Biotricity, Inc. (NASDAQ:BTCY) Q2 2024 Earnings Conference Call November 14, 2023 6:00 PM ET Company Participants Debra Chen - IR Waqaas Al-Siddiq - Founder and CEO John Ayanoglou - CFO Conference Call Participants Michael Davin - H.C. Wainwright Operator Good afternoon, and welcome to Biotricity's Second Quarter Fiscal 2024 Financial Results and Business Update Conference Call. Today's conference is being recorded. And at this time, I would like to turn the conference over to Debra Chen with Investor Relat ...

Part I – Financial Information [Condensed Consolidated Financial Statements](index=4&type=section&id=Item%201%20%E2%80%93%20Condensed%20Consolidated%20Financial%20Statements) The company's unaudited condensed consolidated financial statements for September 30, 2023, show increased revenue and gross profit, but continued net losses and a going concern uncertainty - The company has incurred recurring losses, resulting in an accumulated deficit of **$120.1 million** and a working capital deficiency of **$12.6 million** as of September 30, 2023. These conditions raise substantial doubt about its ability to continue as a going concern[27](index=27&type=chunk) Condensed Consolidated Balance Sheet Data (as of Sept 30, 2023 vs Mar 31, 2023) | Balance Sheet Item | September 30, 2023 ($) | March 31, 2023 ($) | | :--- | :--- | :--- | | **Total Current Assets** | 5,178,206 | 4,720,202 | | **Total Assets** | 6,823,837 | 6,510,544 | | **Total Current Liabilities** | 17,824,363 | 11,160,768 | | **Total Liabilities** | 32,295,289 | 26,355,929 | | **Total Stockholders' Deficiency** | (26,729,036) | (19,845,385) | Condensed Consolidated Statements of Operations Data (Six Months Ended Sept 30) | Metric | 2023 ($) | 2022 ($) | | :--- | :--- | :--- | | **Revenue** | 5,912,062 | 4,437,441 | | **Net Revenue (Gross Profit)** | 3,915,982 | 2,505,366 | | **Loss from Operations** | (4,502,159) | (8,117,648) | | **Net Loss** | (7,103,722) | (9,468,800) | | **Net Loss Attributable to Common Stockholders** | (7,482,861) | (9,928,756) | | **Loss Per Share (Basic and Diluted)** | (0.853) | (1.153) | Condensed Consolidated Statements of Cash Flows (Six Months Ended Sept 30) | Cash Flow Activity | 2023 ($) | 2022 ($) | | :--- | :--- | :--- | | **Net cash used in operating activities** | (4,222,154) | (8,490,203) | | **Net cash provided by (used in) financing activities** | 4,758,634 | (1,105,998) | | **Net increase (decrease) in cash** | 536,480 | (9,596,201) | [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=34&type=section&id=Item%202%20%E2%80%93%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses significant revenue growth, improved gross margins, and reduced operating expenses, despite continued net losses and a going concern risk - The company is focused on a recurring revenue model, with technology fees from its Bioflux and Biotres products being the primary driver of growth. Sales have expanded to **32 U.S. states** as of September 30, 2023[197](index=197&type=chunk)[354](index=354&type=chunk) - In September 2023, the company issued **220 shares** of Series B Convertible Preferred Stock, raising gross proceeds of **$2.0 million** (**$1.9 million** net). This financing is intended to support operations and growth initiatives[154](index=154&type=chunk)[395](index=395&type=chunk) - Management emphasizes its commitment to financial discipline and leveraging AI to improve margins and drive revenue growth. The company has established relationships with Amazon and Google to enhance its proprietary cardiac AI model[173](index=173&type=chunk)[356](index=356&type=chunk) - A going concern risk exists due to recurring losses and a working capital deficit. The company plans to seek additional debt or equity capital to fund operations, product development, and expansion[158](index=158&type=chunk)[241](index=241&type=chunk) [Results of Operations](index=46&type=section&id=Results%20of%20Operations) For the three and six months ended September 30, 2023, revenue grew significantly with improved gross margins and reduced operating expenses, narrowing the net loss Three Months Ended September 30, 2023 vs 2022 | Metric | Q3 2023 ($) | Q3 2022 ($) | Change (%) | | :--- | :--- | :--- | :--- | | **Revenue** | 2,891,297 | 2,381,389 | +21.4% | | **Gross Profit** | 1,999,278 | 1,280,237 | +56.2% | | **Gross Margin** | 69.1% | 53.8% | +15.3 pts | | **Total Operating Expenses** | 4,174,951 | 5,309,224 | -21.4% | | **Loss from Operations** | (2,175,673) | (4,028,987) | +46.0% | | **Net Loss** | (3,690,840) | (4,692,548) | +21.3% | - Technology fees for Q3 2023 increased **30.3%** YoY to **$2.7 million**, comprising **94.5%** of total revenue. The gross margin improvement is attributed to higher-margin technology fees and AI-driven efficiencies in data processing[177](index=177&type=chunk) Six Months Ended September 30, 2023 vs 2022 | Metric | 2023 ($) | 2022 ($) | Change (%) | | :--- | :--- | :--- | :--- | | **Revenue** | 5,912,062 | 4,437,441 | +33.1% | | **Gross Profit** | 3,915,982 | 2,505,366 | +56.3% | | **Gross Margin** | 66.2% | 56.5% | +9.7 pts | | **Total Operating Expenses** | 8,418,141 | 10,623,014 | -20.7% | | **Loss from Operations** | (4,502,159) | (8,117,648) | +44.5% | | **Net Loss** | (7,103,722) | (9,468,800) | +25.0% | - For the six-month period, selling, general and administrative (SG&A) expenses decreased by **21.9%** or **$2.0 million** YoY, reflecting increased monitoring of spending efficiency[211](index=211&type=chunk) [Liquidity and Capital Resources](index=52&type=section&id=Liquidity%20and%20Capital%20Resources) As of September 30, 2023, the company had $1.2 million in cash, with improved operating cash flow and significant financing inflows, while acknowledging going concern doubts - The company had cash deposits of approximately **$1.2 million** as of September 30, 2023[393](index=393&type=chunk) - For the six months ended September 30, 2023, net cash from financing activities was **$4.8 million**, mainly from the issuance of Series B preferred stock (**$1.9M**), convertible notes (**$2.0M**), and short-term loans (**$0.8M**)[131](index=131&type=chunk)[415](index=415&type=chunk) - Management states that existing cash, access to funding, and anticipated near-term financings will be sufficient to meet needs for the next twelve months, despite the going concern warning[158](index=158&type=chunk) [Quantitative and Qualitative Disclosures About Market Risk](index=47&type=section&id=Item%203%20%E2%80%93%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) This section is not required for smaller reporting companies, and therefore no information is provided - The company is a smaller reporting company and is not required to provide this disclosure[249](index=249&type=chunk)[417](index=417&type=chunk) [Controls and Procedures](index=47&type=section&id=Item%204%20%E2%80%93%20Controls%20and%20Procedures) Management concluded that disclosure controls and procedures were effective as of September 30, 2023, with no material changes to internal controls over financial reporting - The CEO and CFO concluded that the company's disclosure controls and procedures were effective as of September 30, 2023[159](index=159&type=chunk) - No material changes to internal controls over financial reporting occurred during the three-month period ended September 30, 2023[223](index=223&type=chunk) Part II – Other Information [Legal Proceedings](index=48&type=section&id=Item%201%20%E2%80%93%20Legal%20Proceedings) The company is not currently a party to any legal proceedings expected to have a material adverse effect on its business - The company reports that it is not currently involved in any legal proceedings that management believes would likely have a material adverse effect on the business[224](index=224&type=chunk) [Unregistered Sales of Equity Securities and Use of Proceeds](index=48&type=section&id=Item%202%20%E2%80%93%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) The company reports no unregistered sales of equity securities during the period - None reported[403](index=403&type=chunk) [Defaults Upon Senior Securities](index=48&type=section&id=Item%203%20%E2%80%93%20Defaults%20Upon%20Senior%20Securities) The company reports no defaults upon senior securities - None reported[132](index=132&type=chunk) [Mine Safety Disclosures](index=48&type=section&id=Item%204%20%E2%80%93%20Mine%20Safety%20Disclosures) This section is not applicable to the company - Not applicable[346](index=346&type=chunk) [Other Information](index=48&type=section&id=Item%205%20%E2%80%93%20Other%20Information) The company reports no other information for this item - None reported[226](index=226&type=chunk) [Exhibits](index=48&type=section&id=Item%206%20%E2%80%93%20Exhibits) This section lists the exhibits filed with the Form 10-Q, including Series B Preferred Stock documents and Sarbanes-Oxley certifications - Exhibits filed with the report include documents related to the Series B Preferred Stock financing and required certifications[184](index=184&type=chunk)

Financial Data and Key Metrics Changes - Revenue for Q1 2024 increased by 46.9% year-over-year to $3 million [7][57] - Gross profit rose to $1.9 million, up 56% from $1.2 million a year ago, with a gross profit margin of 63.5%, compared to 59.6% in the prior year [7][23][57] - Net loss decreased by 33% year-over-year to $3.6 million, or $0.069 per share, from a net loss of $5 million, or $0.098 per share [3][8] Business Line Data and Key Metrics Changes - Technology fees, which are recurring subscription service fees, rose by 47% to $2.77 million, comprising 92% of total revenue [36][37] - Device sales accounted for 8.3% of total revenue, reported at $252,000 [58] Market Data and Key Metrics Changes - The healthcare AI market is projected to grow to $208.2 billion by 2030, indicating a significant opportunity for the company [5] - The company has expanded its sales reach to over 35 states in the U.S., contributing to revenue growth [57] Company Strategy and Development Direction - The company aims to increase sales of remote cardiac monitoring devices, ramp up subscription-based services, and accelerate recurring revenue to achieve profitability [10][21] - Focus on enhancing AI technology to improve patient management and disease profiling, with ongoing R&D investments in automation and product enhancement [5][55] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in achieving positive cash flow and highlighted the importance of maintaining financial discipline while driving margin and revenue growth [18][19] - The company is optimistic about the future, with expectations of continued improvement in gross margins as technology fees become a larger portion of revenue [36][48] Other Important Information - The company has monitored over 2 billion heartbeats for atrial fibrillation, resulting in significant cost savings for healthcare systems [4][20] - Management emphasized the importance of customer retention, with a retention rate of approximately 98% [37] Q&A Session Summary Question: Insights on device sales and service fee mix - Management indicated that Bioflux still dominates revenue, but Biotres is expected to grow as it becomes more established in the market [26][41] Question: R&D expenditure focus - The company is focusing R&D on automation and enhancing existing products to improve margins and reduce costs [42][43] Question: Future state coverage targets - Management aims for 50-state coverage and is building out its sales force to optimize distribution relationships [29][46] Question: Sustainability of reduced operating expenses - Management believes the current expense level is sustainable due to optimized operations and a focus on sales and account management [56] Question: Gross margin sustainability - Management anticipates that as revenue becomes predominantly SaaS-related, gross margins will stabilize around the SaaS rate [48][49]

[Part I – Financial Information](index=4&type=section&id=Part%20I%20%E2%80%93%20Financial%20Information) This section provides the company's unaudited condensed consolidated financial statements and management's discussion and analysis [Item 1 – Condensed Consolidated Financial Statements](index=4&type=section&id=Item%201%20%E2%80%93%20Condensed%20Consolidated%20Financial%20Statements) This section presents the unaudited condensed consolidated financial statements for the three months ended June 30, 2023, including balance sheets, statements of operations, and cash flows, along with notes detailing accounting policies and financial condition [Condensed Consolidated Financial Statements (Unaudited)](index=5&type=section&id=Condensed%20Consolidated%20Financial%20Statements%20%28Unaudited%29) The unaudited financial statements for Q2 2023 show increased revenue, reduced net loss, a working capital deficiency, and positive cash from financing activities Condensed Consolidated Statements of Operations (Unaudited) | Metric | Three Months Ended June 30, 2023 ($) | Three Months Ended June 30, 2022 ($) | | :--- | :--- | :--- | | **Revenue** | 3,020,765 | 2,056,052 | | **Gross Profit** | 1,916,704 | 1,225,129 | | **Loss from Operations** | (2,316,486) | (4,088,662) | | **Net Loss Attributable to Common Stockholders** | (3,601,579) | (5,024,389) | | **Loss Per Share (Basic and Diluted)** | (0.069) | (0.098) | Condensed Consolidated Balance Sheets (Unaudited) | Metric | As at June 30, 2023 ($) | As at March 31, 2023 ($) | | :--- | :--- | :--- | | **Total Current Assets** | 4,400,678 | 4,720,202 | | **Total Assets** | 6,144,123 | 6,510,544 | | **Total Current Liabilities** | 15,097,543 | 11,160,768 | | **Total Liabilities** | 29,555,737 | 26,355,929 | | **Total Stockholders' Deficiency** | (23,411,614) | (19,845,385) | Condensed Consolidated Statements of Cash Flows (Unaudited) | Metric | Three Months Ended June 30, 2023 ($) | Three Months Ended June 30, 2022 ($) | | :--- | :--- | :--- | | **Net cash used in operating activities** | (1,832,118) | (4,039,394) | | **Net cash provided by (used in) financing activities** | 1,329,145 | (833,221) | | **Net decrease in cash** | (502,973) | (4,872,615) | | **Cash, end of period** | 51,433 | 7,207,974 | [Notes to the Condensed Consolidated Financial Statements](index=9&type=section&id=Notes%20to%20the%20Condensed%20Consolidated%20Financial%20Statements) These notes detail accounting policies, a going concern warning due to recurring losses and a working capital deficiency, significant debt, and a subsequent reverse stock split - The company has incurred recurring losses, with an accumulated deficit of **$116.2 million** and a working capital deficiency of **$10.7 million** as of June 30, 2023, raising substantial doubt about its ability to continue as a going concern[32](index=32&type=chunk) Revenue Breakdown (Q1 FY2024 vs Q1 FY2023) | Revenue Source | Q1 FY2024 (ended June 30, 2023) ($) | Q1 FY2023 (ended June 30, 2022) ($) | | :--- | :--- | :--- | | **Technology fees** | 2,768,918 | 1,889,982 | | **Device sales** | 251,847 | 166,070 | | **Total Revenue** | **3,020,765** | **2,056,052** | - During the quarter, the company raised additional funds through the issuance of **$1,017,700** in Series C Convertible Notes and net proceeds of **$479,656** from other short-term loans and promissory notes[164](index=164&type=chunk)[61](index=61&type=chunk) - As of June 30, 2023, the company was not in compliance with certain covenants of its term loan but received relief from the lender[137](index=137&type=chunk) - Subsequent to the quarter end, on July 3, 2023, the company effected a **1-for-6 reverse stock split** of its common stock[340](index=340&type=chunk) [Item 2 – Management's Discussion and Analysis of Financial Condition and Results of Operations](index=34&type=section&id=Item%202%20%E2%80%93%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses the company's financial performance, highlighting revenue growth, improved gross margin, reduced operating expenses, and a lower net loss, while reiterating going concern doubts [Company Overview](index=34&type=section&id=Company%20Overview) Biotricity is a medical technology company providing biometric data monitoring solutions, focusing on recurring technology fees from its cardiac products and expanding AI for predictive monitoring - The company's strategy is to deliver remote monitoring solutions with a focus on an **insourcing business model** that generates recurring technology fee revenue[256](index=256&type=chunk)[341](index=341&type=chunk) - Key commercialized products include **Bioflux®**, **Biotres**, and the **Biocare Cardiac Disease Management Solution**, with sales launched in 31 U.S. states by December 31, 2022[231](index=231&type=chunk)[258](index=258&type=chunk)[234](index=234&type=chunk) - A strategic focus is the expansion of proprietary **AI technology** to create a suite of predictive monitoring tools for disease prevention and improved patient management[236](index=236&type=chunk)[351](index=351&type=chunk) [Results of Operations](index=36&type=section&id=Results%20of%20Operations) For the three months ended June 30, 2023, revenue increased, gross profit grew with improved margin, operating expenses decreased, and net loss significantly narrowed Key Operating Results (Q1 FY2024 vs Q1 FY2023) | Metric | Three Months Ended June 30, 2023 ($) | Three Months Ended June 30, 2022 ($) | Change | | :--- | :--- | :--- | :--- | | **Revenue** | 3,020,765 | 2,056,052 | +46.9% | | **Gross Profit** | 1,916,704 | 1,225,129 | +56.4% | | **Gross Margin** | 63.5% | 59.6% | +3.9 p.p. | | **Total Operating Expenses** | 4,233,190 | 5,313,791 | -20.3% | | **Net Loss Attributable to Common Stockholders** | (3,601,579) | (5,024,389) | -28.3% | - The increase in gross margin was primarily attributed to improved margins on technology fees, which comprised **92% of total revenue**[290](index=290&type=chunk) - Selling, general and administrative (SG&A) expenses decreased by **22%** or **$1.0 million** year-over-year, reflecting increased spending efficiency[352](index=352&type=chunk) [Liquidity and Capital Resources](index=41&type=section&id=Liquidity%20and%20Capital%20Resources) As of June 30, 2023, the company had limited cash and a significant working capital deficit, raising going concern doubts and necessitating additional funding, despite improved operating cash flow - The company has a working capital deficit of **$10.7 million** and an accumulated deficit of **$116.2 million**, raising substantial doubt about its ability to continue as a going concern[299](index=299&type=chunk)[297](index=297&type=chunk) - Net cash used in operating activities decreased to **$1.8 million** for the quarter, compared to **$4.0 million** for the same period in 2022, reflecting cost containment efforts[302](index=302&type=chunk)[318](index=318&type=chunk) - Financing activities provided **$1.3 million** in cash, driven by **$0.9 million** from convertible notes and **$0.4 million** from other short-term loans[283](index=283&type=chunk)[303](index=303&type=chunk) [Item 3 – Quantitative and Qualitative Disclosures About Market Risk](index=44&type=section&id=Item%203%20%E2%80%93%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) This disclosure is not required for a smaller reporting company - As a smaller reporting company, Biotricity Inc. is not required to provide this disclosure[306](index=306&type=chunk) [Item 4 – Controls and Procedures](index=44&type=section&id=Item%204%20%E2%80%93%20Controls%20and%20Procedures) Management concluded that the company's disclosure controls and procedures were effective, with no material changes to internal controls over financial reporting during the quarter - Based on an evaluation, the Chief Executive Officer and Chief Financial Officer concluded that the company's disclosure controls and procedures were effective[323](index=323&type=chunk) - No changes in internal controls over financial reporting occurred during the quarter that have materially affected, or are reasonably likely to materially affect, these controls[308](index=308&type=chunk) [Part II – Other Information](index=45&type=section&id=Part%20II%20%E2%80%93%20Other%20Information) This section covers legal proceedings, market risk disclosures, controls, and other required information [Item 1 – Legal Proceedings](index=45&type=section&id=Item%201%20%E2%80%93%20Legal%20Proceedings) The company is not currently a party to any legal proceedings expected to have a material adverse effect on its business - The company reports no material legal proceedings[326](index=326&type=chunk) [Other Items (1A, 2, 3, 4, 5, 6)](index=45&type=section&id=Other%20Items%20%281A%2C%202%2C%203%2C%204%2C%205%2C%206%29) This section covers other required disclosures, noting that risk factors are not required for smaller reporting companies, and no material unregistered sales, defaults, or mine safety issues were reported - Item 1A (Risk Factors): Not required for smaller reporting companies[327](index=327&type=chunk) - Item 2, 3, 5: No unregistered sales of equity, defaults upon senior securities, or other information were reported[328](index=328&type=chunk)[329](index=329&type=chunk)[331](index=331&type=chunk) - Item 4 (Mine Safety Disclosures): Not applicable[330](index=330&type=chunk)

PART I [Business](index=4&type=section&id=ITEM%201.%20BUSINESS) Biotricity provides biometric data monitoring solutions for cardiology, leveraging a TaaS model with FDA-cleared devices [Company Overview](index=4&type=section&id=Company%20Overview) - **Biotricity** is a medical technology company focused on biometric data monitoring, delivering **remote solutions** for diagnostic and post-diagnostic management of chronic illnesses[226](index=226&type=chunk)[229](index=229&type=chunk) - The company's business model is **technology-as-a-service (TaaS)**, focusing on earning utilization-based **recurring technology fee revenue**[230](index=230&type=chunk) - Key products include the **FDA-cleared Bioflux®** for mobile cardiac outpatient monitoring (COM), **Biotres** for Holter monitoring, and the direct-to-consumer **Bioheart** monitor[211](index=211&type=chunk)[215](index=215&type=chunk) [Market Opportunity and Strategy](index=6&type=section&id=Market%20Opportunity%20and%20Strategy) - The global ECG market is growing at a CAGR of **8.3%**, with the US accounting for about **25%**[217](index=217&type=chunk)[261](index=261&type=chunk) - The company targets approximately **23,018 physician offices**, **612 hospitals**, and **300 Independent Diagnostic Testing Facilities (IDTFs)** in the U.S[285](index=285&type=chunk) - Biotricity's **'insourcing' business model** allows physicians to bill for diagnostic services directly, creating a **new revenue stream** for them[269](index=269&type=chunk)[288](index=288&type=chunk) - The company is expanding into the **chronic care management (CCM)** and **remote patient monitoring (RPM)** markets with its **Biocare platform**[233](index=233&type=chunk)[271](index=271&type=chunk) [Product and Technology](index=10&type=section&id=Product%20and%20Technology) - **Bioflux** is a one-piece, **3-channel** mobile cardiac telemetry (COM) device, considered **clinically superior** to competitor two-piece, 2-channel solutions[252](index=252&type=chunk)[272](index=272&type=chunk)[290](index=290&type=chunk) - **Biotres** is a **3-channel**, connected, and rechargeable Holter patch solution, designed to provide **faster and higher quality data** than competing 1-channel, non-connected patches[254](index=254&type=chunk)[275](index=275&type=chunk)[292](index=292&type=chunk) - **Bioheart** and **Biocare** form a **cardiac-tailored disease management solution** for consumers and physicians respectively[250](index=250&type=chunk)[293](index=293&type=chunk)[295](index=295&type=chunk) [Competition](index=14&type=section&id=Competition) - **Primary competitors** in the Cardiac Outpatient Monitoring (COM) market include Biotelemetry (Philips), Preventice (Boston Scientific), ScottCare, and Infobionic[280](index=280&type=chunk)[300](index=300&type=chunk)[281](index=281&type=chunk) - In the Holter patch market, **key competitors** are iRhythm Technologies and BardyDx (Hillrom), who primarily operate as IDTFs with 1-channel, non-connected devices[319](index=319&type=chunk)[284](index=284&type=chunk) - **Competitors** in the cardiac disease management space include Alivecor for direct-to-consumer monitoring and Optimize Health for chronic care platforms[320](index=320&type=chunk)[303](index=303&type=chunk)[304](index=304&type=chunk) [Intellectual Property and R&D](index=17&type=section&id=Intellectual%20Property%20and%20R%26D) - The company primarily relies on **trade secret protection** for its proprietary information and uses non-disclosure and confidentiality agreements with employees and partners[307](index=307&type=chunk)[308](index=308&type=chunk) Research and Development Costs (Millions USD) | Expense | FY 2023 | FY 2022 | | :--- | :--- | :--- | | Research and Development Costs | $3.0 million | $2.7 million | [Government Regulation](index=17&type=section&id=Government%20Regulation) - The company's products are subject to regulation by the **U.S. FDA** and other federal, state, and foreign agencies, governing development, manufacturing, labeling, and marketing[324](index=324&type=chunk)[9](index=9&type=chunk) - The company's products, such as Bioflux and Biotres, are classified as **Class II medical devices** and have received **510(k) clearance** from the FDA[315](index=315&type=chunk)[332](index=332&type=chunk) - Post-clearance, the company must comply with **ongoing FDA requirements**, including the Quality System Regulation (QSR) and Medical Device Reporting (MDR)[344](index=344&type=chunk)[492](index=492&type=chunk) [Risk Factors](index=22&type=section&id=ITEM%201A.%20RISK%20FACTORS) The company faces significant risks including limited operating history, net losses, going concern doubt, regulatory compliance, and intense competition [Risks Related to Our Business](index=22&type=section&id=Risks%20Related%20to%20Our%20Business) - The company has a limited operating history and has not been profitable, with an accumulated deficit of **$112.6 million** as of March 31, 2023[338](index=338&type=chunk)[359](index=359&type=chunk)[22](index=22&type=chunk) - There is **substantial doubt** about the company's ability to continue as a going concern due to recurring losses, negative cash flow, and a cash balance of only **$0.6 million** at year-end[407](index=407&type=chunk)[522](index=522&type=chunk) - The business is **dependent on physicians** utilizing its solutions; failure to drive adoption could cause revenue to decrease[14](index=14&type=chunk)[363](index=363&type=chunk) - The company's assets, including intellectual property, are **secured as collateral** under a credit agreement, with default potentially leading to foreclosure[471](index=471&type=chunk)[362](index=362&type=chunk)[341](index=341&type=chunk) - Operations are subject to **extensive and changing government regulations** (FDA, Health Canada), and non-compliance could result in fines or suspension[343](index=343&type=chunk)[15](index=15&type=chunk)[366](index=366&type=chunk) [Risks Related to Our Industry](index=31&type=section&id=Risks%20Related%20to%20Our%20Industry) - The medical technology industry is **highly competitive** and subject to rapid technological change, with competitors potentially having greater resources[408](index=408&type=chunk)[425](index=425&type=chunk) - **Unfavorable clinical trial data**, from the company or competitors, could adversely affect regulatory approvals and market perception[429](index=429&type=chunk)[523](index=523&type=chunk) - **Changes in healthcare reimbursement policies** from government or private payers could reduce demand, create pricing pressure, and negatively impact revenue[369](index=369&type=chunk)[417](index=417&type=chunk) - The company may be subject to federal and state **healthcare fraud and abuse laws**, with violations leading to substantial penalties[415](index=415&type=chunk)[454](index=454&type=chunk)[455](index=455&type=chunk) [Risks Related to Intellectual Property](index=33&type=section&id=Risks%20Related%20to%20Intellectual%20Property) - The company has **no utility patent protection** and relies on trade secrets, copyrights, and limited design patents, which may not provide meaningful protection[465](index=465&type=chunk)[5](index=5&type=chunk) - The company may become involved in **costly intellectual property litigation**, either by asserting its rights or defending against claims from others[103](index=103&type=chunk)[430](index=430&type=chunk)[105](index=105&type=chunk) - **Failure to protect proprietary rights** could allow competitors to develop similar technologies, potentially damaging the company's competitive position[412](index=412&type=chunk)[6](index=6&type=chunk) [Risks Related to Our Securities](index=35&type=section&id=Risks%20Related%20to%20Our%20Securities) - The company is at risk of being **delisted from Nasdaq** for failing to maintain the minimum **$1.00 bid price requirement**[437](index=437&type=chunk)[456](index=456&type=chunk) - The company's common stock is classified as a **"penny stock"** under SEC rules, which could make it more difficult for broker-dealers to complete transactions[3](index=3&type=chunk)[485](index=485&type=chunk) - The company has **never paid cash dividends** on its common stock and does not anticipate doing so in the foreseeable future[4](index=4&type=chunk)[487](index=487&type=chunk) - **Anti-takeover provisions** in the company's charter and bylaws may prevent or frustrate attempts by stockholders to change the board or management[2](index=2&type=chunk)[448](index=448&type=chunk) [Unresolved Staff Comments](index=41&type=section&id=ITEM%201B.%20UNRESOLVED%20STAFF%20COMMENTS) The company reports that there are no unresolved staff comments - None identified[109](index=109&type=chunk)[84](index=84&type=chunk) [Properties](index=41&type=section&id=ITEM%202.%20PROPERTIES) The company leases its 8,300 square foot principal executive office in Redwood City, California, owning no real estate - The company's principal executive office is a leased space of approximately **8,300 square feet** at 203 Redwood Shores Parkway, Suite 600, Redwood City, California[109](index=109&type=chunk) - The company **does not own any real estate**[109](index=109&type=chunk) [Legal Proceedings](index=41&type=section&id=ITEM%203.%20LEGAL%20PROCEEDINGS) The company is not a party to any material legal or governmental regulatory proceedings - The company is **not currently a party** in any material legal or governmental regulatory proceeding[111](index=111&type=chunk) [Mine Safety Disclosures](index=41&type=section&id=ITEM%204.%20MINE%20SAFETY%20DISCLOSURES) This item is not applicable to the company - Not applicable[112](index=112&type=chunk)[143](index=143&type=chunk) PART II [Market for Registrant's Common Equity, Related Stockholder Matters, and Issuer Purchases of Equity Securities](index=42&type=section&id=ITEM%205.%20MARKET%20FOR%20REGISTRANT%27S%20COMMON%20EQUITY%2C%20RELATED%20STOCKHOLDER%20MATTERS%2C%20AND%20ISSUER%20PURCHASES%20OF%20EQUITY%20SECURITIES) The company's common stock trades on NASDAQ, with 51 million shares outstanding, and no cash dividends are anticipated - The company's common stock has traded on **NASDAQ** under the symbol "BTCY" since August 26, 2021, with a closing price of **$0.47** per share on March 31, 2023[87](index=87&type=chunk) - As of June 29, 2023, there were **51,047,865 shares** of common stock issued and outstanding[88](index=88&type=chunk) - The company does not anticipate paying **no cash dividends** on common shares, while Series A preferred shares earn a **12% per annum dividend**[90](index=90&type=chunk) - In March 2023, the company adopted a new **2023 Equity Incentive Plan**, reserving **5,000,000 shares** plus shares remaining from the 2016 plan[95](index=95&type=chunk) [Selected Financial Data](index=45&type=section&id=ITEM%206.%20SELECTED%20FINANCIAL%20DATA) This item is not applicable as the company is a smaller reporting company - Not applicable to a smaller reporting company[17](index=17&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=45&type=section&id=ITEM%207.%20MANAGEMENT%27S%20DISCUSSION%20AND%20ANALYSIS%20OF%20FINANCIAL%20CONDITION%20AND%20RESULTS%20OF%20OPERATIONS) Revenue grew 26% to $9.6 million, net loss narrowed, but liquidity challenges raise going concern doubt [Results of Operations](index=48&type=section&id=Results%20of%20Operations) Financial Performance Summary (USD) | Metric | FY 2023 (USD) | FY 2022 (USD) | Change (USD) | | :--- | :--- | :--- | :--- | | **Revenue** | **$9,639,057** | **$7,650,269** | **+$1,988,788** | | Gross Profit | $5,442,033 | $4,570,153 | +$871,880 | | Gross Margin | 56.5% | 59.7% | -3.2% | | Operating Expenses | $20,851,744 | $21,301,414 | -$455,212 | | **Loss from Operations** | **($15,409,711)** | **($16,731,261)** | **+$1,327,092** | | **Net Loss** | **($18,658,143)** | **($29,130,477)** | **+$10,472,334** | - Revenue growth of **26%** was primarily driven by an increase in technology fees, which rose to **$8.8 million** in FY2023 from **$5.9 million** in FY2022[529](index=529&type=chunk)[57](index=57&type=chunk) - The **slight decrease in gross margin** was due to discounts on device hardware sales intended to increase volumes and expand subscription billings[25](index=25&type=chunk) - Selling, general and administrative (SG&A) expenses **decreased by $0.9 million** to **$17.6 million**, primarily due to increased monitoring of spending efficiency[26](index=26&type=chunk) [Liquidity and Capital Resources](index=52&type=section&id=Liquidity%20and%20Capital%20Resources) - Management has noted **substantial doubt** about the company's ability to continue as a going concern, with only **$0.6 million** in cash deposits as of March 31, 2023[30](index=30&type=chunk) - The company will need to secure **additional funding** through equity or debt financing to fund operations for the next twelve months[30](index=30&type=chunk)[68](index=68&type=chunk) Cash Flow Summary (USD) | Cash Flow Activity | FY 2023 (USD) | FY 2022 (USD) | | :--- | :--- | :--- | | Net cash used in operating activities | ($13,547,935) | ($15,163,384) | | Net cash used in investing activities | $0 | ($29,767) | | Net cash provided by financing activities | $2,001,603 | $25,168,230 | - Net cash from financing activities **decreased significantly** from **$25.2 million** in FY2022 to **$2.0 million** in FY2023, as the prior year included Nasdaq uplisting proceeds[55](index=55&type=chunk)[70](index=70&type=chunk) [Critical Accounting Policies](index=56&type=section&id=Critical%20Accounting%20Policies) - Revenue is recognized in accordance with **ASC 606**, with technology fee revenue recognized upon study completion and device sales revenue upon delivery[71](index=71&type=chunk)[519](index=519&type=chunk) - **Significant accounting estimates** are required for share-based compensation, impairment analysis, fair value of warrants, convertible debt, derivative liabilities, and inventory obsolescence[75](index=75&type=chunk)[545](index=545&type=chunk) - **Derivative liabilities** related to convertible notes and preferred shares are measured at **fair value**, with changes recognized in the statement of operations using complex models[77](index=77&type=chunk)[667](index=667&type=chunk) - Inventories are stated at the **lower of cost or market value**, with write-downs for obsolete or excess inventory charged to cost of revenue[73](index=73&type=chunk)[60](index=60&type=chunk) [Quantitative and Qualitative Disclosures About Market Risk](index=63&type=section&id=ITEM%207A.%20QUANTITATIVE%20AND%20QUALITATIVE%20DISCLOSURES%20ABOUT%20MARKET%20RISK) This item is not applicable as the company is a smaller reporting company - Not applicable to a smaller reporting company[151](index=151&type=chunk) [Financial Statements and Supplementary Data](index=63&type=section&id=ITEM%208.%20FINANCIAL%20STATEMENTS%20AND%20SUPPLEMENTARY%20DATA) The company's financial statements and corresponding notes are included in the report, beginning on page F-1 - The company's financial statements and related notes can be found starting on page **F-1** of the Annual Report[152](index=152&type=chunk) [Changes in and Disagreements with Accountants on Accounting and Financial Disclosures](index=63&type=section&id=ITEM%209.%20CHANGES%20IN%20AND%20DISAGREEMENTS%20WITH%20ACCOUNTANTS%20ON%20ACCOUNTING%20AND%20FINANCIAL%20DISCLOSURES) The company reports no changes in or disagreements with its accountants on accounting and financial disclosures - None[153](index=153&type=chunk) [Controls and Procedures](index=63&type=section&id=ITEM%209A.%20CONTROLS%20AND%20PROCEDURES) Management evaluated disclosure controls and internal control over financial reporting, concluding both were effective with no material changes - Management concluded that the company's disclosure controls and procedures were **effective** as of the end of the reporting period[134](index=134&type=chunk)[172](index=172&type=chunk) - Based on an assessment using the COSO framework, management concluded that the company's internal control over financial reporting was **effective** as of March 31, 2023[155](index=155&type=chunk) - There were **no changes** in internal controls over financial reporting during the fiscal year that materially affected these controls[157](index=157&type=chunk) PART III [Directors and Executive Officers and Corporate Governance](index=65&type=section&id=ITEM%2010.%20DIRECTORS%20AND%20EXECUTIVE%20OFFICERS%20AND%20CORPORATE%20GOVERNANCE) This section identifies executive officers and directors, outlines corporate governance, and includes board diversity information - The company's executive officers include **Waqaas Al-Siddiq (President, CEO, Chairman)** and **John Ayanoglou (CFO)**[178](index=178&type=chunk)[180](index=180&type=chunk)[182](index=182&type=chunk) - The Board of Directors has **three standing committees**: Audit, Compensation, and Nominating and Corporate Governance[190](index=190&type=chunk) - The **Audit Committee** is responsible for overseeing the independent auditor, reviewing financial statements, and managing risk assessment policies[203](index=203&type=chunk)[191](index=191&type=chunk) Board Diversity (As of June 29, 2023) | Board Diversity (As of June 29, 2023) | | :--- | | **Total Directors: 4** | | **Gender Identity** | | Male: 4 | | **Demographic Background** | | African American or Black: 1 | | Asian: 1 | | White: 3 | | *Note: Some directors may identify with more than one demographic background.* | [Executive Compensation](index=68&type=section&id=ITEM%2011.%20EXECUTIVE%20COMPENSATION) This section details executive compensation for FY2023 and FY2022, including salary, bonus, and equity awards for key officers Executive Compensation Summary (USD) | Executive | Fiscal Year | Salary (USD) | Bonus (USD) | Option/Warrant Awards (USD) | Total Compensation (USD) | | :--- | :--- | :--- | :--- | :--- | :--- | | **Waqaas Al-Siddiq (CEO)** | **2023** | **$480,000** | **$240,000** | **$428,757** | **$1,160,757** | | | 2022 | $480,000 | $225,000 | $169,513 | $886,513 | | **John Ayanoglou (CFO)** | **2023** | **$293,750** | **$0** | **$232,537** | **$538,287** | | | 2022 | $300,000 | $75,000 | $504,910 | $891,910 | - CEO Waqaas Al-Siddiq's employment agreement provides for a salary of **$480,000** for FY2023 and eligibility for a cash/equity bonus of up to **50%** of his annual salary[196](index=196&type=chunk) - CFO John Ayanoglou's base salary for calendar year 2023 was set at **$300,000**, including annual grants of warrants to purchase **200,000 shares** of common stock[187](index=187&type=chunk) [Security Ownership of Certain Beneficial Owners and Management](index=73&type=section&id=ITEM%2012.%20SECURITY%20OWNERSHIP%20OF%20CERTAIN%20BENEFICIAL%20OWNERS%20AND%20MANAGEMENT) This section discloses beneficial ownership of common stock, with CEO Waqaas Al-Siddiq as the largest individual shareholder at 15.08% Beneficial Ownership as of June 29, 2023 | Name of Beneficial Owner | Shares Beneficially Owned | % of Shares Beneficially Owned | | :--- | :--- | :--- | | Waqaas Al-Siddiq (CEO) | 9,053,997 | 15.08% | | All directors and executive officers as a group | 11,925,924 | 19.86% | - Beneficial ownership is determined by **SEC rules** and includes voting and/or investment power, including shares subject to options and warrants exercisable within 60 days[590](index=590&type=chunk) [Certain Relationships and Related Transactions, and Director Independence](index=74&type=section&id=ITEM%2013.%20CERTAIN%20RELATIONSHIPS%20AND%20RELATED%20TRANSACTIONS%2C%20AND%20DIRECTOR%20INDEPENDENCE) The company reports no certain relationships or related transactions that require disclosure - None[594](index=594&type=chunk) [Principal Accountant Fees and Services](index=75&type=section&id=ITEM%2014.%20PRINCIPAL%20ACCOUNTANT%20FEES%20AND%20SERVICES) This section presents fees paid to the principal accountant for professional services for FY2023 and FY2022 Principal Accountant Fees (USD) | Fee Category | FY 2023 (USD) | FY 2022 (USD) | | :--- | :--- | :--- | | Audit Fees | $145,733 | $169,250 | | **Total Fees** | **$145,733** | **$169,250** | - The Board **pre-approves** all audit and permitted non-audit services to be performed by the independent auditors[599](index=599&type=chunk) PART IV [Exhibits, Financial Statement Schedules](index=75&type=section&id=ITEM%2015.%20EXHIBITS%2C%20FINANCIAL%20STATEMENT%20SCHEDULES) This section lists exhibits filed as part of the Form 10-K report, including corporate governance documents and material contracts - Lists **key corporate documents** filed as exhibits, including Amended and Restated Articles of Incorporation (Exhibit 3.1) and By-Laws (Exhibit 3.2)[601](index=601&type=chunk) - Includes **material agreements** such as the 2016 Equity Incentive Plan (Exhibit 10.5) and various credit and employment agreements[602](index=602&type=chunk) - Contains **required certifications** from the Principal Executive Officer and Principal Financial Officer under Sections 302 and 906 of the Sarbanes-Oxley Act[603](index=603&type=chunk)

Preferred Stock Dividends The Series A Preferred Stock is convertible into shares of common stock commencing 24 months after the issuance date of the Series A Preferred Stock. Upon which, on a monthly basis, up to 5% of the aggregate amount of the Purchase Price can be converted (subject to adjustment for changes in the Holder's ownership of the underlying Series A Preferred Stock). The conversion price is equal to the greater of $.001 or a 15% discount to the volume-weighted average price ("VWAP") of the C ...

Financial Data and Key Metrics Changes - For the three months ending September 30, 2022, the company earned revenues of $2.4 million, representing a 32% increase from the corresponding quarter of fiscal 2021 [19] - Gross profit for the second quarter totaled $1.3 million, yielding a gross profit margin of 54%, with expectations to improve margins to about 60% over time [19][20] - The company incurred a net loss of $4.9 million, compared to a net loss of $11 million in the comparative quarter of fiscal 2021, resulting in a net loss per common share of $0.094 [21] Business Line Data and Key Metrics Changes - The primary revenue driver was Bioflux, a mobile cardiac telemetry device, with combined device sales and technology fee income totaling $2.4 million for the quarter, showcasing year-over-year growth [9][8] - The company launched Biocare Cardiac, a cardiac disease management solution, following successful pilot programs [11][12] Market Data and Key Metrics Changes - The global recurrent market for atrial fibrillation (AFib) is expected to reach $26 billion by 2027, indicating a growing potential market for the company's offerings [10] - The company ended the fiscal quarter with $2.5 million in cash, reflecting a focus on capital efficiency [24] Company Strategy and Development Direction - The company aims to position itself as a comprehensive solution for cardiac diagnostics and disease management, integrating remote monitoring with telemedicine [7][25] - New distribution partnerships are being pursued to expand access to a larger network of sales representatives [13][14] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's growth trajectory despite a challenging biotech landscape, highlighting ongoing product development and hiring for key positions [36][37] - The company is focused on achieving profitability within the next 18 months through a combination of growth and cost management strategies [35] Other Important Information - The company received an NIH Grant for AI-enabled real-time monitoring and predictive analytics for stroke due to chronic kidney failure, broadening its technology platform [16][17] - The Bioheart device is positioned for individuals diagnosed with cardiac issues, differentiating it from traditional fitness monitors [50][51] Q&A Session Summary Question: Can you provide more details on the distribution network development? - Management indicated that they are successfully building distribution relationships and will disclose more details in the coming weeks [28] Question: How did the pilot programs in Oklahoma and Kentucky perform? - The pilot programs focused on patient engagement, provider workflows, and reimbursement processes, leading to successful optimizations and readiness for commercial launch [30][34] Question: What are the inputs required for the path to profitability? - The path to profitability involves growth, strategic hiring, and cost management, with a prudent approach to cash deployment [36][39] Question: How will Bioflux AI upgrades be implemented? - AI upgrades will be implemented primarily in the cloud to enhance data presentation and operational efficiency [42][43] Question: How are physicians responding to the three-channel patch versus traditional Holters? - Physicians appreciate the quicker data access and the flexibility of using standard electrodes, leading to positive sales uptake [44][46] Question: How is Bioheart positioned against other retail heart monitors? - Bioheart is targeted at individuals with diagnosed cardiac conditions for self-management, differentiating it from general fitness monitors [50][51] Question: Will the sales force be increased alongside distribution partnerships? - The company plans to strategically increase sales representatives to work closely with distribution networks [52]

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 Title of each class Trading Symbol(s) Name of each exchange on which registered Common Stock, par value $0.001 per share BTCY The NASDAQ Stock Market LLC 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, 2022 ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the period from ______________ ...

Financial Data and Key Metrics Changes - Company reported revenue of $2.1 million for Q1 2023, with a year-over-year increase in technology fees of $425,000, representing a 30% increase [12][6] - Gross profit for the quarter was $1.2 million, maintaining a gross profit margin of 60% [12][6] - The company incurred a net loss of $5 million, translating to a net loss per share of $0.098 [12] Business Line Data and Key Metrics Changes - The majority of revenue continues to come from Bioflux, a mobile cardiac telemetry device, with technology as a service revenue increasing to $1.9 million [6][5] - Biotres, a newly launched wireless cardiac monitoring device, is designed for low-risk patients, expanding the addressable market significantly [9][10] - The introduction of Bioheart, a consumer-accessible cardiac monitor, adds to the product portfolio [9][10] Market Data and Key Metrics Changes - The total addressable market (TAM) has expanded from $1 billion to approximately $6 billion with the introduction of new products [10] - The company is targeting integrated delivery networks (IDNs) and hospital systems, which represent a significant market opportunity [22][21] Company Strategy and Development Direction - The company aims to position itself as a comprehensive solution for cardiac diagnostics and disease management, focusing on a recurring revenue model [5][11] - Plans to introduce Biocare, a virtual clinic and disease management platform, are underway, targeting the $35 billion monthly care market [10][11] - The strategy includes building a complete ecosystem to address gaps in cardiac care, enhancing patient monitoring and management [11][10] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the growth potential of the business, emphasizing the importance of innovation and commercialization [14][16] - The company anticipates improvements in gross margins as sales volumes expand and costs decrease as a percentage of revenue [12][14] - Management highlighted the long-term strategy of building relationships with IDNs, acknowledging the lengthy sales cycles involved [22][21] Other Important Information - The company ended the quarter with $7.2 million in cash, indicating a solid financial position to support growth initiatives [14] - Operating expenses increased to $5.7 million, primarily due to investments in building a professional salesforce [13] Q&A Session Summary Question: Utilization opportunity with 2,000 physicians - Management noted that while there is a broad network, the depth of utilization is still being assessed, particularly with new products like Biotres [18][19] Question: Commentary on IDNs - Management discussed the long sales cycles associated with IDNs but emphasized the unique advantages of their products in hospital systems [21][22] Question: Gross margin outlook - Management expects gross margins to remain around 60% to mid-60% as the product mix evolves and economies of scale are realized [23] Question: Success in selling through to physicians - Management indicated that they control approximately 85% of the mobile cardiac telemetry business among their physician clients [25][24] Question: Sales team quotas and performance metrics - Management explained that sales representatives are benchmarked against internal performance metrics, with clear revenue targets [27][26] Question: Synergistic effects of Biotres and Bioflux - Management provided an example of how the introduction of Biotres has complemented existing products, enhancing economic justification for clinics [30][29]

[Part I – Financial Information](index=4&type=section&id=Part%20I%20%E2%80%93%20Financial%20Information) This part presents Biotricity Inc.'s unaudited condensed consolidated financial statements and notes for Q2 2022 [Item 1 – Condensed Consolidated Financial Statements](index=4&type=section&id=Item%201%20%E2%80%93%20Condensed%20Consolidated%20Financial%20Statements) This section provides Biotricity Inc.'s unaudited condensed consolidated financial statements and notes for Q2 2022 [Condensed Consolidated Balance Sheets](index=5&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) The balance sheet shows a decrease in total assets from **$16.68 million** at March 31, 2022, to **$12.15 million** at June 30, 2022, primarily driven by a significant reduction in cash | Metric | As at June 30, 2022 ($) | As at March 31, 2022 ($) | Change ($) | Change (%) | | :---------------------- | :---------------------- | :----------------------- | :--------- | :--------- | | Cash | 7,207,974 | 12,066,929 | (4,858,955) | -40.27% | | Total Current Assets | 10,846,540 | 15,322,811 | (4,476,271) | -29.21% | | Total Assets | 12,149,679 | 16,677,970 | (4,528,291) | -27.15% | | Total Current Liabilities | 4,577,442 | 4,866,814 | (289,372) | -5.95% | | Total Liabilities | 18,710,097 | 18,822,706 | (112,609) | -0.60% | | Stockholders' Deficiency| (6,560,418) | (2,144,736) | (4,415,682) | 205.89% | [Condensed Consolidated Statements of Operations and Comprehensive Loss](index=6&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations%20and%20Comprehensive%20Loss) For the three months ended June 30, 2022, the company reported increased revenue and gross profit but also higher operating expenses, with net loss improving to **$(5.02) million** | Metric | Three Months Ended June 30, 2022 ($) | Three Months Ended June 30, 2021 ($) | Change ($) | Change (%) | | :--------------------------------------- | :----------------------------------- | :----------------------------------- | :--------- | :--------- | | Revenue | 2,056,052 | 1,764,110 | 291,942 | 16.55% | | Cost of Revenue | 830,923 | 594,029 | 236,894 | 39.88% | | Gross Profit | 1,225,129 | 1,170,081 | 55,048 | 4.70% | | Total Operating Expenses | 5,702,179 | 4,172,597 | 1,529,582 | 36.66% | | Net Loss Before Income Taxes | (4,776,252) | (5,656,099) | 879,847 | -15.56% | | Net Loss Attributable to Common Stockholders | (5,024,389) | (5,897,363) | 872,974 | -14.80% | | Comprehensive Loss | (4,791,385) | (5,890,803) | 1,099,418 | -18.66% | | Loss Per Share, Basic and Diluted | (0.098) | (0.151) | 0.053 | -35.10% | [Condensed Consolidated Statements of Stockholders' Deficiency](index=7&type=section&id=Condensed%20Consolidated%20Statements%20of%20Stockholders'%20Deficiency) The stockholders' deficiency significantly increased to **$(6.56) million** at June 30, 2022, primarily due to net loss and preferred stock dividends | Metric | As at June 30, 2022 ($) | As at March 31, 2022 ($) | | :----------------------------------- | :---------------------- | :----------------------- | | Total Stockholders' Equity (Deficiency) | (6,560,418) | (2,144,736) | | Net Loss Before Dividends for the period | (4,776,252) | N/A | | Preferred Stock Dividends | (248,137) | N/A | | Conversion of convertible notes into common shares | 457,026 | N/A | | Preferred stock purchased back via cash | (285,427) | N/A | [Condensed Consolidated Statements of Cash Flows](index=9&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) The company experienced a net decrease in cash of **$4.86 million** for Q2 2022, primarily from operating and financing activities | Metric | Three Months Ended June 30, 2022 ($) | Three Months Ended June 30, 2021 ($) | Change ($) | Change (%) | | :-------------------------------------- | :----------------------------------- | :----------------------------------- | :--------- | :--------- | | Net Cash Used in Operating Activities | (4,039,394) | (2,681,396) | (1,357,998) | 50.65% | | Net Cash (Used in) Provided by Financing Activities | (833,221) | 581,088 | (1,414,309) | -243.39% | | Net Cash Used in Investing Activities | - | - | 0 | 0.00% | | Net Decrease in Cash During the Period | (4,858,955) | (1,999,974) | (2,858,981) | 142.95% | | Cash, End of Period | 7,207,974 | 201,588 | 7,006,386 | 3475.60% | [Notes to the Condensed Consolidated Financial Statements](index=10&type=section&id=Notes%20to%20the%20Condensed%20Consolidated%20Financial%20Statements) These notes provide detailed information supporting the condensed consolidated financial statements, covering operations, accounting policies, and specific financial instruments [1. Nature of Operations](index=10&type=section&id=1.%20NATURE%20OF%20OPERATIONS) Biotricity Inc. focuses on research, development, and commercialization of remote monitoring solutions for preventative care, particularly in mobile cardiac telemetry - Biotricity Inc. focuses on research, development, and commercialization of remote monitoring solutions in preventative care, specifically diagnostic and post-diagnostic solutions for cardiac health[19](index=19&type=chunk)[20](index=20&type=chunk) [2. Basis of Presentation, Measurement and Consolidation](index=10&type=section&id=2.%20BASIS%20OF%20PRESENTATION%2C%20MEASUREMENT%20AND%20CONSOLIDATION) The unaudited condensed consolidated financial statements are prepared in accordance with US GAAP for interim information, expressed in USD, and include the accounts of the Company and its wholly-owned subsidiary - Financial statements are prepared under **US GAAP** for interim periods, expressed in **USD**, and consolidate the Company and its wholly-owned subsidiary[21](index=21&type=chunk)[22](index=22&type=chunk)[23](index=23&type=chunk) [Liquidity and Basis of Presentation](index=10&type=section&id=Liquidity%20and%20Basis%20of%20Presentation) The Company has incurred recurring losses and an accumulated deficit of **$98.06 million** but maintains a working capital surplus of **$6.27 million** and seeks additional capitalization | Metric | As at June 30, 2022 ($) | As at March 31, 2022 ($) | | :---------------------- | :---------------------- | :----------------------- | | Accumulated Deficit | (98,061,531) | (93,037,142) | | Working Capital Surplus | 6,269,098 | (10,455,997) | - The Company expects to continue devoting significant resources to capital expenditures, R&D, operations, marketing, and sales for Bioflux product development[26](index=26&type=chunk)[251](index=251&type=chunk) - Management believes existing cash and anticipated near-term equity financings will meet needs for the next 12 months, but additional capital may be required for business opportunities and challenges[28](index=28&type=chunk)[252](index=252&type=chunk) [3. Summary of Significant Accounting Policies](index=11&type=section&id=3.%20SUMMARY%20OF%20SIGNIFICANT%20ACCOUNTING%20POLICIES) This section details the Company's significant accounting policies, including revenue recognition, inventory valuation, and critical accounting estimates for fair value measurements - Revenue is recognized under **ASC 606**, primarily from technology fee sales and device sales for the Bioflux mobile cardiac telemetry device[33](index=33&type=chunk)[35](index=35&type=chunk)[178](index=178&type=chunk) | Revenue Type | For Three Months Ended June 30, 2022 ($) | For Three Months Ended June 30, 2021 ($) | Change ($) | Change (%) | | :----------------- | :--------------------------------------- | :--------------------------------------- | :--------- | :--------- | | Technology fee sales | 1,889,982 | 1,464,937 | 425,045 | 29.01% | | Device sales | 166,070 | 299,173 | (133,103) | -44.52% | | Total Revenue | 2,056,052 | 1,764,110 | 291,942 | 16.55% | - Key accounting estimates involve fair value of stock options, warrants, and derivative liabilities, which are sensitive to assumptions like volatility, risk-free rates, and expected life[41](index=41&type=chunk)[43](index=43&type=chunk)[44](index=44&type=chunk) [4. Accounts Payable and Accrued Liabilities](index=18&type=section&id=4.%20ACCOUNTS%20PAYABLE%20AND%20ACCRUED%20LIABILITIES) Total accounts payable and accrued liabilities increased slightly to **$2.70 million** at June 30, 2022, from **$2.60 million** at March 31, 2022 | Metric | As at June 30, 2022 ($) | As at March 31, 2022 ($) | Change ($) | Change (%) | | :----------------------------------- | :---------------------- | :----------------------- | :--------- | :--------- | | Accounts payable and deferred revenue | 1,457,901 | 1,159,477 | 298,424 | 25.74% | | Accrued liabilities | 1,243,176 | 1,436,270 | (193,094) | -13.44% | | Total | 2,701,077 | 2,595,747 | 105,330 | 4.06% | [5. Convertible Promissory Notes and Short Term Loans](index=19&type=section&id=5.%20CONVERTIBLE%20PROMISSORY%20NOTES%20AND%20SHORT%20TERM%20LOANS) The Company had **$1.24 million** in outstanding convertible notes at June 30, 2022, down from **$1.54 million** at March 31, 2022, due to conversions | Metric | As at June 30, 2022 ($) | As at March 31, 2022 ($) | | :-------------------------------------- | :---------------------- | :----------------------- | | Balance of Convertible Promissory Notes | 1,238,000 | 1,540,000 | | Metric | Three Months Ended June 30, 2022 ($) | Three Months Ended June 30, 2021 ($) | | :-------------------------------------- | :----------------------------------- | :----------------------------------- | | Interest Expense on Debt Instruments | 31,414 | 265,658 | - During Q2 2022, **$302,000** (face value) of Series B Notes were converted into **390,464** common shares[106](index=106&type=chunk) [6. Term Loan](index=22&type=section&id=6.%20TERM%20LOAN) The Company secured a **$12 million** term loan on December 21, 2021, maturing in December 2026, with an interest rate of **LIBOR + 10.5%** - The Company entered into a **$12 million** term loan on December 21, 2021, with a maturity date of December 21, 2026, and an interest rate of **LIBOR + 10.5%**[111](index=111&type=chunk) - The term loan is secured by all of the Company's assets and intellectual property[112](index=112&type=chunk)[250](index=250&type=chunk) | Metric | Three Months Ended June 30, 2022 ($) | | :-------------------------------------- | :----------------------------------- | | Amortization of Debt Discount Expense | 50,070 | | Total Interest Expense on Term Loan | 348,833 | [7. Federally Guaranteed Loans](index=22&type=section&id=7.%20FEDERALLY%20GUARANTEED%20LOANS) The Company received **$370,900** and **$499,900** from the SBA EIDL program, while a **$1.2 million** PPP loan was fully forgiven - Received **$370,900** (April 2020) and **$499,900** (May 2021) from SBA EIDL program (**30-year term, 3.75% interest**)[117](index=117&type=chunk)[118](index=118&type=chunk) - **$1.2 million** PPP Loan was fully forgiven by SBA in May 2021[119](index=119&type=chunk) [8. Derivative Liabilities](index=23&type=section&id=8.%20DERIVATIVE%20LIABILITIES) Derivative liabilities related to preferred shares increased to **$537,318**, while those for convertible notes decreased to **$419,332** due to conversions | Metric | As at June 30, 2022 ($) | As at March 31, 2022 ($) | | :-------------------------------------- | :---------------------- | :----------------------- | | Derivative liabilities (Preferred Shares) | 537,318 | 352,402 | | Derivative liabilities (Convertible Notes) | 419,332 | 520,747 | - The Company redeemed **$328,904** preferred shares through cash during Q2 2022, resulting in a deemed dividend distribution of **$32,872**[125](index=125&type=chunk) [9. Stockholders' Equity (Deficiency)](index=24&type=section&id=9.%20STOCKHOLDERS'%20EQUITY%20(DEFICIENCY)) This section details changes in stockholders' equity, including authorized stock, the reverse takeover exchange agreement, share issuances, warrant activities, and stock-based compensation [Authorized Stock](index=24&type=section&id=Authorized%20stock) As of June 30, 2022, the Company is authorized to issue **125 million** common shares and **10 million** preferred shares, with **20,000** designated as Series A preferred stock | Stock Type | Authorized Shares (June 30, 2022) | Issued & Outstanding (June 30, 2022) | | :------------------ | :-------------------------------- | :----------------------------------- | | Common Stock | 125,000,000 | 50,219,034 | | Preferred Stock | 10,000,000 | 1 (Special Voting) | | Series A Preferred Stock | 20,000 | 6,872 | | Exchangeable Shares | N/A | 1,466,718 | [Exchange Agreement](index=24&type=section&id=Exchange%20Agreement) The Company was formed through a reverse-take-over on February 2, 2016, involving the exchange of iMedical shares for Biotricity common stock and exchangeable shares - Reverse-take-over on **February 2, 2016**, involved issuing **13,376,947** common shares and **9,123,031** exchangeable shares for iMedical shareholders[131](index=131&type=chunk) [Share Issuances](index=26&type=section&id=Share%20issuances) During Q2 2022, **404,545** common shares were issued from convertible note conversions, settling **$406,118** in debt for a fair value of **$457,026** | Metric | Three Months Ended June 30, 2022 ($) | | :-------------------------------------- | :----------------------------------- | | Common Shares Issued (from conversions) | 404,545 | | Debt Settled (face value) | 302,000 | | Carrying amount of conversion/redemption feature | 104,118 | | Fair Value of Shares Issued | 457,026 | | Loss on Conversion | 50,908 | [Shares to be Issued](index=26&type=section&id=Shares%20to%20be%20issued) During Q2 2022, **40,094** previously designated shares were removed due to warrant exercise cancellations, and **11,792** new shares were recognized for warrant exercise requests - **40,094** shares previously designated "to be issued" were removed due to warrant exercise cancellations, reducing the balance by **$42,500**[139](index=139&type=chunk) - An additional **11,792** shares were recognized as "to be issued" for new warrant exercise requests, increasing the balance by **$12,500**[139](index=139&type=chunk) [Warrant Issuances and Exercises](index=27&type=section&id=Warrant%20issuances%20and%20exercises) During Q2 2022, **53,827** warrants were issued as compensation to an executive, fair valued at **$77,414**, with **8,055,698** total outstanding warrants | Metric | Three Months Ended June 30, 2022 | | :-------------------------------------- | :------------------------------- | | Warrants Issued (compensation) | 53,827 | | Fair Value of Warrants Issued | $77,414 | | Total Warrants Outstanding (June 30, 2022) | 8,055,698 | [Stock-based Compensation](index=28&type=section&id=Stock-based%20compensation) The Company granted **10,180** options during Q2 2022, recorded **$149,190** in stock-based compensation expense, and had **7,419,894** total outstanding options | Metric | Three Months Ended June 30, 2022 | | :-------------------------------------- | :------------------------------- | | Options Granted | 10,180 | | Stock-based Compensation Expense | $149,190 | | Total Options Outstanding (June 30, 2022) | 7,419,894 | [10. Operating Lease Right-of-Use Assets and Lease Obligations](index=29&type=section&id=10.%20OPERATING%20LEASE%20RIGHT-OF-USE%20ASSETS%20AND%20LEASE%20OBLIGATIONS) The Company's right-of-use asset decreased to **$1.19 million** and lease obligations decreased to **$1.28 million** at June 30, 2022, with **$121,735** in operating lease expense | Metric | As at June 30, 2022 ($) | As at March 31, 2022 ($) | | :-------------------------------------- | :---------------------- | :----------------------- | | Right-of-Use Asset | 1,192,169 | 1,242,700 | | Lease Obligations | 1,280,828 | 1,330,338 | | Operating Lease Expense (Q2 2022) | 121,735 | N/A | [11. Property and Equipment](index=30&type=section&id=11.%20PROPERTY%20AND%20EQUIPMENT) Net book value of property and equipment decreased to **$25,970** at June 30, 2022, due to **$1,489** in depreciation expense for the quarter | Metric | As at June 30, 2022 ($) | As at March 31, 2022 ($) | | :-------------------------------------- | :---------------------- | :----------------------- | | Net Book Value of Property and Equipment | 25,970 | 27,459 | | Depreciation Expense (Q2 2022) | 1,489 | N/A | [12. Contingencies](index=30&type=section&id=12.%20CONTINGENCIES) As of June 30, 2022, there were no significant unrecognized claims against the Company - No significant unrecognized claims against the Company as of **June 30, 2022**[163](index=163&type=chunk) [13. Subsequent Events](index=30&type=section&id=13.%20SUBSEQUENT%20EVENTS) Subsequent to June 30, 2022, the Company issued shares from convertible note conversions, to an advisor for services, and for warrant exercises - Subsequent to **June 30, 2022**, the Company issued **117,647** shares from Series B convertible note conversions[164](index=164&type=chunk) - Issued **22,772** shares to an advisor for contractual services and **71,792** shares for warrant exercise requests after **June 30, 2022**[164](index=164&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations.](index=31&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations.) Management discusses the Company's financial condition, operating results, liquidity, and capital resources for Q2 2022 [Company Overview](index=31&type=section&id=Company%20Overview) Biotricity Inc. is a medical technology company focused on remote biometric data monitoring solutions, particularly diagnostic mobile cardiac telemetry with its FDA-cleared Bioflux® technology - Biotricity Inc. is a medical technology company providing remote biometric data monitoring solutions, focusing on diagnostic and post-diagnostic solutions for cardiac illnesses[168](index=168&type=chunk) - The company's FDA-cleared Bioflux® MCT technology is available in **29 U.S. states**, with a focus on an insourcing business model to generate utilization-based recurring technology fee revenue[169](index=169&type=chunk)[171](index=171&type=chunk)[172](index=172&type=chunk) - Recent FDA clearances include the Biotres patch solution (**January 2022**) for Holter monitoring and the Bioflux Software II System (**2021**) to improve workflow and reduce analysis time[173](index=173&type=chunk)[174](index=174&type=chunk) - The Company commercially launched its Bioheart consumer technology and is developing other ancillary technologies and a telemedicine platform to expand into remote chronic care management[175](index=175&type=chunk)[176](index=176&type=chunk) [Critical Accounting Policies](index=33&type=section&id=Critical%20Accounting%20Policies) This section reiterates the Company's critical accounting policies, including revenue recognition under ASC 606, inventory valuation, and significant accounting estimates for fair value of financial instruments - Revenue recognition follows **ASC 606**, distinguishing between device sales and technology fee sales, with technology fees being the primary focus for recurring revenue[178](index=178&type=chunk)[179](index=179&type=chunk)[184](index=184&type=chunk) - Significant accounting estimates are required for fair value measurements of complex financial instruments like stock options, warrants, and derivative liabilities, which are sensitive to underlying assumptions[187](index=187&type=chunk)[188](index=188&type=chunk)[189](index=189&type=chunk) - The Company continues to evaluate the impact of new accounting pronouncements, including **ASU 2016-13 (CECL)**, **ASU 2019-12 (Income Taxes)**, and **ASU 2021-04 (Warrant modifications)**, on its financial statements[222](index=222&type=chunk)[225](index=225&type=chunk)[227](index=227&type=chunk) [Results of Operations](index=40&type=section&id=Results%20of%20Operations) For Q2 2022, revenue increased by **17%** to **$2.1 million**, with technology fees comprising **91.9%** of total revenues, and net loss improved to **$5.0 million** despite increased operating expenses | Metric | Three Months Ended June 30, 2022 ($) | Three Months Ended June 30, 2021 ($) | Change ($) | Change (%) | | :--------------------------------------- | :----------------------------------- | :----------------------------------- | :--------- | :--------- | | Revenue | 2,056,052 | 1,764,110 | 291,942 | 16.55% | | Technology Fees (% of Revenue) | 91.9% | N/A | N/A | N/A | | Gross Margin | 60% | 66% | -6% | -9.09% | | Net Loss Attributable to Common Stockholders | (5,024,389) | (5,897,363) | 872,974 | -14.80% | | Total Operating Expenses | 5,702,179 | 4,172,597 | 1,529,582 | 36.66% | | General and Administrative Expenses | 4,881,003 | 3,583,600 | 1,297,403 | 36.20% | | Research and Development Expenses | 821,176 | 588,997 | 232,179 | 39.42% | - The increase in general and administrative expenses is due to investment in building the professional sales force, while R&D expenses increased for new technologies and product enhancements[236](index=236&type=chunk)[237](index=237&type=chunk) - Accretion and amortization expense related to debt financing decreased significantly to **$0.05 million** from **$2.3 million** in the prior year, as debt discount for Series A and B convertible notes was fully amortized[239](index=239&type=chunk) [EBITDA and Adjusted EBITDA](index=41&type=section&id=EBITDA%20and%20Adjusted%20EBITDA) Adjusted EBITDA for Q2 2022 improved to **$(4.39) million** from **$(4.69) million** in the prior year, reflecting adjustments for non-operational items | Metric | Three Months Ended June 30, 2022 ($) | Three Months Ended June 30, 2021 ($) | | :--------------------------------------- | :----------------------------------- | :----------------------------------- | | Net Loss Attributable to Common Stockholders | (5,024,389) | (5,897,363) | | EBITDA | (4,634,512) | (5,501,678) | | Adjusted EBITDA | (4,385,381) | (4,685,749) | | Adjusted Loss per Share, Basic and Diluted | (0.085) | (0.120) | - Adjusted EBITDA excludes one-time accretion expenses, losses from convertible note conversions, and fair value changes on derivative liabilities to provide a clearer view of operational performance[242](index=242&type=chunk)[245](index=245&type=chunk) [Translation Adjustment](index=42&type=section&id=Translation%20Adjustment) The translation adjustment for Q2 2022 resulted in a loss of approximately **$0.2 million**, reflecting currency translation from Canadian to U.S. dollars | Metric | Three Months Ended June 30, 2022 ($) | Three Months Ended June 30, 2021 ($) | | :-------------------- | :----------------------------------- | :----------------------------------- | | Translation Adjustment | (200,000) (approx) | (70,000) (approx) | [Liquidity and Capital Resources](index=42&type=section&id=Liquidity%20and%20Capital%20Resources) The Company requires cash for commercialization and product development, maintaining a **$6.27 million** working capital surplus and anticipating sufficient liquidity for the next 12 months - The Company requires cash for device purchases, sales initiatives, operating expenses, and R&D for its Bioflux product and BioSphere ecosystem[248](index=248&type=chunk)[249](index=249&type=chunk)[251](index=251&type=chunk) | Metric | As at June 30, 2022 ($) | As at March 31, 2022 ($) | | :---------------------- | :---------------------- | :----------------------- | | Accumulated Deficit | (98,061,531) | (93,037,142) | | Working Capital Surplus | 6,269,098 | (10,455,997) | - Management believes current cash and anticipated near-term equity financings will cover needs for the next 12 months, but additional debt or equity capital may be sought for future opportunities and challenges[252](index=252&type=chunk) [Net Cash Used in Operating Activities](index=43&type=section&id=Net%20Cash%20Used%20in%20Operating%20Activities) Cash used in operating activities increased to **$4.0 million** for Q2 2022, reflecting increased expenditures for sales, infrastructure, business development, marketing, and R&D | Metric | Three Months Ended June 30, 2022 ($) | Three Months Ended June 30, 2021 ($) | | :-------------------------------------- | :----------------------------------- | :----------------------------------- | | Net Cash Used in Operating Activities | (4,039,394) | (2,681,396) | [Net Cash from Financing Activities](index=44&type=section&id=Net%20Cash%20from%20Financing%20Activities) Net cash used in financing activities was **$0.8 million** for Q2 2022, a significant shift from **$0.6 million** net cash provided in the prior year period | Metric | Three Months Ended June 30, 2022 ($) | Three Months Ended June 30, 2021 ($) | | :-------------------------------------- | :----------------------------------- | :----------------------------------- | | Net Cash (Used in) Provided by Financing Activities | (833,221) | 581,088 | [Net Cash Used in Investing Activities](index=44&type=section&id=Net%20Cash%20Used%20in%20Investing%20Activities) The Company reported no cash used in investing activities for Q2 2022, consistent with the prior year period | Metric | Three Months Ended June 30, 2022 ($) | Three Months Ended June 30, 2021 ($) | | :-------------------------------------- | :----------------------------------- | :----------------------------------- | | Net Cash Used in Investing Activities | - | - | [Off-Balance Sheet Arrangements](index=44&type=section&id=Off-Balance%20Sheet%20Arrangements) The Company has no off-balance sheet arrangements that have or are reasonably likely to have a material effect on its financial condition or results of operations - The Company has no off-balance sheet arrangements[257](index=257&type=chunk) [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=44&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) This item is not required for a smaller reporting company - Not required for a smaller reporting company[258](index=258&type=chunk) [Item 4. Controls and Procedures](index=44&type=section&id=Item%204.%20Controls%20and%20Procedures.) The Company's management evaluated the effectiveness of disclosure controls and procedures as of June 30, 2022, concluding they were effective, with no material changes in internal controls [Evaluation of Disclosure Controls and Procedures](index=44&type=section&id=Evaluation%20of%20Disclosure%20Controls%20and%20Procedures) The Company's disclosure controls and procedures were evaluated by management and deemed effective as of June 30, 2022 - Disclosure controls and procedures were evaluated and deemed effective as of **June 30, 2022**[261](index=261&type=chunk) [Changes in Internal Controls](index=44&type=section&id=Changes%20in%20Internal%20Controls) There were no material changes in the Company's internal controls over financial reporting during the three-month period ended June 30, 2022 - No material changes in internal controls over financial reporting during the three months ended **June 30, 2022**[262](index=262&type=chunk) [Part II – Other Information](index=45&type=section&id=Part%20II%20%E2%80%93%20Other%20Information) This part contains additional information including legal proceedings, equity sales, and exhibits [Item 1. Legal Proceedings](index=45&type=section&id=Item%201.%20Legal%20Proceedings.) The Company reported no legal proceedings - No legal proceedings[266](index=266&type=chunk) [Item 1A. Risk Factors](index=45&type=section&id=Item%201A.%20Risk%20Factors) This item is not required for smaller reporting companies - Not required for smaller reporting companies[267](index=267&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=45&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds.) Post-Q2 2022, the Company issued common shares from conversions, exercises, and for services under Section 4(a)(2) exemption - Subsequent to **June 30, 2022**, the Company issued **117,647** common shares from convertible note conversions, **71,792** common shares from warrant exercises, and **22,772** common shares to consultants for services[269](index=269&type=chunk) - All these issuances were made under the exemption from registration provided by **Section 4(a)(2)** of the Securities Act of 1933[269](index=269&type=chunk) [Item 3. Defaults Upon Senior Securities](index=45&type=section&id=Item%203.%20Defaults%20Upon%20Senior%20Securities.) The Company reported no defaults upon senior securities - No defaults upon senior securities[271](index=271&type=chunk) [Item 4. Mine Safety Disclosures](index=45&type=section&id=Item%204.%20Mine%20Safety%20Disclosures.) This item is not applicable to the Company - Not applicable[273](index=273&type=chunk) [Item 5. Other Information](index=45&type=section&id=Item%205.%20Other%20Information.) The Company reported no other information - No other information[275](index=275&type=chunk) [Item 6. Exhibits](index=45&type=section&id=Item%206.%20Exhibits) This section lists the exhibits filed with the 10-Q report, including certifications and Inline XBRL documents - Includes certifications pursuant to **Sections 302 and 906** of the Sarbanes-Oxley Act of 2002[276](index=276&type=chunk) - Contains Inline XBRL Instance Document, Taxonomy Extension Schema, Calculation Linkbase, Definition Linkbase, Label Linkbase, and Presentation Linkbase Documents[276](index=276&type=chunk) [Signatures](index=46&type=section&id=Signatures) The report was signed on **August 15, 2022**, by the Chief Executive Officer and Chief Financial Officer, certifying its submission - Report signed by CEO Waqaas Al-Siddiq and CFO John Ayanoglou on **August 15, 2022**[279](index=279&type=chunk)