[framework.browserify]: Error: ENOTDIR: not a directory, stat

I'm trying to setup a karma/ jasmine ttd into my project and get the above subject error

the following is my package.json

....
  "devDependencies": {
    "babelify": "^6.1.3",
    "browser-sync": "^2.8.0",
    "browserify": "^11.0.0",
    "del": "^1.2.0",
    "exorcist": "^0.4.0",
    "gulp": "^3.9.0",
    "gulp-buffer": "0.0.2",
    "gulp-if": "^1.2.5",
    "gulp-karma": "*",
    "gulp-uglify": "^1.2.0",
    "gulp-util": "^3.0.6",
    "jasmine": "*",
    "karma": "*",
    "karma-browserify": "^5.0.3",
    "karma-chrome-launcher": "^0.2.3",
    "karma-jasmine": "*",
    "vinyl-source-stream": "^1.1.0",
    "watchify": "^3.7.0",
    "yargs": "^3.16.1"
  },
  "dependencies": {
    "phaser": "^2.4.1"
  },
  "browserify": {
    "transform": [
      "babelify"
    ]
  }
}

My karma.conf.js

module.exports = function(config) {
  config.set({
    basePath: "./",
    browsers: ['Chrome'],
    frameworks: ['browserify','jasmine'],
    files: [
      'src/**/*.js',
      'tests/**/*.spec.js'
    ],
    port: 3000,
    colors: true,
    logLevel: config.LOG_INFO,
    autoWatch: true,
    singleRun: true,
    failOnEmptyTestSuite: false,
    preprocessors: {
      'src/**/*.js': ['browserify'],
      'tests/**/*.js': ['browserify']
    },
    browserify: {
        debug: true,
        transform: [ 'babelify' ]
    }
  });
};

The logs

05 04 2016 21:16:38.567:ERROR [framework.browserify]: bundle error 05 04 2016 21:16:38.568:ERROR [framework.browserify]: Error: ENOTDIR: not a directory, stat '/Applications/Atom.app/Contents/Resources/app.asar/exports/states/GameStateInit'

The directory is wrong and doesn't lead to the project's directory.

I'm new to karma so I'm not sure what to look for. What does the error message suggest?

nikku / karma-browserify

[framework.browserify]: Error: ENOTDIR: not a directory, stat #179