BioSig Technologies(BSGM) - 2019 Q3 - Quarterly Report

PART I. FINANCIAL INFORMATION This section presents the company's unaudited condensed consolidated financial information, including statements and management's discussion and analysis Financial Statements This section presents the unaudited condensed consolidated financial statements for BioSig Technologies, Inc. as of September 30, 2019, and for the three and nine-month periods then ended Condensed Consolidated Balance Sheets This section provides a snapshot of the company's financial position, detailing assets, liabilities, and equity as of September 30, 2019, and December 31, 2018 Balance Sheet Highlights | Balance Sheet Highlights | Sep 30, 2019 (unaudited) | Dec 31, 2018 | | :--- | :--- | :--- | | Assets | | | | Cash | $12,308,578 | $4,450,160 | | Total current assets | $12,882,521 | $4,628,602 | | Total assets | $14,221,328 | $4,996,832 | | Liabilities & Equity | | | | Total current liabilities | $1,213,402 | $1,197,563 | | Total liabilities | $1,588,569 | $1,197,563 | | Total stockholders' equity | $12,417,759 | $3,324,269 | Condensed Consolidated Statements of Operations This section details the company's financial performance, including research and development, general and administrative expenses, and net loss for the three and nine months ended September 30, 2019 and 2018 Operating Results (unaudited) | Operating Results (unaudited) | Three Months Ended Sep 30, 2019 | Three Months Ended Sep 30, 2018 | Nine Months Ended Sep 30, 2019 | Nine Months Ended Sep 30, 2018 | | :--- | :--- | :--- | :--- | :--- | | Research and development | $1,643,659 | $744,173 | $4,950,457 | $3,056,101 | | General and administrative | $3,841,189 | $2,405,722 | $14,380,898 | $8,492,070 | | Loss from operations | ($5,503,358) | ($3,152,872) | ($19,367,779) | ($11,556,977) | | Net loss | ($5,464,004) | ($3,150,929) | ($19,283,156) | ($11,554,686) | | Net loss per common share | ($0.25) | ($0.22) | ($0.96) | ($0.89) | Condensed Consolidated Statements of Cash Flows This section outlines the company's cash inflows and outflows from operating, investing, and financing activities for the nine months ended September 30, 2019 and 2018 Cash Flow Summary (unaudited) | Cash Flow Summary (unaudited) | Nine Months Ended Sep 30, 2019 | Nine Months Ended Sep 30, 2018 | | :--- | :--- | :--- | | Net cash used in operating activities | ($11,581,686) | ($7,286,321) | | Net cash used in investing activities | ($194,888) | ($250,370) | | Net cash provided by financing activities | $19,634,992 | $13,268,632 | | Net increase in cash | $7,858,418 | $5,731,941 | | Cash, end of period | $12,308,578 | $7,279,520 | Notes to Condensed Consolidated Financial Statements This section provides detailed explanations of the company's accounting policies and financial results, covering operations, going concern, equity, stock-based compensation, leases, and related party transactions - The company is a pre-revenue entity focused on improving cardiac recordings, having formed NeuroClear Technologies, Inc. in November 2018 for broader technology applications[32][33] - Substantial doubt exists regarding the company's going concern ability due to recurring net losses and negative cash flows, despite holding $12.3 million in cash as of September 30, 2019, with management projecting sufficiency for at least the next 10 months[38] - The company adopted ASC 842 on January 1, 2019, recognizing approximately $419,000 in ROU assets and $422,000 in lease liabilities[61][65] - During the first nine months of 2019, NeuroClear, an 89.8% majority-owned subsidiary, sold 739,000 shares for $3.7 million in net proceeds[98][119] Management's Discussion and Analysis of Financial Condition and Results of Operations Management provides an overview of the business, a detailed analysis of operating results, and a discussion of liquidity and capital resources, highlighting increased losses and going concern risk Business Overview BioSig is a pre-commercial medical device company developing its PURE EP™ System for cardiac catheter ablation, with its subsidiary NeuroClear focusing on electroneurogram recordings - The company's initial product, the PURE EP System, a signal processing technology for cardiac catheter ablation, received FDA 510(k) clearance in August 2018[140][141] - First-in-human clinical cases for the PURE EP™ System began in February 2019, demonstrating improved signal detection and fidelity[146] - The company is pursuing ISO and MDSAP certification by Q1 2020 and a CE Mark by Q2 2020 to enable international expansion[158] - Subsidiary NeuroClear Technologies, Inc. is developing technology for electroneurogram (ENG) recordings, utilizing the core PURE EP™ signal processing platform[162][163] Results of Operations The company reported no revenue, with significant increases in R&D and G&A expenses leading to substantial net losses for both the three and nine-month periods ended September 30, 2019 Expense Comparison (Three Months Ended Sep 30) | Expense Comparison (Three Months Ended Sep 30) | 2019 | 2018 | Change (%) | | :--- | :--- | :--- | :--- | | Research & Development | $1,643,659 | $744,173 | +120.9% | | General & Administrative | $3,841,189 | $2,405,722 | +59.7% | | Net Loss | ($5,448,343) | ($3,345,362) | +62.8% | Expense Comparison (Nine Months Ended Sep 30) | Expense Comparison (Nine Months Ended Sep 30) | 2019 | 2018 | Change (%) | | :--- | :--- | :--- | :--- | | Research & Development | $4,950,457 | $3,056,101 | +62.0% | | General & Administrative | $14,380,898 | $8,492,070 | +69.3% | | Net Loss | ($19,282,904) | ($12,335,032) | +56.3% | - The rise in R&D expenses was primarily driven by increased personnel, research studies, design work, and stock-based compensation as the company progresses towards commercialization[167][183] - The increase in G&A expenses resulted from higher payroll, performance pay, increased stock-based compensation, and professional and consulting fees[172][185] Liquidity and Capital Resources The company's liquidity is characterized by $12.3 million in cash and $11.7 million in working capital as of September 30, 2019, with management acknowledging substantial doubt about going concern and the need for additional funding - As of September 30, 2019, the company held $12.3 million in cash and $11.7 million in working capital[195] - For the nine months ended September 30, 2019, net cash used in operations was $11.6 million, offset by $19.6 million in net cash provided by financing activities from stock sales and warrant/option exercises[195][196][198] - The independent auditor expressed substantial doubt about the company's going concern ability due to recurring net losses and negative cash flows[201] - Management projects a need for an additional $4 million to fund operations for the next 12 months, necessitating further fundraising efforts[204] Quantitative and Qualitative Disclosures about Market Risk This disclosure is not required as the company qualifies as a "smaller reporting company" - This disclosure is not required for the company as it qualifies as a "smaller reporting company"[218] Controls and Procedures Management concluded the company's disclosure controls and procedures were effective, with recent enhancements to internal controls over financial reporting - The CEO and CFO affirmed the effectiveness of the company's disclosure controls and procedures as of September 30, 2019[218] - During Q3 2019, the company enhanced internal controls by hiring a controller and upgrading financial systems to improve segregation of duties and oversight[219] PART II. OTHER INFORMATION This section provides additional information including legal proceedings, risk factors, equity sales, other corporate updates, and a list of exhibits Legal Proceedings The company reported no legal proceedings during the period - No legal proceedings were reported[222] Risk Factors This disclosure is not required as the company qualifies as a "smaller reporting company" - This disclosure is not required for the company as it qualifies as a "smaller reporting company"[223] Unregistered Sales of Equity Securities and Use of Proceeds The company's subsidiary, NeuroClear Technologies, Inc., completed an unregistered private placement of 739,000 shares for $3.7 million in net proceeds - From August 5 to September 5, 2019, subsidiary NeuroClear Technologies, Inc. sold 739,000 shares of its common stock at $5.00 per share, raising an aggregate of $3.7 million[223] - The sale constituted an unregistered private placement to accredited investors, exempt under Section 4(a)(2) and Regulation D of the Securities Act[224] Other Information The Board of Directors approved an amendment to the company's bylaws regarding the term of office for elected directors - On October 17, 2019, the company amended its bylaws concerning the term of office for elected directors[227] Exhibits This section lists all exhibits filed with the Form 10-Q, including corporate governance documents, material contracts, and certifications