{"url_path":"/sec/btcy/10-k/2026/item-1","section_key":"item-1","section_title":"Item 1 BUSINESS**","topic":"sec","document":{"doc_type":"10-K","doc_date":"2026-07-14","source_url":"https://www.sec.gov/Archives/edgar/data/1630113/0001493152-26-033207-index.html","accession_number":"0001493152-26-033207","cik":"0001630113","ticker":"BTCY","issuer_name":"BIOTRICITY INC.","edgar_url":"https://www.sec.gov/Archives/edgar/data/1630113/0001493152-26-033207-index.html","primary_entity_key":"0001630113","primary_entity_name":"BIOTRICITY INC."},"word_count":9971,"has_tables":true,"body_markdown":"**ITEM\n1. BUSINESS**\n\n \n\nBiotricity\nInc. (the “Company”, “Biotricity”, “we”, “us”, “our”) is a medical technology\ncompany focused on biometric data monitoring solutions. Our aim is to deliver innovative, remote monitoring solutions to the medical,\nhealthcare, and consumer markets, with a focus on diagnostic and post-diagnostic solutions for lifestyle and chronic illnesses. We approach\nthe diagnostic side of remote patient monitoring by applying innovation within existing business models where reimbursement is established.\nWe believe this approach reduces the risk associated with traditional medical device development and accelerates the path to revenue.\nIn post-diagnostic markets, we intend to apply medical grade biometrics to enable consumers to self-manage, thereby driving patient compliance\nand reducing healthcare costs. We first focused on a segment of the ambulatory diagnostic cardiac outpatient market, otherwise known\nas Mobile Cardiac Outpatient Monitoring (“COM”), while also providing the capability to perform all types of ambulatory cardiac\nstudies.\n\n \n\nWe\ndeveloped our Bioflux® (“Bioflux”) COM technology, which has received clearance from the U.S. Food and Drug Administration\n(“FDA”), comprised of a monitoring device and software components, which we made available to the market under limited release\non April 6, 2018, to assess, establish and develop sales processes and market dynamics. Full market release of the Bioflux device for\ncommercialization occurred in April 2019. The fiscal year ended March 31, 2021 marked our first year of expanded commercialization efforts,\nfocused on sales growth and expansion. In 2021, we commenced the initial launch of Bioheart, a direct-to-consumer heart monitor that\noffers the same continuous heart monitoring technology used by physicians. In addition to developing and receiving regulatory approval\nor clearance of other technologies that enhance our ecosystem, in 2022, we announced the launch of our Biocore Cardiac Monitoring Device\n(“Biocore”, previously branded as Biotres), a three-lead device for ECG and arrhythmia monitoring intended for lower risk\npatients, a much broader addressable market segment. Late in 2024, we launched the cellular version of that same device, the Biocore\nPro, which is now our flagship technology. We have since expanded our sales efforts to 35 states and intend\nto expand further and compete in the broader US market using an insourcing business model. Our technology has a large potential total\naddressable market, which can include hospitals, clinics and physicians’ offices, as well as other Independent Diagnostic Testing\nFacilities (“IDTFs)”. Cardiac disease is ranked as the number one chronic care disease in the US and most markets globally,\nmaking our technology useful across the globe. As such, we are pursuing and have achieved regulatory approvals in several key jurisdictions\nin preparation of future distribution efforts outside of the US. We believe our technological and clinical advantage combined with our\nsolution’s insourcing model, which empowers physicians with state-of-the-art technology and charges technology service fees for\nits use, has the benefit of a reduced operating overhead for us, and enables a more efficient market penetration and distribution strategy.\n\n \n\nWe\nare a technology company focused on earning utilization-based recurring technology fee revenue. Our ability to grow this type of revenue\nis predicated on the size and quality of our sales efforts and our ability to penetrate the market and place devices with clinically\nfocused, repeat users of our cardiac study technology. We plan to grow our sales force to address new markets and achieve sales penetration\nin the markets currently served.\n\n \n\nWe\nare incorporated in the State of Nevada and our headquarters are in Nevada and Ontario. Our principal executive office is located at 203\nRedwood Shores Pkwy Suite 600, Redwood City, California, and our telephone number is (800) 590-4155. Our website address is\nwww.biotricity.com. The information on our website is not part of this Annual Report on Form 10-K.\n\n \n\nCommercial\nHistory\n\n \n\nFull\nmarket release of the Bioflux device for commercialization launched in April 2019, after receiving its second and final required FDA\nclearance. To commence commercialization, we ordered device inventory from our FDA-approved manufacturer and hired a small, captive sales\nforce, with deep experience in cardiac technology sales; we expanded on our limited market release, which identified potential anchor\nclients who could be early adopters of our technology. We then expanded our sales force and geographic footprint.\n\n \n\nIn\n2021, we received a 510(k) clearance from the FDA for our Bioflux Software II System, engineered to improve workflows and reduce estimated\nreview time from 5 minutes to 30 seconds. This improvement in review time reduces operational costs and allows us to continue to focus\non excellent customer service and industry-leading response times to physicians and their at-risk patients. Additionally, these advances\nmean we can focus our resources on high-level operations and sales.\n\n \n\nDuring\n2021 and the early part of 2022, we also commercially launched our Bioheart technology, which is a consumer technology whose development\nwas forged out of the clinical technologies that are already part of our technology ecosystem, the Biosphere. In recognition of our innovations,\nin November 2022, Bioheart received recognition as one of TIME’s Best Inventions of 2022.\n\n \n\n3\n\n \n\n \n\nWe\ncontinue to develop our telemedicine capabilities of real-time streaming of medical data. We are expanding our platform to include remote\npatient monitoring, chronic care management, and implantable device management, creating a single unified cardiac platform for medical\nfacilities. Our focus has always been and continues to remain on developing technology that supports clinics while driving economic benefits\nand costs savings to healthcare service providers within the traditional reimbursement and value based care payer models. Our goal is\nto position ourselves as an all-in-one cardiac diagnostic and disease management solution. We continue to grow our data set of billions\nof patient heartbeats, allowing us to further develop our predictive capabilities relative to atrial fibrillation and arrythmias.\n\n \n\nIn\nJanuary 2022, we received the 510(k) FDA clearance of our Biocore (previously named Biotres) patch solution, which is a novel product\nin the field of Holter monitoring. This three-lead technology can provide connected Holter monitoring that is designed to produce more\naccurate arrythmia detection than is typical of competing remote patient monitoring solutions. It is also foundational, since this platform\ntechnology has a pipeline of development expansions focused on clinical applications which are currently unavailable in the market. In\nOctober 2023, we launched the cellular version of this device, the Biocore Pro.\n\n \n\nSince\nthen, we have launched Biocare, after successfully piloting this technology in two facilities that provide cardiac care to more than\n60,000 patients. This technology and other consumer technologies and applications such as the Biokit and Biocare have been developed\nto allow us to transform and use our strong cardiac footprint to expand into remote chronic care management solutions that will be part\nof the Biosphere. The technology puts actionable data into the hands of physicians to assist them in making effective treatment decisions\nquickly.\n\n \n\nThis\nsupports us in expanding our footprint within existing customer sites to provide full-cycle chronic care management solutions to our\nclinic and patient network.\n\n \n\nWe\nare also developing several other ancillary technologies, which will require application for further FDA clearances, which we anticipate\napplying for within the next twelve months. Among these are:\n\n \n\n \n●\nadvanced\nECG algorithms and analysis software for further improvements in sensitivity and specificity to analyze and synthesize patient ECG\nmonitoring data with the purpose of distilling it down to the important information that requires clinical intervention, while reducing\nthe amount of human intervention necessary in the process;\n\n \n \n \n\n \n●\nthe\nBiocore® Pro 2.0, which is the next generation of our award winning Biocore®\n\n \n\nWe\nidentified the importance of recent developments in accelerating our path to profitability, including the launch of important new products,\nwhich have a ready market through cross-selling to existing customer clinics, and large new distribution partnerships that allow us to\nsell into large hospital networks.\n\n \n\nOur\nmission is to innovate and create transformative healthcare products while ensuring financial discipline, to drive margin and revenue\ngrowth while delivering value creation for our investors. Our commitment to innovation means that we harness data intelligently to explore\nnovel avenues for enhancing healthcare outcomes. Through cutting-edge research and development, we believe we are redefining medical\ndiagnostics and patient care by developing new innovative AI-driven solutions.\n\n \n\nWe\nare expanding our AI technology development in remote cardiac care, leveraging proprietary AI technology to provide a suite of predictive\nmonitoring tools to enhance new disease profiling, improve patient management, and revolutionize the healthcare industry for disease\nprevention.\n\n \n\nWe\nhave also strengthened relationships with Amazon and Google. The healthcare AI market opportunity is projected to grow to $208.2 billion\nby 2030 according to Grand View Research. We have already established a strong foothold, having already built a powerful proprietary\ncardiac AI model that combines Google’s TensorFlow, AWS infrastructure, big data and a continuous learning engine. This combination\nallows us to rapidly improve our cardiac technology. In the near future, we believe the capabilities of our cardiac AI model will allow\nus to support healthcare professionals in handling exponentially more patients while identifying the most critical data. This will enable\nhealthcare workers to elevate the quality of care while serving a larger number of patients. As growing patient numbers further stress\nthe shortage of healthcare professionals, our technology could help alleviate this pressing issue. We have engineered our technology\nto not only improve patient care and outcomes, but to do so in a manner that supports more patients. This has led to increasing sales\nof our remote cardiac monitoring devices and the ramp-up of our subscription-based service, increasing our recurring revenue over the\npast few quarters and charting a clear path to profitability.\n\n \n\n4\n\n \n\n \n\nFrom\na market perspective, increasing interest and demand continue to drive the adoption of our suite of products, which are focused on chronic\ncardiac disease prevention and management. Our efforts in commercialization and development have yielded tremendous progress in remote\nmonitoring solutions for diagnostic and post-diagnostic products.\n\n \n\n**Market\nOverview**\n\n \n\nChronic\ndiseases are the number one burden on the healthcare system, driving up costs year over year. Lifestyle related illnesses such as obesity\nand hypertension are the top contributing factors of chronic conditions including diabetes and heart disease. Government and healthcare\norganizations are focused on driving costs down by shifting to evidence-based healthcare where individuals, especially those suffering\nfrom chronic illnesses, engage in self-management. This has led to growth in the connected health market, which according to an October\n2023 report by MarketUs is projected to reach $150 billion by 2024 at a compound annual growth rate (CAGR) of 25%.\n\n \n\nAccording\nto the American Heart Association, the number one cost to the healthcare system is cardiovascular disease, estimated by the CDC Foundation\nto be responsible for 1 in every 6 healthcare dollars spent in the US. Since cardiovascular disease is the number one cause of death\nworldwide, early detection, diagnosis, and management of chronic cardiac conditions are necessary to relieve the increasing burden on\nthe healthcare infrastructure. Diagnostic tests such as ECGs are used to detect, diagnose and track certain types of cardiovascular conditions.\nWe believe that the rise of lifestyle related illnesses associated with heart disease has created a need to develop cost-effective diagnostic\nsolutions to fill a hole in the current ECG market. These solutions will not only deliver faster and earlier diagnoses but also build\nthe foundation for disease management, supporting the transition from diagnosis to disease management.\n\n \n\nA\nreport by Grand View Research projects that the global ECG equipment market will grow at a CAGR of 6.5% from 2023 to 2030, with the US\nmarket valued at $2.01 billion in 2022. The factors driving this market include an aging population, an increase in chronic diseases\nrelated to lifestyle choices, improved technology in diagnostic ECG devices, and high growth rates of ECG device sales.\n\n \n\nIn\nthe US, COM tests are primarily conducted through outsourced IDTFs that are reimbursed at an estimated average rate of approximately\n$850 per diagnostic test, based on pricing information provided by the Centers for Medicare & Medicaid Services, a part of the U.S.\nDepartment of Health and Human Services, and weighted towards the largest markets of New York, California, Texas and Florida. Reimbursement\nrates can be lower in smaller markets, although the national average is $801. Further, we believe private insurers provide for similar\nor better reimbursement rates.\n\n \n\nOur\ninitial device offerings intended to revolutionize the COM and Holter markets by providing convenient, cost-effective, integrated solutions,\ninclusive of both software and hardware for physician providers and their patients. Biotricity, however, has a broader strategic vision\nto offer an ecosystem of technologies that engage the patient-user and their medical practitioner(s) in sustained monitoring, diagnosis,\ncommunication and pro-active treatment and management of chronic care conditions. Our core solution is designed as a platform to encompass\nmultiple segments of the remote monitoring market, and its future growth.\n\n \n\n**Market\nOpportunity**\n\n \n\nCardiac\nDiagnostics\n\n \n\nECGs\nare a key diagnostic test utilized in the diagnosis of cardiovascular disease, the number one cause of death worldwide. The American\nHeart Association reported that there were approximately 128 million adults in the US living with cardiovascular disease in 2020.\n\n \n\nThe\nUS ECG market is divided into three major product segments:\n\n \n\n \n1.\nEvent\nmonitoring systems;\n\n \n2.\nStress\nECG systems; and\n\n \n3.\nResting\n(non-stress) ECG systems.\n\n \n\nEvent\nmonitoring systems are projected to grow the fastest due to a shift from in-hospital/clinic monitoring to outpatient monitoring. This\nshift is expected to help reduce health care costs by limiting the number of overnight hospital stays for patient monitoring. We believe\nthat physicians prefer event monitoring systems over resting and stress ECG systems because they provide better insight to the patient’s\ncondition for diagnostic purposes.\n\n \n\n5\n\n \n\n \n\nThe\nevent monitoring market is divided into the Holter/Extended Holter, Event Loop and COM product segments, of which Holter, and its variant\nExtended Holter, and Event Loop are the current market leaders. Among event monitoring systems, we believe that the preferred choice\nof physicians and cardiologists is COM, because of its ability to continuously analyze patient data and transmit, thereby speeding up\ndiagnoses. COM devices have built-in arrhythmia analysis and regular communication, which allow physicians to prescribe the device for\na longer period of time; thereby enabling prolonged data collection and delivering a more complete picture for diagnosis.\n\n \n\nTypical\nHolter/Extended Holter and Event Loop solutions lack the ability to alert the patient or provider in case of an anomaly. Holters are\ntypically used as a short-term solution, up to 3 days, whereas Event Loop is used for up to 30 days. Extended Holter, the long-term variant\nof Holter can be used for up to 21 days. It is the most recent of the cardiac monitoring options and was created for longer term holter\nrecordings. Since Event Loop is also long term, reimbursement for Extended Holter and Event Loop are converging. Reimbursement for these\nis much lower compared to COM due to the nature of the solution, recording vs monitoring. With Holter and Event Loop monitoring, ECG\ndata is not uploaded or transmitted regularly. Comparatively, if the patient were monitored through a COM device with regular ECG data\ntransfer and cellular connectivity, then in the event of cardiac anomalies, the monitoring center could send communication to the patient’s\nphysician.\n\n \n\nSince\nCOM requires an FDA-cleared device (meaning for our purposes that it can be used to review medical ECG data from ECG devices), FDA-cleared\nECG reporting software, and remote monitoring capabilities, regulatory and development hurdles have resulted in relatively few companies\nbeing able to successfully develop an all-encompassing solution. We believe that there are currently only 5 COM solutions within the\nmarket. Some of these solutions are sold to the market through solutions providers that have not developed and do not manufacture their\nown device.\n\n \n\nOf\nthe COM systems currently available in the market, most are IDTFs who employ an outsourcing business model, focused on providing clinical\nservices for which they can earn reimbursement; this means that they would typically not sell their devices to physicians, but offer\ntheir clinical services. Some COM providers choose to sell their solution by charging high prices for devices and upfront software costs,\nas well as a per cardiac study monitoring fee. Among these are solutions that are not scalable; some lack monitoring software, requiring\na customer to acquire third party software and incur integration expenses. These would require an investment by the physician, to incur\nupfront costs that would take time to recoup before profits are realized.\n\n \n\nThe\nlimited number of competitors makes this an attractive market for new entrants. However, entry into the market requires a hardware device\ncoupled with complex algorithms, ECG software and access to a monitoring center. Two of the five COM players have done so by building\ntheir own monitoring infrastructure, developing their own ECG software and utilizing TZ Medical’s COM device. However, this is\ncapital intensive and we believe cost prohibitive for most hospitals and clinics. These barriers are in our opinion among the key reasons\nas to why Holter and Event Loop have maintained a significant portion of the US event monitoring market despite the increase in patient\nsafety and improved outcomes with COM.\n\n \n\nThe\nBiocore solution and business model attempts to address these complications with its complete, turn-key solution for providers to deliver\ncardiac diagnostics directly. Technologically, the Biocore solution is superior as a one-piece solution as opposed to a two-piece and\ncollects 3 channels of ECG compared with 1 or 2, resulting in better data and higher quality diagnoses. It is also designed to be easy\nto wear in a form factor that attains high patient compliance. Combined with our insourced business model, providers can deliver better\nand faster care while also billing. This combination has led to our continued growth and high customer retention rates.\n\n \n\nChronic\nCare and Remote Patient Monitoring\n\n \n\nChronic\ndiseases are the number one healthcare expense and are continuing to grow as the population ages. Lifestyle related illnesses such as\nobesity, hypertension, cardiovascular diseases, and diabetes are the top contributing factors of chronic conditions. Government and healthcare\norganizations are focused on driving costs down by shifting to holistic management where individuals, especially those suffering from\nchronic illnesses, are supported outside of the clinic. This has led to growth in chronic care management market, which is projected\nto reach $8.7 billion in the US by 2027 at a compound annual growth rate (CAGR) of 18% between 2021 and 2027, according to a January\n2022 report by Precedence Research.\n\n \n\nRemote\npatient monitoring (RPM), one of the key areas of focus for disease-management and evidence-based practice, is projected by Research\nand Markets to reach a market size of $96.67 billion by 2030 at a CAGR of 17.6%, according to a January 2024 report by Research and Markets.\nToday, approximately 20% of large healthcare facilities in the US are already using remote monitoring with a projected 70 million US\npatients utilizing remote monitoring by 2025, as reported by Strategic Market Research in July 2023.\n\n \n\n6\n\n \n\n \n\nSimilar\nto chronic care and RPM, lifestyle management is seeing increasing growth where stable patients are becoming more and more engaged in\nlifestyle management. Grand View Research reported that the global wearable technology market has already reached $61.3 billion in 2022\nwith an expected CAGR of 14.6% from 2023 to 2030. In 2021, the US portion of that market was valued at $17.9 billion.\n\n \n\nThe\nprimary driver of each of these markets are individuals diagnosed with or at risk-for chronic conditions. Cardiac diseases are the number\none expense and the number one killer, making up the bulk of the individuals utilizing such solutions. Despite this, existing solutions\nare not tailored for cardiac patients but for diabetes, obesity, and hypertension as these conditions are supported by medical or personal\ndevices that can track biometrics that support management. Up until now, there has been no solution available to support cardiac patients\nas technology was limited to manual short term heart rhythm collection or heart rate monitors.\n\n \n\nBiotricity\nchanged this with the creation of Bioheart and Biocare, which delivers the first cardiac tailored solution for disease management. The\nengine of this solution is the Bioheart, the first-of-its-kind continuous heart rhythm monitor that autonomously and continuously collect\nheart rhythm data with no limitation on duration, a necessity for cardiac issues. Just as diabetic patients have continuous glucose monitoring,\nindividuals with cardiac issues now have continuous heart monitoring.\n\n \n\nCombining\nour technological innovation with our business model delivers a solution that is not only industry leading technologically and clinically,\nbut one that also supports providers to deliver better care while creating a new revenue stream. We believe this leap in innovation will\nhelp us compete with the more generic solutions as well as those limited by shorter duration data collection. The leap in innovation\ncreated by Bioheart was also recognized by TIME, where they named Bioheart one of the Best Inventions of the World in 2022.\n\n \n\n**Market\nStrategy**\n\n \n\nCardiac\nDiagnostics\n\n \n\nOur\ncardiac diagnostics strategy is focused on the target addressable market of approximately 34,000 cardiologist physician offices in the\nU.S. (approximately 6% of all specialty physician offices in the U.S.), approximately 780 hospitals that specialize in cardiology, heart\nand vascular surgery (approximately 13% of all hospitals in the U.S.), and 300 IDTFs that provide cardiac monitoring services (an estimated\n10% of all IDTFs in the U.S.). To do this, we invested in the hiring of top caliber sales professionals with a proven track record in\ncardiac technology and device sales, and strong business relationships with providers of cardiac medical services. To further expand\nour market reach, we have partnered with leading distributors and GPOs.\n\n \n\nCOM\n\n \n\nThe\nBioflux and Biocore Pro solutions are deployed into physicians’ offices, clinics, hospitals, and IDTFs. For the prescribing physician,\nthe COM diagnostic read is a reimbursable service from payers such as Medicare and insurance companies. In the United States, billing\ncodes for an COM diagnostic read are available under the American Medical Association Current Procedural Terminalogy, with a current average\nreimbursement rate of $850 per read (a read is between 1 and 30 days long).\n\n \n\nWe\nbelieve that Biotricity’s revenue model, which is a platform or technology *as a service* model (*PAAS* or *TAAS*),\nis a significant and disruptive departure from the pricing and reimbursement strategies of the existing competitors in the COM market,\nwhich apply an outsourced model to COM diagnostics, where the entire procedure and reimbursement is outsourced; the COM solutions provider\ntakes over the clinical responsibilities and earns the reimbursement and pays the physician a small administrative stipend. Biocore’s\ntechnology, revenue and insourced business model entail differentiators that are expected to create barriers to entry for other competitors\nseeking to emulate our strategy.\n\n \n\nWe\nalso believe our solutions are not only financially superior but also clinically superior. Existing COM solutions are two-piece solutions\nwith 2 channel ECGs. Comparatively, Biocore is a one-piece solution with 3 channels of ECG, delivering more and higher quality data with\nbetter patient compliance. This is a significant barrier to entry for existing and new competitors as they would need to develop an entirely\nnew solution that encompasses multiple channels and integrated cellular connectivity to compete with the Bioflux or Biocore.\n\n \n\n7\n\n \n\n \n\nHolter/Extended\nHolter\n\n \n\nThe\nBiocore solution is purpose-built for the holter and extended holter market and is deployed into physicians’ offices, clinics,\nhospitals, and IDTFs. For the prescribing physician, the Holter/Extended Holter diagnostic read is a reimbursable service from payers\nsuch as Medicare and insurance companies. In the United States, billing codes for a Holter and Extended Holter diagnostics are available\nunder the American Medical Association Current Procedural Terminalogy, with a current blended average reimbursement rate of $200 per test,\nwhere a test is between 1 and 21 days long.\n\n \n\nWe\nbelieve that Biocore’s revenue model, which is a platform or technology *as a service* model (*PAAS* or *TAAS*),\nis a significant and disruptive departure from the pricing and reimbursement strategies of the existing competitors in the Holter market,\nwhich apply an outsourced model to Holter diagnostics, where the entire procedure and reimbursement is outsourced; the Holter solutions\nprovider takes over the clinical responsibilities and earns the reimbursement and pays the physician a small administrative stipend.\nBiocore’s technology, revenue and insourced business model entail differentiators that are expected to create barriers to entry\nfor other competitors seeking to emulate our strategy.\n\n \n\nAdditionally,\nwe believe the Biocore solution is not only financially superior but also clinically superior. Existing holter patch solutions are 1\nchannel devices that lack connectivity. This leads to cardiac diagnostic results taking up to 2 weeks. Biocore is a connected 3 channel\npatch solution, delivering more and higher quality data while reducing the time to diagnosis from 2 weeks to 3 days or less. This is\na significant barrier to entry for existing and new competitors as they would need to develop an entirely new solution that encompasses\nconnectivity and multiple channels to compete with the Biocore.\n\n \n\nChronic\nCare Management (CCM) and Remote Patient Monitoring (RPM)\n\n \n\nOur\nchronic care management and remote patient monitoring strategy is focused on the same target addressable market of approximately 34,000\ncardiologist physician offices (approximately 6% of all physician offices in the U.S.), approximately 780 hospitals that specialize in\ncardiology, heart and vascular surgery (approximately 13% of all hospitals in the U.S.), and 300 IDTFs that provide cardiac monitoring\nservices (an estimated 10% of all IDTFs in the U.S.) that we are targeting for our diagnostics. The difference in our strategy here is\na focus on selling into existing accounts and new diagnostic accounts as opposed to building out a new channel strategy. These solutions\nare complementary to our diagnostics solution and can be sold as part of a complete platform to target new and existing customers.\n\n \n\n**Product\nand Technology**\n\n \n\nBioflux\nand Biocore Pro\n\n \n\nBioflux\nand Biocore Pro are advanced, integrated ECG device and software solutions for the COM market. The device attaches like a patch into\nutilizes wet electrodes that are applied to a patient’s chest. The Biocore ECG reporting software allows doctors and labs to view\na patient’s ECG data for monitoring and diagnostic purposes.\n\n \n\nThe\nBiocore Pro device has been developed, among other things, with the following features:\n\n \n\n \n●\n3\nchannels\n\n \n●\nBuilt-in\ncellular connectivity for global cellular network compatibility;\n\n \n●\nExtended\nbattery size for up to 5 days of battery life.\n\n \n\nThe\nBioflux and Biocore Pro platform has a built-in cellular chipset and a real-time embedded operating system which allows for our technology\nto be utilized as an Internet of Things (IoT) platform. This technology can be leveraged into other applications and industries by utilizing\nthe platform and OS side of our technology.\n\n \n\n8\n\n \n\n \n\nBiocore\n\n \n\nHolter\nand Extended Holter monitors are significantly simplified versions of cardiac diagnostics that lack connectivity and analysis. Holter\nand Extended Holter monitors require data to be downloaded manually, resulting in diagnostic results taking up to 2 weeks or longer.\nThe Biocore device has been designed to address the limitations of existing solutions while providing the same disruptive business model\nas the Bioflux. Responding to our customer needs, the Biocore was developed with the following features:\n\n \n\n \n●\n3\nchannels\n\n \n●\nConnectivity\n\n \n●\nRechargeable\n\n \n●\nReusable\n\n \n\nThe\nBiocore is also a platform technology that can be leveraged and used to enter other markets and support future product enhancements.\nThe company has already developed a number of enhancements for Biocore that will be available in the next generation of the solution.\n\n \n\nBiocare,\nBioheart and Biokit\n\n \n\nIt\nis widely reported that chronic illnesses related to lifestyle diseases are on the rise, resulting in increased healthcare costs. This\nhas caused a major shift in the US healthcare market, emphasizing a need for evidence-based healthcare system focused on overall health\noutcomes. Patient compliance is a critical component in driving improved health outcomes, where the patient adheres to and implements\ntheir physician’s recommendation. Unfortunately, poor patient compliance is one of the most pressing issues in the healthcare market.\nOne of the key contributing factors to this is the lack of a feedback mechanism to measure improvement and knowledge. Studies show that\npoor patient compliance costs the US healthcare system $100 to $289 billion annually1, representing 3% to 10% of total US\nhealthcare costs2 . Studies have proven that regular monitoring of chronic care conditions improves patient outcomes in the\nform of lower morbidity rates and reduce the financial burden on the healthcare system by empowering preventative care.\n\n \n\nThe\nCompany has developed Biocare to support medical practitioners as they gather data and regularly monitor and treat patients with two\nor more chronic care conditions. We expect that Bioheart combined with our Biocare platform, our fourth product, is focused on filling\nthis need by providing a clinically relevant, preventative care and disease management solution for the consumer. A key underlying component\nof Bioheart is the ability to measure patient improvements—with clinical accuracy—helping to drive feedback and support patient\ncompliance. This approach is implemented in our development process by focusing on a disease/chronic illness profile, as opposed to a\ncustomer profile. We are focused on cardiovascular disease for our first preventative care solution since Bioflux is aimed at the same\nhealth segment.\n\n \n\nThe\nfocus on cardiovascular disease states make the combination of Bioheart and Biocare a unique offering within the chronic care management\nspace which is primarily focused on diabetes. With no long term consumer solution for heart patients, chronic care management has focused\non those conditions that do have personal devices, mainly diabetes, hypertension, and COPD. This is why we developed Bioheart, a consumer\nsolution for personal use for individuals with cardiac issues. Combined with our Biocare platform, it is one of the first disease management\nsolutions capable of delivering holistic chronic care management to cardiovascular patients.\n\n \n\nTaking\nit a step further, we developed Biokit to support cardiac patients that had other chronic conditions such as hypertension or COPD. Biokit\nis a remote patient monitoring kit that combines a blood pressure cuff, an pulse oximeter and a digital thermometer into the Biocare\nplatform to support the collection of additional biometrics for those patients with multiple conditions. Biocare was developed with the\nfollowing features:\n\n \n\n \n●\nIntegration\nwith cardiac diagnostics: Bioflux and Biocore\n\n \n●\nBioheart\n\n \n●\nBiokit\n\n \n●\nVirtual\nClinic\n\n \n●\nAutomated\nbiometric reporting\n\n \n●\nPatient\nDashboards\n\n \n●\nAutomated\ntime tracking\n\n \n●\nBuilt-in\npatient reminders and calling\n\n \n●\nAsynchronous\nchat\n\n \n●\nMonthly\ndata summaries\n\n \n\n9\n\n \n\n \n\nBiocare\nis also a platform technology that can be leveraged and used to enter other chronic condition markets and support future product enhancements.\nThe company has already developed a number of enhancements for Biocare that will be available in the next generation of the solution.\n\n \n\n**Future\nMarkets**\n\n \n\nIn\nthe next few years, we intend to expand use of our technology platform with medical-grade solutions for the monitoring of implantable\ncardiac devices, diabetes, sleep apnea, chronic pain, as well as fetal monitoring, and other adjacent healthcare and lifestyle markets.\n\n \n\nBionatal\nis a proposed product for monitoring fetus’ health by remote cardiac telemetry. In the US, there were approximately 24,073 fetal\ndeaths at 20 or more weeks gestation in 20123. The rise of older mothers and mothers with chronic conditions have driven high-risk\npregnancies to a new high; high-risk complications now occur in 6 to 8 percent of all pregnancies4.\n\n \n\nThe\nCompany has also received an NIH grant to investigate cardiac anomalies in chronic kidney disease patients, which is designed to be a\npredictive or early detection tool for CKD patients. This and other new technology that the Company is developing is applicable to the\nmarket segments that the Company intends to serve and will continue to adhere to the Company’s revenue model of deriving income\nfrom technology fees.\n\n \n\n**Competition**\n\n \n\n**Cardiac\nDiagnostics**\n\n \n\n**Cardiac\nOutpatient Monitoring**\n\n \n\nThe\nmedical technology equipment industry is characterized by strong competition and rapid technological change. There are a number of companies\ndeveloping technologies that are competitive to our existing and proposed products, many of them, when compared to our Company, having\nsignificantly longer operational history and greater financial and other resources.\n\n \n\nWithin\nthe US event monitoring systems market, we are aware of six main competitors in the COM product segment. These competitors have increased\nmarket presence and distribution primarily by working through existing IDTFs. The existing competitors have maintained a competitive\nadvantage within the market by controlling the distribution of all available COM devices and software solutions. Our primary competitors\nin the COM market are:\n\n \n\n●\nPhilips Biotel - *Biotelemetry (formerly CardioNet), recently acquired by Philips for a reported $2.8B*. We believe that BioTelemetry,\nInc. has the largest network of IDTFs within the COM market. BioTelemetry is considered a complete solution provider as it produces and\ndistributes its own COM device, software solution, and COM monitoring centers. The company acquired its COM device through the acquisition\nof a COM manufacturer, Braemar. Upon acquisition of Braemar, BioTelemetry offered limited support to other clients utilizing Braemar’s\ntechnology. This resulted in BioTelemetry increasing the use of its device and software solution, enabling wide market penetration. We\nbelieve that BioTelemetry business model is focused on providing the COM diagnostic service, as opposed to selling COM solutions to other\nIDTFs or service providers, which enables a perpetual per-read fee as opposed to one time device or software sales. Equity research analysts\ncategorize BioTelemetry as a clinical health provider, because of its business model, rather than as a medical device company. As such,\nwe believe that BioTelemetry market cap is limited by the low multiples associated with that type of business, and, as a clinical health\nprovider, BioTelemetry has significant overhead and fixed costs associated with monitoring centers and health professionals.\n\n \n\n●\nBoston Scientific – Preventice *Preventice (formerly eCardio.), recently acquired by Boston Scientific for a reported $1.2B.*Preventice is a private company, based in Houston, Texas. Preventice’s device is manufactured by a third party medical device\ncompany, TZ Medical. Preventice has integrated TZ Medical’s device with its software solution to create a complete COM solution.\nSimilar to Biotelemetry, we believe eCardio follows the same business model of offering the COM service and acting as a clinical health\nprovider.\n\n \n\n●\n*ScottCare*. ScottCare is a private company in the US and a subsidiary of Scott Fetzer Company, a division of Berkshire Hathaway.\nScottCare provides equipment for cardiovascular clinics and diagnostic technicians. ScottCare has built its own COM device and software\nsolution, and white-labeled TZ Medical’s device. Unlike the others, ScottCare offers its solution in an insourced model, where\nthe physician has the opportunity to bill. This model requires the physician to purchase a minimum number of devices at an approximate\naverage cost of $2,000 and their software at a cost of $25,000 to $40,000. After this initial upfront cost, ScottCare charges an additional\nper test fee for monitoring. We believe the above model creates a long return on investment for the physician. In our opinion, this has\nresulted in little market penetration for ScottCare as compared to the others.\n\n \n\n10\n\n \n\n \n\n●\n*Infobionic*. Infobionic is a private company located in Waltham, Massachusetts. It follows a leasing model where it leases its\ntechnology at a fixed monthly rate, whether technology is used or not. They have a complete solution, comprised of a device and software.\nWe believe that they have a good model that will enable them to be competitive in the market. In our opinion, there is room for both\nBiotricity and Infobionic within the marketplace, though we believe that our solution is superior in two ways. 3 channels and built in\ncellular technology.\n\n \n\n●\n*VitalConnect*. VitalConnect is a private company that has expanded into the COM space by offering a disposable patch coupled with\na cellphone. They have adopted the same model as Boston Sci and Philips. They are well funded and are growing but continue to lose money\nand have integrated various third party technologies to build their solution. Operationally, a disposable patch is expensive to manage\nand increases COGS. Long term we think our solution is superior as it is clinically better with 3 channels and built in cellular technology\nalongside industry leading operational workflows. Economically, we know that solutions like this cannot compete with us when it comes\nto costs and margins.\n\n \n\nIn\naddition, we note that:\n\n \n\n●\n*Medtronic*. Medtronic is a major medical device conglomerate. It has an COM solution by the name of SEEQ that was added to their\nportfolio through the acquisition of Corventis. We have seen no significant activity or usage with SEEQ in our market analysis. We also\nnote that SEEQ is a patch based COM solution that only collects data on 1 lead. As such, it has strong competition from 3 lead systems\nwhich are the standard for COM. In early 2018, Medtronic withdrew SEEQ from the marketplace. We do not view Medtronic as a primary competitor,\nbut, given the size and reach of Medtronic, they are an organization that we must continuously watch and be aware of.\n\n \n\n●\n*TZ Medical*. TZ Medical is a medical device company that focuses on manufacturing a variety of medical devices. We do not consider\nTZ Medical to be a direct competitor as they produce a COM device that is available for purchase, and sold to competitors such as to\nScottcare and Preventice, described above. However, we do not believe that TZ Medical has a software solution, requiring any new entrant\nto either acquire or build out a software solution and then integrate that with the TZ Medical device. This creates a requirement for\na large upfront capital investment. As a result, we believe this approach only works for organizations looking to become COM solution\nproviders with the same business model as the others.\n\n \n\nWe\nbelieve that our Bioflux COM solution will successfully compete because:\n\n \n\n \n●\nit\nis designed as a platform to encompass all segments of the event monitoring market;\n\n \n \n \n\n \n●\nof\nthe insourcing business model which we believe is applicable to a significantly larger portion of the total available market and\nenable more efficient strategic penetration and distribution; and\n\n \n \n \n\n \n●\nfor\nthe other reasons described earlier under “Market Opportunity.”\n\n \n\n**Holter/Extended\nHolter**\n\n \n\nWithin\nthe US event monitoring systems market, we are aware of three main competitors in the Holter patch product segment. These competitors\nhave increased market presence and distribution primarily by working with Hospitals. The existing competitors have maintained a competitive\nadvantage within the market by a first mover advantage. Our primary competitors in the Holter patch market are:\n\n \n\n \n●\niRhythm\nTechnologies: iRhythm is the leader in holter patch technology with the largest footprint. They are primarily hospital focused and\noperate as an IDTF, much like our COM competitors. Their core product is the Zio patch, which is a 1 channel holter with no connectivity\nand is not rechargeable\n\n \n \n \n\n \n●\nBardyDx\n(*Recently Acquired by Hilrom*): BardyDx is the second largest player in the holter space. They operate as an IDTF as well.\nTheir core product is a 1 channel patch with no connectivity with a removable chip for data uploads.\n\n \n \n \n\n \n●\nVitalConnect:\nis a small player in the holter space. They have a disposable patch monitor that can be used for a limited time, making it unusable\nfor long term studies. They operate as an IDTF.\n\n** **\n\n11\n\n \n\n** **\n\n**Cardiac\nDisease Management**\n\n \n\nWithin\nthe US cardiac disease management market, we are aware of three main competitors in the cardiac care management segment. These competitors\nhave different approaches, solutions, and technologies but we still regard them as competitors. Technologically we have a number of differentiators\nas we are the only company that has a continuous heart monitor. Our primary competitors in the cardiac disease management market are:\n\n \n\nBioheart:\n\n \n\n \n●\nAlivecor\nis a direct to consumer cardiac monitoring company. They are the biggest brand in consumer cardiac care and have a simple to use\nhandheld cardiac device. They operate as a service provider, providing cardiac insights direct to individuals.\n\n \n\nBiocare:\n\n \n\n \n●\nOptimize\nHealth: Optimize health is a chronic care and RPM platform for a variety of chronic conditions. Thought it is platform with no focus\non cardiac specifically, it provides a complete platform for clinics and hospitals to utilize and build out a chronic disease management\nprogram.\n\n \n \n \n\n \n●\nHelloHeart:\nHello Heart is a disease management program focused on hypertension. It is one of the few disease management programs that is focused\non a heart related chronic disease\n\n \n\nIn\nthe digital health space, we have noticed that we have competitors for different products but not a single competitor that has the entire\nproduct portfolio that we have. This adds a layer of differentiation and competitive advantage as customer can deal with one vendor as\nopposed to multiple vendors that they have to integrate.\n\n \n\n**Intellectual\nProperty**\n\n \n\nWe\nprimarily rely on trade secret protection for our proprietary information. No assurance can be given that we can meaningfully protect\nour trade secrets. Others may independently develop substantially equivalent confidential and proprietary information or otherwise gain\naccess to, or disclose, our trade secrets.\n\n \n\nWe\nhave and generally plan to continue to enter into non-disclosure, confidentiality and intellectual property assignment agreements with\nall new employees as a condition of employment. In addition, we intend to also generally enter into confidentiality and non-disclosure\nagreements with consultants, manufacturers’ representatives, distributors, suppliers and others to attempt to limit access to,\nuse and disclosure of our proprietary information. There can be no assurance, however, that these agreements will provide meaningful\nprotection or adequate remedies for our trade secrets in the event of unauthorized use or disclosure of such information.\n\n \n\nWe\nalso may from time to time rely on other intellectual property developed or acquired, including patents, technical innovations, laws\nof unfair competition and various other licensing agreements to provide our future growth and to build our competitive position. We have\nfiled an industrial design patent in Canada, and we may decide to file for additional patents as we continue to expand our intellectual\nproperty portfolio. However, we can give no assurance that competitors will not infringe on our patent or other rights or otherwise create\nsimilar or non-infringing competing products that are technically patentable in their own right. We fully intend to vigorously defend\nour intellectual property and patents.\n\n \n\nCurrently,\nwe have a number of registered trademarks; we may obtain additional registrations in the future.\n\n \n\n**Research\nand Development**\n\n \n\nOur\nresearch and development programs are generally pursued by engineers and scientists employed by us in California and Toronto on a full-time\nbasis or hired as per diem consultants or through partnerships with industry leaders in manufacturing and design and researchers and\nacademia. We are also working with subcontractors in developing specific components of our technologies. In all cases, we ensure that\nall areas of IP are owned and controlled by the Company.\n\n \n\n12\n\n \n\n \n\nThe\nprimary objective of our research and development program is to advance the development of our existing and proposed products, to enhance\nthe commercial value of such products.\n\n \n\nWe\nincurred research and development costs of $2.7 million for the fiscal year ended March 31, 2026 and $2.2 million for the fiscal year\nended March 31, 2025.\n\n \n\n**Government\nRegulation**\n\n \n\n**General**\n\n \n\nOur\nmedical device products are subject to regulation by the U.S. FDA and various other federal and state agencies, as well as by foreign\ngovernmental agencies. These agencies enforce laws and regulations that govern the development, testing, manufacturing, labeling, advertising,\nmarketing and distribution, and market surveillance of our medical device products.\n\n \n\nIn\naddition to those indicated below, the only other regulations we encounter are regulations that are common to all businesses, such as\nemployment legislation, implied warranty laws, and environmental, health and safety standards, to the extent applicable. We will also\nencounter in the future industry-specific government regulations that would govern our products, if and when developed for commercial\nuse. It may become the case that other regulatory approvals will be required for the design and manufacture of our products and proposed\nproducts.\n\n \n\n**U.S.\nRegulation**\n\n \n\nThe\nFDA governs the following activities that Biotricity performs, will perform, upon the clearance or approval of its product candidates,\nor that are performed on its behalf, to ensure that medical products distributed domestically or exported internationally are safe and\neffective for their intended uses:\n\n \n\n \n●\nproduct\ndesign, and development;\n\n \n \n \n\n \n●\nproduct\nsafety, testing, labeling and storage;\n\n \n \n \n\n \n●\nrecord\nkeeping procedures; and\n\n \n \n \n\n \n●\nproduct\nmarketing.\n\n \n\nThere\nare numerous FDA regulatory requirements governing the approval or clearance and subsequent commercial marketing of Biotricity’s\nproducts. These include:\n\n \n\n \n●\nthe\ntimely submission of product listing and establishment registration information, along with associated establishment user fees;\n\n \n \n \n\n \n●\ncontinued\ncompliance with the Quality System Regulation, or QSR, which require specification developers and manufacturers, including third-party\nmanufacturers, to follow stringent design, testing, control, documentation and other quality assurance procedures during all aspects\nof the manufacturing process;\n\n \n \n \n\n \n●\nlabeling\nregulations and FDA prohibitions against the promotion of products for uncleared, unapproved or off-label use or indication;\n\n \n \n \n\n \n●\nclearance\nor approval of product modifications that could significantly affect the safety or effectiveness of the device or that would constitute\na major change in intended use;\n\n \n \n \n\n \n●\nMedical\nDevice Reporting regulations (MDR), which require that manufacturers keep detailed records of investigations or complaints against\ntheir devices and to report to the FDA if their device may have caused or contributed to a death or serious injury or malfunctioned\nin a way that would likely cause or contribute to a death or serious injury if it were to recur;\n\n \n \n \n\n \n●\nadequate\nuse of the Corrective and Preventive Actions process to identify and correct or prevent significant systemic failures of products\nor processes or in trends which suggest same;\n\n \n \n \n\n \n●\npost-approval\nrestrictions or conditions, including post-approval study commitments;\n\n \n \n \n\n \n●\npost-market\nsurveillance regulations, which apply when necessary to protect the public health or to provide additional safety and effectiveness\ndata for the device; and\n\n \n \n \n\n \n●\nnotices\nof correction or removal and recall regulations.\n\n \n\n13\n\n \n\n \n\nDepending\non the classification of the device, before Biotricity can commercially distribute medical devices in the United States, it had to obtain,\neither prior 510(k) clearance, 510(k) de-novo clearance or premarket approval (PMA), from the FDA unless a respective exemption applied.\nThe FDA classifies medical devices into one of three classes based on the degree of risk associated with each medical device and the\nextent of regulatory controls needed to ensure the device’s safety and effectiveness:\n\n \n\n \n●\nClass\nI devices, which are low risk and subject to only general controls (e.g., registration and listing, medical device labeling compliance,\nMDRs, Quality System Regulations, and prohibitions against adulteration and misbranding) and, in some cases, to the 510(k) premarket\nclearance requirements;\n\n \n \n \n\n \n●\nClass\nII devices, which are moderate risk and generally require 510(k) or 510(k) de-novo premarket clearance before they may be commercially\nmarketed in the United States as well as general controls and potentially special controls like performance standards or specific\nlabeling requirements; and\n\n \n \n \n\n \n●\nClass\nIII devices, which are devices deemed by the FDA to pose the greatest risk, such as life-sustaining, life-supporting or implantable\ndevices, or devices deemed not substantially equivalent to a predicate device. Class III devices generally require the submission\nand approval of a PMA supported by clinical trial data.\n\n \n\nThe\ncustom software and hardware of our products are classified as Class II. Class II devices are those for which general controls alone\nare insufficient to provide reasonable assurance of safety and effectiveness and there is sufficient information to establish special\ncontrols. Special controls can include performance standards, post-market surveillance, patient histories and FDA guidance documents.\nPremarket review and clearance by the FDA for these devices is generally accomplished through the 510(k) or 510(k) de-novo premarket\nnotification process. As part of the 510(k) or 510(k) de-novo notification process, the FDA may have required the following:\n\n \n\n \n●\nDevelopment\nof comprehensive product description and indications for use.\n\n \n \n \n\n \n●\nCompletion\nof extensive preclinical tests and preclinical animal studies, performed in accordance with the FDA’s Good Laboratory Practice\n(GLP) regulations.\n\n \n \n \n\n \n●\nComprehensive\nreview of predicate devices and development of data supporting the new product’s substantial equivalence to one or more predicate\ndevices.\n\n \n \n \n\n \n●\nIf\nappropriate and required, certain types of clinical trials (IDE submission and approval may be required for conducting a clinical\ntrial in the US).\n\n \n\nIf\nrequired, clinical trials involve use of the medical device on human subjects under the supervision of qualified investigators in accordance\nwith current Good Clinical Practices (GCPs), including the requirement that all research subjects provide informed consent for their\nparticipation in the clinical study. A written protocol with predefined end points, an appropriate sample size and pre-determined patient\ninclusion and exclusion criteria, is required before initiating and conducting a clinical trial. All clinical investigations of devices\nto determine safety and effectiveness must be conducted in accordance with the FDA’s Investigational Device Exemption, or IDE,\nregulations that among other things, govern investigational device labeling, prohibit promotion of the investigational device, and specify\nrecordkeeping, reporting and monitoring responsibilities of study sponsors and study investigators. If the device presents a “significant\nrisk,” as defined by the FDA, the agency requires the device sponsor to submit an IDE application, which must become effective\nprior to commencing human clinical trials. The IDE will automatically become effective 30 days after receipt by the FDA, unless the FDA\ndenies the application or notifies the company that the investigation is on hold and may not begin. If the FDA determines that there\nare deficiencies or other concerns with an IDE that requires modification, the FDA may permit a clinical trial to proceed under a conditional\napproval. In addition, the study must be approved by, and conducted under the oversight of, an Institutional Review Board (IRB) for each\nclinical site. If the device presents a non-significant risk to the patient, a sponsor may begin the clinical trial after obtaining approval\nfor the trial by one or more IRBs without separate approval from the FDA, but it must still follow abbreviated IDE requirements, such\nas monitoring the investigation, ensuring that the investigators obtain informed consent, and labeling and record-keeping requirements.\n\n \n\n14\n\n \n\n \n\nGiven\nsuccessful completion of all required testing, a detailed 510(k) premarket notification or 510(k) de-novo was submitted to the FDA requesting\nclearance to market the product. The notification included all relevant data from pertinent preclinical and clinical trials, together\nwith detailed information relating to the product’s manufacturing controls and proposed labeling, and other relevant documentation.\n\n \n\nA\n510(k) clearance letter from the FDA then authorized commercial marketing of the device for one or more specific indications of use.\n\n \n\nAfter\n510(k) clearance, Biotricity is required to comply with a number of post-clearance requirements, including, but not limited to, Medical\nDevice Reporting and complaint handling, and, if applicable, reporting of corrective actions. Also, quality control and manufacturing\nprocedures must continue to conform to QSRs. The FDA periodically inspects manufacturing facilities to assess compliance with QSRs, which\nimpose extensive procedural, substantive, and record keeping requirements on medical device manufacturers. In addition, changes to the\nmanufacturing process are strictly regulated, and, depending on the change, validation activities may need to be performed. Accordingly,\nmanufacturers must continue to expend time, money and effort in the area of production and quality control to maintain compliance with\nQSRs and other types of regulatory controls.\n\n \n\nAfter\na device receives 510(k) clearance from FDA, any modification that could significantly affect its safety or effectiveness, or that would\nconstitute a major change in its intended use or technological characteristics, requires a new 510(k) clearance or could require a PMA.\nThe FDA requires each manufacturer to make the determination of whether a modification requires a new 510(k) notification or PMA in the\nfirst instance, but the FDA can review any such decision. If the FDA disagrees with a manufacturer’s decision not to seek a new\n510(k) clearance or PMA for a particular change, the FDA may retroactively require the manufacturer to seek 510(k) clearance or PMA.\nThe FDA can also require the manufacturer to cease U.S. marketing and/or recall the modified device until additional 510(k) clearance\nor PMA approval is obtained.\n\n \n\nThe\nFDA and the Federal Trade Commission, or FTC, will also regulate the advertising claims of Biotricity’s products to ensure that\nthe claims it makes are consistent with its regulatory clearances, that there is scientific data to substantiate the claims and that\nproduct advertising is neither false nor misleading.\n\n \n\nWe\nreceived 510(k) clearance for both the software and hardware components of our Bioflux and Biocore products. To obtain 510(k) clearance,\na company must submit a notification to the FDA demonstrating that its proposed device is substantially equivalent to a predicate device\n(i.e., a device that was in commercial distribution before May 28, 1976, a device that has been reclassified from Class III to Class\nI or Class II, or a 510(k)-cleared device). The FDA’s 510(k) clearance process generally takes from three to 12 months from the\ndate the application is submitted but also can take significantly longer. If the FDA determines that the device or its intended use is\nnot substantially equivalent to a predicate device, the device is automatically placed into Class III, requiring the submission of a\nPMA. Once the information is submitted, there is no guarantee that the FDA will grant a company 510(k) clearance for its pipeline products,\nand failure to obtain the necessary clearances for its products would adversely affect its ability to grow its business. Delays in receipt\nor failure to receive the necessary clearances, or the failure to comply with existing or future regulatory requirements, could reduce\nits business prospects.\n\n \n\nDevices\nthat cannot be cleared through the 510(k) process due to lack of a predicate device but would be considered low or moderate risk may\nbe eligible for the 510(k) de-novo process. In 1997, the Food and Drug Administration Modernization Act, or FDAMA added the de novo classification\npathway now codified in section 513(f)(2) of the 29&C Act. This law established an alternate pathway to classify new devices into\nClass I or II that had automatically been placed in Class III after receiving a Not Substantially Equivalent, or NSE, determination in\nresponse to a 510(k) submission. Through this regulatory process, a sponsor who receives an NSE determination may, within 30 days of\nreceipt, request FDA to make a risk-based classification of the device through what is called a “de novo request.” In 2012,\nsection 513(f)(2) of the 29&C Act was amended by section 607 of the Food and Drug Administration Safety and Innovation Act (FDASIA),\nin order to provide a second option for de novo classification. Under this second pathway, a sponsor who determines that there is no\nlegally marketed device upon which to base a determination of substantial equivalence can submit a de novo request to FDA without first\nsubmitting a 510(k).\n\n \n\nIn\nthe event that a company receives a Not Substantially Equivalent determination for its candidates in response to a 510(k) submission,\nthe device may still be eligible for the 510(k) de-novo classification process.\n\n \n\nDevices\nthat cannot be cleared through the 510(k) or 510(k) de-novo classification process require the submission of a PMA. The PMA process is\nmuch more time consuming and demanding than the 510(k) notification process. A PMA must be supported by extensive data, including but\nnot limited to data obtained from preclinical and/or clinical studies and data relating to manufacturing and labeling, to demonstrate\nto the FDA’s satisfaction the safety and effectiveness of the device. After a PMA application is submitted, the FDA’s in-depth\nreview of the information generally takes between one and three years and may take significantly longer. If the FDA does not grant 510(k)\nclearance to its future products, there is no guarantee that Biotricity will submit a PMA or that if it does, that the FDA would grant\na PMA approval of Biotricity’s future products, either of which would adversely affect Biotricity’s business.\n\n \n\n15\n\n \n\n \n\nWe\nhave installed a suitable and effective quality management system, which establishes controlled processes for our product design, manufacturing,\nand distribution. We plan to do this in compliance with the internationally recognized standard ISO 13485:2013 Medical Devices –\nQuality Management Systems – Requirements for Regulatory Purposes. Following the introduction of a product, the FDA and foreign\nagencies engage in periodic reviews of our quality systems, as well as product performance and advertising and promotional materials.\nThese regulatory controls, as well as any changes in FDA policies, can affect the time and cost associated with the development, introduction\nand continued availability of new products. Where possible, we anticipate these factors in our product development processes. These agencies\npossess the authority to take various administrative and legal actions against us, such as product recalls, product seizures and other\ncivil and criminal sanctions.\n\n \n\n**Foreign\nRegulation**\n\n \n\nIn\naddition to regulations in the United States, we will be subject to a variety of foreign regulations governing clinical trials and commercial\nsales and distribution of our products in foreign countries. Whether or not we obtain FDA approval for a product, we must obtain approval\nof a product by the comparable regulatory authorities of foreign countries before we can commence clinical trials or marketing of the\nproduct in those countries. The approval process varies from country to country, and the time may be longer or shorter than that required\nfor FDA approval. The requirements governing the conduct of clinical trials, product licensing, pricing and reimbursement vary greatly\nfrom country to country.\n\n \n\nThe\npolicies of the FDA and foreign regulatory authorities may change and additional government regulations may be enacted which could prevent\nor delay regulatory approval of our products and could also increase the cost of regulatory compliance. We cannot predict the likelihood,\nnature or extent of adverse governmental regulation that might arise from future legislative or administrative action, either in the\nUnited States or abroad.\n\n \n\n**Manufacturing\nand Suppliers**\n\n \n\nEarlier\nin the life-cycle of the Company, we focused primarily on research and development of the first generation version of the Bioflux. We\nhave since completed the development of Biocore and of Bioheart and their proposed marketing and distribution. We currently assemble\nour devices at our Redwood City, California facility. In order to maintain compliance with FDA and other regulatory requirements, our\nmanufacturing facilities must be periodically re-evaluated and qualified under a quality system to ensure they meet production and quality\nstandards. Suppliers of components and products used to manufacture our devices must also comply with FDA regulatory requirements, which\noften require significant resources and subject us and our suppliers to potential regulatory inspections and stoppages.\n\n \n\nWe\nhave a scalable manufacturing strategy and goals and use Providence Enterprises (*herein* “*Providence*”), which\nis an FDA qualified manufacturer for contract manufacturing. We do not have a contract with Providence or any obligation to use them\n(nor do they have any obligations with respect to us other than with respect to any specific orders we may make) and we enter into purchase\norders for each manufacturing request we have with Providence, as we would with other vendors. Despite our working relationship with\nProvidence, we intend to continue to identify and develop other efficient, automated, low-cost manufacturing capabilities and options\nto meet the quality, price, engineering, design and production standards or production volumes required to successfully mass market our\nproducts, especially at the low-cost levels we require to facilitate our business plan.\n\n \n\nWe\ncurrently rely on a number of principal suppliers for the components that make up our products and proposed products; these include Digikey\nCorporation and Mouser Electronics for electronics and connectors, Telit/Stollmann for Bluetooth modules, Yongan Innovations for batteries,\nDongguan Bole RP&M Cp. Ltd. For plastics, Unimed Medical and Conmed for ECG cables and electrodes, and Medico Systems for touch-panel\nLCD displays. We believe that the raw materials used or expected to be used in our planned products can be acquired from multiple sources\nand are readily available on the market.\n\n \n\n**Employees**\n\n \n\nWe\ncurrently have 46 full-time employees and approximately 20 consultants who are based in our offices located in Silicon Valley, California\nand Toronto, Canada. These employees oversee day-to-day operations of the Company and, together with the consultants, support management,\nengineering, manufacturing, and administration. We have no unionized employees.\n\n \n\nWe\nplan to hire 10 to 15 additional full-time employees within the next 12 months, as needed to support continued growth in our business.\nTheir principal responsibilities will be the support of our sales, marketing, research and development, and clinical development activities.\n\n \n\nWe\nconsider relations with our employees to be satisfactory.\n\n \n\n16"}