BioSig Technologies(BSGM) - 2025 Q2 - Quarterly Report

PART I. FINANCIAL INFORMATION This section presents the company's unaudited financial statements and management's discussion for the quarter ended June 30, 2025 Financial Statements This section presents the unaudited consolidated financial statements for Q2 2025, reflecting the Streamex acquisition's impact Condensed Consolidated Balance Sheet Highlights (in thousands) | Account | June 30, 2025 | December 31, 2024 | Change | | :--- | :--- | :--- | :--- | | Assets | | | | | Cash | $2,820 | $142 | +$2,678 | | Total current assets | $3,001 | $344 | +$2,657 | | Intangible assets, net | $47,917 | $269 | +$47,648 | | Goodwill | $58,692 | $0 | +$58,692 | | Total assets | $109,721 | $842 | +$108,879 | | Liabilities & Equity | | | | | Accounts payable and accrued expenses | $7,572 | $2,052 | +$5,520 | | Derivative liability | $105,498 | $0 | +$105,498 | | Total liabilities | $113,200 | $2,264 | +$110,936 | | Total stockholders' deficit | ($3,584) | ($1,527) | -$2,057 | Condensed Consolidated Statements of Operations Highlights (in thousands, except per share data) | Metric | Q2 2025 | Q2 2024 | YTD 2025 | YTD 2024 | | :--- | :--- | :--- | :--- | :--- | | Revenue | $0 | $13 | $0 | $27 | | Research and development | $19 | $342 | $25 | $580 | | General and administrative | $19,792 | $4,914 | $22,748 | $7,796 | | Loss from operations | ($20,365) | ($5,292) | ($23,350) | ($8,729) | | Net loss attributable to BioSig | ($20,372) | ($3,915) | ($23,185) | ($7,317) | | Net loss per share | ($0.74) | ($0.30) | ($0.95) | ($0.65) | Condensed Consolidated Statements of Cash Flows Highlights (Six Months Ended June 30, in thousands) | Cash Flow Category | 2025 | 2024 | | :--- | :--- | :--- | | Net cash used in operating activities | ($2,393) | ($2,795) | | Net cash provided by investing activities | $366 | $0 | | Net cash provided by financing activities | $4,700 | $4,709 | | Net increase in cash | $2,678 | $1,914 | Note 1: Nature of Operations BioSig Technologies diversified its medical device operations by acquiring Streamex Exchange Corporation, a software company - The company's core business is its PURE EP™ platform, an advanced digital signal processing technology for electrophysiologists treating cardiovascular arrhythmias[19][20] - On May 28, 2025, BioSig completed the acquisition of Streamex Exchange Corporation, a software company building digital tools for commodity trading and finance[21] - BioSig holds majority ownership in subsidiaries ViralClear Pharmaceuticals, Inc. (69.74%) and BioSig AI Sciences, Inc. (84.5%) as of June 30, 2025[23][24] Note 2: Going Concern and Management's Liquidity Plans The company's financial condition raises substantial doubt about its ability to continue as a going concern due to liquidity - As of June 30, 2025, the company had $2.8 million in cash and a working capital deficit of $110 million, with net cash used in operations of $2.4 million for the first six months of the year[27] - These conditions create a liquidity concern and raise substantial doubt about the company's ability to continue as a going concern[27] - The company has historically funded operations through equity and debt issuance and expects to require additional financing for the foreseeable future[28][29] Note 13: Business Acquisition BioSig acquired Streamex Exchange Corporation for $105.7 million, recognizing significant goodwill and intangible assets - The acquisition of Streamex was completed on May 28, 2025, with the goal of expanding into digital commodity trading and blockchain-based financial technologies[163][166] Preliminary Purchase Price Allocation (in thousands) | Account | Amount | | :--- | :--- | | Assets Acquired | | | Cash | $366 | | Trade name | $5,100 | | Developed technology | $40,000 | | Legal and compliance framework | $2,400 | | Goodwill | $57,847 | | Other assets | $47 | | Total assets acquired | $105,760 | | Liabilities Assumed | | | Accounts payable and accrued expenses | ($262) | | Net assets acquired | $105,498 | - The company incurred $7.1 million in acquisition-related costs, which were expensed in the period and included legal, accounting, consulting, and finder's fees[169][172] Note 17: Subsequent Events Post-quarter, BioSig secured significant financing, including a $100M debenture and a $1B equity agreement - On July 7, 2025, the company entered into a purchase agreement for up to $100 million in senior secured convertible debentures with Yorkville[214][215] - Also on July 7, 2025, the company entered into a Standby Equity Purchase Agreement (SEPA) allowing it to sell up to $1 billion of its common stock over a 36-month period[216] - On August 15, 2025, the company completed a public offering of common stock, generating gross proceeds of approximately $15.0 million[221] Management's Discussion and Analysis of Financial Condition and Results of Operations Management discusses business transformation and financial results, highlighting increased net loss and liquidity Business Overview The company's business now focuses on its PURE EP™ Platform and the newly acquired Streamex digital asset platform - The company's strategic focus has expanded to include digital infrastructure for tokenizing and exchanging real-world assets (RWAs) through the acquisition of Streamex, which is currently pre-revenue and in the development stage[229][230] - In its medical device segment, BioSig has shifted focus from commercial hardware distribution to the R&D of proprietary software algorithms, aiming to improve pulsed field ablation (PFA) outcomes[228] Results of Operations Q2 2025 revenue was zero, with net loss increasing to $20.4 million due to acquisition-related G&A expenses Comparison of Operating Results (Three Months Ended June 30, in thousands) | Expense Category | 2025 | 2024 | Change (%) | | :--- | :--- | :--- | :--- | | Revenue | $0 | $13 | -100% | | Research and Development | $19 | $342 | -94% | | General and Administrative | $19,792 | $4,914 | +303% | | Net Loss Attributable to Common Shareholders | $20,374 | $3,918 | +420% | - The surge in G&A expenses was mainly due to costs associated with the Streamex acquisition, including $12.1 million in stock-based compensation and a $6.0 million finder's fee[235] - R&D expenses fell sharply as the company prioritized efforts and resources toward closing the Streamex acquisition, temporarily pausing or scaling back certain R&D initiatives[234] Liquidity and Capital Resources and Going Concern The company faces significant liquidity challenges with a $110M working capital deficit, necessitating additional financing - As of June 30, 2025, the company had a working capital deficit of $110 million and insufficient cash to fund operations for the next 12 months, raising substantial doubt about its ability to continue as a going concern[253][255] - Management's plan to address liquidity includes exploring equity offerings, strategic partnerships, and debt financing[257][258] - Post-quarter financing activities include a potential $100 million convertible debenture, a $1 billion standby equity purchase agreement (SEPA), and a completed public offering in August 2025 that raised approximately $13.62 million in net proceeds[260][270] Critical Accounting Estimates Management identifies critical accounting estimates for derivative liability valuation and preliminary purchase price allocation - Valuation of Exchangeable Shares (Derivative Liability): The fair value is estimated using a discounted cash flow (DCF) model with significant unobservable (Level 3) inputs, making it highly sensitive to assumptions about Streamex's future performance and the outcome of a required shareholder vote[274][275][277] - Purchase Price Allocation (PPA) for Streamex Acquisition: The allocation of the purchase price to intangible assets and goodwill is preliminary and involves significant judgment. It uses Level 3 valuation techniques and is subject to change, which could materially impact goodwill and future amortization expense[278][279][280] Quantitative and Qualitative Disclosures about Market Risk As a smaller reporting company, BioSig Technologies, Inc. is exempt from these market risk disclosures - The company is exempt from this disclosure requirement due to its status as a smaller reporting company[282] Controls and Procedures Management concluded disclosure controls were ineffective due to material weaknesses in internal financial reporting controls - Management concluded that disclosure controls and procedures are not effective at a reasonable assurance level[283] - Material weaknesses were identified in internal controls related to: (i) stock-based compensation, (ii) period-end financial reporting review, (iii) segregation of duties, and (iv) accounting for business combinations[286] - Management intends to implement a remediation plan in 2025, which includes adding sufficient staff and oversight to provide adequate accounting segregation[289] PART II. OTHER INFORMATION This section details legal proceedings, risk factors, unregistered equity sales, and exhibits, supplementing financial information Legal Proceedings No material changes occurred in legal proceedings during the quarter, with no expected material adverse financial impact - No material changes in legal proceedings occurred during the quarter ended June 30, 2025[294] Risk Factors Investors should review risk factors detailed in the company's previously filed 10-K, 8-K/A, and Schedule 14A - The company refers to risk factors detailed in its 10-K, a recent 8-K/A, and a Schedule 14A filing for a comprehensive understanding of potential risks[295] Unregistered Sales of Equity Securities, Use of Proceeds, and Issuer Purchases of Equity Securities The company issued common stock in unregistered transactions for services, RSU vesting, and warrant exercises - On April 24, 2025, the company issued 2,750,000 shares of common stock to consultants for services[297] - On May 28, 2025, 1,062,500 shares were issued to the company's former CEO, Anthony Amato, upon the vesting of RSUs[297] - The company also issued numerous smaller tranches of stock throughout the quarter for RSU vesting and cashless warrant exercises[297] Exhibits Key exhibits include the Streamex Share Purchase Agreement and officer certifications required by Sarbanes-Oxley Act - Key exhibits filed include the Share Purchase Agreement with Streamex Exchange Corporation and related transaction documents[301] - Certifications from the Chief Executive Officer and Chief Financial Officer pursuant to Sections 302 and 906 of the Sarbanes-Oxley Act are also included as exhibits[301]