BTCY.OQBBiotricity INC
10-Q/A: Biotricity Inc. Amends Quarterly Report, Cites Data Entry Errors Amidst Going Concern Uncertainty
Sentiment:
Quarterly Report Amendment
Biotricity Inc. files an amended quarterly report to correct clerical errors, while still facing substantial doubt about its ability to continue as a going concern.
Capital raiseThe company will need to seek additional debt or equity capital to respond to business opportunities and challenges, including ongoing operating expenses, protecting intellectual property, developing or acquiring new lines of business, and enhancing operating infrastructure.The terms of future financings may be dilutive to, or otherwise adversely affect, holders of common stock.The company may also seek additional funds through arrangements with collaborators or other third parties.
Summary
- Biotricity Inc. filed an amendment to its quarterly report on Form 10-Q/A to correct data entry errors in the original filing.
- The errors affected the Condensed Consolidated Statements of Mezzanine Equity and Stockholders Deficiency and the Condensed Consolidated Statements of Cash Flows.
- The company's financial statements are prepared assuming it will continue as a going concern, but there is substantial doubt about its ability to do so.
- As of December 31, 2024, Biotricity had an accumulated deficit of $137,419,652 and a working capital deficiency of $16,280,084.
- The company anticipates it will continue on its revenue growth and loss reduction trajectory and improve its liquidity through continued business development and after additional equity and debt capitalization.
- The company is actively selling in 35 U.S. states as of December 31, 2024.
- The Company earned combined device sales and technology fee income of $10.1 million during the nine months ended December 31, 2024.
- Technology fee revenue increased to $9.5 million during the nine months ended December 31, 2024.
- Gross profit percentage was 75.2% for the nine months ended December 31, 2024, as compared to 68.5% in the corresponding prior year period.
- Total operating expenses for the nine months ended December 31, 2024, were $9.2 million as compared to $11.9 million for the nine months ended December 31, 2023.
Sentiment
Score: 4
Explanation: The document presents a mixed sentiment. While there's revenue growth and cost control, the going concern uncertainty and accumulated deficit raise concerns. The need for additional capital also adds a layer of risk.
Positives
- The company is actively selling in 35 U.S. states as of December 31, 2024.
- Technology fee revenue increased to $9.5 million during the nine months ended December 31, 2024, which is a 14.3% increase over the corresponding nine-month period of the prior year.
- Gross profit percentage was 75.2% for the nine months ended December 31, 2024, as compared to 68.5% in the corresponding prior year period.
- Total operating expenses for the nine months ended December 31, 2024, were $9.2 million as compared to $11.9 million for the nine months ended December 31, 2023, a 22.7% decrease.
Negatives
- The company faces substantial doubt about its ability to continue as a going concern.
- As of December 31, 2024, Biotricity had an accumulated deficit of $137,419,652 and a working capital deficiency of $16,280,084.
Risks
- The company's existing cash deposits may not be sufficient to fund its operating expenses through at least twelve months from the date of this filing.
- The company may not be able to raise additional capital on terms acceptable to it, or at all.
- Any failure to raise capital when needed could compromise the company's ability to execute its business plan.
- If the company is unable to obtain the necessary capital, it may have a material adverse effect on its operations and the development of its technology, or it may have to cease operations altogether.
Future Outlook
Management anticipates the Company will continue on its revenue growth and loss reduction trajectory and improve its liquidity through continued business development and after additional equity and debt capitalization of the Company.
Industry Context
The COVID-19 pandemic has highlighted the importance of telemedicine and remote patient monitoring technologies, which Biotricity is developing.
Stakeholder Impact
- The company's ability to continue as a going concern impacts shareholders, employees, customers, suppliers, and creditors.
- The terms of future financings may be dilutive to, or otherwise adversely affect, holders of common stock.
Next Steps
- The company will continue to pursue sources of funding that management believes will be sufficient to support the company's 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.
- The company expects to continue to devote significant resources on capital expenditures, as well as research and development costs and operations, marketing and sales expenditures as it proceeds with the commercialization of the Bioflux, Biocore, and Biocare product development.
Key Dates
| Date | Description |
|---|---|
| 2012-08-29 | Biotricity Inc. was incorporated under the laws of the State of Nevada. |
| 2016-02-02 | iMedical Innovations Inc. became a wholly-owned subsidiary of Biotricity through reverse take-over. |
| 2018-04-01 | The Company adopted Accounting Standards Codification Topic 606, Revenue from Contracts with Customers (ASC 606). |
| 2018-04-06 | Limited release of the Bioflux COM technology. |
| 2019-04-01 | Full market release of the Bioflux device for commercialization. |
| 2020-04-01 | The Company received $370,900 from the U.S. Small Business Administration (SBA) under the Economic Injury Disaster Loan (EIDL) program. |
| 2021-05-01 | The Company received an additional $499,900 from the SBA under the same terms. |
| 2021-08-30 | The Company completed an underwritten public offering of its common stock that concurrently facilitated its listing on the Nasdaq Capital Market. |
| 2021-12-21 | The Company entered into a Credit Agreement with SWK Funding LLC and borrowed $12.4 million. |
| 2022-01-01 | The Company received the 510(k) FDA clearance of its Biocore patch solution. |
| 2022-11-01 | Bioheart received recognition as one of TIME's Best Inventions of 2022. |
| 2022-12-01 | The Company entered into a short-term bridge loan agreement with a collateralized merchant finance company that advanced gross proceeds of $400,000. |
| 2022-12-30 | 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. |
| 2023-03-28 | The FASB issued ASU No. 2023-01, Leases (Topic 842): Common Control Arrangements. |
| 2023-03-29 | The Company entered into an additional collateralized bridge loan agreement with a finance company that advanced gross proceeds of $300,000. |
| 2023-03-31 | The Company adopted the 2023 Equity Incentive Plan (the 2023 Plan). |
| 2023-06-29 | The Company filed a Certificate of Amendment to its Amended and Restated Articles of Incorporation to effect a one-for-six (1-for-6) share consolidation (the Reverse Split). |
| 2023-07-03 | The Reverse Split became effective. |
| 2023-07-13 | The Company entered into another short-term bridge loan agreement with a collateralized merchant finance company that advanced gross proceeds of $400,000. |
| 2023-07-18 | The Company entered into an amendment with the finance company and increased total proceeds borrowed to $700,000. |
| 2023-08-11 | 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. |
| 2023-09-19 | The Company entered into a security purchase agreement with an institutional investor for the issuance and sale of 220 shares of the Company's newly designated Series B Convertible Preferred Stock. |
| 2023-09-25 | The Company entered into a convertible preferred note financing and issued a convertible note (Preferred Note) in the principal amount of $1,000,000. |
| 2023-10-01 | Launched the cellular version of Biocore device, the Biocore Pro. |
| 2023-10-23 | Final closing date of Series C Notes. |
| 2023-10-25 | The Company issued a Preferred Note in the principal amount of $250,000. |
| 2023-12-08 | The Company entered into a short-term bridge loan agreement with a collateralized merchant finance company that advanced gross proceeds of $630,000. |
| 2023-12-31 | The new convertible note matured. |
| 2024-01-01 | The Company issued a Preferred Note for a principal amount of $114,303. |
| 2024-01-01 | The new standard is effective for the Company for its fiscal year beginning January 1, 2024, with early adoption permitted. |
| 2024-01-01 | Appointed Dr. Fareeha Siddiqui, a scientist and expert in community health and diagnostics, to the position of VP of Healthcare to spearhead the roll-out and Biocare adoption to existing and new customers. |
| 2024-02-02 | The Company entered into a short-term bridge loan agreement with a collateralized merchant finance company that advanced gross proceeds of $700,000. |
| 2024-06-17 | The Company issued a Preferred Note for a principal amount of $300,000. |
| 2024-08-01 | The Company received a notice from Nasdaq stating that Nasdaq has determined to delist the Company's shares of common stock on The Nasdaq Capital Market, effective at the open of business on August 5, 2024. |
| 2024-11-12 | 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 $945 thousand in interest amounts due on its existing term loan. |
| 2024-11-26 | The FASB issued ASU 2024-04, DebtDebt with Conversion and Other Options (Subtopic 470-20): Induced Conversions of Convertible Debt Instruments. |
| 2025-01-01 | During January and February of 2025, the Company issued $337 thousand in unsecured convertible promissory notes to private investors. |
| 2025-01-01 | During January 2025, the Company issued 394,340 in partial settlement of residual shares owing as a result of a conversion notice rendered to the Company in October 2024. |
| 2025-02-18 | 24,751,756 shares of Common Stock, $ 0.001 par value, at February 18, 2025. |
| 2025-02-19 | The date the Condensed Consolidated Financial Statements were issued. |
| 2025-02-20 | Date of signatures on the report. |
Keywords
Biotricity, financial results, going concern, amended report, quarterly report, financial statements, revenue, operating expenses, deficit, liquidity
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