Biotricity (US:BTCY)2023-08-13 16:00Part I – Financial Information This section provides the company's unaudited condensed consolidated financial statements and management's discussion and analysis Item 1 – Condensed Consolidated Financial Statements 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) 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 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 $10.7 million as of June 30, 2023, raising substantial doubt about its ability to continue as a going concern32 Revenue Breakdown (Q1 FY2024 vs Q1 FY2023) | Revenue Source | Q1 FY2024 (ended June 30, 2023) ($) | 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 $479,656 from other short-term loans and promissory notes16461 - As of June 30, 2023, the company was not in compliance with certain covenants of its term loan but received relief from the lender137 - Subsequent to the quarter end, on July 3, 2023, the company effected a 1-for-6 reverse stock split of its common stock340 Item 2 – Management's Discussion and Analysis of Financial Condition and Results of Operations Management discusses the company's financial performance, highlighting revenue growth, improved gross margin, reduced operating expenses, and a lower net loss, while reiterating going concern doubts Company Overview Biotricity is a medical technology company providing biometric data monitoring solutions, focusing on recurring technology fees from its cardiac products and expanding AI for predictive monitoring - The company's strategy is to deliver remote monitoring solutions with a focus on an insourcing business model that generates recurring technology fee revenue256341 - Key commercialized products include Bioflux®, Biotres, and the Biocare Cardiac Disease Management Solution, with sales launched in 31 U.S. states by December 31, 2022231258234 - A strategic focus is the expansion of proprietary AI technology to create a suite of predictive monitoring tools for disease prevention and improved patient management236351 Results of Operations For the three months ended June 30, 2023, revenue increased, gross profit grew with improved margin, operating expenses decreased, and net loss significantly narrowed Key Operating Results (Q1 FY2024 vs Q1 FY2023) | Metric | Three Months Ended June 30, 2023 ($) | 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 revenue290 - Selling, general and administrative (SG&A) expenses decreased by 22% or $1.0 million year-over-year, reflecting increased spending efficiency352 Liquidity and Capital Resources 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 concern299297 - 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 efforts302318 - Financing activities provided $1.3 million in cash, driven by $0.9 million from convertible notes and $0.4 million from other short-term loans283303 Item 3 – Quantitative and Qualitative Disclosures About Market Risk This disclosure is not required for a smaller reporting company - As a smaller reporting company, Biotricity Inc. is not required to provide this disclosure306 Item 4 – Controls and Procedures 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 effective323 - No changes in internal controls over financial reporting occurred during the quarter that have materially affected, or are reasonably likely to materially affect, these controls308 Part II – Other Information This section covers legal proceedings, market risk disclosures, controls, and other required information Item 1 – Legal Proceedings 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 proceedings326 Other Items (1A, 2, 3, 4, 5, 6) 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 companies327 - Item 2, 3, 5: No unregistered sales of equity, defaults upon senior securities, or other information were reported328329331 - Item 4 (Mine Safety Disclosures): Not applicable330