Biotricity Inc (BTCY) 2021 Q4 法說會逐字稿

Good day and welcome to the Biotricity fourth-quarter and fiscal 2021 financial results conference call. Today's conference is being recorded. At this time I would like to turn the conference over to Mark Forney of MKR Investor Relations. Please go ahead.

Good afternoon, everyone, and welcome to Biotricity's 2021 Q4 and fiscal year earnings conference call. As a reminder, Biotricity's quarter and fiscal year ended on March 31, 2021, so all figures presented for this period will reflect that end date.

Earlier today, we issued our fiscal 2021 Q4 and annual results press release, which highlighted a number of financial results. It should be noted that these figures may be subject to change when the final filing is complete. A copy of the press release is available on the Investor Relations section of our website and the completed financials will be posted on EDGAR by June 30, 2021.

Before beginning our formal remarks, I'd like to remind listeners that today's discussion may contain forward-looking statements that reflect management's current views with respect to future events. Any such statements are subject to risks and uncertainties that could cause actual results to differ materially from those projected in these forward-looking statements. Biotricity does not undertake to update any forward-looking statements except as required.

At this point I'm pleased to turn the call over to Biotricity's Founder and CEO, Waqaas Al-Siddiq. Please go ahead.

Thank you, Mark, and thank you everybody who took the time to join us today and thank you to our shareholders who are joining on this call as well. By and large, the quarterly details will be covered by John. I think, obviously, my esteemed colleague is more astute in delivering those details. And the bulk of my remarks will be focused on the areas that I think are important to the quarter from a business perspective, as well as laying out the vision for the Company and what I believe can help lead us in realizing our goal of becoming a $1 billion company.

So, in terms of the quarter and what I think is important from a business perspective on the quarter, we had a record quarter. And of course John is going to go into those details. But what I'm more excited about is how that quarter and how that year -- or our last fiscal year has set us up for the rest of this year and for our next fiscal year.

I believe we will easily beat what we did in our March 31 quarter in the quarter June -- that's going to be ending June 30. I think we are on track for one of our biggest sequential quarter-over-quarter growths we have ever had, beating the projections that were put out by Maxim.

And the reason this is occurring is because we have gone through this pandemic and through COVID and this shut down and the country is reopening. And of course we suffered alongside all other businesses because of the limited -- limitations in terms of freedom of movement. But what certainly became a point of importance during the pandemic is the importance of monitoring. And we are seeing that as we come out of the pandemic. And that's what I'm excited about in terms of the quarter for June 30 as well as the rest of the year.

The other important aspect of what I have seen that has transpired since our first quarter and our -- March 31 quarter, is that, based on our expectations for the quarter ending June 30, we believe we are on track for what was the target that was set out earlier, which was an $8 million to $10 million for this fiscal year ending March 31, 2022.

So, to summarize my quarterly comments, we expect a great year ahead post-COVID. Our business and our base business in terms of our focus on the Bioflux and the business that is at the core of Biotricity, that is actually accelerating.

And with that, I will turn things back to what I was talking about earlier, which is our vision, what we are doing in terms of realizing that vision and our approach to building the Company to a $1 billion story that we are very excited about. And for those of you who are new to the story, let me tell you a little bit about the Company and what we are doing. So, Biotricity has -- those of you who are familiar -- we are a remote patient monitoring company that's focused on the complex cardiac space. And we really feel that the future is in connected healthcare devices.

So, what do we mean by that? We mean that as things get more and more connected, we see that the future of healthcare is going to be where devices that are smart, intelligent, but diagnostically and clinically relevant are going to be provided to patients so that they can go and they can monitor themselves in the comfort of their home, while they're on the go, while they're moving about, and they will collect the important information that a doctor needs to see.

And if there is an emergency it will actually transmit and provide that to the physician in real time so that they can deal with the response. So, that's where we feel the future is.

And so we built a platform, a remote patient monitoring platform, and we applied that into the cardiac space because we believe fundamentally at Biotricity that all roads lead to cardiac. And what does that mean? That means that, one, first of all, it's the number one killer in the entire world, in every country in the world.

But more importantly, if you are diagnosed with cardiac disease, you are at risk for a number of other things. If you are at risk for -- or if you're diagnosed with hypertension, diabetes, etc., you end up becoming high risk for cardiac as well.

So, you are either suffering or are diagnosed with cardiac disease or you have some other chronic illness which then puts you into the higher risk category for cardiac. So, with that in mind, we believe that the entry point is cardiac, which we have done. And then to move into this complex cardiac, which is really dealing with individuals that have cardiac disease and some other -- a disease that also puts them at higher risk.

And in terms of our vision and how does that apply, so we believe that -- at Biotricity that this is a $1 billion opportunity in terms of number one killer in [familiar] cardiac disease, the idea of these patients living with this over a period of time. And our execution on this path to our vision is really about expanding our total addressable market.

So, right now we are in the real-time high-end cardiac diagnostics and we have a product pipeline that we are working on and executing on. And that product pipeline lets us dig deeper into our existing customers but also touch these patients more often. So again, what does that mean? Well, I'm diagnosed with cardiac disease, let's say, by my cardiologist. My cardiologist puts me on our core product, Bioflux. I get diagnosed, he gives me a medication or he does a procedure, and then I go into this cardiac management.

So, every three months or every six months I'm back to get a prescription renewal or to figure out what is my baseline or what is changing. And so, once I've done the initial Bioflux diagnosis, Biotricity is not touching that patient until six or nine months later. But in between that patient is constantly going back and forth with their cardiologist.

And so our focus is how do we touch the patient in between visits? How do we help manage that patient? How do we facilitate collection of other data so that the doctor, when they are seeing the patient in between visits, they are collecting more holistic picture of that patient? And that is really the $1 billion opportunity.

And so, to put that into a context and also align that with what we've done over the last year comparatively. We now today 1,300 cardiologists that use our product compared to 375 the same time last year. The so that's a huge increase. We have 2.6 million patients that are serviced through those 1,300 cardiologists. So, every cardiologist has about 2,000 patients, so that's 2.6 million patients compared to 750,000 patients that -- for the 375 cardiologists we had this time last year.

Why is that important? Because our goal is to touch more of these patients by expanding our product portfolio. And what is very important for everybody to understand, especially our shareholders, is that our product portfolio is very focused and aligned. Because it all feeds back to our core business. Because, as I said, at Biotricity we believe that all roads lead to cardiac. But everything that we have in our product portfolio and everything in our business, it begins and ends with Bioflux. Always.

And that's very important. Because once you diagnose a patient, the patient gets a procedure, they get a medication. But a year later or six months later when you want to make an adjustment, if they get a pacemaker installed, you want to make an adjustment to that pacemaker setting, you have to, again, diagnose that patient again. And because they're higher risk, you put them back on the Bioflux. So, everything that we're doing in terms of trying to connect with this patient or help manage that patient drives us back to Bioflux. So, it's really a roundabout.

So, where some people are saying, oh, you've got this product portfolio in the product portfolio is -- they don't see how that product portfolio is completely integrated in connected because it's part of one ecosystem and it's always driving the patient back to diagnostics. Because that is essentially what the patient needs to do. And we know this and we can confirm this because we have seen this, our product has been in the market for two years.

So, the patients that were on the Bioflux in the first clinic that we ever opened in -- two years ago, that patient is back on Bioflux every nine months. Because there's an adjustment or there is a change to make sure that the baseline -- or that the patient is stable, it's all verified through diagnostics.

And so, this is an important point in terms of how we are trying to grow and realized that $1 billion vision. It's all about touching those patients more and more often. And while we do that, we are leveraging the multiple growth drivers of business. So, what does that mean?

So, we are -- we have multiple growth drivers outside of product expansion. So, product expansion is, I've got these X customers, I've got these 1,300 cardiologists. They service 2.6 million patient. My products are going to go deeper into these accounts and touch more of these patients, so I have better touch rates.

But simultaneously I'm expanding our sales force. So, we're doing horizontal expansion by, of course, opening up more hospitals, more clinics. And simultaneously to that is geographic expansion. We are in 23 states. So again, how do we expand the number of states that we are in; how do we expand our sales force that's creating horizontal growth; and vertical growth by product expansion?

And what's very, very important about all of this is that we are aligning all of this with our business model, which is technology as a service. And why that's important is because that model is making things superior. Because we have 100% reorder rates coupled with high retention rate because our model is enabling physicians to in-source. It's also allowing us to have less overhead, because we're not busy doing clinical work. We are not setting up clinical offices all around the country, so that's creating better margin.

So, our quarter-over-quarter growth and our year-over-year growth is directly a result of the business model that we have adopted. And this is very important because people are like -- and individuals think we're a lot smaller than that would initially make sense. And the reason I say that is because our revenue run rate, as you will see, is growing in a healthy way. And we said in our last quarter results that we are close to an $8 million run rate and we have grown since then.

But what's important is if we were adopting the trade additional business model, our run rate would be $30 million to $35 million; much, much higher. But we've specifically focused on a strategy that is a technology as a service model because that increases value, reduces overhead, and improves margins in a substantial way.

So, not only are we reducing overhead and the risk of having to deal with all of this infrastructure cost, we are also accelerating growth and creating better margin. So, that's a very important aspect I wanted to talk about in terms of -- we have a good run rate, we are certainly growing. All of those things are positive, but we're still small.

But in terms of looking at an apples-to-apples comparison in the market, we are a lot bigger in terms of presence than you would originally think because of the fact that our business model is approached in a technology angle, which actually lends itself to less revenue initially but far makes up for it in terms of value, margins, and growth. And with that I'd like to turn the call over to our CFO, John Ayanoglou, who will go into the details about our quarter and the important financial numbers that we have posted.

Thank you, Waqaas. Thank you to everyone who has joined us this afternoon. This was another strong growth quarter for Biotricity. So, I want to begin by highlighting our revenue, which increased from $362,920 in fiscal Q4 of fiscal 2020, to $1.2 million in fiscal Q4 2021. This represents a 227% year-over-year quarterly increase. But just as importantly, marks a sequential 19% increase over the $1 million we posted just last quarter of this fiscal year.

We have the pipeline to back triple digit revenue growth far into the future, so our confidence in this kind of quality growth is backed with high visibility into the sources of that growth. It's important to note that most of our growth at this stage is organic, so this pace is set to accelerate as we expand our sales team and layer on new products over the next 12 months.

We spoke last quarter about revenue acceleration, how it is a true measure of sales growth. That trend was even more pronounced in Q4. Comparing the last few quarters, in Q2 of fiscal 2021 we posted year-over-year quarterly growth of 115.3%. Now, follow me through the year. In Q3 fiscal 2021, that increased to 162%. So, 115%, 162%, and now in Q4 it increased again to 227% year-over-year quarterly growth.

That is the definition of a hockey stick when we are looking at trajectory. Our upcoming Q1 should again set a new growth record, with indications that suggest it will be in the neighborhood of approximately 250%. So, our trajectory, our hockey stick, is becoming better defined.

Our sales team have a seasoning effect as new salespeople develop their territories. So, in that regard, you can draw a line to higher sales from each new member of our sales department. As of today, we are in just 23 states. In fact, some of the largest markets in the country are still unpenetrated, including California, Illinois, and a number of key states in New England, the Sough, upper Midwest, and other parts of the country that we want to get to. Filling in those states where we are not yet there, is going to be a multiyear process for us -- filling in that map.

High-risk cardiac patients are the same anywhere in the world coming, so applying our truly global technology as a service model, our TaaS model, in any geography is essentially the same process. As we get more feet on the ground we will eventually have coverage throughout the US. We will then infill those accounts with new products, such as our upcoming Biotres Holter. So, our sales channel will become broader in terms of footprint and deeper in terms of multiple products sold to the same customers. So, broader and deeper.

That's going to give us a multilayered growth over the next few years, even before we turn our eye to international markets. And again, don't forget, we have a connected -- a cellular connected product. It's a truly globally usable and useful product. In lower margin products, such as the Holter, come with far larger market size. So, the net effect is to create scale across our product lines.

The TaaS model is a bit different than a pure SaaS model because every new cardiac office requires devices, and those devices are booked as an upfront equipment cost. The useful life is about three years for these reusable devices, so we have a cost function that involves new and replacement pieces, both from new and existing customers who are growing their individual practices.

During the quarter, we have reclassified certain costs related to provision of cardiac studies from general and admin expenses to cost of revenue -- I should say during the year. And we've also reclassified corresponding expenses in the prior year to conform.

Increases in cost efficiency in combination with that reclassification in our numbers resulted in a quarterly gross margin being 69%, which significantly improved from our prior quarter adjusted gross margin of 22%. Our year-over-year gross margin improvement, which is 45% this year, was 34% last year. The larger our network, the more predictable our margins will become. The more we can scale and reap economies of scale.

There's been a lot of noise recently concerning billing practices in the remote monitoring industry, but our model largely shields us from those issues, as all of the billing under our TaaS model is handled by our customers, typically at the local level. Overall the metrics surrounding our operation showed little change during Q4.

We are particularly proud of our historical high customer retention rate, something we are proud of and find impressive as the size of our network expands. Our customers get best-in-class technology and dramatically increase their own revenue under our model, a combination that continues to improve our market share.

During the three months ended March 31, 2021, Biotricity incurred a net loss of $5.5 million and a comprehensive loss of $5.2 million compared to $4.8 million and $5.1 million in the comparable period of fiscal 2020. We continue to be in an R&D and infrastructure development phase as we prep for our Holter product launch and design our move into chronic care.

To put the scale of this effort into perspective, we are looking to build a sustainable set of products that will take our total addressable market from just $1 billion, with the Bioflux, to at least $30 billion during the next phase of our growth cycle -- $3 billion during the next phases of our growth cycle.

Despite continued R&D and sales team expansion, you will note that our operating expenses decreased 12% compared to the same period last year, owing significantly to the one-time impact of a $1.2 million PPP loan forgiveness at the freight, payroll, and premises costs. We are also layering on extensive growth while at the same time obtaining greater cost efficiency.

Our G&A of $3.3 million was 3% lower than the $3.4 million we posted last quarter, Q3 2021, while R&D was $551,000, about 19% lower than one quarter ago. We have managed our R&D spending well at this stage, as this cost has thus far yielded revenue producing results with very long-term and growing potential.

We had one extra item in the quarter that skewed our results a bit in the form of accretion expense on our most recent convertible note financing. Accretion expense of $1.8 million plus change in fair value of associated derivative liabilities totaling $374,000, approximately, comprised about 40% of the loss we mentioned.

Like other early revenue technology companies, we currently operate at a loss, but we're managing our burn exceptionally well at this stage, with the bulk of our capital applied directly to revenue enhancing products and projects and sales territory expansion. We ended Q4 with $2.2 million in cash and over $4 million in current assets, so we continue to manage our resources to meet our growth objectives.

Waqaas already described how we expect to achieve triple-digit revenue growth for the foreseeable future, but one of the key features of that expansion is that we have excellent visibility. With the exception of a few weeks early in the pandemic, we have grown every month since beginning our revenue stream. We do not see any change in that trend, but expect it to grow even stronger as the year progresses and into future years. At this point, I will turn the call back over to Waqaas for his closing comments.

Thank you, John, and thank you for that overview. And I would just like to add a couple things because I think it's important, and John really focused on it, which is an important aspect. Which is about this idea of expenses that we incur in terms of derivative liabilities and other aspects, and coupled with the fact that we are managing our cash in a very prudent manner.

And the reason I want to bring that up is because when you are raising equity, there are general costs associated with that equity, stock offerings, etc., and it makes your balance sheet and your financials look a certain way. But cash-on-cash burn is something that I think shareholders should also focus on.

Because sometimes individuals think, oh, this is your burn. Well, that burn includes stock options, equity compensation, and all of these other little facets. But when you actually look at cash burn, you realize we're even more efficient than essentially meets the eye.

And a big part of that is the financial team that we have here at Biotricity, who's very good at managing all of this. But I think that that is an important aspect when people look at, okay, what is your burn and how much in the red are you. Well, it's a lot less when you look on and cash-per-cash basis. And so, that's one of the points I wanted to add to and distill to.

And going back to what we were talking about earlier, in terms of the industry and where the industry is going and our vision. And a big part of that is really looking at what's happening in the industry and looking at comparables. Especially right now because we've seen a lot of buyouts that have happened recently in terms of Preventice being bought out and BioTelemetry being bought out.

And I think what is important to note is, compared to others, we are growing faster and more efficiently. BioTelemetry, they launched their product, their first cardiac monitoring product, in I believe 2012. Preventice did the same thing. So these companies have been around for a decade in terms of the space of real-time monitoring.

And compared to them, a company that's only been in the market for two years, from our official product launch, we are growing faster and more efficiently compared to the same time in their lifecycle. And I think that that shows the opportunity for shareholders, not just for now but for the next two, three years. And also it shows that it's not going to take us a decade to achieve that same kind of growth. And that is our -- an important aspect of our business.

And similarly, and John touched on it a little bit already, is our business model, which is this [installation] from reimbursement. So, we've seen the reimbursement get chopped in different industries. Reimbursement in our space is very stable and has been stable, in real-time cardiac monitoring, because the real-time cardiac monitoring has been around for a while.

In the Holter space, extended Holter just got chopped, but that's because that was the newest reimbursement that came out in the marketplace. So, if you take cardiac monitoring, there's four categories. The newest was extended Holter and that code was only approved about two years ago and that's why, obviously, within the first few years it always gets chopped.

But what is important is that Biotricity is insulated from it because of our model. So, if you take our Bioflux model in high-end diagnostics, it costs us $383 to make a device. The lifetime of the device is two years, maybe even three years because we've seen devices that, if we just refurbish a little bit, they'll survive for three years. So, on a two-year basis, if you're making $300 -- I'm going to use simple numbers -- $300 and let's say the device costs $400, and you're using it once a month, over two years that device generates $7,200 on a cost of $400.

So, it's very higher-margin. And so, even if reimbursement gets cut, you're going to get -- there's so much room there that we are very, very insulated because we base our model on getting technology, making it as cheap as possible, as best-in-class as possible, really focusing on the accuracy and the capability, and then making it available to physicians and hospitals to utilize so that the operational overhead is not on our shoulders, it's with the individuals who are actually the users of this technology and have the expertise to build operations to service patients.

So, that's, I think, a very, very important component. So, to summarize those points, if you look at the buyouts and what's going on in the industry, there's certainly consolidation, but we are growing faster and more efficiently comparatively. And we will achieve that type of valuation in a much faster and shorter time period.

And because of our business model we are insulated from some of the things that are happening in the reimbursement aspect of the Holter market. And I bring that up not because it's related to the Bioflux but because the Biotres, which is our future product, will be in the Holter space. So, people asked that question and I wanted to address it for those of you who are not following the space as keenly as we would be.

And I think what is the big component and, I think before I turn it over to questions, the big interesting thing is, what is -- what do things look like post-COVID. What is happening to the industry? What is the change? And what I can say is post-COVID, people understand the value of monitoring. They understand that when things are like a pandemic happen or -- and you're dealing with viruses and things like that, you need to separate yourself.

And as soon as you separate yourself and you want to de-risk yourself, the biggest impact is on high-risk patients, patients who don't want to go and see if their cardiologist, even though heart attack is higher risk than COVID, but just because they want to minimize that exposure. And in that case, monitoring is a critical piece.

And so, what is the future of healthcare? The future of healthcare is connected devices and telehealth integrated together to deliver as much care as can be done to the patient, with the patient going in for procedural work. And COVID has accelerated that awareness. It has created much more understanding of that. It was already going that way but the pandemic has accelerated all that.

And so, what that has done for us as a business is it's accelerated our core business, which is Bioflux. Because Bioflux is for high-risk patients. The problem in the pandemic wasn't individuals who can go in and get onto a telemedicine call because they have a -- they have a runny nose. It was the high-risk patients that were higher risk if they contracted COVID and they had to be kept at home. But if they are kept at home nobody has insight, so passive reporting was just not enough. And so, that's really the future, right? The future is shifting into this connected, real-time, smart monitoring.

And we also see a vision of physicians changing. They also see the risk associated with these patients. They also want to deliver the best of care and they want to minimize the risk to their patients. So, they want these patients to stay at home as much as possible, but they feel more comfortable if, again, the patient is on a smart, connected device.

And so, from our perspective, not only through the pandemic what we have seen but also from our perspective from our time in business, is that we are seeing that physician adoption of this now is all around patient safety and care and has accelerated as a result of what has transpired over the last year.

And so, our vision it Biotricity perfectly fits in this. We saw this future, that's why we built the Company, that's why we focused on remote patient monitoring. What we did not expect was that the adoption would have been accelerating, and that's what is happening right now. Because of the pandemic, adoption of real-time monitoring, the importance of it, telehealth, all of that has accelerated. And it's not going to change because the convenience of it is also an advantage.

And so, if you look at us, at Biotricity, we are not just a high-risk cardiac company, we are a complex cardiac cloud and we are going to go through two transformations, what I believe. And what is our focus? Because earlier I talked about the call and I said that the majority of my remarks will be aligned to how we want to turn Biotricity into a $1 billion company. And so, that's going to, in our perspective and the team's perspective, is going to go through two transformations.

In two years, we will be one of the largest virtual specialty care providers. That is our vision. Now, what does that mean? Well, we have 1,300 cardiologists using our product every day. 1,300 cardiologists in one ecosystem is a very unique position to be in. Now, how do you interconnect all of them? How do you deliver care? How do you deliver more services? But that is our vision. In two years, we will become that because we will interconnect all of these pieces and that will create a specialty access that previously was not there before.

And in four years, so two years after that, our vision is to start expanding our partnership with our physicians. So, we are partnering with our physicians. How? By enabling them with technology, letting them service their patients. But we can also help them optimize their practice by driving patients to them.

If we see patients -- when you get a referral or I get a referral, the first thing I do is I go on Google and I start searching. Well, if I'm getting a referral to a cardiologist, I want that patient to go a cardiologist that is using Biotricity's technologies. So, I want to help drive those patients to those doctors' offices.

But I also want to optimize a doctor's practice by enabling them to focus on what's important. Meaning, taking all of that data -- and we do that with the Bioflux. We take all of the data that the Bioflux generates and we help them look at the pieces that are of interest to them by making all of the data available but allowing them to decide what parts of that data to focus on and zoom in.

And so, that creates optimization of time and it creates this stickiness in terms of our relationship with them. And will help drive us so that when we say, hey, we want to partner with you further because we want to drive patients to you. And that helps us because if we drive patients there, there is a high probability that, at some point, that patient is going to touch one of our technologies.

And so, that really goes into our transformation as a company and our vision as a company and working towards this idea where we really see ourselves as the cardiac of disease management. What Livongo did for diabetes -- and you've heard me say this before -- what Livongo did for diabetes -- they came out, they came out with a glucometer, they gave it to the patients and then they dealt with diabetes management.

We want to do the same for cardiac patients. We want to manage them in between visits. And that is something that we want to launch within the next year. We are playing around with this technology. But what does that mean? That really means that after the patient is diagnosed, they have the technology, they have the software, and they have everything available to them for them to get insight into their condition and follow their doctor's orders.

And that is insurance reimbursable, because everything we do at Biotricity -- and I cannot stress that enough -- is aligned to reimbursement. We make sure that reimbursement is there and then we deliver that in a technology as a service model, so it's a recurring revenue. And the disease management component is such a big opportunity for Biotricity that accelerates our growth. So, the base business of Bioflux is already accelerating.

This further accelerates that because Bioflux in terms of diagnostics, you're only -- as I talked about earlier, you're not touching every patient because not every patient needs diagnostics every month. But almost every patient needs to be managed every month or every other month, because they are dealing with this condition, they live with this condition.

And so, if you -- so if you talk about Bioflux as high reimbursement but low-volume, disease management is the exact opposite. Very high-volume but very low reimbursement. But when you have an ecosystem like ours where you have 1,300 cardiologists who are servicing 2.6 million patients, well, the volume is there. It's about building the right solution, launching it at the right time, and taking advantage of that opportunity.

So, that's really the vision and I really wanted to paint that picture for those of you who haven't heard about us or are new to the story and those of you who are following us and our shareholders. And I bring that up because people are always asking me, what is your exit strategy.

And I bring that up because in terms of me, you're hearing a founder and CEO. I'm a shareholder and I'm looking at creating shareholder value. Part of that is optimizing capital usage, we talked about that. It's why I bring people on that look at how to optimize an organization.

But alongside being a shareholder, just like everybody else on this call, I'm completely tied to this idea of creating value, shareholder value. And that's why I wanted to talk about that vision and aware I see that because people are always asking me, what is that exit strategy. And for me the exit strategy is executing the vision of the Company and getting the Company to $1 billion.

So, that's -- with that, I will finalize my last little point, which is we've talked about what are our milestones and our goals long-term. What are our goals for the rest of the year? So, obviously we want to continue our growth. We want to continue our execution on our product roadmap and work towards this broader vision.

We are also focusing on a national uplisting. And we think that that's really important because it increases the number of institutions that look at us. It increases the shareholder base. It increases our awareness. Because we are a growing company, but we also want to expand that awareness.

And I think that an uplist is a step in that and that's a big milestone for this year, but also that exposes us to the entire global markets as well. And why that is important, because we have a long way to go before we fill the United States map, as John had mentioned, even with our core products.

But our platform is transferable to the international markets as well, because cardiac issues and health issues are ubiquitous across the world. And so, international growth is on another level that we can pull when the time is right and we've already set up our platform and our connectivity designed to facilitate that. And so with that, I'll turn it over for questions.

(Operator instructions). Allen Klee, Maxim Group.

Hello. Congratulations on a very strong quarter. Your revenues were up (multiple speakers) -- yes, thank you. Your revenues were up 227% year-over-year. That was ahead of my guidance and the preannounced growth rate of 203%.

And then for the June quarter, I was guiding for 177% year-over-year. I thought I heard you say that it's going to be maybe be 250%. Which I think of I did the math, that's close to $1.6 million of revenue compared to the $1.2 million you just put up, which is quite amazing, the amount of momentum there. Could you talk a little bit about what you see as the key factors that are causing revenues to increase so much?

Yes, absolutely. So, I think there's a couple factors, right? So obviously COVID slowed our growth down, for sure. So, I think the reopening of the country is putting us back on path to what we felt that we could have done. And that's just now essentially coming back full-circle to before the pandemic and where we were. But also we've expanded our sales force.

As we bring in capital, as we deploy capital, as sales reps become profitable, we expand the sales team. And most importantly, we have figured out, having been in the market after our first year -- we really figured out the right types of talent to recruit. And so, the combination of those things are creating this acceleration.

And then I think the last point which I talked about on the call, which is this awareness of the importance of monitoring, right? So, the sales cycle, where we thought was -- maybe slow down or after you go after low-hanging fruit, you won't be able to maintain such a short sales cycle, it's maintaining because of the fact that awareness is being driven up.

Thank you. Could you give us some color just on what you are seeing in terms of utilization rates of the Bioflux that are out there? Like, I know you can't give the exact numbers, but comparing maybe -- how much of the growth do you think is coming from more devices out there versus the cardiologists are starting to realize the value and using it more, the ones that have it?

That's an excellent question. So, we always look at growth as two aspects, right? As you rightfully pointed out, it's, one, utilization of existing devices, and the other thing is expansion of the market. And so, I would say both, but more of it is focused on opening up accounts and creating accounts.

I mean, device utilization is certainly there, but we have not begun to optimize utilization yet and we think of that as a secondary sale. Not because we can't do it today or that we don't think it is important or that we are unaware of it. It's just right now, if I have to focus a sales rep's time, I'm going to focus on lowest hanging fruit and biggest bang for your dollar, which is driving more account and opening up the network. Because we have the -- as I've talked about, a vision and a product portfolio that's going to come in.

And so, the more -- the bigger that network is, the better we are positioned for that. And then optimization comes second. That does not mean that we aren't using technology to optimize. We are certainly helping driving utilization by updating our software, updating aspects of the workflow that facilitate all of that.

But that's an ongoing journey and that's one that we will continue. But to answer your question, I'd say 80% of it is coming from new accounts and new growth and 20% -- or maybe it's 70/30 -- 20% to 30% is coming from optimizing utilization. And that will continue to optimize.

I mean, certain doctors, it's automatic. They figure it out. They're like, oh, this is so much better for my patient and I can get the patient in earlier. And they naturally optimize it because they're just a -- that organization or that hospital is more attuned and just has more infrastructure and more individuals. And other of our practices, you have to educate them.

Thank you. I thought I heard that after making some adjustments, that your gross margins were around 63.9% for the quarter. I would think that over time, as what you just answered the other question, that more devices get out there but then more of it comes from using them and getting the higher-margin usage, that may be that number could improve over time. How do you think about that?

(multiple speakers) the margins, Allen -- it's John Ayanoglou. Yes, what we did was we optimized our cost of revenue. We want to be held accountable for all of those costs. Some of the monitoring costs that we have put in prior years below the line as operating costs, we've moved up above. And when we conform the prior years' numbers to current year's presentation, we really see that we're doing well in terms of managing those costs.

So, to answer your question, yes, over time, as we scale this business, we're going to be able to purchase more and more devices for sale less expensively. We're going to be able to leverage our artificial intelligence to run the monitoring process that much more efficiently. So, all of these costs that are associated with our various levels and network of products, our ecosystem of products, are over time going to come down.

Great. And for Biotres, which the FDA is reviewing now, I know it's not possible to comment on how that's going to go. Although I think you reasonably think this year is a pretty good opportunity. Maybe if there is anything you can comment under that. And if, once you do, I assume, get approval, how do you think about what the -- what your growth strategy is going to be there of implementing it?

Yes, absolutely. So, I think that with what has transpired over the last year what the pandemic and obviously the reopening of the country, the focus has been on -- from the FDA perspective, on devices and technology that relate to opening up the [pandemic]. But we've gotten three FDA clearances. This is a watered-down, less complex version of the Bioflux. So, we are very confident in our process and we expect it to be cleared this year and launched this year, as we had earlier indicated.

And in terms of our growth strategy and our plan, the Biotres is really an add on to our Bioflux. So, first of all, we would deploy it in all of our existing accounts for the Holter focused market within those accounts. And then as we go and open up new accounts, it will be part of the offering.

We always lead with the Bioflux because that's high-end diagnostics, highest reimbursements, highest margins. And then the Biotres is there as a secondary product so that now the doctor or the hospital has a -- all of their cardiac monitoring needs in the product portfolio that Biotricity is offering.

So, that's kind of our approach there. It'll really be offered as part of the sales cycle. We are not going to create a special sales group that focuses just on the Biotres, or a special channel strategy or anything. It's all -- it all comes together in a portfolio and that portfolio is sold.

Thank you. One of the competitive advantages of your Company is you're really technology led. Can you comment on where you're focusing your R&D and technology spend now?

Absolutely. So, we talked about that product portfolio and we talked about our interest in our TAM and stuff like that. So, what we are spending our R&D dollars on right now and where we will, I think, continue to focus for the -- until we complete this cycle, is in downstream from diagnostics.

So, it's like I talked about earlier, the cardiac patient comes in, they get diagnosed. Now what else does this patient have to touch in terms of technology for their entire patient journey, which is, okay, from diagnosis, to procedural work, to medication, to disease management, to personal management, etc.?

So, we are focusing on R&D dollars -- on technologies and solutions and software that can fulfill all of the touch points insofar as that we are capable of and that make sense in our remote monitoring model. Because obviously there's many things that they touch that does not fit in remote monitoring category, so we won't touch it. But the R&D dollars are designed to follow that patient.

So, we get them into the funnel; Bioflux, great. We diagnose them. Well now we want to keep them into the funnel all the way down into disease management and then take them back up and then plop them through. So, our R&D dollars today are spent on how to collect other biometrics from that patient for other potential diseases that they have on software for disease management, for products like the Biotres which is Holter for low risk patients.

So, once they diagnose they have a pacemaker, they don't need to be on the Bioflux necessarily unless there's a symptom. But if they have no symptom and they're totally stable, we don't need to use high-end diagnostic at that time. So, we're looking and spending our R&D dollars on those technologies that facilitate more touch points on patients that come through the Bioflux. Does that make sense?

That makes sense. Okay. That's it for me. Congratulations for the strong quarter.

Thank you.

Chet White, Helios Alpha Fund.

Thank you very much and congratulations, guys, on the great quarter. Just wanted to ask you a couple quick questions. If you can comment a little bit about the uplist. So, to date the retail investor has been great, you've been seeing a lot of demand. And now the national exchange uplist can open up some institutional demand. But what are you seeing as the compelling reason why some of these institutions might come in a little bit early to a small cap company? (inaudible) what fundamentals are you seeing out there that are attracting them?

Excellent question, Chet, and a tough one in some ways. But yes, so like I kind of alluded to, uplist certainly opens up the horizon of all types of shareholders, both retail and international. But in terms of your specific question about how to -- why institutional investors will invest in a company that's smaller.

Institutional investors look at growth stories. What's the next big idea and vision. And I think that if our vision was, we're going to build a business, we're going to organically grow it and we are really a one product story, they wouldn't take that much interest.

But I think that when they see that, hey, this company is not only accelerating its growth but it's expanding its total addressable market, it's got a product portfolio that is vertically sold into its existing ecosystem so it can essentially scale rapidly.

I think they will take an interest and come in and start investing when we are at this stage, because they see the vision two years, three years, four years, five years out, right? Like, as they see -- as companies grow, right? Most importantly, what's happening in the next one to two years.

And I talked about this earlier, I see Biotricity going through two transformations, right? Two years from now and then another two years after that. And both of those transformations create a massive acceleration in value. And I think institutions, they see the same thing that we see, right? We build something -- they are seeing the trends. They are seeing what's happening in healthcare.

They are going to see the future, and they have to make a bet, right? And what that are they going to make? Well, Livongo's acquired, right? The cardiac companies that had any kind of revenue but an old model with low margin, they've been acquired. So, if you want to make a play to become the largest specialty care or cardiac cloud for -- in the cardiac space, there's a handful of bets to make, a handful of players to make.

And our focus on technology, technology specifically as a technology player, not a clinical player, I think that positions as well. And I think that's what's going to attract institutions. And of course continue to work with people that will build that awareness, which is working with research, working with analysts, taking the time to let those individuals kick the tires, come inside our organization.

And we're very open like that. We open for research and for analysts. We let them talk to our customers. We let them talk to people within the organization, our engineering, our sales team, all of that. Because that's how that story is going to get out. So, part of it is taking that vision and institutional guys getting interested. And then part of that is doing the hard work of driving awareness by working with research and analysts and all of that.

Got it. Excellent. Thank you. And Waqaas, just as a follow-up, you've laid out what sounds like, of course, the fundamentals showing up with great results and longer-term vision. Clearly you are on a great road. And so, if you can, I would expect that that is driving some competition looking and watching what you're doing now, and both from larger companies and some startups. Can you just give us an update on what you're seeing out there in terms of new competition product wise and business model wise?

Yes, for sure. So, in terms of -- we're always keeping a pulse on the marketplace and things like that. And we don't see anything in the real-time cardiac space. I mean, algorithms are very complicated, a trade secret. We are not seeing anybody really pop up in that space, but we are keeping an eye on it. And of course we are constantly optimizing, right? We believe in the concept of sustainable competitive advantage.

You're only as good as your last update, right? And so, because we are a tech company we are constantly improving our products. So, if my sustainable competitive advantage was -- is two years and then I sit on my hands, then every month that gets reduced by a month, right? But what we're doing is we're constantly updating, so we are maintaining bleeding edge. And by maintaining bleeding edge you maintain your sustainable competitive advantage.

So, that I think is the answer to your question about new startups and new entrants and stuff like that. We are not seeing anybody really looking at the real-time cardiac space. We have seen people jump into the Holter space, but that is a commoditized space and it's very easy because there's no algorithms and there's no -- the real-time connectivity and all of that stuff.

Some people oversimplify and they say, hey, cellular connectivity and all these things are simple. Well, the infrastructure is a lot more complicated nowadays and integrating all of that and getting wireless coverage, then you have to get FCC certification. And all of that stuff messes up your electrical signal for data collection if you don't properly protect it. So, all of those things are -- make the product a lot more complicated to develop, so that is a barrier to entry. And we maintain that barrier to entry by constantly updating.

And then to your other question in terms of people updating their offering and their business model, I think that's what you were asking. Certainly organizations can update their business model, but obviously the two that would have updated would have been BioTelemetry and Preventice, and they got acquired. But at that point we have built the -- we have the smallest, most accurate device in the market, so cheaper, better, faster.

So if you've got a cheaper, better, faster product they've got to compete with you on that perspective. And in that case we win. And not only that, because our model and our operational overhead is very low, we can be very, very aggressive in terms of capturing the market because profitability for us, as we talked about a little bit about margin with John and Allen earlier, we've got a lot of room there. And that lends ourselves to be very, very competitive.

And when you look at these other organizations, what does that mean to compete? If you're -- when BioTel was bought, they were I think 18% margin business, okay? Well, 18% margin business, and we're just going to use simple numbers, right? So, national average of reimbursement for real-time cardiac monitoring is $850. Well, they're used to making $850. Well, we're competing -- we'll with them at $300. We'll compete with them at $200. So, we are very competitive. We'll -- just to beat them, we'll drop on ours.

But if you are used to making $850 and suddenly to compete with Biotricity you have to drop to $350 -- forget us even being aggressive; this is just -- just to compete with us, you've got to get rid of $500. Well, if suddenly now you're in the red instantly. So, how many accounts are you going to do that? You have to restructure your business.

So, it's not that simple for them to compete in terms of our offering. And that's if we aren't even in a price battle. And in our case, we don't even think we have to jump into a price battle issue because the technology is so much better that -- well, first you have to beat us on technology or deliver the same things, right? So, that's the apples-to-apples comparison. Now let's start competing on dollars. And in that case we'll win because our -- we focused on making technology as cheap as possible, so that gives us a lot more room.

Excellent. Well, thank you so much, Waqaas and John. Very good quarter. Thank you.

Thank you. This concludes our Q&A. I'll pass it back to management for closing remarks.

Thank you. And so, I think my closing remark for our quarter is we're super excited about what has transpired from March 31. But what I'm super excited about is the rest of the year -- let you know. As I indicated, June 30, the quarter ending June 30, I believe we will beat our last quarter and the expectations set out by analysts, by a healthy margin.

So, that super exciting because that really aligns with the guidance that I have provided in terms of our target of triple digit for fiscal quarter -- fiscal year 2022. But I think more importantly, this vision and us realizing this vision and marching towards that vision of building Biotricity and realizing that dream of making the Company into a $1 billion company. And so, I think that we are stepping in that direction. We are accelerating our growth. We are executing on our product portfolio.

We have a number of milestones up-and-coming this year that are going to be exciting. We are planning to do that uplist as well. So, I think all of these things are really, really important milestones and really, really important things for shareholders to keep an eye on. But it's also an opportunity that shows a growth in the value of the Company over the next couple years in a clear and in a way that you can see it and almost touch it.

And with that I'd like to just thank everybody for joining and I'll look forward to hearing from you guys. We are always available; if you have any questions, please shoot us out or contact our IR group. And outside of that, we will be available on the next earnings call in a quarter.

This concludes today's call. Thank you for your participation. You may now disconnect.