STEX 10-Q Quarter ended March 31, 2018

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QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

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TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

Delaware		26-4333375
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)

Large accelerated filer	☐		Accelerated filer	☐
Non-accelerated filer	☐		Smaller reporting company	☒
Emerging growth company	☒

PART I.	FINANCIAL INFORMATION
	ITEM 1.	Financial Statements
		Condensed balance sheets as of March 31, 2018 (unaudited) and December 31, 2017		3
		Condensed statements of operations for the three months ended March 31, 2018 and 2017 (unaudited)		4
		Condensed statement of stockholders’ deficit for the three months ended March 31, 2018 (unaudited)		5
		Condensed statements of cash flows for the three months ended March 31, 2018 and 2017 (unaudited)		6
		Notes to condensed financial statements (unaudited)		7-18
	ITEM 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operation		19-24
	ITEM 3.	Quantitative and Qualitative Disclosures about Market Risk		24
	ITEM 4.	Controls and Procedures		25
PART II.	OTHER INFORMATION
	ITEM 1.	Legal Proceedings		26
	ITEM 1A.	Risk Factors		26
	ITEM 2.	Unregistered Sales of Equity Securities and Use of Proceeds		26
	ITEM 3.	Defaults Upon Senior Securities		26
	ITEM 4.	Mine Safety Disclosures		26
	ITEM 5.	Other Information		26
	ITEM 6.	Exhibits		27
	SIGNATURES			28

BIOSIG TECHNOLOGIES, INC.
CONDENSED BALANCE SHEETS
		March 31,				December 31,
		2018				2017
		(unaudited)
ASSETS
Current assets:
Cash		$	1,035,100			$	1,547,579
Prepaid expenses			119,111				116,938
Total current assets			1,154,211				1,664,517
Property and equipment, net			19,457				18,716
Other assets:
Deposits			22,477				17,084
Total assets		$	1,196,145			$	1,700,317
LIABILITIES AND STOCKHOLDERS’ DEFICIT
Current liabilities:
Accounts payable and accrued expenses, including $7,236 and $27,375 to related parties as of March 31, 2018 and December 31, 2017, respectively		$	338,811			$	473,098
Dividends payable			482,636				447,901
Warrant liability			-				2,358,240
Derivative liability			-				685,922
Total current  liabilities			821,447				3,965,161
Series C Preferred Stock, 965 and 985 shares issued and outstanding; liquidation preference of $965,000 and $985,000 as of March 31, 2018 and December 31, 2017, respectively			965,000				985,000
Stockholders’ deficit
Preferred stock, $0.001 par value, authorized 1,000,000 shares, designated 200 shares of Series A, 600 shares of Series B, 4,200 shares of Series C, 1,400 shares of Series D, 1,000 shares of Series E Preferred Stock
Series D Preferred Stock, $0.001 par value, 687 and 1,334 shares issued and outstanding; liquidation preference of $1,030,500 and $2,001,000 as of March 31, 2018 and December 31, 2017, respectively			1				1
Series E Preferred Stock, $0.001 par value, 1,000 and 0 shares issued and outstanding; liquidation preference of $1,500,000 and $0 as of March 31, 2018 and December 31, 2017, respectively			1				-
Common stock, $0.001 par value, authorized 200,000,000 shares, 30,497,707 and 29,321,204 issued and outstanding as of March 31, 2018 and December 31, 2017, respectively			30,498				29,321
Additional paid in capital			55,381,386				53,215,635
Common stock subscription			115,470				29,985
Accumulated deficit			(56,117,658	)			(56,524,786	)
Total stockholders’ deficit			(590,302	)			(3,249,844	)
Total liabilities and stockholders’ deficit		$	1,196,145			$	1,700,317
See the accompanying notes to the unaudited condensed financial statements

BIOSIG TECHNOLOGIES, INC.
CONDENSED STATEMENTS OF OPERATIONS
(unaudited)
		Three months ended March 31,
		2018				2017
Operating expenses:
Research and development		$	862,420			$	1,338,604
General and administrative			1,771,796				1,557,341
Depreciation			2,903				3,069
Total operating expenses			2,637,119				2,899,014
Loss from operations			(2,637,119	)			(2,899,014	)
Other income (expense):
Loss on change in fair value of derivatives			-				(373,611	)
Interest income			85				-
Loss before income taxes			(2,637,034	)			(3,272,625	)
Income taxes (benefit)			-				-
Net loss			(2,637,034	)			(3,272,625	)
Preferred stock dividend			(305,046	)			(23,745	)
NET LOSS AVAILABLE TO COMMON STOCKHOLDERS		$	(2,942,080	)		$	(3,296,370	)
Net loss per common share, basic and diluted		$	(0.09	)		$	(0.14	)
Weighted average number of common shares outstanding, basic and diluted			29,944,445				23,051,872
See the accompanying notes to the unaudited condensed financial statements

BIOSIG TECHNOLOGIES, INC.
CONDENSED STATEMENT OF STOCKHOLDERS’ DEFICIT
THREE MONTHS ENDED MARCH 31, 2018
																										Additional
		Series D Preferred stock								Series E Preferred stock								Common stock								Paid in				Common stock				Accumulated
		Shares				Amount				Shares				Amount				Shares				Amount				Capital				Subscription				Deficit				Total
Balance, December 31, 2017			1,334			$	1				-			$	-				29,321,204			$	29,321			$	53,215,635			$	29,985			$	(56,524,786	)		$	(3,249,844	)
Reclassify fair value of derivative and warrant liabilities to equity upon adoption of ASU 2017-11			-				-				-				-				-				-				-				-				3,044,162				3,044,162
Common stock issued for services			-				-				-				-				100,000				100				141,900				-				-				142,000
Sale of common stock			-				-				-				-				200,000				200				299,785				(29,985	)			-				270,000
Common stock issued upon conversion of Series C Preferred Stock at $1.50 per share			-				-				-				-				13,334				13				19,987				-				-				20,000
Common stock issued settlement of Series C Preferred Stock accrued dividends at $1.25 per share			-				-				-				-				6,595				7				8,269				-				-				8,276
Common stock issued upon conversion of Series D Preferred Stock at $1.50 per share			(647	)			-				-				-				647,000				647				(647	)			-				-				-
Common stock issued settlement of Series D Preferred Stock accrued dividends at $1.25 per share			-				-				-				-				209,574				210				261,825				-				-				262,035
Sale of Series E Preferred stock			-				-				1,000				1				-				-				1,492,968				-				-				1,492,969
Common stock subscription received			-				-				-				-				-				-				-				115,470				-				115,470
Stock based compensation			-				-				-				-				-				-				246,710				-				-				246,710
Preferred stock dividend			-				-				-				-				-				-				(305,046	)			-				-				(305,046	)
Net loss			-				-				-				-				-				-				-				-				(2,637,034	)			(2,637,034	)
Balance, March 31, 2018 (unaudited)			687			$	1				1,000			$	1				30,497,707			$	30,498			$	55,381,386			$	115,470			$	(56,117,658	)		$	(590,302	)
See the accompanying notes to the unaudited condensed financial statements

BIOSIG TECHNOLOGIES, INC.
CONDENSED STATEMENTS OF CASH FLOWS
(unaudited)
		Three months ended March 31,
		2018				2017
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss		$	(2,637,034	)		$	(3,272,625	)
Adjustments to reconcile net loss to cash used in operating activities:
Depreciation			2,903				3,069
Change in derivative liabilities			-				373,611
Equity based compensation			388,710				560,746
Fair value of issued warrant to acquire research and development			-				543,927
Changes in operating assets and liabilities:
Prepaid expenses			(2,173	)			(27,514	)
Security deposit			(5,393	)			-
Accounts payable			(134,714	)			209,466
Deferred rent payable			427				(521	)
Net cash used in operating activities			(2,387,274	)			(1,609,841	)
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of property and equipment			(3,644	)			(1,620	)
Net cash used in investing activity			(3,644	)			(1,620	)
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from sale of common stock			270,000				1,799,692
Proceeds from sale of Series E preferred stock			1,492,969				-
Proceeds from common stock subscription			115,470				-
Net cash provided by financing activities			1,878,439				1,799,692
Net (decrease) increase in cash and cash equivalents			(512,479	)			188,231
Cash and cash equivalents, beginning of the period			1,547,579				1,055,895
Cash and cash equivalents, end of the period		$	1,035,100			$	1,244,126
Supplemental disclosures of cash flow information:
Cash paid during the period for interest		$	-			$	-
Cash paid during the period for income taxes		$	-			$	-
Non cash investing and financing activities:
Common stock issued upon conversion of Series C Preferred Stock and accrued dividends		$	28,276			$	-
Common stock issued upon conversion of Series D Preferred Stock and accrued dividends		$	262,035			$	-
Reclassify fair value of derivative and warrant liabilities to equity upon adoption of ASU 2017-11		$	3,044,162			$	-
Accrual of dividend payable charged to additional paid in capital		$	305,046			$	23,745
See the accompanying notes to the unaudited condensed financial statements

		March 31, 2018				March 31, 2017
Series C convertible preferred stock			643,333				713,333
Series D convertible preferred stock			687,000				-
Series E convertible preferred stock			1,000,000				-
Options to purchase common stock			8,230,319				8,245,190
Warrants to purchase common stock			12,237,628				10,419,655
Totals			22,798,280				19,378,178

		March 31, 2018				December 31, 2017
Computer equipment		$	90,703			$	87,059
Furniture and fixtures			12,975				12,975
Subtotal			103,678				100,034
Less accumulated depreciation			(84,221	)			(81,318	)
Property and equipment, net		$	19,457			$	18,716

		March 31, 2018				December 31, 2017
Accrued accounting and legal		$	151,745			$	93,595
Accrued reimbursements			10,510				2,600
Accrued consulting			12,650				109,059
Accrued research and development expenses			148,932				246,030
Accrued office and other			644				7,912
Deferred rent			997				569
Accrued settlement related to arbitration			13,333				13,333
		$	338,811			$	473,098

Options Outstanding												Options Exercisable
								Weighted
								Average				Exercisable
Exercise				Number of				Remaining Life				Number of
Price				Options				In Years				Options
$	1.01-2.00				3,545,540				7.2				2,483,540
	2.01-3.00				4,384,779				3.4				4,384,779
	3.01-4.00				300,000				7.0				300,000
					8,230,319				5.2				7,168,319

										Weighted-Average
						Weighted-Average				Remaining				Aggregate
		Shares				Exercise Price				Contractual Term				Intrinsic Value
Outstanding at December 31, 2017			8,510,319			$	2.11				5.2			$	27,045
Grants			50,000			$	1.42				10.0			$	-
Exercised			-
Canceled			(330,000	)			1.66
Outstanding at March 31, 2018			8,230,319			$	2.12				5.2			$	158,930
Exercisable at March 31, 2018			7,168,319			$	2.20				4.7			$	104,305

Risk-free interest rate			2.65	%
Dividend yield			0	%
Stock price volatility			94.10	%
Expected life		5 years
Weighted average grant date fair value		$	1.01

Exercise				Number			Expiration
Price				Outstanding			Date
$	0.001				383,320		January 2020
$	1.50				7,615,982		February 2018 to May 2021
$	1.75				500,000		August 2021
$	1.84				35,076		January 2020
$	1.95				1,689,026		October 2018 to September 2019
$	2.00				100,000		August 2018
$	2.02				30,755		January 2020
$	2.50				100,000		August 2018
$	2.75				228,720		August 2019 to September 2019
$	3.67				214,193		December 2018 to January 2019
$	3.75				1,340,556		April 2019 to March 2020
					12,237,628

										Weighted-Average
						Weighted-Average				Remaining				Aggregate
		Shares				Exercise Price				Contractual Term				Intrinsic Value
Outstanding at December 31, 2017			12,789,086			$	1.82				1.7			$	551,636
Grants			700,000			$	1.68				3.0				-
Exercised			-
Expired			(1,251,458	)		$	1.50				-				-
Outstanding at March 31, 2018			12,237,628			$	1.85				1.7			$	1,134,548
Vested and expected to vest at March 31, 2018			12,237,628			$	1.85				1.7			$	1,134,548
Exercisable at March 31, 2018			12,237,628			$	1.85				1.7			$	1,134,548

		Warrant Liability				Derivative
Balance, December 31, 2017		$	2,358,240			$	685,922
Total (gains) losses
Transfers out due to the adoption of ASU 2017-11 effective January 1, 2018			(2,358,240	)			(685,922	)
Balance, March 31, 2018		$	-			$	-

●	Precise, uninterrupted, real-time evaluations of electrograms (PURE EP™);

●	Higher quality cardiac signal acquisition for accurate and more efficient electrophysiology studies and catheter ablation procedures to help reduce costs and length of procedures;

●	Reliable display of information to better determine precise ablation targets, strategy and end point of procedures with the objective of reducing the need for multiple procedures;

●	A device that can be fully integrated into existing electrophysiology lab environments.

●	On January 9, 2018, we announced that we have partnered with Charles Austin and JK Advisors in preparation of the commercial launch of our PURE EP System.

●	On January 10, 2018, Dr. Asirvatham and his team performed our eleventh pre-clinical study at Mayo Clinic in Rochester, Minnesota.

●	On February 22, 2018, we announced that we have partnered with Focus Marketing to assist our commercial team in preparation of our launch of our PURE EP System.

●	On March 20, 2018, we announced that we have formed an Advisory Board to advise the leadership of BioSig on a range of subjects, including strategy, marketing, government affairs, partnerships, mergers and acquisitions, intellectual property, and capital markets.

●	On March 28, 2018, we announced that we have filed our 510(k) application to the U.S. Food and Drug Administration (FDA) for our first product, PURE EP™ System.

		March 31, 2018				March 31, 2017
Salaries and equity compensation		$	287,849			$	260,722
Consulting expenses			131,601				91,545
Clinical studies and design work			419,325				396,301
Acquired research and development			-				543,927
Travel, supplies, other			23,645				46,109
Total		$	862,420			$	1,338,604

31.01	Certification of Chief Executive Officer pursuant to Exchange Act Rules 13a-14(a) and 15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
31.02	Certification of Chief Financial Officer pursuant to Exchange Act Rules 13a-14(a) and 15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
32.01	Certifications of Chief Executive Officer and Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
101 INS	XBRL Instance Document
101 SCH	XBRL Taxonomy Extension Schema Document
101 CAL	XBRL Taxonomy Calculation Linkbase Document
101 DEF	XBRL Taxonomy Extension Definition Linkbase Document
101 LAB	XBRL Taxonomy Labels Linkbase Document
101 PRE	XBRL Taxonomy Presentation Linkbase Document

	BIOSIG TECHNOLOGIES, INC.
Date: May 4, 2018	By:	/s/ KENNETH L. LONDONER
		Kenneth L. Londoner
		Chairman and Chief Executive Officer (Principal Executive Officer)
Date: May 4, 2018	By:	/s/ STEVEN CHAUSSY
		Steven Chaussy
		Chief Financial Officer (Principal Accounting Officer)