{"url_path":"/sec/btcy/10-k/2026/item-7","section_key":"item-7","section_title":"Item 7 MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS**","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":9420,"has_tables":true,"body_markdown":"**ITEM\n7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS**\n\n \n\n*The\nfollowing Management’s Discussion and Analysis of Financial Condition and Results of Operations (“*MD&A*”)\ncovers information pertaining to the Company up to March 31, 2026 and should be read in conjunction with our consolidated financial statements\nand related notes of the Company as of and for the fiscal years ended March 31, 2026 and 2025 contained elsewhere in this Annual Report\non Form 10-K. Except as otherwise noted, the financial information contained in this MD&A and in the financial statements has been\nprepared in accordance with accounting principles generally accepted in the United States of America. All amounts are expressed in U.S.\ndollars unless otherwise noted.*\n\n \n\n**Forward\nLooking Statements**\n\n \n\nCertain\ninformation contained in this MD&A and elsewhere in this Annual Report on Form 10-K includes “forward-looking statements.”\nStatements which are not historical reflect our current expectations and projections about our future results, performance, liquidity,\nfinancial condition and results of operations, prospects and opportunities and are based upon information currently available to us and\nour management and their interpretation of what is believed to be significant factors affecting our existing and proposed business, including\nmany assumptions regarding future events. Actual results, performance, liquidity, financial condition and results of operations, prospects\nand opportunities could differ materially and perhaps substantially from those expressed in, or implied by, these forward-looking statements\nas a result of various risks, uncertainties and other factors, including those risks described in detail in the section entitled “Risk\nFactors” as well as elsewhere herein.\n\n \n\nForward-looking\nstatements, which involve assumptions and describe our future plans, strategies, and expectations, are generally identifiable by use\nof the words “may,” “should,” “would,” “will,” “could,” “scheduled,”\n“expect,” “anticipate,” “estimate,” “believe,” “intend,” “seek,”\nor “project” or the negative of these words or other variations on these words or comparable terminology.\n\n \n\nIn\nlight of these risks and uncertainties, and especially given the nature of our existing and proposed business, there can be no assurance\nthat the forward-looking statements contained in this section and elsewhere in herein will in fact occur. Potential investors should\nnot place undue reliance on any forward-looking statements. Except as expressly required by the federal securities laws, there is no\nundertaking to publicly update or revise any forward-looking statements, whether as a result of new information, future events, changed\ncircumstances or any other reason.\n\n \n\n**Company\nOverview**\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 intend to first focus on a segment of the diagnostic mobile cardiac telemetry market, otherwise known\nas COM, while providing our chosen markets with the capability to also perform other cardiac studies.\n\n \n\n36\n\n \n\n \n\nWe\ninitially developed our FDA-cleared Bioflux® COM technology, comprised of a monitoring device and software components, which we made\navailable to the market under limited release on April 6, 2018, in order to assess, establish and develop sales processes and market\ndynamics. The fiscal year ended March 31, 2021 marked the Company’s first year of expanded commercialization efforts, focused on\nsales growth and expansion. In 2021, the Company announced the initial launch of Bioheart, a direct-to-consumer heart monitor that offers\nthe same continuous heart monitoring technology used by physicians. In addition to developing and receiving regulatory approval or clearance\nof other technologies that enhance its ecosystem, in 2022, the Company announced the launch of its 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. The Biocore Pro, which is a cellular version of this device is now our flagship\ntechnology. We have expanded our sales efforts to 35 states, with intention to expand further and compete in the broader US market using\nan insourcing business model. Our technology has a large potential total addressable market, which can include hospitals, clinics and\nphysicians’ offices, as well as other Independent Diagnostic Testing Facilities (“IDTFs)”. We believe our solution’s\ninsourcing model, which empowers physicians with state-of-the-art technology and charges technology service fees for its use, has the\nbenefit of a reduced operating overhead for the Company, 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. The Company’s ability to grow this\ntype of revenue is predicated on the size and quality of its sales force and their ability to penetrate the market and place devices\nwith clinically focused, repeat users of its cardiac study technology. The Company plans to grow its sales force in order to address\nnew markets and achieve sales penetration in the markets currently served.\n\n \n\nFull\nmarket release of the Bioflux COM device for commercialization launched in April 2019, after receiving its second and final required\nFDA clearance. To commence commercialization, we ordered device inventory from our FDA-approved manufacturer and hired a small, captive\nsales force, with deep experience in cardiac technology sales; we expanded on our limited market release, which identified potential\nanchor clients who could be early adopters of our technology. By increasing our sales force and geographic footprint, we had launched\nsales in 31 U.S. states by December 31, 2022.\n\n \n\nOn\nJanuary 24, 2022 the Company announced that it has received the 510(k) FDA clearance of its Biocore patch solution, which is a novel\nproduct in the field of Holter monitoring. This three-lead technology can provide connected Holter monitoring that is designed to produce\nmore accurate arrythmia detection than is typical of competing remote patient monitoring solutions. It is also foundational, since already\ndeveloped improvements to this technology will follow which are not known by the Company to be currently available in the market, for\nclinical and consumer patch solution applications.\n\n \n\nDuring\n2021, the Company also announced that it received a 510(k) clearance from the FDA for its Bioflux Software II System, engineered to improve\nworkflows and reduce estimated analysis time from 5 minutes to 30 seconds. ECG monitoring requires significant human oversight to review\nand interpret incoming patient data to discern actionable events for clinical intervention, highlighting the necessity of driving operational\nefficiency. This improvement in analysis time reduces operational costs and allows the Company to continue to focus on excellent customer\nservice and industry-leading response times to physicians and their at-risk patients. Additionally, these advances mean we can focus\nour resources on high-level operations and sales.\n\n \n\nThe\nCompany has also developed or is developing several other ancillary technologies, which will require application for further FDA clearances,\nwhich the Company anticipates applying for within the next to twelve months. Among these are:\n\n \n\n \n●\nadvanced\nECG analysis software that can analyze and synthesize patient ECG monitoring data with the purpose of distilling it down to the important\ninformation that requires clinical intervention, while reducing the 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 Biocore®\n\n \n\nDuring\n2021 and the early part of 2022, the Company has also commercially launched its Bioheart technology, which is a consumer technology whose\ndevelopment was forged out of prior the development of the clinical technologies that are already part of the Company’s technology\necosystem, the BioSphere. In recognition of its product development, in November 2022, the Company’s Bioheart received recognition\nas one of Time Magazine’s Best Inventions of 2022.\n\n \n\nThe\nCompany’s goal is to position itself as an all-in-one cardiac diagnostic and disease management solution. The Company continues\nto grow its data set of billions of patient heartbeats, allowing it to further develop its predictive capabilities relative to atrial\nfibrillation and arrythmias.\n\n \n\n37\n\n \n\n \n\nIn\nOctober 2022, the Company launched its Biocare Cardiac Disease Management Solution, after successfully piloting this technology in two\nfacilities that provide cardiac care to more than 60,000 patients. This technology and other consumer technologies and applications such\nas the Biokit and Biocare have been developed to allow the Company to transform and use its strong cardiac footprint to expand into remote\nchronic care management solutions that will be part of the BioSphere. The technology puts actionable data into the hands of physicians\nin order to assist them in making effective treatment decisions quickly. During March 2023, the Company launched its patient-facing Biocare\napp on Android and Apple app stores. This further allows the Company to expand its footprint in providing full-cycle chronic care management\nsolutions to its clinic and patient network.\n\n \n\nThe\nCompany identified the importance of recent developments in accelerating its path to profitability, including the launch of important\nnew products identified, which have a ready market through cross-selling to existing large customer clinics, and large new distribution\npartnerships that allow the Company to sell into large hospital networks. Additionally, in September 2022, the Company was awarded a\nNIH Grant from the National Heart, Blood, and Lung Institute for AI-Enabled real-time monitoring, and predictive analytics for stroke\ndue to chronic kidney failure. This is a significant achievement that broadens our technology platform’s disease space demographic.\nThe grant focusses on Bioflux-AI as an innovative system for real-time monitoring and prediction of stroke episodes in chronic kidney\ndisease patients. The Company received $238,703 under this award in March 2023, used to defray research, development and other associated\ncosts, and continues to use AI to enhance its technology and make its operations\nmore efficient.\n\n \n\n**Results\nof Operations**\n\n \n\nBiotricity incurred a net loss attributed to common stockholders of $3,128,458\n(loss per share of $ 0.115) during the year ended March 31, 2026 as compared to $11,942,000 (loss per share of $0.555) during the year\nended March 31, 2025. From the Company’s inception in 2009 through March 31, 2026, the Company has generated an accumulated deficit\nof $142,570,243. We devoted, and expect to continue to devote, significant resources in the areas of sales and marketing and research\nand development costs. We also expect to incur additional operating losses, as we build the infrastructure required to support higher\nsales volume.\n\n \n\n**Comparison\nof the Fiscal Years and the Three Months Periods Ended March 31, 2026 and 2025**\n\n \n\nThe\nfollowing table sets forth our results of operations for the fiscal years ended March 31, 2026 and 2025.\n\n \n\n \n \n**Year Ended\nMarch 31, 2026**\n \n \n**Year Ended\nMarch 31, 2025**\n \n \n**YTD vs PYYTD**\n \n\n \n \n**$**\n \n \n**$**\n \n \n \n \n\n \n \n \n \n \n \n \n \n \n \n\n**REVENUE**\n \n \n**15,998,239**\n \n \n \n13,790,294\n \n \n \n2,207,945\n \n\n \n \n \n \n \n \n \n \n \n \n \n \n \n\nCost of Revenue\n \n \n**3,049,441**\n \n \n \n3,225,803\n \n \n \n(176,362\n)\n\n**GROSS PROFIT**\n \n \n**12,948,798**\n \n \n \n10,564,491\n \n \n \n2,384,307\n \n\n \n \n \n \n \n \n \n \n \n \n \n \n \n\n**EXPENSES**\n \n \n \n \n \n \n \n \n \n \n \n \n\nSelling, general and administrative expenses\n \n \n**8,493,365**\n \n \n \n10,857,797\n \n \n \n(2,364,432\n)\n\nResearch and development expenses\n \n \n**2,764,197**\n \n \n \n2,155,660\n \n \n \n608,537\n \n\n**TOTAL OPERATING EXPENSES**\n \n \n**11,257,562**\n \n \n \n13,013,457\n \n \n \n(1,755,895\n)\n\n**INCOME (LOSS) FROM OPERATIONS**\n \n \n**1,691,236**\n \n \n \n(2,448,966\n)\n \n \n4,140,202\n \n\n \n \n \n \n \n \n \n \n \n \n \n \n \n\nOther income/(expense) *[Note 3]*\n \n \n**159,978**\n \n \n \n(78,569\n)\n \n \n238,547\n \n\nInterest expense\n \n \n**(3,361,950**\n**)**\n \n \n(3,262,038\n)\n \n \n(99,912\n)\n\nGain/(Loss) upon convertible promissory notes conversion and redemption *[Note 8]*\n \n \n**19,842**\n \n \n \n(137,934\n)\n \n \n157,776\n \n\nAccretion and amortization expenses\n \n \n**(745,896**\n**)**\n \n \n(1,939,816\n)\n \n \n1,193,920\n \n\nChange in fair value of derivative liabilities *[Note 8]*\n \n \n**(167,349**\n**)**\n \n \n(553,856\n)\n \n \n386,507\n \n\n**NET LOSS BEFORE INCOME TAXES**\n \n \n**(2,404,139**\n**)**\n \n \n(8,421,179\n)\n \n \n6,017,040\n \n\n \n \n \n \n \n \n \n \n \n \n \n \n \n\nIncome taxes\n \n \n—\n \n \n \n—\n \n \n \n \n \n\n**NET LOSS BEFORE DIVIDENDS**\n \n \n**(2,404,139**\n**)**\n \n \n(8,421,179\n)\n \n \n6,017,040\n \n\n \n\n38\n\n \n\n \n\nThe\nfollowing table sets forth our results of operations for the three months ended March 31, 2026 and 2025.\n\n \n\n \n \n\n**3 Months Ended**\n\n**March 31, 2026**\n\n \n \n\n**3 Months Ended**\n\n**March 31, 2025**\n\n \n \n**QoPYQ**\n \n\n \n \n**$**\n \n \n**$**\n \n \n \n \n\n \n \n \n \n \n \n \n \n \n \n\n**REVENUE**\n \n \n**4,250,632**\n \n \n \n3,702,597\n \n \n \n548,035\n \n\n \n \n \n \n \n \n \n \n \n \n \n-\n \n\nCost of Revenue\n \n \n**851,608**\n \n \n \n724,416\n \n \n \n127,192\n \n\n**GROSS PROFIT**\n \n \n**3,399,024**\n \n \n \n2,978,181\n \n \n \n420,843,\n \n\n \n \n \n \n \n \n \n \n \n \n \n \n \n\n**EXPENSES**\n \n \n \n \n \n \n \n \n \n \n-\n \n\nSelling, general and administrative expenses\n \n \n**1,862,798**\n \n \n \n3,261,080\n \n \n \n(1,398,282\n)\n\nResearch and development expenses\n \n \n**841,669**\n \n \n \n572,567\n \n \n \n269,102\n \n\n**TOTAL OPERATING EXPENSES**\n \n \n**2,704,467**\n \n \n \n3,833,647\n \n \n \n(1,129,180\n)\n\n**INCOME (LOSS) FROM OPERATIONS**\n \n \n**694,557**\n \n \n \n(855,466\n)\n \n \n1,550,023\n \n\n \n \n \n \n \n \n \n \n \n \n \n \n \n\nOther income/(expense) *[Note 3]*\n \n \n**25,955**\n \n \n \n49,405\n \n \n \n(23,450\n)\n\nInterest expense\n \n \n**(840,938**\n**)**\n \n \n(891,752\n)\n \n \n(50,814\n)\n\nGain/(Loss) upon convertible promissory notes conversion and redemption *[Note 8]*\n \n \n**—**\n \n \n \n11,724\n \n \n \n11,724\n \n\nAccretion and amortization expenses\n \n \n**(204,713**\n**)**\n \n \n(164,072\n)\n \n \n40,641\n \n\nChange in fair value of derivative liabilities *[Note 8]*\n \n \n**957**\n \n \n \n(85,576\n)\n \n \n(86,553\n)\n\n**NET LOSS BEFORE INCOME TAXES**\n \n \n**(324,182**\n**)**\n \n \n(1,935,737\n)\n \n \n1,611,555\n \n\n \n \n \n \n \n \n \n \n \n \n \n \n \n\nIncome taxes\n \n \n**—**\n \n \n \n—\n \n \n \n \n \n\n**NET LOSS BEFORE DIVIDENDS**\n \n \n**(324,182**\n**)**\n \n \n(1,935,737\n)\n \n \n1,611,555\n \n\n \n\n*Revenue\nand cost of revenue*\n\n \n\nThrough\nthe efforts of our sales force to increase our geographic footprint, we have launched sales in 35 U.S. states by March 31, 2026. The\nCompany earned combined device sales and technology fee income totaling $16.0 million during the year ended March 31, 2026, a 16.0% increase\nover the $13.8 million earned in the preceding fiscal year. During three months ended March 31, 2026, the Company earned total sales\nof $4.25 million, a 14.8 % increase over the $3.70 million sales earned in the corresponding quarter in prior year.\n\n \n\nOur\ngross profit percentage was 81% during the year ended March 31, 2026 as compared to 76.6% during the comparable prior year period.\nThe increase in average margins was a result of increase of technology sales as a percentage of total sales, since these enjoy a higher\nmargin than device sales. Gross margin on technology sales was 84.3 % for the year ended March 31, 2026, which improved significantly\nfrom the prior year technology sales gross margin of 79.8%, as a result of the Company’s continuous efforts to improve efficiency\nin delivering those services. We expect the gross margin related to technology fees to continue improving going forward as we achieve\ngreater economy of scale, including the cost of monitoring. Given the improved gross margin on technology fees and an evolving revenue\nmix where technology fees are expected to comprise an increasing proportion of revenue, we anticipate continued improvement in overall\nblended gross margin over time.\n\n \n\nGross\nprofit percentage on technology fees was 90.1% during three months ended March 31, 2026 as compared to 82.7% in the corresponding quarter\nin the prior year. This was mainly a result of increased study revenue from an increased number of studies performed at a lower cost\nof revenue due to economy of scale and continued efforts to reduce the cost per study.\n\n \n\n*Operating\nExpenses*\n\n \n\nTotal\noperating expenses for the fiscal year ended March 31, 2026 were $11.25 million compared to $13.0 million for the fiscal year ended March\n31, 2025. Total operating expenses for the three months ended March 31, 2026 were $2.7 million as compared $3.8 million for the three\nmonths ended March 31, 2025. See further explanations below.\n\n \n\n39\n\n \n\n \n\n*Selling,\nGeneral and administrative expenses*\n\n \n\nOur\nselling, general and administrative expenses for the fiscal year ended March 31, 2026 decreased to $8.5 million, compared to approximately\n$10.8 million for the fiscal year ended March 31, 2025 and decreased to $1.8 million for the three months ended March 31, 2026 compared\nto and $3.2 million during the three months ended March 31, 2025. Our total selling, general and administrative expenses decreased by\n$2.4 million for the fiscal year ended March 31, 2026, which was primarily due increased monitoring of spending efficiency over sales\ncommissions and fixed general and administrative expenses.\n\n \n\n*Research\nand development expenses*\n\n \n\nDuring the fiscal year and three months ended March 31, 2026 we recorded\nresearch and development expenses of $2.8 million and $0.8 million, respectively, compared to $2.2 million and $0.57 million incurred\nin the fiscal year and three months ended March 31, 2025. The research and development activity related to both existing and new products.\nThe increase in research and development activity was a result of the timing of activities associated with the development of new technologies\nfor our ecosystem and product enhancements.\n\n \n\n*Interest\nExpense*\n\n \n\nDuring\nthe fiscal year ended March 31, 2026 and March 31, 2025, we incurred interest expenses of $3.4 million and $3.3 million, respectively.\nDuring three months ended March 31, 2026 and March 31, 2025, we incurred interest expenses of $0.8 million and $0.9 million, respectively.\nThe increase in interest expense on a year-to-date basis was primarily attributable to higher average borrowings and increases in market\ninterest rates. However, interest expense decreased for the three-month period ended March 31, 2026 compared to the corresponding period\nin the prior year, primarily due to lower average borrowings during the quarter.\n\n \n\n*Accretion\nand amortization expenses*\n\n \n\nDuring the fiscal year ended March 31, 2026 and March 31, 2025, we incurred\naccretion expense of $0.7 million and $1.9 million, respectively. The decrease from the prior year period mainly due to fully amortization\nof Convertible Notes Series C. The amortization during the current year related primarily to the amortization of debt discount related\nto the Company’s term loan, merchant loans and series C convertible notes. During the three months ended March 31, 2026 and March\n31, 2025, we incurred accretion expenses of $0.2 million and 0.16 million. The expense for the quarters increase due to amortization of\nfinder fee.\n\n \n\n*Change\nin fair value of derivative liabilities*\n\n \n\nDuring\nthe year ended March 31, 2026 and March 31, 2025, the Company recognized $(167) thousand and $(554) thousand, respectively, related to\nthe change in fair value of derivative liabilities. During the three months ended March 31, 2026 and March 31, 2025, the Company recognized\n$957 and $(127) thousand, respectively, related to the change in fair value of derivative liabilities.\n\n \n\n*Loss\nupon convertible promissory notes conversion*\n\n \n\nDuring\nthe year ended March 31, 2026, we recorded a gain $19.8 thousand, compared to a loss of $(138) thousand during the year ended March 31,\n2025, related to the redemption of our convertible promissory notes. During the three months ended March 31, 2026 and 2025, we recorded\na gain of $nil and $12 thousand, respectively, related to the redemption of our convertible promissory notes.\n\n \n\n*Other\n(expense) income*\n\n \n\nDuring\nthe years ended March 31, 2026, and March 31, 2025 we recognized $160 thousand and $79 thousand in net other expense. The change in net\nother (expense) income is mainly a result of loss upon debt extinguishments and the financing component of revenue recognized as interest\n(note 3). During the three months ended March 31, 2026, and March 31, 2025, we recognized $26 thousand and $49 thousand, respectively,\nin net other income.\n\n \n\n40\n\n \n\n \n\n*EBITDA\nand Adjusted EBITDA*\n\n \n\nEarnings\nbefore interest, taxes, depreciation and amortization expenses (EBITDA) and Adjusted EBITDA, which are presented below, are non-generally\naccepted accounting principles (non-GAAP) measures that we believe are useful to management, investors and other users of our financial\ninformation in evaluating operating profitability. EBITDA is calculated by adding back interest, taxes, depreciation and amortization\nexpenses to net income.\n\n \n\nAdjusted\nEBITDA is calculated by excluding from EBITDA the effect of the following non-operational items: equity in earnings and losses of unconsolidated\nbusinesses and other income and expense, net, as well as the effect of special items that related to one-time, non-recurring expenditures.\nWe believe that this measure is useful to management, investors and other users of our financial information in evaluating the effectiveness\nof our operations and underlying business trends in a manner that is consistent with management’s evaluation of business performance.\nFurther, the exclusion of non-operational items and special items enables comparability to prior period performance and trend analysis.\nSee notes in the table below for additional information regarding special items. EBITDA for the three months ended March 31,\n2026 was positive $723 thousand compared to negative $878 thousand in the corresponding period of the prior fiscal year.\n\n \n\nIt\nis management’s intent to provide non-GAAP financial information to enhance the understanding of Biotricity’s GAAP financial\ninformation, and it should be considered by the reader in addition to, but not instead of, the financial statements prepared in accordance\nwith GAAP. We believe that providing these non-GAAP measures in addition to the GAAP measures allows management, investors and other\nusers of our financial information to more fully and accurately assess business performance. The non-GAAP financial information presented\nmay be determined or calculated differently by other companies and may not be directly comparable to that of other companies.\n\n \n\n**EBITDA\nand Adjusted EBITDA**\n\n \n\n** **\n\n****\n\n \n \n\n**3 months**\n\n**ended March**\n\n**31, 2026**\n\n \n \n\n**3 months**\n\n**ended March**\n\n**31, 2025**\n\n \n \n\n**Year ended**\n\n**March 31,**\n\n**2026**\n\n \n \n\n**Year ended**\n\n**March 31,**\n\n**2025**\n\n \n\n \n \n**$**\n \n \n**$**\n \n \n**$**\n \n \n**$**\n \n\nNet loss attributable to common stockholders\n \n \n(453,775\n)\n \n \n(2,022,133\n)\n \n \n(3,128,458\n)\n \n \n(11,942,000\n)\n\nAdd:\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n\nProvision for income taxes\n \n \n-\n \n \n \n-\n \n \n \n-\n \n \n \n-\n \n\nInterest expense\n \n \n840,938\n \n \n \n891,752\n \n \n \n3,361,950\n \n \n \n3,262,038\n \n\nAccretion and amortization expenses\n \n \n204,713\n \n \n \n164,072\n \n \n \n745,896\n \n \n \n1,939,816\n \n\nDepreciation\n \n \n1,488\n \n \n \n1,488\n \n \n \n5,953\n \n \n \n5,953\n \n\nPreferred stock dividends (2)\n \n \n129,593\n \n \n \n86,396\n \n \n \n724,319\n \n \n \n3,520,821\n \n\n**EBITDA**\n \n \n722,957\n \n \n \n(878,425\n)\n \n \n1,709,660\n \n \n \n(3,213,372\n )\n\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n\n**Add (Less)**\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n\nShare based compensation (1)\n \n \n7,695\n \n \n \n1,288,896\n \n \n \n25,632\n \n \n \n1,461,698\n \n\nOther (income)/loss (3)\n \n \n(25,955\n) \n \n \n(49,405\n )\n \n \n(159,978\n) \n \n \n78,569\n \n\n(Gain) loss upon convertible promissory notes conversion and redemption (3)\n \n \n-\n \n \n \n(11,724\n)\n \n \n(19,842\n)\n \n \n137,934\n \n\nFair value change on derivative liabilities (3)\n \n \n(957\n)\n \n \n85,576\n \n \n \n167,349\n \n \n \n553,856\n \n\n**Adjusted EBITDA**\n \n \n703,741\n \n \n \n434,918\n \n \n \n1,722,821\n \n \n \n(981,315\n)\n\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n\nWeighted average number of common shares outstanding\n \n \n28,591,293\n \n \n \n21,524,884\n \n \n \n27,304,317\n \n \n \n21,524,884\n \n\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n\n**Adjusted Loss per Share, Basic and Diluted**\n \n \n0.025\n \n \n \n0.020\n \n \n \n0.063\n \n \n \n(0.046\n)\n\n** **\n\n(1)\nShare based compensation is a non-cash item\n\n(2)\nThese items relate to financing transactions and therefore do not reflect the Company’s core operating activities\n\n(3)\nCertain amounts presented in the prior year period have been reclassified to conform to current period presentation.\n\n \n\n41\n\n \n\n \n\n*Net\nLoss*\n\n \n\nAs a result of the foregoing, the net loss attributable to common stockholders\nfor the fiscal year ended March 31, 2026 was $3.13 million compared to a net loss of $11.9 million during the fiscal year ended March\n31, 2025.\n\n \n\n*Translation\nAdjustment*\n\n \n\nTranslation\nadjustment for the fiscal year ended March 31, 2026 was a loss of $34 thousand compared to a gain of $113 thousand for the fiscal year\nended March 31, 2025. Translation adjustment was a gain of $8 thousand for the three months ended March 31, 2026, compared to a gain\nof $142 thousand for the three months ended March 31, 2025. This translation adjustment represents gains and losses that result from\nthe translation of currency in the financial statements from our functional currency of Canadian dollars to the reporting currency in\nU.S. dollars over the course of the reporting period.\n\n \n\n**Liquidity\nand Capital Resources**\n\n \n\nManagement\nhas previously noted the existence of substantial doubt about our ability to continue as a going concern. Additionally, our independent\nregistered public accounting firm included an explanatory paragraph in the report on our financial statements as of and for the years\nended March 31, 2026 and 2025, respectively, noting the existence of substantial doubt about our ability to continue as a going concern.\nOur existing cash deposits may not be sufficient to fund our operating expenses through at least twelve months from the date of this\nfiling. To continue to fund operations, we will need to secure additional funding through public or private equity or debt financings,\nthrough collaborations or partnerships with other companies or other sources. We may not be able to raise additional capital on terms\nacceptable to us, or at all. Any failure to raise capital when needed could compromise our ability to execute our business plan. If we\nare unable to raise additional funds, or if our anticipated operating results are not achieved, we believe planned expenditure may need\nto be reduced in order to extend the time period that existing resources can fund our operations. If we are unable to obtain the necessary\ncapital, it may have a material adverse effect on our operations and the development of our technology, or we may have to cease operations\naltogether.\n\n \n\nThe\ndevelopment and commercialization of our product offerings are subject to numerous uncertainties, and we could use our cash resources\nsooner than we expect. Additionally, the process of developing our products is costly, and the timing of progress can be subject to uncertainty;\nour ability to successfully transition to profitability may be dependent upon achieving further regulatory approvals and achieving a\nlevel of product sales adequate to support our cost structure. Though we are optimistic with respect to our revenue growth trajectory\nand our cost control initiatives, we cannot be certain that we will ever be profitable or generate positive cash flow from operating\nactivities.\n\n \n\nThe\nCompany is in commercialization mode, while continuing to pursue the development of its next generation COM product as well as new products\nthat are being developed.\n\n \n\nWe\ngenerally require cash to:\n\n \n\n \n●\npurchase\ndevices that will be placed in the field for pilot projects and to produce revenue,\n\n \n \n \n\n \n●\n\nlaunch\nsales initiatives,\n\n \n \n \n\n \n●\n\nfund\nour operations and working capital requirements,\n\n \n \n \n\n \n●\n\ndevelop\nand execute our product development and market introduction plans,\n\n \n \n \n\n \n●\n\nfund\nresearch and development efforts, and\n\n \n \n \n\n \n●\n\npay\nany expense obligations as they come due.\n\n \n\nThe\nCompany continues to be in the early stages of commercializing its products. It is concurrently in development mode, operating a\nresearch and development program in order to develop an ecosystem of medical technologies, and, where required or deemed advisable,\nobtain regulatory approvals for, and commercialize other proposed products. The Company launched its first commercial sales program\nas part of a limited market release, during the year ended March 31, 2019, using an experienced professional in-house sales team. A\nfull market release ensued during the year ended March 31, 2020. Management anticipates the Company will continue on its revenue\ngrowth trajectory and improve its liquidity through continued business development and after additional equity and debt\ncapitalization of the Company. The Company has incurred recurring losses from operations, and as at March 31, 2026, has an\naccumulated deficit of $142.5 million (2025: $139 million), the Company has a working capital deficit of $31.3 million (2025: $16.0\nmillion).\n\n \n\n42\n\n \n\n \n\nOn\nAugust 30, 2021 the Company completed an underwritten public offering of its common stock that concurrently facilitated its listing on\nthe Nasdaq Capital Market. On August 1, 2024, the Company received a notice from Nasdaq stating that Nasdaq has determined to delist\nthe Company’s shares of common stock on The Nasdaq Capital Market, effective at the open of business on August 5, 2024. Nasdaq\nreached its decision pursuant to Nasdaq Listing Rule 5550(b)(2) because the Company no longer complied with the minimum $35 million market\nvalue of listed securities. Following the suspension of trading on The Nasdaq Capital Market, the Company’s shares of common stock\nwere again listed on the OTCQB under the symbol “BTCY.”\n\n \n\nDuring the year ended March 31, 2026, the Company\ncontinued to fund its operations through a combination of debt financing arrangements and existing financing facilities.\n\n \n\nThe Company issued $1.395 million of unsecured convertible\npromissory notes to private investors. The notes bear interest at rates ranging from 10.0% to 12.0% and mature between nine and twenty-four\nmonths from issuance. The conversion features of these notes require the mutual consent of both the investor and the Company; accordingly,\nno derivative liability was recognized in connection with these conversion rights.\n\n \n\nDuring the year, the Company redeemed convertible\nnotes with a face value of $58,333 and accrued interest of $18,670 through a cash payment of $77,003. The Company recognized a gain of\n$19,842 related to the derecognition of the associated derivative liability.\n\n \n\nThe Company also continued to utilize its existing\ndebt facilities. During the year ended March 31, 2026, the Company made a scheduled principal repayment of $600,000 on its term loan facility\nwith SWK Funding LLC. As of March 31, 2026, the outstanding principal balance under the facility was $15.3 million.\n\n \n\nDuring fiscal 2026, 30 shares of Series B Convertible\nPreferred Stock, together with accrued dividends thereon, were converted into 2,506,020 shares of common stock. In addition, the Company\nredeemed 20 shares of Series B Convertible Preferred Stock.\n\n \n\nAs of March 31, 2026, the Company had cash and cash\nequivalents of $149,789 and continued to evaluate additional financing alternatives to support working capital requirements, product development\ninitiatives and future growth opportunities.\n\n \n\nDuring the fiscal year ended March 31, 2026, the Company raised additional\nfunding from private investors in the form of promissory notes and convertible promissory notes.\n\n \n\n43\n\n \n\n \n\nAdjusted EBITDA, which management uses as a measure for tracking free cashflow\nlevels, improved to $702 thousand for the quarter ended March 31, 2026, compared to $435 thousand in the comparative period of the prior\nfiscal year, representing an improvement of approximately 61.3%\n\n  \n\nThe\nCompany has developed and continues to pursue sources of funding that management believes will be sufficient to support the Company’s\noperating plan and alleviate any substantial doubt as to its ability to meet its obligations for at least a period of one year from the\ndate of these Condensed Consolidated Financial Statements.\n\n \n\nAs\nwe proceed with the commercialization of the Biocore and Biocare products and continue their development, we expect to continue to devote\nsignificant resources on capital expenditures, as well as research and development costs and operations, marketing and sales expenditures.\n\n \n\nBased\non the above facts and assumptions, we believe our existing cash, along with anticipated near-term financings, will be sufficient to\ncontinue to meet our needs for the next twelve months from the filing date of this report. However, we will need to seek additional debt\nor equity capital to respond to business opportunities and challenges, including our ongoing operating expenses, protecting our intellectual\nproperty, developing or acquiring new lines of business and enhancing our operating infrastructure. The terms of our future financing\nmay be dilutive to, or otherwise adversely affect, holders of our common stock. We may also seek additional funds through arrangements\nwith collaborators or other third parties. There can be no assurance we will be able to raise this additional capital on acceptable terms,\nor at all. If we are unable to obtain additional funding on a timely basis, we may be required to modify our operating plan and otherwise\ncurtail or slow the pace of development and commercialization of our proposed product lines.\n\n \n\nThe\nfollowing is a summary of cash flows for each of the periods set forth below.\n\n \n\n \n \n**For the Years Ended**\n \n\n \n \n**March 31,**\n \n\n \n \n**2026**\n \n \n**2025**\n \n\nNet cash used in operating activities\n \n$\n(718,955\n)\n \n$\n(2,380,177\n)\n\nNet cash used in investing activities\n \n \n-\n \n \n \n—\n \n\nNet cash provided by financing activities\n \n \n557,736\n \n \n \n1,929,259\n \n\nNet (decrease) increase in cash\n \n$\n(161,219\n)\n \n$\n(450,918\n)\n\n \n\n**Net\nCash Used in Operating Activities**\n\n \n\nDuring the fiscal year ended March 31, 2026, we used cash in operating\nactivities in the amount of $ 0.72 million compared to $2.4 million for the fiscal year ended March 31, 2025. For each of the fiscal years\nended March 31, 2026 and March 31, 2025, the cash used in operating activities was primarily due to selling expenses as well as research,\nproduct development, business development, marketing and general operations. The decrease in cash used reflects management’s concerted\neffort to contain costs while increasing revenues, on the path of achieving break-even.\n\n** **\n\n**Net\nCash Used in Investing Activities**\n\n \n\nNet\ncash used in investing activities was $nil and $nil in the fiscal years ended March 31, 2026 and March 31, 2025.\n\n \n\n**Net\nCash Provided by Financing Activities**\n\n \n\nNet cash provided by financing activities was $0.56 million for the fiscal\nyear ended March 31, 2026 compared to $1.9 million for the fiscal year ended March 31, 2025.\n\n \n\nFor the fiscal year ended March 31, 2026, the net cash provided by financing\nactivities was primarily due to a short term loan of $1.4 million, the proceeds of which were used to make a principal payment of $600\nthousand towards the Term Loan; the Company used cash to redeem $200 thousand of Series B preferred stock.\n\n \n\nFor\nthe fiscal year ended March 31, 2025, the cash provided by financing activities was primarily from proceeds in the issuance of Series\nB preferred stock, in the amount of $1.73 million. And Capitalization of interest of term loan of $0.5 million.\n\n \n\n44\n\n \n\n \n\n**Critical\nAccounting Policies**\n\n \n\nThe\nfinancial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“US\nGAAP”) and are expressed in United States Dollars. Significant accounting policies are summarized below:\n\n \n\n*Revenue\nRecognition*\n\n \n\nThe\nCompany adopted Accounting Standards Codification Topic 606, “Revenue from Contracts with Customers” (“ASC 606”)\non April 1, 2018. In accordance with ASC 606, revenue is recognized when promised goods or services are transferred to customers in an\namount that reflects the consideration to which the Company expects to be entitled in exchange for those goods or services by applying\nthe core principles – 1) identify the contract with a customer, 2) identify the performance obligations in the contract, 3) determine\nthe transaction price, 4) allocate the transaction price to performance obligations in the contract, and 5) recognize revenue as performance\nobligations are satisfied.\n\n \n\nThe\nBioflux mobile cardiac telemetry device, a wearable device, is worn by patients for a monitoring period up to 30 days. The cardiac data\nthat the device monitors and collects is curated and analyzed by the Company’s proprietary algorithms and then securely communicated\nto a remote monitoring facility for electronic reporting and conveyance to the patient’s prescribing physician or other certified\ncardiac medical professional. Revenues earned with respect to this device are comprised of device sales revenues and technology fee revenues\n(technology as a service). The device, together with its licensed software, is available for sale to the medical center or physician,\nwho is responsible for the delivery of clinical diagnosis and therapy. The remote monitoring, data collection and reporting services\nperformed by the technology culminate in a patient study that is generally billable when it is complete and is issued to the physician.\nIn order to recognize revenue, management considers whether or not the following criteria are met: persuasive evidence of a commercial\narrangement exists, and delivery has occurred or services have been rendered. For sales of devices, which are invoiced directly, additional\nrevenue recognition criteria include that the price is fixed and determinable and collectability is reasonably assured; for device sales\ncontracts with terms of more than one year, the Company recognizes any significant financing component as revenue over the contractual\nperiod using the effective interest method, and the associated interest income is reflected accordingly on the statement of operations\nand included in other income; for revenue that is earned based on customer usage of the proprietary software to render a patient’s\ncardiac study, the Company recognizes revenue when the study ends based on a fixed billing rate. Costs associated with providing the\nservices are recorded as the service is provided regardless of whether or when revenue is recognized.\n\n \n\nThe\nCompany may also earn service-related revenue from contracts with other counterparties with which it consults. This contract work is\nseparate and distinct from services provided to clinical customers, but may be with a reseller or other counterparties that are working\nto establish their operations in foreign jurisdictions or ancillary products or market segments in which the Company has expertise and\nmay eventually conduct business.\n\n \n\nThe\nCompany recognized the following forms of revenue for the fiscal years ended March 31, 2026 and 2025:\n\n \n\n  \n2026  \n2025 \n\n  \n$  \n$ \n\nTechnology fees \n 14,440,900  \n 12,591,036 \n\nDevice sales \n 1,557,339  \n 1,199,258 \n\n  \n 15,998,239  \n 13,790,294 \n\n \n\nThe\nCompany recognized the following forms of revenue for the three months ended March 31, 2026 and 2025:\n\n \n\n  \n2026  \n2025 \n\n  \n$  \n$ \n\nTechnology fees \n 3,921,333  \n 3,123,389 \n\nDevice sales \n 329,298  \n 579,208 \n\n  \n 4,250,631  \n 3,702,597 \n\n \n\n45\n\n \n\n \n\n*Inventory*\n\n \n\nInventory is stated at the lower of cost and net realizable value.\nCost is determined on a weighted average cost basis. Net realizable value, of our finished goods inventory is generally the selling price\nless normally predictable costs of disposal and transportation. The Company records write-downs of inventory that is obsolete or in excess\nof anticipated demand or market value based on consideration of product lifecycle stage, technology trends, product development plans\nand assumptions about future demand and market conditions. Actual demand may differ from forecasted demand, and such differences may have\na material effect on recorded inventory values. Inventory write-downs are charged to cost of revenue and establish a new cost basis for\nthe inventory.\n\n \n\n*Significant\naccounting estimates and assumptions*\n\n \n\nThe\npreparation of the consolidated financial statements requires the use of estimates and assumptions to be made in applying the accounting\npolicies that affect the reported amounts of assets, liabilities, revenue and expenses and the disclosure of contingent assets and liabilities.\nThe estimates and related assumptions are based on previous experiences and other factors considered reasonable under the circumstances,\nthe results of which form the basis for making the assumptions about the carrying values of assets and liabilities that are not readily\napparent from other sources.\n\n \n\nThe\nestimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognized in the period\nin which the estimate is revised if the revision affects only that period or in the period of the revision and future periods if the\nrevision affects both current and future periods.\n\n \n\nSignificant\naccounts that require estimates as the basis for determining the stated amounts include share-based compensation, impairment analysis\nand fair value of warrants, structured notes, convertible debt and conversion liabilities.\n\n \n\n●\nFair\nvalue of stock options\n\n \n\nThe\nCompany measures the cost of equity-settled transactions with employees by reference to the fair value of equity instruments at the date\nat which they are granted. Estimating fair value for share-based payments requires determining the most appropriate valuation model for\na grant of such instruments, which is dependent on the terms and conditions of the grant. The estimate also requires determining the\nmost appropriate inputs to the Black-Scholes option pricing model, including the expected life of the instrument, risk-free rate, volatility,\nand dividend yield.\n\n \n\n●\nFair\nvalue of warrants\n\n \n \n\n \nIn\ndetermining the fair value of the warrant issued for services and issue pursuant to financing transactions, the Company used the\nBlack-Scholes option pricing model with the following assumptions: volatility rate, risk-free rate, and the remaining expected life\nof the warrants that are classified under equity.\n\n \n\n●\nFair\nvalue of derivative liabilities\n\n \n\nIn\ndetermining the fair values of the derivative liabilities from the conversion and redemption features, the Company used valuation models\nwith the following assumptions: dividend yields, volatility, risk-free rate and the remaining expected life. Changes in those assumptions\nand inputs could in turn impact the fair value of the derivative liabilities and can have a material impact on the reported loss and\ncomprehensive loss for the applicable reporting period.\n\n \n\n●\nFunctional\ncurrency\n\n \n\nDetermining\nthe appropriate functional currencies for entities in the Company requires analysis of various factors, including the currencies and\ncountry-specific factors that mainly influence labor, materials, and other operating expenses.\n\n \n\n●\nUseful\nlife of property and equipment\n\n \n\nThe\nCompany employs significant estimates to determine the estimated useful lives of property and equipment, considering industry trends\nsuch as technological advancements, past experience, expected use and review of asset useful lives. The Company makes estimates when\ndetermining depreciation methods, depreciation rates and asset useful lives, which requires considering industry trends and company-specific\nfactors. The Company reviews depreciation methods, useful lives and residual values annually or when circumstances change and adjusts\nits depreciation methods and assumptions prospectively.\n\n \n\n46\n\n \n\n \n\n●\nProvisions\n\n \n\nProvisions\nare recognized when the Company has a present obligation, legal or constructive, as a result of a previous event, if it is probable that\nthe Company will be required to settle the obligation and a reliable estimate can be made of the obligation. The amount recognized is\nthe best estimate of the expenditure required to settle the present obligation at the end of the reporting period, taking into account\nthe risks and uncertainties surrounding the obligations. Provisions are reviewed at the end of each reporting period and adjusted to\nreflect the current best estimate of the expected future cash flows.\n\n \n\n●\nContingencies\n\n \n\nContingencies\ncan be either possible assets or possible liabilities arising from past events, which, by their nature, will be resolved only when one\nor more uncertain future events occur or fail to occur. The assessment of the existence and potential impact of contingencies inherently\ninvolves the exercise of significant judgment and the use of estimates regarding the outcome of future events.\n\n \n\n●\nInventory\nobsolescence\n\n \n\nInventories are stated at the lower of cost and net realizable value.\nNet realizable valueof our inventory, which is all purchased finished goods, is generally the selling price less normally predictable\ncosts of disposal and transportation. The Company estimates net realizable value as the amount at which inventories are expected to be\nsold, taking into consideration fluctuations in retail prices less estimated costs necessary to make the sale. Inventories are written\ndown to net realizable value when the cost of inventories is estimated to be unrecoverable due to obsolescence, damage, or declining selling\nprices.\n\n \n\n●\nIncome\nand other taxes\n\n \n\nThe\ncalculation of current and deferred income taxes requires the Company to make estimates and assumptions and to exercise judgment regarding\nthe carrying values of assets and liabilities which are subject to accounting estimates inherent in those balances, the interpretation\nof income tax legislation across various jurisdictions, expectations about future operating results, the timing of reversal of temporary\ndifferences and possible audits of income tax filings by the tax authorities. In addition, when the Company incurs losses for income\ntax purposes, it assesses the probability of taxable income being available in the future based on its budgeted forecasts. These forecasts\nare adjusted to take into account certain non-taxable income and expenses and specific rules on the use of unused credits and tax losses.\n\n \n\nWhen\nthe forecasts indicate that sufficient future taxable income will be available to deduct the temporary differences, a deferred tax asset\nis recognized for all deductible temporary differences. Changes or differences in underlying estimates or assumptions may result in changes\nto the current or deferred income tax balances on the consolidated statements of financial position, a charge or credit to income tax\nexpense included as part of net income (loss) and may result in cash payments or receipts. Judgment includes consideration of the Company’s\nfuture cash requirements in its tax jurisdictions. All income, capital and commodity tax filings are subject to audits and reassessments.\nChanges in interpretations or judgments may result in a change in the Company’s income, capital, or commodity tax provisions in\nthe future. The amount of such a change cannot be reasonably estimated.\n\n \n\n●\nIncremental\nborrowing rate for lease\n\n \n\nThe\ndetermination of the Company’s lease obligation and right-of-use asset depends on certain assumptions, which include the selection\nof the discount rate. The discount rate is set by reference to the Company’s incremental borrowing rate. Significant assumptions\nare required to be made when determining which borrowing rates to apply in this determination. Changes in the assumptions used may have\na significant effect on the Company’s consolidated financial statements.\n\n \n\n*Earnings\n(Loss) Per Share*\n\n \n\nThe\nCompany has adopted the Financial Accounting Standards Board’s (“FASB”) Accounting Standards Codification (“ASC”)\nTopic 260-10 which provides for calculation of “basic” and “diluted” earnings per share. Basic earnings per share\nincludes no dilution and is computed by dividing net income or loss available to common stockholders by the weighted average number of\ncommon shares outstanding for the period. Diluted earnings per share reflect the potential dilution of securities that could share in\nthe earnings of an entity. Diluted earnings per share exclude all potentially dilutive shares if their effect is anti-dilutive. There\nwere no potentially dilutive shares outstanding as at March 31, 2026 and 2025.\n\n \n\n47\n\n \n\n \n\n*Cash*\n\n \n\nCash\nincludes cash on hand and balances with banks.\n\n \n\n*Foreign\nCurrency Translation*\n\n \n\nThe\nfunctional currency of the Company’s Canadian-based subsidiary is the Canadian dollar and the US-based parent is the U.S. dollar.\nTransactions denominated in currencies other than the functional currency are translated into the functional currency at the exchange\nrates prevailing at the dates of the transaction. Monetary assets and liabilities denominated in foreign currencies are translated using\nthe exchange rate prevailing at the balance sheet date. Non-monetary assets and liabilities are translated using the historical rate\non the date of the transaction. All exchange gains or losses arising from translation of these foreign currency transactions are included\nin net income (loss) for the year. In translating the financial statements of the Company’s Canadian subsidiaries from their functional\ncurrency into the Company’s reporting currency of United States dollars, balance sheet accounts are translated using the closing\nexchange rate in effect at the balance sheet date and income and expense accounts are translated using an average exchange rate prevailing\nduring the reporting period. Adjustments resulting from the translation, if any, are included in cumulative other comprehensive income\n(loss) in stockholders’ deficiency. The Company has not, to the date of these consolidated financial statements, entered into derivative\ninstruments to offset the impact of foreign currency fluctuations.\n\n* *\n\n*Accounts\nReceivable*\n\n \n\nAccounts receivable consists of amounts due to the Company from medical\nfacilities, which receive reimbursement from institutions and third-party government and commercial payors and their related patients,\nas a result of the Company’s normal business activities. Accounts receivable is reported on the balance sheets net of an estimated\nallowance for expected credit losses. The Company establishes an allowance for expected credit losses for estimated uncollectible receivables\nbased on historical experience, assessment of specific risk, review of outstanding invoices, and various assumptions and estimates that\nare believed to be reasonable under the circumstances, and recognizes the provision as a component of selling, general and administrative\nexpenses. Uncollectible accounts are written off against the allowance after appropriate collection efforts have been exhausted and when\nit is deemed that a balance is uncollectible.\n\n \n\n*Fair\nValue of Financial Instruments*\n\n \n\nASC\n820 defines fair value, establishes a framework for measuring fair value and expands required disclosure about fair value measurements\nof assets and liabilities. ASC 820-10 defines fair value as the exchange price that would be received for an asset or paid to transfer\na liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between\nmarket participants on the measurement date. ASC 820-10 also establishes a fair value hierarchy, which requires an entity to maximize\nthe use of observable inputs and minimize the use of unobservable inputs when measuring fair value. The standard describes three levels\nof inputs that may be used to measure fair value:\n\n \n\n●\nLevel 1 – Valuation based on quoted market prices in active markets for identical assets or liabilities.\n\n \n\n●\nLevel 2 – Valuation based on quoted market prices for similar assets and liabilities in active markets.\n\n \n\n●\nLevel 3 – Valuation based on unobservable inputs that are supported by little or no market activity, therefore requiring management’s\nbest estimate of what market participants would use as fair value.\n\n \n\nIn\ninstances where the determination of the fair value measurement is based on inputs from different levels of the fair value hierarchy,\nthe level in the fair value hierarchy within which the entire fair value measurement falls is based on the lowest level input that is\nsignificant to the fair value measurement in its entirety. The Company’s assessment of the significance of a particular input to\nthe fair value measurement in its entirety requires judgment, and considers factors specific to the asset or liability.\n\n \n\nFair\nvalue estimates discussed herein are based upon certain market assumptions and pertinent information available to management. The respective\ncarrying value of certain on-balance-sheet financial instruments approximated their fair values due to the short-term nature of these\ninstruments or interest rates that are comparable to market rates. These financial instruments include cash, accounts receivable, deposits\nand other receivables, convertible promissory notes, and accounts payable and accrued liabilities. The Company’s cash and derivative\nliabilities, which are carried at fair values, are classified as a Level 1 and Level 3, respectively. The Company’s bank accounts\nare maintained with financial institutions of reputable credit, therefore, bear minimal credit risk.\n\n \n\n48\n\n \n\n \n\n*Property\nand Equipment*\n\n \n\nProperty\nand equipment are stated at cost less accumulated depreciation. Depreciation is computed using the straight-line method over the estimated\nuseful lives of the assets. Leasehold improvements are amortized over the shorter of the lease term or the estimated useful lives of\nthe assets. Maintenance and repairs are charged to expense as incurred, and improvements and betterments are capitalized. Depreciation\nof property and equipment is provided using the straight-line method for all assets with estimated lives as follow:\n\n \n\n \nOffice\nequipment\n5\nyears\n\n \nLeasehold\nimprovement\n5\nyears\n\n* *\n\n*Impairment\nfor Long-Lived Assets*\n\n \n\nThe\nCompany applies the provisions of ASC Topic 360, Property, Plant, and Equipment, which addresses financial accounting and reporting for\nthe impairment or disposal of long-lived assets. ASC 360 requires impairment losses to be recorded on long-lived assets, including right-of-use\nassets, used in operations when indicators of impairment are present and the undiscounted cash flows estimated to be generated by those\nassets are less than the assets’ carrying amounts. In that event, a loss is recognized based on the amount by which the carrying\namount exceeds the fair value of the long-lived assets. Loss on long-lived assets to be disposed of is determined in a similar manner,\nexcept that fair values are reduced for the cost of disposal. Based on its review at March 31, 2026 and 2025, the Company believes there\nwas no impairment of its long-lived assets.\n\n \n\n*Leases*\n\n \n\nOn\nApril 1, 2019, the Company adopted Accounting Standards Codification Topic 842, “Leases” (“ASC 842”) to replace\nexisting lease accounting guidance. This pronouncement is intended to provide enhanced transparency and comparability by requiring lessees\nto record right-of-use assets and corresponding lease liabilities on the balance sheet for most leases. Expenses associated with leases\nwill continue to be recognized in a manner like previous accounting guidance. The Company adopted ASC 842 utilizing the transition practical\nexpedient added by the Financial Accounting Standards Board (“FASB”), which eliminates the requirement that entities apply\nthe new lease standard to the comparative periods presented in the year of adoption.\n\n \n\nThe\nCompany is the lessee in a lease contract when the Company obtains the right to use the asset. Operating leases are included in the line\nitems right-of-use asset, lease obligation, current, and lease obligation, long-term in the consolidated balance sheet. Right-of-use\n(“ROU”) asset represents the Company’s right to use an underlying asset for the lease term and lease obligations represent\nthe Company’s obligations to make lease payments arising from the lease, both of which are recognized based on the present value\nof the future minimum lease payments over the lease term at the commencement date. Leases with a lease term of 12 months or less at inception\nare not recorded on the consolidated balance sheet and are expensed on a straight-line basis over the lease term in our consolidated\nstatement of income. The Company determines the lease term by agreement with lessor. As our lease does not provide an implicit interest\nrate, the Company uses the Company’s incremental borrowing rate based on the information available at commencement date in determining\nthe present value of future payments.\n\n \n\n*Income\nTaxes*\n\n \n\nThe\nCompany accounts for income taxes in accordance with ASC 740. The Company provides for Federal and Provincial income taxes payable, as\nwell as for those deferred because of the timing differences between reporting income and expenses for financial statement purposes versus\ntax purposes. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between\nthe carrying amount of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. Deferred\ntax assets and liabilities are measured using the enacted tax rates expected to apply to taxable income in the years in which those temporary\ndifferences are expected to be recoverable or settled. The effect of a change in tax rates is recognized as income or expense in the\nperiod of the change. A valuation allowance is established, when necessary, to reduce deferred income tax assets to the amount that is\nmore likely than not to be realized.\n\n \n\n*Research\nand Development*\n\n \n\nResearch\nand development costs, which relate primarily to product and software development, are charged to operations as incurred. Under certain\nresearch and development arrangements with third parties, the Company may be required to make payments that are contingent on the achievement\nof specific developmental, regulatory and/or commercial milestones. Before a product receives regulatory approval, milestone payments\nmade to third parties are expensed when the milestone is achieved**.**Milestone payments made to third parties after regulatory approval\nis received are capitalized and amortized over the estimated useful life of the approved product.\n\n \n\n49\n\n \n\n \n\n*Selling,\nGeneral and Administrative*\n\n \n\nSelling,\ngeneral and administrative expenses consist primarily of personnel-related costs including stock based compensation for personnel in\nfunctions not directly associated with research and development activities. Other significant costs include sales and marketing\ncosts, investor relation and legal costs relating to corporate matters, professional fees for consultants assisting with business\ndevelopment and financial matters, and office and administrative expenses.\n\n \n\n*Stock\nBased Compensation*\n\n \n\nThe\nCompany accounts for share-based payments in accordance with the provision of ASC 718, which requires that all share-based payments issued\nto acquire goods or services, including grants of employee stock options, be recognized in the statement of operations based on their\nfair values, net of estimated forfeitures. ASC 718 requires forfeitures to be estimated at the time of grant and revised, if necessary,\nin subsequent periods if actual forfeitures differ from those estimates. Compensation expense related to share-based awards is recognized\nover the requisite service period, which is generally the vesting period.\n\n \n\nThe\nCompany accounts for stock based compensation awards issued to non-employees for services, as prescribed by ASC 718-10, at either\nthe fair value of the services rendered or the instruments issued in exchange for such services, whichever is more readily\ndeterminable, using the guidelines in ASC 505-50. The Company issues compensatory shares for services including, but not limited to,\nexecutive, management, accounting, operations, corporate communication, financial and administrative consulting services.\n\n \n\n*Convertible\nNotes Payable and Derivative Instruments*\n\n \n\nThe\nCompany has adopted the provisions of ASU 2017-11 to account for the down round features of warrants issued with private placements effective\nas of April 1, 2017. In doing so, warrants with a down round feature previously treated as derivative liabilities in the consolidated\nbalance sheet and measured at fair value are henceforth treated as equity, with no adjustment for changes in fair value at each reporting\nperiod. Previously, the Company accounted for conversion options embedded in convertible notes in accordance with ASC 815. ASC 815 generally\nrequires companies to bifurcate conversion options embedded in convertible notes from their host instruments and to account for them\nas free-standing derivative financial instruments. ASC 815 provides for an exception to this rule when convertible notes, as host instruments,\nare deemed to be conventional, as defined by ASC 815-40. The Company accounts for convertible notes deemed conventional and conversion\noptions embedded in non-conventional convertible notes which qualify as equity under ASC 815, in accordance with the provisions of ASC\n470-20, which provides guidance on accounting for convertible securities with beneficial conversion features. Accordingly, the Company\nrecords, as a discount to convertible notes, the intrinsic value of such conversion options based upon the differences between the fair\nvalue of the underlying common stock at the commitment date of the note transaction and the effective conversion price embedded in the\nnote. Debt discounts under these arrangements are amortized over the term of the related debt.\n\n \n\n*Series\nB Convertible Preferred Stock*\n\n \n\nThe\nSeries B convertible preferred stock (“Series B Preferred Stock”) was accounted for as mezzanine equity and the embedded\nconversion and redemption features was accounted for as derivative liabilities with change in fair value at each reporting period end\ncharged to consolidated statement of operation in accordance with ASC 480 and ASC 815.\n\n \n\n*Preferred\nShare Redemption and Conversions*\n\n \n\nThe\nCompany accounted for preferred stock redemptions and conversions in accordance to ASU-260-10-S99. For Series A preferred stock redemptions,\nthe difference between the fair value of consideration transferred to the holders of the preferred stock and the carrying amount of the\npreferred stock is accounted as deemed dividend distribution and subtracted from net loss. For Series B preferred stock conversions,\nno gain or loss is recognized upon Series B preferred stock conversion except for the fair value adjustment for the conversion and redemption\nfeature derivative liabilities on the conversion date.\n\n \n\n*Recently\nIssued Accounting Pronouncements*\n\n \n\nRefer\nto “Note 3— Summary of Significant Accounting Policies” to our consolidated financial statements included in “Part\nII, Item 8 – Financial Statements and Supplementary Data” in this Annual Report for a discussion of recently issued accounting\npronouncements.\n\n \n\n50\n\n \n\n \n\n**Off\nBalance Sheet Arrangements**\n\n \n\nWe\nhave no off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition,\nchanges in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources."}