BTCY 10-K & 10-Q changes, risk factors and insider trading

As of March 31, 2025,2026, the Company had $365,145$149,789 in cash, accumulated deficit of $138,972,413$142,570,243 and cash flow used in operations of $2,312,834$ 720,955 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 Company’s 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 Company’s 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 Company’s 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.

We have 26,567,76929,402,934 outstanding shares as of JulyJune 15,20, 2025,2026, of which 12,325,16513,940,360 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,

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 platform’s 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.costs, and continues to use AI to enhance its technology and make its operations more efficient.

Biotricity incurred a net loss attributed to common stockholders of $11,246,320 $3,128,458 (loss per share of $0.552$ 0.115) during the year ended March 31, 2025 2026 as compared to $14,928,960$11,942,000 (loss per share of $1.66$0.555) during the year ended March 31, 2024.2025. From the Company’s inception in 2009 through March 31, 2025,2026, the Company has generated an accumulated deficit of $138,900,568.$142,570,243. 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.

During the fiscal year and three months ended March 31, 20252026 we recorded research and development expenses of $2.8 million and $0.8 million, respectively, compared to $2.2 million and $ 0.57 million, respectively, compared to $2.6 million and $0.7$0.57 million incurred in the fiscal year and three months ended March 31, 2024.2025. The research and development activity related to both existing and new products. The decreaseincrease 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.

During the fiscal year ended March 31, 20252026 and March 31, 2024,2025, we incurred interest expenses of $3.3$3.4 million and $3$3.3 million, respectively. During three months ended March 31, 20252026 and March 31, 2024,2025, we incurred interest expenses of $0.9$0.8 million and $0.8$0.9 million, respectively. The increase in interest expense correspondedon a year-to-date basis was primarily attributable to anhigher increase inaverage borrowings and market increases in market interest ratesrates. However, interest expense decreased for the three-month period overended period.March 31, 2026 compared to the corresponding period in the prior year, primarily due to lower average borrowings during the quarter.

During the fiscal year ended March 31, 20252026 and March 31, 2024,2025, we incurred accretion expense of $1.9$0.7 million and $2.2$1.9 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 Company’s term loan, merchant loans and series C convertible notes. During the three months ended March 31, 20252026 and March 31, 2024,2025, we incurred accretion expenses of $0.16$0.2 million and 0.60.16 million. The expense for the quarters decreaseincrease due to fullyamortization amortizationof offinder Convertible Notes Series C.fee.

During the year ended March 31, 20252026 and March 31, 2024,2025, the Company recognized $(167) thousand and $(554) thousand, respectively, related to the change in fair value of derivative liabilities. During the three months ended March 31, 2026 and March 31, 2025, the Company recognized $(595) thousand$957 and $10$(127) 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.

During the year ended March 31, 2025,2026, we recorded a lossgain of $141$19.8 thousand, compared to a gainloss of $19$(138) thousand during the year ended March 31, 2024,2025, related to the redemption of our convertible promissory notes. During the three months ended March 31, 20252026 and 2024,2025, we recorded a gain of $8 thousand$nil and $3$12 thousand, respectively, related to the redemption of our convertible promissory notes.

During the years ended March 31, 2025,2026, and March 31, 20242025 we recognized $79$160 thousand and $103$79 thousand in net other expense. The change in net other 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, 2025,2026, and March 31, 2024,2025, we recognized $49$26 thousand and $16$49 thousand, respectively, in net other 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 . 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 management’s 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 2026 was positive $438,260$723 thousand compared to negative $2,561,573 $878 thousand in the corresponding period of the prior fiscal year.

(1) Share based compensation is a non-cash item therefore is removed from our adjusted EBITDA analysis (2) Preferred stock dividend payment is at Company’s discretion and therefore is removed from our adjusted EBITDA analysis (3) These items relate to financing transactions and therefore do not reflect the Company’s core operating activities (43) Certain amounts presented in the prior year period have been reclassified to conform to current period presentation.

Translation adjustment for the fiscal year ended March 31, 20252026 was a gain loss of $206$34 thousand compared to a gain of $185$113 thousand for the fiscal year ended March 31, 2024.2025. Translation adjustment was a gain of $235 thousand for the three months ended March 31, 2025, compared to a gain of $284$8 thousand for the three months ended March 31, 2024.2026, compared to a gain of $142 thousand for the three months ended March 31, 2025. 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.

The Company iscontinues to be 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, 2025,2026, has an accumulated accumulated deficit of $139$142.5 million (2024 2025: $128$139 million), the Company has a working capital deficit of $15.9$31.3 million ( 2024 2025: $30 $16.0 million).

During the year ended March 31, 2025, theThe Company issued $1,985,000$1.395 inmillion of unsecured convertible promissory notes to private investors;investors. $100,000 of theThe notes mature on their six-month anniversary of issuance and bear interest ofat 20%;rates $710,000ranging offrom the10.0% notesto 12.0% and mature onbetween their twenty four-month anniversary of issuance and bear interest of 10%;nine and $1,175,000twenty-four months offrom theissuance. notes mature on their eighteen-month anniversary of issuance and bear not interest; all of the notes haveThe conversion features thatof these notes require the mutual consent of both the investor and the Company.Company; Since the conversion is not in controlaccordingly, of the holder of the note, the Company did not recognize ano derivative liability was recognized in connection with thethese conversion option of the Other Convertible Notes.rights.

During period subsequentthe tofiscal Decemberyear ended March 31, 2024,2026, 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 $702 thousand for the quarter ended March 31, 2026, compared to $435 thousand in the comparative period of the prior fiscal year, representing an improvement of approximately 61.3% The Company has developed and continues 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.

During the fiscal year ended March 31, 2025,2026, we used cash in operating activities in the amount of $2.4$ 0.72 million compared to $6.7$2.4 million for the fiscal year ended March 31, 2024.2025. For each of the fiscal years ended March 31, 20252026 and March 31, 2024,2025, the cash used 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 management’s concerted effort to contain costs while increasing revenues, on the path of achieving break-even.

Net cash used in investing activities was Nil$nil and $nil in the fiscal years ended March 31, 20252026 and March 31, 2024.2025.

Inventory is stated at the lower of cost and marketnet value,realizable costvalue. Cost beingis determined on a weighted average cost basis. MarketNet valuerealizable 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.

Inventories are stated at the lower of cost and marketnet realizable value. Net Marketrealizable value ofvalueof 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.

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 Company’s normal business activities. Accounts receivable is reported on the balance sheets net of an estimated allowance for doubtfulexpected accounts.credit losses. The Company establishes an allowance for doubtfulexpected accountscredit losses 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.

Selling, general and administrative expenses consist primarily of personnel-related costs including stock-basedstock based compensation for personnel in functions not directly associated with research and development activities. Other significant costs include sales and marketing costs, costs, investor relation and legal costs relating to corporate matters, professional fees for consultants assisting with business development development and financial matters, and office and administrative expenses.

The Company accounts for stock-basedstock based compensation awards issued to non-employees for services, as prescribed by ASC 718-10, at either the the fair value of the services rendered or the instruments issued in exchange for such services, whichever is more readily determinable, 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.

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 revolutionizetransform the healthcare industry for disease prevention.

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 tremendoussignificant progress in remote monitoring solutions for diagnostic and post-diagnostic products.

The following table sets forth our results of operations for the ninethree months ended DecemberJune 31,30, 2025,2026, and 2024.2025.

Technology fee revenue increased to $10.5$4.2 million during the ninethree months ended DecemberJune 31,30, 2025,2026, which is ana 11%23.6% increase over the corresponding nine-monththree-month period of the prior year. The majority of this revenue is recurring, and its growth can be attributed to strong customer retention retention that is supported by the quality of customer and cardiologist-friendly support services that emphasize accuracy of diagnostics and ease-of-use. Device salessales, which were lower this quarter due to channel timing, comprised 10.5%2.6% of our total revenue, or $1.2$0.11 million for the nine-monththree-month period ended DecemberJune 31,30, 2025.2026. Gross profit percentage was 81.3%82.6% for the ninethree months ended DecemberJune 31,30, 2025,2026, compared to 75.2%80.5% in the corresponding prior year quarter. This increase in gross margin is a result of improved margins on technology fee revenue as well as significantly improved margin on device sales. Given consistent gross margin on technology fees of approximately 82.1%,86.9%, and efficiencies gained in using AI in data processing as well as an evolving revenue mix where we expect technology fees to comprise an increasing proportion of revenue, we anticipate continued improvement in overall blended gross margin over time. Technology fees comprised 89.5%97.4% of total revenue for the nine-monththree-month period ended June December30, 31, 2025.2026.

Total operating expenses for the ninethree months ended DecemberJune 31,30, 2025,2026, were $8.5$3.4 million as compared to $9.2$2.8 million for the ninethree months ended June December30, 31,2025, 2024.driven Seeprimarily furtherby explanationsselling, below.general and administrative expenses, partially offset by lower research and development spending.

For the ninethree months ended DecemberJune 31,30, 20252026 we recorded research and development expenses of $1.9$0.67 million, compared to $1.6$0.7 million for the ninethree months ended DecemberJune 31,30, 2024.2025. The research and development activity related to both existing and new products. The increasedecrease in research research and development activity was a result of the timing of activities associated with the development of new technologies for our ecosystem ecosystem and product enhancements.enhancements, rather than a reduction in overall planned development spending.

For the ninethree months ended DecemberJune 31,30, 20252026 and 2024,2025, we recognized a loss of $168$110 thousand versus a gainloss of $468$25 thousand, respectively, related related to the change in fair value of derivative liabilities. The fair value changes were largely attributed to the underlying change in our mezzanine equity, convertible notes and equity fair value.

Translation adjustment was a lossgain of 15 thousand$422 versus a loss of $77$36 thousand for the three months ended DecemberJune 31,30, 20252026 and 2024, 2025, respectively. 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.

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 additional equity and debt capitalization of the Company. The Company has incurred recurring losses from operations, and as at MarchJune 31,30, 2025,2026, has an accumulated deficit of $139$143 million (2024March 30, 2026: $128$143 million), the Company has a working capital deficit of $16$32 million (2024March 30, 2026: $18$31 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 Company’s 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 Company’s shares of common stock were again listedquoted on the OTCQB under the symbol “BTCY.”

The Company has consistently reported positive Free Cash Flows for last six quarters,year, which is defined as the operating cash flow generated by the Company that is available to pay for dividend and interest obligations. Free Cash Flow is a non-generally accepted accounting principle (“non-GAAP”) measure that represents the cash that the Company generates from its operations after deducting cash used on operating expenses and any capital asset spending. Unlike other accounting measures such as earnings or net income, this measure of profitability excludes non-cash expenses, but includes spending on capital assets and changes in working capital on the Company’s Balance Sheet. This is a key measure that management and investors use to evaluate progress towards Company profitability.

During the ninethree months ended DecemberJune 31,30, 2025,2026, we usedgenerated cash in operating activities of $698$507 thousand.thousand compared to $1.98$373 millionthousand cash used for the corresponding prior year period. The cash in operating activities was primarily due to selling expenses as well as research, product development, business development, marketing and general operations. The decreaseincrease in cash usedgeneration reflects management’s concerted effort to contain costs while increasing revenues.

Net cash used in investing activities was Nil and Nil during the ninethree months ended DecemberJune 31,30, 20252026 and 2024.2025.

Net cash providedused in financing activities was $649$191 thousand compared to net cash provided of $1.76$436 millionthousand during the ninethree months ended DecemberJune 31,30, 20252026 and 2024,2025, respectively.