BIOTRICITY INC.

Previous wording

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 Google’s 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.

Current wording

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 built a powerful proprietary cardiac AI model that combines Google’s TensorFlow, AWS infrastructure, big data and a continuous learning engine. This combination allows us to rapidly improve our cardiac technology. Our goal is to enhance the capabilities of our cardiac AI model to 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 as we chart a clear path to profitability.

Previous wording

The following table sets forth our results of operations for the six months ended September 30, 2024, and 2023.

Current wording

The following table sets forth our results of operations for the nine months ended December 31, 2024, and 2023.

Previous wording

Net loss before dividends for the three months ended September 30, 2024, demonstrate year-over-year revenue growth and improvements in key operating metrics. Specifically, our recurring technology fees, device sales, and gross margins all demonstrated positive growth while maintaining cost control through management’s efforts to ensure cost reduction and expense management in order to make progress on its plan to achieve positive cash flow and profitability.

Current wording

Net loss before dividends for the nine months ended December 31, 2024, demonstrate year-over-year revenue growth and improvements in key operating metrics. Specifically, our recurring technology fees, device sales, and gross margins all demonstrated positive growth while maintaining cost control through management’s efforts to ensure cost reduction and expense management in order to make progress on its plan to achieve positive cash flow and profitability.

Previous wording

By increasing our sales force and geographic footprint, we are actively selling in 35 U.S. states as of September 30, 2024. The Company earned combined device sales and technology fee income of $6.5 million during the six months ended September 30, 2024 – 9.4% growth in revenue over the $5.9 million earned in the prior year comparable quarter.

Current wording

By increasing our sales force and geographic footprint, we are 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 – 13.5% growth in revenue over the $8.9 million earned in the prior year comparable nine month period.

Previous wording

Technology fee revenue increased to $6.0 million during the six months ended September 30, 2024, which is a 10.6% increase over the corresponding six-month period of the prior year. The majority of this revenue is recurring, and its growth can be attributed to strong customer retention that is supported by the quality of customer and cardiologist-friendly support services that emphasize accuracy of diagnostics and ease-of-use. Device sales comprised 6% of our total revenue, or $388 thousand for the six-month period ended September 30, 2024. Gross profit percentage was 74.6% for the six months ended September 30, 2024, as compared to 66.2% 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 77.3%, and efficiencies gained in using AI in data processing as well as 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. Technology fees comprised 94% of total revenue for the six-month period ended September 30, 2024.

Current wording

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. The majority of this revenue is recurring, and its growth can be attributed to strong customer retention that is supported by the quality of customer and cardiologist-friendly support services that emphasize accuracy of diagnostics and ease-of-use. Device sales comprised 6.1% of our total revenue, or $620 thousand for the nine-month period 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. 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 over 80%, and efficiencies gained in using AI in data processing as well as 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. Technology fees comprised 93.9% of total revenue for the nine-month period ended December 31, 2024.

Previous wording

Total operating expenses for the six months ended September 30, 2024, were $6.2 million as compared to $8.4 million for the six months ended September 30, 2023. See further explanations below.

Current wording

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. See further explanations below.

Previous wording

Our selling, general and administrative expenses for the six months ended September 30, 2024, was $5.2 million, compared to approximately $7 million during the six months ended September 30, 2023 – a 25.6% reduction. The reduction was a result of increased monitoring of spending efficiency over our fixed general and administrative expenses in the current period.

Current wording

Our selling, general and administrative expenses for the nine months ended December 31, 2024, was $7.6 million, compared to approximately $10.0 million during the nine months ended December 31, 2023 – a 24.1% reduction. The reduction was a result of increased monitoring of spending efficiency over our fixed general and administrative expenses in the current period.

Previous wording

For the six months ended September 30, 2024, we recorded research and development expenses of $1 million, compared to $1.4 million incurred for six months ended September 30, 2023. 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.

Current wording

For the nine months ended December 31, 2024, we recorded research and development expenses of $1.6 million, compared to $1.9 million incurred for nine months ended December 31, 2023. 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.

Previous wording

For the six months ended September 30, 2024, and 2023, we incurred interest expenses of $1.5 million and $1.4 million, respectively. The increase in interest expense during the current period was the result of an increase in borrowings when compared to the prior year period.

Current wording

For the nine months ended December 31, 2024, and 2023, we incurred interest expenses of $2.4 million and $2.2 million, respectively. The increase in interest expense during the current period was the result of an increase in borrowings when compared to the prior year period.

Previous wording

For the six months ended September 30, 2024, and 2023, we incurred accretion expenses of $1.5 million and $1.2 million, respectively. The increase in the current period was a result of debt discount amortization related to convertible notes conversions during the first fiscal quarter.

Current wording

For the nine months ended December 31, 2024, and 2023, we incurred accretion expenses of $1.8 million and $1.6 million, respectively. The increase in the current period was a result of debt discount amortization related to convertible notes conversions during the first fiscal quarter.

Previous wording

For the three months ended September 30, 2024, and 2023, we recognized a loss of $194 thousand versus a loss of $19 thousand, respectively, 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.

Current wording

For the nine months ended December 31, 2024, and 2023, we recognized a loss of $468 thousand versus a loss of $244 thousand, respectively, 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.

Previous wording

Loss upon convertible promissory notes conversion

Current wording

Gain (loss) upon convertible promissory notes conversion

Previous wording

During the six months ended September 30, 2024, and 2023, we recorded a loss of $132 thousand versus a gain of $13 thousand, respectively, related to the redemption and conversion of our convertible promissory notes.

Current wording

During the nine months ended December 31, 2024, and 2023, we recorded a loss of $90 thousand versus a gain of $15 thousand, respectively, related to the redemption and conversion of our convertible promissory notes.

Previous wording

During the six months ended September 30, 2024, we recognized $193 thousand in net other income/expense, which consisted of loss on debt extinguishment, income from late payment charges, as well as expenses attributed to the financing component provisions contained in our revenue contracts. During the six months ended September 30, 2023, we recognized $129 thousand in net other expense attributed to non-operating costs from note modifications, transaction expense on the Series B preferred share issuance, and the financing component provisions contained in our revenue contracts.

Current wording

During the nine months ended December 31, 2024, we recognized $128 thousand in other expense, which consisted of loss on debt extinguishment, income from late payment charges, as well as expenses attributed to the financing component provisions contained in our revenue contracts. During the nine months ended December 31, 2023, we recognized $119 thousand in other expense attributed to non-operating costs from note modifications, transaction expense on the Series B preferred share issuance, and the financing component provisions contained in our revenue contracts.

Previous wording

By increasing our sales force and geographic footprint, we are actively selling in 35 U.S. states as of September 30, 2024. The Company earned combined device sales and technology fee income of $3.3 million during the three months ended September 30, 2024 – 13% growth in revenue over the $2.9 million earned in the prior year comparable quarter.

Current wording

By increasing our sales force and geographic footprint, we are actively selling in 35 U.S. states as of December 31, 2024. The Company earned combined device sales and technology fee income of $3.6 million during the three months ended December 31, 2024 – 21.7% growth in revenue over the $3.0 million earned in the prior year comparable quarter.

Previous wording

Technology fee revenue increased to $3.0 million during the three months ended September 30, 2024, which is a 12.2% increase over the corresponding three-month period of the prior year. The majority of this revenue is recurring, and its growth can be attributed to strong customer retention that is supported by the quality of customer and cardiologist-friendly support services that emphasize accuracy of diagnostics and ease-of-use. Device sales comprised 6.2% of our total revenue, or $202 thousand for the three-month period ended September 30, 2024. Gross profit percentage was 75.3% for the three months ended September 30, 2024, as compared to 69.1% 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 strong gross margin on technology fees of approximately 78.9%, and efficiencies gained in using AI in data processing as well as 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. Technology fees comprised 93.8% of total revenue for the three-month period ended September 30, 2024.

Current wording

Technology fee revenue increased to $3.4 million during the three months ended December 31, 2024, which is a 21.8% increase over the corresponding three-month period of the prior year. The majority of this revenue is recurring, and its growth can be attributed to strong customer retention that is supported by the quality of customer and cardiologist-friendly support services that emphasize accuracy of diagnostics and ease-of-use. Device sales comprised 6.4% of our total revenue, or $233 thousand for the three-month period ended December 31, 2024. Gross profit percentage was 76.4% for the three months ended December 31, 2024, as compared to 72.9% 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 strong gross margin on technology fees of approximately 81.4%, and efficiencies gained in using AI in data processing as well as 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. Technology fees comprised 93.6% of total revenue for the three-month period ended December 31, 2024.

Previous wording

Total operating expenses for the three months ended September 30, 2024, were $2.8 million as compared to $4.2 million for the three months ended September 30, 2023. See further explanations below.

Current wording

Total operating expenses for the three months ended December 31, 2024, were $2.93 million as compared to $3.45 million for the three months ended December 31, 2023. See further explanations below.

Previous wording

Our selling, general and administrative expenses for the six months ended September 30, 2024, was $2.2 million, compared to approximately $3.5 million during the three months ended September 30, 2023 – a 35.5% reduction. The reduction was a result of increased monitoring of spending and efficiency gains that resulted in reductions in fixed general and administrative expenses in the current period.

Current wording

Our selling, general and administrative expenses for the three months ended December 31, 2024, was $2.4 million, compared to approximately $3.0 million during the three months ended December 31, 2023 – a 20.5% reduction. The reduction was a result of increased monitoring of spending and efficiency gains that resulted in reductions in fixed general and administrative expenses in the current period.

Previous wording

For the three months ended September 30, 2024, we recorded research and development expenses of $0.5 million, compared to $0.7 million incurred for the three months ended September 30, 2023. 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.

Current wording

For the three months ended December 31, 2024, we recorded research and development expenses of $0.6 million, compared to $0.5 million incurred for the three months ended December 31, 2023. 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.

Previous wording

For the six months ended September 30, 2024, and 2023, we recognized a loss of $501 thousand versus a gain of $83 thousand, respectively, 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.

Current wording

For the three months ended December 31, 2024, and 2023, we recognized a gain of $32 thousand versus a loss of $0.3 million, respectively, 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.

Previous wording

Loss upon convertible promissory notes conversion

Current wording

Gain (loss) upon convertible promissory notes conversion

Previous wording

During the three months ended September 30, 2024, and 2023, we recorded a loss of $5 thousand versus a gain of $7 thousand, respectively, related to the redemption and conversion of our convertible promissory notes.

Current wording

During the three months ended December 31, 2024, and 2023, we recorded a gain of $42 thousand versus a gain of $2 thousand, respectively, related to the redemption and conversion of our convertible promissory notes.

Previous wording

During the three months ended September 30, 2024, we recognized $36 thousand in net other income/expense, which consisted of loss on debt extinguishment, income from late payment charges, as well as income attributed to the financing component provisions contained in our revenue contracts. During the three months ended September 30, 2023, we recognized $143 thousand in net other expense attributed to non-operating costs from note modifications, transaction expense on the Series B preferred share issuance, and the financing component provisions contained in our revenue contracts.

Current wording

During the three months ended December 31, 2024, we recognized $65 thousand in other income, which consisted of loss on debt extinguishment, income from late payment charges, as well as income attributed to the financing component provisions contained in our revenue contracts. During the three months ended December 31, 2023, we recognized $11 thousand in other expense attributed to non-operating costs from note modifications, transaction expense on the Series B preferred share issuance, and the financing component provisions contained in our revenue contracts.

Previous wording

Management considers the EBITDA and adjusted EBITDA measures for the three and six-month periods ended September 30, 2024, to be indicators of the Company’s progress towards breakeven profitability as well as improvement towards operating cash-flow break-even. EBITDA improved by 80% and 50.4%, respectively, when compared to the three and six months ended for the corresponding prior period. Adjusted EBITDA, which management uses as a measure for tracking free cashflow levels, improved to negative $249 thousand for the quarter ended September 30, 2024, a reduction of over $1.7 million dollars in negative Adjusted EBITDA from the comparative period of the prior fiscal year, which is an 87% improvement. The Company was able to achieve a positive Adjusted EBITDA for the month of September 2024 for the first time in its history.

Current wording

Management considers the EBITDA and adjusted EBITDA measures for the three and nine-month periods ended December 31, 2024, to be indicators of the Company’s progress towards breakeven profitability as well as improvement towards operating cash-flow break-even. EBITDA improved by 98.3% and 62.9%, respectively, when compared to the three and nine months ended for the corresponding prior period. Adjusted EBITDA, which management uses as a measure for tracking free cashflow levels, improved to negative $110.6 thousand for the quarter ended December 31, 2024, a reduction of approximately $1 million in negative Adjusted EBITDA from the comparative period of the prior fiscal year, which is an 90% improvement.

Previous wording

Translation adjustment was a loss of $105 thousand versus a gain of $105 thousand for the six months ended September 30, 2024, and 2023, 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.

Current wording

Translation adjustment was a gain of $76.7 thousand versus a loss of $29.1 thousand for the nine months ended December 31, 2024, and 2023, 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.

Previous wording

Management has 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, 2024, and 2023, 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.

Current wording

Management has 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, 2024, and 2023, 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 financing, and 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.

Previous wording

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 September 30, 2024, has an accumulated deficit of $136,101,106. 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 September 30, 2024, the Company had a working capital deficit of $17,424,814. 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 listed on the OTCQB under the symbol “BTCY.”

Current wording

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 December 31, 2024, has an accumulated deficit of $137,419,652. On December 31, 2024, the Company had a working capital deficit of $16,280,084.

Previous wording

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 Company’s 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 ended March 31, 2024, 110 Series B preferred shares were issued for net proceeds of $925,000.

Current wording

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 Company’s 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.

Previous wording

During the six months ended September 30, 2024, 220 Series B preferred shares were issued for net proceeds of $1,732,532. The Company also raised $650,000 from the issuance of convertible notes to a lender. Lastly, the Company sold 97,811 common shares through use of its registration statement, for net proceeds of $125,227.

Current wording

During the nine months ended December 31, 2024, 220 Series B preferred shares were issued for net proceeds of $1.7 million. The Company also raised $1.5 million from the issuance of convertible notes to private lenders. Lastly, the Company sold 97,811 common shares through use of its registration statement, for net proceeds of $125,277.

Previous wording

During period subsequent to September 30, 2024, the Company raised additional funding from private investors in the amount of $811 thousand in the form of promissory notes and convertible promissory notes. The Company also raised additional term loan funding of $635,000 from its main term loan provider.

Current wording

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.

Previous wording

Adjusted EBITDA, which management uses as a measure for tracking free cashflow levels, improved to negative $249 thousand for the quarter ended September 30, 2024, a reduction of over $1.7 million in negative Adjusted EBITDA from the comparative period of the prior fiscal year, which is an 87% improvement. The Company was able to achieve a positive Adjusted EBITDA for the month of September 2024 and expects further improvements in this measure in future periods.

Current wording

Adjusted EBITDA, which management uses as a measure for tracking free cashflow levels, improved to negative $110,555 thousand for the quarter ended December 31, 2024, a reduction of approximately $1 million in negative Adjusted EBITDA from the comparative period of the prior fiscal year, which is a 90% improvement.

Previous wording

On September 30, 2024, we had cash deposits in the aggregate of $173,270.

Current wording

On December 31, 2024, we had cash deposits in the aggregate of $509,601.

Previous wording

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 at least for a period of one year from the date of these Condensed Consolidated Financial Statements.

Current wording

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.

Previous wording

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.

Current wording

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.

Previous wording

During the six months ended September 30, 2024, we used cash in operating activities in the amount of $1.9 million. 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 management’s concerted effort to contain costs while increasing revenues, on the path of achieving break-even.

Current wording

During the nine months ended December 31, 2024, we used cash in operating activities in the amount of $1.4 million. 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 management’s concerted effort to achieve break-even cashflow by containing costs while increasing revenues.

Previous wording

During the six months ended September 30, 2023, we used cash in operating activities of $4.2 million. These activities involved expenditures for sales, infrastructure and business development, as well as marketing and operating activities, and continued research and product development.

Current wording

During the nine months ended December 31, 2023, we used cash in operating activities of $5.53 million. These activities involved expenditures for sales, infrastructure and business development, as well as marketing and operating activities, and continued research and product development.

Previous wording

Net cash used in investing activities was Nil during the six months ended September 30, 2024, and 2023.

Current wording

Net cash used in investing activities was Nil during the nine months ended December 31, 2024, and 2023.

Previous wording

Net cash provided by financing activities was $1.3 million as compared to net cash provided of $4.8 million during the six months ended September 30, 2024, and 2023, respectively.

Current wording

Net cash provided by financing activities was $1.76 million as compared to net cash provided of $4.95 million during the nine months ended December 31, 2024, and 2023, respectively.

Previous wording

For the six months ended September 30, 2024, the net cash provided by financing activities was primarily due to the issuance of Series B preferred stock of $1.7 million.

Current wording

For the nine months ended December 31, 2024, the net cash provided by financing activities was primarily due to the issuance of Series B preferred stock of $1.7 million.

Previous wording

For the six months ended September 30, 2023, the net cash provided by financing activities related primarily to net proceeds attributed to the issuance of Series B preferred stock of $1.9 million, the issuance of convertible notes of $2.0 million and the issuance of short term loans and promissory notes of approximately $0.8 million, net of repayments. Lastly, we issued common stock resulting in $0.1 million of net proceeds.

Current wording

For the nine months ended December 31, 2023, the net cash provided by financing activities related primarily to net proceeds attributed to the issuance of Series B preferred stock of $1.9 million, the issuance of convertible notes of $2.3 million and the issuance of short term loans and promissory notes of approximately $1.4 million, net of repayments. Lastly, we issued common stock resulting in $0.1 million of net proceeds.