Biotricity (US:BTCY)2023-11-13 16:00Part I – Financial Information Condensed Consolidated Financial Statements 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 $12.6 million as of September 30, 2023. These conditions raise substantial doubt about its ability to continue as a going concern27 Condensed Consolidated Balance Sheet Data (as of Sept 30, 2023 vs Mar 31, 2023) | Balance Sheet Item | September 30, 2023 ($) | 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 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, 2023197354 - In September 2023, the company issued 220 shares of Series B Convertible Preferred Stock, raising gross proceeds of $2.0 million ($1.9 million net). This financing is intended to support operations and growth initiatives154395 - Management emphasizes its commitment to financial discipline and leveraging AI to improve margins and drive revenue growth. The company has established relationships with Amazon and Google to enhance its proprietary cardiac AI model173356 - A going concern risk exists due to recurring losses and a working capital deficit. The company plans to seek additional debt or equity capital to fund operations, product development, and expansion158241 Results of Operations For the three and six months ended September 30, 2023, revenue grew significantly with improved gross margins and reduced operating expenses, narrowing the net loss Three Months Ended September 30, 2023 vs 2022 | Metric | Q3 2023 ($) | 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 $2.7 million, comprising 94.5% of total revenue. The gross margin improvement is attributed to higher-margin technology fees and AI-driven efficiencies in data processing177 Six Months Ended September 30, 2023 vs 2022 | Metric | 2023 ($) | 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 efficiency211 Liquidity and Capital Resources 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, 2023393 - 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)131415 - 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 warning158 Quantitative and Qualitative Disclosures About Market Risk 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 disclosure249417 Controls and Procedures 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, 2023159 - No material changes to internal controls over financial reporting occurred during the three-month period ended September 30, 2023223 Part II – Other Information 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 that it is not currently involved in any legal proceedings that management believes would likely have a material adverse effect on the business224 Unregistered Sales of Equity Securities and Use of Proceeds The company reports no unregistered sales of equity securities during the period - None reported403 Defaults Upon Senior Securities The company reports no defaults upon senior securities - None reported132 Mine Safety Disclosures This section is not applicable to the company - Not applicable346 Other Information The company reports no other information for this item - None reported226 Exhibits 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 certifications184