Filed 2025-07-15 · Period ending 2025-03-31 · 75,202 words · SEC EDGAR
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# BIOTRICITY INC. (BTCY) — 10-K
**Filed:** 2025-07-15
**Period ending:** 2025-03-31
**Accession:** 0001641172-25-019755
**Source:** [SEC EDGAR](https://www.sec.gov/Archives/edgar/data/1630113/000164117225019755/)
**Origin leaf:** eabaea29ecd29f520113a980a7c8e848ab889b0e4d2e0e5ac12e65ec1b5bee0b
**Words:** 75,202
---
**
UNITED
STATES**
**SECURITIES
AND EXCHANGE COMMISSION**
**WASHINGTON,
D.C. 20549**
**FORM
10-K**
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For
the fiscal year ended: March 31, 2025
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
Commission
File Number: 001-40761
**BIOTRICITY
INC.**
(Exact
name of registrant as specified in its charter)
|
nevada |
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30-0983531 | |
|
(State
or other jurisdiction of
incorporation
or organization) |
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(I.R.S.
Employer
Identification) | |
|
203
Redwood Shores Parkway, Suite 600 | |
|
Redwood
City, CA 94065 | |
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(Address
of principal executive offices, including zip code) | |
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(800)
590-4155 | |
|
(Registrants
telephone number, including area code) | |
Securities
registered pursuant to Section 12(b) of the Act: None
Securities
registered pursuant to Section 12(b) of the Act:
|
Title
of Class |
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Trading
Symbol (s) |
|
Name
of each exchange on which registered | |
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N/A |
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|
|
N/A | |
Securities
registered pursuant to Section 12(g) of the Act:
|
Title
of Each Class |
|
Name
of Each Exchange On Which Registered | |
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Common Stock, Par Value $0.001 |
|
OTCQB | |
Indicate
by check mark if the registrant is a well-known seasoned issuer, as defined in 405 of the Securities Act. Yes No
Indicate
by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Exchange Act. Yes
No
Indicate
by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange
Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2)
has been subject to such filing requirements for the past90 days. Yes No
Indicate
by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule
405 of Regulation S-T ( 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant
was required to submit such fi les). Yes No
Indicate
by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting
company, or emerging growth company. See the definitions of large accelerated filer, accelerated filer, smaller
reporting company, and emerging growth company in Rule 12b-2 of the Exchange Act.
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Large
accelerated filer |
Accelerated
filer | |
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Non-accelerated
filer |
Smaller
Reporting Company | |
|
|
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Emerging
Growth Company | |
If
an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying
with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. Yes No
Indicate
by check mark whether the registrant has filed a report on and attestation to its managements assessment of the effectiveness
of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered
public accounting firm that prepared or issued its audit report.
If
securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the registrant
included in the filing reflect the correction of an error to previously issued financial statements.
Indicate
by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive-based compensation
received by any of the registrants executive officers during the relevant recovery period pursuant to 240.10D-1(b).
Indicate
by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes No
State
the aggregate market value of the voting and non-voting common equity held by non-affiliates computed by reference to the price at which
the common equity was last sold, or the average bid and asked price of such common equity, as of the last business day of the registrants
most recently completed second fiscal quarter: $2,787,999.
The
number of shares outstanding of each of the registrants classes of common stock, as of July 15, 2025, was 26,567,769 (not including
160,672 Exchangeable Shares, directly exchangeable into an equivalent number of shares of common stock).
DOCUMENTS
INCORPORATED BY REFERENCE
None.
| | |
****
**BIOTRICITY
INC.**
**Form
10-K**
**For
the Fiscal Year Ended March 31, 2025**
**TABLE
OF CONTENTS**
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PART I |
3 | |
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ITEM 1. BUSINESS |
3 | |
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ITEM 1A. RISK FACTORS |
18 | |
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ITEM 1B. UNRESOLVED STAFF COMMENTS |
34 | |
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ITEM 1C. CYBERSECURITY |
34 | |
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ITEM 2. PROPERTIES |
35 | |
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ITEM 3. LEGAL PROCEEDINGS |
35 | |
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ITEM 4. MINE SAFETY DISCLOSURES. |
35 | |
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PART II |
36 | |
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ITEM 5. MARKET FOR REGISTRANTS COMMON EQUITY, RELATED STOCKHOLDER MATTERS, AND ISSUER PURCHASES OF EQUITY SECURITIES |
36 | |
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ITEM 6. [RESERVED] |
38 | |
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ITEM 7. MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS |
38 | |
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ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK |
55 | |
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ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA |
55 | |
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ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURES |
55 | |
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ITEM 9A. CONTROLS AND PROCEDURES |
55 | |
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ITEM 9B. OTHER INFORMATION |
56 | |
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ITEM 9C. DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTIONS |
56 | |
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PART III |
57 | |
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ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE |
57 | |
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ITEM 11. EXECUTIVE COMPENSATION |
62 | |
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ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT |
65 | |
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ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE |
66 | |
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ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES |
66 | |
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PART IV |
67 | |
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ITEM 15. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES |
67 | |
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SIGNATURES |
70 | |
| 2 | |
**PART
I**
**ITEM
1. BUSINESS**
Biotricity
Inc. (the Company, Biotricity, we, us, our) is a medical technology
company focused on biometric data monitoring solutions. Our aim is to deliver innovative, remote monitoring solutions to the medical,
healthcare, and consumer markets, with a focus on diagnostic and post-diagnostic solutions for lifestyle and chronic illnesses. We approach
the diagnostic side of remote patient monitoring by applying innovation within existing business models where reimbursement is established.
We believe this approach reduces the risk associated with traditional medical device development and accelerates the path to revenue.
In post-diagnostic markets, we intend to apply medical grade biometrics to enable consumers to self-manage, thereby driving patient compliance
and reducing healthcare costs. We first focused on a segment of the ambulatory diagnostic cardiac outpatient market, otherwise known
as Mobile Cardiac Outpatient Monitoring (COM), while also providing the capability to perform all types of ambulatory cardiac
studies.
We developed our Bioflux (Bioflux) COM technology, which
has received clearance from the U.S. Food and Drug Administration (FDA), comprised of a monitoring device and software components,
which we made available to the market under limited release on April 6, 2018, to assess, establish and develop sales processes and market
dynamics. Full market release of the Bioflux device for commercialization occurred in April 2019. The fiscal year ended March 31, 2021
marked our first year of expanded commercialization efforts, focused on sales growth and expansion. In 2021, we commenced the initial
launch of Bioheart, a direct-to-consumer heart monitor that offers the same continuous heart monitoring technology used by physicians.
In addition to developing and receiving regulatory approval or clearance of other technologies that enhance our ecosystem, in 2022, we
announced the launch of our Biocore Cardiac Monitoring Device (Biocore, previously branded as Biotres), a three-lead device
for ECG and arrhythmia monitoring intended for lower risk patients, a much broader addressable market segment. Late in 2024, we launched
the cellular version of that same device, the Biocore Pro, which is now our flagship technology. During this period of development, we
have expanded our sales efforts to 35 states and intend to expand further and compete in the broader US market using an insourcing business
model. Our technology has a large potential total addressable market, which can include hospitals, clinics and physicians offices,
as well as other Independent Diagnostic Testing Facilities (IDTFs). Cardiac disease is ranked as the number one chronic
care disease in the US and most markets globally, making our technology useful across the globe. As such, we are pursuing and have achieved
regulatory approvals in several key jurisdictions in preparation of future distribution efforts outside of the US. We believe our technological
and clinical advantage combined with our solutions insourcing model, which empowers physicians with state-of-the-art technology
and charges technology service fees for its use, has the benefit of a reduced operating overhead for us, and enables a more efficient
market penetration and distribution strategy.
We are a technology company focused on earning utilization-based recurring
technology fee revenue. Our ability to grow this type of revenue is predicated on the size and quality of our sales efforts and our ability
to penetrate the market and place devices with clinically focused, repeat users of our cardiac study technology. We plan to grow our sales
force to address new markets and achieve sales penetration in the markets currently served.
Our
principal executive office is located at 203 Redwood Shores Pkwy Suite 600, Redwood City, California, and our telephone number is (800)
590-4155. Our website address is www.biotricity.com. The information on our website is not part of this Annual Report on Form 10-K.
Commercial
History
Full
market release of the Bioflux device for commercialization launched in April 2019, after receiving its second and final required
FDA clearance. To commence commercialization, we ordered device inventory from our FDA-approved manufacturer and hired a small, captive
sales force, with deep experience in cardiac technology sales; we expanded on our limited market release, which identified potential
anchor clients who could be early adopters of our technology. We then expanded our sales force and geographic footprint.
In
2021, we received a 510(k) clearance from the FDA for our Bioflux Software II System, engineered to improve workflows and reduce estimated
review time from 5 minutes to 30 seconds. This improvement in review time reduces operational costs and allows us to continue to focus
on excellent customer service and industry-leading response times to physicians and their at-risk patients. Additionally, these advances
mean we can focus our resources on high-level operations and sales.
| 3 | |
During
2021 and the early part of 2022, we also commercially launched our Bioheart technology, which is a consumer technology whose development
was forged out of the clinical technologies that are already part of our technology ecosystem, the Biosphere. In recognition of our
innovations, in November 2022, Bioheart received recognition as one of TIMEs Best Inventions of
2022.
We continue to develop our telemedicine capabilities of real-time streaming
of medical data. We are expanding our platform to include remote patient monitoring, chronic care management, and implantable device
management, creating a single unified cardiac platform for medical facilities. Our focus has always been and continues to remain on developing
technology that supports clinics while driving economic benefits and costs savings to healthcare service providers within the traditional
reimbursement and value based care payer models. Our goal is to position ourselves as an
all-in-one cardiac diagnostic and disease management solution. We continue to grow our data set of billions of patient heartbeats, allowing
us to further develop our predictive capabilities relative to atrial fibrillation and arrythmias.
In
January 2022, we received the 510(k) FDA clearance of our Biocore (previously named Biotres) patch solution, which is a novel product
in the field of Holter monitoring. This three-lead technology can provide connected Holter monitoring that is designed to produce more
accurate arrythmia detection than is typical of competing remote patient monitoring solutions. It is also foundational, since this platform technology has a pipeline of development expansions focused on clnical applications which are
currently unavailable in the market. In October 2023, we launched the cellular version of this device, the Biocore Pro.
Since then, we have launched Biocare, after successfully piloting this
technology in two facilities that provide cardiac care to more than 60,000 patients. This technology and other consumer technologies and
applications such as the Biokit and Biocare have been developed to allow us to transform and use our strong cardiac footprint to expand
into remote chronic care management solutions that will be part of the Biosphere. The technology puts actionable data into the hands of
physicians to assist them in making effective treatment decisions quickly.
This supports us in expanding our footprint within existing customer sites to provide full-cycle chronic care management solutions to
our clinic and patient network.
We
are also developing several other ancillary technologies, which will require application for further FDA clearances, which we anticipate
applying for within the next twelve months. Among these are:
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advanced
ECG algorithms and analysis software for further improvements in sensitivity and specificity to analyze and synthesize patient ECG
monitoring data with the purpose of distilling it down to the important information that requires clinical intervention, while reducing
the amount of human intervention necessary in the process; | |
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the
Biocore Pro 2.0, which is the next generation of our award winning Biocore | |
We
identified the importance of recent developments in accelerating our path to profitability, including the launch of important new products, which have a ready market through cross-selling to existing customer clinics, and large new distribution partnerships
that allow us to sell into large hospital networks.
| 4 | |
Our
mission is to innovate and create transformative healthcare products while ensuring financial discipline, to drive margin and revenue
growth while delivering value creation for our investors. Our commitment to innovation means that we harness data intelligently to explore
novel avenues for enhancing healthcare outcomes. Through cutting-edge research and development, we believe we are redefining medical
diagnostics and patient care by developing new innovative AI-driven solutions.
We
are expanding our AI technology development in remote cardiac care, leveraging proprietary AI technology to provide a suite of predictive
monitoring tools to enhance new disease profiling, improve patient management, and revolutionize the healthcare industry for disease
prevention.
We
have also strengthened relationships with Amazon and Google. The healthcare AI market opportunity is projected to grow to $208.2 billion
by 2030 according to Grand View Research. We have already established a strong foothold, having already built a powerful proprietary
cardiac AI model that combines Googles TensorFlow, AWS infrastructure, big data and a continuous learning engine. This combination
allows us to rapidly improve our cardiac technology. In the near future, we believe the capabilities of our cardiac AI model will allow
us to support healthcare professionals in handling exponentially more patients while identifying the most critical data. This will enable
healthcare workers to elevate the quality of care while serving a larger number of patients. As growing patient numbers further stress
the shortage of healthcare professionals, our technology could help alleviate this pressing issue. We have engineered our technology
to not only improve patient care and outcomes, but to do so in a manner that supports more patients. This has led to increasing sales
of our remote cardiac monitoring devices and the ramp-up of our subscription-based service, increasing our recurring revenue over the
past few quarters and charting a clear path to profitability.
From
a market perspective, increasing interest and demand continue to drive the adoption of our suite of products, which are focused on chronic
cardiac disease prevention and management. Our efforts in commercialization and development have yielded tremendous progress in remote
monitoring solutions for diagnostic and post-diagnostic products.
**Market
Overview**
Chronic
diseases are the number one burden on the healthcare system, driving up costs year over year. Lifestyle related illnesses such as obesity
and hypertension are the top contributing factors of chronic conditions including diabetes and heart disease. Government and healthcare
organizations are focused on driving costs down by shifting to evidence-based healthcare where individuals, especially those suffering
from chronic illnesses, engage in self-management. This has led to growth in the connected health market, which according to an October
2023 report by MarketUs is projected to reach $150 billion by 2024 at a compound annual growth rate (CAGR) of 25%.
According
to the American Heart Association, the number one cost to the healthcare system is cardiovascular disease, estimated by the CDC Foundation
to be responsible for 1 in every 6 healthcare dollars spent in the US. Since cardiovascular disease is the number one cause of death
worldwide, early detection, diagnosis, and management of chronic cardiac conditions are necessary to relieve the increasing burden on
the healthcare infrastructure. Diagnostic tests such as ECGs are used to detect, diagnose and track certain types of cardiovascular conditions.
We believe that the rise of lifestyle related illnesses associated with heart disease has created a need to develop cost-effective diagnostic
solutions to fill a hole in the current ECG market. These solutions will not only deliver faster and earlier diagnoses but also build
the foundation for disease management, supporting the transition from diagnosis to disease management.
A
report by Grand View Research projects that the global ECG equipment market will grow at a CAGR of 6.5% from 2023 to 2030, with the US
market valued at $2.01 billion in 2022. The factors driving this market include an aging population, an increase in chronic diseases
related to lifestyle choices, improved technology in diagnostic ECG devices, and high growth rates of ECG device sales.
| 5 | |
In
the US, COM tests are primarily conducted through outsourced IDTFs that are reimbursed at an estimated average rate of approximately
$850 per diagnostic test, based on pricing information provided by the Centers for Medicare & Medicaid Services, a part of the U.S.
Department of Health and Human Services, and weighted towards the largest markets of New York, California, Texas and Florida. Reimbursement
rates can be lower in smaller markets, although the national average is $801. Further, we believe private insurers provide for similar
or better reimbursement rates.
Our
initial device offerings intended to revolutionize the COM and Holter markets by providing convenient, cost-effective, integrated solutions,
inclusive of both software and hardware for physician providers and their patients. Biotricity, however, has a broader strategic vision
to offer an ecosystem of technologies that engage the patient-user and their medical practitioner(s) in sustained monitoring, diagnosis,
communication and pro-active treatment and management of chronic care conditions. Our core solution is designed as a platform to encompass
multiple segments of the remote monitoring market, and its future growth.
**Market
Opportunity**
Cardiac
Diagnostics
ECGs
are a key diagnostic test utilized in the diagnosis of cardiovascular disease, the number one cause of death worldwide. The American
Heart Association reported that there were approximately 128 million adults in the US living with cardiovascular disease in 2020.
The
US ECG market is divided into three major product segments:
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1. |
Event
monitoring systems; | |
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2. |
Stress
ECG systems; and | |
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|
3. |
Resting
(non-stress) ECG systems. | |
Event
monitoring systems are projected to grow the fastest due to a shift from in-hospital/clinic monitoring to outpatient monitoring. This
shift is expected to help reduce health care costs by limiting the number of overnight hospital stays for patient monitoring. We believe
that physicians prefer event monitoring systems over resting and stress ECG systems because they provide better insight to the patients
condition for diagnostic purposes.
The
event monitoring market is divided into the Holter/Extended Holter, Event Loop and COM product segments, of which Holter, and its variant
Extended Holter, and Event Loop are the current market leaders. Among event monitoring systems, we believe that the preferred choice
of physicians and cardiologists is COM, because of its ability to continuously analyze patient data and transmit, thereby speeding up
diagnoses. COM devices have built-in arrhythmia analysis and regular communication, which allow physicians to prescribe the device for
a longer period of time; thereby enabling prolonged data collection and delivering a more complete picture for diagnosis.
Typical
Holter/Extended Holter and Event Loop solutions lack the ability to alert the patient or provider in case of an anomaly. Holters are
typically used as a short-term solution, up to 3 days, whereas Event Loop is used for up to 30 days. Extended Holter, the long-term variant
of Holter can be used for up to 21 days. It is the most recent of the cardiac monitoring options and was created for longer term holter
recordings. Since Event Loop is also long term, reimbursement for Extended Holter and Event Loop are converging. Reimbursement for these
is much lower compared to COM due to the nature of the solution, recording vs monitoring. With Holter and Event Loop monitoring, ECG
data is not uploaded or transmitted regularly. Comparatively, if the patient were monitored through a COM device with regular ECG data
transfer and cellular connectivity, then in the event of cardiac anomalies, the monitoring center could send communication to the patients
physician.
Since
COM requires an FDA-cleared device (meaning for our purposes that it can be used to review medical ECG data from ECG devices), FDA-cleared
ECG reporting software, and remote monitoring capabilities, regulatory and development hurdles have resulted in relatively few companies
being able to successfully develop an all-encompassing solution. We believe that there are currently only 5 COM solutions within the
market. Some of these solutions are sold to the market through solutions providers that have not developed and do not manufacture their
own device.
| 6 | |
Of
the COM systems currently available in the market, most are IDTFs who employ an outsourcing business model, focused on providing clinical
services for which they can earn reimbursement; this means that they would typically not sell their devices to physicians, but offer
their clinical services. Some COM providers choose to sell their solution by charging high prices for devices and upfront software costs,
as well as a per cardiac study monitoring fee. Among these are solutions that are not scalable; some lack monitoring software, requiring
a customer to acquire third party software and incur integration expenses. These would require an investment by the physician, to incur
upfront costs that would take time to recoup before profits are realized.
The
limited number of competitors makes this an attractive market for new entrants. However, entry into the market requires a hardware device
coupled with complex algorithms, ECG software and access to a monitoring center. Two of the five COM players have done so by building
their own monitoring infrastructure, developing their own ECG software and utilizing TZ Medicals COM device. However, this is
capital intensive and we believe cost prohibitive for most hospitals and clinics. These barriers are in our opinion among the key reasons
as to why Holter and Event Loop have maintained a significant portion of the US event monitoring market despite the increase in patient
safety and improved outcomes with COM.
The Biocore solution and business model attempts to address these complications
with its complete, turn-key solution for providers to deliver cardiac diagnostics directly. Technologically, the Biocore solution is superior
as a one-piece solution as opposed to a two-piece and collects 3 channels of ECG compared with 1 or 2, resulting in better data and higher
quality diagnoses. It is also designed to be easy to wear in a form factor that attains high patient compliance. Combined with our insourced
business model, providers can deliver better and faster care while also billing. This combination has led to our continued growth and
high customer retention rates.
Chronic
Care and Remote Patient Monitoring
Chronic
diseases are the number one healthcare expense and are continuing to grow as the population ages. Lifestyle related illnesses such as
obesity, hypertension, cardiovascular diseases, and diabetes are the top contributing factors of chronic conditions. Government and healthcare
organizations are focused on driving costs down by shifting to holistic management where individuals, especially those suffering from
chronic illnesses, are supported outside of the clinic. This has led to growth in chronic care management market, which is projected
to reach $8.7 billion in the US by 2027 at a compound annual growth rate (CAGR) of 18% between 2021 and 2027, according to a January
2022 report by Precedence Research.
Remote
patient monitoring (RPM), one of the key areas of focus for disease-management and evidence-based practice, is projected by Research
and Markets to reach a market size of $96.67 billion by 2030 at a CAGR of 17.6%, according to a January 2024 report by Research and Markets.
Today, approximately 20% of large healthcare facilities in the US are already using remote monitoring with a projected 70 million US
patients utilizing remote monitoring by 2025, as reported by Strategic Market Research in July 2023.
Similar
to chronic care and RPM, lifestyle management is seeing increasing growth where stable patients are becoming more and more engaged in
lifestyle management. Grand View Research reported that the global wearable technology market has already reached $61.3 billion in 2022
with an expected CAGR of 14.6% from 2023 to 2030. In 2021, the US portion of that market was valued at $17.9 billion.
The
primary driver of each of these markets are individuals diagnosed with or at risk-for chronic conditions. Cardiac diseases are the number
one expense and the number one killer, making up the bulk of the individuals utilizing such solutions. Despite this, existing solutions
are not tailored for cardiac patients but for diabetes, obesity, and hypertension as these conditions are supported by medical or personal
devices that can track biometrics that support management. Up until now, there has been no solution available to support cardiac patients
as technology was limited to manual short term heart rhythm collection or heart rate monitors.
Biotricity
changed this with the creation of Bioheart and Biocare, which delivers the first cardiac tailored solution for disease management. The
engine of this solution is the Bioheart, the first-of-its-kind continuous heart rhythm monitor that autonomously and continuously collect
heart rhythm data with no limitation on duration, a necessity for cardiac issues. Just as diabetic patients have continuous glucose monitoring,
individuals with cardiac issues now have continuous heart monitoring.
| 7 | |
Combining
our technological innovation with our business model delivers a solution that is not only industry leading technologically and clinically,
but one that also supports providers to deliver better care while creating a new revenue stream. We believe this leap in innovation will
help us compete with the more generic solutions as well as those limited by shorter duration data collection. The leap in innovation
created by Bioheart was also recognized by TIME, where they named Bioheart one of the Best Inventions of the World in 2022.
**Market
Strategy**
Cardiac
Diagnostics
Our
cardiac diagnostics strategy is focused on the target addressable market of approximately 34,000 cardiologist physician offices in the
U.S. (approximately 6% of all specialty physician offices in the U.S.), approximately 780 hospitals that specialize in cardiology, heart
and vascular surgery (approximately 13% of all hospitals in the U.S.), and 300 IDTFs that provide cardiac monitoring services (an estimated
10% of all IDTFs in the U.S.). To do this, we invested in the hiring of top caliber sales professionals with a proven track record in
cardiac technology and device sales, and strong business relationships with providers of cardiac medical services. To further expand
our market reach, we have partnered with leading distributors and GPOs.
COM
The Bioflux and Biocore Pro solutions are deployed into physicians
offices, clinics, hospitals, and IDTFs. For the prescribing physician, the COM diagnostic read is a reimbursable service from payers such
as Medicare and insurance companies. In the United States, billing codes for an COM diagnostic read are available under the American Medical
Association Current Procedural Terminal, with a current average reimbursement rate of $850 per read (a read is between 1 and 30 days long).
We
believe that Biotricitys revenue model, which is a platform or technology *as a service* model (*PAAS* or *TAAS*),
is a significant and disruptive departure from the pricing and reimbursement strategies of the existing competitors in the COM
market, which apply an outsourced model to COM diagnostics, where the entire procedure and reimbursement is outsourced; the COM
solutions provider takes over the clinical responsibilities and earns the reimbursement and pays the physician a small
administrative stipend. Biocores technology, revenue and insourced business model entail differentiators that are expected to
create barriers to entry for other competitors seeking to emulate our strategy.
We also believe our solutions are not only financially superior but
also clinically superior. Existing COM solutions are two-piece solutions with 2 channel ECGs. Comparatively, Biocore is a one-piece solution
with 3 channels of ECG, delivering more and higher quality data with better patient compliance. This is a significant barrier to entry
for existing and new competitors as they would need to develop an entirely new solution that encompasses multiple channels and integrated
cellular connectivity to compete with the Bioflux or Biocore.
Holter/Extended
Holter
The
Biocore solution is purpose-built for the holter and extended holter market and is deployed into physicians offices, clinics,
hospitals, and IDTFs. For the prescribing physician, the Holter/Extended Holter diagnostic read is a reimbursable service from payers
such as Medicare and insurance companies. In the United States, billing codes for a Holter and Extended Holter diagnostics are available
under the American Medical Association Current Procedural Terminal, with a current blended average reimbursement rate of $200 per test,
where a test is between 1 and 21 days long.
We
believe that Biocores revenue model, which is a platform or technology *as a service* model (*PAAS* or *TAAS*),
is a significant and disruptive departure from the pricing and reimbursement strategies of the existing competitors in the Holter market,
which apply an outsourced model to Holter diagnostics, where the entire procedure and reimbursement is outsourced; the Holter solutions
provider takes over the clinical responsibilities and earns the reimbursement and pays the physician a small administrative stipend.
Biocores technology, revenue and insourced business model entail differentiators that are expected to create barriers to entry
for other competitors seeking to emulate our strategy.
| 8 | |
Additionally,
we believe the Biocore solution is not only financially superior but also clinically superior. Existing holter patch solutions are 1
channel devices that lack connectivity. This leads to cardiac diagnostic results taking up to 2 weeks. Biocore is a connected 3 channel
patch solution, delivering more and higher quality data while reducing the time to diagnosis from 2 weeks to 3 days or less. This is
a significant barrier to entry for existing and new competitors as they would need to develop an entirely new solution that encompasses
connectivity and multiple channels to compete with the Biocore.
Chronic
Care Management (CCM) and Remote Patient Monitoring (RPM)
Our
chronic care management and remote patient monitoring strategy is focused on the same target addressable market of approximately 34,000
cardiologist physician offices (approximately 6% of all physician offices in the U.S.), approximately 780 hospitals that specialize in
cardiology, heart and vascular surgery (approximately 13% of all hospitals in the U.S.), and 300 IDTFs that provide cardiac monitoring
services (an estimated 10% of all IDTFs in the U.S.) that we are targeting for our diagnostics. The difference in our strategy here is
a focus on selling into existing accounts and new diagnostic accounts as opposed to building out a new channel strategy. These solutions
are complementary to our diagnostics solution and can be sold as part of a complete platform to target new and existing customers.
**Product
and Technology**
Bioflux
and Biocore Pro
Bioflux
and Biocore Pro are advanced, integrated ECG device and software solutions for the COM market. The device attaches like a patch
into utilizes wet electrodes that are applied to a patients chest. The Biocore ECG reporting software allows doctors and labs
to view a patients ECG data for monitoring and diagnostic purposes.
The
Biocore Pro device has been developed, among other things, with the following features:
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3
channels | |
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Built-in
cellular connectivity for global cellular network compatibility; | |
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Extended
battery size for up to 5 days of battery life. | |
The Bioflux and Biocore Pro
platform has a built-in cellular chipset and a real-time embedded operating system which allows for our technology to be utilized as an
Internet of Things (IoT) platform. This technology can be leveraged into other applications and industries by utilizing the platform and
OS side of our technology.
Biocore
Holter
and Extended Holter monitors are significantly simplified versions of cardiac diagnostics that lack connectivity and analysis. Holter
and Extended Holter monitors require data to be downloaded manually, resulting in diagnostic results taking up to 2 weeks or longer.
The Biocore device has been designed to address the limitations of existing solutions while providing the same disruptive business model
as the Bioflux. Responding to our customer needs, the Biocore was developed with the following features:
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3
channels | |
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Connectivity | |
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Rechargeable | |
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Reusable | |
The
Biocore is also a platform technology that can be leveraged and used to enter other markets and support future product enhancements.
The company has already developed a number of enhancements for Biocore that will be available in the next generation of the solution.
| 9 | |
Biocare,
Bioheart and Biokit
It
is widely reported that chronic illnesses related to lifestyle diseases are on the rise, resulting in increased healthcare costs. This
has caused a major shift in the US healthcare market, emphasizing a need for evidence-based healthcare system focused on overall health
outcomes. Patient compliance is a critical component in driving improved health outcomes, where the patient adheres to and implements
their physicians recommendation. Unfortunately, poor patient compliance is one of the most pressing issues in the healthcare market.
One of the key contributing factors to this is the lack of a feedback mechanism to measure improvement and knowledge. Studies show that
poor patient compliance costs the US healthcare system $100 to $289 billion annually1, representing 3% to 10% of total US
healthcare costs2 . Studies have proven that regular monitoring of chronic care conditions improves patient outcomes in the
form of lower morbidity rates and reduce the financial burden on the healthcare system by empowering preventative care.
The
Company has developed Biocare to support medical practitioners as they gather data and regularly monitor and treat patients with two
or more chronic care conditions. We expect that Bioheart combined with our Biocare platform, our fourth product, is focused on filling
this need by providing a clinically relevant, preventative care and disease management solution for the consumer. A key underlying component
of Bioheart is the ability to measure patient improvementswith clinical accuracyhelping to drive feedback and support patient
compliance. This approach is implemented in our development process by focusing on a disease/chronic illness profile, as opposed to a
customer profile. We are focused on cardiovascular disease for our first preventative care solution since Bioflux is aimed at the same
health segment.
The
focus on cardiovascular disease states make the combination of Bioheart and Biocare a unique offering within the chronic care management
space which is primarily focused on diabetes. With no long term consumer solution for heart patients, chronic care management has focused
on those conditions that do have personal devices, mainly diabetes, hypertension, and COPD. This is why we developed Bioheart, a consumer
solution for personal use for individuals with cardiac issues. Combined with our Biocare platform, it is one of the first disease management
solutions capable of delivering holistic chronic care management to cardiovascular patients.
Taking
it a step further, we developed Biokit to support cardiac patients that had other chronic conditions such as hypertension or COPD. Biokit
is a remote patient monitoring kit that combines a blood pressure cuff, an pulse oximeter and a digital thermometer into the Biocare
platform to support the collection of additional biometrics for those patients with multiple conditions. Biocare was developed with the
following features:
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Integration
with cardiac diagnostics: Bioflux and Biocore | |
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Bioheart | |
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Biokit | |
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Virtual
Clinic | |
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Automated
biometric reporting | |
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Patient
Dashboards | |
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Automated
time tracking | |
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Built-in
patient reminders and calling | |
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Asynchronous
chat | |
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Monthly
data summaries | |
Biocare
is also a platform technology that can be leveraged and used to enter other chronic condition markets and support future product enhancements.
The company has already developed a number of enhancements for Biocare that will be available in the next generation of the solution.
**Future
Markets**
In
the next few years, we intend to expand use of our technology platform with medical-grade solutions for the monitoring of implantable cardian devices,
diabetes, sleep apnea, chronic pain, as well as fetal monitoring, and other adjacent healthcare and lifestyle markets.
| 10 | |
Bionatal
is a proposed product for monitoring fetus health by remote cardiac telemetry. In the US, there were approximately 24,073 fetal
deaths at 20 or more weeks gestation in 20123. The rise of older mothers and mothers with chronic conditions have driven high-risk
pregnancies to a new high; high-risk complications now occur in 6 to 8 percent of all pregnancies4.
The
Company has also received an NIH grant to investigate cardiac anomalies in chronic kidney disease patients, which is designed to be a
predictive or early detection tool for CKD patients. This and other new technology that the Company is developing is applicable to the
market segments that the Company intends to serve and will continue to adhere to the Companys revenue model of deriving income
from technology fees.
**Competition**
**Cardiac
Diagnostics**
**Cardiac
Outpatient Monitoring**
The
medical technology equipment industry is characterized by strong competition and rapid technological change. There are a number of companies
developing technologies that are competitive to our existing and proposed products, many of them, when compared to our Company, having
significantly longer operational history and greater financial and other resources.
Within
the US event monitoring systems market, we are aware of six main competitors in the COM product segment. These competitors have increased
market presence and distribution primarily by working through existing IDTFs. The existing competitors have maintained a competitive
advantage within the market by controlling the distribution of all available COM devices and software solutions. Our primary competitors
in the COM market are:
Philips Biotel - *Biotelemetry (formerly CardioNet), recently acquired by Philips for a reported $2.8B*. We believe that BioTelemetry,
Inc. has the largest network of IDTFs within the COM market. BioTelemetry is considered a complete solution provider as it produces and
distributes its own COM device, software solution, and COM monitoring centers. The company acquired its COM device through the acquisition
of a COM manufacturer, Braemar. Upon acquisition of Braemar, BioTelemetry offered limited support to other clients utilizing Braemars
technology. This resulted in BioTelemetry increasing the use of its device and software solution, enabling wide market penetration. We
believe that BioTelemetry business model is focused on providing the COM diagnostic service, as opposed to selling COM solutions to other
IDTFs or service providers, which enables a perpetual per-read fee as opposed to one time device or software sales. Equity research analysts
categorize BioTelemetry as a clinical health provider, because of its business model, rather than as a medical device company. As such,
we believe that BioTelemetry market cap is limited by the low multiples associated with that type of business, and, as a clinical health
provider, BioTelemetry has significant overhead and fixed costs associated with monitoring centers and health professionals.
Boston Scientific Preventice *Preventice (formerly eCardio.), recently acquired by Boston Scientific for a reported $1.2B.*Preventice is a private company, based in Houston, Texas. Preventices device is manufactured by a third party medical device
company, TZ Medical. Preventice has integrated TZ Medicals device with its software solution to create a complete COM solution.
Similar to Biotelemetry, we believe eCardio follows the same business model of offering the COM service and acting as a clinical health
provider.
*ScottCare*. ScottCare is a private company in the US and a subsidiary of Scott Fetzer Company, a division of Berkshire Hathaway.
ScottCare provides equipment for cardiovascular clinics and diagnostic technicians. ScottCare has built its own COM device and software
solution, and white-labeled TZ Medicals device. Unlike the others, ScottCare offers its solution in an insourced model, where
the physician has the opportunity to bill. This model requires the physician to purchase a minimum number of devices at an approximate
average cost of $2,000 and their software at a cost of $25,000 to $40,000. After this initial upfront cost, ScottCare charges an additional
per test fee for monitoring. We believe the above model creates a long return on investment for the physician. In our opinion, this has
resulted in little market penetration for ScottCare as compared to the others.
| 11 | |
*Infobionic*.
Infobionic is a private company located in Waltham, Massachusetts. It follows a leasing model where it leases its technology at a
fixed monthly rate, whether technology is used or not. They have a complete solution, comprised of a device and software. We believe
that they have a good model that will enable them to be competitive in the market. In our opinion, there is room for both Biotricity
and Infobionic within the marketplace, though we believe that our solution is superior in two ways. 3 channels and built
in cellular technology.
*VitalConnect*.
VitalConnect is a private company that has expanded into the COM space by offering a disposable patch coupled with a cellphone. They have
adopted the same model as Boston Sci and Philips. They are well funded and are growing but continue to lose money and have integrated
various third party technologies to build their solution. Operationally, a disposable patch is expensive to manage and increases COGS.
Long term we think our solution is superior as it is clinically better with 3 channels and built in cellular technology alongside industry
leading operational workflows. Economically, we know that solutions like this cannot compete with us when it comes to costs and margins.
In
addition, we note that:
*Medtronic*. Medtronic is a major medical device conglomerate. It has an COM solution by the name of SEEQ that was added to their
portfolio through the acquisition of Corventis. We have seen no significant activity or usage with SEEQ in our market analysis. We also
note that SEEQ is a patch based COM solution that only collects data on 1 lead. As such, it has strong competition from 3 lead systems
which are the standard for COM. In early 2018, Medtronic withdrew SEEQ from the marketplace. We do not view Medtronic as a primary competitor,
but, given the size and reach of Medtronic, they are an organization that we must continuously watch and be aware of.
*TZ Medical*. TZ Medical is a medical device company that focuses on manufacturing a variety of medical devices. We do not consider
TZ Medical to be a direct competitor as they produce a COM device that is available for purchase, and sold to competitors such as to
Scottcare and Preventice, described above. However, we do not believe that TZ Medical has a software solution, requiring any new entrant
to either acquire or build out a software solution and then integrate that with the TZ Medical device. This creates a requirement for
a large upfront capital investment. As a result, we believe this approach only works for organizations looking to become COM solution
providers with the same business model as the others.
We
believe that our Bioflux COM solution will successfully compete because:
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it
is designed as a platform to encompass all segments of the event monitoring market; | |
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of
the insourcing business model which we believe is applicable to a significantly larger portion of the total available market and
enable more efficient strategic penetration and distribution; and | |
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for
the other reasons described earlier under Market Opportunity. | |
**Holter/Extended
Holter**
Within
the US event monitoring systems market, we are aware of three main competitors in the Holter patch product segment. These competitors
have increased market presence and distribution primarily by working with Hospitals. The existing competitors have maintained a competitive
advantage within the market by a first mover advantage. Our primary competitors in the Holter patch market are:
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iRhythm
Technologies: iRhythm is the leader in holter patch technology with the largest footprint. They are primarily hospital focused and
operate as an IDTF, much like our COM competitors. Their core product is the Zio patch, which is a 1 channel holter with no connectivity
and is not rechargeable | |
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BardyDx
(Recently Acquired by Hilrom): BardyDx is the second largest player in the holter space. They operate as an IDTF as well.
Their core product is a 1 channel patch with no connectivity with a removable chip for data uploads. | |
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VitalConnect:
is a small player in the holter space. They have a disposable patch monitor that can be used for a limited time, making it unusable
for long term studies. They operate as an IDTF. | |
| 12 | |
****
**Cardiac
Disease Management**
Within
the US cardiac disease management market, we are aware of three main competitors in the cardiac care management segment. These competitors
have different approaches, solutions, and technologies but we still regard them as competitors. Technologically we have a number of differentiators
as we are the only company that has a continuous heart monitor. Our primary competitors in the cardiac disease management market are:
Bioheart:
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Alivecor
is a direct to consumer cardiac monitoring company. They are the biggest brand in consumer cardiac care and have a simple to use
handheld cardiac device. They operate as a service provider, providing cardiac insights direct to individuals. | |
Biocare:
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Optimize
Health: Optimize health is a chronic care and RPM platform for a variety of chronic conditions. Thought it is platform with no focus
on cardiac specifically, it provides a complete platform for clinics and hospitals to utilize and build out a chronic disease management
program. | |
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HelloHeart:
Hello Heart is a disease management program focused on hypertension. It is one of the few disease management programs that is focused
on a heart related chronic disease | |
In
the digital health space, we have noticed that we have competitors for different products but not a single competitor that has the entire
product portfolio that we have. This adds a layer of differentiation and competitive advantage as customer can deal with one vendor as
opposed to multiple vendors that they have to integrate.
**Intellectual
Property**
We
primarily rely on trade secret protection for our proprietary information. No assurance can be given that we can meaningfully protect
our trade secrets. Others may independently develop substantially equivalent confidential and proprietary information or otherwise gain
access to, or disclose, our trade secrets.
We
have and generally plan to continue to enter into non-disclosure, confidentiality and intellectual property assignment agreements with
all new employees as a condition of employment. In addition, we intend to also generally enter into confidentiality and non-disclosure
agreements with consultants, manufacturers representatives, distributors, suppliers and others to attempt to limit access to,
use and disclosure of our proprietary information. There can be no assurance, however, that these agreements will provide meaningful
protection or adequate remedies for our trade secrets in the event of unauthorized use or disclosure of such information.
We
also may from time to time rely on other intellectual property developed or acquired, including patents, technical innovations, laws
of unfair competition and various other licensing agreements to provide our future growth and to build our competitive position. We have
filed an industrial design patent in Canada, and we may decide to file for additional patents as we continue to expand our intellectual
property portfolio. However, we can give no assurance that competitors will not infringe on our patent or other rights or otherwise create
similar or non-infringing competing products that are technically patentable in their own right. We fully intend to vigorously defend
our intellectual property and patents.
Currently,
we have a number of registered trademarks; we may obtain additional registrations in the future.
**Research
and Development**
Our
research and development programs are generally pursued by engineers and scientists employed by us in California and Toronto on a full-time
basis or hired as per diem consultants or through partnerships with industry leaders in manufacturing and design and researchers and
academia. We are also working with subcontractors in developing specific components of our technologies. In all cases, we ensure that
all areas of IP are owned and controlled by the Company.
| 13 | |
The
primary objective of our research and development program is to advance the development of our existing and proposed products, to enhance
the commercial value of such products.
We
incurred research and development costs of $2.2 million for the fiscal year ended March 31, 2025 and $2.6 million for the fiscal year
ended March 31, 2024.
**Government
Regulation**
**General**
Our
medical device products are subject to regulation by the U.S. FDA and various other federal and state agencies, as well as by foreign
governmental agencies. These agencies enforce laws and regulations that govern the development, testing, manufacturing, labeling, advertising,
marketing and distribution, and market surveillance of our medical device products.
In
addition to those indicated below, the only other regulations we encounter are regulations that are common to all businesses, such as
employment legislation, implied warranty laws, and environmental, health and safety standards, to the extent applicable. We will also
encounter in the future industry-specific government regulations that would govern our products, if and when developed for commercial
use. It may become the case that other regulatory approvals will be required for the design and manufacture of our products and proposed
products.
**U.S.
Regulation**
The
FDA governs the following activities that Biotricity performs, will perform, upon the clearance or approval of its product candidates,
or that are performed on its behalf, to ensure that medical products distributed domestically or exported internationally are safe and
effective for their intended uses:
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product
design, and development; | |
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product
safety, testing, labeling and storage; | |
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record
keeping procedures; and | |
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product
marketing. | |
There
are numerous FDA regulatory requirements governing the approval or clearance and subsequent commercial marketing of Biotricitys
products. These include:
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the
timely submission of product listing and establishment registration information, along with associated establishment user fees; | |
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continued
compliance with the Quality System Regulation, or QSR, which require specification developers and manufacturers, including third-party
manufacturers, to follow stringent design, testing, control, documentation and other quality assurance procedures during all aspects
of the manufacturing process; | |
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labeling
regulations and FDA prohibitions against the promotion of products for uncleared, unapproved or off-label use or indication; | |
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clearance
or approval of product modifications that could significantly affect the safety or effectiveness of the device or that would constitute
a major change in intended use; | |
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Medical
Device Reporting regulations (MDR), which require that manufacturers keep detailed records of investigations or complaints against
their devices and to report to the FDA if their device may have caused or contributed to a death or serious injury or malfunctioned
in a way that would likely cause or contribute to a death or serious injury if it were to recur; | |
| 14 | |
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adequate
use of the Corrective and Preventive Actions process to identify and correct or prevent significant systemic failures of products
or processes or in trends which suggest same; | |
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post-approval
restrictions or conditions, including post-approval study commitments; | |
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post-market
surveillance regulations, which apply when necessary to protect the public health or to provide additional safety and effectiveness
data for the device; and | |
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notices
of correction or removal and recall regulations. | |
Depending
on the classification of the device, before Biotricity can commercially distribute medical devices in the United States, it had to obtain,
either prior 510(k) clearance, 510(k) de-novo clearance or premarket approval (PMA), from the FDA unless a respective exemption applied.
The FDA classifies medical devices into one of three classes based on the degree of risk associated with each medical device and the
extent of regulatory controls needed to ensure the devices safety and effectiveness:
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Class
I devices, which are low risk and subject to only general controls (e.g., registration and listing, medical device labeling compliance,
MDRs, Quality System Regulations, and prohibitions against adulteration and misbranding) and, in some cases, to the 510(k) premarket
clearance requirements; | |
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Class
II devices, which are moderate risk and generally require 510(k) or 510(k) de-novo premarket clearance before they may be commercially
marketed in the United States as well as general controls and potentially special controls like performance standards or specific
labeling requirements; and | |
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Class
III devices, which are devices deemed by the FDA to pose the greatest risk, such as life-sustaining, life-supporting or implantable
devices, or devices deemed not substantially equivalent to a predicate device. Class III devices generally require the submission
and approval of a PMA supported by clinical trial data. | |
The
custom software and hardware of our products are classified as Class II. Class II devices are those for which general controls alone
are insufficient to provide reasonable assurance of safety and effectiveness and there is sufficient information to establish special
controls. Special controls can include performance standards, post-market surveillance, patient histories and FDA guidance documents.
Premarket review and clearance by the FDA for these devices is generally accomplished through the 510(k) or 510(k) de-novo premarket
notification process. As part of the 510(k) or 510(k) de-novo notification process, the FDA may have required the following:
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Development
of comprehensive product description and indications for use. | |
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Completion
of extensive preclinical tests and preclinical animal studies, performed in accordance with the FDAs Good Laboratory Practice
(GLP) regulations. | |
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Comprehensive
review of predicate devices and development of data supporting the new products substantial equivalence to one or more predicate
devices. | |
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If
appropriate and required, certain types of clinical trials (IDE submission and approval may be required for conducting a clinical
trial in the US). | |
| 15 | |
If
required, clinical trials involve use of the medical device on human subjects under the supervision of qualified investigators in accordance
with current Good Clinical Practices (GCPs), including the requirement that all research subjects provide informed consent for their
participation in the clinical study. A written protocol with predefined end points, an appropriate sample size and pre-determined patient
inclusion and exclusion criteria, is required before initiating and conducting a clinical trial. All clinical investigations of devices
to determine safety and effectiveness must be conducted in accordance with the FDAs Investigational Device Exemption, or IDE,
regulations that among other things, govern investigational device labeling, prohibit promotion of the investigational device, and specify
recordkeeping, reporting and monitoring responsibilities of study sponsors and study investigators. If the device presents a significant
risk, as defined by the FDA, the agency requires the device sponsor to submit an IDE application, which must become effective
prior to commencing human clinical trials. The IDE will automatically become effective 30 days after receipt by the FDA, unless the FDA
denies the application or notifies the company that the investigation is on hold and may not begin. If the FDA determines that there
are deficiencies or other concerns with an IDE that requires modification, the FDA may permit a clinical trial to proceed under a conditional
approval. In addition, the study must be approved by, and conducted under the oversight of, an Institutional Review Board (IRB) for each
clinical site. If the device presents a non-significant risk to the patient, a sponsor may begin the clinical trial after obtaining approval
for the trial by one or more IRBs without separate approval from the FDA, but it must still follow abbreviated IDE requirements, such
as monitoring the investigation, ensuring that the investigators obtain informed consent, and labeling and record-keeping requirements.
Given
successful completion of all required testing, a detailed 510(k) premarket notification or 510(k) de-novo was submitted to the FDA requesting
clearance to market the product. The notification included all relevant data from pertinent preclinical and clinical trials, together
with detailed information relating to the products manufacturing controls and proposed labeling, and other relevant documentation.
A
510(k) clearance letter from the FDA then authorized commercial marketing of the device for one or more specific indications of use.
After
510(k) clearance, Biotricity is required to comply with a number of post-clearance requirements, including, but not limited to, Medical
Device Reporting and complaint handling, and, if applicable, reporting of corrective actions. Also, quality control and manufacturing
procedures must continue to conform to QSRs. The FDA periodically inspects manufacturing facilities to assess compliance with QSRs, which
impose extensive procedural, substantive, and record keeping requirements on medical device manufacturers. In addition, changes to the
manufacturing process are strictly regulated, and, depending on the change, validation activities may need to be performed. Accordingly,
manufacturers must continue to expend time, money and effort in the area of production and quality control to maintain compliance with
QSRs and other types of regulatory controls.
After
a device receives 510(k) clearance from FDA, any modification that could significantly affect its safety or effectiveness, or that would
constitute a major change in its intended use or technological characteristics, requires a new 510(k) clearance or could require a PMA.
The FDA requires each manufacturer to make the determination of whether a modification requires a new 510(k) notification or PMA in the
first instance, but the FDA can review any such decision. If the FDA disagrees with a manufacturers decision not to seek a new
510(k) clearance or PMA for a particular change, the FDA may retroactively require the manufacturer to seek 510(k) clearance or PMA.
The FDA can also require the manufacturer to cease U.S. marketing and/or recall the modified device until additional 510(k) clearance
or PMA approval is obtained.
The
FDA and the Federal Trade Commission, or FTC, will also regulate the advertising claims of Biotricitys products to ensure that
the claims it makes are consistent with its regulatory clearances, that there is scientific data to substantiate the claims and that
product advertising is neither false nor misleading.
We
received 510(k) clearance for both the software and hardware components of our Bioflux and Biocore products. To obtain 510(k) clearance,
a company must submit a notification to the FDA demonstrating that its proposed device is substantially equivalent to a predicate device
(i.e., a device that was in commercial distribution before May 28, 1976, a device that has been reclassified from Class III to Class
I or Class II, or a 510(k)-cleared device). The FDAs 510(k) clearance process generally takes from three to 12 months from the
date the application is submitted but also can take significantly longer. If the FDA determines that the device or its intended use is
not substantially equivalent to a predicate device, the device is automatically placed into Class III, requiring the submission of a
PMA. Once the information is submitted, there is no guarantee that the FDA will grant a company 510(k) clearance for its pipeline products,
and failure to obtain the necessary clearances for its products would adversely affect its ability to grow its business. Delays in receipt
or failure to receive the necessary clearances, or the failure to comply with existing or future regulatory requirements, could reduce
its business prospects.
| 16 | |
Devices
that cannot be cleared through the 510(k) process due to lack of a predicate device but would be considered low or moderate risk may
be eligible for the 510(k) de-novo process. In 1997, the Food and Drug Administration Modernization Act, or FDAMA added the de novo classification
pathway now codified in section 513(f)(2) of the 29&C Act. This law established an alternate pathway to classify new devices into
Class I or II that had automatically been placed in Class III after receiving a Not Substantially Equivalent, or NSE, determination in
response to a 510(k) submission. Through this regulatory process, a sponsor who receives an NSE determination may, within 30 days of
receipt, request FDA to make a risk-based classification of the device through what is called a de novo request. In 2012,
section 513(f)(2) of the 29&C Act was amended by section 607 of the Food and Drug Administration Safety and Innovation Act (FDASIA),
in order to provide a second option for de novo classification. Under this second pathway, a sponsor who determines that there is no
legally marketed device upon which to base a determination of substantial equivalence can submit a de novo request to FDA without first
submitting a 510(k).
In
the event that a company receives a Not Substantially Equivalent determination for its candidates in response to a 510(k) submission,
the device may still be eligible for the 510(k) de-novo classification process.
Devices
that cannot be cleared through the 510(k) or 510(k) de-novo classification process require the submission of a PMA. The PMA process is
much more time consuming and demanding than the 510(k) notification process. A PMA must be supported by extensive data, including but
not limited to data obtained from preclinical and/or clinical studies and data relating to manufacturing and labeling, to demonstrate
to the FDAs satisfaction the safety and effectiveness of the device. After a PMA application is submitted, the FDAs in-depth
review of the information generally takes between one and three years and may take significantly longer. If the FDA does not grant 510(k)
clearance to its future products, there is no guarantee that Biotricity will submit a PMA or that if it does, that the FDA would grant
a PMA approval of Biotricitys future products, either of which would adversely affect Biotricitys business.
We
have installed a suitable and effective quality management system, which establishes controlled processes for our product design, manufacturing,
and distribution. We plan to do this in compliance with the internationally recognized standard ISO 13485:2013 Medical Devices
Quality Management Systems Requirements for Regulatory Purposes. Following the introduction of a product, the FDA and foreign
agencies engage in periodic reviews of our quality systems, as well as product performance and advertising and promotional materials.
These regulatory controls, as well as any changes in FDA policies, can affect the time and cost associated with the development, introduction
and continued availability of new products. Where possible, we anticipate these factors in our product development processes. These agencies
possess the authority to take various administrative and legal actions against us, such as product recalls, product seizures and other
civil and criminal sanctions.
**Foreign
Regulation**
In
addition to regulations in the United States, we will be subject to a variety of foreign regulations governing clinical trials and commercial
sales and distribution of our products in foreign countries. Whether or not we obtain FDA approval for a product, we must obtain approval
of a product by the comparable regulatory authorities of foreign countries before we can commence clinical trials or marketing of the
product in those countries. The approval process varies from country to country, and the time may be longer or shorter than that required
for FDA approval. The requirements governing the conduct of clinical trials, product licensing, pricing and reimbursement vary greatly
from country to country.
The
policies of the FDA and foreign regulatory authorities may change and additional government regulations may be enacted which could prevent
or delay regulatory approval of our products and could also increase the cost of regulatory compliance. We cannot predict the likelihood,
nature or extent of adverse governmental regulation that might arise from future legislative or administrative action, either in the
United States or abroad.
**Manufacturing
and Suppliers**
Earlier
in the life-cycle of the Company, we focused primarily on research and development of the first generation version of the Bioflux. We
have since completed the development of Biocore and of Bioheart and their proposed marketing and distribution. We currently assemble
our devices at our Redwood City, California facility. In order to maintain compliance with FDA and other regulatory requirements, our
manufacturing facilities must be periodically re-evaluated and qualified under a quality system to ensure they meet production and quality
standards. Suppliers of components and products used to manufacture our devices must also comply with FDA regulatory requirements, which
often require significant resources and subject us and our suppliers to potential regulatory inspections and stoppages.
| 17 | |
We
have a scalable manufacturing strategy and goals and use Providence Enterprises (*herein* *Providence*), which
is an FDA qualified manufacturer for contract manufacturing. We do not have a contract with Providence or any obligation to use them
(nor do they have any obligations with respect to us other than with respect to any specific orders we may make) and we enter into purchase
orders for each manufacturing request we have with Providence, as we would with other vendors. Despite our working relationship with
Providence, we intend to continue to identify and develop other efficient, automated, low-cost manufacturing capabilities and options
to meet the quality, price, engineering, design and production standards or production volumes required to successfully mass market our
products, especially at the low-cost levels we require to facilitate our business plan.
We
currently rely on a number of principal suppliers for the components that make up our products and proposed products; these include Digikey
Corporation and Mouser Electronics for electronics and connectors, Telit/Stollmann for Bluetooth modules, Yongan Innovations for batteries,
Dongguan Bole RP&M Cp. Ltd. For plastics, Unimed Medical and Conmed for ECG cables and electrodes, and Medico Systems for touch-panel
LCD displays. We believe that the raw materials used or expected to be used in our planned products can be acquired from multiple sources
and are readily available on the market.
**Employees**
We
currently have 46 full-time employees and approximately 20 consultants who are based in our offices located in Silicon Valley, California
and Toronto, Canada. These employees oversee day-to-day operations of the Company and, together with the consultants, support management,
engineering, manufacturing, and administration. We have no unionized employees.
We
plan to hire 10 to 15 additional full-time employees within the next 12 months, as needed to support continued growth in our business.
Their principal responsibilities will be the support of our sales, marketing, research and development, and clinical development activities.
We
consider relations with our employees to be satisfactory.
**ITEM
1A. RISK FACTORS**
**Risks
Related to Our Business**
**Natural
disasters and other events beyond our control could materially adversely affect us.**
Natural
disasters or other catastrophic events may cause damage or disruption to our operations, international commerce and the global economy,
and thus could have a strong negative effect on us. Our business operations are subject to interruption by natural disasters, fire, power
shortages, pandemics and other events beyond our control. Such events could make it difficult or impossible for us to deliver our services
to our customers and could decrease demand for our services. Pandemics or disease outbreaks such as COVID-19 and its variants (collectively,
COVID-19) have had, and may continue to have, impacts on the Companys business. These include, limited access to
our facilities, customers, management, support staff and professional advisors and can, in future, impact our manufacturing supply chain.
In addition, the general economic and other impacts related to responsive actions taken by governments and others to mitigate the spread
of COVID-19, or in the future other pandemics or disease outbreaks, including but not limited to stay-at-home, shelter-in-place and other
travel restrictions, social distancing requirements, mask mandates, limitations on certain businesses hours and operations, limits
on public gatherings and other events, and restrictions on what, may continue to, result in similar declines in store traffic and overall
demand, increased operating costs, and decreased or slower unit/store growth.
| 18 | |
****
**We
have a limited operating history upon which investors can rely to evaluate our future prospects.**
We
have a limited operating history upon which an evaluation of its business plan or performance and prospects can be made. The business
and prospects of the Company must be considered in the light of the potential problems, delays, uncertainties and complications encountered
in connection with a newly established business and new industry. The risks include, but are not limited to, the possibility that we
will not be able to develop functional and scalable products and services, or that although functional and scalable, our products and
services will not be economical to market; that our competitors hold proprietary rights that preclude us from marketing such products;
that our competitors market a superior or equivalent product; that we are not able to upgrade and enhance our technologies and products
to accommodate new features and expanded service offerings; or the failure to receive necessary regulatory clearances for our products.
To successfully introduce and market our products at a profit, we must establish brand name recognition and competitive advantages for
our products. There are no assurances that we can successfully address these challenges. If unsuccessful with one or more of these issues,
we and our business, financial condition and operating results could be materially and adversely affected.
The
current and future expense levels in our forecasts are based largely on estimates of planned operations and future revenues rather than
experience. It is difficult to accurately forecast future revenues because our business is new and our market has not been fully developed.
If our forecasts prove incorrect, the business, operating results and financial condition of the Company may be materially and adversely
affected. Moreover, we may be unable to adjust our spending in a timely manner to compensate for any unanticipated reduction in revenues.
As a result, any significant reduction in revenues may immediately and adversely affect our business, financial condition and operating
results.
**We
have not had a long history of producing revenues and we cannot predict when we will achieve sustained profitability.**
We
have not been profitable, and cannot definitely predict when we will achieve profitability, if ever. We have experienced net losses historically.
We do not anticipate generating significant revenues until we successfully continue to develop, commercialize and sell our existing and
proposed products, of which we can give no assurance. We are unable to determine when we will generate significant revenues from the
sale of new products. Our inability to become profitable may force us to curtail or temporarily discontinue our research and development
programs and our day-to-day operations. Furthermore, there can be no assurance that profitability, if achieved, can be sustained on an
ongoing basis. As of March 31, 2025, we had an accumulated deficit of $138,895,913.
**We
may not meet our product development and commercialization milestones.**
We
have established milestones, based upon our expectations regarding our technologies at that time, which we use to assess our progress
toward developing our products. These milestones relate to technology and design improvements as well as dates for achieving development
goals. If our products exhibit technical defects or are unable to meet cost or performance goals, our commercialization schedule could
be delayed and potential purchasers of our initial commercial products may decline to purchase such products or may opt to pursue alternative
products.
We
may also experience shortages of monitors, sensors or bases due to manufacturing difficulties. Multiple suppliers provide the components
used in our devices. Our manufacturing operations could be disrupted by fire, earthquake or other natural disaster, a labor-related disruption,
failure in supply or other logistical channels, electrical outages or other reasons. If there were a disruption to manufacturing facilities,
we would be unable to manufacture devices until we have restored and re-qualified our manufacturing capability or developed alternative
manufacturing facilities.
Generally,
we have met our milestone schedules when making technological advances in our product. We can give no assurance that our commercialization
schedule will continue to be met as we further develop the Bioflux or any of our other proposed products.
| 19 | |
****
****
**We
have entered into a Credit Agreement pursuant to which we have granted the lender a security interest in all of our assets including
our intellectual property and if we default on our obligations in the Credit Agreement the lender could foreclose on our assets.**
On December 21, 2021, we entered into a Credit Agreement (Credit
Agreement) with SWK Funding LLC (Lender), wherein the Company has borrowed $12.4 million, with a maturity date of
December 21, 2026. Subsequent to an amendment during fiscal 2025, borrowings under that facility amount to $14,45 million. The principal
will accrue interest at the LIBOR Rate plus 10.5% (subject to adjustment as set forth in the Credit Agreement). Pursuant to the Credit
Agreement, the Company will be required to make interest only payments for the first 24 months (which may be extended to 36 months under
prescribed circumstances), after which payments will include principal amortization that accommodates a 40% balloon principal payment
at maturity. Prepayment of amounts owing under the Credit Agreement are allowed under prescribed circumstances. Pursuant to the Credit
Agreement the Company paid an Origination Fee in the amount of $120,000. Based on the Credit Agreement, upon Termination, the Company
shall pay an Exit Fee of $1,425,000.
The
Company and Lender also entered into a Guarantee and Collateral Agreement wherein the Company agreed to secure the Credit Agreement with
all of the Companys assets. The Company and Lender also entered into an Intellectual Property Security Agreement dated December
21, 2021 wherein the Credit Agreement is also secured by the Companys right title and interest in the Companys Intellectual
Property.
If
we default on our obligations to the lender, the lender could foreclose on their security interests and liquidate some or all of these
assets, which would harm our business, financial condition and results of operations and could require us to curtail or cease operations.
**Our
business is dependent upon physicians utilizing our solution when prescribing cardiac monitoring; if we fail to continue to be successful
in convincing physicians in utilizing our solution, our revenue could fail to grow and could decrease.**
The
success of our cardiac monitoring business is dependent upon physicians utilizing our solution when prescribing cardiac monitoring to
their patients. The utilization of our solution by physicians for use in the prescription of cardiac monitoring is directly influenced
by a number of factors, including:
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the
ability of the physicians with whom we work to obtain sufficient reimbursement and be paid in a timely manner for the professional
services they provide in connection with the use of our monitoring solutions; | |
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continuing
to establish ourselves as a cardiac technology company; | |
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our
ability to educate physicians regarding the benefits of COM over alternative diagnostic monitoring solutions; | |
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our
demonstrating that our proposed products are reliable and supported by us in the field; | |
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supplying
and servicing sufficient quantities of products directly or through marketing alliances; and | |
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pricing
our devices and technology service fees in a medical device industry that is becoming increasingly price sensitive. | |
If
we are unable to drive physician utilization, revenue from the provision of our arrhythmia monitoring solutions could fail to grow or
even potentially decrease.
****
| 20 | |
****
**We
are subject to extensive governmental regulations relating to the manufacturing, labeling and marketing of our products.**
Our
medical technology products and operations are subject to regulation by the FDA, Health Canada and other foreign and local governmental
authorities. These agencies enforce laws and regulations that govern the development, testing, manufacturing, labeling, advertising,
marketing and distribution, and market surveillance of our medical products.
Under
the United States Federal Food, Drug, and Cosmetic Act, medical devices are classified into one of three classes Class I, Class
II or Class III depending on the degree of risk associated with each medical device and the extent of control needed to ensure
safety and effectiveness. Our Bioflux device is a Class II medical device and we believe our planned products will also be Class II medical
devices. Class II devices are subject to additional controls, including full applicability of the Quality System Regulations, and requirements
for 510(k) pre-market notification.
From
time to time, the FDA may disagree with the classification of a new Class II medical device and require the manufacturer of that device
to apply for approval as a Class III medical device. In the event that the FDA determines that our Class II medical products should be
classified as Class III medical devices, we could be precluded from marketing the devices for clinical use within the United States for
a period of time, the length of which depends on the specific change in the classification. Reclassification of our Class II medical
products as Class III medical devices could significantly increase our regulatory costs, including the timing and expense associated
with required clinical trials and other costs.
In
addition to regulations in the United States, we will be subject to a variety of foreign regulations governing clinical trials and commercial
sales and distribution of our products in foreign countries. Whether or not we obtain FDA approval for a product, we must obtain approval
of a product by the comparable regulatory authorities of foreign countries before we can commence clinical trials or marketing of the
product in those countries. The approval process varies from country to country, and the time may be longer or shorter than that required
for FDA approval. The requirements governing the conduct of clinical trials, product licensing, pricing and reimbursement vary greatly
from country to country.
The
policies of the FDA and foreign regulatory authorities may change and additional government regulations may be enacted which could prevent
or delay regulatory approval of our products and could also increase the cost of regulatory compliance. We cannot predict the likelihood,
nature or extent of adverse governmental regulation that might arise from future legislative or administrative action, either in the
United States or abroad.
The
FDA and non-U.S. regulatory authorities require that our products be manufactured according to rigorous standards. These regulatory requirements
may significantly increase our production costs and may even prevent us from making our products in amounts sufficient to meet market
demand. If we change our approved manufacturing process, the FDA may need to review the process before it may be used. Failure to comply
with applicable regulatory requirements discussed could subject us to enforcement actions, including warning letters, fines, injunctions
and civil penalties, recall or seizure of our products, operating restrictions, partial suspension or total shutdown of our production,
and criminal prosecution.
Federal,
state and non-U.S. regulations regarding the manufacture and sale of medical devices are subject to future changes. The complexity, timeframes
and costs associated with obtaining marketing clearances are unknown. Although we cannot predict the impact, if any, these changes might
have on our business, the impact could be material.
Following
the introduction of a product, these agencies will also periodically review our design and manufacturing processes and product performance.
The process of complying with the applicable good manufacturing practices, adverse event reporting, clinical trial and other requirements
can be costly and time consuming, and could delay or prevent the production, manufacturing or sale of our products. In addition, if we
fail to comply with applicable regulatory requirements, it could result in fines, delays or suspensions of regulatory clearances, closure
of manufacturing sites, seizures or recalls of products and damage to our reputation. Recent changes in enforcement practice by the FDA
and other agencies have resulted in increased enforcement activity, which increases the compliance risk for the Company and other companies
in our industry. In addition, governmental agencies may impose new requirements regarding registration, labeling or prohibited materials
that may require us to modify or re-register products already on the market or otherwise impact our ability to market our products in
those countries. Once clearance or approval has been obtained for a product, there is an obligation to ensure that all applicable FDA,
Health Canada and other regulatory requirements continue to be met.
Additionally,
injuries caused by the malfunction or misuse of cardiac monitoring devices, even where such malfunction or misuse occurs with respect
to one of our competitors products, could cause regulatory agencies to implement more conservative regulations on the medical
cardiac monitoring industry, which could significantly increase our operating costs.
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**If
our customers are not able to both obtain and maintain adequate levels of third-party reimbursement for services using our products,
it would have a material adverse effect on our business.**
Healthcare
providers and related facilities are generally reimbursed for their services through payment systems managed by various governmental
agencies worldwide, private insurance companies, and managed care organizations. The manner and level of reimbursement in any given case
may depend on the site of care, the procedure(s) performed, the final patient diagnosis, the device(s) utilized, available budget, the
efficacy, safety, performance and cost-effectiveness of our planned products and services, or a combination of these or other factors,
and coverage and payment levels are determined at each payers discretion. The coverage policies and reimbursement levels of these
third-party payers may impact the decisions of healthcare providers and facilities regarding which medical products they purchase and
the prices they are willing to pay for those products. Thus, changes in reimbursement levels or methods may either positively or negatively
impact sales of our products.
We
have no direct control over payer decision-making with respect to coverage and payment levels for our medical device products. Additionally,
we expect many payers to continue to explore cost-containment strategies (e.g., comparative and cost-effectiveness analyses, so-called
pay-for-performance programs implemented by various public and private payers, and expansion of payment bundling schemes
such as Accountable Care Organizations, and other such methods that shift medical cost risk to providers) that may potentially impact
coverage and/or payment levels for our current products or products we develop.
The
ability of physicians and other providers to successfully utilize our cardiac monitoring solution and successfully allow payors to reimburse
for the physicians technical and professional fees is critical to our business because physicians and their patients will select
arrhythmia monitoring solutions other than ours in the event that payors refuse to adequately reimburse our technical fees and physicians
professional fees.
**Our
customers may experience difficulty in obtaining reimbursement for our services from commercial payors that consider our technology to
be experimental and investigational, which would adversely affect our revenue and operating results.**
Many
commercial payors refuse to enter into contracts to reimburse the fees associated with medical devices or services that such payors determine
to be experimental and investigational. Commercial payors typically label medical devices or services as experimental
and investigational until such devices or services have demonstrated product superiority evidenced by a randomized clinical trial.
Clinical
trials have been performed on other mobile cardiac telemetry devices, proving higher diagnostic yield than traditional event loop monitoring.
Certain remaining commercial payors, however, have stated that they do not believe the data from the clinical trials justifies the removal
of the experimental designation for mobile cardiac telemetry solutions. As a result, certain commercial payors may refuse to reimburse
the technical and professional fees associated with cardiac monitoring solutions such as the one expected to be offered by Biotricity.
If
commercial payors decide not reimburse physicians or providers for their services during the utilization of our cardiac monitoring solutions,
our revenue could fail to grow and could decrease.
**Reimbursement
by Medicare is highly regulated and subject to change; our failure to comply with applicable regulations, could decrease our expected
revenue and may subject us to penalties or have an adverse impact on our business.**
The
Medicare program is administered by the Centers for Medicare and Medicaid Services (CMS), which imposes extensive and detailed
requirements on medical services providers, including, but not limited to, rules that govern how we structure our relationships with
physicians, and how and where we provide our arrhythmia monitoring solutions. Our failure to comply with applicable Medicare rules could
result in discontinuing the ability for physicians to receive reimbursement as they will likely utilize our cardiac monitoring solution
under the Medicare payment program, civil monetary penalties, and/or criminal penalties, any of which could have a material adverse effect
on our business and revenues.
| 22 | |
****
**Consolidation
of commercial payors could result in payors eliminating coverage of mobile cardiac monitoring solutions or reducing reimbursement rates.**
When
payors combine their operations, the combined company may elect to reimburse physicians for cardiac monitoring services at the lowest
rate paid by any of the participants in the consolidation. If one of the payors participating in the consolidation does not reimburse
for these services at all, the combined company may elect not to reimburse at any rate. Reimbursement rates tend to be lower for larger
payors. As a result, as payors consolidate, our expected average reimbursement rate may decline.
**Product
defects could adversely affect the results of our operations.**
The
design, manufacture and marketing of our products involve certain inherent risks. Manufacturing or design defects, unanticipated use
of our products, or inadequate disclosure of risks relating to the use of our products can lead to injury or other adverse events. These
events could lead to recalls or safety alerts relating to our products (either voluntary or required by the FDA, Health Canada or similar
governmental authorities in other countries), and could result, in certain cases, in the removal of a product from the market. A recall
could result in significant costs, as well as negative publicity and damage to our reputation that could reduce demand for our products.
Personal injuries relating to the use of our products could also result in product liability claims being brought against us. In some
circumstances, such adverse events could also cause delays in new product approvals.
**Interruptions
or delays in telecommunications systems or in the data services provided to us by cellular communication providers or the loss of our
wireless or data services could impair the delivery of our cardiac monitoring services.**
The
success of Biotricitys cardiac monitoring services will be dependent upon our ability to store, retrieve, process and manage data
and to maintain and upgrade our data processing and communication capabilities. The monitoring solution relies on a third-party wireless
carrier to transmit data over its data network. All data sent by our monitors via this wireless data network or via landline is expected
to be routed directly to data centers and subsequently routed to the third-party ECG monitoring centers. We are therefore dependent upon
third party wireless carrier to provide data transmission and data hosting services to us. If we lose wireless carrier services, we would
be forced to seek alternative providers of data transmission and data hosting services, which might not be available on commercially
reasonable terms or at all.
As
we expand our commercial activities, an increased burden is expected to be placed upon our data processing systems and the equipment
upon which they rely. Interruptions of our data networks, or the data networks of our wireless carrier, for any extended length of time,
loss of stored data or other computer problems could have a material adverse effect on our business and operating results. Frequent or
persistent interruptions in our arrhythmia monitoring services could cause permanent harm to our reputation and could cause current or
potential users or prescribing physicians to believe that our systems are unreliable, leading them to switch to our competitors. Such
interruptions could result in liability, claims and litigation against us for damages or injuries resulting from the disruption in service.
Our
systems are also expected to be vulnerable to damage or interruption from earthquakes, floods, fires, power loss, telecommunication failures,
terrorist attacks, computer viruses, break-ins, sabotage, and acts of vandalism. Despite any precautions that we may take, the occurrence
of a natural disaster or other unanticipated problems could result in lengthy interruptions in these services. We do not carry business
interruption insurance to protect against losses that may result from interruptions in service as a result of system failures. Moreover,
the communications and information technology industries are subject to rapid and significant changes, and our ability to operate and
compete is dependent on our ability to update and enhance the communication technologies used in our systems and services.
**We
could be exposed to significant liability claims if we are unable to obtain insurance at acceptable costs and adequate levels or otherwise
protect ourselves against potential product liability claims.**
The
testing, manufacture, marketing and sale of medical devices entail the inherent risk of liability claims or product recalls. Product
liability insurance is expensive and, if available, may not be available on acceptable terms at all periods of time. A successful product
liability claim or product recall could inhibit or prevent the successful commercialization of our products, cause a significant financial
burden on the Company, or both, which in either case could have a material adverse effect on our business and financial condition.
| 23 | |
**We
require additional capital to support our present business plan and our anticipated business growth, and such capital may not be available
on acceptable terms, or at all, which would adversely affect our ability to operate.**
We will require additional funds to further develop our business plan.
Based on our current operating plans, we plan to use an additional $10 million in capital to fund our planned operations and sales efforts
necessary to propel commercialization into broader US markets. We may choose to raise additional capital beyond this in order to expedite
and propel growth more rapidly. We can give no assurance that we will be successful in raising any additional funds. Additionally, if
we are unable to generate sufficient planned revenues from our sales and operating activities, we may need to raise additional funds,
doing so through debt and equity offerings, in order to meet our expected future liquidity and capital requirements, including capital
required for the development completion and introduction of our other planned products and technologies. Any such financing that we undertake
will likely be dilutive to current stockholders.
We
intend to continue to make investments to support our business growth, including patent or other intellectual property asset creation.
In addition, we may also need additional funds to respond to business opportunities and challenges, including our ongoing operating expenses,
protecting our intellectual property, satisfying debt payment obligations, developing new lines of business and enhancing our operating
infrastructure. While we may need to seek additional funding for such purposes, we may not be able to obtain financing on acceptable
terms, or at all. In addition, the terms of our financings may be dilutive to, or otherwise adversely affect, holders of our common stock.
We may also seek to raise additional funds through arrangements with collaborators or other third parties. We may not be able to negotiate
any such arrangements on acceptable terms, if at all. If we are unable to obtain additional funding on a timely basis, we may be required
to curtail or terminate some or all of our business plans.
**We
cannot predict our future capital needs and we may not be able to secure additional financing.**
We
will need to raise additional funds in the future to fund our working capital needs and to fund further expansion of our business. We
may require additional equity or debt financings, collaborative arrangements with corporate partners or funds from other sources for
these purposes. No assurance can be given that necessary funds will be available for us to finance our development on acceptable terms,
if at all. Furthermore, such additional financings may involve substantial dilution of our stockholders or may require that we relinquish
rights to certain of our technologies or products. In addition, we may experience operational difficulties and delays due to working
capital restrictions. If adequate funds are not available from operations or additional sources of financing, we may have to delay or
scale back our growth plans.
**The
results of our research and development efforts are uncertain and there can be no assurance of the continued commercial success of our
products.**
We
believe that we will need to incur additional research and development expenditures to continue development of our existing proposed
products as well as research and development expenditures to develop new products and services. The products and services we are developing
and may develop in the future may not be technologically successful. In addition, the length of our product and service development cycle
may be greater than we originally expected, and we may experience delays in product development. If our resulting products and services
are not technologically successful, they may not achieve market acceptance or compete effectively with our competitors products
and services.
**If
we fail to retain certain of our key personnel and attract and retain additional qualified personnel, we might not be able to pursue
our growth strategy.**
Our
future success will depend upon the continued service of Waqaas Al-Siddiq, our President and Chief Executive Officer. We entered into
an employment with Mr. Al-Siddiq on April 10, 2020 pursuant to which he will continue to serve as Chief Executive officer for 12 months
from the execution date unless his employment is terminated sooner or the employment agreement is automatically renewed pursuant to its
terms. Although we believe that our relationship with him is positive, there can be no assurance that his services will continue to be
available to us in the future. We do not carry any key man life insurance policies on any of our executive officers.
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**Executive
and legislative actions, or legal proceedings that seek to amend or impede the implementation of the Affordable Care Act, as well as
future efforts to repeal, replace or further modify the Affordable Care Act may adversely affect our business, financial condition and
results of operations.**
Since
its adoption into law in 2010, the Affordable Care Act has been challenged before the U.S. Supreme Court, and Congress in order to delay,
defund, or repeal implementation of or amend significant provisions of the Affordable Care Act. In addition, there continues to be ongoing
litigation over the interpretation and implementation of certain provisions of the law. The net effect of the Affordable Care Act, as
currently in effect, on our business is subject to a number of variables, including the laws complexity, lack of complete implementing
regulations and interpretive guidance, and the sporadic implementation of the numerous programs designed to improve access to and the
quality of healthcare services. Additional variables of the Affordable Care Act impacting our business will be how states, providers,
insurance companies, employers, and other market participants respond to any future challenges to the Affordable Care Act.
We
cannot predict whether the Affordable Care Act will be modified, or whether it will be repealed or replaced, in whole or in part, and,
if so, what the replacement plan or modifications would be, when the replacement plan or modifications would become effective, or whether
any of the existing provisions of the Affordable Care Act would remain in place
**We
will not be profitable unless we can demonstrate that our products can be manufactured at low prices.**
To date, we have focused primarily on research and development of the first
and second generation of products, as well as other technologies we plan to introduce in our eco-system, and their proposed marketing
and distribution. Consequently, we have limited experience in manufacturing these products on a commercial basis. We may manufacture our
products through third-party manufacturers. We can offer no assurance that either we or our manufacturing partners will develop efficient,
automated, low-cost manufacturing capabilities and processes to meet the quality, price, engineering, design and production standards
or production volumes required to successfully mass market our products, especially at the low-cost levels we require to absorb the cost
of near free distribution of our products pursuant to our proposed business plan. Even if we or our manufacturing partners are successful
in developing such manufacturing capability and processes, we do not know whether we or they will be timely in meeting our product commercialization
schedule or the production and delivery requirements of potential customers. A failure to develop such manufacturing processes and capabilities
could have a material adverse effect on our business and financial results.
Our
profitability in part is dependent on material and other manufacturing costs. We are unable to offer any assurance that either we or
a manufacturing partner will be able to reduce costs to a level which will allow production of a competitive product or that any product
produced using lower cost materials and manufacturing processes will not suffer from a reduction in performance, reliability and longevity.
**Significant
developments or changes in national laws or policies to protect or promote domestic interests and/or address foreign competition can
have an adverse effect on our business and financial statements.**
Significant
developments or changes in national laws or policies to protect or promote domestic interests and/or address foreign competition, including
laws and policies in areas such as trade, manufacturing, government purchasing, healthcare, intellectual property, regulatory enforcement
and investment/development, can adversely affect our business and financial statements. The U.S. has announced and/or implemented significant
new tariffs on imports from a wide range of countries, which has prompted retaliatory tariffs by a number of countries and a cycle of
retaliatory tariffs by both the U.S. and other countries. In early April 2025, actions were taken by the U.S. and certain other countries
to delay the effective date of certain of these tariffs, but as of the date of this report a number of new tariffs remain in effect,
including significant tariffs between the U.S. and China. Collectively, these tariffs increase the cost to us of supplies and components,
which in turn will require us to implement surcharges and/or increase the price of certain of our products; can increase the cost to
our customers of certain of our finished goods, which together with the surcharges and price increases noted above can adversely impact
demand for our products and our competitive positioning; could adversely impact the availability to us of certain products in certain
countries and disrupt our supply chains, with related impacts to our operations; and could exacerbate inflation, diminish investment
and result in broader negative impacts, economic instability and capital markets dislocation that may adversely impact demand for our
products. In addition, whenever we are unable to fully recover higher costs, or whenever there is a time delay between the increase in
costs and our ability to recover these costs, our margins and profitability can decline. The U.S. may implement additional tariffs and
other measures, further retaliatory tariffs and other retaliatory actions may follow and the risks and adverse effects noted above may
increase. Though the risks identified above in certain cases have already adversely impacted part of our business, the full impact of
these tariffs and other actions on the Company and on our business partners remains highly uncertain and subject to rapid change. In
addition, certain governments have implemented policies to induce re-shoring of supply chains, reduce reliance on imported
supplies and promote national production. For example, the Chinese government has issued a series of policies in the past several years
to promote the development and use of local medical devices.
**We
are vulnerable to changes in political and economic conditions, including the effects of tariffs and/or international trade wars and
disruptions to remittances.**
In
April 2025, the U.S. government announced a baseline tariff of 10% on products from all countries and an additional individualized reciprocal
tariff on the countries with which the United States has the largest trade deficits. The U.S. and/or countries into which we import merchandise
and equipment may, in the future, adjust and/or impose new quotas, duties, tariffs or reciprocal tariffs or other restrictions which
may affect our operations and our ability to purchase imported merchandise at reasonable prices, which may negatively affect affordability
to our Members. The ultimate impact of any tariffs will depend on various factors, including how long such tariffs remain in place, the
ultimate levels of such tariffs and how other countries respond to the U.S. tariffs. Our Miami Distribution Center, which operates within
a Free Trade Zone ("FTZ"), serves as a strategic mechanism for mitigating the economic risks posed by tariffs, but the use
of the FTZ may not mitigate the impact of duties on items we purchase from U.S. vendors that are either imported finished goods or that
contain significant amounts of imported inputs. We may also choose to re-route merchandise directly from the country of origin directly
to the markets where we have warehouse clubs to bypass the impact of U.S. tariffs. However, if we are unable to mitigate tariff-related
risks through supply chain adjustments, pricing strategies, or other measures, our financial performance and growth prospects could be
negatively affected.
Remittances
make up a significant portion of GDP in certain markets, including Guatemala, El Salvador, Nicaragua and Honduras. A remittance is a
transfer of money by a foreign worker to an individual in his or her home country. If deportations of these workers from the United States
increases, either due to changes in immigration policy, enforcement actions, or legal challenges, it could disrupt their ability to send
money back to their families. Additionally, the financial strain of relocation and reintegration into their home countries may further
diminish workers' disposable income and their ability to provide financial support. The resulting decline in remittance flows could have
a direct negative impact on the economies of several of the Latin American nations where we may operate, which rely on remittances as
a key source of income and poverty alleviation for millions of families.
**New
or increased tariffs or other trade restrictions could have a material adverse effect on our business, financial condition, results of
operations and cash flows.**
We
are subject to tariffs and taxes in the United States and numerous foreign jurisdictions, and we may be subject to trade protection measures
that are being contemplated by the United States and other governments around the world, as well as potential disruptions in trade agreements,
such as a possible amendment to or withdrawal from the USMCA and the exit of the United Kingdom from the EU. For example, during 2024
the United States announced increased tariffs on a Chinese-sourced component of certain of our products. While we have received an extension
on the effectiveness of such tariffs, we are exploring options to identify a longer-term solution to such tariffs (although there can
be no assurance that we will succeed in such efforts).
In
addition, changes in the United States government following the 2024 presidential and congressional elections may result in significant
changes to United States trade policies and significantly increased tariffs on imported goods, and may cause other countries to react
to such changes. Considerable uncertainty exists regardingtariffpolicy towards Mexico, Canada, China and other countries.
On February 1, 2025, PresidentTrumpannounced the imposition of a 25%tariffon all goods imported from Mexico and
Canada. Days later, PresidentTrumpsuspended the imposition of such tariffs for a period of 30 days. Also in February 2025,
PresidentTrumpimposed a 10%tariffon goods imported from China, resulting in retaliatory tariffs imposed on United
States exports to China. As of the date of this Form 10-K, it remains unclear whether additional new tariffs will be imposed on imported
goods and, if so, at what level and for how long.
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Furthermore,
PresidentTrumphas expressed his antipathy towards certain existing international trade agreements and organizations, including
the USMCA and the United States membership in the World Trade Organization (the WTO). An amendment to or the United
States withdrawal from the USMCA or the WTO could result in increased tariffs or other new trade restrictions on imports from
Mexico, Canada, China and other countries.
These
developments, measures and disruptions may result in new or higher tariffs, import-export restrictions and taxes. Changes in, or revised
interpretations of import-export laws or international trade agreements, along with new or increased tariffs, trade restrictions or taxation
on income earned or goods manufactured outside the United States may have a material adverse effect on our business, financial condition,
results of operations and cash flows.
**If
we or our suppliers fail to achieve or maintain regulatory approval of manufacturing facilities, our growth could be limited, and our
business could be harmed.**
We
currently assemble devices in our California facility. To maintain compliance with FDA and other regulatory requirements, our manufacturing
facilities must be periodically re-evaluated and qualified under a quality system to ensure they meet production and quality standards.
Suppliers of components and products used to manufacture our devices must also comply with FDA regulatory requirements, which often require
significant resources and subject us and our suppliers to potential regulatory inspections and stoppages. If we or our suppliers do not
maintain regulatory approval for our manufacturing operations, our business could be adversely affected.
**Our
dependence on a limited number of suppliers may prevent us from delivering our devices on a timely basis.**
We
currently rely on a limited number of suppliers of components for our devices. If these suppliers became unable to provide components
in the volumes needed or at an acceptable price, we would have to identify and qualify acceptable replacements from alternative sources
of supply. The process of qualifying suppliers is lengthy. Delays or interruptions in the supply of our requirements could limit or stop
our ability to provide sufficient quantities of devices on a timely basis or meet demand for our services, which could have a material
adverse effect on our business, financial condition and results of operations.
**Our
operations in international markets involve inherent risks that we may not be able to control.**
Our
business plan includes the marketing and sale of our proposed products in international markets. Accordingly, our results could be materially
and adversely affected by a variety of uncontrollable and changing factors relating to international business operations, including:
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Macroeconomic
conditions adversely affecting geographies where we intend to do business; | |
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Foreign
currency exchange rates; | |
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Political
or social unrest or economic instability in a specific country or region; | |
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Higher
costs of doing business in foreign countries; | |
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Infringement
claims on foreign patents, copyrights or trademark rights; | |
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Difficulties
in staffing and managing operations across disparate geographic areas; | |
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Difficulties
associated with enforcing agreements and intellectual property rights through foreign legal systems; | |
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Trade
protection measures and other regulatory requirements, which affect our ability to import or export our products from or to various
countries; | |
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Adverse
tax consequences; | |
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Unexpected
changes in legal and regulatory requirements; | |
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Military
conflict, terrorist activities, natural disasters and medical epidemics; and | |
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Our
ability to recruit and retain channel partners in foreign jurisdictions. | |
**Our
existing and future levels of indebtedness could adversely affect our financial health, ability to obtain financing in the future, ability
to react to changes in our business and ability to fulfill our obligations under such indebtedness.**
As of March 31, 2025, in addition to our accounts payable, we had aggregate
outstanding indebtedness of $25.2 million compared to $22.6 million for the year ended March 31, 2024. This level of indebtedness could:
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Make
it more difficult for us to satisfy our obligations with respect to our outstanding notes and other indebtedness, resulting in possible
defaults on and acceleration of such indebtedness. | |
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Require
us to dedicate a substantial portion of our cash flow from operations to the payment of principal and interest on our indebtedness,
thereby reducing the availability of such cash flows to fund working capital, acquisitions, capital expenditures and other general
corporate purposes. | |
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Limit
our ability to obtain additional financing for working capital, acquisitions, capital expenditures, debt service requirements and
other general corporate purposes. | |
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Limit
our ability to refinance indebtedness or cause the associated costs of such refinancing to increase. | |
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Increase
our vulnerability to general adverse economic and industry conditions, including interest rate fluctuations (because our borrowings
are at variable rates of interest); and | |
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Place
us at a competitive disadvantage compared to our competitors with proportionately less debt or comparable debt at more favorable
interest rates which, as a result, may be better positioned to withstand economic downturns. | |
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****
**Our
auditors have indicated doubt about our ability to continue as a going concern.**
As
of March 31, 2025, the Company had $365,145 in cash, accumulated deficit of $138,972,413 and cash flow used in operations of $2,312,834
for the fiscal year then ended. The Company has incurred and expects to continue to incur significant costs in pursuit of its expansion
and development plans. These conditions raise doubt about the Companys ability to continue as a going concern and accordingly
our auditors have included a going concern opinion in our annual report. Management has taken certain action and continues to implement
changes designed to improve the Companys financial results and operating cash flows. The actions involve certain cost-saving initiatives
and growing strategies, including (a) engage in very limited activities without incurring any liabilities that must be satisfied in cash;
and (b) offer noncash consideration and seek equity lines as a means of financing its operations. Additionally, the Companys plan
includes certain scheduled research and development activities and related clinical trials which may be deferred as needed. If the Company
is unable to obtain revenue producing contracts or financing or if the revenue or financing it does obtain is insufficient to cover any
operating losses it may incur, it may substantially curtail its operations or seek other business opportunities through strategic alliances,
acquisitions or other arrangements that may dilute the interests of existing stockholders.
**Risks
Related to Our Industry**
**The
industry in which we operate is highly competitive and subject to rapid technological change. If our competitors are better able to develop
and market products that are safer, more effective, less costly, easier to use, or are otherwise more attractive, we may be unable to
compete effectively with other companies.**
The
medical technology industry is characterized by intense competition and rapid technological change, and we will face competition on the
basis of product features, clinical outcomes, price, services and other factors. Competitors may include large medical device and other
companies, some of which have significantly greater financial and marketing resources than we do, and firms that are more specialized
than we are with respect to particular markets. Our competition may respond more quickly to new or emerging technologies, undertake more
extensive marketing campaigns, have greater financial, marketing and other resources than ours or may be more successful in attracting
potential customers, employees and strategic partners.
Our
competitive position will depend on multiple, complex factors, including our ability to achieve regulatory clearance and market acceptance
for our products, develop new products, implement production and marketing plans, secure regulatory approvals for products under development
and protect our intellectual property. In some instances, competitors may also offer, or may attempt to develop, alternative systems
that may be delivered without a medical device or a medical device superior to ours. The development of new or improved products, processes
or technologies by other companies may render our products or proposed products obsolete or less competitive. The entry into the market
of manufacturers located in low-cost manufacturing locations may also create pricing pressure, particularly in developing markets. Our
future success depends, among other things, upon our ability to compete effectively against current technology, as well as to respond
effectively to technological advances or changing regulatory requirements, and upon our ability to successfully implement our marketing
strategies and execute our research and development plan. Our research and development efforts are aimed, in part, at solving increasingly
complex problems, as well as creating new technologies, and we do not expect that all of our projects will be successful. If our research
and development efforts are unsuccessful, our future results of operations could be materially harmed.
**We
face competition from other medical device companies that focus on similar markets.**
We
face competition from other companies that have longer operating histories and may have greater name recognition and substantially greater
financial, technical and marketing resources than us. Many of these companies also have FDA or other applicable governmental approval
to market and sell their products, and more extensive customer bases, broader customer relationships and broader industry alliances than
us, including relationships with many of our potential customers. Increased competition from any of these sources could result in our
failure to achieve and maintain an adequate level of customers and market share to support the cost of our operations.
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****
****
**Unsuccessful
clinical or other trials or procedures relating to products under development could have a material adverse effect on our prospects.**
The
regulatory approval process for new products and new indications for existing products requires extensive clinical trials and procedures,
including early clinical experiences and regulatory studies. Unfavorable or inconsistent clinical data from current or future clinical
trials or procedures conducted by us, our competitors, or third parties, or perceptions regarding this clinical data, could adversely
affect our ability to obtain necessary approvals and the markets view of our future prospects. Such clinical trials and procedures
are inherently uncertain and there can be no assurance that these trials or procedures will be completed in a timely or cost-effective
manner or result in a commercially viable product. Failure to successfully complete these trials or procedures in a timely and cost-effective
manner could have a material adverse effect on our prospects. Clinical trials or procedures may experience significant setbacks even
after earlier trials have shown promising results. Further, preliminary results from clinical trials or procedures may be contradicted
by subsequent clinical analysis. In addition, results from our clinical trials or procedures may not be supported by actual long-term
studies or clinical experience. If preliminary clinical results are later contradicted, or if initial results cannot be supported by
actual long-term studies or clinical experience, our business could be adversely affected. Clinical trials or procedures may be suspended
or terminated by us, the FDA or other regulatory authorities at any time if it is believed that the trial participants face unacceptable
health risks.
**Intellectual
property litigation and infringement claims could cause us to incur significant expenses or prevent us from selling certain of our products.**
The
medical device industry in which we operate is characterized by extensive intellectual property litigation and, from time to time, we
might be the subject of claims by third parties of potential infringement or misappropriation. Regardless of outcome, such claims are
expensive to defend and divert the time and effort of our management and operating personnel from other business issues. A successful
claim or claims of patent or other intellectual property infringement against us could result in our payment of significant monetary
damages and/or royalty payments, or it could negatively impact our ability to sell current or future products in the affected category
and could have a material adverse effect on business, cash flows, financial condition or results of operations.
**If
we are unable to protect the confidentiality of our trade secrets, our business and competitive position would be harmed.**
We
plan on relying on trade secrets, including unpatented know-how, technology and other proprietary information, to maintain our competitive
position. We will seek to protect these trade secrets, in part, by entering into non-disclosure and confidentiality agreements with parties
who have access to them, such as our employees, corporate collaborators, outside scientific collaborators, contract manufacturers, consultants,
advisors and other third parties. We will seek to protect our confidential proprietary information, in part, by entering into confidentiality
and invention or intellectual property assignment agreements with our employees and consultants. Moreover, to the extent we enter into
such agreements, any of these parties may breach the agreements and disclose our proprietary information, including our trade secrets,
and we may not be able to obtain adequate remedies for such breaches. Enforcing a claim that a party illegally disclosed or misappropriated
a trade secret is difficult, expensive and time-consuming, and the outcome is unpredictable. In addition, some courts inside and outside
the United States are less willing or unwilling to protect trade secrets. If any of our trade secrets were to be lawfully obtained or
independently developed by a competitor, we would have no right to prevent them, or those to whom they communicate it, from using that
technology or information to compete with us. If any of our trade secrets were to be disclosed to or independently developed by a competitor,
our competitive position would be harmed. In general, any loss of trade secret protection or other unpatented proprietary rights could
harm our business, results of operations and financial condition.
**If
we are unable to protect our proprietary rights, or if we infringe on the proprietary rights of others, our competitiveness and business
prospects may be materially damaged.**
We
have filed for one industrial design patent in Canada and in the U.S. We may continue to seek patent protection for our designs and may
seek patent protection for our proprietary technology if warranted. Seeking patent protection is a lengthy and costly process, and there
can be no assurance that patents will be issued from any pending applications, or that any claims allowed from existing or pending patents
will be sufficiently broad or strong to protect our designs or our proprietary technology. There is also no guarantee that any patents
we hold will not be challenged, invalidated or circumvented, or that the patent rights granted will provide competitive advantages to
us. Our competitors have developed and may continue to develop and obtain patents for technologies that are similar or superior to our
technologies. In addition, the laws of foreign jurisdictions in which we develop, manufacture or sell our products may not protect our
intellectual property rights to the same extent, as do the laws of Canada or the United States.
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Adverse
outcomes in current or future legal disputes regarding patent and other intellectual property rights could result in the loss of our
intellectual property rights, subject us to significant liabilities to third parties, require us to seek licenses from third parties
on terms that may not be reasonable or favorable to us, prevent us from manufacturing, importing or selling our products, or compel us
to redesign our products to avoid infringing third parties intellectual property. As a result, we may be required to incur substantial
costs to prosecute, enforce or defend our intellectual property rights if they are challenged. Any of these circumstances could have
a material adverse effect on our business, financial condition and resources or results of operations.
**Dependence
on our proprietary rights and failing to protect such rights or to be successful in litigation related to such rights may result in our
payment of significant monetary damages or impact offerings in our product portfolios.**
Our
long-term success largely depends on our ability to market technologically competitive products. If we fail to obtain or maintain adequate
intellectual property protection, we may not be able to prevent third parties from using our proprietary technologies or may lose access
to technologies critical to our products. Also, our currently pending industrial design patent or any future patents applications may
not result in issued patents, and issued patents are subject to claims concerning priority, scope and other issues.
Furthermore,
to the extent we do not file applications for patents domestically or internationally, we may not be able to prevent third parties from
using our proprietary technologies or may lose access to technologies critical to our products in other countries.
**Enforcement
of federal and state laws regarding privacy and security of patient information may adversely affect our business, financial condition
or operations.**
The
use and disclosure of certain health care information by health care providers and their business associates have come under increasing
public scrutiny. Recent federal standards under the Health Insurance Portability and Accountability Act of 1996, or HIPAA, establish
rules concerning how individually identifiable health information may be used, disclosed and protected. Historically, state law has governed
confidentiality issues, and HIPAA preserves these laws to the extent they are more protective of a patients privacy or provide
the patient with more access to his or her health information. As a result of the implementation of the HIPAA regulations, many states
are considering revisions to their existing laws and regulations that may or may not be more stringent or burdensome than the federal
HIPAA provisions. We must operate our business in a manner that complies with all applicable laws, both federal and state, and that does
not jeopardize the ability of our customers to comply with all applicable laws. We believe that our operations are consistent with these
legal standards. Nevertheless, these laws and regulations present risks for health care providers and their business associates that
provide services to patients in multiple states. Because these laws and regulations are recent, and few have been interpreted by government
regulators or courts, our interpretations of these laws and regulations may be incorrect. If a challenge to our activities is successful,
it could have an adverse effect on our operations, may require us to forego relationships with customers in certain states and may restrict
the territory available to us to expand our business. In addition, even if our interpretations of HIPAA and other federal and state laws
and regulations are correct, we could be held liable for unauthorized uses or disclosures of patient information as a result of inadequate
systems and controls to protect this information or as a result of the theft of information by unauthorized computer programmers who
penetrate our network security. Enforcement of these laws against us could have a material adverse effect on our business, financial
condition and results of operations.
**We
may become subject, directly or indirectly, to federal and state health care fraud and abuse laws and regulations and if we are unable
to fully comply with such laws, the Company could face substantial penalties.**
Although
not affected at this time, our operations may in the future become directly or indirectly affected by various broad state and federal
health care fraud and abuse laws, including the Federal Healthcare Programs Anti-Kickback Statute and the Stark law, which among
other things, prohibits a physician from referring Medicare and Medicaid patients to an entity with which the physician has a financial
relationship, subject to certain exceptions. If our future operations are found to be in violation of these laws, we or our officers
may be subject to civil or criminal penalties, including large monetary penalties, damages, fines, imprisonment and exclusion from Medicare
and Medicaid program participation. If enforcement action were to occur, our business and results of operations could be adversely affected.
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**We
may be subject to federal and state false claims laws which impose substantial penalties.**
Many
of the physicians and patients whom we expect to use our services will file claims for reimbursement with government programs such as
Medicare and Medicaid. As a result, we may be subject to the federal False Claims Act if we knowingly cause the filing
of false claims. Violations may result in substantial civil penalties, including treble damages. The federal False Claims Act also contains
whistleblower or qui tam provisions that allow private individuals to bring actions on behalf of the government
alleging that the defendant has defrauded the government. In recent years, the number of suits brought in the medical industry by private
individuals has increased dramatically. Various states have enacted laws modeled after the federal False Claims Act, including qui
tam provisions, and some of these laws apply to claims filed with commercial insurers. We are unable to predict whether we could
be subject to actions under the federal False Claims Act, or the impact of such actions. However, the costs of defending claims under
the False Claims Act, as well as sanctions imposed under the False Claims Act, could adversely affect our results of operations.
**Changes
in the health care industry or tort reform could reduce the number of arrhythmia monitoring solutions ordered by physicians, which could
result in a decline in the demand for our planned solutions, pricing pressure and decreased revenue.**
Changes
in the health care industry directed at controlling health care costs or perceived over-utilization of arrhythmia monitoring solutions
could reduce the volume of solutions ordered by physicians. If more health care cost controls are broadly instituted throughout the health
care industry, the volume of cardiac monitoring solutions could decrease, resulting in pricing pressure and declining demand for our
planned services, which could harm our operating results. In addition, it has been suggested that some physicians order arrhythmia monitoring
solutions, even when the services may have limited clinical utility, primarily to establish a record for defense in the event of a claim
of medical malpractice against the physician. Legal changes increasing the difficulty of initiating medical malpractice cases, known
as tort reform, could reduce the amount of our services prescribed as physicians respond to reduced risks of litigation, which could
harm our operating results.
**Risks
Related to Our Securities and Other Risks**
**There
is a limited existing market for our common stock and we do not know if a more liquid market for our common stock will develop to provide
you with adequate liquidity.**
We
cannot assure you that a more active trading market for our common stock will develop or if it does develop, that it will be maintained.
You may not be able to sell your securities quickly or at the market price if trading in our securities is not active. In the absence
of an active public trading market:
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you
may not be able to resell your securities at or above the public offering price; | |
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the
market price of our common stock may experience more price volatility; and | |
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there
may be less efficiency in carrying out your purchase and sale orders. | |
**The
market price of our common stock may be volatile.**
The
market price for our common stock may be volatile and subject to wide fluctuations in response to factors including the following:
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Our
ability to successfully bring any of our proposed or planned products to market; | |
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Actual
or anticipated fluctuations in our quarterly or annual operating results; | |
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Changes
in financial or operational estimates or projections; | |
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Conditions
in markets generally; | |
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Changes
in the economic performance or market valuations of companies similar to ours; | |
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Announcements
by us or our competitors of new products, acquisitions, strategic partnerships, joint ventures or capital commitments; | |
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Our
intellectual property position; and | |
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General
economic or political conditions in the United States or elsewhere. | |
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In
addition, the securities market has from time to time experienced significant price and volume fluctuations that are not related to the
operating performance of particular companies. These market fluctuations may also materially and adversely affect the market price of
shares of our common stock.
**There
may be a significant number of shares of common stock eligible for sale, which could depress the market price of such stock.**
We
have 26,567,769 outstanding shares as of July 15, 2025, of which 12,325,165 are unrestricted shares of
common stock, such that a large number of shares of our common stock could be made available for sale in the public market, which could
harm the market price of the stock. We also have 160,672 Exchangeable Shares, directly exchangeable
into an equivalent number of shares of common stock, which could be exchanged and made available for sale in public markets,
**Our
largest stockholder will substantially influence our Company for the foreseeable future, including the outcome of matters requiring shareholder
approval and such control may prevent you and other stockholders from influencing significant corporate decisions and may result in conflicts
of interest that could cause the Companys stock price to decline.**
Mr.
Al-Siddiq, our chief executive officer and a member of our board of directors, beneficially owns approximately 7.21% of our outstanding
shares of common stock and common stock underlying the Exchangeable Shares. As a result, coupled with his board seat, he will have the
ability to influence the election of our directors and the outcome of corporate actions requiring shareholder approval, such as: (i)
a merger or a sale of our Company, (ii) a sale of all or substantially all of our assets, and (iii) amendments to our articles of incorporation
and bylaws. This concentration of voting power and control could have a significant effect in delaying, deferring or preventing an action
that might otherwise be beneficial to our other shareholders and be disadvantageous to our shareholders with interests different from
those entities and individuals. Mr. Al-Siddiq also has significant control over our business, policies and affairs as an executive officer
or director of our Company. He may also exert influence in delaying or preventing a change in control of the Company, even if such change
in control would benefit the other stockholders of the Company. In addition, the significant concentration of stock ownership may adversely
affect the market value of the Companys common stock due to investors perception that conflicts of interest may exist or
arise.
**Failure
to maintain effective internal control over our financial reporting in accordance with Section 404 of the Sarbanes-Oxley Act of 2002
(Sarbanes-Oxley Act) could cause our financial reports to be inaccurate.**
We
are required pursuant to Section 404 of the Sarbanes-Oxley Act to maintain internal control over financial reporting and to assess and
report on the effectiveness of those controls. This assessment includes disclosure of any material weaknesses identified by our management
in our internal control over financial reporting. Although we prepare our financial statements in accordance with accounting principles
generally accepted in the United States, our internal accounting controls may not meet all standards applicable to companies with publicly
traded securities. If we fail to implement any required improvements to our disclosure controls and procedures, we may be obligated to
report control deficiencies and our independent registered public accounting firm may not be able to certify the effectiveness of our
internal controls over financial reporting. In either case, we could become subject to regulatory sanction or investigation. Further,
these outcomes could damage investor confidence in the accuracy and reliability of our financial statements.
Our
management has concluded that our internal controls over financial reporting were, and continue to be, effective, as of March 31, 2025.
If we are not able to maintain effective internal control over financial reporting, our financial statements, including related disclosures,
may be inaccurate, which could have a material adverse effect on our business.
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**Our
issuance of additional common stock or preferred stock may cause our common stock price to decline, which may negatively impact your
investment.**
Issuances
of a substantial number of additional shares of our common or preferred stock, or the perception that such issuances could occur, may
cause prevailing market prices for our common stock to decline. In addition, our board of directors is authorized to issue additional
series of shares of preferred stock without any action on the part of our stockholders. Our board of directors also has the power, without
stockholder approval, to set the terms of any such series of shares of preferred stock that may be issued, including voting rights, conversion
rights, dividend rights, preferences over our common stock with respect to dividends or if we liquidate, dissolve or wind up our business
and other terms. If we issue cumulative preferred stock in the future that has preference over our common stock with respect to the payment
of dividends or upon our liquidation, dissolution or winding up, or if we issue preferred stock with voting rights that dilute the voting
power of our common stock, the market price of our common stock could decrease.
**Anti-takeover
provisions in the Companys charter and bylaws may prevent or frustrate attempts by stockholders to change the board of directors
or current management and could make a third-party acquisition of the Company difficult.**
The
Companys certificate of incorporation and bylaws contain provisions that may discourage, delay or prevent a merger, acquisition
or other change in control that stockholders may consider favorable, including transactions in which stockholders might otherwise receive
a premium for their shares. For example, our Certificate of Incorporation permits the Board of Directors without stockholder approval
to issue up to 10,000,000 shares of preferred stock (20,000 of these shares have been designated as Series A Preferred, of which 6,305
are outstanding, 600 of these shares have been designated as Series B Preferred, of which 265 are outstanding, and one special voting
preferred share is designated and outstanding) and to fix the designation, power, preferences, and rights of the shares and preferred
stock. Furthermore, the Board of Directors has the ability to increase the size of the Board and fill newly created vacancies without
stockholder approval. These provisions could limit the price that investors might be willing to pay in the future for shares of the Companys
common stock.
**Our
common stock could become subject to the SECs penny stock rules and accordingly, broker-dealers may experience difficulty in completing
customer transactions and trading activity in our securities may be adversely affected.**
The
SEC has adopted regulations, which generally define penny stock to be an equity security that has a market price of less
than $5.00 per share, subject to specific exemptions. The market price of our common stock is less than $5.00 per share and therefore
would be a penny stock according to SEC rules, unless we are listed on a national securities exchange. Under these rules,
broker-dealers who recommend such securities to persons other than institutional accredited investors must:
Make a special written suitability determination for the purchaser;
Receive the purchasers prior written agreement to the transaction;
Provide the purchaser with risk disclosure documents which identify certain risks associated with investing in penny stocks
and which describe the market for these penny stocks as well as a purchasers legal remedies; and
Obtain a signed and dated acknowledgment from the purchaser demonstrating that the purchaser has actually received the required risk
disclosure document before a transaction in a penny stock can be completed.
If
our common stock became subject to these rules, broker-dealers may find it difficult to effectuate customer transactions and trading
activity in our securities may be adversely affected. As a result, the market price of our securities may be depressed, and you may find
it more difficult to sell your securities.
| 32 | |
**We
have not paid dividends in the past and do not expect to pay dividends in the future, and any return on investment may be limited to
the value of our stock.**
We
have never paid any cash dividends on our common stock and do not anticipate paying any cash dividends on our common stock in the foreseeable
future and any return on investment may be limited to the value of our common stock. We plan to retain any future earning to finance
growth.
**Risks
Related to Intellectual Property**
**We
have no utility patent protection, and have only limited design patent protection and rely on unregistered copyright and trade secret
protection, if we are unable to obtain and maintain patent protection for our products, our competitors could develop and commercialize
products and technology similar or identical to ours, and our ability to successfully commercialize our existing products and any products
we may develop, and our technology may be adversely affected.**
**Any
failure to obtain or maintain sufficient intellectual property protection with respect to our current and planned products could have
a material adverse effect on our business, financial condition, and results of operations.**
We
rely on trade secret protection to protect proprietary know-how that may not be patentable or that we elect not to patent, processes
for which patents may be difficult to obtain or enforce, and any other elements of our products and services that involve proprietary
know-how, information or technology that is not covered by patents. However, trade secrets can also be difficult to protect. If the steps
taken to maintain our trade secrets are deemed inadequate, we may have insufficient recourse against third parties for misappropriating
any trade secrets. Misappropriation or unauthorized disclosure of our trade secrets could significantly affect our competitive position
and may have a material adverse effect on our business. Furthermore, trade secret protection does not prevent competitors from independently
developing similar technology. To the extent we also rely on copyright protection, it, too, does not prevent competitors from independently
developing similar technology.
Even
if we were to obtain additional patent protection, such patents may not issue in a form that will provide us with any meaningful protection,
prevent competitors or other third parties from competing with us, or otherwise provide us with any competitive advantage. Any patents
that we own may be challenged, narrowed, circumvented, or invalidated by third parties. Consequently, we do not know whether our products
will be protectable or remain protected by valid and enforceable patents. Our competitors or other third parties may be able to circumvent
our intellectual property by developing similar or alternative technologies or products in a non-infringing manner which could materially
adversely affect our business, financial condition, results of operations and prospects.
The
Company has made and will continue to make decisions regarding what patents and trademarks and other intellectual property to pursue
and maintain in is business judgment balanced against the cost of obtaining and maintaining that IP.
**We
may not be able to protect our intellectual property and proprietary rights throughout the world.**
Third
parties may attempt to commercialize competitive products or services in foreign countries where we do not have any patents or patent
applications where legal recourse may be limited. This may have a significant commercial impact on our foreign business operations.
**We
may become involved in intellectual property litigation either due to claims by others that we are infringing their intellectual property
rights or due to our own assertions that others are infringing upon our intellectual property rights.**
**We
have not done any investigation of and thus cannot provide assurance that our products or methods do not infringe the patents or other
intellectual property rights of third parties.**
If
our business is successful, the possibility may increase that others will assert infringement claims against us.
| 33 | |
Infringement
and other intellectual property claims and proceedings brought against us, whether successful or not, could result in substantial costs
and harm to our reputation. Such claims and proceedings can also distract and divert management and key personnel from other tasks important
to the success of the business. We cannot be certain that we will successfully defend against allegations of infringement of patents
and intellectual property rights of others. In the event that we become subject to a patent infringement or other intellectual property
lawsuit and if the other partys patents or other intellectual property were upheld as valid and enforceable and we were found
to infringe the other partys patents or violate the terms of a license to which we are a party, we could be required to do one
or more of the following:
|
|
|
cease
selling or using any of our products that incorporate the asserted intellectual property, which would adversely affect our revenue; | |
|
|
|
pay
substantial damages for past use of the asserted intellectual property; | |
|
|
|
obtain
a license from the holder of the asserted intellectual property, which license may not be available on reasonable terms, if at all,
and which could reduce profitability; and | |
|
|
|
redesign
or rename, in the case of trademark claims, our products to avoid violating or infringing the intellectual property rights of third
parties, which may not be possible and could be costly and time-consuming if it is possible to do so. | |
Third-party
claims of intellectual property infringement, misappropriation or other violation against may also prevent or delay the sale and marketing
of our products.
**We
may also be subject to claims that our employees, consultants or advisors have wrongfully used or disclosed alleged trade secrets of
their current or former employers or claims asserting ownership of what we regard as our own intellectual property.**
If
we fail in defending any such claims, it could have a material adverse effect on our business, financial condition, and results of operations.
Even if we are successful in defending against such claims, litigation could result in substantial costs to us and be a distraction to
management.
**If
our trademarks and trade names are not adequately protected, then we may not be able to build name recognition in our markets of interest
and our business may be adversely affected. None identified.**
Our
trademarks or trade names may be challenged, infringed, circumvented or declared generic or determined to be violating or infringing
on other marks. We may not be able to protect our rights to these trademarks and trade names, which we need to build name recognition
among potential partners or customers in our markets of interest. At times, competitors or other third parties may adopt trade names
or trademarks similar to ours, thereby impeding our ability to build brand identity and possibly leading to market confusion. In addition,
there could be potential trade name or trademark infringement or dilution claims brought by owners of other trademarks. Over the long
term, if we are unable to establish name recognition based on our trademarks and trade names, then we may not be able to compete effectively
and our business may be adversely affected. Our efforts to enforce or protect our proprietary rights related to trademarks, trade secrets,
domain names, copyrights or other intellectual property may be ineffective and could result in substantial costs and diversion of resources
and could adversely affect our business, financial condition, and results of operations.
**ITEM
1B. UNRESOLVED STAFF COMMENTS**
Not
applicable.
**ITEM
1C. CYBERSECURITY**
We
have established policies and processes for assessing, identifying, and managing material risk from cybersecurity threats, and have integrated
these processes into our overall risk management systems and processes. We routinely assess material risks from cybersecurity threats,
including any potential unauthorized occurrence on or conducted through our information systems that may result in adverse effects on
the confidentiality, integrity, or availability of our information systems or any information residing therein.
| 34 | |
We
conduct periodic risk assessments to identify cybersecurity threats, as well as assessments in the event of a material change in our
business practices that may affect information systems that are vulnerable to such cybersecurity threats. These risk assessments include
identification of reasonably foreseeable internal and external risks, the likelihood and potential damage that could result from such
risks, and the sufficiency of existing policies, procedures, systems, and safeguards in place to manage such risks.
Following
these risk assessments, we re-design, implement, and maintain reasonable safeguards to minimize identified risks; reasonably address
any identified gaps in existing safeguards; and regularly monitor the effectiveness of our safeguards. Primary responsibility for assessing,
monitoring and managing our cybersecurity risks rests with Vice President of Technology, who reports to our Chief Executive Officer,
to manage the risk assessment and mitigation process.
We
engage consultants, or other third parties in connection with our risk assessment processes. These service providers assist us to design
and implement our cybersecurity policies and procedures, as well as to monitor and test our safeguards. We require each third-party service
provider to certify that it has the ability to implement and maintain appropriate security measures, consistent with all applicable laws,
to implement and maintain reasonable security measures in connection with their work with us, and to promptly report any suspected breach
of its security measures that may affect our company.
We
have not encountered cybersecurity challenges that have materially impaired our operations or financial standing.
**Governance**
Our
board of directors addresses the Companys cybersecurity risk management as part of its general oversight function. The board of
directors audit committee is responsible for overseeing Companys cybersecurity risk management processes, including oversight
and mitigation of risks from cybersecurity threats.
Our
cybersecurity risk assessment and management processes are implemented and maintained by certain Company management, including the information
technology team at the direction of our Vice President of Technology. Our executive team including our Chief Executive Officer, and Chief
Financial Officer are responsible for hiring appropriate personnel, helping to integrate cybersecurity risk considerations into the Companys
overall risk management strategy, and communicating key priorities to relevant personnel. This executive team is responsible for approving
budgets, helping prepare for cybersecurity incidents, approving cybersecurity processes, and reviewing security assessments and other
security-related reports.
Our
cybersecurity incident response and vulnerability management policies are designed to escalate certain cybersecurity incidents to members
of management depending on the circumstances, including our Chief Executive Officer, and Chief Financial Officer. In addition, the Companys
incident response and vulnerability management policies include reporting to the audit committee of the board of directors for certain
cybersecurity incidents including significant breaches to the Companys networks or systems. The audit committee receives regular
reports from the information technology team concerning the Companys significant cybersecurity threats and risk and the processes
the Company has implemented to address them. The audit committee also has access to the Vice President of Technology, to receive various
reports, summaries or presentations related to cybersecurity threats, risk and mitigation.
**ITEM
2. PROPERTIES**
Our
principal executive office is located in leased premises of approximately 8,300 square feet at 203 Redwood Shores Parkway, Suite 600,
Redwood City, California. We believe that these facilities are adequate for our needs, including providing the space and infrastructure
to accommodate our development work based on our current operating plan. We do not own any real estate.
****
**ITEM
3. LEGAL PROCEEDINGS**
From
time to time, we may become involved in various lawsuits and legal proceedings, which arise in the ordinary course of business. However,
litigation is subject to inherent uncertainties, and an adverse result in these or other matters may arise from time to time that may
harm business.
We
are not currently a party in any material legal proceeding where we are defendants, or governmental regulatory proceeding.
**ITEM
4. MINE SAFETY DISCLOSURES.**
Not
applicable.
| 35 | |
**PART
II**
**ITEM
5. MARKET FOR REGISTRANTS COMMON EQUITY, RELATED STOCKHOLDER MATTERS, AND ISSUER PURCHASES OF EQUITY SECURITIES**
**Market
for our Common Stock**
Our
common stock is traded on OTCQB under the symbol BTCY since August, 2024. On March 31, 2025 the closing price of our common stock as reported on
NASDAQ was $0.34 per share.
**Shareholders
of Record**
As
of July 15, 2025, an aggregate of 26,567,769 shares
of the Companys common stock were issued and outstanding and owned by approximately 134 named shareholders of record. As
of July 15, 2025, 160,672 Exchangeable Shares were also issued and outstanding and held by approximately
10 holders of record. The numbers of record holders do not include beneficial owners holding shares through nominee names.
As
of July 15, 2025 there is also one share of the Special Voting Preferred Stock issued and outstanding, held by the Trustee, 200 Series
A 385 Series B preferred shares issued and outstanding and owned by one respective shareholder each.
**Dividends**
Our
Series A preferred shares earning dividends at the rate of 12% per annum. We do not anticipate paying any cash dividends on our common
shares in the foreseeable future and we intend to retain all of our earnings, if any, to finance our growth and operations and to fund
the expansion of our business. Payment of any dividends will be made in the discretion of our Board of Directors, after our taking into
account various factors, including our financial condition, operating results, current and anticipated cash needs and plans for expansion.
No dividends may be declared or paid on our common shares, unless a dividend, payable in the same consideration or manner, is simultaneously
declared or paid, as the case may be, on our shares of preferred stock, if any.
**Issuance
of Securities**
During
the year ended March 31, 2025, the Company issued 3,970,682 common shares for conversion of preferred shares. The Company issued 100,000
common shares for services provided. Lastly, The Company issued 97,811 common shares for private placement.
The
securities referenced above were offered and sold pursuant to Section 4(a)(2) of the Securities Act.
**Securities
Authorized for Issuance under Equity Compensation Plans**
We
adopted an equity incentive plan effective as of February 2, 2016 (the 2016 Equity Incentive Plan) to attract and retain
employees, directors and consultants. Pursuant to the Companys annual meeting of shareholders on March 31, 2023, we adopted an
updated incentive plan (the 2023 Equity Incentive Plan), to be used in future years. The equity incentive plans are administered
by our Board of Directors which may determine, among other things, the (a) terms and conditions of any option or stock purchase right
granted, including the exercise price and the vesting schedule, (b) persons who are to receive options and stock purchase rights and
(c) the number of shares to be subject to each option and stock purchase right. The equity incentive plan may also be administered by
a special committee, as determined by the Board of Directors.
The
maximum aggregate number of shares of our common stock that may be issued under the 2016 Equity Incentive Plan is 3,653,606. As provided
in the plan, the maximum aggregate number of shares of our common stock that may be issued shall automatically increase on January 1
of each year for no more than 10 yearsto an amount no greater than 15% of our outstanding shares of common stock and Exchangeable Shares
as of such January 1. The equity incentive plan provides for the grant of, among other awards, (i) incentive options (qualified
under section 422 of the Internal Revenue Code of 1986, as amended) to our employees and (ii) non-statutory options and restricted stock
to our employees, directors or consultants.
| 36 | |
On
March 31, 2023, we adopted the Companys 2023 Equity Incentive Plan (the 2023 Plan). The 2023 Plan authorizes grants
of equity-based and incentive cash awards to eligible participants designated by the 2023 Plans administrator. The 2023 Plan will
be administered by the Compensation Committee of the Companys Board of Directors (the Board). The maximum aggregate
number of shares of our common stock that may be issued under the 2023 Equity Incentive Plan was 5,000,0000 at its inception. the Plan
allows an automatic annual increase to be added as of the first day of the Corporations fiscal year beginning in 2024 equal to
the lessor of (i) 10% of the outstanding common stock on a fully diluted basis as of the end of the Corporations immediately preceding
fiscal year, (ii) 5,000,000 shares, and (iii) a lesser amount determined by the Board; provided, however, that any shares from any such
increases in previous years that are not actually issued shall continue to be available for issuance under the Plan An aggregate of 5,000,000
shares of the Companys common stock (the Common Stock), plus the number of shares available for issuance under the
Companys 2016 Equity Incentive Plan that had not been made subject to outstanding awards, were reserved for issuance under the
2023 Plan. Unless earlier terminated by the Board, the 2023 Plan will remain in effect until all Common Stock reserved for issuance has
been issued, provided, however, that all awards shall be granted, if at all, on or before the day immediately preceding the tenth (10th)
anniversary of the effective date of the 2023 Plan. We also adopted the Companys Employee Stock Purchase Plan (the ESPP).
The ESPP allows eligible employees of the Company and the Companys designated subsidiaries the ability to purchase shares of the
Companys Common Stock at a discount, subject to various limitations. Under the ESPP, employees will be granted the right to purchase
Common Stock at a discount during a series of successive offerings, the duration and timing of which will be determined by the ESPP administrator
(the Administrator). In no event can any single offering period be longer than 27 months. The purchase price (the Purchase
Price) for each offering will be established by the Administrator. With respect to an offering under Section 423 of the Internal
Revenue Code of 1986 (Section 423 Offering), in no case may such Purchase Price be less than the lesser of (i) an amount
equal to 85 percent of the fair market value on the commencement date, or (ii) an amount not less than 85 percent of the fair market
value the on the purchase date. In the event of financial hardship, an employee may withdraw from the ESPP by providing a request at
least 20 Business Days before the end of the offering period (the Offering Period). Otherwise, the employee will be deemed
to have exercised the purchase right in full as of such exercise date. Upon exercise, the employee will purchase the number of whole
shares that the participants accumulated payroll deductions will buy at the Purchase Price. If an employee wants to decrease the
rate of contribution, the employee must make a request at least 20 Business Days before the end of an Offering Period (or such earlier
date as determined by the Administrator). An employee may not transfer any rights under the ESPP other than by will or the laws of descent
and distribution. During a participants lifetime, purchase rights under the ESPP shall be exercisable only by the participant.
Shown
below is information as of March 31, 2025 with respect to the common stock of the Company that may be issued under its equity compensation
plans.
|
Plan Category | |
(a) Number of securities to be issued upon exercise of outstanding options, warrants and rights | | |
(b) Weighted- average exercise price of outstanding options, warrants and rights | | |
(c) Number of securities remaining available for future issuance under equity compensation plans (excluding securities reflected in column (a)) | | |
|
Equity compensation plans approved by security holders (1) | |
| 3,953,442 | | |
$ | 3.0525 | | |
| 4,849,418 | | |
|
| |
| | | |
| | | |
| | | |
|
Warrants granted to Directors and Officers (4) | |
| 736,216 | | |
$ | 2.2943 | | |
| - | | |
|
| |
| | | |
| | | |
| | | |
|
Total | |
| 4,689,658 | | |
| 5.3468 | | |
| 4,849,418 | | |
|
|
(1) |
Represents
the Companys 2016 Equity Incentive Plan and includes options to purchase an aggregate of 416,664 shares of our common stock
granted to Mr. Al-Siddiq pursuant to his employment agreement at an exercise price of $13.2, and a grant to Mr. Al-Siddiq of 233,334
options in April 2020 which would vest quarterly over four years and have an exercise price of $6.3 per share, as well as additional
two grants to Mr. Al-Siddiq of 58,334 options each on March 12, 2023, with an exercise price of $7.5 and $10.5 per share respectively
for each grant, out of which 29,167 options from each grant (in total 58,334) had vested immediately upon grant date, and the remaining
29,167 options from each grant (in total 58,334) vested on March 12, 2024. A further grant was made to Mr. Al-Siddiq of 166,695 options
on March 12, 2023, with an exercise price of $4.86 per share, out of which 41,667 options had vested immediately upon grant and the
rest will vest monthly over 36 months. | |
| 37 | |
|
|
(2) |
At
the time of the Acquisition Transaction on February 2, 2016, each (a) outstanding option granted or issued pursuant to iMedicals
existing equity compensation plan was exchanged for approximately 0.1995 economically equivalent replacement options with a corresponding
adjustment to the exercise price and (b) outstanding warrant granted or issued pursuant to iMedicals equity compensation plans
was adjusted so the holder receives approximately 0.1995 shares of common stock with a corresponding adjustment to the exercise price.
Does not include options granted to Mr. Al-Siddiq discussed in (1) above. | |
|
|
|
| |
|
|
(3) |
On
March 30, 2015, iMedical approved Directors, Officers and Employees Stock Option Plan, under which it authorized and issued 500,000
options. This plan was established to enable the Company to attract and retain the services of highly qualified and experience directors,
officers, employees and consultants and to give such person an interest in the success of the Company. As of March 31, 2018, there
were 22,919 outstanding options at an exercise price of $.0006 under this plan. These options represented the right to purchase 27,432
shares of the Companys common stock using the ratio of 1.1969:1. All of these options were exercised during the year ended
March 31, 2019. No other grants will be made under this plan. | |
|
|
|
| |
|
|
(4) |
This
category relates to individuals who, at the time of grant, were not part of the Companys 2016 Equity Incentive Plan. | |
**ITEM
6. [RESERVED]**
**ITEM
7. MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS**
*The
following Managements Discussion and Analysis of Financial Condition and Results of Operations (*MD&A*)
covers information pertaining to the Company up to March 31, 2025 and should be read in conjunction with our consolidated financial statements
and related notes of the Company as of and for the fiscal years ended March 31, 2025 and 2024 contained elsewhere in this Annual Report
on Form 10-K. Except as otherwise noted, the financial information contained in this MD&A and in the financial statements has been
prepared in accordance with accounting principles generally accepted in the United States of America. All amounts are expressed in U.S.
dollars unless otherwise noted.*
**Forward
Looking Statements**
Certain
information contained in this MD&A and elsewhere in this Annual Report on Form 10-K includes forward-looking statements.
Statements which are not historical reflect our current expectations and projections about our future results, performance, liquidity,
financial condition and results of operations, prospects and opportunities and are based upon information currently available to us and
our management and their interpretation of what is believed to be significant factors affecting our existing and proposed business, including
many assumptions regarding future events. Actual results, performance, liquidity, financial condition and results of operations, prospects
and opportunities could differ materially and perhaps substantially from those expressed in, or implied by, these forward-looking statements
as a result of various risks, uncertainties and other factors, including those risks described in detail in the section entitled Risk
Factors as well as elsewhere herein.
| 38 | |
Forward-looking
statements, which involve assumptions and describe our future plans, strategies, and expectations, are generally identifiable by use
of the words may, should, would, will, could, scheduled,
expect, anticipate, estimate, believe, intend, seek,
or project or the negative of these words or other variations on these words or comparable terminology.
In
light of these risks and uncertainties, and especially given the nature of our existing and proposed business, there can be no assurance
that the forward-looking statements contained in this section and elsewhere in herein will in fact occur. Potential investors should
not place undue reliance on any forward-looking statements. Except as expressly required by the federal securities laws, there is no
undertaking to publicly update or revise any forward-looking statements, whether as a result of new information, future events, changed
circumstances or any other reason.
**Company
Overview**
Biotricity
Inc. (the Company, Biotricity, we, us, our) is a medical technology
company focused on biometric data monitoring solutions. Our aim is to deliver innovative, remote monitoring solutions to the medical,
healthcare, and consumer markets, with a focus on diagnostic and post-diagnostic solutions for lifestyle and chronic illnesses. We approach
the diagnostic side of remote patient monitoring by applying innovation within existing business models where reimbursement is established.
We believe this approach reduces the risk associated with traditional medical device development and accelerates the path to revenue.
In post-diagnostic markets, we intend to apply medical grade biometrics to enable consumers to self-manage, thereby driving patient compliance
and reducing healthcare costs. We intend to first focus on a segment of the diagnostic mobile cardiac telemetry market, otherwise known
as COM, while providing our chosen markets with the capability to also perform other cardiac studies.
We initially developed our FDA-cleared Bioflux COM technology, comprised
of a monitoring device and software components, which we made available to the market under limited release on April 6, 2018, in order
to assess, establish and develop sales processes and market dynamics. The fiscal year ended March 31, 2021 marked the Companys
first year of expanded commercialization efforts, focused on sales growth and expansion. In 2021, the Company announced the initial launch
of Bioheart, a direct-to-consumer heart monitor that offers the same continuous heart monitoring technology used by physicians. In addition
to developing and receiving regulatory approval or clearance of other technologies that enhance its ecosystem, in 2022, the Company announced
the launch of its Biocore Cardiac Monitoring Device (Biocore, previously branded as Biotres), a three-lead device for ECG
and arrhythmia monitoring intended for lower risk patients, a much broader addressable market segment. The Biocore Pro, which is a cellular
version of this device is now our flagship technology. We have expanded our sales efforts to 31 states, with intention to expand further
and compete in the broader US market using an insourcing business model. Our technology has a large potential total addressable market,
which can include hospitals, clinics and physicians offices, as well as other Independent Diagnostic Testing Facilities (IDTFs).
We believe our solutions insourcing model, which empowers physicians with state-of-the-art technology and charges technology service
fees for its use, has the benefit of a reduced operating overhead for the Company, and enables a more efficient market penetration and
distribution strategy.
We
are a technology company focused on earning utilization-based recurring technology fee revenue. The Companys ability to grow this
type of revenue is predicated on the size and quality of its sales force and their ability to penetrate the market and place devices
with clinically focused, repeat users of its cardiac study technology. The Company plans to grow its sales force in order to address
new markets and achieve sales penetration in the markets currently served.
Full
market release of the Bioflux COM device for commercialization launched in April 2019, after receiving its second and final required
FDA clearance. To commence commercialization, we ordered device inventory from our FDA-approved manufacturer and hired a small, captive
sales force, with deep experience in cardiac technology sales; we expanded on our limited market release, which identified potential
anchor clients who could be early adopters of our technology. By increasing our sales force and geographic footprint, we had launched
sales in 31 U.S. states by December 31, 2022.
| 39 | |
On
January 24, 2022 the Company announced that it has received the 510(k) FDA clearance of its Biocore patch solution, which is a novel
product in the field of Holter monitoring. This three-lead technology can provide connected Holter monitoring that is designed to produce
more accurate arrythmia detection than is typical of competing remote patient monitoring solutions. It is also foundational, since already
developed improvements to this technology will follow which are not known by the Company to be currently available in the market, for
clinical and consumer patch solution applications.
During
2021, the Company also announced that it received a 510(k) clearance from the FDA for its Bioflux Software II System, engineered to improve
workflows and reduce estimated analysis time from 5 minutes to 30 seconds. ECG monitoring requires significant human oversight to review
and interpret incoming patient data to discern actionable events for clinical intervention, highlighting the necessity of driving operational
efficiency. This improvement in analysis time reduces operational costs and allows the Company to continue to focus on excellent customer
service and industry-leading response times to physicians and their at-risk patients. Additionally, these advances mean we can focus
our resources on high-level operations and sales.
The
Company has also developed or is developing several other ancillary technologies, which will require application for further FDA clearances,
which the Company anticipates applying for within the next to twelve months. Among these are:
|
|
|
advanced
ECG analysis software that can analyze and synthesize patient ECG monitoring data with the purpose of distilling it down to the important
information that requires clinical intervention, while reducing the amount of human intervention necessary in the process; | |
|
|
|
| |
|
|
|
the
Biocore Pro 2.0, which is the next generation of our Biocore | |
During
2021 and the early part of 2022, the Company has also commercially launched its Bioheart technology, which is a consumer technology whose
development was forged out of prior the development of the clinical technologies that are already part of the Companys technology
ecosystem, the BioSphere. In recognition of its product development, in November 2022, the Companys Bioheart received recognition
as one of Time Magazines Best Inventions of 2022.
The
Companys goal is to position itself as an all-in-one cardiac diagnostic and disease management solution. The Company continues
to grow its data set of billions of patient heartbeats, allowing it to further develop its predictive capabilities relative to atrial
fibrillation and arrythmias.
In
October 2022, the Company launched its Biocare Cardiac Disease Management Solution, after successfully piloting this technology in two
facilities that provide cardiac care to more than 60,000 patients. This technology and other consumer technologies and applications such
as the Biokit and Biocare have been developed to allow the Company to transform and use its strong cardiac footprint to expand into remote
chronic care management solutions that will be part of the BioSphere. The technology puts actionable data into the hands of physicians
in order to assist them in making effective treatment decisions quickly. During March 2023, the Company launched its patient-facing Biocare
app on Android and Apple app stores. This further allows the Company to expand its footprint in providing full-cycle chronic care management
solutions to its clinic and patient network.
| 40 | |
The
Company identified the importance of recent developments in accelerating its path to profitability, including the launch of important
new products identified, which have a ready market through cross-selling to existing large customer clinics, and large new distribution
partnerships that allow the Company to sell into large hospital networks. Additionally, in September 2022, the Company was awarded a
NIH Grant from the National Heart, Blood, and Lung Institute for AI-Enabled real-time monitoring, and predictive analytics for stroke
due to chronic kidney failure. This is a significant achievement that broadens our technology platforms disease space demographic.
The grant focusses on Bioflux-AI as an innovative system for real-time monitoring and prediction of stroke episodes in chronic kidney
disease patients. The Company received $238,703 under this award in March 2023, used to defray research, development and other associated
costs.
**Results
of Operations**
Biotricity
incurred a net loss attributed to common stockholders of $11,246,320 (loss per share of $0.552) during the year ended March 31, 2025
as compared to $14,928,960 (loss per share of $1.66) during the year ended March 31, 2024. From the Companys inception in 2009
through March 31, 2025, the Company has generated an accumulated deficit of $138,900,568. We devoted, and expect to continue to devote,
significant resources in the areas of sales and marketing and research and development costs. We also expect to incur additional operating
losses, as we build the infrastructure required to support higher sales volume.
**Comparison
of the Fiscal Years and the Three Months Periods Ended March 31, 2025 and 2024**
The
following table sets forth our results of operations for the fiscal years ended March 31, 2025 and 2024.
|
| |
For the years ended March 31, | | |
|
| |
2025 | | |
2024 | | |
Period to Period Change | | |
|
| |
| | |
| | |
| | |
|
Revenue | |
| 13,790,294 | | |
| 12,063,345 | | |
| 1,726,949 | | |
|
Cost of Revenue | |
| 3,225,803 | | |
| 3,707,064 | | |
| (481,261 | ) | |
|
Gross profit | |
| 10,564,491 | | |
| 8,356,281 | | |
| 2,208,210 | | |
|
| |
| 76.6 | % | |
| 69.3 | % | |
| 7.3 | % | |
|
Operating expenses: | |
| | | |
| | | |
| | | |
|
Selling, general and administrative expenses | |
| 10,812,878 | | |
| 14,612,724 | | |
| (3,799,846 | ) | |
|
Research and development expenses | |
| 2,155,660 | | |
| 2,571,826 | | |
| (416,166 | ) | |
|
Total operating expenses | |
| 12,968,538 | | |
| 17,184,550 | | |
| (4,216,012 | ) | |
|
Loss from operations | |
| (2,404,047 | ) | |
| (8,828,269 | ) | |
| 6,424,222 | | |
|
Interest expense | |
| (3,262,038 | ) | |
| (3,018,803 | ) | |
| (243,235 | ) | |
|
Accretion expense including day one derivative loss | |
| (1,939,816 | ) | |
| (2,172,920 | ) | |
| 233,104 | | |
|
Change in fair value of derivative liabilities | |
| (595,442 | ) | |
| 9,777 | | |
| (605,219 | ) | |
|
Gain/(Loss) upon convertible promissory note conversion and redemption | |
| (141,267 | ) | |
| 18,539 | | |
| (159,806 | ) | |
|
Other (expense) income | |
| (78,569 | ) | |
| (102,607 | ) | |
| 24,038 | | |
|
Net loss before income taxes | |
| (8,421,179 | ) | |
| (14,094,283 | ) | |
| 5,673,104 | | |
|
| |
| | | |
| | | |
| | | |
|
Income taxes | |
| | | |
| | | |
| | | |
|
Net loss before dividends | |
| (8,421,179 | ) | |
| (14,094,283 | ) | |
| 5,673,104 | | |
| 41 | |
The
following table sets forth our results of operations for the three months ended March 31, 2025 and 2024.
|
| |
For the 3 months ended March 31, | | |
|
| |
2025 | | |
2024 | | |
Period to Period Change | | |
|
| |
| | |
| | |
| | |
|
Revenue | |
| 3,702,597 | | |
| 3,178,311 | | |
| 524,286 | | |
|
Cost of Revenue | |
| 724,416 | | |
| 905,998 | | |
| (181,582 | ) | |
|
Gross profit | |
| 2,978,181 | | |
| 2,272,313 | | |
| 705,868 | | |
|
| |
| 80.4 | % | |
| 71.5 | % | |
| 8.9 | % | |
|
Operating expenses: | |
| | | |
| | | |
| | | |
|
Selling, general and administrative expenses | |
| 3,216,161 | | |
| 4,608,374 | | |
| (1,392,213 | ) | |
|
Research and development expenses | |
| 572,567 | | |
| 708,275 | | |
| (135,708 | ) | |
|
Total operating expenses | |
| 3,788,728 | | |
| 5,316,649 | | |
| (1,527,921 | ) | |
|
Loss from operations | |
| (810,547 | ) | |
| (3,044,336 | ) | |
| 2,233,789 | | |
|
Interest expense | |
| (891,752 | ) | |
| (814,943 | ) | |
| (76,809 | ) | |
|
Accretion expense including day one derivative loss | |
| (164,072 | ) | |
| (596,575 | ) | |
| 432,503 | | |
|
Change in fair value of derivative liabilities | |
| (127,162 | ) | |
| 253,791 | | |
| (380,953 | ) | |
|
Gain/(Loss) upon convertible promissory note conversion and redemption | |
| 8,391 | | |
| 3,259 | | |
| 5,132 | | |
|
Other (expense) income | |
| 49,405 | | |
| 16,334 | | |
| 33,071 | | |
|
Net loss before income taxes | |
| (1,935,737 | ) | |
| (4,182,470 | ) | |
| 2,246,733 | | |
|
| |
| | | |
| | | |
| | | |
|
Income taxes | |
| | | |
| | | |
| | | |
|
Net loss before dividends | |
| (1,935,737 | ) | |
| (4,182,470 | ) | |
| 2,246,733 | | |
*Revenue
and cost of revenue*
Through
the efforts of our sales force to increase our geographic footprint, we have launched sales in 31 U.S. states by March 31, 2025. The
Company earned combined device sales and technology fee income totaling $13.8 million during the year ended March 31, 2025, a 14.3% increase
over the $12.1 million earned in the preceding fiscal year. During three months ended March 31, 2025, the Company earned total sales
of $3.7 million, a 16.5 % increase over the $3.2 million sales earned in the corresponding quarter in prior year.
Our
gross profit percentage was 76.6% during the year ended March 31, 2025 as compared to 69.3% during the comparable prior year period.
The increase in average margins was a result of increase of technology sales as a percentage of total sales, since these enjoy a higher
margin than device sales. Gross margin on technology sales was 79.8 % for the year ended March 31, 2025, which improved significantly
from the prior year technology sales gross margin of 75%, as a result of the Companys continuous efforts to improve efficiency
in delivering those services. We expect the gross margin related to technology fees to continue improving going forward as we achieve
greater economy of scale, including the cost of monitoring. Given the improved gross margin on technology fees and an evolving revenue
mix where technology fees are expected to comprise an increasing proportion of revenue, we anticipate continued improvement in overall
blended gross margin over time.
Gross profit percentage on technology fees was 82.7% during three months
ended March 31, 2025 as compared to 77.3% in the corresponding quarter in the prior year. This was mainly a result of increased study
revenue from an increased number of studies performed at a lower cost of revenue due to economy of scale and continued efforts to reduce
the cost per study.
*Operating
Expenses*
Total
operating expenses for the fiscal year ended March 31, 2025 were $13.0 million compared to $17.2 million for the fiscal year ended March
31, 2024. Total operating expenses for the three months ended March 31, 2025 were $3.8 million as compared $5.3 million for the three
months ended March 31, 2024. See further explanations below.
| 42 | |
**
*Selling,
General and administrative expenses*
Our
selling, general and administrative expenses for the fiscal year ended March 31, 2025 decreased to $10.8 million, compared to approximately
$14.6 million for the fiscal year ended March 31, 2024 and decreased to $3.2 million for the three months ended March 31, 2025 compared
to and $4.6 million during the three months ended March 31, 2024. Our total selling, general and administrative expenses decreased by
$3.8 million for the fiscal year ended March 31, 2025, which was primarily due increased monitoring of spending efficiency over sales
commissions and fixed general and administrative expenses.
*Research
and development expenses*
During
the fiscal year and three months ended March 31, 2025 we recorded research and development expenses of $2.2 million and $ 0.57 million,
respectively, compared to $2.6 million and $0.7 million incurred in the fiscal year and three months ended March 31, 2024. The research
and development activity related to both existing and new products. The decrease in research and development activity was a result of
the timing of activities associated with the development of new technologies for our ecosystem and product enhancements.
*Interest
Expense*
During the fiscal year ended March 31, 2025 and March 31, 2024, we incurred
interest expenses of $3.3 million and $3 million, respectively. During three months ended March 31, 2025 and March 31, 2024, we incurred
interest expenses of $0.9 million and $0.8 million, respectively. The increase in interest expense corresponded to an increase in borrowings
and market increases in interest rates period over period.
*Accretion
and amortization expenses*
During the fiscal year ended March 31, 2025 and March 31, 2024, we incurred
accretion expense of $1.9 million and $2.2 million, respectively. The decrease from the prior year period mainly due to fully amortization
of Convertible Notes Series C. The amortization during the current year related primarily to the amortization of debt discount related
to the Companys term loan, merchant loans and series C convertible notes. During the three months ended March 31, 2025 and March
31, 2024, we incurred accretion expenses of $0.16 million and 0.6 million. The expense for the quarters decrease due to fully amortization
of Convertible Notes Series C.
*Change
in fair value of derivative liabilities*
During the year ended March 31, 2025 and March 31, 2024, the Company recognized
$(595) thousand and $10 thousand, respectively, related to the change in fair value of derivative liabilities. During the three months
ended March 31, 2025 and March 31, 2024, the Company recognized $(127) thousand and $254 thousand, respectively, related to the change
in fair value of derivative liabilities.
*Loss
upon convertible promissory notes conversion*
During
the year ended March 31, 2025, we recorded a loss of $141 thousand, compared to a gain of $19 thousand during the year ended March 31,
2024, related to the redemption of our convertible promissory notes. During the three months ended March 31, 2025 and 2024, we recorded
a gain of $8 thousand and $3 thousand, respectively, related to the redemption of our convertible promissory notes.
*Other
(expense) income*
During
the years ended March 31, 2025, and March 31, 2024 we recognized $79 thousand and $103 in net other expense. The change in net other
(expense) income is mainly a result of loss upon debt extinguishments and the financing component of revenue recognized as interest (note
3). During the three months ended March 31, 2025, and March 31, 2024, we recognized $49 thousand and $16 thousand, respectively, in net
other income.
| 43 | |
*EBITDA
and Adjusted EBITDA*
Earnings
before interest, taxes, depreciation and amortization expenses (EBITDA) and Adjusted EBITDA, which are presented below, are non-generally
accepted accounting principles (non-GAAP) measures that we believe are useful to management, investors and other users of our financial
information in evaluating operating profitability. EBITDA is calculated by adding back interest, taxes, depreciation and amortization
expenses to net income.
Adjusted EBITDA is calculated by excluding from EBITDA the effect of the
following non-operational items: equity in earnings and losses of unconsolidated businesses and other income and expense, net, as well
as the effect of special items that related to one-time, non-recurring expenditures . We believe that this measure is useful to management,
investors and other users of our financial information in evaluating the effectiveness of our operations and underlying business trends
in a manner that is consistent with managements evaluation of business performance. Further, the exclusion of non-operational items
and special items enables comparability to prior period performance and trend analysis. See notes in the table below for additional information
regarding special items. Adjusted EBITDA for the three months ended March 31, 2025 was positive $438,260 compared to negative $2,561,573
in the corresponding period of the prior fiscal year.
It
is managements intent to provide non-GAAP financial information to enhance the understanding of Biotricitys GAAP financial
information, and it should be considered by the reader in addition to, but not instead of, the financial statements prepared in accordance
with GAAP. We believe that providing these non-GAAP measures in addition to the GAAP measures allows management, investors and other
users of our financial information to more fully and accurately assess business performance. The non-GAAP financial information presented
may be determined or calculated differently by other companies and may not be directly comparable to that of other companies.
|
EBITDA and Adjusted EBITDA | |
|
|
|
Year ended
March 31,
2025 |
|
|
Year ended
March 31,
2024 |
|
|
3 months ended
March 31,
2025 |
|
|
3 months ended
March 31,
2024 |
| |
|
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
| |
|
Net loss attributable to common stockholders |
|
|
(11,942,000 |
) |
|
|
(14,928,960 |
) |
|
|
(2,022,133 |
) |
|
|
(4,400,104 |
) | |
|
Add: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
Provision for income taxes |
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
| |
|
Interest expense |
|
|
3,262038 |
|
|
|
3,018,803 |
|
|
|
891,752 |
|
|
|
814,943 |
| |
|
Accretion and amortization expenses |
|
|
1,945,769 |
|
|
|
2,178,873 |
|
|
|
165,560 |
|
|
|
598,063 |
| |
|
Preferred stock dividends (2) |
|
|
3,520,821 |
|
|
|
834,677 |
|
|
|
86,396 |
|
|
|
217,634 |
| |
|
EBITDA |
|
|
(3,213,372 |
) |
|
|
(8,896,607 |
) |
|
|
(878,425 |
) |
|
|
(2,769,464 |
) | |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
Add (Less) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
Share based compensation (1) |
|
|
1,420,121 |
|
|
|
1,025,930 |
|
|
|
1,247,319 |
|
|
|
481,275 |
| |
|
Other (income)/loss (3) |
|
|
78,569 |
|
|
|
102,607 |
|
|
|
(49,405 |
) |
|
|
(16,334 |
) | |
|
Gain (loss) upon convertible promissory notes conversion and
redemption (3) |
|
|
141,267 |
|
|
|
(18,539 |
) |
|
|
(8,391 |
) |
|
|
(3,259 |
) | |
|
Fair value change on derivative liabilities (3) |
|
|
595,442 |
|
|
|
(9,777 |
) |
|
|
127,162 |
|
|
|
(253,791 |
) | |
|
Adjusted EBITDA |
|
|
(972,973 |
) |
|
|
(7,796,386 |
) |
|
|
438,260 |
|
|
|
(2,561,573 |
) | |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
Weighted average number of common shares outstanding |
|
|
21,524,884 |
|
|
|
8,991,766 |
|
|
|
25,094,484 |
|
|
|
9,441,667 |
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
Adjusted Loss per Share, Basic and Diluted |
|
|
(0.045 |
) |
|
|
(0.867 |
) |
|
|
0.017 |
|
|
|
(0.271 |
) | |
(1)
Share based compensation is a non-cash item therefore is removed from our adjusted EBITDA analysis
(2)
Preferred stock dividend payment is at Companys discretion and therefore is removed from our adjusted EBITDA analysis
(3)
These items relate to financing transactions and therefore do not reflect the Companys core operating activities
(4)
Certain amounts presented in the prior year period have been reclassified to conform to current period presentation.
| 44 | |
**
*Net
Loss*
As a result of the foregoing, the net loss attributable to common stockholders
for the fiscal year ended March 31, 2025 was $11.7 million compared to a net loss of $14.9 million during the fiscal year ended March
31, 2024.
*Translation
Adjustment*
Translation adjustment for the fiscal year ended March 31, 2025 was a gain
of $206 thousand compared to a gain of $185 thousand for the fiscal year ended March 31, 2024. Translation adjustment was a gain of $235
thousand for the three months ended March 31, 2025, compared to a gain of $284 thousand for the three months ended March 31, 2024. This
translation adjustment represents gains and losses that result from the translation of currency in the financial statements from our functional
currency of Canadian dollars to the reporting currency in U.S. dollars over the course of the reporting period.
**Liquidity
and Capital Resources**
Management
has previously noted the existence of substantial doubt about our ability to continue as a going concern. Additionally, our independent
registered public accounting firm included an explanatory paragraph in the report on our financial statements as of and for the years
ended March 31, 2025 and 2024, respectively, noting the existence of substantial doubt about our ability to continue as a going concern.
Our existing cash deposits may not be sufficient to fund our operating expenses through at least twelve months from the date of this
filing. To continue to fund operations, we will need to secure additional funding through public or private equity or debt financings,
through collaborations or partnerships with other companies or other sources. We may not be able to raise additional capital on terms
acceptable to us, or at all. Any failure to raise capital when needed could compromise our ability to execute our business plan. If we
are unable to raise additional funds, or if our anticipated operating results are not achieved, we believe planned expenditure may need
to be reduced in order to extend the time period that existing resources can fund our operations. If we are unable to obtain the necessary
capital, it may have a material adverse effect on our operations and the development of our technology, or we may have to cease operations
altogether.
The
development and commercialization of our product offerings are subject to numerous uncertainties, and we could use our cash resources
sooner than we expect. Additionally, the process of developing our products is costly, and the timing of progress can be subject to uncertainty;
our ability to successfully transition to profitability may be dependent upon achieving further regulatory approvals and achieving a
level of product sales adequate to support our cost structure. Though we are optimistic with respect to our revenue growth trajectory
and our cost control initiatives, we cannot be certain that we will ever be profitable or generate positive cash flow from operating
activities.
| 45 | |
The
Company is in commercialization mode, while continuing to pursue the development of its next generation COM product as well as new products
that are being developed.
We
generally require cash to:
|
|
|
purchase
devices that will be placed in the field for pilot projects and to produce revenue, | |
|
|
|
| |
|
|
|
launch
sales initiatives, | |
|
|
|
| |
|
|
|
fund
our operations and working capital requirements, | |
|
|
|
| |
|
|
|
develop
and execute our product development and market introduction plans, | |
|
|
|
| |
|
|
|
fund
research and development efforts, and | |
|
|
|
| |
|
|
|
pay
any expense obligations as they come due. | |
The Company is in the early stages of commercializing its products. It
is concurrently in development mode, operating a research and development program in order to develop an ecosystem of medical technologies,
and, where required or deemed advisable, obtain regulatory approvals for, and commercialize other proposed products. The Company launched
its first commercial sales program as part of a limited market release, during the year ended March 31, 2019, using an experienced professional
in-house sales team. A full market release ensued during the year ended March 31, 2020. Management anticipates the Company will continue
on its revenue growth trajectory and improve its liquidity through continued business development and after additional equity and debt
capitalization of the Company. The Company has incurred recurring losses from operations, and as at March 31, 2025, has an accumulated
deficit of $139 million (2024 : $128 million), the Company has a working capital deficit of $15.9 million ( 2024 : $30 million).
On
August 30, 2021 the Company completed an underwritten public offering of its common stock that concurrently facilitated its listing on
the Nasdaq Capital Market. On August 1, 2024, the Company received a notice from Nasdaq stating that Nasdaq has determined to delist
the Companys shares of common stock on The Nasdaq Capital Market, effective at the open of business on August 5, 2024. Nasdaq
reached its decision pursuant to Nasdaq Listing Rule 5550(b)(2) because the Company no longer complied with the minimum $35 million market
value of listed securities. Following the suspension of trading on The Nasdaq Capital Market, the Companys shares of common stock
were again listed on the OTCQB under the symbol BTCY.
During
the fiscal year ended March 31, 2023, the Company raised short-term loans and promissory notes, net of repayments of $1,476,121 from
various lenders, and also raised convertible notes, net of redemptions of $2,355,318 from various lenders. During the fiscal year ended
March 31, 2024, the Company raised short-term loans and promissory notes, net of repayments of $853,030 and convertible notes, net of
redemptions of $2,962,386 from various lenders. The Company sold 36,897 common shares through use of its registration statement, for
gross proceeds of $123,347, raising a net amount of $119,285 after paying a 3% placement fee and other issuance expenses. Additionally,
on September 19, 2023, the Company entered into a security purchase agreement with an institutional investor for the issuance and sale
of 220 shares of the Companys newly designated Series B Convertible Preferred Stock, at a purchase price of $9,091 per share of
Series B Preferred Stock (Note 9), or gross proceeds of $2,000,000. Net proceeds after issuance costs was $1,900,000. During the three
months ending March 31, 2024, 110 Series B preferred shares were issued for net proceeds of $925,000.
During the three months and year ended March 31, 2025, convertible notes
with a face value of $nil and $1,487,700 and accrued interest of $nil and $237,230, were converted into nil and 2,173,089 common shares,
respectively. As of March 31, 2025, 581,599 shares are recognized as an obligation for shares to be issued relating to the conversions.
The fair value of common shares issued during the three months and year ended March 31, 2025 is $nil and $2,431,178, respectively, and
is determined based on market price upon conversion. Total value of debt settled is in the amount of $nil and $ 2,234,232, respectively,
which consisted of the face value of notes converted, accrued interest of $nil and $237,230, respectively, and relevant derivative liability
of $nil and $509,303, respectively. The Company recognized a loss upon conversion of $nil and $196,945.34, respectively, representing
the difference between the value of debt settled and fair value of shares issued and to be issued.
During the three months and the year ended March 31, 2025, convertible
notes with a face value of $25,000 and $150,000 and accrued interest of $5,021 and $34,864, were redeemed for a cash payment of $30,021
and $184,864. The Company recorded a gain on redemption of $8,391 and $50,692 related to the conversion, representing the difference between
the value of the debt settled and the cash payment value.
During the year ended March 31, 2025,
the Company issued $1,985,000 in unsecured convertible promissory notes to private investors; $100,000 of the notes mature on their six-month
anniversary of issuance and bear interest of 20%; $710,000 of the notes mature on their twenty four-month anniversary of issuance and
bear interest of 10%; and $1,175,000 of the notes mature on their eighteen-month anniversary of issuance and bear not interest; all of
the notes have conversion features that require the mutual consent of the investor and the Company. Since the conversion is not in control
of the holder of the note, the Company did not recognize a derivative liability in connection with the conversion option of the Other
Convertible Notes.
| 46 | |
In November 2024, the Company completed an additional transaction with
its term lender to receive an additional $635 thousand in term loan proceeds, and interest relief through the capitalization of approximately
$1.5 million in interest amounts due on its existing term loan. As part of this arrangement, the Company issued 600,000, 7-year share
warrants to the term lender with a strike price of $0.50 per share and agreed to increase the term loan exit fee to $1.425 million at
the end of its 5-year term. Concurrently, the Company received waiver and forbearance relief on certain term loan covenants and their
respective defaults.
During
period subsequent to December 31, 2024, the Company also raised additional funding from private investors in the amount of $337 thousand
in the form of promissory notes and convertible promissory notes.
Adjusted
EBITDA, which management uses as a measure for tracking free cashflow levels, improved to $443 thousand for the quarter ended March 31,
2025, a reduction of approximately $3 million in negative Adjusted EBITDA from the comparative period of the prior fiscal year, which
is a 120% improvement.
On
March 31, 2025, we had cash deposits in the aggregate of approximately $0.4 million.
The
Company has developed and continues to pursue sources of funding that management believes will be sufficient to support the Companys
operating plan and alleviate any substantial doubt as to its ability to meet its obligations for at least a period of one year from the
date of these Condensed Consolidated Financial Statements.
As
we proceed with the commercialization of the Biocore and Biocare products and continue their development, we expect to continue to devote
significant resources on capital expenditures, as well as research and development costs and operations, marketing and sales expenditures.
Based
on the above facts and assumptions, we believe our existing cash, along with anticipated near-term financings, will be sufficient to
continue to meet our needs for the next twelve months from the filing date of this report. However, we will need to seek additional debt
or equity capital to respond to business opportunities and challenges, including our ongoing operating expenses, protecting our intellectual
property, developing or acquiring new lines of business and enhancing our operating infrastructure. The terms of our future financing
may be dilutive to, or otherwise adversely affect, holders of our common stock. We may also seek additional funds through arrangements
with collaborators or other third parties. There can be no assurance we will be able to raise this additional capital on acceptable terms,
or at all. If we are unable to obtain additional funding on a timely basis, we may be required to modify our operating plan and otherwise
curtail or slow the pace of development and commercialization of our proposed product lines.
The
following is a summary of cash flows for each of the periods set forth below.
|
| |
For the Years Ended | | |
|
| |
March 31, | | |
|
| |
2025 | | |
2024 | | |
|
Net cash used in operating activities | |
$ | (2,401,397 | ) | |
$ | (6,693,912 | ) | |
|
Net cash used in investing activities | |
| | | |
| | | |
|
Net cash provided by financing activities | |
| 1,929,253 | | |
| 6,741,685 | | |
|
Net (decrease) increase in cash | |
$ | (472,144 | ) | |
$ | 47,773 | | |
**Net
Cash Used in Operating Activities**
During
the fiscal year ended March 31, 2025, we used cash in operating activities in the amount of $2.4 million compared to $6.7 million for
the fiscal year ended March 31, 2024. For each of the fiscal years ended March 31, 2025 and March 31, 2024, the cash in operating activities
was primarily due to selling expenses as well as research, product development, business development, marketing and general operations.
The decrease in cash used reflects managements concerted effort to contain costs while increasing revenues, on the path of achieving
break-even.
| 47 | |
****
**Net
Cash Used in Investing Activities**
Net
cash used in investing activities was Nil in the fiscal years ended March 31, 2025 and March 31, 2024.
**Net
Cash Provided by Financing Activities**
Net
cash provided by financing activities was $1.9 million for the fiscal year ended March 31, 2025 compared to $6.7 million for the fiscal
year ended March 31, 2024.
For
the fiscal year ended March 31, 2025, the cash provided by financing activities was primarily from proceeds in the issuance of Series
B preferred stock, in the amount of $1.73 million. And Capitalization of interest of term loan of $0.5 million.
For
the fiscal year ended March 31, 2024, the cash provided by financing activities was primarily from proceeds in connection with the issuance
of convertible notes and loans, net of repayments, in the amount of $3.8 million and the issuance of Series B convertible preferred stock,
in the amount of $2.8 million.
**Critical
Accounting Policies**
The
financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (US
GAAP) and are expressed in United States Dollars. Significant accounting policies are summarized below:
*Revenue
Recognition*
The
Company adopted Accounting Standards Codification Topic 606, Revenue from Contracts with Customers (ASC 606)
on April 1, 2018. In accordance with ASC 606, revenue is recognized when promised goods or services are transferred to customers in an
amount that reflects the consideration to which the Company expects to be entitled in exchange for those goods or services by applying
the core principles 1) identify the contract with a customer, 2) identify the performance obligations in the contract, 3) determine
the transaction price, 4) allocate the transaction price to performance obligations in the contract, and 5) recognize revenue as performance
obligations are satisfied.
The
Bioflux mobile cardiac telemetry device, a wearable device, is worn by patients for a monitoring period up to 30 days. The cardiac data
that the device monitors and collects is curated and analyzed by the Companys proprietary algorithms and then securely communicated
to a remote monitoring facility for electronic reporting and conveyance to the patients prescribing physician or other certified
cardiac medical professional. Revenues earned with respect to this device are comprised of device sales revenues and technology fee revenues
(technology as a service). The device, together with its licensed software, is available for sale to the medical center or physician,
who is responsible for the delivery of clinical diagnosis and therapy. The remote monitoring, data collection and reporting services
performed by the technology culminate in a patient study that is generally billable when it is complete and is issued to the physician.
In order to recognize revenue, management considers whether or not the following criteria are met: persuasive evidence of a commercial
arrangement exists, and delivery has occurred or services have been rendered. For sales of devices, which are invoiced directly, additional
revenue recognition criteria include that the price is fixed and determinable and collectability is reasonably assured; for device sales
contracts with terms of more than one year, the Company recognizes any significant financing component as revenue over the contractual
period using the effective interest method, and the associated interest income is reflected accordingly on the statement of operations
and included in other income; for revenue that is earned based on customer usage of the proprietary software to render a patients
cardiac study, the Company recognizes revenue when the study ends based on a fixed billing rate. Costs associated with providing the
services are recorded as the service is provided regardless of whether or when revenue is recognized.
The
Company may also earn service-related revenue from contracts with other counterparties with which it consults. This contract work is
separate and distinct from services provided to clinical customers, but may be with a reseller or other counterparties that are working
to establish their operations in foreign jurisdictions or ancillary products or market segments in which the Company has expertise and
may eventually conduct business.
| 48 | |
The
Company recognized the following forms of revenue for the fiscal years ended March 31, 2025 and 2024:
|
| |
2025 | | |
2024 | | |
|
| |
$ | | |
$ | | |
|
Technology fees | |
| 12,591,036 | | |
| 11,249,113 | | |
|
Device sales | |
| 1,199,258 | | |
| 814,232 | | |
|
| |
| 13,790,294 | | |
| 12,063,345 | | |
The
Company recognized the following forms of revenue for the three months ended March 31, 2025 and 2024:
|
| |
2025 | | |
2024 | | |
|
| |
| $ | | |
| $ | | |
|
Technology fees | |
| 3,123,389 | | |
| 2,968,639 | | |
|
Device sales | |
| 579,208 | | |
| 209,671 | | |
|
| |
| 3,702,597 | | |
| 3,178,310 | | |
*Inventory*
Inventory
is stated at the lower of cost and market value, cost being determined on a weighted average cost basis. Market value of our finished
goods inventory is determined based on its estimated net realizable value, which is generally the selling price less normally predictable
costs of disposal and transportation. The Company records write-downs of inventory that is obsolete or in excess of anticipated demand
or market value based on consideration of product lifecycle stage, technology trends, product development plans and assumptions about
future demand and market conditions. Actual demand may differ from forecasted demand, and such differences may have a material effect
on recorded inventory values. Inventory write-downs are charged to cost of revenue and establish a new cost basis for the inventory.
*Significant
accounting estimates and assumptions*
The
preparation of the consolidated financial statements requires the use of estimates and assumptions to be made in applying the accounting
policies that affect the reported amounts of assets, liabilities, revenue and expenses and the disclosure of contingent assets and liabilities.
The estimates and related assumptions are based on previous experiences and other factors considered reasonable under the circumstances,
the results of which form the basis for making the assumptions about the carrying values of assets and liabilities that are not readily
apparent from other sources.
The
estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognized in the period
in which the estimate is revised if the revision affects only that period or in the period of the revision and future periods if the
revision affects both current and future periods.
Significant
accounts that require estimates as the basis for determining the stated amounts include share-based compensation, impairment analysis
and fair value of warrants, structured notes, convertible debt and conversion liabilities.
|
|
Fair
value of stock options | |
The
Company measures the cost of equity-settled transactions with employees by reference to the fair value of equity instruments at the date
at which they are granted. Estimating fair value for share-based payments requires determining the most appropriate valuation model for
a grant of such instruments, which is dependent on the terms and conditions of the grant. The estimate also requires determining the
most appropriate inputs to the Black-Scholes option pricing model, including the expected life of the instrument, risk-free rate, volatility,
and dividend yield.
| 49 | |
|
|
Fair
value of warrants | |
|
|
| |
|
|
In
determining the fair value of the warrant issued for services and issue pursuant to financing transactions, the Company used the
Black-Scholes option pricing model with the following assumptions: volatility rate, risk-free rate, and the remaining expected life
of the warrants that are classified under equity. | |
|
|
Fair
value of derivative liabilities | |
In
determining the fair values of the derivative liabilities from the conversion and redemption features, the Company used valuation models
with the following assumptions: dividend yields, volatility, risk-free rate and the remaining expected life. Changes in those assumptions
and inputs could in turn impact the fair value of the derivative liabilities and can have a material impact on the reported loss and
comprehensive loss for the applicable reporting period.
|
|
Functional
currency | |
Determining
the appropriate functional currencies for entities in the Company requires analysis of various factors, including the currencies and
country-specific factors that mainly influence labor, materials, and other operating expenses.
|
|
Useful
life of property and equipment | |
The
Company employs significant estimates to determine the estimated useful lives of property and equipment, considering industry trends
such as technological advancements, past experience, expected use and review of asset useful lives. The Company makes estimates when
determining depreciation methods, depreciation rates and asset useful lives, which requires considering industry trends and company-specific
factors. The Company reviews depreciation methods, useful lives and residual values annually or when circumstances change and adjusts
its depreciation methods and assumptions prospectively.
|
|
Provisions | |
Provisions
are recognized when the Company has a present obligation, legal or constructive, as a result of a previous event, if it is probable that
the Company will be required to settle the obligation and a reliable estimate can be made of the obligation. The amount recognized is
the best estimate of the expenditure required to settle the present obligation at the end of the reporting period, taking into account
the risks and uncertainties surrounding the obligations. Provisions are reviewed at the end of each reporting period and adjusted to
reflect the current best estimate of the expected future cash flows.
|
|
Contingencies | |
Contingencies
can be either possible assets or possible liabilities arising from past events, which, by their nature, will be resolved only when one
or more uncertain future events occur or fail to occur. The assessment of the existence and potential impact of contingencies inherently
involves the exercise of significant judgment and the use of estimates regarding the outcome of future events.
|
|
Inventory
obsolescence | |
Inventories
are stated at the lower of cost and market value. Market value of our inventory, which is all purchased finished goods, is determined
based on its estimated net realizable value, which is generally the selling price less normally predictable costs of disposal and transportation.
The Company estimates net realizable value as the amount at which inventories are expected to be sold, taking into consideration fluctuations
in retail prices less estimated costs necessary to make the sale. Inventories are written down to net realizable value when the cost
of inventories is estimated to be unrecoverable due to obsolescence, damage, or declining selling prices.
| 50 | |
|
|
Income
and other taxes | |
The
calculation of current and deferred income taxes requires the Company to make estimates and assumptions and to exercise judgment regarding
the carrying values of assets and liabilities which are subject to accounting estimates inherent in those balances, the interpretation
of income tax legislation across various jurisdictions, expectations about future operating results, the timing of reversal of temporary
differences and possible audits of income tax filings by the tax authorities. In addition, when the Company incurs losses for income
tax purposes, it assesses the probability of taxable income being available in the future based on its budgeted forecasts. These forecasts
are adjusted to take into account certain non-taxable income and expenses and specific rules on the use of unused credits and tax losses.
When
the forecasts indicate that sufficient future taxable income will be available to deduct the temporary differences, a deferred tax asset
is recognized for all deductible temporary differences. Changes or differences in underlying estimates or assumptions may result in changes
to the current or deferred income tax balances on the consolidated statements of financial position, a charge or credit to income tax
expense included as part of net income (loss) and may result in cash payments or receipts. Judgment includes consideration of the Companys
future cash requirements in its tax jurisdictions. All income, capital and commodity tax filings are subject to audits and reassessments.
Changes in interpretations or judgments may result in a change in the Companys income, capital, or commodity tax provisions in
the future. The amount of such a change cannot be reasonably estimated.
|
|
Incremental
borrowing rate for lease | |
The
determination of the Companys lease obligation and right-of-use asset depends on certain assumptions, which include the selection
of the discount rate. The discount rate is set by reference to the Companys incremental borrowing rate. Significant assumptions
are required to be made when determining which borrowing rates to apply in this determination. Changes in the assumptions used may have
a significant effect on the Companys consolidated financial statements.
*Earnings
(Loss) Per Share*
The
Company has adopted the Financial Accounting Standards Boards (FASB) Accounting Standards Codification (ASC)
Topic 260-10 which provides for calculation of basic and diluted earnings per share. Basic earnings per share
includes no dilution and is computed by dividing net income or loss available to common stockholders by the weighted average number of
common shares outstanding for the period. Diluted earnings per share reflect the potential dilution of securities that could share in
the earnings of an entity. Diluted earnings per share exclude all potentially dilutive shares if their effect is anti-dilutive. There
were no potentially dilutive shares outstanding as at March 31, 2025 and 2024.
*Cash*
Cash
includes cash on hand and balances with banks.
*Foreign
Currency Translation*
The
functional currency of the Companys Canadian-based subsidiary is the Canadian dollar and the US-based parent is the U.S. dollar.
Transactions denominated in currencies other than the functional currency are translated into the functional currency at the exchange
rates prevailing at the dates of the transaction. Monetary assets and liabilities denominated in foreign currencies are translated using
the exchange rate prevailing at the balance sheet date. Non-monetary assets and liabilities are translated using the historical rate
on the date of the transaction. All exchange gains or losses arising from translation of these foreign currency transactions are included
in net income (loss) for the year. In translating the financial statements of the Companys Canadian subsidiaries from their functional
currency into the Companys reporting currency of United States dollars, balance sheet accounts are translated using the closing
exchange rate in effect at the balance sheet date and income and expense accounts are translated using an average exchange rate prevailing
during the reporting period. Adjustments resulting from the translation, if any, are included in cumulative other comprehensive income
(loss) in stockholders deficiency. The Company has not, to the date of these consolidated financial statements, entered into derivative
instruments to offset the impact of foreign currency fluctuations.
| 51 | |
**
*Accounts
Receivable*
Accounts
receivable consists of amounts due to the Company from medical facilities, which receive reimbursement from institutions and third-party
government and commercial payors and their related patients, as a result of the Companys normal business activities. Accounts
receivable is reported on the balance sheets net of an estimated allowance for doubtful accounts. The Company establishes an allowance
for doubtful accounts for estimated uncollectible receivables based on historical experience, assessment of specific risk, review of
outstanding invoices, and various assumptions and estimates that are believed to be reasonable under the circumstances, and recognizes
the provision as a component of selling, general and administrative expenses. Uncollectible accounts are written off against the allowance
after appropriate collection efforts have been exhausted and when it is deemed that a balance is uncollectible.
*Fair
Value of Financial Instruments*
ASC
820 defines fair value, establishes a framework for measuring fair value and expands required disclosure about fair value measurements
of assets and liabilities. ASC 820-10 defines fair value as the exchange price that would be received for an asset or paid to transfer
a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between
market participants on the measurement date. ASC 820-10 also establishes a fair value hierarchy, which requires an entity to maximize
the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. The standard describes three levels
of inputs that may be used to measure fair value:
Level 1 Valuation based on quoted market prices in active markets for identical assets or liabilities.
Level 2 Valuation based on quoted market prices for similar assets and liabilities in active markets.
Level 3 Valuation based on unobservable inputs that are supported by little or no market activity, therefore requiring managements
best estimate of what market participants would use as fair value.
In
instances where the determination of the fair value measurement is based on inputs from different levels of the fair value hierarchy,
the level in the fair value hierarchy within which the entire fair value measurement falls is based on the lowest level input that is
significant to the fair value measurement in its entirety. The Companys assessment of the significance of a particular input to
the fair value measurement in its entirety requires judgment, and considers factors specific to the asset or liability.
Fair
value estimates discussed herein are based upon certain market assumptions and pertinent information available to management. The respective
carrying value of certain on-balance-sheet financial instruments approximated their fair values due to the short-term nature of these
instruments or interest rates that are comparable to market rates. These financial instruments include cash, accounts receivable, deposits
and other receivables, convertible promissory notes, and accounts payable and accrued liabilities. The Companys cash and derivative
liabilities, which are carried at fair values, are classified as a Level 1 and Level 3, respectively. The Companys bank accounts
are maintained with financial institutions of reputable credit, therefore, bear minimal credit risk.
*Property
and Equipment*
Property
and equipment are stated at cost less accumulated depreciation. Depreciation is computed using the straight-line method over the estimated
useful lives of the assets. Leasehold improvements are amortized over the shorter of the lease term or the estimated useful lives of
the assets. Maintenance and repairs are charged to expense as incurred, and improvements and betterments are capitalized. Depreciation
of property and equipment is provided using the straight-line method for all assets with estimated lives as follow:
|
|
Office
equipment |
5
years | |
|
|
Leasehold
improvement |
5
years | |
| 52 | |
**
*Impairment
for Long-Lived Assets*
The
Company applies the provisions of ASC Topic 360, Property, Plant, and Equipment, which addresses financial accounting and reporting for
the impairment or disposal of long-lived assets. ASC 360 requires impairment losses to be recorded on long-lived assets, including right-of-use
assets, used in operations when indicators of impairment are present and the undiscounted cash flows estimated to be generated by those
assets are less than the assets carrying amounts. In that event, a loss is recognized based on the amount by which the carrying
amount exceeds the fair value of the long-lived assets. Loss on long-lived assets to be disposed of is determined in a similar manner,
except that fair values are reduced for the cost of disposal. Based on its review at March 31, 2025 and 2024, the Company believes there
was no impairment of its long-lived assets.
*Leases*
On
April 1, 2019, the Company adopted Accounting Standards Codification Topic 842, Leases (ASC 842) to replace
existing lease accounting guidance. This pronouncement is intended to provide enhanced transparency and comparability by requiring lessees
to record right-of-use assets and corresponding lease liabilities on the balance sheet for most leases. Expenses associated with leases
will continue to be recognized in a manner like previous accounting guidance. The Company adopted ASC 842 utilizing the transition practical
expedient added by the Financial Accounting Standards Board (FASB), which eliminates the requirement that entities apply
the new lease standard to the comparative periods presented in the year of adoption.
The
Company is the lessee in a lease contract when the Company obtains the right to use the asset. Operating leases are included in the line
items right-of-use asset, lease obligation, current, and lease obligation, long-term in the consolidated balance sheet. Right-of-use
(ROU) asset represents the Companys right to use an underlying asset for the lease term and lease obligations represent
the Companys obligations to make lease payments arising from the lease, both of which are recognized based on the present value
of the future minimum lease payments over the lease term at the commencement date. Leases with a lease term of 12 months or less at inception
are not recorded on the consolidated balance sheet and are expensed on a straight-line basis over the lease term in our consolidated
statement of income. The Company determines the lease term by agreement with lessor. As our lease does not provide an implicit interest
rate, the Company uses the Companys incremental borrowing rate based on the information available at commencement date in determining
the present value of future payments.
*Income
Taxes*
The
Company accounts for income taxes in accordance with ASC 740. The Company provides for Federal and Provincial income taxes payable, as
well as for those deferred because of the timing differences between reporting income and expenses for financial statement purposes versus
tax purposes. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between
the carrying amount of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. Deferred
tax assets and liabilities are measured using the enacted tax rates expected to apply to taxable income in the years in which those temporary
differences are expected to be recoverable or settled. The effect of a change in tax rates is recognized as income or expense in the
period of the change. A valuation allowance is established, when necessary, to reduce deferred income tax assets to the amount that is
more likely than not to be realized.
*Research
and Development*
Research
and development costs, which relate primarily to product and software development, are charged to operations as incurred. Under certain
research and development arrangements with third parties, the Company may be required to make payments that are contingent on the achievement
of specific developmental, regulatory and/or commercial milestones. Before a product receives regulatory approval, milestone payments
made to third parties are expensed when the milestone is achieved**.**Milestone payments made to third parties after regulatory approval
is received are capitalized and amortized over the estimated useful life of the approved product.
*Selling,
General and Administrative*
Selling,
general and administrative expenses consist primarily of personnel-related costs including stock-based compensation for personnel in
functions not directly associated with research and development activities. Other significant costs include sales and marketing costs,
investor relation and legal costs relating to corporate matters, professional fees for consultants assisting with business development
and financial matters, and office and administrative expenses.
| 53 | |
*Stock
Based Compensation*
The
Company accounts for share-based payments in accordance with the provision of ASC 718, which requires that all share-based payments issued
to acquire goods or services, including grants of employee stock options, be recognized in the statement of operations based on their
fair values, net of estimated forfeitures. ASC 718 requires forfeitures to be estimated at the time of grant and revised, if necessary,
in subsequent periods if actual forfeitures differ from those estimates. Compensation expense related to share-based awards is recognized
over the requisite service period, which is generally the vesting period.
The
Company accounts for stock-based compensation awards issued to non-employees for services, as prescribed by ASC 718-10, at either the
fair value of the services rendered or the instruments issued in exchange for such services, whichever is more readily determinable,
using the guidelines in ASC 505-50. The Company issues compensatory shares for services including, but not limited to, executive, management,
accounting, operations, corporate communication, financial and administrative consulting services.
*Convertible
Notes Payable and Derivative Instruments*
The
Company has adopted the provisions of ASU 2017-11 to account for the down round features of warrants issued with private placements effective
as of April 1, 2017. In doing so, warrants with a down round feature previously treated as derivative liabilities in the consolidated
balance sheet and measured at fair value are henceforth treated as equity, with no adjustment for changes in fair value at each reporting
period. Previously, the Company accounted for conversion options embedded in convertible notes in accordance with ASC 815. ASC 815 generally
requires companies to bifurcate conversion options embedded in convertible notes from their host instruments and to account for them
as free-standing derivative financial instruments. ASC 815 provides for an exception to this rule when convertible notes, as host instruments,
are deemed to be conventional, as defined by ASC 815-40. The Company accounts for convertible notes deemed conventional and conversion
options embedded in non-conventional convertible notes which qualify as equity under ASC 815, in accordance with the provisions of ASC
470-20, which provides guidance on accounting for convertible securities with beneficial conversion features. Accordingly, the Company
records, as a discount to convertible notes, the intrinsic value of such conversion options based upon the differences between the fair
value of the underlying common stock at the commitment date of the note transaction and the effective conversion price embedded in the
note. Debt discounts under these arrangements are amortized over the term of the related debt.
*Series
B Convertible Preferred Stock*
The
Series B convertible preferred stock (Series B Preferred Stock) was accounted for as mezzanine equity and the embedded
conversion and redemption features was accounted for as derivative liabilities with change in fair value at each reporting period end
charged to consolidated statement of operation in accordance with ASC 480 and ASC 815.
*Preferred
Share Redemption and Conversions*
The
Company accounted for preferred stock redemptions and conversions in accordance to ASU-260-10-S99. For Series A preferred stock redemptions,
the difference between the fair value of consideration transferred to the holders of the preferred stock and the carrying amount of the
preferred stock is accounted as deemed dividend distribution and subtracted from net loss. For Series B preferred stock conversions,
no gain or loss is recognized upon Series B preferred stock conversion except for the fair value adjustment for the conversion and redemption
feature derivative liabilities on the conversion date.
*Recently
Issued Accounting Pronouncements*
Refer
to Note 3 Summary of Significant Accounting Policies to our consolidated financial statements included in Part
II, Item 8 Financial Statements and Supplementary Data in this Annual Report for a discussion of recently issued accounting
pronouncements.
| 54 | |
****
**Off
Balance Sheet Arrangements**
We
have no off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition,
changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources.
**ITEM
7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK**
Not
applicable to a smaller reporting company.
**ITEM
8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA**
Our
financial statements and corresponding notes thereto called for by this item may be found beginning on page F-1 of this Annual Report
on Form 10-K.
**ITEM
9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURES**
None
**ITEM
9A. CONTROLS AND PROCEDURES**
**Evaluation
of Disclosure Controls and Procedures**
The
Company maintains disclosure controls and procedures that are designed to ensure that information required to be disclosed in the Companys
Exchange Act reports is recorded, processed, summarized and reported within the time communicated to the Companys management,
including its Chief Executive Officer and principal financial officer, as appropriate, to allow timely decisions regarding required disclosure
based closely on the definition of disclosure controls and procedures in Rule 13a-15(e). The Companys disclosure
controls and procedures are designed to provide a reasonable level of assurance of reaching the Companys desired disclosure control
objectives. In designing periods specified in the SECs rules and forms, and that such information is accumulated and evaluating
the disclosure controls and procedures, management recognized that any controls and procedures, no matter how well designed and operated,
can provide only reasonable assurance of achieving the desired control objectives, and management necessarily was required to apply its
judgment in evaluating the cost-benefit relationship of possible controls and procedures. The Companys certifying officers have
concluded that the Companys disclosure controls and procedures are effective in reaching that level of assurance.
At
the end of the period being reported upon, the Company carried out an evaluation, under the supervision and with the participation of
the Companys management, including the Companys Chief Executive Officer and principal financial officer, of the effectiveness
of the design and operation of the Companys disclosure controls and procedures. Based on the foregoing, our Chief Executive Officer
and principal financial officer concluded that our disclosure controls and procedures were effective to ensure that the material information
required to be included in our Securities and Exchange Commission reports is accumulated and communicated to our management, including
our principal executive and financial officer, recorded, processed, summarized and reported within the time periods specified in Securities
and Exchange Commission rules and forms relating to the Company, based on the assessment and control of disclosure decisions currently
performed by a small team. The Company plans to expand its management team and build a fulsome internal control framework required by
a more complex entity.
| 55 | |
****
**Managements
Report on Internal Control over Financial Reporting**
Management
of the Company is responsible for establishing and maintaining adequate internal control over financial reporting (as defined in Section
13a-15(f) of the Securities Exchange Act of 1934, as amended). Internal control over financial reporting is a process designed by, or
under the supervision of, the Companys principal financial officer to provide reasonable assurance regarding the reliability of
financial reporting and the preparation of the Companys financial statements for external reporting purposes in conformity with
U.S. generally accepted accounting principles and include those policies and procedures that (i) pertain to the maintenance of records
that in reasonable detail accurately and fairly reflect the transactions and disposition of the assets of the Company; (ii) provide reasonable
assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted
accounting principles, and that receipts and expenditures of the Company are being made only in accordance with authorization of management
and directors of the Company; and (iii) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition,
use or disposition of the Companys assets that could have a material effect on the financial statements.
As
of March 31, 2025, management conducted an assessment of the effectiveness of the Companys internal control over financial reporting
based on the framework established in Internal Control-Integrated Framework issued by the Committee of Sponsoring Organizations (COSO)
of the Treadway Commission (2013). Based on the criteria established by COSO management concluded that the Companys internal control
over financial reporting was effective as of March 31, 2025.
This
Report does not include an attestation report of the Companys independent registered public accounting firm regarding internal
control over financial reporting as smaller reporting companies are not required to include such report. Managements report is
not subject to attestation by the Companys independent registered public accounting firm.
**Limitations
on the Effectiveness of Controls**
Management
has confidence in its internal controls and procedures. The Companys management believes that a control system, no matter how
well designed and operated can provide only reasonable assurance and cannot provide absolute assurance that the objectives of the internal
control system are met, and no evaluation of internal controls can provide absolute assurance that all control issues and instances of
fraud, if any, within a company have been detected. Further, the design of an internal control system must reflect the fact that there
are resource constraints, and the benefits of controls must be considered relative to their costs. Because of the inherent limitation
in all internal control systems, no evaluation of controls can provide absolute assurance that all control issuers and instances of fraud,
if any, within the Company have been detected.
**Changes
in Internal Controls**
There
were no changes in the Companys internal controls over financial reporting that occurred during the three months ended March 31,
2025 that have materially affected, or are reasonably likely to materially affect, our internal controls over financial reporting.
Internal
control systems, no matter how well designed and operated, have inherent limitations. Therefore, even a system which is determined to
be effective cannot provide absolute assurance that all control issues have been detected or prevented. Our systems of internal controls
are designed to provide reasonable assurance with respect to financial statement preparation and presentation.
**ITEM
9B. OTHER INFORMATION**
During
the quarter ended March 31, 2025, no director or officer of the Company adopted or terminated a Rule 10b5-1 trading arrangement
or non-Rule 10b5-1 trading arrangement, as each term is defined in Item 408(a) of Regulation S-K.
**ITEM
9C. DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTIONS**
Not
applicable.
| 56 | |
**PART
III**
**ITEM
10. DIRECTORS AND EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE**
Our
executive officers and directors are as follows:
|
Name |
|
Age |
|
Position | |
|
Waqaas Al-Siddiq |
|
40 |
|
President,
Chief Executive Officer and Chairman of the Board of Directors | |
|
David A. Rosa |
|
60 |
|
Director (Independent) | |
|
Ron McClurg |
|
67 |
|
Director (Independent) | |
|
Jainal Bhuiyan* |
|
42 |
|
Director (Independent) | |
|
John Ayanoglou |
|
59 |
|
Chief Financial Officer | |
*Appointed
as a director as of August 15, 2024
**Waqaas
Al-Siddiq: President, Chief Executive Officer and Chairman of the Board of Directors.** Waqaas Al-Siddiq is the founder of iMedical
and has been its Chairman and Chief Executive Officer since inception in July 2014. Prior to that, from July 2010 through July 2014,
he was the Chief Technology Officer of Sensor Mobility Inc., a Canadian private company engaged in research and development activities
within the remote monitoring segment of preventative care and that was acquired by iMedical in August 2014. Mr. Al-Siddiq also provided
consulting services with respect to technology strategy during this time. Mr. Al-Siddiq serves as a member of the Board of Directors
as he is the founder of iMedical and his current executive position with the Company. We also believe that Mr. Al-Siddiq is qualified
due to his experience as an entrepreneur and raising capital.
**David
Rosa: Director**. Mr. Rosa has been a director of the Company since May 3, 2016. In addition, he is a director and Chairman of
the board for Neuro Event Labs, a privately held company based in Finland that is developing a diagnostic epilepsy video technology.
He currently also serves as the CEO and President of NeuroOne, a medical technology company, having served in various capacities since
October 2016. He was the CEO and President of Sunshine Heart, a publicly-held early-stage medical device company, from October 2009 through
November 2015. From 2008 to November 2009, Mr. Rosa served as CEO of Milksmart, a company that specializes in medical devices for animals.
From 2004 to 2008, Mr. Rosa served as the Vice President of Global Marketing for Cardiac Surgery and Cardiology at St. Jude Medical.
He is a member of the Board of Directors of QXMedical, a Montreal-based medical device company, and other privately-held companies. We
believe Mr. Rosa is qualified to serve as a director due to his senior leadership experience in the medical device industry, and his
expertise in market development, clinical affairs, commercialization and public and private financing. as well as his strong technical,
strategic and global operating experience.
**Ronald
McClurg: Director.**Mr. McClurg is a senior financial executive with over 30 years of experience leading the finance, administrative
and IT functions in private and public companies. He has served as Chief Financial Officer of NeuroOne Medical Technologies Corp. (Nasdaq:NMTC)
since 2021. . From 2003 to 2019, Mr. McClurg was the Vice President, Finance & Administration and Chief Financial Officer for Incisive
Surgical, Inc. Prior to 2002, Mr. McClurg served as Chief Financial Officer of several other publicly-held companies. He serves on the
Board of Governors and as Audit Committee Chair of Biomagnetic Sciences, LLC and as Audit Chair of Healthcare Triangle, Inc. (Nasdaq:
HTCI). We believe that Mr. McClurg is qualified to serve as a director due to his extensive background in corporate finance.
**Jainal
Bhuiyan: Director.**Mr. Bhuiyan has 18 years healthcare investment banking and capital markets
and financial advisory experience. He is currently a Senior Managing Director in investment banking at Paulson Investment Company. Prior
to Paulson he was a partner at HRA Capital, a boutique investment bank he co-founded in 2012. He has advised private and public healthcare
companies from start-ups to commercially mature enterprises, totaling more than $3B in transactions. He holds FINRA Series 7, Series 63
and Series 79 licenses. We believe that Mr. Bhuiyan is qualified to serve as a director based on his outstanding and unique experience
in investment banking in the healthcare sector. Prior to Provident he worked as a Management Analyst with BearingPoint, consulting to the Department of Defense.
Mr. Bhuiyan has a Bachelor of Science degree from Cornell Universitys Charles H. Dyson School of Applied Economics and Management.
| 57 | |
**John
Ayanoglou: Chief Financial Officer.**Mr. Ayanoglou has served as our Chief Financial Officer since 2017 and has served as Chief
Financial Officer of four other companies during his career, three of which were publicly-listed. Mr. Ayanoglou currently serves as a
director of DX Mortgage Investment Corporation (2019), Green Sky Labs (2020) and Omega Wealthguard (2020). From 2011 to 2017, Mr. Ayanoglou
served as Executive Vice President of Build Capital. Prior to this, he served as Chief Financial Officer and Senior Vice President of
Equitable Group Inc. (TSX: ETC) and its wholly owned subsidiary, Equitable Bank, Canadas 9th largest bank during the
global banking crisis, from 2008 through 2011. Mr. Ayanoglou also served as CFO, Vice President and Corporate Secretary of Xceed Mortgage
Corporation (TSX: XMC), from 2004 to 2008. He launched his career in financial services while providing advisory services to clients
at PricewaterhousCoopers LLP and working for Scotiabank and TD Bank. He is a chartered accountant and a member of CPA Canada. He received
his ICD.D designation from the Institute of Corporate Directors at the Rotman School of Business.
There
are no family relationships among any of our current officers and directors.
****
**Section
16(a) Beneficial Ownership Reporting Compliance**
Section
16(a) of the Securities Exchange Act requires that our directors and executive officers and persons who beneficially own more than 10%
of our common stock (referred to herein as the reporting persons) file with the SEC various reports as to their ownership
of and activities relating to our common stock. Such reporting persons are required by the SEC regulations to furnish us with copies
of all Section 16(a) reports they file. Based solely on our review of copies of the reports filed with the SEC and the written representations
of our directors and executive officers, we believe that all reporting requirements for fiscal year 2025 were complied with by each person
who at any time during the 2025 fiscal year was a director or an executive officer or held more than 10% of our common stock.
**Corporate
Governance**
The
business and affairs of the Company are managed under the direction of our Board of Directors, which is comprised of Mr. Al-Siddiq, Mr.
Rosa, Mr. McClurg and Mr. Bhuiyan.
| 58 | |
****
**Term
of Office**
Directors
are appointed to hold office until the next annual general meeting of stockholders, and until their successors have been duly elected
and qualified, or until their earlier resignation or removal from office in accordance with our bylaws. Our officers are appointed by
our Board and hold office until removed by our Board or their resignation.
**Clawback
Policy**
The
Board has adopted a clawback policy which allows us to recover performance-based compensation, whether cash or equity, from a current
or former executive officer in the event of an Accounting Restatement. The clawback policy defines an Accounting Restatement as an accounting
restatement of our financial statements due to our material noncompliance with any financial reporting requirement under the securities
laws. Under such policy, we may recoup incentive-based compensation previously received by an executive officer that exceeds the amount
of incentive-based compensation that otherwise would have been received had it been determined based on the restated amounts in the Accounting
Restatement.
The
Board has the sole discretion to determine the form and timing of the recovery, which may include repayment, forfeiture and/or an adjustment
to future performance-based compensation payouts or awards. The remedies under the clawback policy are in addition to, and not in lieu
of, any legal and equitable claims available to the Company.
**Insider
Trading Policies**
We
have adopted an insider trading policy governing the purchase, sale, and other dispositions of our securities by directors, senior management,
and employees. A copy of the Insider Trading Policy has been filed herewith, and attached hereto as Exhibit 19 to the current annual report.
**Board
Committees**
Our
Board of Directors has established three standing committees: an audit committee, a nominating and corporate governance committee, and
a compensation committee, which are described below. Members of these committees are elected annually at the regular board meeting held
in conjunction with the annual stockholders meeting.
**Audit
Committee**
The
Audit Committee, among other things, is responsible for:
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selecting a qualified firm
to serve as the independent registered public accounting firm to audit our financial statements; | |
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| |
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helping to ensure the independence
and performance of the independent registered public accounting firm; | |
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discussing the scope and
results of the audit with the independent registered public accounting firm, and reviewing, with management and the independent accountants,
our interim and year-end operating results; | |
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developing procedures for
employees to submit concerns anonymously about questionable accounting or audit matters; | |
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reviewing our policies
on risk assessment and risk management; | |
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reviewing related
party transactions; | |
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obtaining and reviewing
a report by the independent registered public accounting firm at least annually, that describes our internal quality-control procedures,
any material issues with such procedures, and any steps taken to deal with such issues when required by applicable law; and | |
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approving (or,
as permitted, pre-approving) all audit and all permissible non-audit services, other than de minimis non-audit services, to be performed
by the independent registered public accounting firm. | |
| 59 | |
The
Board has affirmatively determined that each member of the Audit Committee meets the additional independence criteria applicable to
audit committee members under SEC rules and the NASDAQ Stock Market. The Board of Directors has adopted a written charter setting
forth the authority and responsibilities of the Audit Committee. The Board has affirmatively determined that each member of the
Audit Committee is financially literate, and that Ronald McClurg meets the qualifications of an Audit Committee financial expert.
The Audit Committee consists of Ronald McClurg and David A. Rosa. Ronald McClurg is the chairman of the Audit
Committee. Norman Betts was the chairman of the Audit Committee until his resignation from the Board in August 2022.
**Compensation
Committee**
The
functions of the compensation committee include:
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reviewing and approving,
or recommending that our Board approve, the compensation of our executive officers; | |
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| |
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reviewing and recommending
that our Board approve the compensation of our directors; | |
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reviewing and approving,
or recommending that our Board approve, the terms of compensatory arrangements with our executive officers; | |
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administering our stock
and equity incentive plans; | |
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selecting independent compensation
consultants and assessing conflict of interest compensation advisers; | |
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reviewing and approving,
or recommending that our Board approve, incentive compensation and equity plans; and; | |
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reviewing and establishing
general policies relating to compensation and benefits of our employees and reviewing our overall compensation philosophy. | |
The
Board has adopted a written charter setting forth the authority and responsibilities of the Compensation Committee. The Compensation
Committee consists of David Rosa and Jainal Buiyan. Dave Rosa is the chairman of the Compensation Committee.
**Nominating
and Corporate Governance Committee**
The
Nominating and Corporate Governance Committee, among other things, is responsible for:
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identifying and screening
individuals qualified to become members of the Board, consistent with the criteria approved by the Board; | |
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making recommendations
to the Board regarding the selection and approval of the nominees for director to be submitted to a stockholder vote at the annual
meeting of stockholders; | |
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developing and recommending
to the Board a set of corporate governance guidelines applicable to the Company, to review these principles at least once a year
and to recommend any changes to the Board; | |
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| |
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overseeing the Companys
corporate governance practices and procedures, including identifying best practices and reviewing and recommending to the Board for
approval any changes to the documents, policies and procedures in the Companys corporate governance framework, including its
certificate of incorporation and by-laws; and | |
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| |
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developing subject to approval
by the Board, a process for an annual evaluation of the Board and its committees and to oversee the conduct of this annual evaluation. | |
| 60 | |
The
Board of Directors has adopted a written charter setting forth the authority and responsibilities of the Nominating and Corporate Governance
Committee. The Nominating and Corporate Governance Committee consists of David Rosa and Ron McClurg, with David Rosa serving as chairman.
**Code
of Business Conduct and Ethics Policy**
We
adopted a Code of Business Conduct and Ethics as of April 12, 2016, that applies to, among other persons, our principal executive officers,
principal financial officer, principal accounting officer or controller, and persons performing similar functions. Our Code of Business
Conduct and Ethics is available on our website www.biotricity.com.
**Director
Independence**
We
use the definition of independence of The NASDAQ Stock Market to make this determination. NASDAQ Listing Rule 5605(a)(2)
provides that an independent director is a person other than an officer or employee of the company or any other individual
having a relationship, which, in the opinion of the Companys Board, would interfere with the exercise of independent judgment
in carrying out the responsibilities of a director. The NASDAQ listing rules provide that a director cannot be considered independent
if:
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The director is, or at
any time during the past three years was, an employee of the company; | |
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| |
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The director or a family
member of the director accepted any compensation from the company in excess of $120,000 during any period of 12 consecutive months
within the three years preceding the independence determination (subject to certain exclusions, including, among other things, compensation
for board or board committee service); | |
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A family member of the
director is, or at any time during the past three years was, an executive officer of the company; | |
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The director or a family
member of the director is a partner in, controlling stockholder of, or an executive officer of an entity to which the company made,
or from which the company received, payments in the current or any of the past three fiscal years that exceed 5% of the recipients
consolidated gross revenue for that year or $200,000, whichever is greater (subject to certain exclusions); | |
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| |
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The director or a family
member of the director is employed as an executive officer of an entity where, at any time during the past three years, any of the
executive officers of the company served on the compensation committee of such other entity; or | |
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The director or a family
member of the director is a current partner of the companys outside auditor, or at any time during the past three years was
a partner or employee of the companys outside auditor, and who worked on the companys audit. | |
Under
such definitions, Mr. McClurg. Mr. Bhuiyan and Mr. Rosa are independent directors.
| 61 | |
****
**ITEM
11. EXECUTIVE COMPENSATION**
The
following table set forth certain information as to the compensation paid to the executive officers of the Company and iMedical, its
predecessor, for the fiscal years ended March 31, 2025 and March 31, 2024.
|
Name and Principal Position | |
Fiscal Year | | |
Salary | | |
Bonus | | |
Stock Awards | | |
Option/Warrant Awards(1) | | |
Non-Equity Incentive Plan Compensation | | |
All Other Compensation | | |
Total | | |
|
Waqaas Al-Siddiq | |
| 2025 | | |
$ | 480,000 | | |
$ | 240,000 | | |
| | | |
$ | | | |
| | | |
$ | 12,000 | | |
$ | 732,000 | | |
|
Chief Executive Officer | |
| 2024 | | |
$ | 480,000 | | |
$ | 240,000 | | |
| | | |
$ | 522,153 | | |
| | | |
$ | 12,000 | | |
$ | 1,254,153 | | |
|
| |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
|
John Ayanoglou | |
| 2025 | | |
$ | 300,000 | | |
$ | 250,000 | | |
| | | |
| 176,023 | | |
| | | |
$ | 12,000 | | |
$ | 738,023 | | |
|
Chief Financial Officer | |
| 2024 | | |
$ | 300,000 | | |
$ | 250,000 | | |
| | | |
$ | | | |
| | | |
$ | 12,000 | | |
$ | 562,000 | | |
|
|
(1) |
For assumptions made in
such valuation, see Note 7 to our audited financial statements included in this Annual report on Form 10-K, commencing on page F-1.
Amounts shown as option awards for Mr. Ayanoglou were granted as warrants, while he was not a member of the Companys options
program. On June 21, 2024, Mr. Ayanoglou was awarded a grant of 21,585 warrants that vested on grant, and have a 10-year term, and
an exercise price of $1.48. | |
| 62 | |
****
**Outstanding
Equity Awards at Fiscal Year-End**
The
following table provides information about the number of outstanding equity awards held by our named executive officers at March 31,
2025:
|
| |
| |
| |
| | |
Option Awards(1) | | |
| |
|
Name | |
Award Type | |
Grant Date | |
Number of securities underlying unexercised options or warrants exercisable | | |
Number of securities underlying unexercised options or warrants exercisable | | |
Option or Warrant exercise price ($) | | |
Option or Warrant expiration date | |
|
Waqaas Al-Siddiq | |
Option | |
2-14-25 | |
| 900,000 | (2) | |
| | | |
$ | 0.43 | | |
2-14-35 | |
|
John Ayanoglou | |
Warrant | |
10-26-17 | |
| 8,333 | (2,3) | |
| | | |
$ | 0.43 | | |
12-31-30 | |
|
John Ayanoglou | |
Warrant | |
3-31-18 | |
| 8,333 | (2,3) | |
| | | |
$ | 0.43 | | |
12-31-30 | |
|
John Ayanoglou | |
Warrant | |
6-30-18 | |
| 8,333 | (2,3) | |
| | | |
$ | 0.43 | | |
12-31-30 | |
|
John Ayanoglou | |
Warrant | |
9-30-18 | |
| 8,333 | (2,3) | |
| | | |
$ | 0.43 | | |
12-31-30 | |
|
John Ayanoglou | |
Warrant | |
12-31-18 | |
| 8,333 | (2,3) | |
| | | |
$ | 0.43 | | |
12-30-28 | |
|
John Ayanoglou | |
Warrant | |
3-31-19 | |
| 8,333 | (2,3) | |
| | | |
$ | 0.43 | | |
3-30-29 | |
|
John Ayanoglou | |
Warrant | |
6-30-19 | |
| 8,333 | (2,3) | |
| | | |
$ | 0.43 | | |
6-29-29 | |
|
John Ayanoglou | |
Warrant | |
9-30-19 | |
| 8,333 | (2,3) | |
| | | |
$ | 0.43 | | |
9-29-29 | |
|
John Ayanoglou | |
Warrant | |
12-31-19 | |
| 8,333 | (2,3) | |
| | | |
$ | 0.43 | | |
12-30-29 | |
|
John Ayanoglou | |
Warrant | |
3-31-20 | |
| 8,333 | (2,3) | |
| | | |
$ | 0.43 | | |
3-31-30 | |
|
John Ayanoglou | |
Warrant | |
6-30-20 | |
| 8,333 | (2,3) | |
| | | |
$ | 0.43 | | |
6-30-30 | |
|
John Ayanoglou | |
Warrant | |
9-30-20 | |
| 8,333 | (2,3) | |
| | | |
$ | 0.43 | | |
9-30-30 | |
|
John Ayanoglou | |
Warrant | |
1-24-20 | |
| 8,333 | (2,3) | |
| | | |
$ | 0.43 | | |
1-23-30 | |
|
John Ayanoglou | |
Warrant | |
12-31-20 | |
| 8,333 | (2,3) | |
| | | |
$ | 0.43 | | |
12-31-30 | |
|
John Ayanoglou | |
Warrant | |
3-31-21 | |
| 8,333 | (2,3) | |
| | | |
$ | 0.43 | | |
3-31-31 | |
|
John Ayanoglou | |
Warrant | |
4-30-17 | |
| 1,250 | (2,3) | |
| | | |
$ | 0.43 | | |
12-31-30 | |
|
John Ayanoglou | |
Warrant | |
5-31-17 | |
| 1,250 | (2,3) | |
| | | |
$ | 0.43 | | |
12-31-30 | |
|
John Ayanoglou | |
Warrant | |
6-30-17 | |
| 1,250 | (2,3) | |
| | | |
$ | 0.43 | | |
12-31-30 | |
|
John Ayanoglou | |
Warrant | |
7-31-17 | |
| 1,250 | (2,3) | |
| | | |
$ | 0.43 | | |
12-31-30 | |
|
John Ayanoglou | |
Warrant | |
8-31-17 | |
| 1,250 | (2,3) | |
| | | |
$ | 0.43 | | |
12-31-30 | |
|
John Ayanoglou | |
Warrant | |
9-30-17 | |
| 2,917 | (2,3) | |
| | | |
$ | 0.43 | | |
12-31-30 | |
|
John Ayanoglou | |
Warrant | |
9-30-17 | |
| 3,333 | (2,3) | |
| | | |
$ | 0.43 | | |
12-31-30 | |
|
John Ayanoglou | |
Warrant | |
12-5-17 | |
| 2,301 | (2,3) | |
| | | |
$ | 0.43 | | |
12-31-30 | |
|
John Ayanoglou | |
Warrant | |
6-30-21 | |
| 8,333 | (2,3) | |
| | | |
$ | 0.43 | | |
6-30-31 | |
|
John Ayanoglou | |
Warrant | |
9-30-21 | |
| 8,333 | (2,3) | |
| | | |
$ | 0.43 | | |
9-30-31 | |
|
John Ayanoglou | |
Warrant | |
12-31-21 | |
| 8,333 | (2,3) | |
| | | |
$ | 0.43 | | |
12-31-31 | |
|
John Ayanoglou | |
Warrant | |
3-31-22 | |
| 6,266 | (2,3) | |
| | | |
$ | 0.43 | | |
3-31-32 | |
|
John Ayanoglou | |
Warrant | |
6-30-22 | |
| 8,971 | (2,3) | |
| | | |
$ | 0.43 | | |
6-30-32 | |
|
John Ayanoglou | |
Warrant | |
9-30-22 | |
| 19,714 | (2,3) | |
| | | |
$ | 0.43 | | |
9-30-32 | |
|
John Ayanoglou | |
Warrant | |
12-31-22 | |
| 36,464 | (2,3) | |
| | | |
$ | 0.43 | | |
12-30-32 | |
|
John Ayanoglou | |
Warrant | |
02-14-25 | |
| 500,000 | (2) | |
| | | |
$ | 0.43 | | |
02-14-35 | |
|
(1) |
Unless otherwise indicated,
vesting of all options and warrants is subject to continued service on the applicable vesting date. | |
|
(2) |
The shares subject to the
options/warrants, as applicable, vested in full upon the date of grant. | |
|
(3) |
The shares repriced from original issuance date price to $0.43 on 02-14-25. | |
| 63 | |
**Employment
Agreements**
**Waqaas
Al-Siddiq**
We
entered into an employment agreement with Mr. Al-Siddiq dated as of April 10, 2020. Pursuant to the Employment Agreement, Mr. Al-Siddiq
(Executive) will continue to serve as the Corporations Chief Executive Officer. The term of the Employment Agreement
is for 12 months unless it is earlier terminated pursuant to its terms and it shall be automatically renewed for successive one year
periods until the Executive or the Company delivers to the other party a written notice of their intent not to renew the employment term
at least 30 days prior to the expiration of the then effective employment term. During the term of the Employment Agreement, Executive
salary was initially $390,000, subject to any increase approved by the Companys board. For the years ended March 31, 2024 and
2025, Mr. Al-Sidddiqs salary was $480,000 and $480,000 per annum. Under the Employment Agreement, the Executive is eligible to
earn a cash and/or equity bonus of up to 50% of his then annual salary. In the event that the Executive is terminated without just cause
or terminates for good reason (as these terms are defined in the Employment Agreement), the Executive will be entitled to a severance
payment equal to 12 months of salary paid on a monthly basis and accrued but unused vacation. Mr. Al-Siddiq is also compensated through
period, approved option grants.
This
summary is qualified in all respects by the actual terms of the employment agreement, which was filed as Exhibit 10.1 to our current
report on Form 8-K on April 13, 2020.
**John
Ayanoglou**
In
connection with Mr. Ayanoglous official appointment as Chief Financial Officer effective as of October 27, 2017, the Company agreed
to pay Mr. Ayanoglou an initial base salary of $200,000, subject to approved increases and an approved cash or equity bonus. Mr. Ayanoglous
base salary for calendar year 2022, 2023, 2024 and 2025 was set at $300,000 and $300,000. In addition, the Company agreed to grant Mr.
Ayanoglou warrants to purchase 33,333 shares (200,000 shares on a pre-reverse-split basis) of the Companys common stock, during
each year of his tenure, granted in equal quarterly installments starting with the first fiscal quarter of employment. The warrants vest
monthly on a pro-rata basis over a period of 12 months, with the same 10-year term and the same rights and protections as executive options
awarded under the Companys 2016 Equity Incentive Plan.
**Director
Compensation**
The
following table sets forth a summary of the compensation for our non-employee directors during the fiscal years ended March 31, 2025
and March 31, 2024.
|
Name | |
Year | | |
Fees Earned or Paid in Cash | | |
Stock Awards | | |
Option Awards | | |
Non-Equity Incentive Plan Compensation | | |
Nonqualified Deferred Compensation Earnings | | |
All Other Compensation | | |
Total | | |
|
Ronald McClurg (1) | |
| 2025 | | |
$ | 16,000 | | |
| | | |
| 8,801 | | |
| | | |
| | | |
| | | |
$ | 24,801 | | |
|
| |
| 2024 | | |
$ | 16,000 | | |
| - | | |
| 16,617 | | |
| - | | |
| - | | |
| - | | |
$ | 32,617 | | |
|
| |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
|
David A. Rosa (2) | |
| 2025 | | |
$ | 60,000 | | |
| | | |
| 44,006 | | |
| | | |
| | | |
| | | |
$ | 104,006 | | |
|
| |
| 2024 | | |
$ | 60,000 | | |
| | | |
| - | | |
| | | |
| | | |
| | | |
$ | 60,000 | | |
|
| |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
|
Jainal Bhuiyan (3) | |
| 2025 | | |
$ | | |
| | | |
| 44,006 | | |
| | | |
| | | |
| | | |
| 44,006 | | |
|
| |
| 2024 | | |
$ | | |
| | | |
| - | | |
| | | |
| | | |
| | | |
| | | |
|
(1) |
Mr. McClurg was appointed to the board on May 2, 2022.
On February 14,2025, Mr. McClurg was awarded a grant of 25000 options, that vested on grant, and have a 10-year term, and an exercise
price of $0.43. | |
| 64 | |
|
(2) |
On
February 14, 2025, in addition to previous grants, Mr. Rosa was awarded a grant of 125,000 options, that vested on grant, and have a
10-year term, and an exercise price of $0.43. | |
|
(3) |
Mr. Bhuiyan was appointed to the board on August 15, 2024. On February 14, 2025, Mr. Bhuiyan was awarded a grant of 125,000 options, that vested on grant, and have a 10-year term, and an exercise
price of $0.43. | |
**ITEM
12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS**
The
following table shows the beneficial ownership of our common stock as of July 14, 2025 held by (i) each affiliated person known to us
to be the beneficial owner of more than five percent of our common stock; (ii) each director; (iii) each executive officer; and (iv)
all directors, director nominees and executive officers as a group.
Beneficial
ownership is determined in accordance with the rules of the SEC, and generally includes voting power and/or investment power with respect
to the securities held. Shares of common stock subject to options and warrants currently exercisable or which may become exercisable
within 60 days of July 15, 2025 are deemed outstanding and beneficially owned by the person holding such options or warrants for purposes
of computing the number of shares and percentage beneficially owned by such person, but are not deemed outstanding for purposes of computing
the percentage beneficially owned by any other person. Except as indicated in the footnotes to this table, the persons or entities named
have sole voting and investment power with respect to all shares of our common stock shown as beneficially owned by them.
The
following table assumes 26,728,411 shares are outstanding as of July 15, 2025, consisting of 26,567,769 shares of common stock and 160,672
Exchangeable Share common stock equivalents. The percentages below assume the exchange by all of the holders of Exchangeable Shares
of iMedical for an equal number of shares of our common stock in accordance with the terms of the Exchangeable Shares. Unless
otherwise indicated, the address of each beneficial holder of our common stock is our corporate address.
|
Name of Beneficial Owner | |
Shares of Common Stock Benefically Owned | | |
% of Shares of Common Stock Benefically Owned | | |
|
Waqaas Al-Siddiq (1) | |
| 2,248,723 | | |
| 8.02 | % | |
|
John Ayanoglou (2) | |
| 743,161 | | |
| 2.65 | % | |
|
Dave Rosa (2) | |
| 359,689 | | |
| * | | |
|
Jainal Bhuiyan (2) | |
| 150,000 | | |
| * | | |
|
Ron McClurg (2) | |
| 25,000 | | |
| * | | |
|
Sohaira Siddiqui | |
| 1,916,910 | | |
| 6.84 | % | |
|
Mohammad Siddiqui | |
| 1,898,159 | | |
| 6.77 | % | |
|
Rizwana Siddiqui | |
| 1,790,434 | | |
| 6.39 | % | |
|
Rizwan Rahman | |
| 1,790,434 | | |
| 6.39 | % | |
|
Mohamed Abdi | |
| 1,790,434 | | |
| 6.39 | % | |
|
| |
| | | |
| | | |
|
All directors and executive officers as a group (5 person) | |
| 3,401,573 | | |
| 12.58 | % | |
*
Less than 1%
(1)
Includes an option to purchase an aggregate of 983,333 of the Companys shares.
(2)
Includes options and warrants that were granted during 2017 to 2025, that are exercisable within 60 days of July 15, 2025.
| 65 | |
**ITEM
13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE**
None.
****
**ITEM
14. PRINCIPAL ACCOUNTANT FEES AND SERVICES**
The
following table presents the fees for professional audit services for the fiscal years ended March 31, 2025 and March 31, 2024.
|
Fee Category | |
2025 | | |
2024 | | |
|
Audit Fees (1) | |
$ | 118,447 | | |
$ | 155,377 | | |
|
Audit-Related Fees (2) | |
| - | | |
| - | | |
|
Tax Fees | |
| - | | |
| - | | |
|
All Other Fees | |
| - | | |
| - | | |
|
Total Fees | |
$ | 118,447 | | |
$ | 155,377 | | |
|
(1) |
Audit fees consist of audit
and review services, consents and review of documents filed with the SEC. | |
|
|
| |
|
(2) |
Audit-related fees consists
of fees for professional services rendered in connection with the Companys registration statements and offerings. | |
**Pre-Approval
Policies and Procedures**
In
its capacity, the Board pre-approves all audit (including audit-related) and permitted non-audit services to be performed by the independent
auditors. The Board will annually approve the scope and fee estimates for the year-end audit to be performed by the Companys independent
auditors for the fiscal year. With respect to other permitted services, the Board pre-approves specific engagements, projects and categories
of services on a fiscal year basis, subject to individual project and annual maximums. To date, the Company has not engaged its auditors
to perform any non-audit related services.
| 66 | |
**PART
IV**
**ITEM
15. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES**
|
Exhibit |
|
Description | |
|
3.1 |
|
Amended and Restated Articles of Incorporation (filed as Exhibit 3(i) to the Registrants Current Report on Form 8-K filed with the SEC on February 3, 2016 and incorporated herein by reference). | |
|
3.2 |
|
Amended and Restated By-Laws (filed as Exhibit 3(ii) to the Registrants Current Report on Form 8-K filed with the SEC on February 3, 2016 and incorporated herein by reference). | |
|
4.1 |
|
Certificate of Designation of Preferences, Rights and Limitations of Special Voting Preferred Stock of Biotricity Inc. (filed as Exhibit 4.1 to the Registrants Current Report on Form 8-K filed with the SEC on February 3, 2016 and incorporated herein by reference). | |
|
4.2 |
|
Exchangeable Share provisions with respect to the special rights and restrictions attached to Exchangeable Shares (filed as Exhibit 4.2 to the Registrants Current Report on Form 8-K filed with the SEC on February 3, 2016 and incorporated herein by reference). | |
|
4.3 |
|
Form of Secured Convertible Debenture due September 21, 2017 (filed as Exhibit 4.3 to the Registrants Current Report on Form 8-K filed with the SEC on February 3, 2016 and incorporated herein by reference). | |
|
4.4 |
|
Form of Warrant (filed as Exhibit 4.4 to the Registrants Current Report on Form 8-K filed with the SEC on February 3, 2016 and incorporated herein by reference). | |
|
4.5 |
|
Form of Convertible Promissory Note (filed as Exhibit 4.5 to the Registrants Transition Report on Form 10-KT filed with the SEC on April 13, 2016 and incorporated herein by reference). | |
|
4.6 |
|
Form of Warrant (filed as Exhibit 4.6 to the Registrants Transition Report on Form 10-KT filed with the SEC on April 13, 2016 and incorporated herein by reference). | |
|
4.7 |
|
Form of Warrant (filed as Exhibit 4.1 to the Registrants Current Report on Form 8-K filed with the SEC on March 9, 2017 and incorporated herein by reference). | |
|
4.8 |
|
Form of Placement Agent Warrant (filed as Exhibit 4.2 to the Registrants Current Report on Form 8-K filed with the SEC on March 9, 2017 and incorporated herein by reference). | |
|
4.9 |
|
Form of Promissory Note (filed as Exhibit 10.3 to the Registrants Current Report on Form 8-K filed with the SEC on March 9, 2017 and incorporated herein by reference). | |
|
4.10 |
|
Form of Promissory Note (filed as Exhibit 10.2 to the Registrants Current Report on Form 8-K filed with the SEC on July 12, 2019 and incorporated herein by reference). | |
|
4.11 |
|
Certificate of Designation of Rights, Powers, Preferences, Privileges and Restrictions of Series A Convertible Preferred Stock (filed as Exhibit 3.1 to the Registrants Current Report on Form 8-K filed with the SEC on December 20, 2019 and incorporated herein by reference). | |
|
4.12 |
|
Promissory Note between Biotricity Ic. and Cross River Bank (filed as exhibit 4.12 to the Registrants Annual Report on Form 10-K for the fiscal year ended March 31, 2020 filed with the SEC on July 15, 2020 and incorporated herein by reference). | |
|
4.13 |
|
Description of Registrants Securities | |
|
10.1 |
|
Exchange Agreement, dated February 2, 2016, among Biotricity Inc., Biotricity Callco Inc., Biotricity Exchangeco Inc., iMedical Innovation Inc. and the Shareholders of iMedical Innovations Inc. (filed as Exhibit 10.1 to the Registrants Current Report on Form 8-K filed with the SEC on February 3, 2016 and incorporated herein by reference). | |
|
10.2 |
|
Assignment and Assumption Agreement, dated as of February 2, 2016, by and between Biotricity Inc. and W270 SA (filed as Exhibit 10.2 to the Registrants Current Report on Form 8-K filed with the SEC on February 3, 2016 and incorporated herein by reference). | |
|
10.3 |
|
Voting and Exchange Trust Agreement, as of February 2, 2016, among Biotricity Inc., Biotricity Callco Inc., Biotricity Exchangeco Inc. and Computershare filed as Exhibit 10.3 to the Registrants Current Report on Form 8-K filed with the SEC on February 3, 2016 and incorporated herein by reference). | |
|
10.4 |
|
Support Agreement, made as of February 2, 2016, among Biotricity Inc., Biotricity Callco Inc. and Biotricity Exchangeco Inc. (filed as Exhibit 10.4 to the Registrants Current Report on Form 8-K filed with the SEC on February 3, 2016 and incorporated herein by reference). | |
|
10.5* |
|
2016 Equity Incentive Plan (filed as Exhibit 10.5 to the Registrants Current Report on Form 8-K filed with the SEC on February 3, 2016 and incorporated herein by reference). | |
| 67 | |
|
10.6 |
|
Exclusivity & Royalty Agreement, dated as of September 15, 2014, by and between iMedical Innovation Inc. and CardioComm Solutions, Inc. (Filed as Exhibit 10.6 to the Registrants Current Report on Form 8-K filed with the SEC on February 3, 2016 and incorporated herein by reference). | |
|
10.7* |
|
Employment Agreement dated April 12, 2016 with Waqaas Al-Siddiq (filed as Exhibit 10.7 to the Registrants Transition Report on Form 10-KT filed with the SEC on April 13, 2016 and incorporated herein by reference). | |
|
10.8 |
|
Form of Subscription Agreement for convertible promissory notes and warrants (filed as Exhibit 10.8 to the Registrants Transition Report on Form 10-KT filed with the SEC on April 13, 2016 and incorporated herein by reference). | |
|
10.9 |
|
Investment Banking Agreement, as amended (filed as Exhibit 10.1 to the Registrants Current Report on Form 8-K filed with the SEC on March 9, 2017 and incorporated herein by reference). | |
|
10.10 |
|
Form of Subscription Agreement (filed as Exhibit 10.2 to the Registrants Current Report on Form 8-K filed with the SEC on March 9, 2017 and incorporated herein by reference). | |
|
10.11+ |
|
Software Development and Services Agreement, dated as of September 15, 2014, by and between iMedical Innovations Inc. and CardioComm Solutions, Inc. (filed as Exhibit 10.11 to the Registrants Transition Report on Form 10-KT filed with the SEC on June 29, 2017 and incorporated herein by reference). | |
|
10.12 |
|
Form of Securities Purchase Agreement (filed as Exhibit 10.1 to the Registrants Current Report on Form 8-K filed with the SEC on December 26, 2017 and incorporated herein by reference). | |
|
10.14 |
|
Form of Promissory Note (filed as Exhibit 10.1 to the Registrants Current Report on Form 8-K filed with the SEC on January 15, 2019 and incorporated herein by reference). | |
|
10.15 |
|
Form of Purchase Agreement (filed as Exhibit 10.2 to the Registrants Current Report on Form 8-K filed with the SEC on January 15, 2019 and incorporated herein by reference). | |
|
10.16 |
|
Form of Subscription Agreement (filed as Exhibit 10.1 to the Registrants Current Report on Form 8-K filed with the SEC on July 12, 2019 and incorporated herein by reference). | |
|
10.17 |
|
Form of Securities Purchase Agreement (filed as Exhibit 10.1 to the Registrants Current Report on Form 8-K filed with the SEC on December 20, 2019 and incorporated herein by reference). | |
|
10.18 |
|
Employment Agreement between the Company and Waqaas Al-Siddiq filed as Exhibit 10.1 to the Registrants Current Report on Form 8-K filed with the SEC on April 13, 2020 and incorporated herein by reference). | |
|
10.19 |
|
Form of Subscription Agreement (filed as Exhibit 10.1 to the Registrants Current Report on Form 8-K filed with the SEC on August 6, 2020 and incorporated herein by reference). | |
|
10.20 |
|
Form of Convertible Promissory Note (filed as Exhibit 10.2 to the Registrants Current Report on Form 8-K filed with the SEC on August 6, 2020 and incorporated herein by reference). | |
|
10.21 |
|
Form of Warrant filed as Exhibit 10.3 to the Registrants Current Report on Form 8-K filed with the SEC on August 6, 2020 and incorporated herein by reference). | |
|
10.22 |
|
Form of Registration Rights Agreement filed as Exhibit 10.4 to the Registrants Current Report on Form 8-K filed with the SEC on August 6, 2020 and incorporated herein by reference). | |
|
10.23 |
|
Form of Subscription Agreement filed as Exhibit 10.1 to the Registrants Current Report on Form 8-K filed with the SEC on January 22, 2021 and incorporated herein by reference). | |
|
10.24 |
|
Form of Convertible Promissory Note filed as Exhibit 10.2 to the Registrants Current Report on Form 8-K filed with the SEC on January 22, 2021 and incorporated herein by reference). | |
|
10.25 |
|
Form of Registration Rights Agreement filed as Exhibit 10. 4 to the Registrants Current Report on Form 8-K filed with the SEC on January 22, 2021 and incorporated herein by reference). | |
|
10.26 |
|
Credit Agreement (filed as Exhibit 10.1 to the Registrants Current Report on Form 8-K filed with the SEC on December 28, 2021 and incorporated herein by reference). | |
|
10.27 |
|
Common Stock Purchase Agreement (filed as Exhibit 10.2 to the Registrants Current Report on Form 8-K filed with the SEC on December 28, 2021 and incorporated herein by reference). | |
|
10.28 |
|
Collateral Agreement (filed as Exhibit 10.3 to the Registrants Current Report on Form 8-K filed with the SEC on December 28, 2021 and incorporated herein by reference). | |
|
10.29 |
|
IP Security Agreement (filed as Exhibit 10.4 to the Registrants Current Report on Form 8-K filed with the SEC on December 28, 2021 and incorporated herein by reference). | |
| 68 | |
|
10.30 |
|
At The Market Offering Agreement, by and between the Company and H.C. Wainwright & CO, LLC, dated March 22, 2022 (filed as Exhibit 10.1 to the Registrants Current Report on Form 8-K filed with the SEC on March 22, 2022 and incorporated herein by reference). | |
|
10.31 |
|
Credit Agreement, by and between the Company and SWK Funding LLC (filed as Exhibit 10.1 to the current report under Form 8-K filled with SEC on December 28, 2021) | |
|
14.1 |
|
Code of Business Conduct and Ethics (filed as Exhibit 14.1 to the Registrants Transition Report on Form 10-KT filed with the SEC on April 13, 2016 and incorporated herein by reference). | |
|
19 |
|
Insider Trading Policy | |
|
21.1 |
|
List of Subsidiaries (filed as Exhibit 21.1 to the Registrants Transition Report on Form 10-KT filed with the SEC on April 13, 2016 and incorporated herein by reference). | |
|
23.1 |
|
Consent of SRCO Professional Corporation | |
|
31.1 |
|
Section 302 Certification of Principal Executive Officer | |
|
31.2 |
|
Section 302 Certification of Principal Financial and Accounting Officer | |
|
32.1 |
|
Section 906 Certification of Principal Executive Officer | |
|
32.2 |
|
Section 906 Certification of Principal Financial and Accounting Officer | |
|
97 |
|
Clawback policy | |
|
101 |
|
Inline XBRL Instance Document (the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document) | |
|
104 |
|
Cover Page Interactive Data File (embedded within the Inline XBRL document) | |
|
* |
Indicates management contract or compensatory plan or arrangement. | |
|
+ |
Portions of this document have been omitted and submitted separately with the Securities and Exchange Commission pursuant to a request for Confidential Treatment. | |
**ITEM 16. FORM 10-K SUMMARY**
None.
| 69 | |
**SIGNATURES**
Pursuant
to the requirements of the Section 13 or 15 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report
to be signed on its behalf by the undersigned, thereunto duly authorized on the day of July 15, 2025.
|
|
BIOTRICITY INC. | |
|
|
|
| |
|
|
By: |
/s/ Waqaas
Al-Siddiq | |
|
|
|
Waqaas Al-Siddiq | |
|
|
|
Chief Executive Officer and President | |
In
accordance with the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant
and in the capacities and on the dates indicated.
|
Signature |
|
Title |
|
Date | |
|
|
|
|
|
| |
|
/s/
Waqaas Al-Siddiq |
|
Chairman, President and
Chief Executive Officer (principal executive officer) |
|
July 15, 2025 | |
|
Waqaas Al-Siddiq |
|
|
|
| |
|
|
|
|
|
| |
|
/s/ John
Ayanoglou |
|
Chief Financial Officer (principal financial and accounting
officer) |
|
July 15, 2025 | |
|
John Ayanoglou |
|
|
|
| |
|
|
|
|
|
| |
|
/s/ David
A. Rosa |
|
Director |
|
July 15, 2025 | |
|
David A. Rosa |
|
|
|
| |
|
|
|
|
|
| |
|
/s/ Jainal Bhuiyan |
|
Director |
|
July 15, 2025 | |
|
Jainal Bhuiyan |
|
|
|
| |
|
|
|
|
|
| |
|
/s/ Ronald
McClurg |
|
Director |
|
July 15, 2025 | |
|
Ronald McClurg |
|
|
|
| |
| 70 | |
**Consolidated
Financial Statements**
**Biotricity
Inc.**
**For
the years ended March 31, 2025 and 2024**
**Table
of Contents**
|
Report of Independent Registered Public Accounting Firm (PCAOB ID: 5828) |
F-1 | |
|
Consolidated Financial Statements for the years ended
March 31, 2025 and 2024: |
| |
|
Consolidated Balance Sheets |
F-3 | |
|
Consolidated Statements of Operations and Comprehensive Loss |
F-4 | |
|
Consolidated Statements of Mezzanine Equity and Stockholders Deficiency |
F-5 | |
|
Consolidated Statements of Cash Flows |
F-6 | |
|
Notes to Consolidated Financial Statements |
F-7 - F-40 | |
| 71 | |
*
**REPORT
OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM**
To
the Board of Directors and Stockholders of Biotricity Inc.:
**Opinion
on the Financial Statements**
****
We
have audited the accompanying consolidated balance sheets of Biotricity Inc. and its subsidiary (the Company) as of March 31, 2025 and
2024 and the related consolidated statements of operations and comprehensive loss, mezzanine equity and stockholders deficiency,
and cash flows for each of the years in the two-year period ended March 31, 2025 and related notes (collectively referred to as the financial
statements). In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of
the Company as at March 31, 2025 and 2024 and the results of its operations and its cash flows for each of the years in the two-year
period ended March 31, 2025, in conformity with accounting principles generally accepted in the United States of America.
**Material
Uncertainty Related to Going Concern**
The
accompanying financial statements have been prepared assuming the Company will continue as a going concern. As discussed in Note 2 to
the financial statements, the Company has incurred recurring losses from operations, has negative cash flows from operating activities,
working capital deficiency and has an accumulated deficit that raise substantial doubt about its ability to continue as a going concern.
Managements plans in regard to these matters are also described in Note 2. The financial statements do not include any adjustments
that might result from the outcome of this uncertainty.
**Basis
for Opinion**
****
These
financial statements are the responsibility of the Companys management. Our responsibility is to express an opinion on the Companys
financial statements based on our audit. We are a public accounting firm registered with the Public Company Accounting Oversight Board
(United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities
laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We
conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. The Company
is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audit,
we are required to obtain an understanding of internal control over financial reporting, but not for the purpose of expressing an opinion
on the effectiveness of the Companys internal control over financial reporting. Accordingly, we express no such opinion.
Our
audit included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or
fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding
the amounts and disclosures in the financial statements. Our audit also included evaluating the accounting principles used and significant
estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audit provides
a reasonable basis for our opinion.
| F-1 | |
**Critical
Audit Matters**
The
critical audit matters communicated below are matters arising from the current period audit of the financial statements that were communicated
or required to be communicated to the audit committee and that: (1) relate to accounts or disclosures that are material to the financial
statements and (2) involved our especially challenging, subjective, or complex judgments. The communication of critical audit matters
does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit
matters below, providing separate opinions on the critical audit matters or on the accounts or disclosures to which they relate.
**Valuation
of Derivative Liabilities**
Critical
Audit Matter Description*
**
As
described further in Notes 5 and 8 to the financial statements, the Company determined that the conversion features and redemption features
of its convertible promissory notes, certain warrants, and Series A and Series B preferred shares, issued in conjunction with financing
arrangements required to be accounted for as derivative liabilities. The derivative liabilities are recorded at fair value when issued
and subsequently re-measured to fair value each reporting period. These derivatives require valuation techniques that may include complex
models and non-observable inputs, requiring managements estimation and judgment.
*How
the Critical Audit Matter was Addressed in the Audit*
To
test the valuation of the derivative liabilities, our audit procedures included, among others, reviewing the terms of the underlying
instruments, testing managements process for developing the fair value measurement, evaluating the appropriateness of the methodologies
used in the valuation model and testing the reasonableness of the significant assumptions and inputs used. We have also evaluated the
financial statement disclosures related to these matters.
**Accounting
and classification of mezzanine equity**
*Critical
Audit Matter Description*
As
described further in Note 9 to the financial statements, the Company identified that the Series B preferred shares are required to be
accounted for and classified as mezzanine equity. The accounting and classification of Series B preferred shares requires significant
management judgment in applicable accounting guidance in these areas and the significant nature of the financing arrangement.
*How
the Critical Audit Matter was Addressed in the Audit*
To
test the accounting and classification related to the mezzanine equity, our audit procedures included, among others, examining and evaluating
the underlying financing terms and agreements, and assessing the Companys analysis of the accounting of the mezzanine equity,
in accordance with relevant accounting standards. We have also evaluated the financial statement disclosures related to these matters.
|
|
/s/ SRCO Professional
Corporation | |
|
|
| |
|
We
have served as the Companys auditor since 2015
Richmond
Hill, Ontario, Canada
July
15, 2025 |
CHARTERED
PROFESSIONAL ACCOUNTANTS
Authorized
to practice public accounting by the
Chartered
Professional Accountants of Ontario | |
| F-2 | |
**BIOTRICITY
INC.**
**CONSOLIDATED
BALANCE SHEETS**
**(Expressed
in US Dollars)**
|
| |
As at March 31, 2025 | | |
As at March 31, 2024 | | |
|
| |
$ | | |
$ | | |
|
CURRENT ASSETS | |
| | | |
| | | |
|
Cash | |
| 365,145 | | |
| 786,060 | | |
|
Accounts receivable, net | |
| 1,658,772 | | |
| 1,468,655 | | |
|
Inventory [Note 3] | |
| 1,555,385 | | |
| 1,879,402 | | |
|
Deposits and other receivables | |
| 1,059,990 | | |
| 336,456 | | |
|
Total current assets | |
| 4,639,292 | | |
| 4,470,573 | | |
|
| |
| | | |
| | | |
|
Deposits and other receivables [Note 12] | |
| 109,297 | | |
| 85,000 | | |
|
Long-term accounts receivable | |
| 70,713 | | |
| 149,907 | | |
|
Property and equipment [Note 13] | |
| 9,599 | | |
| 15,552 | | |
|
Operating right of use assets [Note 12] | |
| 812,053 | | |
| 1,221,593 | | |
|
TOTAL ASSETS | |
| 5,640,954 | | |
| 5,942,625 | | |
|
| |
| | | |
| | | |
|
CURRENT LIABILITIES | |
| | | |
| | | |
|
Accounts payable and accrued liabilities [Note 4] | |
| 7,661,924 | | |
| 9,613,118 | | |
|
Convertible promissory notes and short term loans [Note 5] | |
| 9,618,738 | | |
| 9,236,471 | | |
|
Term loan, current | |
| 2,400,000 | | |
| 2,400,000 | | |
|
Derivative liabilities [Note 8] | |
| 424,200 | | |
| 991,866 | | |
|
Operating lease obligations, current [Note 10] | |
| 531,286 | | |
| 457,371 | | |
|
Total current liabilities | |
| 20,636,148 | | |
| 22,698,826 | | |
|
| |
| | | |
| | | |
|
Federally guaranteed loans [Note 7] | |
| 870,800 | | |
| 870,800 | | |
|
Term loan [Note 6] | |
| 12,271,559 | | |
| 9,985,033 | | |
|
Derivative liabilities [Note 8] | |
| 1,478,717 | | |
| 1,435,668 | | |
|
Operating lease obligations | |
| 397,830 | | |
| 929,115 | | |
|
TOTAL LIABILITIES | |
| 35,655,054 | | |
| 35,919,442 | | |
|
| |
| | | |
| | | |
|
MEZZANINE EQUITY | |
| | | |
| | | |
|
Series B Convertible Redeemable preferred stock, 0.001 par value, 600 shares authorized as of March 31, 2025 and March 31, 2024, respectively, 385and 265 shares issued and outstanding as of March 31, 2025 and March 31, 2024, respectively [Note 9] | |
| 2,000,290 | | |
| 1,488,920 | | |
|
| |
| | | |
| | | |
|
STOCKHOLDERS DEFICIENCY | |
| | | |
| | | |
|
Preferred stock, $0.001 par value, 9,979,400 shares authorized as of March 31, 2025 and March 31, 2024, respectively, 1 share issued and outstanding as of March 31, 2025 and March 31, 2024 [Note 9] | |
| 1 | | |
| 1 | | |
|
Preferred stock, $0.001 par value, 20,000 authorized as at March 31, 2025 and March 31, 2024, respectively, 200 and 6,304 preferred shares issued and outstanding as at March 31, 2025 and as at March 31, 2024, respectively [Note 9] | |
| - | | |
| 6 | | |
|
Preferred stock, value | |
| - | | |
| 6 | | |
|
Common stock, $0.001 par value, 125,000,000 authorized as at March 31, 2025 and March 31, 2024, respectively. Issued and outstanding common shares: 26,081,295 and 9,353,768 as at March 31, 2025 and March 31, 2024, respectively, and exchangeable shares of 160,672 outstanding as at March 31, 2025 and March 31, 2024, respectively [Note 9] | |
| 26,243 | | |
| 9,515 | | |
|
Shares to be issued (581,599 and 324,276 shares of common stock as at March 31, 2025 and March 31, 2024, respectively) [Note 9] | |
| 284,244 | | |
| 269,065 | | |
|
Additional paid-in-capital | |
| 106,971,115 | | |
| 95,723,083 | | |
|
Accumulated other comprehensive gain (loss) | |
| 145,792 | | |
| 32,378 | | |
|
Accumulated deficit | |
| (139,441,785 | ) | |
| (127,499,785 | ) | |
|
Total stockholders deficiency | |
| (32,014,390 | ) | |
| (31,465,737 | ) | |
|
TOTAL LIABILITIES, MEZZANINE EQUITY AND STOCKHOLDERS DEFICIENCY | |
| 5,640,954 | | |
| 5,942,625 | | |
Commitments
and contingencies *[Note 11]*
Subsequent
events *[Note 14]*
*See
accompanying notes to consolidated financial statements*
**
**
| F-3 | |
**
**BIOTRICITY
INC.**
**CONSOLIDATED
STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS**
**(Expressed
in US Dollars)**
|
| |
Year Ended March
31, 2025 | | |
Year Ended March 31, 2024 | | |
|
| |
$ | | |
$ | | |
|
| |
| | |
| | |
|
REVENUE | |
| 13,790,294 | | |
| 12,063,345 | | |
|
| |
| | | |
| | | |
|
Cost of Revenue | |
| 3,225,803 | | |
| 3,707,064 | | |
|
GROSS PROFIT | |
| 10,564,491 | | |
| 8,356,281 | | |
|
| |
| | | |
| | | |
|
EXPENSES | |
| | | |
| | | |
|
Selling, general and administrative expenses | |
| 10,857,797 | | |
| 14,612,724 | | |
|
Research and development expenses | |
| 2,155,660 | | |
| 2,571,826 | | |
|
TOTAL OPERATING EXPENSES | |
| 13,013,457 | | |
| 17,184,550 | | |
|
LOSS FROM OPERATIONS | |
| (2,448,966 | ) | |
| (8,828,269 | ) | |
|
| |
| | | |
| | | |
|
Other income/(expense) [Notes 3, 5] | |
| (78,569 | ) | |
| (102,607 | ) | |
|
Interest expense [Notes 5, 6, 7] | |
| (3,262,038 | ) | |
| (3,018,803 | ) | |
|
Gain/(Loss) upon convertible promissory notes conversion and redemption [Note 5] | |
| (137,934 | ) | |
| 18,539 | | |
|
Accretion and amortization expenses [Notes 5, 6] | |
| (1,939,816 | ) | |
| (2,172,920 | ) | |
|
Change in fair value of derivative liabilities and warrants [Note 8] | |
| (553,856 | ) | |
| 9,777 | | |
|
NET LOSS BEFORE INCOME TAXES | |
| (8,421,179 | ) | |
| (14,094,283 | ) | |
|
| |
| | | |
| | | |
|
Income taxes [Note 10] | |
| | | |
| | | |
|
NET LOSS BEFORE DIVIDENDS | |
| (8,421,179 | ) | |
| (14,094,283 | ) | |
|
| |
| | | |
| | | |
|
Preferred Stock Dividends | |
| (466,141 | ) | |
| (834,677 | ) | |
|
Deemed Dividends [Note 9] | |
| (3,054,680 | ) | |
| | | |
|
NET LOSS ATTRIBUTABLE TO COMMON STOCKHOLDERS | |
| (11,942,000 | ) | |
| (14,928,960 | ) | |
|
| |
| | | |
| | | |
|
Translation adjustment | |
| 113,414 | | |
| 185,175 | | |
|
| |
| | | |
| | | |
|
COMPREHENSIVE LOSS | |
| (11,828,586 | ) | |
| (14,743,785 | ) | |
|
| |
| | | |
| | | |
|
LOSS PER SHARE, BASIC AND DILUTED | |
| (0.555 | ) | |
| (1.660 | ) | |
|
| |
| | | |
| | | |
|
WEIGHTED AVERAGE NUMBER OF COMMON SHARES OUTSTANDING | |
| 21,524,884 | | |
| 8,991,766 | | |
*See
accompanying notes to the consolidated financial statements*
**
| F-4 | |
**BIOTRICITY,
INC.**
**CONSOLIDATED
STATEMENTS OF MEZZANINE EQUITY AND STOCKHOLDERS DEFICIENCY**
**(Expressed
in US Dollars)**
|
|
|
Shares |
|
|
$ |
|
|
$ |
|
|
Shares |
|
|
$ |
|
|
Shares |
|
|
$ |
|
|
Shares |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
| |
|
|
|
Mezzanine
Equity |
|
|
Total
Mezzanine Equity |
|
|
Preferred
stock |
|
|
Common
stock and exchangeable common shares |
|
|
Shares
to be Issued |
|
|
Additional
paid in capital |
|
|
Accumulated
other comprehensive (loss) income |
|
|
Accumulated
deficit |
|
|
Total
Stockholders Deficiency |
| |
|
|
|
Shares |
|
|
$ |
|
|
$ |
|
|
Shares |
|
|
$ |
|
|
Shares |
|
|
$ |
|
|
Shares |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
Balance,
March 31, 2024 |
|
|
265 |
|
|
|
1,488,920 |
|
|
|
1,488,920 |
|
|
|
6,305 |
|
|
|
7 |
|
|
|
9,514,440 |
|
|
|
9,515 |
|
|
|
344,276 |
|
|
|
269,065 |
|
|
|
95,723,083 |
|
|
|
32,378 |
|
|
|
(127,499,785 |
) |
|
|
(31,465,737 |
) | |
|
Issuance of common shares to adjust for rounding effect of Reverse Split [Note 9] |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
Issuance of common shares to adjust for rounding effect of Reverse Split [Note 9], shares |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
Issuance of mezzanine equity
[Note 9] |
|
|
220 |
|
|
|
1,082,999 |
|
|
|
1,082,999 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
Issuance of common shares for private placement [Note 9] |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
Issuance of common shares for private placement [Note 9], shares |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
Issuance of warrants for brokers [Note 9] |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
Issuance of common shares from
at-the-market transaction [Note 9] |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
97,811 |
|
|
|
98 |
|
|
|
|
|
|
|
|
|
|
|
125,129 |
|
|
|
|
|
|
|
|
|
|
|
125,227 |
| |
|
Conversion of mezzanine equity
into common shares [Note 9] |
|
|
(100 |
) |
|
|
(571,630 |
) |
|
|
(571,630 |
) |
|
|
|
|
|
|
|
|
|
|
4,365,022 |
|
|
|
4,365 |
|
|
|
(320,321 |
) |
|
|
(288,786 |
) |
|
|
1,240,257 |
|
|
|
|
|
|
|
|
|
|
|
1,015,836 |
| |
|
Conversion of preferred shares
into common shares [Note 9] |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(6,104 |
) |
|
|
(6 |
) |
|
|
8,952,170 |
|
|
|
8,952 |
|
|
|
|
|
|
|
|
|
|
|
4,925,756 |
|
|
|
|
|
|
|
|
|
|
|
4,934,702 |
| |
|
Conversion of convertible notes
into common shares [Note 9 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1,595,445 |
|
|
|
1,595 |
|
|
|
577,644 |
|
|
|
259,245 |
|
|
|
2,107,338 |
|
|
|
|
|
|
|
|
|
|
|
2,431,178 |
| |
|
Issuance of shares for services
[Note 9] |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
716,666 |
|
|
|
717 |
|
|
|
(20,000 |
) |
|
|
(15,280 |
) |
|
|
335,446 |
|
|
|
|
|
|
|
|
|
|
|
320,883 |
| |
|
Issuance of shares for settlement
of accounts payable [Note 9] |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1,000,413 |
|
|
|
1,000 |
|
|
|
|
|
|
|
|
|
|
|
989,408 |
|
|
|
|
|
|
|
|
|
|
|
990,409 |
| |
|
Stock based compensation -
ESOP [Note 9] |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1,461,698 |
|
|
|
|
|
|
|
|
|
|
|
1,461,698 |
| |
|
Translation adjustment |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
113,414 |
|
|
|
|
|
|
|
113,414 |
| |
|
Net loss before dividends for
the period |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(8,421,179 |
) |
|
|
(8,421,179 |
) | |
|
Preferred stock dividends |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(466,141 |
) |
|
|
(466,141 |
) | |
|
Deemed
Dividend |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(3,054,680 |
) |
|
|
(3,054,680 |
) | |
|
Balance,
March 31, 2025 |
|
|
385 |
|
|
|
2000,290 |
|
|
|
2,000,290 |
|
|
|
201 |
|
|
|
1 |
|
|
|
26,241,967 |
|
|
|
26,243 |
|
|
|
581,599 |
|
|
|
284,244 |
|
|
|
106,971,115 |
|
|
|
145,792 |
|
|
|
(139,441,785 |
) |
|
|
(32,014,390 |
) | |
|
|
|
Mezzanine
Equity |
|
|
Total
Mezzanine Equity |
|
|
Preferred
stock |
|
|
Common
stock and exchangeable common shares |
|
|
Shares
to be Issued |
|
|
Additional
paid in capital |
|
|
Accumulated
other comprehensive (loss) income |
|
|
Accumulated
deficit |
|
|
Total
Stockholders Deficiency |
| |
|
|
|
Shares |
|
|
$ |
|
|
$ |
|
|
Shares |
|
|
$ |
|
|
Shares |
|
|
$ |
|
|
Shares |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
Balance,
March 31, 2023 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
6,305 |
|
|
|
7 |
|
|
|
8,752,510 |
|
|
|
8,753 |
|
|
|
3,955 |
|
|
|
24,999 |
|
|
|
92,844,478 |
|
|
|
(152,797 |
) |
|
|
(112,570,825 |
) |
|
|
(19,845,385 |
) | |
|
Balance |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
6,305 |
|
|
|
7 |
|
|
|
8,752,510 |
|
|
|
8,753 |
|
|
|
3,955 |
|
|
|
24,999 |
|
|
|
92,844,478 |
|
|
|
(152,797 |
) |
|
|
(112,570,825 |
) |
|
|
(19,845,385 |
) | |
|
Issuance
of common shares to adjust for rounding effect of Reverse Split [Note 9] |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
20,846 |
|
|
|
21 |
|
|
|
|
|
|
|
|
|
|
|
(21 |
) |
|
|
|
|
|
|
|
|
|
|
|
| |
|
Issuance
of common shares for private placement [Note 9] |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
36,897 |
|
|
|
37 |
|
|
|
|
|
|
|
|
|
|
|
119,248 |
|
|
|
|
|
|
|
|
|
|
|
119,285 |
| |
|
Issuance
of mezzanine equity [Note 9] |
|
|
330 |
|
|
|
1,860,554 |
|
|
|
1,860,554 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
Issuance
of warrants for private placement holders [Note 9] |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1,137,716 |
|
|
|
|
|
|
|
|
|
|
|
1,137,716 |
| |
|
Issuance
of warrants for brokers [Note 9] |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
141,070 |
|
|
|
|
|
|
|
|
|
|
|
141,070 |
| |
|
Conversion
of mezzanine equity into common shares [Note 9] |
|
|
(65 |
) |
|
|
(371,634 |
) |
|
|
(371,634 |
) |
|
|
|
|
|
|
|
|
|
|
612,062 |
|
|
|
612 |
|
|
|
320,321 |
|
|
|
228,786 |
|
|
|
353,907 |
|
|
|
|
|
|
|
|
|
|
|
583,305 |
| |
|
Issuance
of shares for services [Note 9] |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
92,125 |
|
|
|
92 |
|
|
|
20,000 |
|
|
|
15,280 |
|
|
|
100,755 |
|
|
|
|
|
|
|
|
|
|
|
116,127 |
| |
|
Stock
based compensation - ESOP [Note 9] |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1,025,930 |
|
|
|
|
|
|
|
|
|
|
|
1,025,930 |
| |
|
Translation
adjustment |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
185,175 |
|
|
|
|
|
|
|
185,175 |
| |
|
Net
loss before dividends for the period |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(14,094,283 |
) |
|
|
(14,094,283 |
) | |
|
Preferred
stock dividends |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(834,677 |
) |
|
|
(834,677 |
) | |
|
Balance,
March 31, 2024 |
|
|
265 |
|
|
|
1,488,920 |
|
|
|
1,488,920 |
|
|
|
6,305 |
|
|
|
7 |
|
|
|
9,514,440 |
|
|
|
9,515 |
|
|
|
344,276 |
|
|
|
269,065 |
|
|
|
95,723,083 |
|
|
|
32,378 |
|
|
|
(127,499,785 |
) |
|
|
(31,465,737 |
) | |
|
Balance |
|
|
265 |
|
|
|
1,488,920 |
|
|
|
1,488,920 |
|
|
|
6,305 |
|
|
|
7 |
|
|
|
9,514,440 |
|
|
|
9,515 |
|
|
|
344,276 |
|
|
|
269,065 |
|
|
|
95,723,083 |
|
|
|
32,378 |
|
|
|
(127,499,785 |
) |
|
|
(31,465,737 |
) | |
**
*See accompanying notes to the consolidated financial statements*
**
| F-5 | |
**
**BIOTRICITY
INC.**
**CONSOLIDATED
STATEMENTS OF CASH FLOWS**
**(Expressed
in US dollars)**
|
| |
Year ended March 31, 2025 | | |
Year ended March 31, 2024 | | |
|
| |
| | |
| | |
|
CASH FLOWS FROM OPERATING ACTIVITIES | |
| | | |
| | | |
|
Net loss before dividends | |
| (8,421,179 | ) | |
| (14,094,283 | ) | |
|
Adjustments to reconcile net loss to net cash used in operations | |
| | | |
| | | |
|
Stock based compensation | |
| 1,461,698 | | |
| 1,025,930 | | |
|
Issuance of shares for services | |
| 320,883 | | |
| 116,127 | | |
|
Accretion and amortization expenses | |
| 1,939,816 | | |
| 2,172,920 | | |
|
Change in fair value of derivative liabilities | |
| 553,856 | | |
| (9,777 | ) | |
|
(Gain) Loss on debt conversion and redemption | |
| 137,934 | | |
| (18,539 | ) | |
|
Loss upon settlement of accounts payable | |
| 249,093 | | |
| | | |
|
Loss on debt and warrant modification | |
| | | |
| 59,161 | | |
|
Property and equipment depreciation | |
| 5,953 | | |
| 5,953 | | |
|
Operating right of use assets amortization | |
| 409,540 | | |
| 365,899 | | |
|
| |
| | | |
| | | |
|
Changes in operating assets and liabilities: | |
| | | |
| | | |
|
Accounts receivable, net | |
| (110,923 | ) | |
| (298,248 | ) | |
|
Inventory | |
| 324,017 | | |
| 457,604 | | |
|
Deposits and other receivables | |
| (747,831 | ) | |
| 252,143 | | |
|
Accounts payable and accrued liabilities and lease obligations | |
| 1,496,966 | | |
| 3,271,198 | | |
|
Net cash used in operating activities | |
| (2,380,177 | ) | |
| (6,693,912 | ) | |
|
| |
| | | |
| | | |
|
CASH FLOWS FROM FINANCING ACTIVITIES | |
| | | |
| | | |
|
Issuance of common shares, net | |
| 125,227 | | |
| 119,285 | | |
|
Issuance of preferred shares, net | |
| 1,732,532 | | |
| 2,825,000 | | |
|
Conversion of preferred shares | |
| - | | |
| - | | |
|
Conversion of Convertible notes. | |
| - | | |
| - | | |
|
Proceeds from convertible debentures, net | |
| 1,835,000 | | |
| 2,962,386 | | |
|
Proceeds from (repayment of) short term loan and promissory notes, net | |
| (1,733,516 | ) | |
| 853,030 | | |
|
Term Loan, net | |
| - | | |
| - | | |
|
Preferred Stock Dividend | |
| (29,984 | ) | |
| (18,016 | ) | |
|
Net cash provided by financing activities | |
| 1,929,259 | | |
| 6,741,685 | | |
|
| |
| | | |
| | | |
|
Effect of foreign currency translation | |
| 30,003 | | |
| 167,827 | | |
|
Net increase (decrease) in cash during the year | |
| (450,918 | ) | |
| 47,773 | | |
|
Cash, beginning of year | |
| 786,060 | | |
| 570,460 | | |
|
Cash, end of year | |
| 365,145 | | |
| 786,060 | | |
|
| |
| | | |
| | | |
|
Supplemental disclosure of cash flow information: | |
| | | |
| | | |
|
Interest paid | |
| 3,611,939 | | |
| 2,022,221 | | |
|
Taxes | |
| | | |
| | | |
*See
accompanying notes to the consolidated financial statements*
**
| F-6 | |
**BIOTRICITY
INC.**
**Notes
to Consolidated Financial Statements**
**Years
ended March 31, 2025 and 2024**
**(Expressed
in US Dollars)**
**1.
NATURE OF OPERATIONS**
Biotricity
Inc. (formerly MetaSolutions, Inc.) (the Company or Biotricity) was incorporated under the laws of the State
of Nevada on August 29, 2012. iMedical Innovations Inc. (iMedical) was incorporated on July 3, 2014 under the laws of the
Province of Ontario, Canada and became a wholly-owned subsidiary of Biotricity through reverse take-over on February 2, 2016.
Both
the Company and iMedical are engaged in research and development activities within the remote monitoring segment of preventative care.
They are focused on a realizable healthcare business model that has an existing market and commercialization pathway. As such, its efforts
to date have been devoted to building and commercializing an ecosystem of technologies that enable access to this market.
**2.
BASIS OF PRESENTATION, MEASUREMENT AND CONSOLIDATION**
The
consolidated financial statements of the Company have been prepared in accordance with accounting principles generally accepted in the
United States of America (US GAAP) and are expressed in United States dollars (USD).
The
consolidated financial statements of the Company have been prepared on a historical cost basis except Cash and derivative liabilities
which are carried at fair value.
The
consolidated financial statements include the accounts of the Company and its wholly-owned subsidiary. Significant intercompany accounts
and transactions have been eliminated.
*Reclassifications*
**
Certain
amounts presented in the prior year period have been reclassified to conform to current period consolidated financial statement presentation.
| F-7 | |
****
****
**BIOTRICITY INC.**
**Notes to Consolidated Financial
Statements**
**Years ended March 31, 2025
and 2024**
**(Expressed in US Dollars)**
****
**Going
Concern, Liquidity and Basis of Presentation**
The
accompanying consolidated financial statements have been prepared assuming that the Company will continue as a going concern. The Company
is in the early stages of commercializing its first product and is concurrently in development mode, operating a research and development
program in order to develop, obtain regulatory clearance for, and commercialize other proposed products. The Company has incurred recurring
losses from operations, and as of March 31, 2025, had an accumulated deficit of $139,441,785 (2024: $127,499,785) and a working capital
deficiency of $15,996,856 (2024: $ 18,228,253). Those conditions raise substantial doubt about its ability to continue as
a going concern for a period of one year from the issuance of these consolidated financial statements. The consolidated financial statements
do not include adjustments that might result from the outcome of this uncertainty.
Management
anticipates the Company will continue on its revenue growth trajectory and improve its liquidity through continued business development
and after additional equity and debt capitalization of the Company. During fiscal year ended March 31, 2022, the Company raised $499,900
through government EIDL loan. During the fiscal quarter ended September 30, 2021, the Company
also raised total net proceeds of $14,545,805 through the underwritten public offering that was concurrent with its listing onto the
Nasdaq Capital Markets. During the fiscal quarter ended December 31, 2021, the Company raised
additional net proceeds of $11,756,563 through a term loan transaction (Note 6) and made repayment of the previously issued promissory
notes and short-term loans. In connection with this loan, the Company and Lender entered into a Guarantee and Collateral Agreement, as
well as an Intellectual Property Security Agreement, wherein the Company agreed to secure the Credit Agreement with all of the Companys
assets, as well as secured by the Companys right title and interest in the Companys Intellectual Property. During the fiscal
year ended March 31, 2024, the Company raised short-term loans and promissory notes, net of repayments of $853,030 from various lenders,
and also raised convertible notes, net of redemptions of $2,962,386 from various lenders. The Company sold 36,897 common shares through
use of its registration statement, for gross proceeds of $123,347, raising a net amount of $119,285 after paying a 3% placement fee and
other issuance expenses.
Additionally,
on September 19, 2023, the Company entered into a security purchase agreement with an institutional investor for the issuance and sale
of 220 shares of the Companys newly designated Series B Convertible Preferred Stock, $0.001 par value (the Series B Preferred
Stock), at a purchase price of $9,091 per share of Series B Preferred Stock (Note 9), or gross proceeds of $2,000,000. Net proceeds
after issuance costs amounted to $1,900,000 for the Series B Preferred Stock. During the year ended March 31, 2025, the Company issued
an additional 220 Series B preferred shares for net proceeds of $1,732,532.
Shares
of Series B Preferred Stock and shares of common stock of the Company that are issuable upon conversion of, or as dividends on, the Series
B Preferred Stock were offered and were issued pursuant to the Prospectus Supplement, filed September 19, 2023, to the Prospectus included
in the Companys Registration Statement on Form S-3 (Registration No. 333-255544) filed with the Securities and Exchange Commission
on April 27, 2021, and declared effective May 4, 2021.
As
we proceed with the commercialization of the Bioflux, Biocore, and Biocare product development, we expect to continue to devote significant
resources on capital expenditures, as well as research and development costs and operations, marketing and sales expenditures.
Based
on the above facts and assumptions, we believe our existing cash, along with anticipated near-term financings, will be sufficient to
continue to meet our needs for the next twelve months from the filing date of this report. However, we will need to seek additional debt
or equity capital to respond to business opportunities and challenges, including our ongoing operating expenses, protecting our intellectual
property, developing or acquiring new lines of business and enhancing our operating infrastructure. The terms of our future financings
may be dilutive to, or otherwise adversely affect, holders of our common stock. We may also seek additional funds through arrangements
with collaborators or other third parties. There can be no assurance we will be able to raise this additional capital on acceptable terms,
or at all. If we are unable to obtain additional funding on a timely basis, we may be required to modify our operating plan and otherwise
curtail or slow the pace of development and commercialization of our proposed product lines.
| F-8 | |
**BIOTRICITY INC.**
**Notes to Consolidated Financial
Statements**
**Years ended March 31, 2025
and 2024**
**(Expressed in US Dollars)**
**3.
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES**
*Revenue
Recognition*
The
Company adopted Accounting Standards Codification Topic 606, Revenue from Contracts with Customers (ASC 606)
on April 1, 2018. In accordance with ASC 606, revenue is recognized when promised goods or services are transferred to customers in an
amount that reflects the consideration to which the Company expects to be entitled in exchange for those goods or services by applying
the core principles (1) identify the contract with a customer, (2) identify the performance obligations in the contract, (3)
determine the transaction price, (4) allocate the transaction price to performance obligations in the contract, and (5) recognize revenue
as performance obligations are satisfied.
Both
the Bioflux mobile cardiac telemetry device, and the Biocore device are wearable devices. The cardiac data that the devices monitor and
collect is curated and analyzed by the Companys proprietary algorithms and then securely communicated to a remote monitoring facility
for electronic reporting and conveyance to the patients prescribing physician or other certified cardiac medical professional.
Revenues earned are comprised of device sales revenues and technology fee revenues (technology as a service). The devices, together with
their licensed software, are available for sale to the medical center or physician, who is responsible for the delivery of clinical diagnosis
and therapy. The remote monitoring, data collection and reporting services performed by the technology culminate in a patient study that
is generally billable when it is complete and is issued to the physician. In order to recognize revenue, management considers whether
or not the following criteria are met: persuasive evidence of a commercial arrangement exists, and delivery has occurred or services
have been rendered. For sales of devices, which are invoiced directly, additional revenue recognition criteria include that the price
is fixed and determinable and collectability is reasonably assured; for device sales contracts with terms of more than one year, the
Company recognizes any significant financing component as revenue over the contractual period using the effective interest method, and
the associated interest income is reflected accordingly on the statement of operations and included in other income; for revenue that
is earned based on customer usage of the proprietary software to render a patients cardiac study, the Company recognizes revenue
when the study ends based on a fixed billing rate. Costs associated with providing the services are recorded as the service is provided
regardless of whether or when revenue is recognized.
The
Company may also earn service-related revenue from contracts with other counterparties with which it consults. This contract work is
separate and distinct from services provided to clinical customers, but may be with a reseller or other counterparties that are working
to establish their operations in foreign jurisdictions or ancillary products or market segments in which the Company has expertise and
may eventually conduct business.
The
Company recognized the following forms of revenue for the fiscal years ended March 31, 2025 and 2024:
SCHEDULE
OF REVENUE RECOGNITION
|
| |
2025 | | |
2024 | | |
|
| |
$ | | |
$ | | |
|
Technology fees | |
| 12,591,036 | | |
| 11,249,113 | | |
|
Device sales | |
| 1,199,258 | | |
| 814,232 | | |
|
Revenue recognized | |
| 13,790,294 | | |
| 12,063,345 | | |
**
*Inventories*
Inventory
is stated at the lower of cost and net realizable value, cost being determined on a weighted average cost basis. Market value of our finished
goods inventory and raw material inventory is determined based on its estimated net realizable value, which is generally the selling
price less normally predictable costs of disposal and transportation. The Company records write-downs of inventory that is obsolete or
in excess of anticipated demand or market value based on consideration of product lifecycle stage, technology trends, product development
plans and assumptions about future demand and market conditions. Actual demand may differ from forecasted demand, and such differences
may have a material effect on recorded inventory values. Inventory write-downs are charged to cost of revenue and establish a new cost
basis for the inventory.
| F-9 | |
**BIOTRICITY INC.**
**Notes to Consolidated Financial
Statements**
**Years ended March 31, 2025
and 2024**
**(Expressed in US Dollars)**
SCHEDULE
OF INVENTORIES
|
| |
2025 | | |
2024 | | |
|
| |
$ | | |
$ | | |
|
Raw material | |
| 1,225,665 | | |
| 1,128,700 | | |
|
Finished goods | |
| 329,720 | | |
| 750,702 | | |
|
| |
| | | |
| | | |
|
Inventories | |
| 1,555,385 | | |
| 1,879,402 | | |
*Significant
accounting estimates and assumptions*
****
The
preparation of the consolidated financial statements requires the use of estimates and assumptions to be made in applying the accounting
policies that affect the reported amounts of assets, liabilities, revenue and expenses and the disclosure of contingent assets and liabilities.
The estimates and related assumptions are based on previous experiences and other factors considered reasonable under the circumstances,
the results of which form the basis for making the assumptions about the carrying values of assets and liabilities that are not readily
apparent from other sources.
The
estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognized in the period
in which the estimate is revised if the revision affects only that period or in the period of the revision and future periods if the
revision affects both current and future periods.
Significant
accounts that require estimates as the basis for determining the stated amounts include share-based compensation, impairment analysis
and fair value of warrants, promissory notes, convertible notes and derivative liabilities.
|
|
Fair value of stock
options | |
The
Company measures the cost of equity-settled transactions with employees by reference to the fair value of equity instruments at the date
at which they are granted. Estimating fair value for share-based payments requires determining the most appropriate valuation model for
a grant of such instruments, which is dependent on the terms and conditions of the grant. The estimate also requires determining the
most appropriate inputs to the Black-Scholes option pricing model, including the expected life of the instrument, risk-free rate, volatility,
and dividend yield.
|
|
Fair value of warrants | |
In
determining the fair value of the warrant issued for services and issue pursuant to financing transactions, the Company used the Black-Scholes
option pricing model with the following assumptions: volatility rate, risk-free rate, and the remaining expected life of the warrants
that are classified under equity.
|
|
Fair value of derivative
liabilities | |
In
determining the fair values of the derivative liabilities from the conversion and redemption features, the Company used Monte-Carlo and
lattice models with the following assumptions: dividend yields, volatility, risk-free rate and the remaining expected life. Changes in
those assumptions and inputs could in turn impact the fair value of the derivative liabilities and can have a material impact on the
reported loss and comprehensive loss for the applicable reporting period.
|
|
Functional currency | |
Determining
the appropriate functional currencies for entities in the Company requires analysis of various factors, including the currencies and
country-specific factors that mainly influence labor, materials, and other operating expenses.
| F-10 | |
**BIOTRICITY INC.**
**Notes to Consolidated Financial
Statements**
**Years ended March 31, 2025
and 2024**
**(Expressed in US Dollars)**
|
|
Useful life of property
and equipment | |
The
Company employs significant estimates to determine the estimated useful lives of property and equipment, considering industry trends
such as technological advancements, past experience, expected use and review of asset useful lives. The Company makes estimates when
determining depreciation methods, depreciation rates and asset useful lives, which requires considering industry trends and company-specific
factors. The Company reviews depreciation methods, useful lives and residual values annually or when circumstances change and adjusts
its depreciation methods and assumptions prospectively.
|
|
Provisions | |
Provisions
are recognized when the Company has a present obligation, legal or constructive, as a result of a previous event, if it is probable that
the Company will be required to settle the obligation and a reliable estimate can be made of the obligation. The amount recognized is
the best estimate of the expenditure required to settle the present obligation at the end of the reporting period, taking into account
the risks and uncertainties surrounding the obligations. Provisions are reviewed at the end of each reporting period and adjusted to
reflect the current best estimate of the expected future cash flows.
|
|
Contingencies | |
Contingencies
can be either possible assets or possible liabilities arising from past events, which, by their nature, will be resolved only when one
or more uncertain future events occur or fail to occur. The assessment of the existence and potential impact of contingencies inherently
involves the exercise of significant judgment and the use of estimates regarding the outcome of future events.
|
|
Inventory obsolescence | |
Inventories
are stated at the lower of cost and net realizable value. Market value of our inventory, which is all purchased finished goods, is determined
based on its estimated net realizable value, which is generally the selling price less normally predictable costs of disposal and transportation.
The Company estimates net realizable value as the amount at which inventories are expected to be sold, taking into consideration fluctuations
in retail prices less estimated costs necessary to make the sale. Inventories are written down to net realizable value when the cost
of inventories is estimated to be unrecoverable due to obsolescence, damage, or declining selling prices.
|
|
Income and other taxes | |
The
calculation of current and deferred income taxes requires the Company to make estimates and assumptions and to exercise judgment regarding
the carrying values of assets and liabilities which are subject to accounting estimates inherent in those balances, the interpretation
of income tax legislation across various jurisdictions, expectations about future operating results, the timing of reversal of temporary
differences and possible audits of income tax filings by the tax authorities. In addition, when the Company incurs losses for income
tax purposes, it assesses the probability of taxable income being available in the future based on its budgeted forecasts. These forecasts
are adjusted to take into account certain non-taxable income and expenses and specific rules on the use of unused credits and tax losses.
When
the forecasts indicate that sufficient future taxable income will be available to deduct the temporary differences, a deferred tax asset
is recognized for all deductible temporary differences. Changes or differences in underlying estimates or assumptions may result in changes
to the current or deferred income tax balances on the consolidated balance sheets, a charge or credit to income tax expense included
as part of net income (loss) and may result in cash payments or receipts. Judgment includes consideration of the Companys future
cash requirements in its tax jurisdictions. All income, capital and commodity tax filings are subject to audits and reassessments. Changes
in interpretations or judgments may result in a change in the Companys income, capital, or commodity tax provisions in the future.
The amount of such a change cannot be reasonably estimated.
| F-11 | |
**BIOTRICITY INC.**
**Notes to Consolidated Financial
Statements**
**Years ended March 31, 2025
and 2024**
**(Expressed in US Dollars)**
|
|
Incremental borrowing
rate for lease | |
The
determination of the Companys lease obligation and right-of-use asset depends on certain assumptions, which include the selection
of the discount rate. The discount rate is set by reference to the Companys incremental borrowing rate. Significant assumptions
are required to be made when determining which borrowing rates to apply in this determination. Changes in the assumptions used may have
a significant effect on the Companys consolidated financial statements.
*Earnings
(Loss) Per Share*
The
Company has adopted the Financial Accounting Standards Boards (FASB) Accounting Standards Codification (ASC)
Topic 260-10 which provides for calculation of basic and diluted earnings per share. Basic loss per share
of common stock is computed by dividing net loss by the weighted average number of shares of common stock outstanding during the period.
Diluted earnings or loss per share of common stock is computed similarly to basic earnings or loss per share except the weighted average
shares outstanding are increased to include additional shares from the assumed exercise of any common stock equivalents, if dilutive.
The Companys warrants, options, convertible promissory notes, convertible preferred stock, shares to be issued and restricted
stock awards while outstanding are considered common stock equivalents for this purpose. Diluted earnings is computed utilizing the treasury
method for the warrants, stock options, shares to be issued and restricted stock awards. Diluted earnings with respect to the convertible
promissory notes and convertible preferred stock utilizing the if-converted method was not applicable during the periods presented as
no conditions required for conversion had occurred. No incremental common stock equivalents were included in calculating diluted loss
per share because such inclusion would be anti-dilutive given the net loss reported for the periods presented.
*Cash*
Cash
includes cash on hand and balances with banks.
As of March 31, 2025, and 2024, cash
balance of US$ 259,478 and US$ 752,399 were at financial institutions in the United States that were not covered by the United States
Deposit Protection Regulation.
*Foreign
Currency Translation*
The
functional currency of the Companys Canadian-based subsidiary is the Canadian dollar and the US-based parent is the U.S. dollar.
Transactions denominated in currencies other than the functional currency are translated into the functional currency at the exchange
rates prevailing at the dates of the transaction. Monetary assets and liabilities denominated in foreign currencies are translated using
the exchange rate prevailing at the consolidated balance sheet date. Non-monetary assets and liabilities are translated using the historical
rate on the date of the transaction. All exchange gains or losses arising from translation of these foreign currency transactions are
included in net income (loss) for the year. In translating the financial statements of the Companys Canadian subsidiary from their
functional currency into the Companys reporting currency of United States dollars, consolidated balance sheet accounts are translated
using the closing exchange rate in effect at the consolidated balance sheet date and income and expense accounts are translated using
an average exchange rate prevailing during the reporting period. Adjustments resulting from the translation, if any, are included in
accumulated other comprehensive loss in stockholders deficiency. The Company has not, to the date of these consolidated financial
statements, entered into derivative instruments to offset the impact of foreign currency fluctuations.
*Accounts
Receivable*
Accounts
receivable consists of amounts due to the Company from medical facilities, which receive reimbursement from institutions and third-party
government and commercial payors and their related patients, as a result of the Companys normal business activities. Accounts
receivable is reported on the consolidated balance sheets net of an estimated allowance for doubtful accounts. The Company establishes
an allowance for doubtful accounts for estimated uncollectible receivables based on historical experience, assessment of specific risk,
review of outstanding invoices, and various assumptions and estimates that are believed to be reasonable under the circumstances, and
recognizes the provision as a component of selling, general and administrative expenses. Uncollectible accounts are written off against
the allowance after appropriate collection efforts have been exhausted and when it is deemed that a balance is uncollectible.
*Customer Concentration*
**
During the year ended March 31, 2025, one customer
comprised 29% of total account receivables, there was no such concentration risk during the previous year ended March 31,2024.
| F-12 | |
**BIOTRICITY INC.**
**Notes to Consolidated Financial
Statements**
**Years ended March 31, 2025
and 2024**
**(Expressed in US Dollars)**
*Fair
Value of Financial Instruments*
ASC
820 defines fair value, establishes a framework for measuring fair value and expands required disclosure about fair value measurements
of assets and liabilities. ASC 820-10 defines fair value as the exchange price that would be received for an asset or paid to transfer
a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between
market participants on the measurement date. ASC 820-10 also establishes a fair value hierarchy, which requires an entity to maximize
the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. The standard describes three levels
of inputs that may be used to measure fair value:
Level 1 Valuation based on quoted market prices in active markets for identical assets or liabilities.
Level 2 Valuation based on quoted market prices for similar assets and liabilities in active markets.
Level 3 Valuation based on unobservable inputs that are supported by little or no market activity, therefore requiring managements
best estimate of what market participants would use as fair value.
In
instances where the determination of the fair value measurement is based on inputs from different levels of the fair value hierarchy,
the level in the fair value hierarchy within which the entire fair value measurement falls is based on the lowest level input that is
significant to the fair value measurement in its entirety. The Companys assessment of the significance of a particular input to
the fair value measurement in its entirety requires judgment, and considers factors specific to the asset or liability.
Fair
value estimates discussed herein are based upon certain market assumptions and pertinent information available to management. The respective
carrying value of certain on-balance-sheet financial instruments approximated their fair values due to the short-term nature of these
instruments or interest rates that are comparable to market rates. These financial instruments include cash, accounts receivable, deposits
and other receivables, convertible promissory notes and short term loans, federally guaranteed loans, term loans and accounts payable
and accrued liabilities. The Companys derivative liabilities are carried at fair values and are classified as Level 3 financial
instruments. The Companys bank accounts are maintained with financial institutions of reputable credit, therefore, bear minimal
credit risk.
The
fair value of financial instruments measured on a recurring basis is as follows:
SCHEDULE
OF FAIR VALUE OF FINANCIAL INSTRUMENTS
|
| |
As of March 31, 2025 | | |
|
Description | |
Total | | |
Level 1 | | |
Level 2 | | |
Level 3 | | |
|
Assets: | |
| | | |
| | | |
| | | |
| | | |
|
Cash | |
$ | 365,145 | | |
$ | 365,145 | | |
$ | | | |
$ | | | |
|
Total assets at fair value | |
$ | 365,145 | | |
$ | 365,145 | | |
$ | | | |
$ | | | |
|
| |
| | | |
| | | |
| | | |
| | | |
|
Liabilities: | |
| | | |
| | | |
| | | |
| | | |
|
Derivative liabilities, short-term | |
$ | 424,200 | | |
$ | | | |
$ | | | |
$ | 242,200 | | |
|
Derivative liabilities, long-term | |
| 1,478,717 | | |
$ | | | |
$ | | | |
$ | 1,478,717 | | |
|
Total liabilities at fair value | |
$ | 1,902,917 | | |
$ | | | |
$ | | | |
$ | 1,902,917 | | |
|
| |
As of March 31, 2024 | | |
|
Description | |
Total | | |
Level 1 | | |
Level 2 | | |
Level 3 | | |
|
Assets: | |
| | | |
| | | |
| | | |
| | | |
|
Cash | |
$ | 786,060 | | |
$ | 786,060 | | |
$ | | | |
$ | | | |
|
Total assets at fair value | |
$ | 786,060 | | |
$ | 786,060 | | |
$ | | | |
$ | | | |
|
| |
| | | |
| | | |
| | | |
| | | |
|
Liabilities: | |
| | | |
| | | |
| | | |
| | | |
|
Derivative liabilities, short-term | |
$ | 991,866 | | |
$ | | | |
$ | | | |
$ | 991,866 | | |
|
Derivative liabilities, long-term | |
| 1,435,668 | | |
| | | |
| | | |
| 1,435,668 | | |
|
Total liabilities at fair value | |
$ | 2,427,534 | | |
$ | | | |
$ | | | |
$ | 2,427,534 | | |
| F-13 | |
**BIOTRICITY INC.**
**Notes to Consolidated Financial
Statements**
**Years ended March 31, 2025
and 2024**
**(Expressed in US Dollars)**
There
were no transfers between fair value hierarchy levels during the years ended March 31, 2025 and 2024.
*Property
and Equipment*
Property
and equipment are stated at cost less accumulated depreciation. Depreciation is computed using the straight-line method over the estimated
useful lives of the assets. Leasehold improvements are amortized over the shorter of the lease term or the estimated useful lives of
the assets. Maintenance and repairs are charged to expense as incurred, and improvements and betterments are capitalized. Depreciation
of property and equipment is provided using the straight-line method for all assets with estimated lives as follow:
SCHEDULE
OF PROPERTY AND EQUIPMENT ESTIMATED USEFUL LIVES
|
|
Office equipment |
5 years | |
|
|
Leasehold improvement |
5 years | |
*Impairment
for Long-Lived Assets*
The
Company applies the provisions of ASC Topic 360, Property, Plant, and Equipment, which addresses financial accounting and reporting for
the impairment or disposal of long-lived assets. ASC 360 requires impairment losses to be recorded on long-lived assets, including right-of-use
assets, used in operations when indicators of impairment are present and the undiscounted cash flows estimated to be generated by those
assets are less than the assets carrying amounts. In that event, a loss is recognized based on the amount by which the carrying
amount exceeds the fair value of the long-lived assets. Loss on long-lived assets to be disposed of is determined in a similar manner,
except that fair values are reduced for the cost of disposal. Based on its review at March 31, 2025 and 2024, the Company believes there
was no impairment of its long-lived assets.
*Leases*
The
Company is the lessee in a lease contract when the Company obtains the right to use the asset. Operating leases are included in the line
items Operating right of use assets, Operating lease obligations, current, and Operating lease obligations, long-term in the consolidated
balance sheet.
Right-of-use
(ROU) asset represents the Companys right to use an underlying asset for the lease term and lease obligations represent
the Companys obligations to make lease payments arising from the lease, both of which are recognized based on the present value
of the future minimum lease payments over the lease term at the commencement date. Leases with a lease term of 12 months or less at inception
are not recorded on the consolidated balance sheet and are expensed on a straight-line basis over the lease term in the consolidated
statement of operations and comprehensive loss. The Company determines the lease term by agreement with lessor. As the Companys
lease does not provide implicit interest rate, the Company uses the Companys incremental borrowing rate based on the information
available at commencement date in determining the present value of future payments. Refer to Note 12 for further discussion.
*Income
Taxes*
The
Company accounts for income taxes in accordance with ASC 740. The Company provides for Federal, State and Provincial income taxes payable,
as well as for those deferred because of the timing differences between reporting income and expenses for consolidated financial statement
purposes versus tax purposes. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences
between the carrying amount of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes.
Deferred tax assets and liabilities are measured using the enacted tax rates expected to apply to taxable income in the years in which
those temporary differences are expected to be recoverable or settled. The effect of a change in tax rates is recognized as income or
expense in the period of the change. A valuation allowance is established, when necessary, to reduce deferred income tax assets to the
amount that is more likely than not to be realized.
| F-14 | |
**BIOTRICITY INC.**
**Notes to Consolidated Financial
Statements**
**Years ended March 31, 2025
and 2024**
**(Expressed in US Dollars)**
*Research
and Development*
Research
and development costs, which relate primarily to product and software development, are charged to operations as incurred. Under certain
research and development arrangements with third parties, the Company may be required to make payments that are contingent on the achievement
of specific developmental, regulatory and/or commercial milestones. Before a product receives regulatory approval, milestone payments
made to third parties are expensed when the milestone is achieved**.**Milestone payments made to third parties after regulatory approval
is received are capitalized and amortized over the estimated useful life of the approved product.
*Selling,
General and Administrative*
Selling,
general and administrative expenses consist primarily of personnel-related costs including stock-based compensation for personnel in
functions not directly associated with research and development activities. Other significant costs include sales and marketing costs,
investor relation and legal costs relating to corporate matters, professional fees for consultants assisting with business development
and financial matters, and office and administrative expenses.
**
*Stock
Based Compensation*
The
Company accounts for share-based payments in accordance with the provision of ASC 718, which requires that all share-based payments issued
to acquire goods or services, including grants of employee stock options, be recognized in the consolidated statements of operations
and comprehensive loss based on their fair values, net of estimated forfeitures. ASC 718 requires forfeitures to be estimated at the
time of grant and revised, if necessary, in subsequent periods if actual forfeitures differ from those estimates. Compensation expense
related to share-based awards is recognized over the requisite service period, which is generally the vesting period.
The
Company accounts for stock based compensation awards issued to non-employees for services, as prescribed by ASC 718-10, at either the
fair value of the services rendered or the instruments issued in exchange for such services, whichever is more readily determinable,
using the guidelines in ASC 505-50. The Company issues compensatory shares for services including, but not limited to, executive, management,
accounting, operations, corporate communication, financial and administrative consulting services.
*Convertible
Notes Payable and Derivative Instruments*
The
Company has adopted the provisions of ASU 2017-11 to account for the down round features of warrants issued with private placements effective
as of April 1, 2017. In doing so, warrants with a down round feature previously treated as derivative liabilities in the consolidated
balance sheet and measured at fair value are henceforth treated as equity, with no adjustment for changes in fair value at each reporting
period. Previously, the Company accounted for conversion options embedded in convertible notes in accordance with ASC 815. ASC 815 generally
requires companies to bifurcate conversion options embedded in convertible notes from their host instruments and to account for them
as free-standing derivative financial instruments. ASC 815 provides for an exception to this rule when convertible notes, as host instruments,
are deemed to be conventional, as defined by ASC 815-40. The Company accounts for convertible notes deemed conventional and conversion
options embedded in non-conventional convertible notes which qualify as equity under ASC 815, in accordance with the provisions of ASC
470-20, which provides guidance on accounting for convertible securities with beneficial conversion features. Accordingly, the Company
records, as a discount to convertible notes, the intrinsic value of such conversion options based upon the differences between the fair
value of the underlying common stock at the commitment date of the note transaction and the effective conversion price embedded in the
note. Debt discounts under these arrangements are amortized over the term of the related debt.
| F-15 | |
**
**
**BIOTRICITY INC.**
**Notes to Consolidated Financial
Statements**
**Years ended March 31, 2025
and 2024**
**(Expressed in US Dollars)**
**
*Series
B Convertible Preferred Stock*
The
Series B convertible preferred stock (Series B Preferred Stock) was accounted for as mezzanine equity and the embedded
conversion and redemption features was accounted for as derivative liabilities with change in fair value at each reporting period end
charged to the consolidated statement of operation and comprehensive loss in accordance with ASC 480 and ASC 815.
*Preferred
Share Redemption and Conversions*
The
Company accounted for preferred stock redemptions and conversions in accordance to ASU-260-10-S99. For Series A preferred stock redemptions,
the difference between the fair value of consideration transferred to the holders of the preferred stock and the carrying amount of the
preferred stock is accounted as deemed dividend distribution and subtracted from net loss. For Series B preferred stock conversions,
no gain or loss is recognized upon Series B preferred stock conversion except for the fair value adjustment for the conversion and redemption
feature derivative liabilities on the conversion date.
*Segment
Information*
Operating
segments are defined as components of an entity where discrete financial information is evaluated regularly by the chief operating decision
maker in deciding how to allocate resources and assessing performance. The Company has identified its Chief Executive Officer (CEO)
as the chief operating decision maker (CODM). The Company operates in one operating segment. The Companys CODM allocates
resources and assesses performance at the consolidated level. The Companys property and equipment and operating right of use lease
asset are in the United States as of March 31, 2025 and 2024.
The CODM uses net loss for purposes of making operating
decisions, allocating resources, and evaluating financial performance. Significant expenses include non-cash stock-based compensation,
depreciation and amortization, and write-off of property and equipment, which are reflected in the Consolidated Statements of Cash Flows
for the years ended March 31, 2025 and 2024.
The long-lived assets outside of U.S. are not material as of March 31, 2025. The measure of segment assets is reported
on the balance sheet as total consolidated assets. Refer to the Consolidated Balance Sheets as of March 31, 2025 and 2024 for total consolidated
assets.
*Recently
Issued Accounting Pronouncements*
In
June 2016, the FASB issued ASU 2016-13, Financial Instruments - Credit Losses (Topic 326) - Measurement of Credit Losses on Financial
Instruments. This pronouncement, along with subsequent ASUs issued to clarify provisions of ASU 2016-13, changes the impairment
model for most financial assets and will require the use of an expected loss model for instruments measured at amortized
cost. Under this model, entities will be required to estimate the lifetime expected credit loss on such instruments and record an allowance
to offset the amortized cost basis of the financial asset, resulting in a net presentation of the amount expected to be collected on
the financial asset. In developing the estimate for lifetime expected credit loss, entities must incorporate historical experience, current
conditions, and reasonable and supportable forecasts. This pronouncement is effective for fiscal years, and for interim periods within
those fiscal years, beginning after December 15, 2019. On November 19, 2019, the FASB issued ASU No. 2019-10, Financial InstrumentsCredit
Losses (Topic 326), finalized various effective date delays for private companies, not-for-profit organizations, and certain smaller
reporting companies applying the credit losses (CECL), the revised effective for fiscal years beginning after December 15, 2022. The
Company has adopted Topic 326 on the Companys consolidated financial statements according to the effective date and the adoption
has no significant impact on the Companys consolidated financial statements.
In
December 2019, the FASB issued ASU No. 2019-12, Simplifying the Accounting for Income Taxes (ASU 2019-12), which simplifies
the accounting for income taxes, eliminates certain exceptions within ASC 740, Income Taxes, and clarifies certain aspects of the current
guidance to promote consistency among reporting entities. ASU 2019-12 is effective for fiscal years beginning after December 15, 2021.
Most amendments within the standard are required to be applied on a prospective basis, while certain amendments must be applied on a
retrospective or modified retrospective basis. There is no significant impact from adopting ASU 2019-12 on the Companys financial
condition, results of operations, and cash flows.
| F-16 | |
**BIOTRICITY INC.**
**Notes to Consolidated Financial
Statements**
**Years ended March 31, 2025
and 2024**
**(Expressed in US Dollars)**
In
April 2021, The FASB issued ASU 2021-04 to codify the final consensus reached by the Emerging Issues Task Force (EITF) on how an issuer
should account for modifications made to equity-classified written call options (hereafter referred to as a warrant to purchase the issuers
common stock). The guidance in the ASU requires the issuer to treat a modification of an equity-classified warrant that does not cause
the warrant to become liability-classified as an exchange of the original warrant for a new warrant. This guidance applies whether the
modification is structured as an amendment to the terms and conditions of the warrant or as termination of the original warrant and issuance
of a new warrant. The Company adopted this guidance for the fiscal year beginning April 1, 2022. There is no significant impact from
adopting ASU 2021-04 on the Companys financial condition, results of operations, and cash flows.
On
March 28, 2023, the FASB issued ASU No. 2023-01, Leases (Topic 842): Common Control Arrangements. ASU 2023-01 is designed to clarify
the accounting for leasehold improvements associated with common control leases, thereby reducing diversity in practice. The new standard
is effective for the Company for its fiscal year beginning January 1, 2024, with early adoption permitted. The Company is currently evaluating
the impact of adopting the standard.
In
November 2023, the Financial Accounting Standards Board (FASB) issued ASU 2023-07, Segment Reporting (Topic 280): Improvements
to Reportable Segment Disclosures (ASU 2023-07) to improve the disclosures regarding a public entitys reportable
segments and address requests from investors for additional, more detailed information about a reportable segments expenses. The
Company is required to adopt the guidance in the fourth quarter of fiscal 2025, though early adoption is permitted. The Company adopted the new standard during the current year and conclude that there is no material impact.
In
December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740): Improvement to Income Tax Disclosures (ASU 2023-09)
to provide disaggregated income tax disclosures on rate reconciliation and income taxes paid. The Company is required to adopt the guidance
in the fourth quarter of fiscal 2026, though early adoption is permitted. The Company is currently evaluating the impact of this amendment
on its consolidated financial statements.
The
Company continue to evaluate the impact of the new accounting pronouncement, including enhanced disclosure requirements, on our business
processes, controls and systems.
**4.
ACCOUNTS PAYABLE AND ACCRUED LIABILITIES**
SCHEDULE
OF ACCOUNTS PAYABLE AND ACCRUED LIABILITIES
|
| |
As at March 31, 2025 | | |
As at March 31, 2024 | | |
|
| |
$ | | |
$ | | |
|
Trade and other payables | |
| 4,602,309 | | |
| 5,221,992 | | |
|
Accrued liabilities | |
| 3,034,293 | | |
| 4,369,576 | | |
|
Deferred revenue | |
| 25,322 | | |
| 21,550 | | |
|
Total | |
| 7,661,924 | | |
| 9,613,118 | | |
Trade
and other payables and accrued liabilities as at March 31, 2025 and 2024 included $373,744 and $837,945, respectively, due to a shareholder,
who is a director and executive of the Company.
| F-17 | |
****
****
**BIOTRICITY INC.**
**Notes to Consolidated Financial
Statements**
**Years ended March 31, 2025
and 2024**
**(Expressed in US Dollars)**
****
****
**5.
CONVERTIBLE PROMISSORY NOTES AND SHORT TERM LOANS**
****
**Series
A Convertible Promissory Notes***:*
During
the year ended March 31, 2021, the Company issued $11,275,500 (face value) in two series of convertible promissory notes (the Series
A Notes) sold under subscription agreements to accredited investors. The Notes mature one year from the final closing date of
the offering and accrue interest at 12% per annum.
For
the first series of Series A Notes, commencing six months following the Issuance Date, and at any time thereafter (provided the Holder
has not received notice of the Companys intent to prepay the note), at the sole election of the Holder, any amount of the outstanding
principal and accrued interest of this note (the Outstanding Balance) could be converted into that number of shares of
Common Stock equal to: (i) the Outstanding Balance divided by (ii) 75% of the volume weighted average price of the Common Stock for the
5 trading days prior to the Conversion Date (the conversion price).
For
the first series of Series A Notes, the notes would automatically convert into common stock (in each case, subject to the trading volume
of the Companys common stock being a minimum of $500,000 for each trading day in the 20 consecutive trading days immediately preceding
the conversion date), upon the earlier to occur of (i) the Companys common stock being listed on a national securities exchange,
in which event the conversion price would be equal to 75% of the volume weighted average price of the common stock for the 20 trading
days prior to the conversion date, or (ii) upon the closing of the Companys next equity round of financing for gross proceeds
of greater than $5,000,000, in which event the conversion price would be equal to 75% of the price per share of the common stock (or
of the conversion price in the event of the sale of securities convertible into common stock) sold in such financing. The Company could,
at its discretion, redeem the notes for 115% of their face value plus accrued interest.
For
the second series of Series A Notes, the notes could be converted into shares of common stock, at the option of the holder, commencing
six months from issuance, at a conversion price equal to the lower of $24.00 per share or 75% of the volume weighted average price of
the common stock for the five trading days prior to the conversion date.
For
the second series of Series A Notes, the notes would automatically convert into common stock (in each case, subject to the trading volume
of the Companys common stock being a minimum of $500,000 for each trading day in the 20 consecutive trading days immediately preceding
the conversion date), upon the earlier to occur of (i) the Companys common stock being listed on a national securities exchange,
in which event the conversion price would be equal to the lower of $24.00 per share or 75% of the volume weighted average price of the
common stock for the 20 trading days prior to the conversion date, or (ii) upon the closing of the Companys next equity round
of financing for gross proceeds of greater than $5,000,000, in which event the conversion price would be equal to the lower of $24.00
per share or 75% of the price per share of the common stock (or of the conversion price in the event of the sale of securities convertible
into common stock) sold in such financing. The Company could, at its discretion, redeem the notes for 115% of their face value plus accrued
interest.
| F-18 | |
**BIOTRICITY INC.**
**Notes to Consolidated Financial
Statements**
**Years ended March 31, 2025
and 2024**
**(Expressed in US Dollars)**
The
Company was obligated to issue warrants that accompany the convertible notes and provide 50% warrant coverage. The warrants have a 3-year
term from date of issuance and an exercise price that is 120% of the 20-day volume weighted average price of the Companys common
shares at the time final closing.
The
Company was obligated to pay the placement agent of the first series of Series A Notes a 12% cash fee for $8,925,500 (face value) of
the notes and 2.5% cash fee and other sundry expenses for the remaining $2,350,000 (face value) of the notes.
The
Company was also obligated to issue warrants to the placement agent that have a 10-year term and cover 12% of funds raised for $8,925,550
(face value) of the notes (first series) and 2.5% of funds raised for the remaining $2,350,000 (face value) of notes (second series),
with an exercise price that is 120% of the 20-day volume weighted average price of the Companys common shares at the time final
closing. On final closing, which occurred on January 8, 2021, the warrants exercise price was struck at $6.36 per share.
Prior
to January 8, 2021 (final closing date), the Company determined that the conversion and redemption features contained in those Notes
represented a single compound derivative liability that meets the requirements for liability classification under ASC 815. The Company
accounted for these obligations by determining the fair value of the related derivative liabilities associated with the embedded conversion
and redemption features.
For
the Series A Notes, The Company recognized debt issuance costs in the amount of $2,301,854 and treated these as a deduction from the
convertible note liabilities directly, as a contra-liability, and amortized the debt issuance cost over the term of the Notes. The Company
also recognized initial debt discount in the amount of $8,088,003 and accreted the interest over the remaining lives of those Notes.
The debt issuance costs were fully amortized by March 31, 2022.
On
December 30, 2022, the Company exchanged $500,000 of Series A Notes along with its outstanding interest accrual of $121,500 into a new
convertible note with the same note holder. The new convertible note has principal of $621,500, stated interest rate of 12% per annum,
as well as option to convert outstanding principal and accrued interest at the conversion price, calculated at 75% multiplied by the
average of the three lowest closing prices during the previous ten trading days prior to the receipt of the conversion notice. The new
convertible note matured on December 30, 2023.
During
the year ended March 31 2025,, all of the Series A notes had been converted into common shares, with the exception of notes held by two
investors, with a remaining face value in the amount of $821,000.
During
the year ended March 31, 2025, the Company recognized discount amortization of $nil (2024: $49,393) as accretion and amortization
expense. As of March 31, 2024, the discount on Series A convertible notes was fully amortized.
As
of March 31, 2025, and March 31, 2024, the Company recorded $272,342 and $173,762, respectively, of interest accruals for the Series
A Notes.
During
the years ended March 31, 2025, and March 31, 2024, the Company recognized interest expense in the amount of $98,580 and $98,850, respectively.
**Series
B Convertible Notes**
During
the year ended March 31, 2021, the Company also issued $1,312,500 (face value) of convertible promissory notes (Series B Notes)
to various accredited investors.
| F-19 | |
**BIOTRICITY INC.**
**Notes to Consolidated Financial
Statements**
**Years ended March 31, 2025
and 2024**
**(Expressed in US Dollars)**
Commencing
six months following the issuance date, and at any time thereafter, subject to the Companys Conversion Buyout clause, at the sole
election of the holder, any amount of the outstanding principal and accrued interest of the note (the outstanding balance)
could be converted into that number of shares of Common Stock equal to: (i) the outstanding balance divided by (ii) the Conversion Price.
Partial conversions of the note shall have the effect of lowering the outstanding principal amount of the note. The holder may exercise
such conversion right by providing written notice to the Company of such exercise in a form reasonably acceptable to the Company (a conversion
notice). Conversion price means (subject in all cases to proportionate adjustment for stock splits, stock dividends, and similar
transactions), seventy-five percent (75%) multiplied by the average of the three (3) lowest closing prices during the previous ten (10)
trading days prior to the receipt of the conversion notice.
The
Series B Notes will automatically convert into common stock upon a merger, consolidation, exchange of shares, recapitalization, reorganization,
as a result of which the Companys common stock shall be changed into another class or classes of stock of the Company or another
entity, or in the case of the sale of all or substantially all of the assets of the Company other than a complete liquidation of the
Company. Within the first 180 days after the issuance date, the Company may, at its discretion, redeem the notes for 115% of their face
value plus accrued interest. The Company is obligated to issue warrants that accompany the convertible notes and provide 50% warrant
coverage. The warrants have a 3-year term from date of issuance and an exercise price that is $6.36 per share for 100,000 warrant shares
and $9.0 per share for 35,417 warrant shares.
Net
proceeds to the Company from convertible note issuances to March 31, 2021 amounted to $1,240,000 after the original issuance discount
as well as payment of the financing related fees. The Company determined that the conversion and redemption features contained in the
Series B Notes represented a single compound derivative liability that meets the requirements for liability classification under ASC
815. The Company accounted for these obligations by determining the fair value of the related derivative liability associated with the
embedded conversion and redemption features.
The
Company recognized debt issuance costs in the amount of $10,000 and treated these as a deduction from the convertible note liabilities
directly, as a contra-liability, and amortized the debt issuance cost over the term of the Series B Notes. The Company recognized initial
debt discount in the amount of $1,312,500 and accreted the interest over the remaining lives of those notes. The debt issuance costs
were fully amortized by March 31, 2022.
During
the year ended March 31, 2022, $472,500 (face value) of Series B Notes were converted into 34,586 common shares. As at March 31, 2022,
$840,000 of Series B Notes remained unconverted and outstanding, which was equal to the face value of the relevant convertible notes.
During
the year ended March 31, 2023, $555,600 (face value) of Series B Notes were converted into 126,833 common shares (Note 9 d).
During
the year ended March 31, 2023, $126,680 (face value) of Series B Notes were redeemed by cash payment of $145,682. The redemption price
was determined in accordance to the Series B note agreement, where the Company has an option to redeem the note at 115% of its principal
value instead of converting the note upon receipt of a conversion notice. The difference between the redemption cash payment and the
book value of the note redeemed, including the derivative liability associated to the note, was $24,408, and was recognized as a gain
upon convertible note repayment.
During
the year ended March 31, 2025, the Company redeemed $22,009 of Series B Notes, through a cash payment of $25,342. A gain on redemption
$8,320 was recognized as a result of this redemption, representing the difference between the cash payment and the face value of Series
B Notes redeemed net of the related derivative liabilities ($8,320 for the year ended March 31, 2025).
During
the year ended March 31, 2024, the Company redeemed $135,710 of Series B Notes, through a cash payment of $162,851. A gain on redemption
$18,540 was recognized as a result of this redemption, representing the difference between the cash payment and the face value of Series
B Notes redeemed net of the related derivative liabilities ($45,681 for the year ended March 31, 2024).
As
of March 31, 2025, there were no Series B Notes outstanding.
| F-20 | |
**BIOTRICITY INC.**
**Notes to Consolidated Financial
Statements**
**Years ended March 31, 2025
and 2024**
**(Expressed in US Dollars)**
As
of March 31, 2025, and March 31, 2024, the Company recorded accrued interest in the amount of $88,881 and $88,602, respectively, related
to the Series B Notes.
During
the years ended March 31, 2025, and March 31, 2024, the Company recognized interest expense in the amount of $279 and $3,739, respectively.
**Series
C Convertible Notes**
****
The
Company has issued Series C Notes of $1,812,700 (face value) by March 31, 2024, with net proceeds of $1,100,430 after payment of the
relevant financing related fees.
The
Series C Notes were sold under subscription agreements to accredited investors. The Notes mature one year from the final closing date
of the offering and accrue interest at 15% per annum.
For
Series C Notes, commencing six months following the Issuance Date, and at any time thereafter, at the sole election of the Holder, any
amount of the outstanding principal and accrued interest of this note (the Conversion Amount) could be converted into that
number of shares of Common Stock equal to: the Conversion Amount divided by the Optional Conversion Price, which is defined
as lower of (i) seventy-five percent (75%) of the VWAP for the five (5) Trading Days prior to the Conversion Date, or (ii) eighty percent
(80%) of the gross sale price per share of Common Stock (or conversion or exercise price per share of Common Stock of any Common Stock
Equivalents) sold in a Qualified Financing (as defined in the Series C note agreements).
For
Series C Notes, Mandatory Conversion of the notes would convert into common stock at the applicable Mandatory Conversion
Price, if either (i) on each of any twenty (20) consecutive Trading Days (the Measurement Period) (A) the closing
price of the Common Stock on the applicable Trading Market is at least $18.00 per share and (B) the dollar value of average daily trades
of the Common Stock on the applicable Trading Market is at least $400,000 per Trading Day; or (ii) upon the closing of a Qualified Financing,
provided that the dollar value of average daily trades of the Common Stock on the applicable National Exchange on each of the ten (10)
consecutive Trading Days following such closing is at least $400,000 per Trading Day. Mandatory Conversion Price means, in the case of
a Mandatory Conversion under situation (i) above, seventy percent (70%) of the VWAP over the Measurement Period, or in the case of a
Mandatory Conversion under situation (ii) above, eighty percent (80%) of the gross sale price per share of Common Stock (or conversion
or exercise price per share of Common Stock of any Common Stock Equivalents) sold in a Qualified Financing.
The
Company was obligated to issue warrants that accompany the convertible notes and provide 100% warrant coverage. The warrants have a 4-year
term from date of issuance and an exercise price that is 200% of the 5-day volume weighted average price of the Companys common
shares at the time of final closing.
The
Company was obligated to pay the placement agent of the first series of Series C Notes a 10% cash fee for the face value of the notes.
The
Company was also obligated to issue warrants to the placement agent that have a 10-year term and cover 8% of face value of the notes,
with an exercise price that equals to the 5-day volume weighted average price of the Companys common shares at the time final
closing.
| F-21 | |
**BIOTRICITY INC.**
**Notes to Consolidated Financial
Statements**
**Years ended March 31, 2025
and 2024**
**(Expressed in US Dollars)**
Prior
to the final closing date (October 23, 2023), the Company determined that the conversion features contained in those Note, as well as
the obligations to issue investor warrants and placement agent warrants represented a single compound derivative liability that meets
the requirements for liability classification under ASC 815. The Company accounted for these obligations by determining the fair value
of the related derivative liabilities associated with the embedded conversion features, as well as the obligations related to investor
warrant and placement agent warrant issuance. Subsequently, the exercise price of all warrants was concluded and locked to $4.18 and
$2.09, respectively, for the note holder and placement agent warrants, as of the final closing date October 23, 2023. Since the exercise
price was no longer a variable, the Company concluded that the noteholder and placement agent warrants should no longer be accounted
for as a derivative liability in accordance with ASC 815 guidelines related to equity indexation and classification. The derivative liabilities
related to those warrants were therefore marked to market as of October 23, 2023 and then transferred to equity (collectively, End
of warrants derivative treatment) in the amount of $1,278,786 (Note 8).
For
the Series C Notes, the Company recognized debt issuance costs of $207,361 during the year ended March 31, 2024 and treated these as
debt discounts. The Company also recognized additional debt discount in the amount of $1,005,829 in connection with the recognition of
derivative liabilities for the conversion features, investor warrants and placement agent warrants. The debt discounts are recorded as
a contra liability against the convertible note and are amortized and recognized as accretion expenses using the effective interest method
over the remaining lives of the Notes.
During
the year ended March 31, 2025, and March 31, 2024 the Company recognized discount amortization of $1,267,668 and $693,518, respectively,
on Series C Notes as accretion and amortization expense. As of March 31, 2025 and March 31, 2024, the remaining unamortized discount
on Series C convertible notes was $ nil and $1,232,274, respectively.
During
the year ended March 31, 2025, convertible notes with a face value of $1,487,700
and accrued interest of $237,230,
were converted into 2,173,089
common shares. As of March 31, 2025, 577,644
shares are recognized as an obligation for shares to be issued
relating to the conversions. The fair value of common shares issued during the year ended March 31, 2025 is $2,431,178, and is determined based on market price upon conversion. Total value of debt settled is in the amount of $ 2,234,232,
which consisted of the face value of notes converted, accrued interest of $237,230,
and relevant derivative liability of $509,303.
The Company recognized a loss upon conversion of $196,945,
respectively, representing the difference between the value of debt settled and fair value of shares issued and to be issued.
During
the year ended March 31, 2025, convertible notes with a face value of $150,000
and accrued interest of $34,864,
were redeemed for a cash payment of $184,864.
The Company recorded a $nil gain on redemption related to the conversion, representing the difference between the value of the debt settled
and the cash payment value.
As
of March 31, 2025, and March 31, 2024, the Company recorded accrued interest in the amount of $53,188 and $253,643, respectively, related
to the Series C Notes.
During
the years ended March 31, 2025, and March 31, 2024, the Company recognized interest expense in the amounts of $70,712 and $251,045, respectively.
**Convertible
Preferred Notes**
The
Company entered into a convertible preferred note financing on September 25, 2023 and issued a convertible note (Preferred Note)
for a principal amount of $1,000,000. The Preferred Note matures on the eighteen (18) month anniversary of the issuance date, or if there
be more than one closing pursuant to a qualified offering as defined in the financing agreement, the eighteen (18) month anniversary
of the last closing date of the offering (the Maturity Date). The Preferred Note bears interest at a fixed rate of 12%
which is payable in cash monthly.
| F-22 | |
**BIOTRICITY INC.**
**Notes to Consolidated Financial
Statements**
**Years ended March 31, 2025
and 2024**
**(Expressed in US Dollars)**
The
Company also issued a Preferred Note on October 25, 2023 in the principal amount of $250,000. The Preferred Note matures on the eighteen
month anniversary of the issuance date, or if there will be more than one closing pursuant to a qualified offering as defined in the
financing agreement, the eighteen month anniversary of the last closing date of the offering. The Preferred Note bears interest at a
fixed rate of 12%, which is payable in cash quarterly.
The
Company issued a further Preferred Note in January 2024 for a principal amount of $114,303. The Preferred Note matures on the twenty-four
(24) month anniversary of the issuance date, or if there will be more than one closing pursuant to a qualified offering as defined in
the financing agreement, the twenty-four month anniversary of the last closing date of the offering. The Preferred Note bears interest
at a fixed rate of 8% which is payable in cash quarterly.
The
Company also issued a Preferred Note on June 17, 2024, for a principal amount of $300,000. The Preferred Note matures on the eighteen
(18) month anniversary of the issuance date, or if there will be more than one closing pursuant to a qualified offering as defined in
the financing agreement, the eighteen month anniversary of the last closing date of the offering (the Maturity Date). The
Preferred Note bears interest at a fixed rate of 12% which is payable in cash quarterly.
During
the year ended March 31, 2025, the Company issued $1,985,000 in unsecured convertible promissory notes to private investors; $100,000
of the notes mature on their six-month anniversary of issuance and bear interest of 20%; $710,000 of the notes mature on their twenty
four-month anniversary of issuance and bear interest of 10%; and $1,175,000 of the notes mature on their eighteen-month anniversary of
issuance and bear not interest; all of the notes have conversion features that require the mutual consent of the investor and the Company.
Since the conversion is not in control of the holder of the note, the Company did not recognize a derivative liability in connection
with the conversion option of the Other Convertible Notes.
As
of March 31, 2025 and March 31, 2024, the Company recorded accrued interest in the amount of $36,163 and $4,103, respectively,
related to the Preferred Notes.
During
the year ended March 31, 2025, the Company recognized interest expense in the amount of $180,888 (2024: $74,851).
**Other
Convertible Notes**
On
January 23, 2023, the Company issued $2,000,000 (face value) in convertible preferred notes (the Notes) to an accredited
investor. The Notes mature 18 months from the issuance date. This note bears interest rate at a fixed rate of 10% in the form of stock
with a striker price equal to the closing stock price on the note issuance date. Therefore, the Company issued 45,045 units of common
stock in lieu of interest on this convertible note. These stocks were valued at $221,621 and was recognized as a deferred cost on the
convertible note, recorded as a contra liability against the convertible note, and was amortized and recognized as accretion expense
using the effective interest rate method over the remaining lives of the Notes.
The
conversion of the Notes is automatic upon a Qualified Financing which is in the control of the Company, or at maturity of the notes,
upon mutual agreement by the noteholder and the Company. Since the conversion is not in control of the holder of the note, the Company
did not recognize a derivative liability in connection with the conversion option of the Notes.
As
of March 31, 2024, the discount on Other Convertible Notes was fully amortized. As of March 31, 2023, the remaining unamortized discount
on Other Convertible Notes was $186,404.
During
the year ended March 31, 2025, and March 31, 2024 the Company recognized discount amortization of $nil and $186,404, respectively, on
the Notes as accretion and amortization expense.
| F-23 | |
****
****
**BIOTRICITY INC.**
**Notes to Consolidated Financial
Statements**
**Years ended March 31, 2025
and 2024**
**(Expressed in US Dollars)**
****
**Other
Short-term loans and Promissory Notes**
In
December 2022, the Company entered into a short-term bridge loan agreement with a collateralized merchant finance company that advanced
gross proceeds of $400,000, prior to the deduction of issuance costs in the amount of $9,999. The issuance costs were recognized as a
debt discount and amortized via the effective interest method. The term of the finance agreement is 40 weeks. The Company is required
to make weekly payments of $13,995 ($560,000 in the aggregate). As of March 31, 2024, the principal was fully repaid and
discount for this loan was fully amortized. The discount amortization during the years ended March 31, 2025, and March 31, 2024 was $nil
and $6,142, respectively, and was recognized as part of the accretion and amortization expenses. In addition, the Company recognized
$nil and $66,213 accretion expenses, during the years ended March 31, 2025, and March 31, 2024, respectively, related to the increase
in present value of the loan over its term. For the year ended March 31, 2025, total repayments for the loan amounted to $nil.
In
December 2022, the Company also entered into a short-term collateralized bridge loan agreement with a finance company that advanced gross
proceeds of $800,000, prior to the deduction of issuance costs in the amount of $32,000. The issuance costs were recognized as a debt
discount and amortized via the effective interest method. The term of this second agreement is 40 weeks. The Company is required to make
weekly payments of $29,556 ($13,999 for the first four weeks, and $1,120,000 in the aggregate). As of March 31, 2024, the
principal was fully repaid and discount for this loan was fully amortized. The discount amortization during years ended March 31, 2025,
and March 31, 2024, was $nil and $20,800, respectively, which was recognized as part of the accretion and amortization expenses. In addition,
the Company recognized $nil and $148,027 accretion expenses, during the years ended March 31, 2025, and March 31, 2024, respectively,
related to the increase in present value of the loan over its term. As of March 31, 2025, total repayments for the loan amounted to $nil.
In
December 2022, the Company entered into a promissory note agreement with an individual investor that resulted in gross proceeds of $600,000
(the Principal Amount). The note has a fixed rate of interest at 25% per annum payable monthly on the first day of every
month. This promissory note matured on December 15, 2023, when the Principal Amount became due. The note has various default provisions
which would, if triggered, result in the acceleration of the Principal Amount plus any accrued and unpaid interest. The note also has
a 3% early payment penalty provision. As of March 31, 2025, and March 31, 2024, the amount of principal outstanding on the note was $600,000,
and accrued interest outstanding on the note was $12,723 and $12,723, respectively. The note continues to accrue interest, and no repayment
demand notification was received from noteholder. During the years ended March 31, 2025, and March 21, 2024, the Company recorded interest
expense in the amount of $150,000 and $150,411, respectively, related to the promissory note.
On
December 30, 2022, the Company extinguished 51,101 warrants that were originally issued to Series A Convertible Noteholders and replaced
these warrants with a new promissory note issued to the same warrant holder. The new promissory note has principal balance of $270,000,
stated interest of zero, and maturity date of December 31, 2023. The fair value of this new promissory note was $248,479 as of the issuance
date, which was calculated using a discount rate that was comparable to other loan issuance at the same time as well as the market bond
rates at the time of the promissory note issuance. The difference between the fair value of the new note and its principal balance was
$21,521, and was recognized as a discount, and amortized via effective interest rate method. The Company compared the fair value of the
extinguished warrants immediately prior to extinguishment against the fair value of the new promissory note issued. As of March 31, 2025,
the obligation to repay the principal balance at the original maturity date was waived for a finance charge of $50,000, which the Company
recorded as interest expense in the in the statement of operations. As of March 31, 2025, the amount of principal outstanding on the
note was $270,000, and the remaining unamortized discount was $nil. During years ended March 31, 2025, and March 31, 2024, the Company
recognized amortization of discount on this promissory note in the amounts of $nil and $7,304, respectively, as accretion and amortization
expenses. As of March 31, 2025, the Company recorded accrued interest in the amount of $50,000 related to this promissory note.
| F-24 | |
**BIOTRICITY INC.**
**Notes to Consolidated Financial
Statements**
**Years ended March 31, 2025
and 2024**
**(Expressed in US Dollars)**
On
March 29, 2023, the Company entered into an additional collateralized bridge loan agreement with a finance company that advanced gross
proceeds of $300,000, prior to the deduction of issuance costs in the amount of $12,000. The issuance costs were recognized as a debt
discount and would be amortized via the effective interest method. The term of this agreement is 40 weeks. The Company is required to
make weekly payments of $5,250 for the first four weeks, and $11,083 for the remaining 36 weeks, which is $420,000 in aggregate. On July
18, 2023, the Company entered into an amendment with the finance company and increased total proceeds borrowed to $700,000. The proceeds
from the amended loan balance were netted against previously outstanding balance of the loan, along with an issuance cost in the amount
of $28,000. The term of this new loan agreement is 40 weeks. The Company is required to make weekly payments of $24,500, which is $980,000
in aggregate. The Company accounted for this amendment as a debt extinguishment and recognized a loss on the amendment of $59,161 in
other expenses. The issuance costs on the amended loan were recognized as a debt discount and would be amortized via the effective interest
method. As of March 31, 2025, the amount of principal outstanding under this amended agreement was $nil and the remaining unamortized
issuance cost discount was $nil. During the year ended March 31, 2025, the Company recognized $2,800 of amortization of discount as accretion
and amortization expenses. In addition, the Company recognized $4,152 accretion expenses, during the year ended March 31, 2025, related
to the increase in present value of the loan over its term. During the year ended, net repayments for the loan amounted to $191,500.
In
June 2023, the Company entered into a secured revolving account purchase credit and inventory financing facility (the Revolving
Facility) with a revolving loan lender, pursuant to which the lender may from time to time purchase certain discrete account receivables
from the Company (with full recourse) or may make loans and provide other financial accommodations, the payment of which are guaranteed
and secured by certain assets of the Company. In assigning the selling accounts receivables to the revolving loan lender, the Company
is receiving 85% of their value as an advance of its regular collection of those receivables, limited to $1.2 million in financing, and
expects to receive the remaining balance as part of normal collection activities. The inventory financing provided by this facility was
limited to the lower of $0.3 million, or a 40% maximum of inventory balances. The Revolving Facility was accounted for as a secured borrowing.
As of March 31, 2025, the Company had drawn $1,541,797 (2024: $1,286,792) in accounts receivable financing and $158,000 (2024:
$125,000) in inventory financing with aggregate principal outstanding of $1,699,797 (2024: $1,411,792).
During the year ended March 31, 2025, the Company recognized interest expense in the amount of $431,356 (2024: $263,696) As
of March 31, 2025, the Company recorded accrued interest in the amount of $28,052 (2024: $23,879) related to the Revolving
Facility.
On
July 13, 2023, the Company entered into another short-term bridge loan agreement with a collateralized merchant finance company that
advanced gross proceeds of $400,000, prior to the deduction of issuance costs in the amount of $24,000. The issuance costs were recognized
as a debt discount and amortized via the effective interest method. The term of the finance agreement is 14 weeks. The Company is required
to make weekly payments of $38,705 ($540,000 in the aggregate). As of March 31, 2025, the principal was fully repaid and discount for
this loan was fully amortized. No repayments were made during the year ended March 31, 2025.
On
August 11, 2023, the Company issued two short term promissory notes (August 2023 Notes), each for a principal amount of
$250,000, to one investor for aggregate gross proceeds of $500,000. The August 2023 Notes do not accrue formal interest, but do contain
administrative fees in the aggregate of $75,000. One of the notes matures three months from the issuance date upon which the principal
amount of $250,000 and an administrative fee of $25,000 is due. The second note matures six months from the issuance date upon which
the principal amount of $250,000 and an administrative fee of $50,000 is due. The administrative fees were accrued as interest expenses
for the period of the loans outstanding. As of March 31, 2025, the amount of principal outstanding on the note was $72,500, and accrued
interest outstanding on the note was $75,000.
On
December 8, 2023, the Company entered into a short-term bridge loan agreement with a collateralized merchant finance company that advanced
gross proceeds of $630,000, prior to the deduction of issuance costs in the amount of $15,750. The issuance costs were recognized as
a debt discount and amortized via the effective interest method. The term of the finance agreement is 44 weeks. The Company is required
to make weekly payments of $19,195 ($844,200 in the aggregate). As of March 31, 2025, the amount of principal outstanding under this
short-term bridge loan agreement was $nil and the remaining unamortized issuance cost discount was $nil. During the year
ended March 31, 2025 the Company recognized $10,023 (2024: $5,727) of amortization of discount as accretion and amortization
expenses. In addition, the Company recognized $93,895 (2024: $120,305) accretion expenses during year ended March 31, 2025,
related to the increase in present value of the loan over its term. As of March 31, 2025, total repayments for the loan amounted to $570,425.
| F-25 | |
**BIOTRICITY INC.**
**Notes to Consolidated Financial
Statements**
**Years ended March 31, 2025
and 2024**
**(Expressed in US Dollars)**
During
February 2024, the Company entered into a promissory note agreement with an individual investor that resulted in gross proceeds of $660,504
(the Principal Amount). The note has a fixed rate of interest at 12% per annum on the principle amount, payable monthly.
As of March 31, 2025, the amount of principal outstanding on the note was $660,932, and accrued interest outstanding on the note was
$86,455 (2024: $7,101). The note continues to accrue interest, and no repayment demand notification was received from note
holder. During the year ended March 31, 2025, the Company recognized interest expense in the amount of $79,312 (2024: $7,131)
related to the promissory note.
On
February 2, 2024, the Company entered into a short-term bridge loan agreement with a collateralized merchant finance company that advanced
gross proceeds of $700,000, prior to the deduction of issuance costs in the amount of $35,000. The issuance costs were recognized as
a debt discount and amortized via the effective interest method. The term of the finance agreement is 35 weeks. The Company is required
to make weekly payments of $29,235 ($1,008,000 in the aggregate). As of March 31, 2025, the amount of principal outstanding under this
agreement was $nil and the remaining unamortized issuance cost discount was $nil. During the year ended March 31, 2025, the Company recognized
$26,879 (2024: $8,121) of amortization of discount as accretion and amortization expenses. In addition, the Company recognized
$193,015 (2024: $114,985) accretion expenses during year ended March 31, 2025, related to the increase in present value of
the loan over its term. As of March 31, 2025, total repayments for the loan amounted to $745,305.
**6.
TERM LOAN AND CREDIT AGREEMENT**
*Term
Loan*
On
December 21, 2021, the Company entered into a Credit Agreement (Credit Agreement) with SWK Funding LLC (Lender);
as part of this, the Company has borrowed $12.4 million, with a maturity date of December 21, 2026. The principal will accrue interest
at the LIBOR Rate plus 10.5% per annum (subject to adjustment as set forth in the Credit Agreement). Interest payments are due each February,
May, August and November commencing February 15, 2022. Pursuant to the Credit Agreement, the Company will be required to make interest
only payments for the first 24 months (which may be extended to 36 months under prescribed circumstances), after which payments will
include principal amortization that accommodates a 40% balloon principal payment at maturity. The Company and the Lender have negotiated
the terms under which the Company will be allowed to extend the interest-only period and delay the start of principal repayment. The
negotiated terms indicate principal repayment of $2.4 million ($600,000 per quarter), during the final two years of the term. A current
portion of the term loan of $2,400,000 was reported in the Companys current liabilities as at December 31, 2024. Prepayment of
amounts owing under the Credit Agreement is allowed under prescribed circumstances. Pursuant to the Credit Agreement the Company is subject
to an Origination Fee in the amount of $120,000. Upon Termination of the Credit Agreement, the Company shall pay an Exit Fee, along with
other fees that may be assessed during the term of the loan. As part of the loan transaction, the Company paid legal and professional
costs directly in connection to the debt financing in the amount of $50,000 in cash. Total costs directly in connection to the debt financing
in the amount of $193,437 (professional fee $48,484; lenders origination fee, due diligence fee, and other expenses in the amount
of $144,953) were deduced from the gross proceeds in the amount of $12,000,000. The Company also repaid $1,574,068 of existing short-term
loan and promissory notes and relevant accrued interests by using the proceeds from the loan. Total costs directly in connection to the
loan and fair value of warrants was in the amount of $1,042,149. And such costs were accounted for as debt discount and amortized using
the effective interest method. The amortization of such debt discount was included in the accretion and amortization expenses. During
November 2022, unpaid interest of $364,000 was added to the outstanding principal balance, since then interest onwards would be calculated
on the updated principal balance. In connection with the Credit Agreement, the Company issued 57,536 warrants to the Lender, which were
fair-valued at $198,713 at issuance (Note 9). The warrants were accounted as part of the debt discount as well as a credit into additional
paid-in capital and amortized using the effective interest method.
| F-26 | |
**BIOTRICITY INC.**
**Notes to Consolidated Financial
Statements**
**Years ended March 31, 2025
and 2024**
**(Expressed in US Dollars)**
The
Company and Lender also entered into a Guarantee and Collateral Agreement (Collateral Agreement) wherein the Company agreed
to secure the Credit Agreement with all of the Companys assets. The Company and Lender also entered into an Intellectual Property
Security Agreement dated December 21, 2021 (the IP Security Agreement) wherein the Credit Agreement is also secured by
the Companys right title and interest in the Companys Intellectual Property.
In
November 2024, the Company completed an additional transaction with its term lender to receive an additional $635 thousand in term loan
proceeds, and interest relief through the capitalization of approximately $1.5 million in interest amounts due on its existing term loan.
As part of this arrangement, the Company issued 600,000, 7-year share warrants to the term lender with a strike price of $0.50 per share
and agreed to increase the term loan exit fee to $1.425 million at the end of its 5-year term. Concurrently, the Company received waiver
and forbearance relief on certain term loan covenants and their respective defaults.
The
amortization of such debt discount was included in the accretion and amortization expenses. For the years ended March 31, 2025 and 2024,
the amortization of debt discount expense was $356,778 and $206,224 respectively.
Total
interest expense on the term loan for the years ended March 31, 2025 and 2024 $2,180,897 and $1,981,054, respectively.
During November 2024, the unpaid interest of $1.5 million was added to the outstanding principal balance, since then interest onwards
would be calculated on the updated principal balance.
The
Company had accrued interest payable of $404,621 and $795,656, respectively, as of March 31, 2025 and March 31, 2024.
**7.
FEDERALLY GUARANTEED LOAN**
**Economic
Injury Disaster Loan (EIDL)**
In
April 2020, the Company received $370,900 from the U.S. Small Business Administration (SBA) under the captioned program. The loan has
a term of 30 years and an interest rate of 3.75% per annum, without the requirement for payment in its first 12 months. The Company may
prepay the loan without penalty at will.
In
May 2021, the Company received an additional $499,900 from the SBA under the same terms.
As
of March 31, 2025, the Company recorded accrued interest of $Nil for the EIDL loan (March 31, 2024: $26,497).
Interest
expense on the above loan was $32,655 and $32,744 for the years ended March 31, 2025 and 2024, respectively.
**8.
DERIVATIVE LIABILITIES**
The
Company analyzed the compound features of variable conversion and redemption embedded in the preferred shares instrument, for potential
derivative accounting treatment on the basis of ASC 820 (Fair Value in Financial Instruments), ASC 815 (Accounting for Derivative Instruments
and Hedging Activities), Emerging Issues Task Force (EITF) Issue No. 0019 and EITF 0705, and determined that
the embedded derivatives should be bundled and valued as a single, compound embedded derivative, bifurcated from the underlying equity
instrument, treated as a derivative liability, and measured at fair value. A roll-forward of activity is presented below for the year
ended March 31, 2025 and 2024:
SCHEDULE
OF DERIVATIVE LIABILITIES
|
| |
Fiscal
Year 2025 $ | | |
Fiscal
Year 2024 $ | | |
|
Derivative liabilities, beginning of year | |
| 1,435,668 | | |
| 759,065 | | |
|
New issuance [Note 9] | |
| 649,533 | | |
| 964,446 | | |
|
Change in fair value of derivatives during the year | |
| 553,208 | | |
| (92,961 | ) | |
|
Reduction due to preferred shares redeemed [Note 9] | |
| (1,159,692 | ) | |
| (194,882 | ) | |
|
Derivative liabilities, end of year | |
| 1,478,717 | | |
| 1,435,668 | | |
| F-27 | |
**BIOTRICITY INC.**
**Notes to Consolidated Financial
Statements**
**Years ended March 31, 2025
and 2024**
**(Expressed in US Dollars)**
The
lattice methodology was used to value the derivative components, using the following assumptions:
SCHEDULE
OF DERIVATIVE COMPONENTS VALUATION ASSUMPTIONS
|
| |
Fiscal Year | | |
Fiscal Year | | |
|
| |
2025 | | |
2024 | | |
|
Dividend yield (%) | |
| 12 | | |
| 12 | | |
|
Risk-free rate for term (%) | |
| 3.7 5.1 | | |
| 4.7 13.7 | | |
|
Volatility (%) | |
| 91.2 194.2 | | |
| 71.9 119.1 | | |
|
Remaining terms (Years) | |
| 0.17 2.0 | | |
| 0.25 2.01 | | |
|
Stock price ($ per share) | |
| 0.24 1.34 | | |
| 0.98 3.82 | | |
In
addition, the Company recorded derivative liabilities related to the conversion and redemption features of the convertible notes, as
well as warrants that were issued in connection with the convertible notes (Note 5). Any noteholder and placement agent warrants that
were issued after the finalization of exercise price was accounted for as equity.
SCHEDULE
OF CONVERTIBLE NOTE AND WARRANT DERIVATIVE LIABILITIES
|
| |
Fiscal Year 2025 $ | | |
Fiscal Year 2024 $ | | |
|
| |
| | |
| | |
|
Balance beginning of year | |
| 991,866 | | |
| 1,008,216 | | |
|
New Issuance | |
| - | | |
| 1,224,932 | | |
|
Conversion to common shares | |
| (509,303 | ) | |
| (45,680 | ) | |
|
Convertible note redemption | |
| (59,011 | ) | |
| - | | |
|
Change in fair value of derivative liabilities | |
| 648 | | |
| 83,184 | | |
|
End of derivative treatment of warrants | |
| - | | |
| (1,278,786 | ) | |
|
Convertible note modification | |
| - | | |
| - | | |
|
Balance end of year | |
| 424,200 | | |
| 991,866 | | |
The
Monte-Carlo methodology was used to value the convertible note and warrant derivative components, using the following assumptions:
SCHEDULE
OF CONVERTIBLE NOTE AND WARRANT DERIVATIVE COMPONENTS VALUATION ASSUMPTIONS
|
| |
| Fiscal Year | | |
| Fiscal Year | | |
|
| |
| 2025 | | |
| 2024 | | |
|
Risk-free rate for term (%) | |
| 0.1 5.2 | | |
| 4.2 5.3 | | |
|
Volatility (%) | |
| 91.2 194.4 | | |
| 76.2 126.6 | | |
|
Remaining terms (Years) | |
| 0.25 0.5 | | |
| 0.25 1.49 | | |
|
Stock price ($ per share) | |
| 0.24 1.45 | | |
| 1.08 4.20 | | |
| F-28 | |
**BIOTRICITY INC.**
**Notes to Consolidated Financial
Statements**
**Years ended March 31, 2025
and 2024**
**(Expressed in US Dollars)**
**9.
STOCKHOLDERS DEFICIENCY AND MEZZANINE EQUITY**
(a) **Authorized and Issued Stock**
As
at March 31, 2025, the Company is authorized to issue 125,000,000 (March 31, 2024 125,000,000) shares of common stock ($0.001
par value), and 10,000,000 (March 31, 2024 10,000,000) shares of preferred stock ($0.001 par value), 20,000 of which (March 31,
2024 20,000) are designated shares of Series A preferred stock ($0.001 par value) and 600 (March 31, 2024 600) are designated
shares of Series B preferred stock ($0.001 par value).
At
March 31, 2025, common shares and shares directly exchangeable into equivalent common shares that were issued and outstanding totaled
26,241,967 (2024 9,514,440) shares; these were comprised of 26,081,295 (2024 9,353,768) shares of common stock and 160,672
(2024 160,672) exchangeable shares. At March 31, 2025, there were 201 Series A shares of Preferred Stock that were issued and
outstanding (2024 6,304), and there were 385 shares of Series B Preferred Stock that were issued and outstanding (March 31, 2024
180). There is also one share of the Special Voting Preferred Stock issued and outstanding held by one holder
of record, which is the Trustee in accordance with the terms of the Trust Agreement and outstanding as at March 31, 2025 and 2024.
(**b)
Series A Preferred Stock**
****
The
number of Series A Preferred Stock issued and outstanding as of March 31, 2025 and 2024 was 201 and 6,304.
The
Series A Preferred Stock is junior to the Companys existing undesignated preferred stock, and unless otherwise set forth in the
applicable certificate of designations, shall be junior to any future issuance of preferred stock. The purchase price (the Purchase
Price) for the Series A Preferred Stock to date has been $100 per share. Except as otherwise expressly required by law, the Series
A Preferred Stock does not have voting rights and does not have any liquidation rights.
*Preferred
Stock Dividends*
Dividends
shall be paid at the rate of 12% per annum of the amount of the Series A Preferred Stockholders (the Holder) Purchase
Price. Dividends shall be paid quarterly unless the Holder and the Company mutually agree to accrue and defer any such dividend.
*Conversion*
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 Holders 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 Companys common stock five Trading
Days immediately prior to the conversion date (the Conversion Rate). Additionally, subject to certain provisions, the Holder may
exchange its Series A Preferred Stock into any common stock financing being conducted by the Company at a 15% discount to the pricing
of that financing.
*Other
Adjustments and Rights*
|
|
The Conversion
Rate (and shares issuable upon conversion of the Series A Preferred Stock) will be appropriately adjusted to reflect stock splits,
stock dividends business combinations and similar recapitalization. | |
|
|
| |
|
|
The Holders shall
be entitled to a proportionate share of certain qualifying distributions on the same basis as if they were holders of the Companys
common stock on an as converted basis. | |
| F-29 | |
**BIOTRICITY INC.**
**Notes to Consolidated Financial
Statements**
**Years ended March 31, 2025
and 2024**
**(Expressed in US Dollars)**
*Company
Redemption*
The
Company may redeem all or part of the outstanding Series A Preferred Stock after one year from the date of issuance by paying an amount
equal to the aggregate Purchase Price paid, adjusted for any reduction in Series A Preferred Stock holdings, multiplied by 110% plus
accrued dividends
During
the year ended March 31, 2025, $6,104,444
of Series A Preferred Stock (face value) and $1,071,542
accrued dividends thereon were converted into 8,952,170
common shares. The conversion was accounted as an extinguishment and the difference between the total carrying value of the
preferred shares converted, derivative liabilities derecognized and unpaid dividend at the time of conversion ($7,984,463),
and the fair value of the common shares issued ($11,039,142),
was $3,054,680 and was recognized as a deemed dividend expense.
**(c)
Series B Preferred Stock and Mezzanine Equity**
On
September 19, 2023, the Company entered into a security purchase agreement (the Purchase Agreement) with an institutional
investor (the Investor) for the issuance and sale of 220 shares of the Companys newly designated Series B Convertible
Preferred Stock, $0.001 par value (the Series B Preferred Stock), at a purchase price of $9,091 per share of Preferred
Stock, and after accounted for other issuance related costs, the net proceeds received was in the amount of $1,900,000.
During
the three months ended March 31, 2024, the Company issued an additional 110 Series B preferred shares were issued for net proceeds of
$925,000. During the three and nine months ended December 31, 2024, the Company issued an additional and 220 Series B preferred shares
for net proceeds of $ nil and $1,732,532, respectively.
Shares
of Series B Preferred Stock and shares of Common Stock of the Company that are issuable upon conversion of, or as dividends on, the Series
B Preferred Stock were offered and were issued pursuant to the Prospectus Supplement, filed September 19, 2023, to the Prospectus included
in the Companys Registration Statement on Form S-3 (Registration No. 333-255544) filed with the Securities and Exchange Commission
on April 27, 2021, and declared effective May 4, 2021.
Pursuant
to the initial Purchase Agreement, on September 19, 2023, the Company filed a certificate of designations of Series B Convertible Preferred
Stock (the Certificate of Designations) with the Nevada Secretary of State designating 600 shares of the Companys
shares of Preferred Stock as Series B Convertible Preferred Stock and setting forth the voting and other powers, preferences and relative,
participating, optional or other rights of the Preferred Shares. Each share of Series B Preferred Stock has a stated value of $10,000
per share.
The
Series B Preferred Stock, with respect to the payment of dividends, distributions and payments upon the liquidation, dissolution and
winding up of the Company, ranks senior to all capital stock of the Company unless the holders of the majority of the outstanding shares
of Series B Preferred Stock consent to the creation of other capital stock of the Company that is senior or equal in rank to the Series
B Preferred Stock.
Holders
of Series B Preferred Stock will be entitled to receive cumulative dividends (Dividends), in shares of common stock or
cash on the stated value at an annual rate of 8% (which will increase to 15% if a Triggering Event (as defined in the Certificate of
Designations) occurs. Dividends will be payable upon conversion of the Series B Preferred Stock, upon any redemption, or upon any required
payment upon any Bankruptcy Triggering Event (as defined in the Certificate of Designations).
Holders
of Series B Preferred Stock will be entitled to convert shares of Series B Preferred Stock into a number of shares of common stock determined
by dividing the stated value (plus any accrued but unpaid dividends and other amounts due) by the conversion price. The initial conversion
price is $3.50, subject to adjustment in the event the Company sells common stock at a price lower than the then-effective conversion
price. Holders may not convert the Series B Preferred Stock to common stock to the extent such conversion would cause such holders
beneficial ownership of common stock to exceed 4.99% of the outstanding common stock. In addition, the Company will not issue shares
of common stock upon conversion of the Series B Preferred Stock in an amount exceeding 19.9% of the outstanding common stock as of the
initial issuance date unless the Company receives shareholder approval for such issuances.
| F-30 | |
**BIOTRICITY INC.**
**Notes to Consolidated Financial
Statements**
**Years ended March 31, 2025
and 2024**
**(Expressed in US Dollars)**
Holders
may elect to convert shares of Series B Preferred Stock to common stock at an alternate conversion price equal to 80% (or 70% if the
Companys common stock is suspended from trading on or delisted from a principal trading market or if the Company has effected
a reverse split of the common stock) of the lowest daily volume weighed average price of the common stock during the Alternate Conversion
Measuring Period (as defined in the Certificate of Designations). In the event the Company receives a conversion notice that elects an
alternate conversion price, the Company may, at its option, elect to satisfy its obligation under such conversion with payment in cash
in an amount equal to 110% of the conversion amount.
The
Series B Preferred Stock will automatically convert to common stock upon the 24-month anniversary of the initial issuance date of the
Series B Preferred Stock.
At
any time after the earlier of a holders receipt of a Triggering Event notice and such holder becoming aware of a Triggering Event
and ending on the 20th trading day after the later of (x) the date such Triggering Event is cured and (y) such holders receipt
of a Triggering Event notice, such holder may require the Company to redeem such holders shares of Series B Preferred Stock.
Upon
any Bankruptcy Triggering Event (as defined in the Certificate of Designations), the Company will be required to immediately redeem all
of the outstanding shares of Series B Preferred Stock.
The
Company will have the right at any time to redeem all or any portion of the Series B Preferred Stock then outstanding at a price equal
to 110% of the stated value plus any accrued but unpaid dividends and other amounts due.
Holders
of the Series B Preferred Stock will have the right to vote on an as-converted basis with the common stock, subject to the beneficial
ownership limitation set forth in the Certificate of Designations.
The
Series B Preferred Stock was accounted for as Mezzanine Equity in accordance with ASC 480 - *Distinguishing Liabilities from Equity*and the embedded conversion and redemption features was separated from the host instrument and recognized as derivative liabilities
with change in fair value at each reporting period end recognized in the consolidated statement of operations and comprehensive loss.
(Note 8).
During
the three months ended December 31, 2023, 40 Series B preferred shares and dividends accrued thereon were converted into 612,062 common
shares. As a result of the conversion, the Company reduced the book value of mezzanine equity by $228,727 and reduced its accrued dividends
liability by $16,789. The Company also reduced the fair value of derivative liabilities by $119,359 in relation to related to the shares
converted. The Company recognized corresponding credits to common share par value and paid in capital.
During
the three months ended March 31, 2024, 25 Series B preferred shares and dividends accrued thereon were converted into 320,321 to be issued
common shares. As a result of the conversion, the Company reduced the book value of mezzanine equity by $142,908. The Company also reduced
the fair value of derivative liabilities related to the shares converted by $ 75,523. The Company recognized corresponding credits to
be issued common share par value and paid in capital.
During
the year ended March 31, 2025, 100
Series B preferred shares and dividends accrued thereon were
converted into 3,650,361
common shares. As a result of the conversion, the Company reduced
the book value of mezzanine equity by $571,629.
The Company also reduced the fair value of derivative liabilities related to the shares converted by $351,214
related to the shares converted during the the year ended March 31, 2025. The Company recognized corresponding credits to be issued common shares.
| F-31 | |
**BIOTRICITY INC.**
**Notes to Consolidated Financial
Statements**
**Years ended March 31, 2025
and 2024**
**(Expressed in US Dollars)**
A
roll-forward of activity is presented below for the year ended March 31, 2025:
SCHEDULE
OF SERIES B PREFERRED STOCK FOR MEZZANINE EQUITY
|
| |
2025 | | |
2024 | | |
|
| |
$ | | |
$ | | |
|
Balance beginning of year March 31 | |
| 1,488,920 | | |
| | | |
|
Net proceeds received pursuant to the issuance of preferred shares | |
| 1,732,532 | | |
| 2,825,000 | | |
|
Recognition of derivative liabilities (Note 8) | |
| (649,533 | ) | |
| (964,446 | ) | |
|
Conversion into common shares | |
| (571,629 | ) | |
| (371,634 | ) | |
|
Balance end of year March 31 | |
| 2,000,290 | | |
| 1,488,920 | | |
**(d)
Share issuances**
**Share
issuances during the year ended March 31, 2025**
During
the three months and the year ended March 31, 2025, the Company issued nil and 320,321 common shares to Series B preferred shareholders,
respectively, in relation to shares to be issued obligation as of March 2024 for Series B preferred share conversions.
In
October 2024, the Company issued 1,197,770
common shares on partial conversion of 25
shares of Series B Convertible Redeemable Preferred Stock, and a further 233,441
additional common shares required to complete its conversion obligation of a conversion of 25
shares of Series B Convertible Redeemable Preferred Stock that was triggered on July 11, 2024. During the three and nine months
ended December 31, 2024, the Company issued another 1,431,181
and 2,867,448
common shares to Series B preferred shareholders for an additional request to convert 25
and 75
Series B preferred shares, respectively (see Note 9(c)). In addition, during the year ended March 31, 2025, the Company issued 616,666
common shares for services received with a fair value of $292,596,
which was recognized as a general and administrative expense with a corresponding credit to additional paid-in capital. During that
same period, the Company issued 100,000
shares of common stock valued at $26,000
to a consultant as part of agreed contract remuneration In addition, the Company issued 480,000
common shares to an executive as part of a bonus compensation arrangement. The shares were issued in settlement of previously
accrued bonus liabilities, with a total fair value of $206,400
recognized in the financial statements.During the year ended March 31, 2025, convertible notes with a face value of $1,487,700
were converted into 2,173,089 common shares. The fair value of common shares issued during the year ended March 31, 2025, is $2,431,178,
and is determined based on market price upon conversion. Total value of debt settled is in the amount of $2,234,232,
which consisted of the face value of notes converted, accrued interest of $237,230,
and relevant derivative liability of $509,303.
The Company recognized a loss upon conversion of $196,945,
representing the difference between the value of debt settled and fair value of shares issued and to be issued. (Note 5).
During
the year ended March 31, 2025, $6,104,444 of Series A Preferred Stock (face value) and $1,071,542 relevant accrued dividend were converted
into 8,952,170 common shares. The conversion was accounted as an extinguishment and the difference between the total carrying value of
the preferred shares converted, derivative liabilities derecognized and unpaid dividend at the time of conversion ($7,984,463), and the
fair value of the common shares issued ($11,039,142) was $3,054,680 and was recognized as deemed dividend expense.
The
Company issued 1,000,413 common shares in settlement of $741,316 in amount due to a shareholder which was part of the accounts payable.
The Company recognized a loss upon debt extinguishment of $249,093, which was the difference between the accounts payable settled and
the fair value of common shares issued. The loss was included as part of the other income (expense) in the Condensed Consolidated Statement
of Operations and Comprehensive Loss.
The
Company issued 97,811 common shares for net proceeds of $125,227 pursuant to a registration statement filed on May 15, 2024.
The Company issued
716,666 shares pursuant to the services provided by consultant (236,666 shares) and a director of the Company (480,000), and the fair
of those shares were determined by using market value relative to the issuance.
| F-32 | |
****
**BIOTRICITY INC.**
**Notes to Consolidated Financial
Statements**
**Years ended March 31, 2025
and 2024**
**(Expressed in US Dollars)**
****
**Share
issuances during the year ended March 31, 2024**
The
Company sold 36,897 common shares through use of its registration statement, for gross proceeds of $123,347, raising a net amount of
$119,285 after paying for a 3% placement fee and other issuance expenses. In addition, 20,846 shares of common stock were issued to existing
holders as a result of make whole provisions associated with the Reverse Split.
**(e)
Shares to be issued**
During
the year ended March 31, 2025, the Company issued nil common shares to Series C Note holders, in relation to shares to be issued obligation
as of June 30, 2024, for Series C Note conversions.
During
the year ended March 31, 2025, the Company issued 320,321 common shares to Series B preferred shareholders in relation to shares to be
issued obligation as of March 31, 2024, for Series B preferred share conversions.
During
the year ended March 31, 2025, Series C Notes with a face value of $1,487,700, were converted into 2,173,089 common shares, respectively.
As of March 31, 2025, 577,644 shares are recognized as an obligation for shares to be issued relating to the conversion.
**(f)
Warrant issuances, exercises and other activity**
****
**Warrant
issuances during the year ended March 31, 2025**
During
the year ended March 31, 2025, the Company issued a 1,200,000 warrant to its executive against the stock options from the Companys
2018 Equity Incentive Plan, with exercise price of 0.43. The Company recorded stock-based compensation of $422,456 under selling, general
and administrative expenses with corresponding credit to additional paid in capital.
In November 2024, the Company issued 600,000, 7-year share warrants to
the term lender with a strike price of $0.50 per share with the fair value of 152,184 against an additional transaction with its term
lender. The Company increased the liability with corresponding credit to additional paid in Capital.
**Warrant
issuances during the year ended March 31, 2024**
During
the year ended March 31, 2024, the Company issued 868,098 note holder warrants and 69,062 placement agent warrants related to the final
closing of Series C convertible notes (Note 5). These warrants relate to Series C Convertible Notes. Prior to the final closing date
(October 23, 2023) of Series C Convertible Notes, the Company determined that the obligations to issue note holder warrants and placement
agent warrants represented a derivative liability that meets the requirements for liability classification under ASC 815. The Company
accounted for these obligations by determining the fair value of the related derivative liabilities. Subsequently, the exercise price
of all warrants was concluded and locked to $4.18 and $2.09, respectively, for the note holder and placement agent warrants, as of the
final closing date October 23, 2023. Since the exercise price was no longer a variable, the Company concluded that the note holder and
placement agent warrants should no longer be accounted for as a derivative liability in accordance with ASC 815 guidelines related to
equity indexation and classification. The derivative liabilities related to those warrants were therefore marked to market as of October
23, 2023 and then transferred to equity (collectively, End of warrants derivative treatment). The warrants were therefore
recognized with a reduction of $1,278,786 against the derivative liability and a corresponding credit against paid in capital.
| F-33 | |
**BIOTRICITY INC.**
**Notes to Consolidated Financial
Statements**
**Years ended March 31, 2025
and 2024**
**(Expressed in US Dollars)**
**Warrant
exercises and issuances during the year ended March 31, 2023**
During
the three months ended June 30, 2022, the Company issued 8,972 warrants as compensation to an executive of the Company who was not part
of the Company stock options plan. The warrant expenses were fair-valued at $77,414, and recognized as general and administrative expenses,
with a corresponding credit to additional paid-in capital.
During
the three months ended September 30, 2022, the Company issued 19,714 warrants as compensation to an executive of the Company who was
not part of the Company stock options plan. The warrant expenses were fair-valued at $77,332, and recognized as general and administrative
expenses, with a corresponding credit to additional paid-in capital.
During
the three months ended December 31, 2022, the Company issued 36,463 warrants as compensation to an executive of the Company who was not
part of the Company stock options plan. The fair value of the warrants at issuance was $77,780 and was recognized as a general and administrative
expense, with a corresponding credit to additional paid-in capital. In addition, the Company added 52,083 warrants to its outstanding
warrant schedule in connection with warrants issued to Series B convertible note holders. This has no impact on paid-in capital as the
fair value of warrants was already accounted for as part of the original Series B convertible note issuance accounting entries. Lastly,
the Company extinguished and exchanged 51,101 warrants for promissory notes [Note 5] that resulted in an adjustment to additional paid-in
capital in the amount of $71,768.
Warrant
issuances, exercises and expirations or cancellations during the fiscal years ended March 31, 2025 and 2024 as follows:
**Warrant
activity during the years ended March 31, 2025 and 2024 is indicated below:**
**SCHEDULE
OF WARRANTS OUTSTANDING**
|
| |
Broker Warrants | | |
Consultant and Noteholder Warrants | | |
Warrants Issued on Convertible Notes | | |
Total | | |
|
As at March 31, 2023 | |
| 139,865 | | |
| 279,341 | | |
| 888,277 | | |
| 1,307,483 | | |
|
Expired/cancelled | |
| | | |
| (25,347 | ) | |
| (888,277 | ) | |
| (913,624 | ) | |
|
Issued | |
| 69,062 | | |
| | | |
| 868,098 | | |
| 937,160 | | |
|
As at March 31, 2024 | |
| 208,927 | | |
| 253,994 | | |
| 868,098 | | |
| 1,331,019 | | |
|
Beginning balance | |
| 208,927 | | |
| 253,994 | | |
| 868,098 | | |
| 1,331,019 | | |
|
| |
| | | |
| | | |
| | | |
| | | |
|
Expired/cancelled | |
| | | |
| (15,000 | ) | |
| | | |
| (15,000 | ) | |
|
Issued | |
| 600,000 | | |
| 1,200,000 | | |
| | | |
| 1,800,000 | | |
|
As at March 31, 2025 | |
| 808,927 | | |
| 1,438,994 | | |
| 868,098 | | |
| 3,116,019 | | |
|
Ending balance | |
| 808,927 | | |
| 1,438,994 | | |
| 868,098 | | |
| 3,116,019 | | |
|
| |
| | | |
| | | |
| | | |
| | | |
|
Exercise Price | |
| $ 0.5 to $22.5 | | |
| $ 0.43 to $14.40 | | |
$ | 4.18 | | |
| | | |
|
Expiration Date | |
| August 2026 to October 2033 | | |
| March 2029 to Feb 2035 | | |
| October 2027 | | |
| | | |
****
| F-34 | |
**BIOTRICITY INC.**
**Notes to Consolidated Financial
Statements**
**Years ended March 31, 2025
and 2024**
**(Expressed in US Dollars)**
**(g)
Stock-based compensation**
****
**2016
Equity Incentive Plan**
On
February 2, 2016, the Board of Directors of the Company approved the Companys 2016 Equity Incentive Plan (the Plan).
The purpose of the Plan is to advance the interests of the Company and its stockholders by providing an incentive to attract, retain
and reward persons performing services for the Company and by motivating such persons to contribute to the growth and profitability of
the Company. The Plan seeks to achieve this purpose by providing for awards in the form of options, stock appreciation rights, restricted
stock purchase rights, restricted stock bonuses, restricted stock units, performance shares, performance units and other stock-based
awards.
The
Plan shall continue in effect until its termination by the board of directors or committee formed by the board; provided, however, that
all awards shall be granted, if at all, on or before the day immediately preceding the tenth (10th) anniversary of the effective date.
The maximum number of shares of stock that may be issued under the Plan shall be equal to 1,241,422 shares ; provided that the maximum
number of shares of stock that may be issued under the Plan pursuant to awards shall automatically and without any further Company or
shareholder approval, increase on January 1 of each year for not more than 10 years from the effective date, so the number of shares
that may be issued is an amount no greater than 20% of the Companys outstanding shares of stock and shares of stock underlying
any outstanding exchangeable shares as of such January 1; provided further that no such increase shall be effective if it would violate
any applicable law or stock exchange rule or regulation, or result in adverse tax consequences to the Company or any participant that
would not otherwise result but for the increase.
During
the year ended March 31, 2025, the Company granted 2,836,176
stock options (2024:7,210
options) with a weighted average grant date exercise price
of $0.5
(2024: $2.774).
The Company recorded stock-based compensation of $1,461,698
(2024: $1,025,930)
under selling, general and administrative expenses with corresponding credit to additional paid in capital.
During the year ended March 31,2025, the Company Cancelled stock options
931,000 of fair value $41,246 granted to its executive and reissued the stock options of 900,000 with the exercise price of 0.43 per share
and fair value of 316,842. In addition to that Company also granted 1,936,176 The Company recorded stock based compensation with
the net amount of 275,596 under selling, general and administrative expenses with corresponding credit to additional paid in capital.
The
following table summarizes the stock option activities during the fiscal year ended March 31, 2025:
SCHEDULE
OF STOCK OPTION ACTIVITIES
|
| |
Number of Options | | |
Weighted Average Exercise Price | | |
Weighted Average Remaining Contractual Term (years) | | |
Aggregate Intrinsic Value(1) | | |
|
| |
| | |
| | |
| | |
| | |
|
Outstanding at March 31, 2024 | |
| 1,239,873 | | |
$ | 9.39 | | |
| 5.35 | | |
$ | 9,705,937 | | |
|
Adjustment for rounding effect of Reverse Split | |
| - | | |
| - | | |
| - | | |
| - | | |
|
Granted | |
| 2,836,176 | | |
$ | 0.5 | | |
| 0.02 | | |
| - | | |
|
Cancelled | |
| (931,000 | ) | |
| 9.32 | | |
| 4.24 | | |
| - | | |
|
Expired | |
| (57,582 | ) | |
$ | 0.56 | | |
| 0.17 | | |
| - | | |
|
Forfeited | |
| (19,637 | ) | |
$ | 0.37 | | |
| 2.34 | | |
| - | | |
|
Outstanding at March 31, 2025 | |
| 3,067,830 | | |
$ | 1.14 | | |
| 1.77 | | |
$ | 1,078,756 | | |
|
Vested and expected to vest at March 31, 2025 | |
| 3,067,830 | | |
$ | 1.14 | | |
| 1.77 | | |
$ | 1,078,756 | | |
|
Vested and exercisable at March 31, 2025 | |
| 2,611,411 | | |
$ | 1.17 | | |
| 0.43 | | |
$ | 805,181 | | |
|
(1) |
The aggregate intrinsic
value is calculated as the difference between the exercise price of the underlying options and the fair value of our common stock
as of March 31, 2025 and fair value of common stock adjusted. | |
| F-35 | |
**BIOTRICITY INC.**
**Notes to Consolidated Financial
Statements**
**Years ended March 31, 2025
and 2024**
**(Expressed in US Dollars)**
The
following table summarizes the stock option activities during the fiscal year ended March 31, 2024:
|
| |
Number of Options | | |
Weighted Average Exercise Price | | |
Weighted Average Remaining Contractual Term (years) | | |
Aggregate Intrinsic Value(1) | | |
|
| |
| | |
| | |
| | |
| | |
|
Outstanding at March 31, 2023 | |
| 1,264,890 | | |
$ | 9.29 | | |
| 6.30 | | |
$ | 8,185,321 | | |
|
Adjustment for rounding effect of Reverse Split | |
| 12,655 | | |
| - | | |
| - | | |
| - | | |
|
Granted | |
| 7,210 | | |
$ | 2.77 | | |
| 9.01 | | |
| - | | |
|
| |
| | | |
| | | |
| | | |
| | | |
|
Expired | |
| (39,520 | ) | |
$ | 3.89 | | |
| 3.76 | | |
| - | | |
|
Forfeited | |
| (5,362 | ) | |
$ | 12.30 | | |
| 8.85 | | |
| - | | |
|
Outstanding at March 31, 2024 | |
| 1,239,873 | | |
$ | 9.39 | | |
| 5.35 | | |
$ | 9,705,937 | | |
|
Vested and expected to vest at March 31, 2024 | |
| 1,239,873 | | |
$ | 9.32 | | |
| 5.35 | | |
$ | 9,806,024 | | |
|
Vested and exercisable at March 31, 2024 | |
| 1,134,642 | | |
$ | 9.62 | | |
| 5.10 | | |
$ | 9,320,582 | | |
|
(1) |
The aggregate intrinsic
value is calculated as the difference between the exercise price of the underlying options and the fair value of our common stock
as of March 31, 2024 and fair value of common stock adjusted for the Reverse Split as of March 31, 2023 of $1.48 and $2.81 per share,
respectively. | |
The
fair value of each option granted is estimated at the time of grant using multi-nominal lattice model using the following assumptions,
for each of the respective years ended March 31**:**
SCHEDULE OF FAIR VALUE OF OPTION GRANTED USING VALUATION ASSUMPTIONS
|
| |
2025 | | |
2024 | | |
|
Exercise price ($) | |
| 0.43-0.43 | | |
| 2.78 | | |
|
Risk free interest rate (%) | |
| 4.24-4.33 | | |
| 3.85 | | |
|
Expected term (Years) | |
| 1.46-5.00 | | |
| 10.0 | | |
|
Expected volatility (%) | |
| 113.97-142.22 | | |
| 117.1 | | |
|
Expected dividend yield (%) | |
| 0.00 | | |
| 0.00 | | |
|
Fair value of option ($) | |
| -1.097-1.360 | | |
| 2.3 | | |
|
Expected forfeiture (attrition) rate (%) | |
| 0.00 | | |
| 0.00 | | |
**2023
Equity Incentive Plan and the Employee Stock Purchase Plans**
On
March 31, 2023, the Company adopted the 2023 Equity Incentive Plan (the 2023 Plan). The 2023 Plan authorizes grants of
equity-based and incentive cash awards to eligible participants designated by the 2023 Plans administrator. The 2023 Plan will
be administered by the Compensation Committee of the Companys Board of Directors (the Board). An aggregate of 5,000,000
shares of the Companys common stock (the Common Stock), plus the number of shares available for issuance under the
Companys 2016 Equity Incentive Plan that had not been made subject to outstanding awards, were reserved for issuance under the
2023 Plan. Unless earlier terminated by the Board, the 2023 Plan will remain in effect until all Common Stock reserved for issuance has
been issued, provided, however, that all awards shall be granted, if at all, on or before the day immediately preceding the tenth (10th)
anniversary of the effective date of the 2023 Plan.
| F-36 | |
**BIOTRICITY INC.**
**Notes to Consolidated Financial
Statements**
**Years ended March 31, 2025
and 2024**
**(Expressed in US Dollars)**
The
Company also adopted the Employee Stock Purchase Plan (the ESPP). The ESPP allows eligible employees of the Company and
the Companys designated subsidiaries the ability to purchase shares of the Companys Common Stock at a discount, subject
to various limitations. Under the ESPP, employees will be granted the right to purchase Common Stock at a discount during a series of
successive offerings, the duration and timing of which will be determined by the ESPP administrator (the Administrator).
In no event can any single offering period be longer than 27 months. The purchase price (the Purchase Price) for each offering
will be established by the Administrator. With respect to an offering under Section 423 of the Internal Revenue Code of 1986 (Section
423 Offering), in no case may such Purchase Price be less than the lesser of (i) an amount equal to 85 percent of the fair market
value on the commencement date, or (ii) an amount not less than 85 percent of the fair market value the on the purchase date. In the
event of financial hardship, an employee may withdraw from the ESPP by providing a request at least 20 Business Days before the end of
the offering period (the Offering Period). Otherwise, the employee will be deemed to have exercised the purchase right
in full as of such exercise date. Upon exercise, the employee will purchase the number of whole shares that the participants accumulated
payroll deductions will buy at the Purchase Price. If an employee wants to decrease the rate of contribution, the employee must make
a request at least 20 Business Days before the end of an Offering Period (or such earlier date as determined by the Administrator). An
employee may not transfer any rights under the ESPP other than by will or the laws of descent and distribution. During a participants
lifetime, purchase rights under the ESPP shall be exercisable only by the participant.
**10.
INCOME TAXES**
*Income
taxes*
The
provision for income taxes differs from that computed at combined corporate tax rate of approximately 26% as follows:
**Income
tax recovery**
SCHEDULE OF EFFECTIVE INCOME TAX RATE RECONCILIATION
|
| |
Year ended March 31, 2025 | | |
Year ended March 31, 2024 | | |
|
| |
$ | | |
$ | | |
|
Net loss | |
| (8,421,179 | ) | |
| (14,094,283 | ) | |
|
| |
| | | |
| | | |
|
Expected income tax recovery | |
| (2,189,707 | ) | |
| (3,664,514 | ) | |
|
Non-deductible expenses | |
| 1,322,198 | | |
| 882,745 | | |
|
Other temporary differences | |
| (988 | ) | |
| (4,160 | ) | |
|
Change in valuation allowance | |
| 868,297 | | |
| 2,785,929 | | |
|
Income tax recovery | |
| | | |
| | | |
**Deferred
tax assets**
SCHEDULE OF DEFERRED TAX ASSETS
|
| |
As at March 31, 2025 | | |
As at March 31, 2024 | | |
|
| |
$ | | |
$ | | |
|
Non-capital loss carry forwards | |
| 19,078,653 | | |
| 18,211,344 | | |
|
Other temporary differences | |
| 3,803 | | |
| 7,963 | | |
|
Valuation allowance | |
| (19,082,456 | ) | |
| (18,219,307 | ) | |
|
Deferred tax assets | |
| | | |
| | | |
| F-37 | |
**BIOTRICITY INC.**
**Notes to Consolidated Financial
Statements**
**Years ended March 31, 2025
and 2024**
**(Expressed in US Dollars)**
As
of March 31, 2025 and 2024, the Company decided that a valuation allowance relating to the above deferred tax assets of the Company was
necessary, largely based on the negative evidence represented by losses incurred and a determination that it is not more likely than
not to realize these assets, such that, a corresponding valuation allowance, for each respective period, was recorded to offset deferred
tax assets.
As
of March 31, 2025 and 2024, the Company has approximately $73,379,434 and $70,043,631,
respectively, of non-capital losses available to offset future taxable income. These
losses will expire between 2035 to 2039.
As
of March 31, 2025, and 2024 the Company was not subject to any uncertain tax positions.
**11.
COMMITMENTS AND CONTINGENCIES**
There
are no claims against the Company that were assessed as significant, which were outstanding as at March 31, 2025 and, consequently, no
provision for such has been recognized in the consolidated financial statements.
**12.
OPERATING LEASE RIGHT-OF-USE ASSETS AND LEASE OBLIGATIONS**
The
Company has one operating lease primarily for office and administration.
During
December 2021, the Company entered into a new lease agreement. The Company paid $85,000 deposit that would be returned at the end of
the lease. In December 2022, the Company started a new lease with an additional suite in the same premise as the existing lease.
When
measuring the lease obligations, the Company discounted lease payments using its incremental borrowing rate. The weighted-average-rate
applied is 11.4%.
SCHEDULE OF OPERATING LEASES OBLIGATIONS
|
| |
2025 | | |
2024 | | |
|
Right of Use Asset | |
$ | | |
$ | | |
|
Beginning balance at March 31 | |
| 1,221,593 | | |
| 1,587,492 | | |
|
New leases | |
| - | | |
| - | | |
|
Amortization | |
| (409,540 | ) | |
| (365,899 | ) | |
|
Ending balance at March 31 | |
| 812,053 | | |
| 1,221,593 | | |
|
| |
2025 | | |
2024 | | |
|
Lease Liability | |
$ | | |
$ | | |
|
Beginning balance at March 31 | |
| 1,386,486 | | |
| 1,722,095 | | |
|
New leases | |
| - | | |
| - | | |
|
Repayment and interest accretion | |
| (457,370 | ) | |
| (335,609 | ) | |
|
Ending balance at March 31 | |
| 929,116 | | |
| 1,386,486 | | |
|
| |
| | | |
| | | |
|
Current portion of operating lease liability | |
| 531,286 | | |
| 457,371 | | |
|
Noncurrent portion of operating lease liability | |
| 397,830 | | |
| 929,115 | | |
The
operating lease expense was $587,045 for the year ended March 31, 2025 (2024: $564,167) and included in the selling, general and administrative
expenses. Operating cash flows from operating leases amounted to $587,164 and $509,041 during the years ended March 31, 2025 and March
31, 2024, respectively.
| F-38 | |
**BIOTRICITY INC.**
**Notes to Consolidated Financial
Statements**
**Years ended March 31, 2025
and 2024**
**(Expressed in US Dollars)**
The
following table represents the contractual undiscounted cash flows for lease obligations as at March 31, 2025:
SCHEDULE OF CONTRACTUAL UNDISCOUNTED CASH FLOWS FOR LEASE OBLIGATION
|
Calendar year | |
$ | | |
|
2025 | |
| 600,288 | | |
|
2026 | |
| 565,360 | | |
|
2027 and beyond | |
| - | | |
|
| |
| | | |
|
Total undiscounted lease liability | |
| 1,165,648 | | |
|
Less imputed interest | |
| (236,532 | ) | |
|
Total | |
| 929,116 | | |
**13.
PROPERTY AND EQUIPMENT**
****
During
the year-ended March 31, 2022, the Company purchased leasehold improvements of $12,928 (useful life: 5 years) as well as furniture &
fixtures of $16,839 (useful life: 5 years). There were no purchases of property and equipment during the fiscal years ended March 31,
2025, and March 31, 2024. The Company recognized depreciation expense for these assets in the amount of $5,953 and $5,953 during the
years ended March 31, 2025 and 2024.
SCHEDULE OF PROPERTY AND EQUIPMENT
|
Cost | |
Office
equipment | | |
Leasehold
improvement | | |
Total | | |
|
| |
$ | | |
$ | | |
$ | | |
|
Balance at March 31, 2023 | |
| 16,839 | | |
| 12,928 | | |
| 29,767 | | |
|
Additions | |
| | | |
| | | |
| | | |
|
Balance at March 31, 2024 | |
| 16,839 | | |
| 12,928 | | |
| 29,767 | | |
|
Additions | |
| - | | |
| - | | |
| - | | |
|
Balance at March 31, 2025 | |
| 16,839 | | |
| 12,928 | | |
| 29,767 | | |
|
Accumulated depreciation | |
Office
equipment | | |
Leasehold
improvement | | |
Total | | |
|
| |
$ | | |
$ | | |
$ | | |
|
Balance at March 31, 2023 | |
| 4,675 | | |
| 3,587 | | |
| 8,262 | | |
|
Additions | |
| 3,367 | | |
| 2,586 | | |
| 5,953 | | |
|
Balance at March 31, 2024 | |
| 8,042 | | |
| 6,173 | | |
| 14,215 | | |
|
Additions | |
| 3,367 | | |
| 2,586 | | |
| 5,953 | | |
|
Balance at March 31, 2025 | |
| 11,409 | | |
| 8,759 | | |
| 20,168 | | |
|
| |
| | | |
| | | |
| | | |
|
Net book value | |
| | | |
| | | |
| | | |
|
Balance at March 31, 2024 | |
| 8,797 | | |
| 6,755 | | |
| 15,552 | | |
|
Balance at March 31, 2025 | |
| 5,430 | | |
| 4,169 | | |
| 9,599 | | |
| F-39 | |
****
****
**BIOTRICITY INC.**
**Notes to Consolidated Financial
Statements**
**Years ended March 31, 2025
and 2024**
**(Expressed in US Dollars)**
****
**14.
SUBSEQUENT EVENTS**
During
the period from April 1 to July 15, 2025, the following events occurred:
|
|
|
The Company
received regulatory approval to operate in Saudi Arabia. | |
|
|
|
The Company issued 486,474
additional common shares to Series B preferred shareholders in order to supplement the 782,913 shares issued prior to March 31, 2025,
in relation to its conversion obligations for a conversion of 25 Series B preferred whose conversion period commenced on March 4,
2025. This conversion of preferred shares is intended to redeem or repay $250,000 in principal and $38,884 in accrued dividends. | |
| F-40 | |