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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

 

 

FORM 10-Q

 

 

 

(Mark One)

 

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

 

For the quarterly period ended September 30, 2023

 

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

 

For the transition period from to

 

Commission file number: 001-38659

 

BIOSIG TECHNOLOGIES, INC.

(Exact name of registrant as specified in its charter)

 

Delaware   26-4333375

(State or other jurisdiction of incorporation

or organization)

 

(IRS Employer

Identification No.)

     

55 Greens Farms Road, 1st Floor

Westport, CT

  06880
(Address of principal executive office)   (Zip Code)

 

(203) 409-5444

(Registrant’s telephone number, including area code)

 

Securities registered pursuant to Section 12(b) of the Act:

 

Title of each class   Trading Symbol(s)   Name of each exchange on which registered
Common Stock, par value $0.001 per share   BSGM   The NASDAQ Capital Market

 

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

 

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

 

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

 

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

 

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

 

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No

 

As of November 13, 2023, there were 88,107,565 shares of registrant’s common stock outstanding.

 

 

 

 

 

 

TABLE OF CONTENTS

 

PART I. FINANCIAL INFORMATION    
         
  ITEM 1. Financial Statements    
         
    Condensed consolidated balance sheets as of September 30, 2023 (unaudited) and December 31, 2022   3
         
    Condensed consolidated statements of operations for the three and nine months ended September 30, 2023 and 2022 (unaudited)   4
         
    Condensed consolidated statement of changes in equity (deficit) for the three and nine months ended September 30, 2023 (unaudited)   5
         
    Condensed consolidated statement of changes in equity for the three and nine months ended September 30, 2022 (unaudited)   6
         
    Condensed consolidated statements of cash flows for the nine months ended September 30, 2023 and 2022 (unaudited)   7
         
    Notes to condensed consolidated financial statements (unaudited)   8-32
         
  ITEM 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations   33-43
  ITEM 3. Quantitative and Qualitative Disclosures about Market Risk   44
  ITEM 4. Controls and Procedures   44
         
PART II. OTHER INFORMATION    
         
  ITEM 1. Legal Proceedings   45
  ITEM 1A. Risk Factors   46
  ITEM 2. Unregistered Sales of Equity Securities, Use of Proceeds, and Issuer Purchases of Equity Securities   47
  ITEM 3. Defaults Upon Senior Securities   47
  ITEM 4. Mine Safety Disclosures   47
  ITEM 5. Other Information   47
  ITEM 6. Exhibits   48
         
  SIGNATURES   50

 

2

 

 

PART IFINANCIAL INFORMATION

 

ITEM 1. FINANCIAL STATEMENTS

 

BIOSIG TECHNOLOGIES, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(In Thousands, Except Par Value and Share Amounts)

 

   September 30,   December 31, 
   2023   2022 
   (unaudited)     
ASSETS          
Current assets:          
Cash  $389   $357 
Accounts receivable   14    9 
Inventory, short term   219    336 
Deferred expenses, short term   5    - 
Net investment in leases, short term   102    101 
Prepaid expenses and other current assets   322    325 
Total current assets   1,051    1,128 
           
Property and equipment, net   593    665 
           
Right-to-use assets, net   487    705 
           
Other assets:          
Inventory, long term   -    1,141 
Net investment in leases, long term   43    120 
Patents, net   293    307 
Other assets   687    44 
           
Total assets  $3,154   $4,110 
           
LIABILITIES AND EQUITY (DEFICIT)          
Current liabilities:          
Accounts payable and accrued expenses, including $0 and $120 to related parties as of September 30, 2023 and December 31, 2022, respectively  $3,470   $2,852 
Customer deposits   4    - 
Deferred revenue, short term   -    5 
Dividends payable   98    91 
Lease liability, short term   339    313 
Total current liabilities   3,911    3,261 
           
Lease liability, long term   193    452 
Total long-term liabilities   193    452 
           
Total liabilities   4,104    3,713 
           
Commitments and contingencies (Note 11)   -     -  
           
Series C 9% Convertible Preferred Stock, $0.001 par value, $1,000 stated value, authorized 4,200 shares, 105 shares issued and outstanding; liquidation preference of $105 as of September 30, 2023 and December 31, 2022   105    105 
           
(Deficit) Equity:          
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, 200,000 shares of Series F Preferred Stock. 105 shares of Series C outstanding as of September 30, 2023 and December 31, 2022 (see above)   -    - 
Common stock, $0.001 par value, authorized 200,000,000 shares, 79,243,833 and 54,610,638 issued and outstanding as of September 30, 2023 and December 31, 2022, respectively   79    55 
Additional paid in capital   237,727    216,232 
Accumulated deficit   (238,966)   (215,974)
Total stockholders’ equity (deficit) attributable to BioSig Technologies, Inc.   (1,160)   313 
Non-controlling interest   105    (21)
Total (deficit) equity   (1,055)   292 
           
Total liabilities and (deficit) equity  $3,154   $4,110 

 

The accompanying notes are an integral part of these unaudited Condensed Consolidated Financial Statements

 

3

 

 

BIOSIG TECHNOLOGIES, INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(In Thousands, Except Par Value and Share Amounts)

(unaudited)

 

   2023   2022   2023   2022 
   Three months ended September 30,   Nine months ended September 30, 
   2023   2022   2023   2022 
Revenue:                    
Product  $-   $127   $-   $127 
Service   1    8    6    24 
Total revenue   1    135    6    151 
                     
Cost of revenue   -    30    -    30 
                     
Gross profit   1    105    6    121 
                     
Operating expenses:                    
Research and development   1,145    1,733    3,916    4,701 
General and administrative   2,815    4,774    18,167    15,477 
Depreciation and amortization   92    84    268    210 
Total operating expenses   4,052    6,591    22,351    20,388 
                     
Loss from operations   (4,051)   (6,486)   (22,345)   (20,267)
                     
Other income (expense):                    
Interest income, net   1    1    8    1 
Other income (expense), net:   -    -    (225)   - 
                     
Loss before income taxes   (4,050)   (6,485)   (22,562)   (20,266)
                     
Income taxes (benefit)   -    -    -    - 
                     
Net loss   (4,050)   (6,485)   (22,562)   (20,266)
                     
Non-controlling interest   (517)   113    (430)   172 
                     
Net loss attributable to BioSig Technologies, Inc.   (4,567)   (6,372)   (22,992)   (20,094)
                     
Preferred stock dividend   (2)   (2)   (7)   (7)
Preferred stock deemed dividend   -    (17)   -    (125)
                     
NET LOSS ATTRIBUTABLE TO COMMON SHAREHOLDERS  $(4,569)  $(6,391)  $(22,999)  $(20,226)
                     
Net loss per common share, basic and diluted  $(0.06)  $(0.14)  $(0.33)  $(0.50)
                     
Weighted average number of common shares outstanding, basic and diluted   75,372,373    45,015,574    69,077,898    40,311,669 

 

The accompanying notes are an integral part of these unaudited Condensed Consolidated Financial Statements

 

4

 

 

BIOSIG TECHNOLOGIES, INC.

CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY (DEFICIT)

THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2023

(In Thousands, Except Par Value and Share Amounts)

 

           Additional             
   Common stock   Paid in   Accumulated   Non-controlling     
   Shares   Amount   Capital   Deficit   Interest   Total 
Balance, December 31, 2022   54,610,638   $55   $216,232   $(215,974)  $(21)  $292 
Common stock issued for services   1,167,500    1    1,096    -    -    1,097 
Common stock issued in settlement of accounts payable   88,000    -*    105    -    -    105 
Sale of common stock and warrants, net transactional costs of $482   8,500,300                8    6,740    -                           -    6,748 
Stock based compensation   2,491,249    3    1,044    -    5    1,052 
Preferred stock dividend   -    -    (2)   -    -    (2)
Net loss   -    -    -    (7,332)   (50)   (7,382)
Balance, March 31, 2023 (unaudited)   66,857,687    67    225,215    (223,306)   (66)   1,910 
Common stock issued for services   3,854,346    4    4,807    -    -    4,811 
Sale of common stock and warrants, net transactional costs of $201   2,590,906    2    3,243    -    -    3,245 
Sale of subsidiary stock   -    -    1,379    -    188    1,567 
Common stock issued for exercise of warrants cashlessly   43,601    -*    -*    -    -    - 
Stock based compensation   110,835    -*    (73)   -    4    (69)
Preferred stock dividend   -    -    (3)   -    -    (3)
Net loss   -    -    -    (11,093)   (37)   (11,130)
Balance, June 30, 2023 (unaudited)   73,457,375    73    234,568    (234,399)   89    331 
Common stock issued for services   1,503,000    2    935    -    -    937 
Sale of common stock and warrants, net of transactional costs of $237   3,917,348    4    2,620    -    -    2,624 
Sale of common stock under at-the-market offerings, net of transactional expenses of $164   298,610    -*    (3)   -    -    (3)
Sale of subsidiary stock   -    -    296    -    108    404 
Stock based compensation   67,500    -*    (687)        (609)   (1,296)
Preferred stock dividend   -    -    (2)   -    -    (2)
Net loss   -    -    -    (4,567)   517    (4,050)
Balance, September 30, 2023 (unaudited)   79,243,833   $79   $237,727   $(238,966)  $105   $(1,055)

 

*- less than $1

 

The accompanying notes are an integral part of these unaudited Condensed Consolidated Financial Statements

 

5

 

 

BIOSIG TECHNOLOGIES, INC.

CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2022

(In Thousands, Except Par Value and Share Amounts)

 

   Shares   Amount   Capital   Deficit   Interest   Total 
   Common stock  

Additional

Paid in

   Accumulated   Non-controlling     
   Shares   Amount   Capital   Deficit   Interest   Total 
Balance, December 31, 2021   35,567,180   $36   $201,127   $(188,922)  $219   $12,460 
Common stock issued for services   1,312,500           1    1,600    -                        -    1,601 
Change in fair value of modified options   -    -    15    -    -    15 
Sale of common stock and warrants, net transactional costs of $3   2,613,130    2    3,000    -    -    3,002 
Stock based compensation   66,249    -*    500    -    (101)   399 
Preferred stock dividend   -    -    (2)   -    -    (2)
Net loss   -    -    -    (7,963)   (102)   (8,065)
Balance, March 31, 2022 (unaudited)   39,559,059    39    206,240    (196,885)   16    9,410 
Common stock issued for services   567,500    1    482    -    -    483 
Sale of common stock under at-the-market offerings, net of transaction expenses of $46   322,404    -*    302    -    -    302 
Sale of common stock, net transactional costs of $438   4,341,667    5    2,813    -    -    2,818 
Issuance of subsidiary stock in settlement of debt to parent   -    -    (292)        292    - 
Stock based compensation   21,250    -*    (86)   -    (231)   (317)
Accretion of deemed preferred stock dividend   -    -    108    -    -    108 
Deemed preferred stock dividend   -    -    (108)   -    -    (108)
Preferred stock dividend   -    -    (3)   -    -    (3)
Net loss   -    -    -    (5,759)   43    (5,716)
Balance, June 30, 2022 (unaudited)   44,811,880    45    209,456    (202,644)   120    6,977 
Sale of common stock under at-the-market offerings, net of transaction expenses of $21   914,822    1    806    -    -    807 
Stock based compensation   71,250    -*    532         5    537 
Accretion of deemed preferred stock dividend   -    -    17    -    -    17 
Deemed preferred stock dividend   -    -    (17)   -    -    (17)
Preferred stock dividend   -    -    (2)   -    -    (2)
Net loss   -    -    -    (6,372)   (113)   (6,485)
Balance, September 30, 2022 (unaudited)   45,797,952   $46   $210,792   $(209,016)  $12   $1,834 

 

*- less than $1

 

See the accompanying notes to the unaudited condensed consolidated financial statements

 

6

 

 

BIOSIG TECHNOLOGIES, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(In Thousands, Except Par Value and Share Amounts)

(unaudited)

 

   2023   2022 
   Nine months ended September 30, 
   2023   2022 
CASH FLOWS FROM OPERATING ACTIVITIES:          
Net loss  $(22,562)  $(20,266)
Adjustments to reconcile net loss to cash used in operating activities:          
Depreciation and amortization   268    210 
Non-cash lease expense   216    244 
Non-cash inventory write-down   1,307    - 
Equity based compensation   6,532    2,703 
Change in fair value of modified options   -    15 
Changes in operating assets and liabilities:          
Accounts receivable   (5)   (5)
Lease receivables   75    (114)
Employee advances   (16)   - 
Inventory   (49)   70 
Prepaid expenses and other assets   (625)   (104)
Deferred expense   (4)   - 
Deferred revenue   (5)   (24)
Customer deposits   4    - 
Accounts payable and accrued expenses   724    (87)
Operating lease liabilities   (231)   (233)
Net cash used in operating activities   (14,371)   (17,591)
           
CASH FLOWS FROM INVESTING ACTIVITIES:          
Purchase of property and equipment   (182)   (110)
Net cash used in investing activity   (182)   (110)
           
CASH FLOWS FROM FINANCING ACTIVITIES:          
Proceeds from sale of common stock and warrants, net of issuance costs   12,617    5,820 
Proceeds from sale of common stock under at-the-market offerings, net of issuance costs   (3)   1,109 
Proceeds from the sale of subsidiary stock to non-controlling interest, net of issuance costs   1,971    - 
Net cash provided by financing activities   14,585    6,929 
           
Net increase (decease) in cash and cash equivalents   32    (10,772)
           
Cash, beginning of the period   357    11,659 
Cash, end of the period  $389   $887 
           
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 in settlement of debt  $105   $- 
Dividend payable on preferred stock charged to additional paid in capital  $7   $7 
Series C convertible preferred stock deemed dividend  $-   $125 
Record right-to-use assets and related lease liability  $-   $502 

 

The accompanying notes are an integral part of these unaudited Condensed Consolidated Financial Statements

 

7

 

 

BIOSIG TECHNOLOGIES, INC.

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

SEPTEMBER 30, 2023

(unaudited)

 

NOTE 1 NATURE OF OPERATIONS AND BASIS OF PRESENTATION

 

Business and organization

 

BioSig Technologies, Inc. (“BioSig” or the “Company”) was initially incorporated on February 24, 2009 under the laws of the State of Nevada and subsequently re-incorporated in the state of Delaware in 2011. The Company is principally devoted to improving the standard care in electrophysiology with our PURE EP Platform’s enhanced signal acquisition, digital signal processing, and analysis during ablation of cardiac arrhythmias. The Company has generated minimal revenue to date and consequently its operations are subject to all risks inherent in business enterprises in early commercialization stage.

 

On November 7, 2018, the Company formed a subsidiary under the laws of the State of Delaware originally under the name of NeuroClear Technologies, Inc. which was renamed to ViralClear Pharmaceuticals, Inc. (“ViralClear”) in March 2020. The subsidiary was established to pursue additional applications of the PURE EP™ signal processing technology outside of cardiac electrophysiology, and subsequently in 2020, was repurposed to develop merimepodib, a broad-spectrum anti-viral agent that showed potential for the treatment of COVID-19. Since late 2020, ViralClear has been realigned with its original objective of pursuing additional applications of the PURE EP™ signal processing technology outside of cardiac electrophysiology.

 

As of September 30, 2023, the Company had a majority interest in ViralClear of 69.08%.

 

On July 2, 2020, the Company formed an additional subsidiary, NeuroClear Technologies, Inc., a Delaware corporation, which was renamed to BioSig AI Sciences, Inc. (“BioSig AI”) on May 31, 2023. The subsidiary was established to pursue clinical needs of cardiac and neurological disorders through recordings and analyses of action potentials. BioSig AI aims to contribute to the advancements of AI-based diagnoses and therapies. In June and July 2023, BioSig AI sold an aggregate of 2,205,000 shares of its common stock for net proceeds of $1,971,277 to fund initial operations. At September 30, 2023, the Company had a majority interest in BioSig AI of 84.5% (see Notes 8 and 10).

 

The unaudited condensed consolidated financial statements include the accounts of BioSig Technologies, Inc., and its majority owned subsidiaries, ViralClear and BioSig AI.

 

The unaudited condensed consolidated financial statements of the Company have been prepared in accordance with accounting principles generally accepted in the United States (“GAAP”) for interim financial information and the instructions to Form 10-Q and Rule 8-03 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by GAAP for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included.

 

The condensed consolidated balance sheet as of December 31, 2022 has been derived from audited financial statements.

 

Operating results for the three and nine months ended September 30, 2023 are not necessarily indicative of results that may be expected for the year ending December 31, 2023. These unaudited condensed consolidated financial statements should be read in conjunction with the audited financial statements for the year ended December 31, 2022 filed with the Company’s Form 10-K with the Securities and Exchange Commission on March 31, 2023.

 

COVID-19

 

The World Health Organization determined that COVID-19 no longer fit the definition of a public health emergency and the U.S. government let the declaration of a public health emergency associated with COVID-19 expire on May 11, 2023. COVID-19 is expected to remain a serious endemic threat for an indefinite future period and may continue to adversely affect the global economy, resulting in delays to our commercialization objectives of the PURE EP Platform during 2023.

 

8

 

 

BIOSIG TECHNOLOGIES, INC.

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

SEPTEMBER 30, 2023

(unaudited)

 

Inflation Reduction Act of 2022

 

On August 16, 2022, the U.S. government enacted the Inflation Reduction Act of 2022 that includes, among other provisions, changes to the U.S. corporate income tax system, including a fifteen percent minimum tax based on “adjusted financial statement income,” which is effective for tax years beginning after December 31, 2022, and a one percent excise tax on net repurchases of stock after December 31, 2022. The Company evaluated the Inflation Reduction Act and its requirements, as well as its application to our business, and determined the Inflation Reduction Act to not have a material impact on our financial results.

 

NOTE 2 GOING CONCERN AND MANAGEMENT’S LIQUIDITY PLANS

 

As of September 30, 2023, the Company had cash of $0.4 million and working capital deficit of $(2.9) million. During the nine months ended September 30, 2023, the Company used net cash in operating activities of $14.4 million.

 

The Company’s primary source of operating funds since inception has been cash proceeds from the sale of common and preferred stock. The Company has experienced net losses and negative cash flows from operations since inception and expects these conditions to continue for the foreseeable future.

 

The Company’s plans include the continued commercialization of the PURE EP Platform and other applications of our core technology and raising capital through the sale of additional equity securities, debt or capital inflows from strategic partnerships. The Company’s strategic shift from a focus on technology development to commercialization will allow the Company to significantly reduce operating expenses.

 

The Company will require additional financing to fund future operations. Further, although the Company began commercial operations, there is no assurance that the Company will be able to generate sufficient cash flow to fund operations. In addition, there can be no assurance that the Company’s continuing research and development will be successfully completed or that any additional products will be commercially viable. These conditions raise substantial doubt about the Company’s ability to continue as a going concern.

 

Accordingly, the accompanying unaudited condensed consolidated financial statements have been prepared in conformity with U.S. GAAP, which contemplates continuation of the Company as a going concern and the realization of assets and satisfaction of liabilities in the normal course of business. The carrying amounts of assets and liabilities presented in the unaudited condensed consolidated financial statements do not necessarily purport to represent realizable or settlement values. The unaudited condensed consolidated financial statements do not include any adjustment that might result from the outcome of this uncertainty.

 

NOTE 3 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

 

Use of Estimates

 

The preparation of these unaudited condensed consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Significant estimates include the recoverability and useful lives of long-lived assets, stock-based compensation and the valuation allowance related to deferred tax assets. Actual results may differ from these estimates.

 

Revenue Recognition

 

The Company derives its revenue primarily from the sale and lease of its medical device, the PURE EP™ Platform, and well as related support and maintenance services and software upgrades in connection with the device.

 

9

 

 

BIOSIG TECHNOLOGIES, INC.

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

SEPTEMBER 30, 2023

(unaudited)

 

The Company recognizes revenue in accordance with Accounting Standards Codification (ASC) 842, Leases (“ASC 842”) for lease components and ASC 606, Revenue from Contracts with Customers (“ASC 606”) for non-lease components. For medical device sales, the Company recognizes 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.

 

Under ASC 606, the Company determines revenue recognition through the following five steps:

 

  Identify the contract with the customer;
     
  Identify the performance obligations in the contract;
     
  Determine the transaction price;
     
  Allocate the transaction price to the performance obligation in the contract; and
     
  Recognize revenue when, or as, the performance obligations are satisfied.

 

Performance obligations are the units of accounting for revenue recognition and generally represent the distinct goods or services that are promised to the customer. If the Company determines that it has not satisfied a performance obligation, it will defer recognition of the revenue until the performance obligation is deemed to be satisfied. Once the PURE EP Platform is delivered, installed, and accepted by the customer, our performance obligation is recognized. Support, maintenance, and software upgrades are performance obligations over a defined period and are recognized ratably over the contractual service period. Customers typically purchase these services with the initial sale of the PURE EP Platform and do not have the right to terminate their contracts unless we fail to perform material obligations.

 

The Company may execute more than one contract with a single customer. If so, it is evaluated whether the agreements were negotiated as a package with a single objective, whether the amount of consideration to be paid in one agreement depends on the price and/or performance of another agreement, or whether the goods or services promised in the agreements represent a single performance obligation. The conclusions reached can impact the allocation of the transaction price to each performance obligation and the timing of revenue recognition related to those arrangements.

 

The Company records accounts receivable for amounts invoiced to customers for which the Company has an unconditional right to consideration as provided under the contractual arrangement. Unbilled receivables, if any, include amounts related to the Company’s contractual right to consideration for completed performance obligations not yet invoiced. Deferred revenue includes payments received in advance of performance under the contract. Our unbilled receivables and deferred revenue are reported on an individual contract basis at the end of each reporting period. Unbilled receivables are classified as current or noncurrent based on the timing of when we expect to bill the customer. Deferred revenue is classified as current or noncurrent based on the timing of when we expect to recognize revenue.

 

The Company’s unconditional right to consideration for goods and services transferred to the customer is included in accounts receivable, net (if any) in the Company’s consolidated balance sheet.

 

In 2022, the Company entered two leases for our PURE EP Platform at a rate of $4,333 per month each. The term of the leases is for 30 months with an option provided to extend for an additional one year. The leases also have an option to purchase at the end of the lease at the fair market value. The Company accounts for the leases in accordance with ASC 842 and ASC 606.

 

10

 

 

BIOSIG TECHNOLOGIES, INC.

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

SEPTEMBER 30, 2023

(unaudited)

 

The Company determined the leases meet the criteria of a sales-type lease whereby the present value of the future expected revenue (less the present value of the estimated unguaranteed residual value), cost of sales and profit and loss are recognized at the lease inception. Non-lease components are recognized under ASC 606. The discount rate utilized was the contract explicit rate of 2% per annum. (See Note 6 – Lease Receivables).

 

A reconciliation of contract liabilities with customers for the nine months ended September 30, 2023 and 2022, are presented below:

 

SCHEDULE OF RECONCILIATION OF CONTRACT LIABILITIES WITH CUSTOMERS

Nine months ended September 30, 2023:

 

  

Balance at

December 31,
2022

(000’s)

  

Consideration Received

(000’s)

  

Recognized in Revenue

(000’s)

  

Balance at

September 30,

2023

(000’s)

 
Service revenue  $        5   $               1   $              (6)  $               - 

 

Nine months ended September 30, 2022:

 

  

Balance at

December 31,
2021

(000’s)

  

Consideration Received

(000’s)

  

Recognized in Revenue

(000’s)

  

Balance at

September 30,

2022

(000’s)

 
Service revenue  $         37   $               -   $             (24)  $            13 

 

The table below summarizes our deferred revenue as of September 30, 2023 and December 31, 2022: