Biotricity (BTCY) - 2019 Q3 - Quarterly Report

Part I – Financial Information Item 1 – Condensed Consolidated Financial Statements The unaudited financial statements show an early-stage company with a growing net loss and stockholders' deficiency Condensed Consolidated Balance Sheets The balance sheet reflects a significant cash reduction and a shift to a stockholders' deficiency of $850,731 Condensed Consolidated Balance Sheet Highlights (as of Dec 31, 2018 vs. Mar 31, 2018) | Metric | Dec 31, 2018 (Unaudited) | Mar 31, 2018 (Audited) | | :--- | :--- | :--- | | Assets | | | | Cash | $25,738 | $843,643 | | Total Current Assets | $440,098 | $896,426 | | Total Assets | $473,098 | $929,426 | | Liabilities & Equity | | | | Accounts payable and accrued liabilities | $1,305,677 | $756,179 | | Total Liabilities | $1,323,829 | $756,179 | | Total stockholders' (deficiency) equity | ($850,731) | $173,247 | Condensed Consolidated Statements of Operations and Comprehensive Loss The company generated initial revenue but incurred a higher net loss of $6.77 million for the nine-month period Statement of Operations Summary (Nine Months Ended Dec 31) | Metric | 2018 (Unaudited) | 2017 (Unaudited) | | :--- | :--- | :--- | | Revenue | $220,060 | $0 | | Net Revenue | $135,638 | $0 | | Total Operating Expenses | $6,905,143 | $4,932,260 | | Net Loss | ($6,769,505) | ($5,832,264) | | Loss Per Share (Basic and Diluted) | ($0.206) | ($0.186) | Condensed Consolidated Statements of Cash Flows Net cash used in operations was $4.06 million, with financing activities providing $3.03 million in cash Cash Flow Summary (Nine Months Ended Dec 31, 2018 vs 2017) | Metric | 2018 (Unaudited) | 2017 (Unaudited) | | :--- | :--- | :--- | | Net cash used in operating activities | ($4,063,375) | ($3,236,926) | | Net cash provided by financing activities | $3,029,038 | $5,289,281 | | Net (decrease) increase in cash | ($1,034,337) | $2,052,355 | | Cash, end of period | $25,738 | $2,482,262 | Notes to the Condensed Consolidated Financial Statements The notes detail the company's emerging growth status, significant deficits, and reliance on a $25 million equity facility - The company is an emerging growth entity in early commercialization, with an accumulated deficit of $33,216,935 and a working capital deficit of $883,731[27] - Management believes its funding sources, including a committed equity purchase facility of up to $25 million, are sufficient to support operations for at least one year[27] - The company adopted ASU 2017-11, which resulted in the reclassification of derivative liabilities to equity, reducing the derivative liability balance to zero[65][68] - Subsequent to the quarter end, the company sold $400,000 in non-convertible notes and issued 324,500 common shares under its equity financing facility[114][115] Item 2 – Management's Discussion and Analysis of Financial Condition and Results of Operations Management discusses the initial commercialization of its Bioflux device, operating results, and liquidity position Company Overview Biotricity focuses on remote patient monitoring, launching its Bioflux MCT technology and deploying 244 devices - The company is focused on biometric data monitoring solutions for diagnostic and post-diagnostic care, starting with the mobile cardiac telemetry (MCT) market[119] - Commercial sales of the Bioflux MCT technology began in April 2018, and by December 31, 2018, the company had placed 244 devices in the field[120] Results of Operations The company generated $220,060 in gross revenue and incurred a net loss of $6.8 million in its first nine months Revenue Breakdown (Nine Months Ended Dec 31, 2018) | Revenue Type | Amount | | :--- | :--- | | Device Sales Revenues | $86,800 | | Software Technology Service Fees | $133,260 | | Total Gross Revenues | $220,060 | - Recurring software service fee revenues grew over 200% in Q3 2018 compared to the immediately preceding quarter[156] Operating Expenses Comparison (Nine Months Ended Dec 31) | Expense Category | 2018 | 2017 | | :--- | :--- | :--- | | General & Administrative | $6,015,942 | $3,825,602 | | Research & Development | $889,201 | $1,106,658 | | Total Operating Expenses | $6,905,143 | $4,932,260 | Liquidity and Capital Resources The company funds operations via a $25 million equity facility and believes it has sufficient liquidity for the next year - The company has an accumulated deficit of $33,216,935 as of December 31, 2018, and has incurred recurring losses from operations[165] - A committed equity facility was established, allowing the company to raise up to $25 million, with $3,039,480 in gross proceeds raised during the nine months ended December 31, 2018[166] - Management estimates approximately $4 million is required to grow the sales team and believes existing cash and financing will be sufficient for the next twelve months[168][169] Item 3 – Quantitative and Qualitative Disclosures About Market Risk This section is not required as the company qualifies as a smaller reporting company - Not required for a smaller reporting company[175] Item 4 – Controls and Procedures Management concluded that disclosure controls and procedures were effective with no material changes in internal controls - The Company's Chief Executive Officer and Chief Financial Officer concluded that disclosure controls and procedures were effective as of the end of the period[178] - No changes in internal controls over financial reporting occurred during the quarter that materially affected, or are reasonably likely to materially affect, internal controls[179] Part II – Other Information Item 1 – Legal Proceedings The company reported no legal proceedings during the period - None[182] Item 2 – Unregistered Sales of Equity Securities and Use of Proceeds The company reported no unregistered sales of equity securities during the period - None[185] Item 3 – Defaults Upon Senior Securities The company reported no defaults upon senior securities - None[187] Item 4 – Mine Safety Disclosures This item is not applicable to the company - Not applicable[189] Item 5 – Other Information The company reported no other information - None[191] Item 6 – Exhibits This section lists exhibits filed with the report, including certifications and XBRL data files Signatures The report was signed by the Chief Executive Officer and Chief Financial Officer on February 19, 2019 - The report was duly signed and authorized on February 19, 2019[194] - Signatories include Waqaas Al-Siddiq (CEO) and John Ayanoglou (CFO)[195]