Biotricity (BTCY) - 2021 Q1 - Quarterly Report

Financial Performance - Total revenue for the three months ended June 30, 2020, was $451,898, representing a 38% increase from $327,000 in the same period of 2019[14] - Gross profit for the same period was $260,436, compared to $176,414 in 2019, indicating a significant improvement in profitability[14] - The net loss before income taxes for Q2 2020 was $3,157,179, compared to a loss of $2,089,601 in Q2 2019, reflecting a worsening financial position[14] - The company reported a net loss attributed to common stockholders of $3,394,394 for the three months ended June 30, 2020, compared to $2,089,601 in the prior year[14] - For the three months ended June 30, 2020, Biotricity Inc. reported a net loss of $3,157,179, compared to a net loss of $2,089,601 for the same period in 2019, indicating an increase in losses of approximately 51.2% year-over-year[18] - The loss per share for the three months ended June 30, 2020, was $(0.900), significantly higher than $(0.060) in the same period of 2019[14] - Gross margin improved to 57.6% for the three months ended June 30, 2020, compared to 53.9% for the same period in the prior year[130] Operating Expenses - Total operating expenses increased to $3,629,116 from $2,266,015 year-over-year, primarily due to higher general and administrative expenses[14] - Total operating expenses for the three months ended June 30, 2020, were $3.6 million, an increase from $2.3 million in the corresponding period of fiscal 2019[132] - General and administrative expenses rose to $3.2 million for the three months ended June 30, 2020, up from $2.1 million in the same period of 2019, primarily due to marketing and sales force expansion costs[133] - Research and development expenses increased to $423,883 for the three months ended June 30, 2020, compared to $213,496 in the same period of 2019, reflecting ongoing efforts for FDA clearance and product development[134] Financial Position - Current assets decreased to $1,124,061 as of June 30, 2020, down from $1,658,829 as of March 31, 2020[10] - Total liabilities increased to $6,374,244 as of June 30, 2020, compared to $5,004,809 as of March 31, 2020, indicating rising financial obligations[13] - The company’s accumulated deficit grew to $49,758,758 as of June 30, 2020, from $46,364,364 at the end of the previous quarter[13] - The company incurred a working capital deficiency of $2,696,943 as of June 30, 2020, and has an accumulated deficit of $49,758,758[24] Cash Flow - Cash used in operating activities for the three months ended June 30, 2020, was $2,393,110, compared to $1,328,375 for the same period in 2019, reflecting a significant increase in cash outflows[18] - Net cash used in operating activities for the three months ended June 30, 2020, was $2,393,107, compared to $1,328,375 for the same period in 2019[146] - Net cash provided by financing activities was $1,573,987 for the three months ended June 30, 2020, compared to $1,329,802 for the same period in 2019[147] Financing Activities - Biotricity raised $1,570,900 from federally guaranteed loans during the three months ended June 30, 2020, as part of its efforts to improve liquidity amid the COVID-19 pandemic[24] - The company issued 8,045 Series A preferred shares, raising $6,100,000 in cash proceeds and converting $1,945,000 of promissory notes and accrued interest into shares[24] - The company received a $370,900 Economic Injury Disaster Loan (EIDL) with a 30-year term and a 3.75% interest rate, with no payments required in the first 12 months[49] - A Paycheck Protection Program (PPP) loan of $1.2 million was received, with a two-year term and a 1.0% interest rate, allowing for potential forgiveness under certain conditions[50] - The company anticipates requiring approximately $8 million to accelerate the commercialization of Bioflux and other technologies[144] - The company plans to seek additional funds through equity or debt offerings to meet future liquidity requirements[145] Shareholder Equity - The weighted average number of common shares outstanding increased to 36,768,299 from 35,397,458 year-over-year, reflecting potential dilution[14] - The Company is authorized to issue 125,000,000 shares of common stock and 10,000,000 shares of preferred stock as of June 30, 2020[56] - The Company had 33,384,769 shares of common stock issued and outstanding as of June 30, 2020, an increase from 32,593,769 as of March 31, 2020[57] - The Company issued 791,000 common shares valued at $1,063,754 as compensation for consultants and advisors during the period of April 22 to June 22, 2020[160] Derivative Liabilities and Warrants - As of June 30, 2020, the Company had derivative liabilities totaling $982,340, a decrease from $1,144,733 as of March 31, 2020, reflecting a change in fair value of $(204,142) during the period[55] - The Company issued 50,000 warrants during the three months ended June 30, 2020, with a fair value of $45,113, expensed in general and administrative expenses[70] - As of June 30, 2020, the total outstanding warrants were 5,332,893, which included 2,034,837 Consultant Warrants and 1,823,020 Warrants issued on the conversion of Convertible Notes[73] - The exercise price for the outstanding warrants ranged from $0.48 to $7.59, with expiration dates varying from April 2020 to July 2022[73] Research and Development - The Company is focused on developing technology for remote monitoring in preventative care, with ongoing research and development activities aimed at commercialization[20] - The Company is developing advanced ECG analysis software and the Biotres patch solution, anticipating FDA applications within the next twelve months[108] - The Company is in commercialization mode while pursuing the development of its next generation MCT product and other new products[139] Accounting and Compliance - The company adopted ASC 842 for lease accounting, requiring the recognition of right-of-use assets and lease liabilities on the balance sheet[34] - The company evaluated the impact of new accounting pronouncements, including ASU 2016-13, which changes the impairment model for financial assets[39] - The Company recognized a gain of $204,142 related to the change in fair value of derivative liabilities during the three months ended June 30, 2020[136] Related Party Transactions - Total related party transactions amounted to $386,544 for the three months ended June 30, 2020, down from $443,807 in the same period of 2019[88]