and neurological disorders through recordings and analyses of action potentials. BioSig AI aims to contribute to the advancements of AI-based diagnoses and therapies. On June 30, 2023, BioSig AI sold
The unaudited condensed consolidated financial statements include the accounts of BioSig Technologies, Inc., and its majority owned subsidiaries, ViralClear and BioSig AI.
The unaudited condensed consolidated financial statements of the Company have been prepared in accordance with accounting principles generally accepted in the United States (“GAAP”) for interim financial information and the instructions to Form 10-Q and Rule 8-03 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by GAAP for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included.
The condensed consolidated balance sheet as of December 31, 2022 has been derived from audited financial statements.
Operating results for the three and six months ended June 30, 2023 are not necessarily indicative of results that may be expected for the year ending December 31, 2023. These unaudited condensed consolidated financial statements should be read in conjunction with the audited financial statements for the year ended December 31, 2022 filed with the Company’s Form 10-K with the Securities and Exchange Commission on March 31, 2023.
COVID-19
The World Health Organization determined that COVID-19 no longer fit the definition of a public health emergency and the U.S. government let the declaration of a public health emergency associated with COVID-19 expire on May 11, 2023. COVID-19 is expected to remain a serious endemic threat for an indefinite future period and may continue to adversely affect the global economy, resulting in delays to our commercialization objectives of the PURE EP Platform during 2023.
BIOSIG TECHNOLOGIES, INC.
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
JUNE 30, 2023
(unaudited)
Inflation Reduction Act of 2022
On August 16, 2022, the U.S. government enacted the Inflation Reduction Act of 2022 that includes, among other provisions, changes to the U.S. corporate income tax system, including a fifteen percent minimum tax based on "adjusted financial statement income," which is effective for tax years beginning after December 31, 2022, and a one percent excise tax on net repurchases of stock after December 31, 2022. The Company evaluated the Inflation Reduction Act and its requirements, as well as its application to our business, and determined the Inflation Reduction Act to not have a material impact on our financial results.
NOTE 2 – GOING CONCERN AND MANAGEMENT’S LIQUIDITY PLANS
As of June 30, 2023, the Company had cash of $
The Company’s primary source of operating funds since inception has been cash proceeds from the sale of common and preferred stock. The Company has experienced net losses and negative cash flows from operations since inception and expects these conditions to continue for the foreseeable future.
The Company’s plans include the continued commercialization of the PURE EP Platform and other applications of our core technology and raising capital through the sale of additional equity securities, debt or capital inflows from strategic partnerships. The Company’s strategic shift from a focus on technology development to commercialization will allow the Company to significantly reduce operating expenses.
The Company will require additional financing to fund future operations. Further, although the Company began commercial operations, there is no assurance that the Company will be able to generate sufficient cash flow to fund operations. In addition, there can be no assurance that the Company’s continuing research and development will be successfully completed or that any additional products will be commercially viable.
Accordingly, the accompanying unaudited condensed consolidated financial statements have been prepared in conformity with U.S. GAAP, which contemplates continuation of the Company as a going concern and the realization of assets and satisfaction of liabilities in the normal course of business. The carrying amounts of assets and liabilities presented in the unaudited condensed consolidated financial statements do not necessarily purport to represent realizable or settlement values. The unaudited condensed consolidated financial statements do not include any adjustment that might result from the outcome of this uncertainty.
NOTE 3 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Use of Estimates
The preparation of these unaudited condensed consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Significant estimates include the recoverability and useful lives of long-lived assets, stock-based compensation and the valuation allowance related to deferred tax assets. Actual results may differ from these estimates.
Revenue Recognition
The Company derives its revenue primarily from the sale and lease of its medical device, the PURE EP™ Platform, and well as related support and maintenance services and software upgrades in connection with the device.
The Company recognizes revenue in accordance with Accounting Standards Codification (ASC) 842, Leases (“ASC 842”) for lease components and ASC 606, Revenue from Contracts with Customers (“ASC 606”) for non-lease components. For medical device sales, the Company recognize revenue under ASC 606.
BIOSIG TECHNOLOGIES, INC.
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
JUNE 30, 2023
(unaudited)
The core principle of ASC 606 is that an entity recognizes revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services.
Under ASC 606, the Company determines revenue recognition through the following five steps:
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Identify the contract with the customer; |
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Identify the performance obligations in the contract; |
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Determine the transaction price; |
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Allocate the transaction price to the performance obligation in the contract; and |
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Recognize revenue when, or as, the performance obligations are satisfied. |
Performance obligations are the units of accounting for revenue recognition and generally represent the distinct goods or services that are promised to the customer. If the Company determines that it has not satisfied a performance obligation, it will defer recognition of the revenue until the performance obligation is deemed to be satisfied. Once the PURE EP Platform is delivered, installed, and accepted by the customer, our performance obligation is recognized. Support, maintenance, and software upgrades are performance obligations over a defined period and are recognized ratably over the contractual service period. Customers typically purchase these services with the initial sale of the PURE EP Platform and do not have the right to terminate their contracts unless we fail to perform material obligations.
The Company may execute more than one contract with a single customer. If so, it is evaluated whether the agreements were negotiated as a package with a single objective, whether the amount of consideration to be paid in one agreement depends on the price and/or performance of another agreement, or whether the goods or services promised in the agreements represent a single performance obligation. The conclusions reached can impact the allocation of the transaction price to each performance obligation and the timing of revenue recognition related to those arrangements.
The Company records accounts receivable for amounts invoiced to customers for which the Company has an unconditional right to consideration as provided under the contractual arrangement. Unbilled receivables, if any, include amounts related to the Company’s contractual right to consideration for completed performance obligations not yet invoiced. Deferred revenue includes payments received in advance of performance under the contract. Our unbilled receivables and deferred revenue are reported on an individual contract basis at the end of each reporting period. Unbilled receivables are classified as current or noncurrent based on the timing of when we expect to bill the customer. Deferred revenue is classified as current or noncurrent based on the timing of when we expect to recognize revenue.
The Company’s unconditional right to consideration for goods and services transferred to the customer is included in accounts receivable, net (if any) in the Company’s consolidated balance sheet.
In 2022, the Company entered
The Company determined the leases meet the criteria of a sales-type lease whereby the present value of the future expected revenue (less the present value of the estimated unguaranteed residual value), cost of sales and profit and loss are recognized at the lease inception. Non-lease components are recognized under ASC 606. The discount rate utilized was the contract explicit rate of
A reconciliation of contract liabilities with customers for the six months ended June 30, 2023 and 2022, are presented below:
BIOSIG TECHNOLOGIES, INC.
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
JUNE 30, 2023
(unaudited)
Six months ended June 30, 2023:
Balance at December 31, 2022 (000’s) |
Consideration Received (000’s) |
Recognized in Revenue (000’s) |
Balance at June 30, 2023 (000’s) |
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Service revenue |
$ | $ | $ | ( |
) |
$ |
Six months ended June 30, 2022:
Balance at December 31, 2021 (000’s) |
Consideration Received (000’s) |
Recognized in Revenue (000’s) |
Balance at June 30, 2022 (000’s) |
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Service revenue |
$ | $ | $ | ( |
) |
$ |
June 30, 2023 (000’s) |
December 31, 2022 (000’s) |
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Deferred revenue-current |
$ | $ | ||||||
Deferred revenue-noncurrent |
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Total deferred revenue |
$ | $ |
The Company had one customer which accounts for
At June 30, 2023, the Company had three customers representing
At December 31, 2022, the Company had two customers representing
The Company utilized one contract manufacturer for the manufacture and supply of the PURE EP Platform for the three and six months ended June 30, 2023 and 2022.
Cost of Revenue
Cost of revenue consists primarily of the delivered cost of our medical device(s) sold or leased under a sales-type lease.
Allowance for Doubtful Accounts
The Company adjusts accounts receivable down to net realizable value with its allowance methodology. In determining the allowance for doubtful accounts for estimated losses, aged receivables are analyzed periodically by management. Each identified receivable is reviewed based upon historical collection experience, financial condition of the customer and the status of any open or unresolved issues with the customer preventing the payment thereof. Corrective action, if necessary, is taken by the Company to resolve open issues related to unpaid receivables. The allowance for doubtful accounts was $
BIOSIG TECHNOLOGIES, INC.
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
JUNE 30, 2023
(unaudited)
Concentrations of Credit Risk
Financial instruments and related items, which potentially subject the Company to concentrations of credit risk, consist primarily of cash and cash equivalents. The Company places its cash and temporary cash investments with credit quality institutions. At times, such amounts may be in excess of the FDIC insurance limit. At June 30, 2023 and December 31, 2022, deposits in excess of FDIC limits were $
Fair Value of Financial Instruments
Accounting Standards Codification subtopic 825-10, Financial Instruments (“ASC 825-10”) requires disclosure of the fair value of certain financial instruments. The carrying value of cash, accounts payable and accrued liabilities as reflected in the balance sheets, approximate fair value because of the short-term maturity of these instruments. All other significant financial assets, financial liabilities and equity instruments of the Company are either recognized or disclosed in the financial statements together with other information relevant for making a reasonable assessment of future cash flows, interest rate risk and credit risk. Where practicable the fair values of financial assets and financial liabilities have been determined and disclosed; otherwise only available information pertinent to fair value has been disclosed.
The Company follows Accounting Standards Codification subtopic 820-10, Fair Value Measurements and Disclosures (“ASC 820-10”) and ASC 825-10, which permits entities to choose to measure many financial instruments and certain other items at fair value.
Inventory
June 30, 2023 (000’s) |
December 31, 2022 (000’s) |
|||||||
Finished goods |
$ | $ | ||||||
Less: Inventory reserve |
( |
) |
- | |||||
Finished goods, net |
||||||||
Finished goods-short term |
||||||||
Finished goods-long term |
$ | $ |
During the six months ended June 30, 2023, the Company recorded an allowance for inventory for $
Prepaid Expenses and Vendor Deposits
Prepaid expenses and vendor deposits are comprised of prepaid insurance, operating expenses and other prepayments.
Leases (lessee)
The Company determines if a contractual arrangement is a lease at inception. Operating leases are included in operating lease right-of-use (“ROU”) assets, current operating lease liabilities, and noncurrent operating lease liabilities on the Company’s consolidated balance sheet. The Company evaluates and classifies leases as operating or finance leases for financial reporting purposes. The classification evaluation begins at the commencement date and the lease term used in the evaluation includes the non-cancellable period for which the Company has the right to use the underlying asset, together with renewal option periods when the exercise of the renewal option is reasonably certain and failure to exercise such option which result in an economic penalty. All the Company’s real estate leases are classified as operating leases. ROU assets represent the Company’s right to use an underlying asset for the lease term and lease liabilities represent the Company’s obligation to make lease payments arising from the lease. Operating lease ROU assets and liabilities are recognized at the commencement date of the lease based on the present value of lease payments over the lease term.
BIOSIG TECHNOLOGIES, INC.
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
JUNE 30, 2023
(unaudited)
The lease payments included in the present value are fixed lease payments. As most of the Company’s leases do not provide an implicit rate, the Company estimates its collateralized incremental borrowing rate, based on information available at the commencement date, in determining the present value of lease payments. The Company applies the portfolio approach in applying discount rates to its classes of leases. The operating lease ROU assets include any payments made before the commencement date. Lease expense for lease payments is recognized on a straight-line basis over the lease term. The Company does not currently have subleases. The Company does not currently have residual value guarantees or restrictive covenants in its leases.
Leases (lessor)
The Company classifies contractual lease arrangements entered as a lessor as a sales-type, direct financing or operating lease as described in ASC 842-Leases. For sales-type leases, the Company derecognizes the leased asset and recognizes the lease investment on the balance sheet.
Property and Equipment
Property and equipment are stated at cost and depreciated using the straight-line method over their estimated useful lives of
Other Assets:
June 30, 2023 (000’s) |
December 31, 2022 (000’s) |
|||||||
Vendor deposits |
$ | $ | ||||||
Security deposits |
||||||||
Trademarks |
||||||||
Total other assets |
$ | $ |
Impairment of Long-lived Assets
The Company recognizes an impairment of long-lived assets used in operations, other than goodwill, when events or circumstances indicate that the asset might be impaired and the estimated undiscounted cash flows to be generated by those assets over their remaining lives are less than the carrying amount of those items. The net carrying value of assets not recoverable is reduced to fair value, which is typically calculated using the discounted cash flow method. The Company did not recognize and record any impairments of long-lived assets used in operations during the three and six months ended June 30, 2023 and 2022.
Research and Development Costs
The Company accounts for research and development costs in accordance with the Accounting Standards Codification subtopic 730-10, Research and Development (“ASC 730-10”). Under ASC 730-10, all research and development costs must be charged to expense as incurred. Accordingly, internal research and development costs are expensed as incurred. Third-party research and developments costs are expensed when the contracted work has been performed or as milestone results have been achieved. Company-sponsored research and development costs related to both present and future products are expensed in the period incurred. The Company incurred research and development expenses of $
BIOSIG TECHNOLOGIES, INC.
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
JUNE 30, 2023
(unaudited)
Net Income (loss) Per Common Share
The Company computes earnings (loss) per share under Accounting Standards Codification subtopic 260-10, Earnings Per Share (“ASC 260-10”). Net loss per common share is computed by dividing net loss by the weighted average number of shares of common stock outstanding during the period. Diluted earnings per share, if presented, would include the dilution that would occur upon the exercise or conversion of all potentially dilutive securities into common stock using the “treasury stock” and/or “if converted” methods as applicable.
The computation of basic and diluted loss per share as of June 30, 2023 and 2022 excludes potentially dilutive securities when their inclusion would be anti-dilutive, or if their exercise prices were greater than the average market price of the common stock during the period.
June 30, 2023 |
June 30, 2022 |
|||||||
Series C convertible preferred stock |
||||||||
Options to purchase common stock |
||||||||
Warrants to purchase common stock |
||||||||
Restricted stock units to acquire common stock |
||||||||
Totals |
Stock Based Compensation
The Company measures the cost of services received in exchange for an award of equity instruments based on the fair value of the award as measured on the grant date. The fair value amount is then recognized over the period during which services are required to be provided in exchange for the award, usually the vesting period.
Income Taxes
The Company follows Accounting Standards Codification subtopic 740-10, Income Taxes (“ASC 740-10”) for recording the provision for income taxes. Deferred tax assets and liabilities are computed based upon the difference between the financial statement and income tax basis of assets and liabilities using the enacted marginal tax rate applicable when the related asset or liability is expected to be realized or settled. Deferred income tax expenses or benefits are based on the changes in the asset or liability during each period. If available evidence suggests that it is more likely than not that some portion or all of the deferred tax assets will not be realized, a valuation allowance is required to reduce the deferred tax assets to the amount that is more likely than not to be realized. Future changes in such valuation allowance are included in the provision for deferred income taxes in the period of change. Deferred income taxes may arise from temporary differences resulting from income and expense items reported for financial accounting and tax purposes in different periods.
Patents, Net
The Company capitalizes certain initial asset costs in connection with patent applications including registration, documentation and other professional fees associated with the application. Patent costs incurred prior to the Company’s U.S. Food and Drug Administration (“FDA”) 510(k) application on March 28, 2018 were charged to research and development expense as incurred. Commencing upon first in-man trials on February 18 and 19, 2019, capitalized costs are amortized to expense using the straight-line method over the lesser of the legal patent term or the estimated life of the product of
BIOSIG TECHNOLOGIES, INC.
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
JUNE 30, 2023
(unaudited)
Warranty
The Company generally warrants its products to be free from material defects and to conform to material specifications for a period of up to two (2) years. Warranty expense is estimated based primarily on historical experience and is reflected in the consolidated financial statements.
Segment Information
Operating segments are identified as components of an enterprise about which separate discrete financial information is available for evaluation by the chief operating decision maker, or decision-making group, in making decisions how to allocate resources and assess performance. The information disclosed herein represents all of the material financial information related to the Company’s principal operating segments. (See Note 12 – Segment Reporting).
Non-controlling Interest
The Company’s non-controlling interest represents the non-controlling shareholders ownership interests related to the Company’s subsidiaries, ViralClear and BioSig AI. The Company reports its non-controlling interest in subsidiaries as a separate component of equity in the unaudited condensed consolidated balance sheets and reports both net loss attributable to the non-controlling interest and net loss attributable to the Company’s common shareholders on the face of the unaudited condensed consolidated statements of operations. The Company’s equity interest in ViralClear and BioSig AI is
Warrants
The Company accounts for stock warrants as either equity instruments, derivative liabilities, or liabilities in accordance with ASC 480, Distinguishing Liabilities from Equity (ASC 480), and ASC 815, Derivatives and Hedging (ASC 815), depending on the specific terms of the warrant agreement.
Recent Accounting Pronouncements
In June 2016, the FASB issued ASU 2016-13, Financial Instruments-Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments (“ASU 2016-13”), which requires the measurement and recognition of expected credit losses for financial assets held at amortized cost. ASU 2016-13 replaces the existing incurred loss impairment model with an expected loss model that requires the use of forward-looking information to calculate credit loss estimates. It also eliminates the concept of other-than-temporary impairment and requires credit losses on available-for-sale debt securities to be recorded through an allowance for credit losses instead of as a reduction in the amortized cost basis of the securities. ASU 2016-13 was effective for annual periods, and interim periods within those annual periods, beginning after December 15, 2019. On January 1, 2023, the Company adopted ASU 2016-13. The adoption did not have a material impact on the Company’s financial position, results of operations or cash flows.
There were various updates recently issued, most of which represented technical corrections to the accounting literature or application to specific industries and are not expected to a have a material impact on the Company’s financial position, results of operations or cash flows.
BIOSIG TECHNOLOGIES, INC.
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
JUNE 30, 2023
(unaudited)
NOTE 4 – PROPERTY AND EQUIPMENT
June 30, 2023 (000’s) |
December 31, 2022 (000’s) |
|||||||
Computer equipment |
$ | $ | ||||||
Furniture and fixtures |
||||||||
Manufacturing equipment |
||||||||
Testing/Demo equipment |
||||||||
Leasehold improvements |
||||||||
Total |
||||||||
Less accumulated depreciation |
( |
) |
( |
) |
||||
Property and equipment, net |
$ | $ |
Property and equipment are stated at cost and depreciated using the straight-line method over their estimated useful lives of
Depreciation expenses were $
NOTE 5 – RIGHT TO USE ASSETS AND LEASE LIABILITY
As of June 30, 2023 and December 31, 2022, the Company had outstanding
June 30, 2023 (000’s) |
December 31, 2022 (000’s) |
|||||||
Right to use asset |
$ | $ | ||||||
Less accumulated amortization |
( |
) |
( |
) |
||||
Right to use assets, net |
$ | $ |
During the three and six months ended June 30, 2023, the Company recorded $
June 30, 2023 (000’s) |
December 31, 2022 (000’s) |
|||||||
Total lease liability |
$ | $ | ||||||
Less: short term portion |
( |
) |
( |
) |
||||
Long term portion |
$ | $ |
BIOSIG TECHNOLOGIES, INC.
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
JUNE 30, 2023
(unaudited)
Year ended December 31, 2023 |
$ | |||
Year ended December 31, 2024 |
||||
Year ended December 31, 2025 |
||||
Total |
||||
Less: Present value discount |
( |
) |
||
Lease liability |
$ |
June 30, 2023 (000’s) |
June 30, 2022 (000’s) |
|||||||
Operating lease expense |
$ | $ | ||||||
Short-term lease expense |
||||||||
Variable lease expense |
||||||||
Total |
$ | $ |
Lease expense for the six months ended June 30, 2023 and 2022 was comprised of the following:
June 30, 2023 (000’s) |
June 30, 2022 (000’s) |
|||||||
Operating lease expense |
$ | $ | ||||||
Short-term lease expense |
||||||||
Variable lease expense |
||||||||
Total |
$ | $ |
NOTE 6 – LEASE RECEIVABLES
In 2022, the Company entered into two leases for our PURE EP Platform at a rate of $
The Company determined the leases meet the criteria of a sales-type lease whereby the present value of the future expected revenue (less the present value of the estimated unguaranteed residual value), cost of sales and profit and loss are recognized at the lease inception. The discount rate utilized was the contract explicit rate of
Six months ended June 30, 2023:
Balance at December 31, 2022 (000’s) |
Recognized in Revenue (000’s) |
Invoiced to Customer (000’s) |
Interest Earned (000’s) |
Unguaranteed Residual Assets (000’s) |
Balance at June 30, 2023 (000’s) |
|||||||||||||||||||
Contract asset |
$ | $ | $ | ( |
) |
$ | $ | $ | ||||||||||||||||
Less current portion |
( |
) |
( |
) |
( |
) |
||||||||||||||||||
Noncurrent portion |
$ | $ | $ | ( |
) |
$ | $ |
BIOSIG TECHNOLOGIES, INC.
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
JUNE 30, 2023
(unaudited)
Year ended December 31, 2023 |
$ | |||
Year ended December 31, 2024 |
||||
Year ended December 31, 2025 |
||||
Present value of unguaranteed residual assets |
||||
Total |
||||
Less: Present value discount |
( |
) |
||
Net investment in leases |
$ |
NOTE 7 – ACCOUNTS PAYABLE AND ACCRUED EXPENSES
June 30, 2023 (000’s) |
December 31, 2022 (000’s) |
|||||||
Accrued accounting and legal |
$ | $ | ||||||
Accrued reimbursements and travel |
||||||||
Accrued consulting |
||||||||
Accrued research and development expenses |
||||||||
Accrued product and equipment purchases |
||||||||
Accrued marketing |
||||||||
Accrued office and other |
||||||||
Accrued payroll |
||||||||
Accrued settlement related to arbitration |
||||||||
$ | $ |
NOTE 8 – STOCKHOLDERS’ EQUITY
Preferred stock
The Company is authorized to issue
Series C Preferred Stock
As of June 30, 2023 and December 31, 2022, the Company had
Common stock
The Company is authorized to issue
During the six months ended June 30, 2023, the Company issued an aggregate of
BIOSIG TECHNOLOGIES, INC.
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
JUNE 30, 2023
(unaudited)
During the six months ended June 30, 2023, the Company issued an aggregate of
During the six months ended June 30, 2023, the Company issued an aggregate of
At June 30, 2023, the Company accrued board fees of $
Equity sales:
BioSig Technologies, Inc.:
From January through May 2023, the Company entered into multiple Securities Purchase Agreements with certain institutional and accredited investors, pursuant to which the Company sold to the investors an aggregate of
Pursuant to certain engagement agreements, dated October 11, 2022 and February 24, 2023 the Company had entered into with Laidlaw & Company (UK) Ltd. (“Laidlaw”), the Company issued to Laidlaw in connection with the 2023 PIPEs, warrants to purchase an aggregate of
BioSig AI Sciences, Inc.:
On June 30, 2023, BioSig AI sold
Pursuant to an engagement agreement, dated June 13, 2023, as amended on July 19, 2023, BioSig AI entered into with Laidlaw, BioSig AI issued to Laidlaw to purchase an aggregate of
NOTE 9 – OPTIONS, RESTRICTED STOCK UNITS AND WARRANTS
BioSig Technologies, Inc.
2023 Long-Term Incentive Plan
On December 27, 2022, the Board of Directors of BioSig (the “Board”) approved the 2023 Long-Term Incentive Plan (the “Plan”) and on February 7, 2023 it was approved by the Company’s shareholders. The Plan provides for the issuance of options, stock appreciation rights, restricted stock, restricted stock units, performance awards, dividend equivalent rights, other awards, performance goals, and tandem awards which may be granted singly or in combination, or in tandem, to purchase up to
However,
BIOSIG TECHNOLOGIES, INC.
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
JUNE 30, 2023
(unaudited)
Additionally, the vesting period of the grants under the Plan will be determined by the Administrator, in its sole discretion, with an expiration period of not more than
Options
Option valuation models require the input of highly subjective assumptions. The fair value of stock-based payment awards was estimated using the Black-Scholes option model with a volatility figure derived from historical stock prices of the Company. The Company accounts for the expected life of options using the based on the contractual life of options for non-employees.
For employees, the Company accounts for the expected life of options in accordance with the “simplified” method, which is used for “plain-vanilla” options, as defined in the accounting standards codification. The risk-free interest rate was determined from the implied yields of U.S. Treasury zero-coupon bonds with a remaining life consistent with the expected term of the options.
During the six months ended June 30, 2023, the Company granted an aggregate of
|
Options Outstanding |
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Options Exercisable |
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Average |
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Exercisable |
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Exercise |
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Number of |
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Options |
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Shares |
Weighted-Average Exercise Price |
Weighted-Average Remaining Contractual Term |
Aggregate Intrinsic Value |
|||||||||||||
Outstanding at December 31, 2022 |
$ | $ | ||||||||||||||
Grants |
$ | $ | - | |||||||||||||
Forfeited/expired |
( |
) |
$ | |||||||||||||
Outstanding at June 30, 2023 |
$ | $ | ||||||||||||||
Exercisable at June 30, 2023 |
$ | $ |
The aggregate intrinsic value in the preceding tables represents the total pretax intrinsic value, based on options with an exercise price less than the stock price of BioSig of $
BIOSIG TECHNOLOGIES, INC.
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
JUNE 30, 2023
(unaudited)
During the six months ended June 30, 2023, the Company granted an aggregate of 1,217,500 options to purchase the Company’s common stock at a weighted average exercise price of $
Risk-free interest rate |
% |
|||
Dividend yield |
% |
|||
Stock price volatility |
% |
|||
Expected life |
|
|||
Weighted average grant date fair value |
$ |
The fair value of all options vesting during the three and six months ended June 30, 2023 of $
Warrants
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Exercise |
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Number |
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Expiration |
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Price |
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Outstanding |
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During the six months ended June 30, 2023, the Company issued warrants to purchase an aggregate of 5,545,603 shares of its common stock to investors and warrants to purchase
During the six months ended June 30, 2023, the Company issued
BIOSIG TECHNOLOGIES, INC.
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
JUNE 30, 2023
(unaudited)
Shares |
Weighted-Average Exercise Price |
Weighted-Average Remaining Contractual Term |
Aggregate Intrinsic Value |
|||||||||||||
Outstanding at December 31, 2022 |
$ | $ | ||||||||||||||
Issued |
$ | - | ||||||||||||||
Exercised |
( |
) |
$ | - | - | |||||||||||
Outstanding at June 30, 2023 |
$ | $ | ||||||||||||||
Vested and expected to vest at June 30, 2023 |
$ | $ | ||||||||||||||
Exercisable at June 30, 2023 |
$ | $ |
The aggregate intrinsic value in the preceding tables represents the total pretax intrinsic value, based on options with an exercise price less than the company’s stock price of $
Restricted Stock Units
Restricted shares issued as of January 1, 2023 |
||||
Granted |
||||
Vested and issued |
( |
) |
||
Vested restricted shares as of June 30, 2023 |
||||
Unvested restricted shares as of June 30, 2023 |
On January 29, 2023, in connection with a separation agreement, the Company granted
On March 27, 2023, the Company granted an aggregate of
On June 26, 2023, the Company granted an aggregate of
Stock based compensation expense related to restricted stock grants was $
ViralClear Pharmaceuticals, Inc.
2019 Long-Term Incentive Plan
On September 24, 2019, ViralClear’s Board of Directors approved the 2019 Long-Term Incentive Plan (as subsequently amended, the “ViralClear Plan”). The ViralClear Plan was approved by BioSig as ViralClear’s majority stockholder. The ViralClear Plan provides for the issuance of options, stock appreciation rights, restricted stock and restricted stock units to purchase up to
BIOSIG TECHNOLOGIES, INC.
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
JUNE 30, 2023
(unaudited)
However,
Additionally, the vesting period of the grants under the ViralClear Plan will be determined by the Administrator, in its sole discretion, with an expiration period of not more than
ViralClear Options
The following table presents information related to stock options at June 30, 2023:
Options Outstanding |
|
|
Options Exercisable |
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Average |
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Exercisable |
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Exercise |
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Number of |
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Remaining Life |
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Number of |
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||||
Price |
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Options |
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In Years |
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Options |
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||||
$ |
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The fair value of all options vesting during the three and six months ended June 30, 2023 of $
Warrants (ViralClear)
|
Exercise |
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Restricted stock units (ViralClear)
The following table summarizes the restricted stock activity for the six months ended June 30, 2023:
Total restricted shares outstanding at June 30, 2023: |
||||
Comprised of: |
||||
Vested restricted shares as of June 30, 2023 |
||||
Unvested restricted shares as of June 30, 2023 |
||||
Total |
Stock based compensation expense related to restricted stock unit grants of ViralClear was $
BIOSIG TECHNOLOGIES, INC.
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
JUNE 30, 2023
(unaudited)
BioSig AI Sciences, Inc.
Warrants (BioSig AI)
The following table summarizes information with respect to outstanding warrants to purchase common stock of BioSig AI at June 30, 2023:
|
Exercise |
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Number |
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Expiration |
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Price |
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Outstanding |
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Date |
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$ |
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On June 30, 2023, the BioSig AI issued warrants to purchase an aggregate of
A summary of the warrant activity for the six months ended June 30, 2023 is as follows:
Shares |
Weighted-Average Exercise Price |
Weighted-Average Remaining Contractual Term |
||||||||||
Outstanding at December 31, 2022 |
- | - | ||||||||||
Issued |
$ | |||||||||||
Outstanding at June 30, 2023 |
$ | |||||||||||
Vested and expected to vest at June 30, 2023 |
$ | |||||||||||
Exercisable at June 30, 2023 |
$ |
NOTE 10 – NON-CONTROLLING INTEREST
On November 7, 2018, the Company formed a subsidiary, now known as ViralClear, to pursue additional applications of the PURE EP™ signal processing technology outside of cardiac electrophysiology, and subsequently in 2020, was repurposed to develop merimepodib, a broad-spectrum anti-viral agent that showed potential for the treatment of COVID-19. Since late 2020, ViralClear has been realigned with its original objective of pursuing additional applications of the PURE EP™ signal processing technology outside of cardiac electrophysiology.
As of June 30, 2023 and December 31, 2022, the Company had a majority interest in ViralClear of
On July 2, 2020, the Company formed an additional subsidiary, now known as BioSig AI Sciences, Inc., to pursue clinical needs of cardiac and neurological disorders through recordings and analyses of action potential. BioSig AI aims to contribute to the advancements of AI-based diagnoses therapies. On June 30, 2023, BioSig AI sold
As June 30, 2023 and December 31, 2022, the Company had a majority interest in BioSig AI of
A reconciliation of ViralClear Pharmaceuticals, Inc. and BioSig AI Sciences, Inc. non-controlling loss attributable to the Company:
BIOSIG TECHNOLOGIES, INC.
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
JUNE 30, 2023
(unaudited)
ViralClear Pharmaceuticals, Inc. (000’s) |
BioSig AI Sciences, Inc. (000’s) |
Total (000’s) |
||||||||||
Net Loss |
$ | ( |
) |
$ | ( |
) |
$ | ( |
) |
|||
Average Non-Controlling interest percentage of profit/losses |
% |
% |
% |
|||||||||
Net loss attributable to non-controlling interest |
$ | ( |
) | $ | $ | ( |
) |
ViralClear Pharmaceuticals, Inc. (000’s) |
BioSig AI Sciences, Inc. (000’s) |
Total (000’s) |
||||||||||
Net Income (loss) |
$ | $ | ( |
) |
$ | |||||||
Average Non-Controlling interest percentage of profit/losses |
% |
% |
% |
|||||||||
Net loss attributable to non-controlling interest |
$ | $ | $ |
ViralClear Pharmaceuticals, Inc. (000’s) |
BioSig AI Sciences, Inc. (000’s) |
Total (000’s) |
||||||||||
Net Loss |
$ | ( |
) |
$ | ( |
) |
$ | ( |
) |
|||
Average Non-Controlling interest percentage of profit/losses |
% |
% |
% |
|||||||||
Net loss attributable to non-controlling interest |
$ | ( |
) | $ | $ | ( |
) |
ViralClear Pharmaceuticals, Inc. (000’s) |
BioSig AI Sciences, Inc. (000’s) |
Total (000’s) |
||||||||||
Net Loss |
$ | ( |
) |
$ | ( |
) |
$ | ( |
) |
|||
Average Non-Controlling interest percentage of profit/losses |
% |
% |
% |
|||||||||
Net loss attributable to non-controlling interest |
$ | ( |
) | $ | $ | ( |
) |
ViralClear Pharmaceuticals, Inc. (000’s) |
BioSig AI Sciences, Inc. (000’s) |
Total (000’s) |
||||||||||
Balance, January 1, 2023 |
$ | ( |
) |
$ | $ | ( |
) |
|||||
Allocation of equity to non-controlling interest due to sale of subsidiary stock |
||||||||||||
Allocation of equity to non-controlling interest due to equity-based compensation issued |
||||||||||||
Net loss attributable to non-controlling interest |
$ | ( |
) | $ | $ | ( |
) |
|||||
Balance, June 30, 2023 |
$ | ( |
) |
$ | $ |
BIOSIG TECHNOLOGIES, INC.
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
JUNE 30, 2023
(unaudited)
NOTE 11 – COMMITMENTS AND CONTINGENCIES
Licensing agreements
Master Services Agreement
On January 1, 2022, the Company entered into a master services agreement with Access Strategy Partners Incorporated (“ASPI”) whereby ASPI will provide commercial executives assigned with specific customer targets and develop sales and marketing plans that are mutually agreed to between ASPI and the Company and assist in their execution. The agreement expires two years from the effective date, with an additional one year extension option.
The Company is obligated to pay ASPI: i) a monthly service fee of $
2017 Know-How License Agreement
On March 15, 2017, the Company entered into a know-how license agreement with Mayo Foundation for Medical Education and Research whereby the Company was granted an exclusive license, with the right to sublicense, certain know how and patent applications in the field of signal processing, physiologic recording, electrophysiology recording, electrophysiology software and autonomics to develop, make and offer for sale. The agreement expires in
The Company is obligated to pay to Mayo Foundation a
Patent and Know-How License Agreement – EP Software Agreement
On November 20, 2019, the Company entered into a patent and know-how license agreement (the “EP Software Agreement”) with Mayo Foundation for Medical Education and Research (“Mayo”). The EP Software Agreement grants to the Company an exclusive worldwide license, with the right to sublicense, within the field of electrophysiology software and under certain patent rights as described in the EP Software Agreement (the “Patent Rights”), to make, have made, use, offer for sale, sell and import licensed products and a non-exclusive license to the Company to use the research and development information, materials, technical data, unpatented inventions, trade secrets, know-how and supportive information of Mayo to develop, make, have made, use, offer for sale, sell, and import licensed products. The EP Software Agreement will expire upon the later of either (a) the expiration of the Patent Rights or (b) the 10th anniversary of the date of the first commercial sale of a licensed product, unless earlier terminated by Mayo for the Company’s failure to cure a material breach of the EP Software Agreement, the Company’s or a sublicensee’s commencement of any action or proceedings against Mayo or its affiliates other than for an uncured material breach of the EP Software Agreement by Mayo, or insolvency of the Company.
In connection with the EP Software Agreement, the Company agreed to make earned royalty payments to Mayo in connection with the Company’s sales of the licensed products to third parties and sublicense income received by the Company and to make milestone payments of up to $
Amended and Restated Patent and Know-How License Agreement – Tools Agreement
On November 20, 2019, the Company entered into an amended and restated patent and know-how license agreement (the “Tools Agreement”) with Mayo. The Tools Agreement contains terms of license grant substantially identical to the EP Software Agreement, although it is for different patent rights and covers the field of electrophysiology systems. In June 2021, patent rights were issued (“Valid Claim”) as defined whereby the Company paid milestone one of $
BIOSIG TECHNOLOGIES, INC.
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
JUNE 30, 2023
(unaudited)
In connection with the Tools Agreement, the Company agreed to pay Mayo an upfront consideration of $
ViralClear Patent and Know-How License Agreement
On November 20, 2019, the Company’s majority-owned subsidiary, ViralClear, entered into a patent and know-how license agreement (the “ViralClear Agreement”) with Mayo. The ViralClear Agreement contains terms of license grant substantially identical to the EP Software Agreement and the Tools Agreement, although it is for different patent rights and covers the field of stimulation and electroporation for hypotension/syncope management, renal and non-renal denervation for hypertension treatment, and for use in treatment of arrhythmias in the autonomic nervous system.
In connection with the ViralClear Agreement, ViralClear agreed to make earned royalty payments to Mayo in connection with ViralClear’s sales of the licensed products to third parties and sublicense income received by the Company and to make milestone payments of up to $
Trek Therapeutics, PBC
In the event of sublicensing, sale, transfer, assignment or similar transaction, ViralClear agreed to pay Trek
As part of the acquired assets, ViralClear received an assignment and licensing rights agreement from Trek with a third-party vendor regarding certain formulas and compounds usage. The agreement calls for milestone payments upon marketing authorization (as amended and defined with respect of product in a particular jurisdiction in the territory, the receipt of all approvals from the relevant regulatory authority necessary to market and sell such product in any such jurisdiction, excluding any pricing approval or reimbursement authorization) in any first and second country of $10 million and $5 million, respectively, in addition to 6% royalty payments. At June 30, 2023 and December 31, 2022, accounts payable due under the contract was $
BioSig AI Sciences, Inc. – Consulting Agreement
On June 17, 2023, BioSig AI entered into an agreement with Reified Labs LLC (“Reified”) whereby Reified will work with the BioSig AI to develop datasets for the purpose of creating a foundational artificial intelligence platform. The agreement has a one-year term from the effective date and automatically renews for successive
BioSig AI is obligated to pay Reified a monthly consulting fee of $
Defined Contribution Plan
Effective January 1, 2019, the Company established a qualified defined contribution plan (the “401(k) Plan”) pursuant to Section 401(k) of the Code, whereby all eligible employees may participate. Participants may elect to defer a percentage of their annual pretax compensation to the 401(k) plan, subject to defined limitations. The Company is required to make contributions to the 401(k) Plan equal to 3 percent of each participant’s eligible compensation, subject to limitations under the Code. For the three and six months ended June 30, 2023, the Company charged operations $
Purchase commitments
As of June 30, 2023, the Company had aggregate purchase commitments of approximately $
BIOSIG TECHNOLOGIES, INC.
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
JUNE 30, 2023
(unaudited)
Litigation
The Company is subject at times to other legal proceedings and claims, which arise in the ordinary course of its business. Although occasional adverse decisions or settlements may occur, the Company believes that the final disposition of such matters should not have a material adverse effect on its financial position, results of operations or liquidity.
NOTE 12 – SEGMENT REPORTING
In accordance with ASC 280-10, the Company reports segment information based on the “management” approach. The management approach designates the internal reporting used by management for making decisions and assessing performance as the source of the Company’s reportable segments. The Company has three reportable segments: BioSig Technologies, Inc. (parent), BioSig AI Sciences, Inc.. and ViralClear Pharmaceuticals, Inc.
Three Months Ended June 30, 2023 (000's) |
Three Months Ended June 30, 2022 (000's) |