美國
證券交易委員會 及交易所
華盛頓特區，20549
表單
（馬克 一）
| 根據1934年證券交易法的第13或15(d)條款，季報。 |
截至年度季度結束
| 根據1934年證券交易法第13或15(d)條的過渡報告 |
在 過渡期從至
委員會
檔案編號：
(根據公司章程所述的註冊人的正確名稱)
(州 或其他成立的管轄區域 或 組織) |
（國稅局雇主 識別號碼） | |
| (主要行政辦公室地址) | （郵政編碼） |
（申報人的電話號碼，包括區號）
根據該法案第12(b)條紀錄的證券：
| 每個類別的標題 | 交易標誌 | 在哪個交易所上市的名字 | ||
| N/A | N/A | N/A |
勾選表示公司已按照證券交易法第13或15(d)條款的規定，在過去12個月（或公司需要提交此類報告的較短期限內）提交了所有所需的報告；並且公司在過去90天內一直受到此類提交報告的要求。
請勾選，指出在過去12個月內（或更短時間並應提供此類文件的情況下），申報人是否已依據Regulation S-t（本章節之§232.405號）提交每一個所需提交的互動式數據文件。
請以勾選的方式表明登記者是大型加速報告者、加速報告者、非加速報告者、較小的報告公司或新興成長公司。請參閱《交易所法》第120億2條中對「大型加速報告者」、「加速報告者」、「較小的報告公司」和「新興成長公司」的定義。
| 大型及加速提交者 | ☐ | 加速提交者 | ☐ |
| ☒ | 較小的報告公司 | ||
| 新興成長型公司 |
如果 新興成長公司，以勾號標示註冊人是否選擇不使用延長過渡期來遵守 根據《外匯法》第 13 (a) 條提供的任何新或修訂的財務會計準則。☐
請勾選是否登記者為外殼公司（依照交易所法規120億2的定義）。是 ☐ 否
截至2024年11月14日，已發行並流通的有 美元每股面值的 的流通股。
目錄
| 第一部分 財務資訊 | |||
| 項目 1. | 財務報表 | ||
| 2024年9月30日（未經審核）及2023年12月31日的總賬 | 3 | ||
| 2024年9月30日及2023年（未經審核）的綜合損益表 | 4 | ||
| 2024年9月30日的股東權益變動簡明綜合報表（未經審核） | 5 | ||
| 2023年9月30日的股東權益變動簡明綜合報表（未經審核） | 6 | ||
| 2024年9月30日及2023年的現金流量總表（未經審核） | 7 | ||
| 基本報表附註 （未經審核） | 8-29 | ||
| 項目2。 | 管理層對財務狀況和經營成果的討論與分析 | 30-37 | |
| 項目3。 | 有關市場風險的定量和定性披露 | 38 | |
| 項目4。 | 控制項和程序 | 38 | |
| 部分 II. 其他信息 | |||
| 項目 1. | 法律訴訟 | 40 | |
| 項目 1A。 | 風險因素 | 41 | |
| 項目 2. | 未註冊 出售股權、資金用途和發行人購買股權 | 42 | |
| 項目 3. | 高級證券的違約 | 42 | |
| 項目 4. | 礦山安全披露 | 42 | |
| 項目5。 | 其他資訊 | 42 | |
| 項目6。 | 展品 | 43 | |
| 簽名 | 44 | ||
| 2 |
第一部分 – 財務信息
項目 1. 基本報表
BIOSIG TECHNOLOGIES, INC.
簡明合併資產負債表
(以千為單位，除面值及股份數量外)
| 九月 30, | 十二月 31日, | |||||||
| 2024 | 2023 | |||||||
| （未經審核） | ||||||||
| 資產 | ||||||||
| 流動資產: | ||||||||
| 現金 | $ | $ | ||||||
| 應收賬款 | ||||||||
| 員工預支 | ||||||||
| 租賃之淨投資，短期 | ||||||||
| 預付費用及供應商 存款 | ||||||||
| 流動資產總額 | ||||||||
| 不動產及設備，淨額 | ||||||||
| 使用權資產，淨額 | ||||||||
| 其他資產： | ||||||||
| 租賃之淨投資，長期 | ||||||||
| 專利資產，淨額 | ||||||||
| 其他資產 | ||||||||
| 總資產 | $ | $ | ||||||
| 負債及權益（赤字） | ||||||||
| 流動負債： | ||||||||
| 應付賬款和應計費用，包括
資產 | $ | $ | ||||||
| 客戶存款 | ||||||||
| 分紅派息應付款 | ||||||||
| 租賃負債，短期 | ||||||||
| 流動負債總額 | ||||||||
| 長期負債: | ||||||||
| 租賃負債，長期 | ||||||||
| 總長期負債 | ||||||||
| 總負債 | ||||||||
| 承諾及不確定事項（附註12） | ||||||||
| 第C系列9％可轉換優先股，擁有已發行並流通的股份; 每股面額為$ 每股面值$ 授權發行及流通中的股票數為 股， 擁有$的清算優先權 | ||||||||
| 赤字 | ||||||||
| 優先股，面額$0.01，授權股數為5,000,000股，發行且流通股數為截至2024年6月30日和2023年12月31日之184,668,188股和181,364,180股。 par value, authorized 指定股份 A系列股份, B系列股份, C系列股份, D系列股份, E系列股份, F優先股份. 2024年9月30日和2023年12月31日（見上文）未來發行的C系列股份。 | ||||||||
| 0.01 面額，授權 股份， 和 截至2024年9月30日和2023年12月31日，發行和流通數量分別為 | ||||||||
| 資本溢額 | ||||||||
| 累積虧損 | ( | ) | ( | ) | ||||
| 歸屬於BioSig Technologies, Inc.的股東總赤字。 | ( | ) | ( | ) | ||||
| 非控制權益 | ||||||||
| 總赤字 | ( | ) | ( | ) | ||||
| 負債及股東權益總計 | $ | $ | ||||||
這個 隨附的附註是這些未經審計的簡明合併財務報表的組成部分
| 3 |
BIOSIG TECHNOLOGIES, INC.
綜合損益表
(以千為單位，除面值及股份數量外)
（未經審核）
| 截至9月30日結束的三個月 | 截至9月30日結束的九個月 | |||||||||||||||
| 2024 | 2023 | 2024 | 2023 | |||||||||||||
| 營業收入: | ||||||||||||||||
| 服務 | $ | $ | $ | $ | ||||||||||||
| 總營業收入 | ||||||||||||||||
| 營運費用： | ||||||||||||||||
| 研發 | ||||||||||||||||
| 一般及行政費用 | ||||||||||||||||
| 長期資產減損 | ||||||||||||||||
| 折舊及攤銷 | ||||||||||||||||
| 營業費用總額 | ||||||||||||||||
| 營運虧損 | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| 其他收入（費用） | ||||||||||||||||
| 利息收益，淨額 | ( | ) | ||||||||||||||
| 結算盈利和賬款寬限額收益 | ||||||||||||||||
| 其他收入（費用）淨額： | ( | ) | ||||||||||||||
| 稅前損失 | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| 所得稅（益） | ||||||||||||||||
| 淨虧損 | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| 非控制權益 | ( | ) | ( | ) | ||||||||||||
| 歸屬於BioSig Technologies公司的淨虧損。 | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| 優先股股息 | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| 視同優先股股利。 | ( | ) | ( | ) | ||||||||||||
| 歸屬於普通股股東的淨虧損。 | ( | ) | $ | ( | ) | $ | ( | ) | $ | ( | ) | |||||
| 每股普通股基本和稀釋的淨虧損 | $ | ) | $ | ) | $ | ) | $ | ) | ||||||||
| 普通股流通的加權平均數，基本和稀釋 | ||||||||||||||||
附註是這些未經審核的簡明合併基本報表的組成部分
| 4 |
BIOSIG TECHNOLOGIES, INC.
濃縮 合併權益變動表
截至2024年9月30日結束的三個月及九個月
(以千為單位，除面值及股份數量外)
| 追加 | 非- | |||||||||||||||||||||||
| 普通股 | 支付 在 | 累積的 | 控制 | |||||||||||||||||||||
| 股份 | 金額 | 資本 | 赤字 | 利息 | 總計 | |||||||||||||||||||
| 2023年12月31日結餘 | $ | | $ | $ | ( | ) | $ | | $ | ( | ) | |||||||||||||
| 發行股票以支付服務 | ||||||||||||||||||||||||
| 出售普通股和warrants | * | |||||||||||||||||||||||
| 基於股票的補償 | * | ( | ) | ( | ) | |||||||||||||||||||
| 股息之權證增值 | - | |||||||||||||||||||||||
| 權證股息 | - | ( | ) | ( | ) | |||||||||||||||||||
| 優先股股息 | - | ( | ) | ( | ) | |||||||||||||||||||
| 淨虧損 | - | ( | ) | ( | ) | ( | ) | |||||||||||||||||
| 2024年3月31日結餘 （未經審核） | $ | $ | $ | ( | ) | $ | $ | ( | ) | |||||||||||||||
| 發行股票以支付服務 | * | |||||||||||||||||||||||
| 普通股和認股權淨交易成本的銷售 | ||||||||||||||||||||||||
| 以普通股交換應付票據本金和應計利息 | * | |||||||||||||||||||||||
| 普通股和認股權淨交易成本的銷售 | ||||||||||||||||||||||||
| 股票發行，以償還應付帳款。 | * | |||||||||||||||||||||||
| 基於股票的補償 | ||||||||||||||||||||||||
| 優先股股息 | - | ( | ) | ( | ) | |||||||||||||||||||
| 淨虧損 | - | ( | ) | ( | ) | |||||||||||||||||||
| 2024年6月30日結餘 （未經審核） | $ | $ | $ | ( | ) | $ | $ | |||||||||||||||||
| 基於股票的補償 | ||||||||||||||||||||||||
| 被視為的優先股股息累積增加。 | - | |||||||||||||||||||||||
| 視為優先股股息 | - | ( | ) | ( | ) | |||||||||||||||||||
| 優先股股息 | - | ( | ) | ( | ) | |||||||||||||||||||
| 淨虧損 | - | ( | ) | ( | ) | |||||||||||||||||||
| 截至2024年9月30日結餘 （未經審核） | $ | $ | $ | ( | ) | $ | $ | ( | ) | |||||||||||||||
| * |
附註是這些未經審核的簡明合併基本報表的組成部分
| 5 |
BIOSIG TECHNOLOGIES, INC.
濃縮 合併權益變動表
二零二三年九月三十日截至之三季及九個月
(以千為單位，除面值及股份數量外)
| 追加 | 非- | |||||||||||||||||||||||
| 普通股 | 支付 在 | 累積的 | 控制 | |||||||||||||||||||||
| 股份 | 金額 | 資本 | 赤字 | 利息 | 總計 | |||||||||||||||||||
| 2022年12月31日的結存 | $ | | $ | $ | ( | ) | $ | ( | ) | $ | ||||||||||||||
| 發行股票以支付服務 | * | |||||||||||||||||||||||
| 以普通股發行以抵償應付帳款 | * | |||||||||||||||||||||||
| 普通股和權證銷售，淨交易成本$ | ||||||||||||||||||||||||
| 基於股票的補償 | * | |||||||||||||||||||||||
| 優先股股息 | - | ( | ) | ( | ) | |||||||||||||||||||
| 淨虧損 | - | ( | ) | ( | ) | ( | ) | |||||||||||||||||
| 2023年3月31日資產負債表（未經稽核） | $ | $ | $ | ( | ) | $ | ( | ) | $ | |||||||||||||||
| 發行股票以支付服務 | * | |||||||||||||||||||||||
| 普通股及認股權證的銷售，扣除交易成本後
金額為$ | ||||||||||||||||||||||||
| 子公司股票的出售 | - | |||||||||||||||||||||||
| 發行普通股以行使認股權證 無需現款 | * | |||||||||||||||||||||||
| 基於股票的補償 | * | ( | ) | ( | ) | |||||||||||||||||||
| 優先股股息 | - | ( | ) | ( | ) | |||||||||||||||||||
| 淨虧損 | - | ( | ) | ( | ) | ( | ) | |||||||||||||||||
| 截至2023年6月30日的賬目平衡表（未經審核） | $ | $ | $ | ( | ) | $ | $ | |||||||||||||||||
| 發行股票以支付服務 | * | |||||||||||||||||||||||
| 普通股和認股權淨交易
成本的銷售 | * | |||||||||||||||||||||||
| 根據市場現價要約出售普通股，扣除交易成本後淨額$ | * | ( | ) | ( | ) | |||||||||||||||||||
| 出售子公司股份 | - | |||||||||||||||||||||||
| 基於股票的補償 | * | ( | ) | ( | ) | ( | ) | |||||||||||||||||
| 優先股股息 | - | ( | ) | ( | ) | |||||||||||||||||||
| 淨虧損 | - | ( | ) | ( | ) | |||||||||||||||||||
| 2023年9月30日結餘（未經查核） | $ | $ | $ | ( | ) | $ | $ | ( | ) | |||||||||||||||
| * |
附註是這些未經審核的簡明合併基本報表的組成部分
| 6 |
BIOSIG TECHNOLOGIES, INC.
綜合現金流量表
(以千為單位，除面值及股份數量外)
（未經審核）
| 截至9月30日結束的九個月 | ||||||||
| 2024 | 2023 | |||||||
| 營業活動之現金流量： | ||||||||
| 淨虧損 | $ | ( | ) | $ | ( | ) | ||
| 調整淨損失與使用現金之間的調節 於營運活動中： | ||||||||
| 折舊及攤銷 | ||||||||
| 非現金租賃費用 | ||||||||
| 非現金庫存減值 | ||||||||
| 長期資產減值 | ||||||||
| 結算盈利和賬款寬限額收益 | ||||||||
| 股本基礎補償 | ||||||||
| 營運資產和負債的變化： | ||||||||
| 應收賬款 | ( | ) | ( | ) | ||||
| 租賃應收款 | ||||||||
| 員工預付款項 | ( | ) | ||||||
| 存貨 | ( | ) | ||||||
| 預付費用和其他 | ( | ) | ||||||
| 延遲支出 | ( | ) | ||||||
| 透過收入 | ( | ) | ||||||
| 客戶存款 | ( | ) | ||||||
| 應付帳款和應計費用 | ( | ) | ||||||
| 營運 租賃負債 | ( | ) | ( | ) | ||||
| 營運活動中使用的淨現金 | ( | ) | ( | ) | ||||
| 投資活動產生的現金流量: | ||||||||
| 購置不動產及 設備 | ( | ) | ||||||
| 投資活動中使用的淨現金 | ( | ) | ||||||
| 融資活動產生的現金流量: | ||||||||
| 與關聯方票據發行所得 | ||||||||
| 普通股及warrants銷售所得， 扣除發行成本 | ||||||||
| 根據市場的普通股銷售所得， 扣除發行成本 | ( | ) | ||||||
| 向非控制性權益出售子公司股票所得， 扣除發行成本 | ||||||||
| 融資活動提供的凈現金 | ||||||||
| 現金及現金等價物淨增加 | ||||||||
| 期初現金 | ||||||||
| 期末現金 | $ | $ | ||||||
| 現金流資訊的補充揭示： | ||||||||
| 期間內支付的現金利息 | $ | $ | ||||||
| 期間內支付的現金所得稅 | $ | $ | ||||||
| 非現金投資和籌資活動： | ||||||||
| 發行的普通股用於結算應付帳款 | $ | $ | ||||||
| 發行的普通股用於結算應計遣散費 | $ | |||||||
| 應付股息 優先股列入額外繳入資本 | $ | $ | ||||||
| 系列C可轉換 優先股視為股息 | $ | $ | ||||||
| 普通股發行 用於支付應付票據及累積利息的轉換 | $ | $ | ||||||
附註是這些未經審核的簡明合併基本報表的組成部分
| 7 |
BIOSIG TECHNOLOGIES, INC.
附註 至簡化合併基本報表
2024年9月30日
（未經審核）
附註1 – 業務性質及報表依據
業務 及組織
BioSig Technologies, Inc. 最初於2009年2月24日根據內華達州的法律註冊成立，並於2011年在特拉華州重新註冊。該公司主要致力於通過我們的PURE EP系統在電生理學中改善標準護理，並提供增強的信號採集、數字信號處理及在心臟心律不整消融過程中的分析。至今該公司產生的營業收入有限，因此其業務運營面臨所有早期商業化階段企業所固有的風險。
2018年11月7日，公司根據特拉華州法律成立了一家子公司，最初名為NeuroClear Technologies，後來於2020年3月更名為ViralClear Pharmaceuticals, Inc.（“ViralClear”）。這家子公司成立是為了開發PURE EP™信號處理技術在心臟電生理學以外的其他應用，隨後在2020年，轉為開發merimepodib，一種廣效抗病毒劑，對治療COVID-19顯示潛力。 自2020年底以來，ViralClear已重新調整其原始目標，尋求在心臟電生理學以外追求PURE EP™信號處理技術的其他應用。
在
2019年和2020年，ViralClear共計向投資者出售了 股普通股，淨收益為$
2020年7月2日，公司成立了一家額外的子公司NeuroClear Technologies, Inc.，一家特拉華州的公司，於2023年5月31日更名為BioSig AI Sciences, Inc.（“BioSig AI”）。這家子公司成立的目的是通過動作電位的記錄和分析來追求心臟和神經系統疾病的臨床需求。BioSig AI旨在促進基於人工智能的診斷和治療的進步。截至2024年9月30日和2023年12月31日，公司對BioSig AI擁有絕大多數股權。
公司持續評估兩家子公司的機會。
2024年1月28日及2024年2月20日，公司管理層開始了旨在大幅減少年度現金燃燒的員工減少，該工作已於2024年2月20日完成。這次員工減少包括了十六位員工的離職，生效日期為2024年1月31日，其中包括公司首席營運官約翰·西克豪斯和公司首席商業官格雷·弗雷明，以及二十六位員工生效日期為2024年2月20日。員工減少的影響在短期內顯著減少了業務。為了員工減少，公司發行了合計 股普通股，其公平價值為$
2024年3月5日，公司收到了納斯達克上市資格部門（"工作人員"）發來的一封信，指出公司尚未恢復符合《納斯達克賬目規則》5550(a)(2)條款，因為公司的普通股未達到1美元的最低買盤價格要求。 每股價格不符合《納斯達克資本市場股份有限公司（“納斯達克”）持續上市所需的最低買價，且公司不符合《規則5810(c)(3)(A)(2)》下的第二180天補救期，因公司未達到納斯達克資本市場最低股東權益初次上市要求，因此，納斯達克將會摘牌公司的普通股，除非公司要求對這個決定提起上訴。
| 8 |
BIOSIG TECHNOLOGIES, INC.
附註 至簡化合併基本報表
九月 30, 2024
（未經審核）
信函進一步指出，公司不再符合維持列出證券最低市值為$的規定。
在2024年6月10日，公司收到了正式通知，納斯達克聽證會小組決定將公司的普通股從納斯達克退市，因為公司持續不符合納斯達克上市規則5550(b)(2)所訂的最低股東權益要求，因此不再符合繼續在納斯達克上市的資格。因此，公司的普通股將於2024年6月12日星期三開盤時在納斯達克停止交易。公司的普通股應符合於2024年6月12日星期三開盤時在場外交易市場的粉紅色當前資訊層下的標的“BSGM”進行交易的資格。根據納斯達克上市規則，公司對小組的決定提出了重新考慮的申請。
在2024年6月24日，公司收到納斯達克的通知，納斯達克聽證委員會拒絕重新考慮其於2024年6月10日做出的決定，即將公司的普通股自納斯達克退市（以下稱「退市決定」）。公司的證券於2024年6月12日開市時在納斯達克暫停交易，屆時公司的普通股可在場外交易市場的粉紅色當前資訊層進行交易。
二零二四年七月十日，公司向納斯達克上市及聽證審查委員會提交上訴以支持反上市決定。
於2024年7月23日，該公司開始在場外交易官方報價系統(OTCQB)交易其普通股，該系統由OTC市場集團公司運營。
2024年10月18日，公司收到了納斯達克上市和聽證會審查委員會的決定，允許公司在2025年3月7日之前獲得寬限期，以恢復符合納斯達克上市規則5550(b)(2)（稱為“MVLS規則”）的要求，該規則要求上市證券的市值至少為$
2024年10月21日，公司收到通知，其普通股將於2024年10月23日週三開市時，在納斯達克資本市場正式掛牌交易。
在 2024年10月24日，公司收到納斯達克上市資格（"納斯達克"）的通知信，告知公司基於從2024年6月11日至恢復日期2024年10月23日的公司普通股收盤買盤價格，公司未能達到納斯達克上市規則（"規則"）要求的最低買盤價格$ 每股。這導致公司不再符合該要求。然而，這些規則還為公司提供了180天的合規期，以便重新達到合規。
2024年11月13日，公司發布新聞稿宣佈其納斯達克買盤價合規。
未經審核的簡明合併基本報表包括BioSig Technologies, Inc.及其大部分持股子公司ViralClear和BioSig人工智能。
本公司未經審計的簡明合併基本報表是依據美國通用會計原則（"GAAP"）針對臨時財務資訊及10-Q表格的說明和S-X規則第8-03條準備的。因此，它們並不包括GAAP要求的完整基本報表所需的所有資訊和註腳。 管理層認為，所有被視為公平表達所需的調整（包括正常的經常性應計項目）均已包括在內。
截止2023年12月31日的縮減合併資產負債表來源於已審核的基本報表。
截至2024年9月30日的三個月和九個月的經營結果不一定能反映2024年12月31日結束的年度可能預期的結果。這些未經審核的簡明綜合基本報表應與截至2023年12月31日的經審核基本報表一同閱讀，該報表已於2024年4月16日提交給證券交易委員會的公司10-k表格中。
註記2 – 繼續營業和管理層的流動性計劃
截至2024年9月30日，公司現金為$
公司自成立以來的主要經營資金來源，主要來自於出售股權證券及發行債務所籌得的現金收入。公司自成立以來一直經歷淨虧損和營運現金流為負，並預期這些情況將在可預見的未來持續。
公司的計劃包括持續商業化PURE EP系統及我們核心科技的其他應用，並通過出售額外的股權證券、債務或來自策略夥伴關係的資本流入來籌集資金。公司的策略轉變可能會聘用一支額外4至6人的團隊，以執行尋找夥伴以商業化PURE EP的業務發展策略，開發脈衝場消融領域的新產品，並持續將PURE EP整合到當前的實驗室設備中，這將使公司能夠顯著降低營業費用。
公司將需要額外的融資來資助未來的運營。此外，盡管公司已開展商業運營，但無法保證公司將能夠產生足夠的現金流以資助運營。此外，無法保證公司持續的研究和開發將成功完成，或任何附加產品將具有商業可行性。
| 9 |
BIOSIG TECHNOLOGIES, INC.
附註 至簡化合併基本報表
九月 30, 2024
（未經審核）
因此， 隨附的未經審計的簡明合併基本報表已按照美國公認會計原則編製，這些原則 假設公司將持續經營，並在正常業務過程中實現資產和償還負債。合併基本報表中呈現的資產和負債的帳面金額不 一定代表可實現或結算的價值。合併基本報表不包含可能因這一不確定性結果而產生的任何 調整。
註記3 – 重要會計政策摘要
附帶的綜合基本報表中採用的重要會計政策摘要如下。
反向 股票合併
於2024年1月31日，公司向特拉華州國務卿提交了反向股票分割修正案，該修正案於2024年2月2日生效。根據反向股票分割修正案，公司實施了
使用估計值
根據GAAP準則，編製這些合併基本報表需要管理層進行估計和假設，這些估計和假設影響資產和負債的申報金額，披露合併基本報表日期時的條件資產和負債以及報告期間內的收入和支出金額。重要的估計包括長壽資產的回收能力和使用年限，股份報酬和與递延稅資產有關的估值準備金。實際結果可能與這些估計不同。
營業收入 認列
公司主要營業收入來自於銷售其器械PURE EP™系統，以及相關的支援、維護服務和軟體升級租賃。
公司根據會計準則編碼（ASC）842來確認營業收入， 租賃 （“ASC 842”）用於租賃元件和ASC 606， 客戶合同的營業收入 （“ASC 606”）用於非租賃元件。對於醫療設備銷售和軟體出租，公司根據ASC 606確認營業收入。
ASC 606的核心原則是，實體在向客戶轉讓承諾的商品或服務時，確認營業收入，以反映實體期望在交易所中獲得的報酬數額。
根據 ASC 606，公司通過以下五個步驟確定營業收入的確認：
| ● | 判斷與客戶的合約; |
| ● | 識別 合約中的履約義務； |
| ● | 判斷交易價格; |
| ● | 將 交易價格分配給合約中的履約義務； |
| ● | 當或在履行義務滿足時，確認 營業收入。 |
| 10 |
BIOSIG TECHNOLOGIES, INC.
附註 至簡化合併基本報表
九月 30, 2024
（未經審核）
履行義務是確認營收的會計單位，通常代表向客戶承諾的獨特商品或服務。如果公司確定未滿足一項履行義務，則將推遲承認收入，直到履行義務被視為滿足。一旦PURE EP平台被交付、安裝並被客戶接受，我們的履行義務即被確認。支援、維護和軟體升級租金是在一定期間內的履行義務，並且在合約服務期間內按比例確認。客戶通常在購買PURE EP平台時同時購買這些服務，並且在未履行重大義務的情況下並無權終止合約。
公司可以與單一客戶執行超過一份合同。 若有如此情況，就需要評估協議是否是作為一個套裝簽定，支付金額是否取決於另一份協議的價格和/或表現，或者協議中承諾的商品或服務是否代表一個單一履約義務。 得出的結論可能會影響將交易價格分配給每個履約義務的方式以及與這些安排相關的收入確認時間。
公司將已向客戶開具帳單並具有無條件收款權的金額記錄為應收帳款，符合合同安排。如有尚未開具帳單的已完工履行義務所涉金額，屬未開帳的應收帳款。逾期收到協議下履行前收取的金額，尚未實現營業收入。我們的未開帳應收帳款和逾期收到款將於每個報告期末按個別合同基礎報告。根據我們預計向客戶開具帳單的時間，未開帳應收帳款分為流動或非流動。根據我們預期認定營業收入的時間，逾期收到款分為流動或非流動。
公司對於轉移給客戶的商品和服務的無條件收款權利已包含在公司的綜合賬戶應收款淨額中（如有）在公司的合併資產負債表中。
在2022年，公司以每月$的價格，租賃了兩個PURE EP平台。
在 2023年，公司簽訂了一份為期一年的軟體升級租約。公司依據ASC 606來處理該租約。
公司確定這些租賃符合銷售類租賃的標準，其中未來預期營業收入的現值（減去估計的未保證殘值的現值）、銷售成本及損益在租賃開始時認列。非租賃元件根據ASC 606進行認列。使用的折現率為合同明確利率的
A 截至2024年9月30日及2023年9月30日的九個月內，與客戶的合同負債對帳，具體如下：
截至2024年9月30日的九個月:
餘額 在 十二月
三十一日， (000’s) | 收款 考量 (000’s) | 認列於營業收入 (000’s) | 餘額 在 九月 30, 2024 (000’s) | |||||||||||||
| 服務營收 | $ | $ | $ | ( | ) | $ | ||||||||||
| 11 |
BIOSIG TECHNOLOGIES, INC.
筆記 至簡明綜合財務報表
九月 30, 2024
（未經審核）
截至2023年9月30日的九個月：
餘額 在 十二月
31日， (000’s) | 收受 的代價 (000’s) | 已認列 在營業收入 (000’s) | 餘額 在 九月 30, 2023 (000’s) | |||||||||||||
| 服務營收 | $ | $ | $ | ( | ) | $ | ||||||||||
該公司在截至2024年和2023年9月30日為止的九個月中有一位客戶佔我們營業收入的
截至
2024年9月30日，本公司擁有三位客戶，分別代表
本公司於2024年和2023年9月30日結束的三個月和九個月內，利用一家合同製造商製造和供應PURE EP平台。
延遲 成本（合約簽訂成本）
公司將初期和續期的銷售佣金資本化，具體在佣金賺取的期間，通常是在客戶合約簽訂時發生，並將遞延佣金成本以直線法攤銷，攤銷期間我們認為是合約期限。作為一項實務上的便利，公司在發生時將銷售佣金計入費用，當相關的遞延佣金成本的攤銷期間為一年或更短時。
壞帳準備
公司根據其授信方法調整應收帳款至淨實現值。在決定懷疑帳戶的應收備抵金額時，管理層定期分析呆舊應收帳款的損失估計。根據客戶的歷史收款經驗、客戶的財務狀況以及阻止支付的任何未解決問題的狀況，對每筆已確認的應收帳款進行審查。如有必要，公司將採取糾正措施以解決與未支付應收帳款相關的未解決問題。應收帳款呆帳的備抵金額為$
信用風險的集中
財務工具及相關項目可能使公司面臨信用風險集中，主要包括現金及現金等價物。公司將其現金和短期現金投資存放在信用質量良好的機構。有時，這些金額可能超過FDIC保險限額。截至2024年9月30日和2023年12月31日，超過FDIC限額的存款為$
金融工具公允價值
會計 準則編碼825-10，金融工具子題（“ASC 825-10”）要求披露某些金融工具的公允價值。現金、應付帳款和應計負債的攤銷值，反映在資產負債表中，由於這些工具的短期到期性質，其公允價值近似。公司所有其他重要金融資產、金融負債和權益工具，或已被記錄或在基本報表中與其他相關信息一起披露，以便合理評估未來現金流量、利率風險和信用風險。在實際可行的情況下，已確定並披露了金融資產和金融負債的公允價值；否則，只披露了與公允價值相關的可用信息。
| 12 |
BIOSIG TECHNOLOGIES, INC.
附註 至簡化合併基本報表
九月 30, 2024
（未經審核）
該公司遵循《會計標準法典》820-10主題，即公允價值衡量和披露（“ASC 820-10”）以及ASC 825-10，其允許實體選擇以公平價值衡量許多金融工具和某些其他項目。
預付費用 及供應商存款
預付費用 及供應商押金包括預付保險、營業費用及其他預付款項。
租約 (承租人)
公司在合同開始時決定是否為租賃安排。營運租賃包括在公司綜合賬戶資產負債表上的營運租賃使用權資產、當前營運租賃負債和非當前營運租賃負債。公司根據財務報告目的評估和分類租賃為營運租賃或融資租賃。分類評估始於開始日期，評估所用的租賃期限包括公司有權使用基礎資產的不可取消期間，以及當續租選擇行使合理確定且未行使該選擇導致經濟處罰時的續租期間。所有公司的房地產業租賃均歸類為營運租賃。使用權資產代表公司使用租賃期間基礎資產的權利，租賃負債代表公司因租賃而產生的租金支付義務。營運租賃使用權資產和負債於租賃開始日期依據租金支付在租賃期間內的現值予以確認。
現值中所包括的租賃付款為固定租賃付款。由於本公司的大多數租賃不提供隱含的利率，因此本公司根據開始日期可用的信息估算其擔保的增量借款利率，以確定租賃付款的現值。本公司在對其租賃類別應用折扣率時採用組合方法。營業租賃使用權資產包括在開始日期前所支付的任何款項。租賃付款的租賃費用以租賃期間的直線法進行確認。本公司目前沒有分租。 本公司目前在其租賃中沒有殘值保證或限制性契約。
租賃 (出租人)
公司將作為出租人進入的合同租賃安排分類為直接銷售、直接融資或經營租賃，如ASC 842-租賃中所述。對於直接銷售租賃，公司會除去已租賃的資產並在資產負債表中認列租賃投資。
資產 和設備
財產
及設備以成本計算，並根據其估計的使用壽命以直線法計提折舊，年限為
| 13 |
BIOSIG TECHNOLOGIES, INC.
附註 至簡化合併基本報表
九月 30, 2024
（未經審核）
非金融資產減損
公司認知到在營運中使用的非無形資產出現損耗情況時（不包括商譽），當事件或情況顯示該資產可能出現損耗，並且估計未折現現金流量低於其剩餘生命週期的資產的帳面價值時，無法收回的資產的淨攜帶價值將降低至公允價值，通常是透過折現現金流方法計算。
在 2024 年 9 月 30 日結束的三個和九個月內，公司重新評估了由於其商業產品的製造減少而導致的某些資產和設備的攜帶金額，並確定這些攜帶金額超過了估計的未折現未來現金流量。因此，公司記錄了 一筆 $$的減損費用於 2024 年 9 月 30 日結束的三個和九個月的營運中。 及
研究 和開發成本
公司根據會計標準規範子主題730-10《研究和開發》（以下簡稱“ASC 730-10”）核算研究和開發成本。根據ASC 730-10，所有研究和開發成本必須在發生時確認為費用。因此，內部研究和開發成本在發生時確認為費用。第三方研究和開發成本在完成合約工作或達到里程碑結果時確認為費用。與現有和未來產品相關的公司贊助的研究和開發成本在發生期間確認為費用。公司於截至2024年和2023年9月30日的三個月內，研究和開發支出為$
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 September 30, 2024 and 2023 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.
September 30, 2024 | September 30, 2023 | |||||||
| Series C convertible preferred stock | ||||||||
| Options to purchase common stock | ||||||||
| Warrants to purchase common stock | ||||||||
| Restricted stock units to acquire common stock | ||||||||
| Totals | ||||||||
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.
| 14 |
BIOSIG TECHNOLOGIES, INC.
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
SEPTEMBER 30, 2024
(unaudited)
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
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 (
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 13 – 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.
| 15 |
BIOSIG TECHNOLOGIES, INC.
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
SEPTEMBER 30, 2024
(unaudited)
Recent Accounting Pronouncements
In December 2023, the FASB issued ASU 2023-09, Improvements to Income Tax Disclosures, which requires disaggregated information about our effective tax rate reconciliation as well as information on income taxes paid. The guidance will first be effective in our annual disclosures for the year ending December 31, 2025, and should be applied on a prospective basis with the option to apply retrospectively. Early adoption is permitted. The Company is in the process of assessing the impact of ASU 2023-09 on our disclosures.
In November 2023, the FASB issued ASU No. 2023-07, Improvements to Reportable Segment Disclosures (Topic 280). ASU 2023-07 modifies reportable segment disclosure requirements, primarily through enhanced disclosures about segment expenses categorized as significant or regularly provided to the Chief Operating Decision Maker (CODM). In addition, the amendments enhance interim disclosure requirements, clarify circumstances in which an entity can disclose multiple segment measures of profit or loss, and contain other disclosure requirements. The purpose of the amendments is to enable investors to better understand an entity’s overall performance and assess potential future cash flows. This ASU is effective for annual periods beginning after December 15, 2023, and interim periods within annual periods beginning after December 15, 2024, with early adoption permitted. The Company is currently evaluating the potential impact of adopting this new guidance on the consolidated financial statements and related disclosures.
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.
NOTE 4 – PROPERTY AND EQUIPMENT
Property and equipment as of September 30, 2024 and December 31, 2023 is summarized as follows:
September 30, 2024 (000’s) | December 31, 2023 (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
During
the three and nine months ended September 30, 2024, the Company re-assessed its carrying amounts of certain property and equipment due
to reduced manufacturing of its commercial products and determined that these carrying amounts exceeded the estimated undiscounted future
cash flows. Accordingly, the Company recorded a $ and $
Depreciation
expenses were $
NOTE 5 – RIGHT TO USE ASSETS AND LEASE LIABILITY
On July 15, 2024 the Company terminated its sublease for the office space at 55 Greens Farms Road Westport, Connecticut which was set to end at December 15, 2024.
As
of December 31, 2023, the Company had outstanding
As
of September 30, 2024, the Company had
Right to use assets is summarized below:
September 30, 2024 (000’s) | December 31, 2023 (000’s) | |||||||
| Right to use asset | $ | $ | ||||||
| Less accumulated amortization | ( | ) | ( | ) | ||||
| Right to use assets, net | $ | $ | ||||||
During
the three months ended September 30, 2024 and 2023, the Company recorded $
| 16 |
BIOSIG TECHNOLOGIES, INC.
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
SEPTEMBER 30, 2024
(unaudited)
Lease liability is summarized below:
September 30, 2024 (000’s) | December 31, 2023 (000’s) | |||||||
| Total lease liability | $ | $ | ||||||
| Less: short term portion | ( | ) | ( | ) | ||||
| Long term portion | $ | $ | ||||||
Maturity analysis under these lease agreements are as follows (000’s):
| Year ended December 31, 2024 | ||||
| Year ended December 31, 2025 | ||||
| Total | ||||
| Less: Present value discount | ( | ) | ||
| Lease liability | $ |
Lease expense for the three months ended September 30, 2024 and 2023 was comprised of the following:
September 30, 2024 (000’s) | September 30, 2023 (000’s) | |||||||
| Operating lease expense | $ | $ | ||||||
| Short-term lease expense | ||||||||
| Variable lease expense | ||||||||
| Total | $ | $ | ||||||
Lease expense for the nine months ended September 30, 2024 and 2023 was comprised of the following:
September 30, 2024 (000’s) | September 30, 2023 (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
A reconciliation of lease receivables with customers for the nine months ended September 30, 2024 and 2023 are presented below:
Nine months ended September 30, 2024:
Balance at December 31, 2023 (000’s) | Recognized in Revenue (000’s) | Invoiced to Customer (000’s) | Interest Earned (000’s) | Unguaranteed Residual Assets (000’s) | Balance
September 30, 2024 (000’s) | |||||||||||||||||||
| Contract asset | $ | $ | $ | ( | ) | $ | $ | $ | ||||||||||||||||
| Less current portion | ( | ) | ( | ) | ( | ) | ||||||||||||||||||
| Noncurrent portion | $ | $ | $ | ( | ) | $ | $ | |||||||||||||||||
| 17 |
BIOSIG TECHNOLOGIES, INC.
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
SEPTEMBER 30, 2024
(unaudited)
Nine months ended September 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 September 30, 2023 (000’s) | |||||||||||||||||||
| Contract asset | $ | $ | $ | ( | ) | $ | $ | $ | ||||||||||||||||
| Less current portion | ( | ) | ( | ) | ( | ) | ||||||||||||||||||
| Noncurrent portion | $ | $ | $ | ( | ) | $ | $ | |||||||||||||||||
Future cash flows under this lease agreement are as follows (000’s):
| 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
Accounts payable and accrued expenses at September 30, 2024 and December 31, 2023 consist of the following:
September 30, 2024 (000’s) | December 31, 2023 (000’s) | |||||||
| Accrued accounting and legal | $ | $ | ||||||
| Accrued reimbursements and travel | ||||||||
| Accrued consulting | ||||||||
| Accrued research and development expenses | ||||||||
| Accrued marketing | ||||||||
| Accrued office and other | ||||||||
| Accrued payroll | ||||||||
| $ | $ | |||||||
During the three and nine months ended September 30,
2024, the company recorded a gain on settlement and forgiveness of accounts payable of approximately $
NOTE 8 – NOTE PAYABLE-RELATED PARTY
On
March 7, 2024, the Company issued a promissory note for $
NOTE 9 – STOCKHOLDER EQUITY
Preferred stock
The Company is authorized to issue shares of $ par value preferred stock. As of September 30, 2024 and December 31, 2023, the Company has designated shares of Series A preferred stock, shares of Series B preferred stock, shares of Series C Preferred Stock, shares of Series D Preferred Stock, shares of Series E Preferred Stock and shares of Series F Preferred Stock. As of September 30, 2024 and December 31, 2023, there were no outstanding shares of Series A, Series B, Series D, Series E and Series F preferred stock.
Series C Preferred Stock
As
of September 30, 2024 and December 31, 2023, the Company had
shares of Series C Preferred stock issued and outstanding. During the nine months ended September 30, 2024, the conversion price of
the Series C Preferred stock was reset from $
| 18 |
BIOSIG TECHNOLOGIES, INC.
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
SEPTEMBER 30, 2024
(unaudited)
Common stock
On
January 31, 2024, the Company filed a Reverse Stock Split Amendment with the Secretary of State of the State of Delaware, effective February
2, 2024. Pursuant to the Reverse Stock Split Amendment, the Company effected a
The Company is authorized to issue shares of $ par value common stock. As of September 30, 2024 and December 31, 2023, the Company had and shares issued and outstanding, respectively.
During
the nine months ended September 30, 2024, the Company issued an aggregate of shares of common stock for the forgiveness of accounts
payable at a fair value of $
During
the nine months ended September 30, 2024, the Company issued an aggregate of shares of common stock for services at a fair
value of $
During the nine months ended September 30, 2024, the Company issued an aggregate of shares of common stock for vested restricted stock units.
Sale of common stock.
On
January 12, 2024, the Company entered into a securities purchase agreement with certain accredited and institutional investors, pursuant
to which the Company sold to the investors an aggregate of shares of the Company’s common stock and warrants to purchase
up to
On
May 1, 2024, the Company entered into a securities purchase agreement with certain accredited investors, pursuant to which the Company
sold to the Investors an aggregate of shares of the Company’s common stock at a purchase price of $ per share, and
warrants to purchase up to
On
May 29, 2024, the Company entered into a securities purchase agreement with certain institutional investors, pursuant to which the
Company agreed to sell and issue to the investors (i) in a registered direct offering,
shares (the “Shares”) of Common Stock, par value $
per share of the Company at a price of $
per share and (ii) in a concurrent private placement, common stock purchase warrants to purchase up to an aggregate of
| 19 |
BIOSIG TECHNOLOGIES, INC.
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
SEPTEMBER 30, 2024
(unaudited)
BioSig Technologies, Inc.
2023 Long-Term Incentive Plan
On December 27, 2022, the Board of Directors of BioSig Technologies, Inc. approved the 2023 Long-Term Incentive Plan (the “2023 Plan”). The 2023 Plan provides for the issuance of options, stock appreciation rights, restricted stock and restricted stock units to purchase up to shares, plus any prior plan awards of the Company’s common stock to officers, directors, employees and consultants of the Company. Under the terms of the Plan the Company may issue Incentive Stock Options as defined by the Internal Revenue Code to employees of the Company only and nonstatutory options. The Board of Directors of the Company or a committee thereof administers the Plan and determines the exercise price, vesting and expiration period of the grants under the Plan.
However, The fair value of the common stock is determined based on the quoted market price or in absence of such quoted market price, by the administrator in good faith.
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 . At September 30, 2024, there were shares available under the 2023 Long-Term Incentive Plan.
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 nine months ended September 30, 2024, an employee was issued stock option to purchase shares of the Company’s common stock with an exercise price $ per share, with 50% of the Options vesting on the date of grant and the remaining 50% of the options vesting over a term of 3 years in equal bi-annual instalments with vesting commencing on the date of grant. The grant date fair value of the option was $.
| Options Outstanding | Options Exercisable | |||||||||||||
| Weighted | ||||||||||||||
| Average | Exercisable | |||||||||||||
| Exercise | Number of | Remaining Life | Number of | |||||||||||
| Price | Options | In Years | Options | |||||||||||
| $ | Under | |||||||||||||
| - | ||||||||||||||
| - | - | |||||||||||||
| - | - | |||||||||||||
| - | ||||||||||||||
| - | - | |||||||||||||
| - | ||||||||||||||
| - | ||||||||||||||
| Shares | Weighted-Average Exercise Price | Weighted-Average Remaining Contractual Term | Aggregate Intrinsic Value | |||||||||||||
| Outstanding at January 1, 2024 | $ | $ | ||||||||||||||
| Issued | ||||||||||||||||
| Forfeited/expired | ( | $ | ||||||||||||||
| Outstanding at September 30, 2024 | $ | $ | ||||||||||||||
| Exercisable at September 30, 2024 | $ | $ | ||||||||||||||
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 Technologies, Inc. of $ as of September 30, 2024, which would have been received by the option holders had those option holders exercised their options as of that date.
The option value during the nine months ended September 30, 2024, was valued using the Black-Scholes option pricing model the Company used the following assumptions (i) an expected term of years , (ii) volatility of %, (iii) risk free interest rate of % and a (iv) dividend yield rate of %.
The fair value of all options vesting during the three and nine months ended September 30, 2024 of $ and $, respectively, was charged to current period operations. The fair value of all options vesting during the three and nine months ended September 30, 2023 of $ and $, respectively, was charged to current period operations. Unrecognized compensation expense of $ at September 30, 2024 which the Company expects to recognize over a weighted average period of years.
| 20 |
BIOSIG TECHNOLOGIES, INC.
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
SEPTEMBER 30, 2024
(unaudited)
Warrants
| Exercise | Number | Expiration | ||||||
| Price | Outstanding | Date | ||||||
| $ | ||||||||
| 21 |
During
the nine months ended September 30, 2024, the Company issued warrants to purchase an aggregate of
A summary of the warrant activity for nine months ended September 30, 2024 is as follows:
| Shares | Weighted-Average Exercise Price | Weighted-Average Remaining Contractual Term | Aggregate Intrinsic Value | |||||||||||||
| Outstanding at January 1, 2024 | $ | $ | ||||||||||||||
| Issued | $ | |||||||||||||||
| Outstanding at September 30, 2024 | $ | $ | ||||||||||||||
| Vested and expected to vest at September 30, 2024 | $ | $ | ||||||||||||||
| Exercisable at September 30, 2024 | $ | $ | ||||||||||||||
The aggregate intrinsic value in the preceding tables represents the total pretax intrinsic value, based on warrants with an exercise price less than the company’s stock price of $ of September 30, 2024, which would have been received by the warrant holders had those warrants holders exercised their options as of that date.
The
fair value of warrants issued for services during the three and nine months ended September 30, 2024 and 2023 of $
Restricted Stock Units
| Restricted shares issued as of January 1, 2024 | ||||
| Granted | ||||
| Vested and issued | ( | ) | ||
| Forfeited | ( | ) | ||
| Total | ||||
| Comprised of: | ||||
| Vested restricted shares as of September 30, 2024 | ||||
| Unvested restricted shares as of September 30, 2024 |
| 22 |
BIOSIG TECHNOLOGIES, INC.
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
SEPTEMBER 30, 2024
(unaudited)
On
March 1, 2024, the Company granted restricted stock units for shares of its common stock to a key consultant, , for services rendered, valued at $
On
April 1, 2024, the Company granted restricted stock units for shares of its common stock to employees, , for services rendered, valued at $
On
May 1, 2024, the Company issued restricted stock units for shares of its common stock to an employee for services rendered valued
at $
On May 1, 2024, the Company granted restricted stock units for shares of its common stock to an employee .
On May 30, 2024, the Company granted an aggregate of restricted stock units for shares of its common stock to consultants of which shares were fully vested at the time of grant and shares vest on July 3, 2024 and the remaining vest on October 4, 2024.
June
1, 2024, the Company issued restricted stock units for shares of its common stock to a consultant for services rendered valued
at $
On
June 7, 2024, the Company granted an aggregate of restricted stock units for shares of its common stock to employees and board
members, the shares were fully vested at the time of grant valued at $
On
July 26, 2024, the Company granted an aggregate of restricted stock units for shares of its common stock to employees and board
members, the shares were fully vested at the time of grant valued at $
On
July 26, 2024, the Company paid $
On September 11, 2024, the company granted shares of restricted common stock, with a grant date fair
value of $
Stock based compensation expense related to restricted stock grants was $ and $ for the three and nine months ended September 30, 2024, respectively. Stock based compensation expense related to restricted stock grants was $ and $ for the three and nine months ended September 30, 2023, respectively. As of September 30, 2024, the stock-based compensation relating to restricted stock of $ remains unamortized.
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 shares of ViralClear’s common stock to officers, directors, employees and consultants of the ViralClear. Under the terms of the ViralClear Plan, ViralClear may issue Incentive Stock Options as defined by the Internal Revenue Code to employees of ViralClear only and nonqualified options. The Board of Directors of ViralClear or a committee thereof (the “Administrator”) administers the ViralClear Plan and determines the exercise price, vesting and expiration period of the grants under the ViralClear Plan.
However, The fair market value of the common stock is determined based on the quoted market price or in absence of such quoted market price, by the Administrator in good faith.
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 . There are shares remaining available for future issuance of awards under the terms of the ViralClear Plan.
ViralClear Options
As of September 30, 2024, there were options outstanding for ViralClear. The remaining options with an exercise price of $ were forfeited as of September 30, 2024.
The fair value of all options vesting during the three and nine months ended September 30, 2024 of $; and $ and $ and $ for the three and nine months ended September 30, 2023, respectively, was charged to current period operations. Unrecognized compensation expense of $ at September 30, 2024 will be expensed in future periods.
| 23 |
BIOSIG TECHNOLOGIES, INC.
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
SEPTEMBER 30, 2024
(unaudited)
Warrants (ViralClear)
| Exercise | Number | Expiration | ||||||||
| Price | Outstanding | Date | ||||||||
| $ | ||||||||||
Restricted stock units (ViralClear)
| Restricted shares outstanding at January 1, 2024: | ||||
| Forfeited | ( | ) | ||
| Total restricted shares outstanding at September 30, 2024: | ||||
| Comprised of: | ||||
| Vested restricted shares as of September 30, 2024 | ||||
| Unvested restricted shares as of September 30, 2024 | ||||
| Total |
Stock based compensation expense related to restricted stock unit grants of ViralClear was $ and $ for the three and nine months ended September 30, 2024 and $ and $ for the three and nine months ended September 30, 2023, respectively. As of September 30, 2024, the stock-based compensation relating to restricted stock of $ remains unamortized.
BioSig AI Sciences, Inc.
Warrants (BioSig AI)
| Exercise | Number | Expiration | ||||||||
| Price | Outstanding | Date | ||||||||
| $ | ||||||||||
NOTE 11 – 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 September 30, 2024 and December 31, 2023, 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. In June and July 2023, BioSig AI sold shares of its common stock for net proceeds of $
As
of September 30, 2024 and December 31, 2023, the Company had a majority interest in BioSig AI of
| 24 |
BIOSIG TECHNOLOGIES, INC.
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
SEPTEMBER 30, 2024
(unaudited)
A reconciliation of ViralClear Pharmaceuticals, Inc. and BioSig AI Sciences, Inc. non-controlling loss attributable to the Company:
Net loss attributable to the non-controlling interest for the three months ended September 30, 2024 (000’s):
ViralClear Pharmaceuticals, Inc. (000’s) | BioSig AI Sciences, Inc. (000’s) | Total (000’s) | ||||||||||
| Net Income (loss) | $ | ( | ) | $ | ( | ) | $ | ( | ) | |||
| Average Non-Controlling interest percentage of losses | % | % | % | |||||||||
| Net income (loss) attributable to non-controlling interest | $ | ) | $ | ( | ) | $ | ) | |||||
Net loss attributable to the non-controlling interest for the three months ended September 30, 2023 (000’s):
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 | $ | $ | ( | ) | $ | |||||||
Net loss attributable to the non-controlling interest for the nine months ended September 30, 2024 (000’s):
ViralClear Pharmaceuticals, Inc. (000’s) | BioSig AI Sciences, Inc. (000’s) | Total (000’s) | ||||||||||
| Net Income (loss) | $ | ( | ) | $ | $ | ( | ) | |||||
| Average Non-Controlling interest percentage of losses | % | % | % | |||||||||
| Net income (loss) attributable to non-controlling interest | $ | ( | ) | $ | $ | ( | ) | |||||
Net loss attributable to the non-controlling interest for the nine months ended September 30, 2023 (000’s):
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 | $ | $ | ( | ) | $ | |||||||
The following table summarizes the changes in non-controlling interest for the nine months ended September 30, 2024 (000’s):
ViralClear Pharmaceuticals, Inc. (000’s) | BioSig AI Sciences, Inc. (000’s) | Total (000’s) | ||||||||||
| Balance, January 1, 2024 | $ | ( | ) | $ | $ | |||||||
| Net income (loss) attributable to non-controlling interest | ( | ) | ( | ) | ||||||||
| Balance, September 30, 2024 | $ | ( | ) | $ | $ | |||||||
| 25 |
BIOSIG TECHNOLOGIES, INC.
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
SEPTEMBER 30, 2024
(unaudited)
NOTE 12 — COMMITMENTS AND CONTINGENCIES
Operating leases
See Note 5 for operating lease discussion.
Licensing agreements
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 ten years from the effective date.
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 $
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 $
| 26 |
BIOSIG TECHNOLOGIES, INC.
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
SEPTEMBER 30, 2024
(unaudited)
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 one year terms, unless terminated. On January 1, 2024, the contract was terminated.
BioSig
AI is obligated to pay Reified a monthly consulting fee of $
Neuro-Kinesis Corporation
On
July 1, 2024, the Company announced the intent to acquire the assets of Neuro-Kinesis Corporation (NKC), a privately held Los Angeles-based
medical technology company developing smart EP tools. A non-binding letter of intent (LOI) has been executed confirming BioSig’s
preliminary interest in the proposed acquisition of the assets of NKC. The purchase price will be paid through the issuance of shares
of BioSig’s common stock to the shareholders of NKC. In addition, at closing, NKC will provide a minimum 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 nine months ended September 30,
2024, the Company charged operations $
Purchase commitments.
As
of September 30, 2024, the Company had aggregate purchase commitments of approximately $
Litigation
Threatened litigation.
On
December 4, 2023, the Company received a threat of litigation for the termination of employment with the Company alleging the termination
of employment was in retaliation for bringing to the attention of the Company’s board of directors and executives a series of wrongful
and questionable practices by members of the Company’s board of directors, Chief Executive Officer and Chief Financial Officer.
The claimant sought compensation in the amount of $
On
February 22, 2024, the Company received a threat of litigation seeking restitution for losses resulting from unlawful actions taken by
the Company’s board of directors. The claimant contends that he and others have sustained losses totaling $
On
March 22, 2024, plaintiff, Michael Gray Fleming (the “Plaintiff”), filed a lawsuit in Hennepin County, Minnesota
District Court naming the Company, its former Chief Executive Officer and former Chief Financial Officer as defendants. The
Plaintiff contends that the Company failed to meet its obligations in issuing the Plaintiff stock certificates under the terms of a
restricted stock award agreement. Plaintiff is seeking at least $
We may be 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.
There are no material proceedings in which any of our directors, officers or affiliates or any registered or beneficial shareholder of more than 5% of our common stock is an adverse party or has a material interest adverse to our interest.
| 27 |
BIOSIG TECHNOLOGIES, INC.
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
SEPTEMBER 30, 2024
(unaudited)
Stock-based compensation
The Company takes some tax positions, including the reporting of stock-based compensation, that may not be accepted by the Internal Revenue Service upon an examination, and we may be subject to penalties for underreporting of recipient’s income. The result of any such examination is uncertain, and any such penalties could be material to our financial position and results of operations given our current limited cash and revenues.
NOTE 13 – 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), ViralClear Pharmaceuticals, Inc. and BioSig AI Sciences, Inc.
Information concerning the operations of the Company’s reportable segments is as follows:
| Three Months Ended | Three Months Ended | Nine Months Ended | Nine Months Ended | |||||||||||||
| September 30, | September 30, | September 30, | September 30, | |||||||||||||
| 2024 | 2023 | 2024 | 2023 | |||||||||||||
| (000’s) | (000’s) | (000’s) | (000’s) | |||||||||||||
| Revenues (from external customers) | ||||||||||||||||
| BioSig | $ | $ | | $ | $ | |||||||||||
| ViralClear | ||||||||||||||||
| BioSig AI Sciences | ||||||||||||||||
| $ | $ | $ | $ | |||||||||||||
| Three Months Ended | Three Months Ended | Nine Months Ended | Six Months Ended | |||||||||||||
| September 30, | September 30, | September 30 | September 30 | |||||||||||||
| 2024 | 2023 | 2024 | 2023 | |||||||||||||
| (000’s) | (000’s) | (000’s) | (000’s) | |||||||||||||
| Operating Expenses: | ||||||||||||||||
| BioSig | $ | $ | $ | $ | ||||||||||||
| ViralClear | ( | ) | ( | ) | ||||||||||||
| BioSig AI Sciences | ||||||||||||||||
| $ | $ | $ | $ | |||||||||||||
| Three Months Ended | Three Months Ended | Nine Months Ended | Nine Months Ended | |||||||||||||
| September 30, | September 30, | September 30, | September 30, | |||||||||||||
| 2024 | 2023 | 2024 | 2023 | |||||||||||||
| (000’s) | (000’s) | (000’s) | (000’s) | |||||||||||||
| Loss from Operations: | ||||||||||||||||
| BioSig | $ | ( | ) | $ | ( | ) | $ | ( | ) | $ | ( | ) | ||||
| ViralClear | ( | ) | ||||||||||||||
| BioSig AI Sciences | ( | ) | ( | ) | ( | ) | ||||||||||
| $ | ( | ) | $ | ( | ) | $ | ( | ) | $ | ( | ) | |||||
| 28 |
BIOSIG TECHNOLOGIES, INC.
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
SEPTEMBER 30, 2024
(unaudited)
September
30, (000’s) | December
31, (000’s) | |||||||
| Total Assets | ||||||||
| BioSig | $ | $ | ||||||
| ViralClear | ||||||||
| BioSig AI Sciences | ||||||||
| $ | $ | |||||||
NOTE 14 – RELATED PARTY TRANSACTIONS
On June 5, 2024, the Company and Mr. Ferdinand Groenewald entered into a consulting agreement (the “Agreement”) effective June 5, 2024, pursuant to which Mr. Groenewald will lead accounting and financial reporting activities of the Company. Mr. Groenewald will serve as the Company’s interim chief financial officer, principal accounting officer and vice president of finance. The Agreement will continue indefinitely until terminated by either party upon 30 days’ advance notice. The Agreement provides for compensation at a fixed rate of $ per month and reimbursement by the Company for any usual and customary business expenses incurred by Mr. Groenewald in connection with performing services pursuant to the Agreement. In addition, the Agreement provides for the Company to indemnify Mr. Groenewald on terms customary for officers.
Accounts
payable and accrued expenses include due to related parties comprised primarily director fees and travel reimbursements. Due to related
parties as of September 30, 2024 and December 31, 2023 was $
On
March 1, 2024, the Company issued shares of common stock to Frederick D Hrkac, director in exchange for consulting services with
a fair value of $
On
March 1, 2024, the Company issued shares of common stock to Anthony Amato, CEO and director in exchange for services with a fair
value of $
On
June 7, 2024, the Company issued shares of common stock to Anthony Amato, CEO and director in exchange for services with a fair
value of $
On
March 7, 2024, the company issued a promissory note to a significant shareholder for $
NOTE 15 – SUBSEQUENT EVENTS
The Company has evaluated subsequent events from the balance sheet date through the date on which these condensed financial statements were issued. Other than as described in the notes above, the Company did not have any material subsequent events that impacted its condensed financial statements or disclosures.
Subsequent to September 30, 2024, the Company issued shares of common stock for vested restricted stock.
Subsequent to September 30, 2024, the Company issued shares of common for services provided by a consultant.
On
October 17, 2024, the Company’s board of directors agreed to amend the existing
| 29 |
ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
This Management’s Discussion and Analysis of Financial Condition and Results of Operations includes a number of forward-looking statements that reflect Management’s current views with respect to future events and financial performance. You can identify these statements by forward-looking words such as “may,” “will,” “expect,” “anticipate,” “believe,” “estimate” and “continue,” or similar words. Those statements include statements regarding the intent, belief or current expectations of us and members of our management team as well as the assumptions on which such statements are based. Prospective investors are cautioned that any such forward-looking statements are not guarantees of future performance and involve risk and uncertainties, and that actual results may differ materially from those contemplated by such forward-looking statements.
Readers are urged to carefully review and consider the various disclosures made by us in this report and in our other reports filed with the Securities and Exchange Commission. Important factors currently known to Management could cause actual results to differ materially from those in forward-looking statements. We undertake no obligation to update or revise forward-looking statements to reflect changed assumptions, the occurrence of unanticipated events or changes in the future operating results over time. We believe that our assumptions are based upon reasonable data derived from and known about our business and operations. No assurances are made that actual results of operations or the results of our future activities will not differ materially from our assumptions. Factors that could cause differences include, but are not limited to, expected market demand for our products, fluctuations in pricing for materials, and competition.
Business Overview
BioSig Technologies is a medical device company with an advanced digital signal processing technology platform to deliver insights to the treatment of cardiovascular arrhythmias. Through collaboration with physicians, experts, and healthcare leaders across the field of electrophysiology (EP), we are committed to addressing healthcare’s biggest priorities — saving time, saving costs, and saving lives.
Our first product, the PURE EP™ System, is an FDA 510(k) cleared non-invasive class II device consisting of a unique combination of hardware and software designed to provide unprecedented signal clarity and precision for real-time visualization of intracardiac signals paving the way for personalized patient care. Integrating with existing systems in the EP lab, PURE EP™ is designed to accurately pinpoint even the most complex signals to maximize procedural success and efficiency.
By capturing critical cardiac signals—even the most complex, the PURE EP™ System is designed to enhance clinical decision-making and improve clinical workflow for all types of arrhythmias - even the most challenging procedures for cardiac arrhythmias, like ventricular tachycardia (VT) and atrial fibrillation (AF).
On July 1, 2024, the Company announced the intent to acquire the assets of Neuro-Kinesis Corporation (NKC), a privately held Los Angeles-based medical technology company developing smart EP tools. A non-binding letter of intent (LOI) has been executed confirming BioSig’s preliminary interest in the proposed acquisition of the assets of NKC. The purchase price will be paid through the issuance of shares of BioSig’s common stock to the shareholders of NKC. In addition, at closing, NKC will provide a minimum of $2.5 million, but could provide up to $6 million, of unrestricted cash to BioSig. The proposed acquisition will require extensive due diligence, potentially through year-end, with full disclosures in the Company’s next proxy statement for shareholder vote.
Our owned patent portfolio now includes 41 issued/allowed utility patents (29 utility patents where BioSig is at least one of the applicants). Twenty-seven additional U.S. and foreign utility patent applications are pending covering various aspects of our PURE EP System for recording, measuring, calculating and displaying of electrocardiograms during cardiac ablation procedures (27 U.S. and foreign utility patent applications where either BioSig, Mayo, or both is at least one of the applicants). We also have one U.S. patent and one U.S. Pending application directed to artificial intelligence (AI). We also have 30 issued worldwide design patents, which cover various features of our display screens and graphical user interface for enhanced visualization of biomedical signals (30 design patents where BioSig is at least one of the applicants). Finally, we have licenses to 12 (issued/allowed) patents and 9 additional worldwide utility patent applications from Mayo Foundation for Medical Education and Research that are pending (12 issued/allowed patents and 9 applications where only Mayo is the applicant). These patents and applications are generally directed to electroporation and stimulation.
| 30 |
Notices of Delisting
On March 5, 2024, the Company received a letter from the Listing Qualifications Department of Nasdaq (the “Staff”) stating that the Company has not regained compliance with Listing Rule 5550(a)(2) because the Company’s common stock did not meet the minimum bid price of $1.00 per share required for continued listing on The Nasdaq Capital Market, and the Company is not eligible for a second 180 day cure period under Rule 5810(c)(3)(A)(2) because the Company does not comply with the $5,000,000 minimum stockholders’ equity initial listing requirement for The Nasdaq Capital Market, and that accordingly, Nasdaq would delist the Company’s common stock unless the Company requested an appeal of this determination. On March 11, 2024, the Company submitted a request for a hearing before the Nasdaq Hearings Panel to appeal the Staff’s delisting determination.
On March 12, 2024, the Company received a letter from the Staff stating that based upon the Staff’s review of the Company and pursuant to Listing Rule 5101, the Staff believes that the Company no longer has an operating business and is a “public shell,” and that the continued listing of its securities is no longer warranted, in view of work force reductions and resignations of members of the board of directors and officers (see below).
The letter further stated that the Company no longer meets the requirement of Rule 5550(b)(2) to maintain a minimum Market Value of Listed Securities of $35 million, if none of the other standards set forth in Rule 5550(b) is met.
The Staff stated that the foregoing matters serve as an additional basis for delisting the Company’s common stock from The Nasdaq Stock Market, and that the Hearings Panel will consider this matter in rendering a determination regarding the Company’s continued listing on The Nasdaq Capital Market.
On June 10, 2024, the Company received formal notice that the Nasdaq Hearings Panel had determined to delist the Company’s common stock from Nasdaq due to the Company’s continued non-compliance with the minimum stockholders’ equity requirement set forth in Nasdaq Listing Rule 5550(b)(2) for continued listing on Nasdaq. As a result, trading in the Company’s common stock will be suspended on Nasdaq effective with the open of business on Wednesday, June 12, 2024. The Company’s common stock should be eligible to trade on the OTC Markets’ Pink Current Information tier under symbol “BSGM” effective with the open of trading on Wednesday, June 12, 2024. The Company sought the Panel’s reconsideration of its decision in accordance with the Nasdaq Listing Rules
On June 24, 2024, the Company was notified by Nasdaq that the Nasdaq Hearings Panel had declined to reconsider its decision dated June 10, 2024 to delist the Company’s common stock from Nasdaq (the “Delisting Decision”). Trading in the Company’s securities was suspended on Nasdaq effective with the open of business on June 12, 2024, at which point the Company’s common stock was eligible to trade on the OTC Market’s Pink Current Information tier.
On July 10, 2024, the Company filed a submission in support of an appeal to the Delisting Decision to the Nasdaq Listing and Hearing Review Council and is currently awaiting a decision.
On July 23, 2024, the Company commenced trading of its common stock on the OTCQB, operated by OTC Markets Group, Inc On October 18, 2024, the Company received a decision from the Nasdaq Listing and Hearing Review Council granting the Company a grace period until March 7, 2025 to regain compliance with the Nasdaq Listing Rule 5550(b)(2), the MVLS Rule, which requires a market value of listed securities of at least $35 million.
On October 21, 2024, the Company was notified that its common stock will commence trading on The Nasdaq Stock Market on Wednesday, October 23, 2024 effective at the opening of trading.
On October 24, 2024, the Company received a letter from the Nasdaq Listing Qualifications (“Nasdaq”) notifying the Company that based upon the closing bid price of the Company’s common stock from the period of June 11, 2024 through the reinstatement date, October 23, 2024, the Company did not meet the minimum bid price of $1.00 per share required by the Listing Rules (“Rules”) and as a result, the Company no longer meets this requirement. However, the Rules also provides the Company a compliance period of 180 calendar days in which to regain compliance.
On November 13, 2024, the Company issued a press release announcing its Nasdaq bid price compliance.
If at any time during this 180 day period the closing bid price of the Company’s security is at least $1 for a minimum of ten consecutive business days, Nasdaq will provide written confirmation of compliance and this matter will be closed. In the event the Company does not regain compliance, the Company may be eligible for additional time. To qualify, the Company will be required to meet the continued listing requirement for market value of publicly held shares and all other initial listing standards for The Nasdaq Capital Market, with the exception of the bid price requirement, and will need to provide written notice of its intention to cure the deficiency during the second compliance period, by effecting a reverse stock split, if necessary.
Private Placement:
On May 1, 2024, the Company entered into a securities purchase agreement with certain accredited investors, pursuant to which the Company sold to the Investors an aggregate of 783,406 shares of the Company’s common stock at a purchase price of $1.4605 per share, and warrants to purchase up to 391,703 shares of common stock at an exercise price of $1.398 per share, that will become exercisable six months after the date of issuance and will expire five and one-half years following the date of issuance, in exchange for aggregate consideration of $1,144,164, including $634,999 in cash and $509,165 representing conversion of the principal balance of and accrued interest on the previously issued related party note payable. The note was not convertible by its terms, but the holder has agreed to convert it into shares of common stock and warrants under the Purchase Agreement as described above. (See Note 9).
On May 29, 2024, the Company entered into a securities purchase agreement (the “SPA”) with certain institutional investors, pursuant to which the Company agreed to sell and issue to the investors (i) in a registered direct offering, 1,570,683 shares (the “Shares”) of Common Stock, par value $0.001 per share of the Company (the “Common Stock”) at a price of $1.91 per share and (ii) in a concurrent private placement, common stock purchase warrants (the “Private Placement Warrants”) to purchase up to an aggregate of 1,570,683 shares of Common Stock, at an exercise price of $1.78 per share of Common Stock.
| 31 |
Lack of funding, workforce reductions, resignations and appointments of members of the Company’s board of directors and certain officers
On January 28, 2024 and February 20, 2024, management of the Company commenced a workforce reduction intended to reduce significantly the annual cash burn which was completed as of February 20, 2024. The workforce reduction consisted of the departure of sixteen employees, effective as of January 31, 2024 and included the departure of John Sieckhaus, the Company’s Chief Operating Officer, and Gray Fleming, the Company’s Chief Commercial Officer and twenty six employees effective February 20, 2024. The effect of the workforce reductions had significantly reduce operations in the short-term.
On February 15, 2024, Steve Buhaly resigned from his position as the Chief Financial Officer of the Company effective as of the same date.
On February 19, 2024, David Weild IV, Donald E. Foley, Patrick J. Gallagher and James J. Barry, resigned from their positions as directors of the Company, effective as of the same date.
On February 20, 2024, James L. Klein and Frederick D. Hrkac resigned from their positions as directors of the Company, effective as of the same date.
On February 20, 2024 due to lack of funding, the company had laid off the entire workforce except for the CEO.
On February 27, 2024, the company re-appointed Frederick D. Hrkac as a director and the president and principal executive officer. Additionally, on February 27, 2024, Kenneth L. Londoner resigned from his positions as director, executive chairman and chief executive officer of the Company and from any and all committees, offices, appointments, designations, responsibilities or other capacities related to the Company or any of its subsidiaries, effective as of the same date.
On April 30, 2024, the board of directors appointed former advisory board member and consultant, Anthony Amato as a director, president, chief executive officer and principal executive officer, effective immediately. In connection with the appointment of Mr. Amato, Mr. Hrkac tendered his resignation as president and principal executive officer effective as of the same date, however, continues to serve as a director and acted as chief financial officer until June 5, 2024.
On May 2, 2024, the board of directors appointed Mr. Chris Baer as a director on the Board.
On May 3, 2024, the board of directors appointed Messrs. Steven E. Abelman and Donald F. Browne as directors on the board.
On June 5, 2024, Frederick D. Hrkac resigned as acting chief financial officer and principal accounting officer of the Company, effective as of the same date. Also on June 5, 2024, the Company and Ferdinand Groenewald entered into the Agreement effective June 5, 2024, pursuant to which Mr. Groenewald will lead accounting and financial reporting activities of the Company. Mr. Groenewald currently serves as the Company’s interim chief financial officer, principal accounting officer and vice president of finance. The Agreement will continue indefinitely until terminated by either party upon 30 days’ advance notice. The Agreement provides for compensation at a fixed rate of $15,000 per month and reimbursement by the Company for any usual and customary business expenses incurred by Mr. Groenewald in connection with performing services pursuant to the Agreement. In addition, the Agreement provides for the Company to indemnify Mr. Groenewald on terms customary for officers.
Currently, the Company has 5 employees and 6 key consultants. Dependent upon funding, the Company would plan on hiring a team of 4-6 persons to execute the business development strategy of finding partners for the commercialization of PURE EP, develop new products in the field of Pulse Field Ablation and to continue to integrate PURE EP into today’s lab equipment.
Results of Operations (000’s)
We anticipate that our results of operations will fluctuate for the foreseeable future due to several factors, such as the progress of our research and development and commercialization efforts, the timing and outcome of future regulatory submissions and uncertainty around the current pandemic. Due to these uncertainties, accurate predictions of future operations are difficult or impossible to make.
| 32 |
Three Months Ended September 30, 2024 Compared to Three Months September 30, 2023 (000’s)
Revenues and Cost of Goods Sold. Revenue for the three months ended September 30, 2024 was $0, comprised of recognized service revenue, as compared to $1, comprised of recognized service revenue for the three months ended September 30, 2023.
We derive our revenue primarily from the sale of our medical device, PURE EP Platform, as well as related support and maintenance services and software upgrades in connection with the device.
We recognize revenue in accordance with Accounting Standards Codification (ASC) 842, Leases for lease components and ASC 606, Revenue from Contracts with Customers (“ASC 606”) for non-lease components. For medical device sales, we recognize revenue under ASC 606.
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.
Research and Development Expenses. Research and development expenses for the three months ended September 30, 2024 were $156, a decrease of $989, or 86.38%, from $1,145 for the three months ended September 30, 2023. The decrease is primarily due to decreases in payroll, consulting, Data/AI development and research and clinical studies and design work to $139 for the three months ended September 30, 2024 as compared to $1,066 for the three months ended September 30, 2023.
Research and development expenses were comprised of the following:
Three months ended:
September 30, 2024 | September 30, 2023 | |||||||
| Salaries and equity compensation | $ | 105 | $ | 815 | ||||
| Consulting expenses | - | 135 | ||||||
| Research and clinical studies and design work | 34 | 62 | ||||||
| Data/AI development | - | 54 | ||||||
| Regulatory | 1 | 21 | ||||||
| Travel, supplies, other | 16 | 58 | ||||||
| Total | $ | 156 | $ | 1,145 | ||||
Stock based compensation for research and development personnel was $7 and $147 for the three months ended September 30, 2024 and 2023, respectively.
General and Administrative Expenses. General and administrative expenses for the three months ended September 30, 2024 were $2,763, a decrease of $52 or 1.85%, from $2,815 incurred in the three months ended September 30, 2023. This decrease is primarily due to a decrease in employee and service provider (stock-based) performance pay in the current period as compared to the same period in the prior year and additional service provider fees paid.
Payroll related expenses, including stock-based compensation expenses, increase to $1,744 in the current period from $1,302 for the three months ended September 30, 2023, an increase of $442, or 33.95%. The increase was primarily due to increase stock-based compensation in the current period compared to the prior period. We incurred $1,510 in stock-based compensation in connection with the vesting of stock and stock options issued to board members, officers, employees and consultants for the three months ended September 30, 2024 as compared to $(506) in stock-based compensation for the same period in 2023.
Professional services for the three months ended September 30, 2024 totaled $227, a decrease of $14, or 5.81%, over the $241 recognized for the three months ended September 30, 2023. Of professional services, the decrease is mainly attributed to a decrease in legal expenses and accounting fees in the current period as compared to the prior period.
Consulting, public and investor relations fees for the three months ended September 30, 2024 were $527 as compared to $734 incurred for the three months ended September 30, 2023, a decrease of $207, or 28.20%. The decrease primarily related to a reduction in investor relations, marketing and consulting during the three months ended September 30, 2024 as compared to the same period, last year.
Travel, meals and entertainment costs for the three months ended September 30, 2024 were $99, a decrease of $66, or 40%, from $165 incurred in the three months ended September 30, 2023. Travel, meals and entertainment costs include travel related to business development and financing. The decrease in 2024 was due to staff reductions in 2024 as compared to 2022.
Rent for the three months ended September 30, 2024 and 2023 was $38 and $96.
Impairment of Long Term Assets. During the three months ended September 30, 2024, the Company re-assessed it’s carrying amounts of certain property and equipment due to reduced manufacturing of its commercial products and determined that these carrying amounts did not exceed the estimated undiscounted future cash flows. Accordingly, the Company recorded no impairment charge.
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Depreciation and Amortization Expense. Depreciation and amortization expense for the three months ended September 30, 2024 totaled $31, a decrease of $61, or 66.30%, over the expense of $92 incurred in the three months ended September 30, 2023, as a result aging of equipment.
Other Income (Expense). Other income (expense) for the three months ended September 30, 2024 totaled $1,036, an increase in other income of $1,035, over the income of $1 incurred in the three months ended September 30, 2023, as a direct result of our gain on settlement and forgiveness of accounts payable negotiated by management during the current period.
Preferred Stock Dividend. Preferred stock dividend for the three months ended September 30, 2024 and 2023 totaled $26 and $2, respectively. Preferred stock dividends are related to the dividends accrued on our Series C Preferred Stock issued during the period from 2013 through 2015.
Net Loss Attributable to BioSig Technologies, Inc. Common Shareholders. As a result of the foregoing, net loss attributable to common shareholders for the three months ended September 30, 2024 was $1,940 compared to a net loss of $4,569 for the three months ended September 30, 2023.
Nine months ended September 30, 2024 Compared to nine months ended September, 2023 (000’s)
Revenues and Cost of Goods Sold. Revenue for the nine months ended September 30, 2024 was $27, comprised of recognized service revenue, as compared to $6, comprised of recognized service revenue for the nine months ended September 30, 2023.
We derive our revenue primarily from the sale of our medical device, PURE EP Platform, as well as related support and maintenance services and software upgrades in connection with the device.
We recognize revenue in accordance with Accounting Standards Codification (ASC) 842, Leases for lease components and ASC 606, Revenue from Contracts with Customers (“ASC 606”) for non-lease components. For medical device sales, we recognize revenue under ASC 606.
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.
Research and Development Expenses. Research and development expenses for the nine months ended September 30, 2024 were $736, a decrease of $3,180, or 81.21%, from $3,916 for the nine months ended September 30, 2023. The decrease is primarily due to decreases in payroll, consulting, Data/AI development and research and clinical studies and design work to $674 for the nine months ended September 30, 2024 as compared to $6,695 for the nine months ended September 30, 2023 primarily in the BioSig Technologies segment, a decrease of $3,021 or 81.76%.
Research and development expenses were comprised of the following:
Nine months ended:
September 30, 2024 | September 30, 2023 | |||||||
| Salaries and equity compensation | $ | 469 | $ | 3,063 | ||||
| Consulting expenses | 120 | 203 | ||||||
| Research and clinical studies and design work | 85 | 338 | ||||||
| Data/AI development | - | 91 | ||||||
| Regulatory | 3 | 64 | ||||||
| Travel, supplies, other | 59 | 157 | ||||||
| Total | $ | 736 | $ | 3,916 | ||||
Stock based compensation for research and development personnel was $83 and $998 for the nine months ended September 30, 2024 and 2023, respectively.
General and Administrative Expenses. General and administrative expenses for the nine months ended September 30, 2024 were $10,559, a decrease of $7,608 or 41.88%, from $18,167 incurred in the nine months ended September 30, 2023. This decrease is primarily due to a decrease in employee and service provider (stock-based) performance pay in the current period as compared to the same period in the prior year and additional service provider fees paid.
Payroll related expenses, including stock-based compensation expenses, decreased to $7,481 in the current period from $11,366 for the nine months ended September 30, 2023, a decrease of $3,885, or 34.18%. The decrease was primarily due to reduced staff in commercialization, sales and general and administration in the BioSig Technologies segment. We incurred $6,508 in stock-based compensation in connection with the vesting of stock and stock options issued to board members, officers, employees and consultants for the nine months ended September 30, 2024 as compared to $5,534 in stock-based compensation for the same period in 2023.
Professional services for the nine months ended September 30, 2024 totaled $884, a decrease of $26 or 2.88%, over the $910 recognized for the nine months ended September 30, 2023. Of professional services, legal fees totaled $556 for the nine months ended September 30, 2024; a decrease of $24, or 4.14%, from $580 incurred for the nine months ended September 30, 2023. The decrease in legal fees are primarily due to costs reduced costs incurred in 2024 for contract work and patent filings for the BioSig Technologies segment as compared to the nine months ended September 30, 2023. Accounting fees incurred in the nine months ended September 30, 2024 amounted to $139, a decrease of $17, or 10.90%, from $156 incurred in same period last year. In 2023, we incurred added accounting fees relating to financing in our BioSig Technologies segment.
Consulting, public and investor relations fees for the nine months ended September 30, 2024 were $986 as compared to $2,733 incurred for the nine months ended September 30, 2023, a decrease of $1,747, or 63.92%. The decrease primarily related to a reduction in investor relations, marketing and consulting during the nine months ended September 30, 2024 as compared to the same period, last year.
Travel, meals and entertainment costs for the nine months ended September 30, 2024 were $308, a decrease of $285, or 48.06%, from $593 incurred in the nine months ended September 30, 2023. Travel, meals and entertainment costs include travel related to business development and financing. The decrease in 2024 was due to staff reductions in 2024 as compared to 2022.
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Rent for the nine months ended September 30, 2024 and 2023 was $203 and $281.
Impairment of Long Term Assets. During the nine months ended September 30, 2024, the Company re-assessed it’s carrying amounts of certain property and equipment due to reduced manufacturing of its commercial products and determined that these carrying amounts exceeded the estimated undiscounted future cash flows. Accordingly, the Company recorded a $253 impairment charge to current operations.
Depreciation and Amortization Expense. Depreciation and amortization expense for the nine months ended September 30, 2024 totaled $158, a decrease of $110, or 41.04%, over the expense of $268 incurred in the nine months ended September 30, 2023, as a result aging of equipment.
Other Income (Expense). Other income (expense) for the nine months ended September 30, 2024 totaled $2,439, an increase in other income of $2,656, over the expense of $(217) incurred in the nine months ended September 30, 2023, as a direct result of our gain on settlement and forgiveness of accounts payable negotiated by management during the current period.
Preferred Stock Dividend. Preferred stock dividend for the nine months ended September 30, 2024 totaled $164, an increase of $157 over the expense of $7 incurred in the nine months ended September 30, 2023. Preferred stock dividends are related to the dividends accrued on our Series C Preferred Stock issued during the period from 2013 through 2015. In addition, the Series C Preferred stock conversion rate reset from $2.50 to $0.41 during the nine months ended September 30, 2024, therefore we recorded a non-cash deemed preferred stock dividend of $157 in the current period.
Net Loss Attributable to BioSig Technologies, Inc. Common Shareholders. As a result of the foregoing, net loss attributable to common shareholders for the nine months ended September 30, 2024 was $9,395 compared to a net loss of $22,999 for the nine months ended September 30, 2023.
Segment Results
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.
Summary Statement of Operations for the three and nine months ended September 30, 2024 as compared to the three and nine months ended September 30, 2023 are detailed in Note 13 of the accompanying unaudited condensed consolidated financial statements.
Liquidity and Capital Resources and Going Concern ($000’s)
As of September 30, 2024, we had a working capital deficit of $853, comprised of cash of $615, accounts receivable of $81, current portion of net investments in leases of $39 and prepaid expenses and other current assets of $113, which was offset by $1,448 of accounts payable and accrued expenses, accrued dividends on preferred stock issuances of $108 and of current portion of lease liability of $145. For the nine months ended September 30, 2024, we used $4,284 of cash in operating activities and nil of cash in investing activities.
Nine Months Ended September 30, 2024 Compared to Nine Months Ended September 30, 2023 (000’s)
Cash provided by financing activities totaled $4,709, comprised of proceeds from the sale of our common stock and warrants, net of expenses, of $4,209 and proceeds from issuance of a related party note of $500.
In the comparable period in 2023, our aggregate cash provided by financing activities totaled $14,585 comprised of proceeds from the sale of our common stock and warrants. At September 30, 2024, we had cash of $615 compared to $389 at September 30, 2023. Our cash is held in bank deposit accounts. At September 30, 2024 and 2023, we had no convertible debentures outstanding.
Cash used in operations for the nine months ended September 30, 2024 and 2023 was $4,284 and $14,371, respectively, which represent cash outlays for research and development and general and administrative expenses in such periods. The decreases in cash outlays principally resulted in reduced operating costs, general and administrative expenses in 2024 and with net decreases in our operating assets of $114 and a net increase in our operating liabilities of $5,242.
We used nil cash for investing activities for the nine months ended September 30, 2024, compared to $182 for the nine months ended September 30, 2023. For the comparable period, we purchased computers and other equipment.
We had an accumulated deficit as of September 30, 2024 of $254.24 million, as well as a net loss attributable to BioSig of $9.2 million and negative operating cash flows. We expect to continue incurring losses and negative cash flows from operations until our products (primarily PURE EP Platform) reach full commercial profitability.
These conditions raise substantial doubt about our ability to continue as a going concern. Our ability to continue as a going concern is an issue raised due to our net losses and negative cash flows from operations since inception and our expectation is that these conditions will continue for the foreseeable future. In addition, we will require additional financing to fund future operations. Although we have commercial products available for sale, we have not generated significant revenues to date, and there is no assurance that we will be able to generate cash flow to fund operations. In addition, there can be no assurance that our research and development will be successfully completed or that any additional products will be approved or commercially viable. Our ability to continue as a going concern is subject to our ability to obtain necessary funding from outside sources, including obtaining additional funding from the sale of our securities, obtaining loans from various financial institutions or being awarded grants from government agencies, where possible. Our continued net operating losses increase the difficulty in meeting such goals and there can be no assurances that such methods will prove successful. Additionally, with our reduction in staff, our planned commercialization may be further delayed.
Our plans include the continued commercialization of the PURE EP System and other applications of our core technology and raising capital through the sale of additional equity securities, debt or capital inflows from strategic partnerships. Our shift from a focus on technology development to commercialization has allowed us to reduce our annual expenses in a meaningful way. As a result of this transition, we have been able to achieve savings through reductions in executive and management compensation and a reduction of our utilization of external consultants and professional service providers. We believe these cost-saving measures combined with our expectations of positive trends in commercial activity create the potential for us to achieve a lower cash flow breakeven rate. There are no assurances, however, that we will be successful in obtaining the level of financing needed for our operations. The ongoing COVID-19 pandemic has resulted and continues to result in significant financial market volatility and uncertainty in recent months. In addition, U.S. and global markets are experiencing volatility and disruption following the escalation of geopolitical tensions and the start of the military conflict between Russia and Ukraine.
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A continuation or worsening of the levels of market disruption and volatility seen in the recent past could have an adverse effect on our ability to access capital and on the market price of our common stock, and we may not be able to successfully raise capital through the sale of our securities.
Our Series C Preferred Stock contains triggering events which would, among other things, require redemption (i) in cash, at the greater of (a) 120% of the stated value of $1 or (b) the product of (I) the variable weighted average price of our common stock on the trading day immediately preceding the date of the triggering event and (II) the stated value divided by the then conversion price or (ii) in shares of our common stock, equal to a number of shares equal to the amount set forth in (i) above divided by 75%. As of September 30, 2024, the aggregate stated value of our Series C Preferred Stock was $105. The triggering events include our being subject to a judgment of greater than $100 or our initiation of bankruptcy proceedings. If any of the triggering events contained in our Series C Preferred Stock occur, the holders of our Series C Preferred Stock may demand redemption, an obligation we may not have the ability to meet at the time of such demand. We will be required to pay interest on any amounts remaining unpaid after the required redemption of our Series C Preferred Stock, at a rate equal to the lesser of 18% per annum or the maximum rate permitted by applicable law.
We expect to incur losses from operations for the near future. We expect to incur additional marketing and commercialization expenses related to our PURE EP system in addition to additional research and development costs relating to the PURE EP and other product candidates, including expenses related to clinical trials. We expect that our general and administrative expenses will increase in the future as we expand our business development, add infrastructure and incur additional costs related to being a public company, including incremental audit fees, investor relations programs and increased professional services.
Our future capital requirements will depend on a number of factors, including the progress of our research and development of product candidates, the timing and outcome of regulatory approvals, the costs involved in preparing, filing, prosecuting, maintaining, defending and enforcing patent claims and other intellectual property rights, the status of competitive products, the availability of financing and our success in developing markets for our product candidates.
Future financing may include the issuance of equity or debt securities, obtaining credit facilities, or other financing mechanisms. Even if we are able to raise the funds required, it is possible that we could incur unexpected costs and expenses or experience unexpected cash requirements that would force us to seek alternative financing. Furthermore, if we issue additional equity or debt securities, existing holders of our securities may experience additional dilution or the new equity securities may have rights, preferences or privileges senior to those of existing holders of our securities.
If additional financing is not available or is not available on acceptable terms, we may be required to delay, reduce the scope of or eliminate our research and development programs, reduce our commercialization efforts or obtain funds through arrangements with collaborative partners or others that may require us to relinquish rights to certain product candidates that we might otherwise seek to develop or commercialize independently.
Equity Financing
On January 12, 2024, we entered into a securities purchase agreement with certain accredited and institutional investors, pursuant to which we sold to the investors an aggregate of 260,720 shares of our common stock and warrants to purchase up to 130,363 shares of common stock, at a purchase price of $3.989 per share and a warrant to purchase one-half of a share. The warrants have an exercise price of $3.364 per share, will become exercisable six months after the date of issuance and will expire five and one-half years following the date of issuance. The gross proceeds from this offering were $1,040,000.
On May 1, 2024, we entered into a securities purchase agreement with certain accredited investors, pursuant to which we sold to the Investors an aggregate of 783,406 shares of our common stock at a purchase price of $1.4605 per share, and warrants to purchase up to 391,703 shares of common stock at an exercise price of $1.398 per share, that will become exercisable six months after the date of issuance and will expire five and one-half years following the date of issuance, in exchange for aggregate consideration of $1,144,164, including $634,999 in cash and $509,165 representing conversion of the principal balance of and accrued interest on the previously issued related party note payable. The note was not convertible by its terms, but the holder has agreed to convert it into shares of common stock and warrants under the purchase agreement as described above. (See Below).
On May 29, 2024, the Company entered into a securities purchase agreement (the “SPA”) with certain institutional investors, pursuant to which the Company agreed to sell and issue to the investors (i) in a registered direct offering, 1,570,683 shares (the “Shares”) of Common Stock, par value $0.001 per share of the Company (the “Common Stock”) at a price of $1.91 per share and (ii) in a concurrent private placement, common stock purchase warrants (the “Private Placement Warrants”) to purchase up to an aggregate of 1,570,683 shares of Common Stock, at an exercise price of $1.78 per share of Common Stock.
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On May 30, 2024, the Company closed the registered direct offering and the concurrent private placement (collectively, the “Offering”), raising gross proceeds of approximately $3.0 million before deducting placement agent fees and other offering expenses payable by the Company. The Company intends to use the net proceeds from the Offering for working capital and general corporate purposes.
Issuance of Debt
On March 7, 2024, we issued a promissory note to an investor and an affiliate (10% or more shareholder) for $500,000. We designated its 12% note due 2026, in accordance with exemptions from registration under the Securities Act of 1933, as amended (the “Securities Act”).
The note is due March 7, 2026. We promise to pay interest in cash on the unpaid principal amount of this note at a rate per annum equal to twelve percent (12%), commencing to accrue on the date hereof and payable on the maturity date or earlier prepayment as provided therein. The Note contains customary events of default.
We may prepay all or any portion of the principal amount of the Note at any time or from time to time without penalty.
On May 1, 2024, we converted the promissory note and related accrued interest of $509,165 into 348,624 shares of common stock and warrants to purchase 174,312 shares of common stock at $1.398 per share, that will become exercisable six months after the date of issuance and will expire five and one-half years following the date of issuance.
Critical Accounting Estimates
The following discussion and analysis of our financial condition and results of operations are based upon our consolidated financial statements, which have been prepared in accordance with generally accepted accounting principles in the U.S. The preparation of consolidated financial statements in accordance with generally accepted accounting principles in the U.S. requires us to make estimates and assumptions that affect the amounts reported in our consolidated financial statements. The consolidated financial statements include estimates based on currently available information and our judgment as to the outcome of future conditions and circumstances.
We believe the following critical accounting estimates affect our more significant judgments and estimates used in the preparation of our financial statements. We evaluate these estimates and judgments on an ongoing basis. We base our estimates on our historical experience and on various other assumptions that we believe to be reasonable under the circumstances. Among the significant judgments made by management in the preparation of our financial statements are the following:
Stock Based Compensation
We estimate the fair value of options and stock warrants granted using the Black Scholes Merton model. We estimate when and if performance-based awards will be earned. If an award is not considered probable of being earned, no amount of equity-based compensation expense is recognized. If the award is deemed probable of being earned, related equity-based compensation expense is recorded. The fair value of an award ultimately expected to vest is recognized as an expense, net of forfeitures, over the requisite service periods in our statements of operations, which is generally the vesting period of the award.
The Black Scholes Merton model requires the input of certain subjective assumptions and the application of judgment in determining the fair value of the awards. The most significant assumptions and judgments include the expected volatility, risk-free interest rate, the expected dividend yield, and the expected term of the awards. In addition, the recognition of equity-based compensation expense is impacted by our forfeitures, which are accounted for as they occur.
The assumptions used in our option pricing model represent management’s best estimates. If factors change and different assumptions are used, our equity-based compensation expense could be materially different in the future. The assumptions used in our option pricing model represent management’s best estimates. If factors change and different assumptions are used, our equity-based compensation expense could be materially different in the future.
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All stock-based payments to employees and to nonemployee directors for their services as directors consisted of grants of restricted stock and stock options, which are measured at fair value on the grant date and recognized in the statements of operations as compensation expense over the relevant vesting period. Restricted stock payments and stock-based payments to non-employees are recognized as an expense over the period of performance.
Such payments are measured at fair value at the earlier of the date a performance commitment is reached, or the date performance is completed. In addition, for awards that vest immediately and are non-forfeitable, the measurement date is the date the award is issued.
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
Not required under Regulation S-K for “smaller reporting companies.”
ITEM 4. CONTROLS AND PROCEDURES
Management’s evaluation of disclosure controls and procedures.
Our management, with the participation of our Chief Executive Officer and Chief Financial Officer, evaluated the effectiveness of our disclosure controls and procedures pursuant to Rule 13a-15(e) under the Exchange Act. In designing and evaluating the disclosure controls and procedures, management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives. In addition, the design of disclosure controls and procedures must reflect the fact that there are resource constraints, and that management is required to apply its judgment in evaluating the benefits of possible controls and procedures relative to their costs.
Based on management’s evaluation, our Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures are not designed at a reasonable assurance level and are not effective in providing reasonable assurance that information we are required to disclose in reports that we file or submit under the Exchange Act is recorded, processed, summarized, and reported within the time periods specified in SEC rules and forms, and that such information is accumulated and communicated to our management, including our chief executive officer and chief financial officer, as appropriate, to allow timely decisions regarding required disclosure.
Management’s report on internal control over financial reporting.
Our management is responsible for establishing and maintaining adequate internal control over financial reporting for our company. Internal control over financial reporting is defined in Rule 13a-15(f) and 15d-15(f) promulgated under the Exchange Act, as a process designed by, or under the supervision of, a company’s principal executive and principal financial officer and effected by the our board of directors, management and other personnel, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles and includes those policies and procedures that:
| (1) | pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; | |
| (2) | provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made in accordance with authorizations of management and directors of the company; and | |
| (3) | provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of the company’s assets that could have a material effect on the financial statements. |
Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate. Management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving their objectives and management necessarily applies its judgment in evaluating the cost-benefit relationship of possible enhancements to controls and procedures.
Management, including our Chief Executive Officer and Chief Financial Officer, conducted an evaluation of the effectiveness of our internal control over financial reporting as of December 31, 2023, based on the criteria in a framework developed by the Company’s management pursuant to and in compliance with the criteria established in Internal Control – Integrated Framework (2013) issued by the Committee of Sponsoring Organizations (“COSO”) of the Treadway Commission. This evaluation included review of the documentation of controls, evaluation of the design effectiveness of controls, walkthroughs of the operating effectiveness of controls and a conclusion on this evaluation. Based on this evaluation, management has concluded that our internal control over financial reporting was not effective as of September 30, 2024, because management identified that i) inadequate identification, recording and reporting of stock based compensation, ii) ineffective review processes over period end financial disclosure and reporting, and (iii) inadequate segregation of duties for transaction posting and processing, amounted to a material weakness in the Company’s internal control over financial reporting.
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The material weaknesses did not result in any identified misstatements to the consolidated financial statements and there were no changes to previously released financial results.
Management’s Remediation Plan
In 2025, we have intents to add sufficient staff and oversight supervision controls to provide adequate accounting segregation. We believe these changes will remediate the underlying deficiencies as identified by us. The remediation efforts will include an ongoing review of the implementation of additional controls to ensure all risks have been addressed.
As a result of the material weaknesses discussed above or of others, we may experience negative impacts on our ability to accurately report our results of operation and financial condition in a timely manner. If we do identify a material weakness in our internal control over financial reporting and are unsuccessful in implementing or following a remediation plan, or fail to update our internal control over financial reporting as our business evolves or to integrate acquired businesses into our controls system, if additional material weaknesses are found in our internal controls in the future, or if our external auditors cannot attest to the effectiveness of our internal control over financial review, if applicable, we may not be able to timely or accurately report our financial condition, results of operations or cash flows or to maintain effective disclosure controls and procedures. If we are unable to report financial information in a timely and accurate manner or to maintain effective disclosure controls and procedures, we could be subject to, among other things, regulatory or enforcement actions by the SEC, an inability for us to be accepted for listing on any national securities exchange in the near future, securities litigation and a general loss of investor confidence, any one of which could adversely affect our business prospects and the market value of our common stock. Further, there are inherent limitations to the effectiveness of any system of controls and procedures, including the possibility of human error and the circumvention or overriding of the controls and procedures. We could face additional litigation exposure and a greater likelihood of an SEC enforcement or other regulatory action if further restatements were to occur or other accounting-related problems emerge.
The weaknesses will not be considered remediated until the applicable controls operate for a sufficient period of time and management has concluded, through testing, that these controls are operating effectively.
Changes in Internal Control over Financial Reporting
There has been no change in our internal control over financial reporting identified in connection with the evaluation referred to above that occurred during our last completed fiscal quarter that has materially negatively affected, or is reasonably likely to materially affect, our internal control over financial reporting. As discussed above, management has remediation plans that will be implemented in 2025.
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PART II. OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
On December 4, 2023, we received a threat of litigation for the termination of employment with the Company alleging the termination of employment was in retaliation for bringing to the attention of the Company’s board of directors and executives a series of wrongful and questionable practices by members of the Company’s board of directors, Chief Executive Officer and Chief Financial Officer. The claimant sought compensation of in the amount of $775,782. After an investigation conducted by the Board and guidance of legal counsel, it was concluded that the claim was without merit.
On February 22, 2024, we received a threat of litigation seeking restitution for losses resulting from unlawful actions taken by the Company’s board of directors. The claimant contends that he and others have sustained losses totaling $1,440,000. On March 22, 2024, the claimant sent another letter to the Company referencing the previous letter and requesting several documents. The Company believes that these claims are without merit.
On March 22, 2024, plaintiff, Michael Gray Fleming (the “Plaintiff”), filed a lawsuit in Hennepin County, Minnesota District Court naming the Company, its former Chief Executive Officer and former Chief Financial Officer as defendants. The Plaintiff contends that the Company failed to meet its obligations in issuing the Plaintiff stock certificates under the terms of a restricted stock award agreement. Plaintiff is seeking at least $288,000 in damages. The Company believes Plaintiff’s allegations are baseless, and its intent is to contest the allegations vigorously. As of the date of this report, the Company is unable to provide an evaluation of the outcome of the litigation or to provide an estimate of the amount of or a range of potential loss that might be incurred by the Company. The Company has moved to dismiss Plaintiff’s claims; a hearing is set in September 2024. The Company also has learned that, following expiration of the SEC Rule 144 waiting period for affiliate/control shares, Plaintiff was able to have his restrictions removed. In light of the pending motion and legend removal, the Company hopes that Plaintiff will simply withdraw his complaint.
We may be 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.
There are no material proceedings in which any of our directors, officers or affiliates or any registered or beneficial shareholder of more than 5% of our common stock is an adverse party or has a material interest adverse to our interest.
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ITEM 1A. RISK FACTORS
The following description of risk factors includes any material changes to risk factors associated with our business, financial condition and results of operations previously disclosed in Item 1A. “Risk Factors” of our annual report on Form 10-K for the fiscal year ended December 31, 2023, as filed with the SEC on April 16, 2024. Our business, financial condition and operating results can be affected by a number of factors, whether currently known or unknown, including but not limited to those described below, any one or more of which could, directly or indirectly, cause our actual financial condition and operating results to vary materially from past, or from anticipated future, financial condition and operating results. Any of these factors, in whole or in part, could materially and adversely affect our business, financial condition, operating results, and stock price.
The following discussion of risk factors contains forward-looking statements. These risk factors may be important to understanding other statements in this Form 10-Q. The following information should be read in conjunction with the condensed consolidated financial statements and related notes in Part I, Item 1, “Financial Statements” and Part I, Item 2, “Management’s Discussion and Analysis of Financial Condition and Results of Operations” of this Form 10-Q.
Our common stock is subject to the “penny stock” rules of the SEC and the trading market in the securities is limited, which makes transactions in the stock cumbersome and may reduce the value of an investment in the stock.
Rule 15g-9 under the Exchange Act, establishes the definition of a “penny stock,” for the purposes relevant to us, as any equity security that has a market price of less than $5.00 per share or with an exercise price of less than $5.00 per share, subject to certain exceptions. For any transaction involving a penny stock, unless exempt, the rules require: (a) that a broker or dealer approve a person’s account for transactions in penny stocks; and (b) the broker or dealer receive from the investor a written agreement to the transaction, setting forth the identity and quantity of the penny stock to be purchased.
In order to approve a person’s account for transactions in penny stocks, the broker or dealer must: (a) obtain financial information and investment experience objectives of the person and (b) make a reasonable determination that the transactions in penny stocks are suitable for that person and the person has sufficient knowledge and experience in financial matters to be capable of evaluating the risks of transactions in penny stocks.
The broker or dealer must also deliver, prior to any transaction in a penny stock, a disclosure schedule prescribed by the SEC relating to the penny stock market, which, in highlight form: (a) sets forth the basis on which the broker or dealer made the suitability determination; and (b) confirms that the broker or dealer received a signed, written agreement from the investor prior to the transaction. Generally, brokers may be less willing to execute transactions in securities subject to the “penny stock” rules. This may make it more difficult for investors to dispose of our common stock and cause a decline in the market value of our common stock.
Disclosure also has to be made about the risks of investing in penny stocks in both public offerings and in secondary trading and about the commissions payable to both the broker or dealer and the registered representative, current quotations for the securities and the rights and remedies available to an investor in cases of fraud in penny stock transactions. Finally, monthly statements have to be sent disclosing recent price information for the penny stock held in the account and information on the limited market in penny stocks.
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ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES, USE OF PROCEEDS, AND ISSUER PURCHASES OF EQUITY SECURITIES
None.
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
None.
ITEM 4. MINE SAFETY DISCLOSURES
None.
ITEM 5. OTHER INFORMATION
None.
| 42 |
ITEM 6. EXHIBITS
* Filed herewith.
** Furnished herewith.
| 43 |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
| BIOSIG TECHNOLOGIES, INC. | ||
| Date: November 14, 2024 | By: | /s/ Anthony Amato |
| Anthony Amato | ||
| Chief Executive Officer (Principal Executive Officer) | ||
| Date: November 14, 2024 | By: | /s/ Ferdinand Groenewald |
| Ferdinand Groenewald | ||
| Acting Chief Financial Officer (Principal Accounting Officer) | ||
| 44 |