biosig20210331

biosig20210331_10q.htm

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 March 31, 2021

☐

TRANSITION REPORT UNDER 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.)

54 Wilton Road, 2nd Floor Westport, CT	06880	(203) 409-5444
(Address of principal executive office)	(Zip Code)	(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 (§ 229.405 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 May 14, 2021, there were 32,180,479 shares of registrant’s common stock outstanding.

TABLE OF CONTENTS

PART I. FINANCIAL INFORMATION

	ITEM 1.	Financial Statements

		Condensed consolidated balance sheets as of March 31, 2021 (unaudited) and December 31, 2020	3

		Condensed consolidated statements of operations for the three months ended March 31, 2021 and 2020 (unaudited)	4

		Condensed consolidated statement of changes in equity for the three months ended March 31, 2021 (unaudited)	5

		Condensed consolidated statement of changes in equity for the three months ended March 31, 2020 (unaudited)	6

		Condensed consolidated statements of cash flows for the three months ended March 31, 2021 and 2020 (unaudited)	7

		Notes to condensed consolidated financial statements (unaudited)	8-27

	ITEM 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	28-34
	ITEM 3.	Quantitative and Qualitative Disclosures about Market Risk	35
	ITEM 4.	Controls and Procedures	35

PART II. OTHER INFORMATION

	ITEM 1.	Legal Proceedings	36
	ITEM 1A.	Risk Factors	36
	ITEM 2.	Unregistered Sales of Equity Securities and Use of Proceeds	36
	ITEM 3.	Defaults Upon Senior Securities	36
	ITEM 4.	Mine Safety Disclosures	36
	ITEM 5.	Other Information	36
	ITEM 6.	Exhibits	37

	SIGNATURES		38

Table of Contents

PART I – FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

BIOSIG TECHNOLOGIES, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(In Thousands, Except Par Value and Share Amounts)

	March 31,			December 31,
	2021			2020
	(unaudited)
ASSETS
Current assets:
Cash	$	22,475		$	28,268
Inventory		650			768
Prepaid expenses and vendor deposits		209			301
Total current assets		23,334			29,337

Property and equipment, net		381			289

Right-to-use assets, net		356			306

Other assets:
Patents, net		341			346
Trademarks		1			1
Prepaid expenses, long term		1			5
Deposits		102			102

Total assets	$	24,516		$	30,386

LIABILITIES AND EQUITY
Current liabilities:
Accounts payable and accrued expenses, including $147 and $317 to related parties as of March 31, 2021 and December 31, 2020, respectively	$	3,459		$	4,722
Deferred revenue, short term		32			-
Dividends payable		75			73
Lease liability, short term		330			313
Total current liabilities		3,896			5,108

Deferred revenue, long term		29			-
Lease liability, long term		28			1
Total long-term debt		57			1

Total liabilities		3,953			5,109

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 March 31, 2021 and December 31, 2020		105			105

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, none issued of Series F Preferred Stock		-			-
Common stock, $0.001 par value, authorized 200,000,000 shares, 32,114,781 and 30,764,792 issued and outstanding as of March 31, 2021 and December 31, 2020, respectively		32			31
Additional paid in capital		185,168			181,344
Accumulated deficit		(165,324	)		(157,005	)
Total stockholders' equity attributable to BioSig Technologies, Inc.		19,876			24,370
Non-controlling interest		582			802
Total equity		20,458			25,172

Total liabilities and equity	$	24,516		$	30,386

See the accompanying notes to the unaudited condensed consolidated financial statements

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BIOSIG TECHNOLOGIES, INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(In Thousands, Except Par Value and Share Amounts)

(unaudited)

	Three months ended March 31,
	2021			2020
Revenue:
Product sales	$	115		$	-
Service		3			-
Total Revenue		118			-

Cost of goods sold		99			-

Gross profit		19			-

Operating expenses:
Research and development		1,266			4,927
General and administrative		7,271			7,855
Depreciation and amortization		42			21
Total operating expenses		8,579			12,803

Loss from operations		(8,560	)		(12,803	)

Other income (expense):
Interest income, net		1			40

Loss before income taxes		(8,559	)		(12,763	)

Income taxes (benefit)		-			-

Net loss		(8,559	)		(12,763	)

Non-controlling interest		240			1,428

Net loss attributable to BioSig Technologies, Inc.		(8,319	)		(11,335	)

Preferred stock dividend		(2	)		(5	)

NET LOSS ATTRIBUTABLE TO COMMON SHAREHOLDERS	$	(8,321	)	$	(11,340	)

Net loss per common share, basic and diluted	$	(0.26	)	$	(0.46	)

Weighted average number of common shares outstanding, basic and diluted		31,584,142			24,389,249

See the accompanying notes to the unaudited condensed consolidated financial statements

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BIOSIG TECHNOLOGIES, INC.

CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

THREE MONTHS ENDED MARCH 31, 2021

(In Thousands, Except Par Value and Share Amounts)

	Common stock				Additional Paid in			Accumulated			Non-controlling
	Shares		Amount		Capital			Deficit			Interest			Total
Balance, December 31, 2020		30,764,792	$	31	$	181,344		$	(157,005	)	$	802		$	25,172
Common stock issued for services		406,692		-		1,777			-			-			1,777
Common stock issued upon exercise of options at $2.96 per share		9,375		-		28			-			-			28
Sale of common stock under At-the-market offering, net of transaction expenses of $40		251,720		-		1,300			-			-			1,300
Stock based compensation		682,202		1		721			-			20			742
Preferred stock dividend		-		-		(2	)		-			-			(2	)
Net loss		-		-		-			(8,319	)		(240	)		(8,559	)
Balance, March 31, 2021 (unaudited)		32,114,781	$	32	$	185,168		$	(165,324	)	$	582		$	20,458

See the accompanying notes to the unaudited condensed consolidated financial statements

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BIOSIG TECHNOLOGIES, INC.

CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

THREE MONTHS ENDED MARCH 31, 2020

(In Thousands, Except Par Value and Share Amounts)

	Common stock				Additional Paid in			Accumulated			Non-controlling
	Shares		Amount		Capital			Deficit			Interest			Total
Balance, December 31, 2019		23,323,087	$	23	$	115,910		$	(104,787	)	$	515		$	11,661
Sale of common stock		2,500,000		2		9,050			-			-			9,052
Common stock issued upon conversion of Series C Preferred Stock at $3.75 per share		2,667		-		10			-			-			10
Common stock issued settlement of Series C Preferred Stock accrued dividends at $5.39 per share		1,083		-		6			-			-			6
Common stock issued upon cashless exercise of warrants		10,574		-		-			-			-			-
Common stock issued upon cashless exercise of options		11,141		-		-			-			-			-
Common stock issued upon exercise of warrants at an average of $3.75 per share		80,432		1		301			-			-			302
Fair value of subsidiary shares issued to acquire research and development from Trek Therapeutics, PBC		-		-		2,440			-			735			3,175
Stock based compensation		81,334		-		3,628			-			785			4,413
Preferred stock dividend		-		-		(5	)		-			-			(5	)
Net loss		-		-		-			(11,335	)		(1,428	)		(12,763	)
Balance, March 31, 2020 (unaudited)		26,010,318	$	26	$	131,340		$	(116,122	)	$	607		$	15,851

See the accompanying notes to the unaudited condensed consolidated financial statements

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BIOSIG TECHNOLOGIES, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(In Thousands, Except Par Value and Share Amounts)

(unaudited)

	Three months ended March 31,
	2021			2020
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss	$	(8,559	)	$	(12,763	)
Adjustments to reconcile net loss to cash used in operating activities:
Depreciation and amortization		42			21
Amortization of right to use assets		111			113
Equity based compensation		2,519			4,413
Fair value of subsidiary stock issued to acquire research and development from Trek Therapeutics, PBC		-			3,174
Changes in operating assets and liabilities:
Inventory		118			(222	)
Vendor deposits		18			(100	)
Prepaid expenses		78			(10	)
Deferred revenue		61			-
Accounts payable and accrued expenses		(1,263	)		(456	)
Operating lease liabilities		(116	)		(112	)
Net cash used in operating activities		(6,991	)		(5,942	)

CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of property and equipment		(130	)		(20	)
Net cash used in investing activity		(130	)		(20	)

CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from sale of common stock, net of issuance costs		-			9,052
Proceeds from sale of common stock under a At-the-market offering, net of issuance costs		1,300			-
Proceeds from exercise of options		28			-
Proceeds from exercise of warrants		-			302
Net cash provided by financing activities		1,328			9,354

Net (decrease) increase in cash and cash equivalents		(5,793	)		3,392

Cash and cash equivalents, beginning of the period		28,268			12,108
Cash and cash equivalents, end of the period	$	22,475		$	15,500

Supplemental disclosures of cash flow information:
Cash paid during the period for interest	$	-		$	-
Cash paid during the period for income taxes	$	-		$	-

Noncash investing and financing activities:
Common stock issued upon conversion of Series C Preferred Stock and accrued dividends	$	-		$	16
Dividend payable on preferred stock charged to additional paid in capital	$	2		$	5
Record right-to-use assets and related lease liability	$	218		$	-

See the accompanying notes to the unaudited condensed consolidated financial statements

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BIOSIG TECHNOLOGIES, INC.

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

MARCH 31, 2021

(unaudited)

NOTE 1 – NATURE OF OPERATIONS AND BASIS OF PRESENTATION

BioSig Technologies, Inc. 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 of care in electrophysiology with its initial product offering, the PURE EP™ System, designed for enhanced cardiac 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. As of March 31, 2021, ViralClear had been realigned with its original objective of pursuing additional applications of the PURE EP™ signal processing technology outside of cardiac electrophysiology.

In 2019 and 2020, ViralClear sold an aggregate of 1,965,240 shares of its common stock to investors for net proceeds of $15.6 million and issued an aggregate of 894,869 shares of its common stock in connection with acquiring assets and with know-how agreements. As of March 31, 2021, the Company had a majority interest in ViralClear of 70.2%.

On July 2, 2020, the Company formed an additional subsidiary, NeuroClear Technologies, Inc., a Delaware corporation.

The unaudited condensed consolidated financial statements include the accounts of BioSig Technologies, Inc., its wholly owned subsidiary, NeuroClear Technologies, Inc. and its majority owned subsidiary, ViralClear Pharmaceuticals, Inc. as the “Company” or “BioSig”.

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, 2020 has been derived from audited financial statements.

Operating results for the three months ended March 31, 2021 are not necessarily indicative of results that may be expected for the year ending December 31, 2021. These unaudited condensed consolidated financial statements should be read in conjunction with the audited financial statements for the year ended December 31, 2020 filed with the Company’s Form 10-K with the Securities and Exchange Commission on March 15, 2021.

COVID-19

On March 11, 2020, the World Health Organization declared a pandemic related to the rapidly spreading coronavirus (COVID-19) outbreak, which has led to a global health emergency. The full public-health impact of the ongoing pandemic is currently indeterminable and rapidly evolving, and the related health crisis has adversely affected and may continue to adversely affect the global economy, resulting in delaying to our commercialization objectives of the PURE EP Systems into 2021.

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BIOSIG TECHNOLOGIES, INC.

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

MARCH 31, 2021

(unaudited)

NOTE 2 – MANAGEMENT’S LIQUIDITY PLANS

BioSig Technologies, Inc.’s primary efforts are principally devoted to improving the standard care of electrophysiology with its PURE EP System’s enhanced signal acquisition, digital signal processing, and analysis during ablation of cardiac arrhythmias; NeuroClear’s and ViralClear’s efforts are in developing additional applications of the PURE EP™ signal processing technology outside of cardiac electrophysiology. The Company has experienced net losses and negative cash flows from operations since inception and expects these conditions to continue for the foreseeable future. Further, the Company has generated minimal revenues and there is no assurance that the Company will be able to generate cash flow to fund operations. In addition, there can be no assurance that the Company's ongoing research and development will be successfully completed or that any product will be commercially viable.

At March 31, 2021, the Company had working capital of approximately $19.4 million. During the three months ended March 31, 2021, the Company raised approximately $1.3 million, net of expenses, through an At-the-market offering. At March 31, 2021 the Company has effective Forms S-3, shelf registration statements for an aggregate of $116.0 million.

At March 31, 2021, the Company had cash of approximately $22.5 million, which constitutes sufficient funds for the Company to meet its commercialization efforts, research and development and other funding requirements for at least the next 12 months from the date of issuance of these unaudited financial statements.

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 unaudited condensed 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, the fair value of long-term operating leases, patent capitalization, fair value of acquired assets, the fair value of the Company’s stock, stock-based compensation, fair values relating to warrant and other derivative liabilities 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 of its medical device, the PURE EP™ System, and well as related support and maintenance services and software upgrades in connection with the system.

The Company recognizes revenue in accordance with Accounting Standards Codification (ASC) 606, Revenue from Contracts with Customers (“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.

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.

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BIOSIG TECHNOLOGIES, INC.

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

MARCH 31, 2021

(unaudited)

Performance obligations are the unit 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. 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 System 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 unaudited condensed consolidated balance sheet.

A reconciliation of contract liabilities with customers is presented below:

	Balance at December 31, 2020		Consideration Received		Recognized in Revenue			Balance at March 31, 2021
Product revenue	$	-	$	115,367	$	(115,367	)	$	-
Service revenue		-		64,312		(2,680	)		61,632
Total	$	-	$	179,679	$	(118,047	)	$	61,632

The table below summarizes our deferred revenue as of March 31, 2021 and December 31, 2020:

	March 31, 2021		December 31, 2020
Deferred revenue-current	$	32,156	$	-
Deferred revenue-noncurrent		29,476		-
Total deferred revenue	$	61,632	$	-

We had one customer which accounted for approximately 100% of our revenue in the three months ended March 31, 2021.

Cost of Goods Sold

Cost of goods sold consists primarily of the delivered cost of our medical device(s) sold.

Fair Value of Financial Instruments

Accounting Standards Codification subtopic 825-10, Financial Instruments (“ASC 825-10”) requires disclosure of the fair value of certain financial instruments. The carrying value of cash and cash equivalents, accounts payable and accrued liabilities as reflected in the balance sheets, approximate fair value because of the short-term maturity of these instruments. All other significant financial assets, financial liabilities and equity instruments of the Company are either recognized or disclosed in the financial statements together with other information relevant for making a reasonable assessment of future cash flows, interest rate risk and credit risk. Where practicable the fair values of financial assets and financial liabilities have been determined and disclosed; otherwise only available information pertinent to fair value has been disclosed.

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BIOSIG TECHNOLOGIES, INC.

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

MARCH 31, 2021

(unaudited)

The Company follows Accounting Standards Codification subtopic 820-10, Fair Value Measurements and Disclosures (“ASC 820-10”) and ASC 825-10, which permits entities to choose to measure many financial instruments and certain other items at fair value.

Concentrations of Credit Risk

Financial instruments and related items, which potentially subject the Company to concentrations of credit risk, consist primarily of cash and cash equivalents. The Company places its cash and temporary cash investments with credit quality institutions. At times, such amounts may be in excess of the FDIC insurance limit. At March 31, 2021 and December 31, 2020, deposits in excess of FDIC limits were $22.0 million and $27.8 million, respectively.

Inventory

The inventory is comprised of finished goods available for sale and are stated at the lower of cost or net realizable value using the first-in, first-out method of valuation. The inventory at March 31, 2021 and December 31, 2020 were $649,937 and $768,319, respectively.

Prepaid Expenses and Vendor Deposits

Prepaid expenses and vendor deposits are comprised of prepaid insurance, operating expenses and other prepayments.

Leases

The Company determines if a contractual arrangement is a lease at inception. Operating leases are included in operating lease right-of-use (“ROU”) assets, current operating lease liabilities, and noncurrent operating lease liabilities on the Company’s consolidated balance sheet. The Company evaluates and classifies leases as operating or finance leases for financial reporting purposes. The classification evaluation begins at the commencement date and the lease term used in the evaluation includes the non-cancellable period for which the Company has the right to use the underlying asset, together with renewal option periods when the exercise of the renewal option is reasonably certain and failure to exercise such option which result in an economic penalty. All the Company’s real estate leases are classified as operating leases. ROU assets represent the Company’s right to use an underlying asset for the lease term and lease liabilities represent the Company’s obligation to make lease payments arising from the lease. Operating lease ROU assets and liabilities are recognized at the commencement date of the lease based on the present value of lease payments over the lease term. The lease payments included in the present value are fixed lease payments. As most of the Company’s leases do not provide an implicit rate, the Company estimates its collateralized incremental borrowing rate, based on information available at the commencement date, in determining the present value of lease payments. The Company applies the portfolio approach in applying discount rates to its classes of leases. The operating lease ROU assets include any payments made before the commencement date. Lease expense for lease payments is recognized on a straight-line basis over the lease term. The Company does not currently have subleases. The Company does not currently have residual value guarantees or restrictive covenants in its leases.

Property and Equipment

Property and equipment are stated at cost and depreciated using the straight-line method over their estimated useful lives of 3 to 5 years. When retired or otherwise disposed, the related carrying value and accumulated depreciation are removed from the respective accounts and the net difference less any amount realized from disposition, is reflected in earnings.

Impairment of Long-lived Assets

The Company recognizes an impairment of long-lived assets used in operations, other than goodwill, when events or circumstances indicate that the asset might be impaired and the estimated undiscounted cash flows to be generated by those assets over their remaining lives are less than the carrying amount of those items. The net carrying value of assets not recoverable is reduced to fair value, which is typically calculated using the discounted cash flow method. The Company did not recognize and record any impairments of long-lived assets used in operations during the three months ended March 31, 2021 and 2020.

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BIOSIG TECHNOLOGIES, INC.

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

MARCH 31, 2021

(unaudited)

Research and Development Costs

The Company accounts for research and development costs in accordance with the Accounting Standards Codification subtopic 730-10, Research and Development (“ASC 730-10”). Under ASC 730-10, all research and development costs must be charged to expense as incurred. Accordingly, internal research and development costs are expensed as incurred. Third-party research and developments costs are expensed when the contracted work has been performed or as milestone results have been achieved. Company-sponsored research and development costs related to both present and future products are expensed in the period incurred. The Company incurred research and development expenses of $1.3 million and $4.9 million for the three months ended March 31, 2021 and 2020, respectively.

Net Income (loss) Per Common Share

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 March 31, 2021 and 2020 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.

Potentially dilutive securities excluded from the computation of basic and diluted net income (loss) per share are as follows:

	March 31, 2021		March 31, 2020
Series C convertible preferred stock		47,659		81,465
Options to purchase common stock		3,780,037		3,828,896
Warrants to purchase common stock		1,436,200		1,963,030
Restricted stock units to acquire common stock		346,000		181,334
Totals		5,609,896		6,054,725

Stock Based Compensation

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.

SEC Form 10-Q filed by BioSig Technologies, Inc.