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spk08: Good day and welcome to Biotricity's fiscal second quarter 2022 financial results conference call. Today's conference is being recorded. At this time, I would like to turn the conference over to Mike Forney. Please go ahead, sir.
spk06: Good afternoon, everyone, and welcome to Biotricity's fiscal 2022 Q2 earnings conference call. As a reminder, Biotristi's quarter ended on September 30th, 2021, so all figures presented for this period will reflect that end date. Earlier today, we issued our fiscal 2022 Q2 results press release, which highlighted a number of financial results. A copy of the press release is available on the investor relations section of our website, and the completed financials will be posted on EDGAR. Before beginning our formal remarks, I'd like to remind listeners that today's discussion may contain forward-looking statements that reflect management's current views with respect to future events. Any such statements are subject to risks and uncertainties that could cause actual results to differ materially from those projected in these forward-looking statements. Biotricity does not undertake to update any forward-looking statements except as required. At this point, I'm pleased to turn the call over to Biotricity founder and CEO, Waqas Al-Siddiq. Please go ahead.
spk02: Waqas Al- Thank you, Mark. And thank you everybody for joining today. I welcome you guys to our second quarter fiscal 2022 phone call. The second quarter of our fiscal 2022, Mark, one of the most important milestones in the company's history with our uplift to the NASDAQ in August. Those of you who listened to my commentary before the opening bell, heard me describe our company in terms of a product timeline and as a journey and our vision. So I will be echoing those themes throughout today's call. Only about 50 companies uplist to NASDAQ every year, so that alone is a major achievement. The positive ramifications for bioelectricity from this event will resonate for years to come. Our journey to NASDAQ came after hard work, which we built our operation from concept to commercialization. No small feat for a small company in one of the most complex diagnostic markets in healthcare. For those of you who are new to the space, it is important to remember that cardiac disease is the number one killer in healthcare in every country in the world, and patients at cardiologist offices are typically lifelong in duration. We set out to build a complete solution that fills some of the current gaps in cardiac care, and we are well on our way to achieve that with the upcoming product releases. We began with cardiac diagnostics via our BioFlux product, which generates the majority of our sales today, but our vision is to follow individuals throughout the cardiac journey. Understanding where we are at on that journey essential to understanding why we are so excited about our future. And I would like to begin by describing our robust product pipeline. In terms of bioelectricity and what we started and what our focus was from the beginning, we felt that there was a gap in the marketplace in remote patient monitoring where patients are coming into these chronic conditions like cardiac disease and they are dealing with services and technologies in silos. And there's really no holistic view of the patient. And so at BioTricity, we built a platform and we applied that in the cardiac space. And our core product is BioFlux for the diagnostics, which is where the entry point in the journey begins. In terms of our product, it's being used by over 1,500 cardiologists across 23 states now. And our approach to delivering diagnostics is a recurring revenue model where we provide the technology to the doctors as opposed to an outsourced service, which is what the traditional approach to diagnostics was before our entry into the marketplace. And to contextualize that a little bit for all of you listeners, if a patient is walking into a cardiologist's office yesterday and they're having an issue or they have a problem, the cardiologist will give them a prescription and send them across the street. And then they get serviced by a service provider to perform the diagnostics and then they are returned back to the doctor and they get their results and the doctor will determine what is the next step in terms of their condition. In terms of our approach, we provide all the technology to the doctor so now they can prescribe and hook up the patient within the clinic. And so what this does is it cuts the number of steps for the patient it also streamlines the workflow but more importantly creates a revenue stream for the doctor and also in our approach creates a revenue stream for biotricity because we are delivering the technology as the technology as a service model so the doctor pays when they utilize the technology as opposed to making zero dollars by outsourcing it and so when we take that model and we apply that in the diagnostics we have gotten great adoption and so When you think of bioelectricity today, it's no longer a proof of concept story. It's about really an execution. So how do we successfully do what we've been doing successfully up until this time? So state that in a different way. How do we continue to sell and do what we've done in 23 states and 50 states? And that is what our next year and next two years is about, is about executing and continuing to do successfully what we've already done. On top of that is to layer on this idea of vertical growth which is execute on our product roadmap and follow this patient through that cardiac journey so let's dive and contextualize that as well what happens to a patient so patient walks in they're complaining of something they go on to diagnostics that's bioflux once they've been diagnosed they come back to the doctor and the doctor does a procedural intervention so you know pacemaker install ablation some sort of interventional procedure or the prescribe a therapeutic for the patient to take that will you know deal with their cardiac issues and help control them and now this patient goes into disease management and so they're in and out of this doctor's office every three months every six months for follow-up and checkups and if something is going outside of range then they go back to Diagnostics so Diagnostics becomes this tool you know, that's used once or twice a year on a patient. It's not used every month. It's not used on a regular basis. Once they've been diagnosed, the majority of the care that is delivered is really around disease management. And this is where we've provided a portfolio. We built a portfolio. that we are executing on, which is designed to track these patients through that entire cardiac journey. So you get diagnosed. The next step is how do you manage that patient? And that's about disease management. And disease management is enabling these individuals with devices that they can have at their home. Just as a diabetic has a glucometer, cardiac patients need tools to track their blood pressure, their medication, their sleep, their heart statistics, and engage with the physicians remotely through telemedicine And all of that is reimbursable. And again, our business model at BioTricity, like we've done at BioFlux, is going to be the same with all of these solutions, is to deliver the technologies to the doctor in one ecosystem. They deliver to the patient. They bill insurance. They collect the revenue stream based on usage. And we collect the revenue stream on usage. And this creates this idea of vertical growth. So we are selling into the existing ecosystem. ecosystem that we have, the existing cardiology customers that we have. So whereas up until today, we've been going around and we've been opening up new clinics and new states successfully with one core product, which is our diagnostics. Tomorrow, we will continue to do that, but with a suite of products. And the idea for us at Biotricity is to accelerate our growth and get better traction. What's also exciting for us is that with every product, we're doing two things. we are supporting our BioFlux and our diagnostic business because this is supplementary and enhancing because now we have a better view of the patient and if we see something in disease management, we can connect it back to saying and recommending to the physician that, hey, perhaps you need to look at diagnostics again to see what has changed so we can support the diagnostic program. But more importantly, we're also increasing our total addressable market. So today, Biotricity, we have one product we have a total addressable market of a billion dollars. Tomorrow, as we deliver disease management and telemedicine and cardiac management as an ecosystem, the total addressable market goes from a billion dollars to $30 billion and then to $50 billion. So the idea for us as a company is to create this vertical growth strategy through executing of a product portfolio to track these patients through their cardiac journey sold directly into the existing clinics whilst increasing this total addressable market. And so we're very excited about that, and that is our plan. And so over the next 12 to 18 months, we will have announcements around our execution on this product portfolio. We have already talked about and did a press release back in September 14th about our upcoming bio kit, which we expect is a product launch early next year. And that product is a suite of medical devices that connect into our ecosystem that allow tracking of a patient. And, you know, that tool now becomes a tool that is given to every patient that supplements diagnostics as opposed to a tool that they're only on once in a while or once a year. It's a personalized toolkit. And all of that is reimbursable. So that is what we are really excited about. And I think that over the next year and the next 18 months, as investors track, there are two things to look out for, right? Which is what I talked about earlier, this idea of continuing to execute what we've already been doing, right? Successfully expand from 23 states to 50 states in the United States, continuing to do what we've done up until now successfully. And that is And not to oversimplify, and that is something that we understand, we know how to do, and we know how to deliver on that as we have shown for 10 consecutive quarters of growth. Layered on top of that is this execution of a product portfolio for vertical growth. And as investors are watching this horizontal approach of expansion, they can then see the vertical growth which will come in as we execute on these product portfolios. We're very excited about where we are going, about executing our vision, about all of these things coming together into one ecosystem to drive a larger market opportunity for bioelectricity and accelerate our growth. And with that, I'm going to turn it over to my CFO.
spk07: Thanks, Rikas. We also extend a welcome and thank you to both our newly interested stakeholders as well as those among us who are longtime supporters of our company's vision who joined us on our call today. As Wacost mentioned, our crowning achievement during Q2 was our successful uplist of the NASDAQ capital market in late August and the concurrent recapitalization. So I will discuss the positive ramifications of those moves and their impact as we consider our financials. As a reminder, during the quarter, we completed an underwritten public offering of approximately 5.4 million shares for total gross proceeds of approximately $16 million before deducting underwriting discounts, commissions, and other offering expenses. We are really proud of the fundamental strength of our uplist offering, which was oversubscribed and priced at $3 per share, our target price, with no warrants. This is the kind of deal typically reserved for larger companies already listed on NASDAQ, so we were excited to welcome a new set of investors under such positive circumstances. I think that one thing that is often overlooked is our dedication to not just creating, but also maintaining shareholder value. And you can see that in our share count at this stage in our maturation as a company. We achieved our up list without a reverse split and are now on NASDAQ with a very modest 43 million shares outstanding. To retain value for our shareholders, we work very hard to maximize our capital resources to squeeze growth out of our operations without unnecessarily accessing the public markets. And that is a strategy we intend to maintain in the future. Our balance sheet is now at its strongest position in company history, giving us the resources for more than a full year of growth. As of quarter end, we had a record cash level of $11.7 million, a much stronger position than the less than half a million in cash on hand we had a year ago. In general, as we grow our revenue pipeline, our burn rate as a percentage of revenue shrinks, enabling us to stretch our dollars farther as we add additional revenue. To do this, we invest in a professional sales force. This allows us to manage our geographic expansion to create current growth while also being relentless in pursuing a strong R&D pipeline, keeping up a strong R&D program to lay the groundwork for future growth. Every quarter, we talk about the built-in growth characteristics of our strategic model. So Q2 2022 highlighted those growth attributes by another strong year-over-year revenue increase. But this quarter, also highlighted the resiliency of our model against unusual circumstances, which in Q2 came in the form of both figurative and actual headwinds. As we had forecast, we achieved solid triple-digit year-over-year revenue growth with $1.81 million in fiscal Q2 2022 revenue versus just under $750,000 in fiscal Q2 2021 revenue. This represents a 143% year over year increase, a continuation of our uninterrupted streak of triple digit year over year quarterly revenue growth since the inception of our revenue cycle. Given the circumstances, this was not an easy quarter to maintain triple digit growth. Q2 is often a quarter that shows some seasonality as many cardiologists go on vacation in the summer months, particularly August. leading to lower usage rates for our technology, and that is typical and expected. What wasn't expected was the surge in COVID. If you look at the start and finish dates for the quarter, which ran from July 1st to September 30th, they coincided with the rise in peak of the COVID Delta variant almost week for week. In the U.S., the Delta surge began around the 4th of July and peaked in mid-September, so that whole disruption fell inside of Q2. As a result, we experienced temporary COVID shutdowns in a number of southern states, particularly Texas, Arizona, Oklahoma, and Florida, as cardiologist offices deferred some procedures. Fortunately, cardiologists and patients who need diagnostic testing and treatment typically deal with clinic closures by deferring those to the weeks that follow clinic reopening, such that this is a temporary situation, and markets recoup that lost volume in the weeks and months that follow. When I say headwinds, I also mean literal headwinds. Hurricane Ida hit Louisiana on August 29th, right in the middle of our quarter, and was bracketed by tropical storms on either side, making this a very busy storm season across our southern and eastern markets, including New England. So COVID was compounded by climate to throw a lot at us in Q2. We still managed 2.5% sequential quarterly growth and great year-over-year growth and most importantly, are already returning to our traditionally higher growth rates. These types of speed bumps have always created pent-up demand for services in the past, as patients who have been forced to delay a visit to their cardiologist do not stop requiring medical attention, and eventually reschedule their visit to a specialist in the coming weeks or months. Our positive outlook is underpinned by the fact that we've made strong investment in the expansion of our sales force, particularly since July. we've opened up new territories and hired a significant number of new salespeople, which bodes very well for revenue growth in the coming quarters. Our gross margin in Q2 was 63%, and our cost of revenue of just under $700,000 only increased 10% compared to last year, despite a 143% increase in revenue. This is an area of focus for us as we scale and deal with the economics of supply chain challenges facing many manufacturers, of technology products that use computer chips in their technology. With an uplisting and equity deal in the quarter, we had a number of significant charges in Q2, which really muddied our results due to the one-time nature of these charges. Overall, our G&A spiked 119% to $5.7 million compared to $2.6 million in Q2 fiscal 2021. With multiple products in development, we also had elevated R&D expense, which totaled $625,626, 55% higher than the $402,000 R&D spending in the same period last year. With this combination of elevated costs, our total operating expenses rose to 111%, rose 111% to $6.3 million compared to $3 million in Q2 fiscal 2021. The result was that biotricity incurred a net loss of $10.7 million versus $3 million in the comparable period in fiscal 2021. However, this included a very large non-cash accretion charge of $5.2 million, representing 1,410%. That's $4.8 million increase over last year's accretion expense. The company also incurred significant NASDAQ listing fees and related charges, that were all one-time in nature, but necessary for the uplist process. Overall, this combination of one-time line items increased our comprehensive loss to about $11 million, a 240% increase over Q2 fiscal 2021. Because so many of these items were uplist-related, we expect to return to more normal expense figures in the next quarter. And to put it into perspective, adjusted net losses would have been $5.2 million, or $0.128 per share, after being normalized by removing the one-time impact of uplisting expenditures. This compares favorably to the $5.6 million loss and $0.156 per share loss in the immediately preceding quarter. Total assets of $14 million and net assets of $7.75 million set new company records, so we ended the quarter with the strongest balance sheet in our history. Although this was a busy quarter with a lot of one-time events, we refueled our growth engine with a well-placed capital infusion that will continue to support highly predictable trajectory into fiscal 2023. Our R&D efforts are well-planned at this point with relatively few unknowns. Some of them, like the FDA or certain market timing considerations, are unknown, but those unknowns, again, they're relatively few. Our recipe for success is well-set. and we now have sufficient funds to pursue our geographic expansion more aggressively. We expect to end this fiscal year at a $10 million annual run rate, but the real firepower begins when we have our biotray and monthly care lines launched as they run in parallel to our powerful bioflux growth. As a result, we are comfortable projecting triple-digit growth rates out as far as fiscal 2024. We have a technology pipeline that we believe will bring significant growth and results over the course of the next few years as Biotricity builds a multifaceted ecosystem that is intended to further penetrate and monetize a patient population that we've already touched with our cardiac technologies, but in a way that potentially follows them throughout the remaining lifetime to monitor and protect them and ensure they are provided with superior chronic care. Doing this within a recurring revenue business model is something we believe our investors truly appreciate and value. At this point, I will turn the call over to Akash for his closing comments.
spk02: Thank you, too. We still were able to do triple-digit growth, and we believe that triple-digit growth for the company is basically unstoppable at this point. And that is focused on just the BioFlux product. Everything else that we talked about on this call is really an add-on and will accelerate this approach, and this is what we're super excited about over the next 12 to 18 months. A couple of things that I would like to highlight, despite weather and COVID, we still managed to have a record quarter where our current trailing revenue is $5.75 million and on track for continued growth. Our Q2 revenue is $1.8 million, and that represented the 10th consecutive quarter of triple-digit year-over-year growth, with quarterly revenue increased over the last fiscal year of 143%. Currently, we have over 300 centers in 23 states and we hope to continue to increase this as we have deployed the capital that we raised through our listing by expanding our sales force. Most importantly, when you look at the company and what we look at in terms of the balance sheet that John has already mentioned in terms of the strength of our balance sheet and that is the strongest it's ever been in our corporate history, We are also positioned to execute on our vision and our growth plans. And most importantly, we have no plans to do any financing in the near future as we are well capitalized. The other fantastic thing that is a testament to the management team and the individuals over here at Biotricity is that our revenue run rate versus our well-controlled burn. So we are constantly managing burn in a very effective way. And so as our revenue run rate increases and we're managing our burn, we are actually making the financial picture of the company stronger because capital is deployed methodically and strategically with all of the functional departments within the company. The other thing that we are doing at Biotricity, and I think it's a testament to the company and how well managed it is, is how we deal with issues that arise that are unforeseen. So, for example, we talk about the weather issues and the COVID issues and still being able to grow, but the other issues that have happened are supply chain issues within the marketplace. As a company, we were able to deal with that because we saw these issues coming earlier than some of the other individuals and what we were able to do was we were able to increase our inventory on hand and so now we keep more inventory on hand to ensure that we fulfill our orders so we are insulated from any chip issues related to our growth plans because one of the things that we are seeing with other companies is that they were not able to adjust their supply chains quickly enough and so their growth plans have been hampered, not because they have a lack of capital or an inability to recruit or be able to do the team, but they simply don't have the equipment or the technology to deploy. We have already solved that issue. So our ability to grow is not going to be hampered by any shortages or any issues within the marketplace because we have already addressed that and dealt with that. And I think that that is a testament to how well managed the company is. So when you take a well-capitalized company alongside companies an execution plan, and a strategy that is built on 10 quarters of showing successful quarter-over-quarter growth, along with a spending and a control of burn, I think we are well-positioned to really, over the next year, execute in a way that investors will be very excited. On top of that, I would like to talk about some of the things in terms of our future and our plan and how we will take the capital that has come into the company and how we will deploy that. So, you know, of course that capital is primarily designed to expand our footprint and expand on our bioflux diagnostic program and create a presence from, you know, going from 23 states to a larger footprint. But one of the questions that come up is that how much of that capital is going to be used in terms of your product roadmap and your deployment, and is your R&D dollars going to increase? And one of the things that I have said in the past, and I will repeat here, is that we've been investing in technology and in product development over the last 18 months and 24 months. And so now our R&D budgets will not increase. They will be managed and the way they will increase will be aligned with how our revenue is increasing because we've already invested a lot of those dollars and those products and those technologies are not whiteboard concepts. They have already been developed and they are ready to actually launch. And so that is a great picture in terms of looking at how we will be able to execute over the next 18 months. And I think the other important carrot that investors should attach to is the fact that We are capitalized, but that capital is going to be utilized for facilitating growth as opposed to taking those dollars and investing it in more R&D where your cash burn actually gets out of control because you're focused on the next evolution. And in our case, the next evolution has already been built. It's now about executing and deploying and expanding our footprint. So I think that those two aspects are very exciting for investors, and it's really going to lead to this simultaneous vertical and horizontal growth. And we see that over the next 12 months, we're going to be adding these line items of vertical growth into our portfolio product portfolio. The ultimate goal for the company, and we're talking a little bit more further into our vision, the ultimate goal for us is really to collapse cardiac services within clinics and hospitals into one ecosystem, which is a bioelectricity ecosystem, so that doctors are using our ecosystem to not deliver just diagnostics, but diagnostics, disease management, remote management, telemedicine, and all of those services in one place. So that will simplify the workflow for them, create multiple revenue streams for them, but also create multiple revenue streams for us, but also create a big stickiness. People talk about the dynamics of healthcare, and Teladoc acquired a company called Livongo, and they paid 60 times earning. It was an $18 billion acquisition. And I bring this up because it's about understanding why Teladoc did that. So a lot of people were like, why did Teladoc buy Livongo? And the answer is because Teladoc did not have retention. They needed stickiness. They needed lifelong patients. They needed retention rates. Well, Livongo built an ecosystem of diabetic patients that were in disease management that they were that they are facilitating care management for. And so these patients are lifelong patients. And so when Teladoc acquires Livongo, they get this influx of retention rates, high retention rates, patients that are there. And then because they have the telemedicine, they can actually service these patients remotely. And so this is what we are doing for the cardiac landscape. And what we see over the next 18 months as we slowly and methodically execute and launch these other products is that we are already in an ecosystem where you have lifelong patients and patients that need and require a number of services for proper care. And we are starting the journey with them, but we are not alongside them throughout that entire journey. So as we execute all of that, we will create replicate what Livongo did for diabetes in the cardiac landscape. And that's what we are very excited about as a management team. That's what I'm very excited about is really bringing that vision to reality and to fruition. And I think the other, and so that is one of the key goals for the next 18 months is really working towards sales acceleration by creating, by two things, expanding our sales force and deploying the capital that we've raised in our recent equity race. while simultaneously executing on our product portfolio. And we have the capital to execute on all of that, and we don't foresee any capital needs for at least 12 months in terms of an equity raise for the company. And the other aspect of that, which I think is beneficial for investors and open market investors as well as institutional investors, is being NASDAQ listed and knowing that the company is well capitalized. we are in a position that investors can watch the company, track our progress, invest, and it opens it up, the company, to a much larger audience and a much larger shareholder base because you know that the company is in a position to execute on its roadmap and you can actually track that progress. So in terms of, you know, to summarize and to talk about, you know, where we are today, bioelectricity really is about executing today. We've invested in technology. We've shown diagnostic product efficacy. We've shown a business model that works. Now we have to continue to do what we've done successfully, and we need to augment that. And to further summarize, if you look carefully at the evolution of our product lines, it becomes very clear that we are developing best-in-class products for existing reimbursable diagnostic and monitoring needs that are common in every cardiology practice and hospital. And so I'm going to pause on that for one minute and reemphasize that. So everything that we are talking about is reimbursable. There's existing reimbursable, and it's a need that is required not only in our existing ecosystem, but in hospitals and clinics all across the country. And so what that does is Whenever you think about a new product, you think about, okay, what is the business model? We're going after areas where reimbursement exists. And what about cost of acquisition? Well, we've already spent the dollars to acquire our existing customers, so we're selling into the existing ecosystem. So that cost of acquisition has already been spent, so we are actually enhancing the lifetime value of our customers as opposed to incurring new cost of acquisitions. And our existing Salesforce does what they continue to do, which is open up new accounts. So our lifetime value goes up. Our cost of acquisition is the same that it has been. So it's not actually creating a new cost of acquisition because that is one thing that investors and people get concerned about is those two items. You're creating a new product. Is there a new cost of acquisition? Is it a different cost of acquisition because you're going after a new type of customer? And in this case, it's our existing customers, so no. And two, what is the business model? Is there reimbursement? Is there a difference? And again, something that we have solved. So we have a singular goal, which is to drive better care for doctors and patients that use our technology every day. We are on the cusp of rapidly changing from a single solution company to having a portfolio of solutions, followed by our evolution into a digital healthcare ecosystem provider. We have already begun this journey by developing solutions that connect our doctors into our telehealth systems. platforms to eventually create the largest virtual cardiac clinic. And what I mean by that is that we have one ecosystem, doctors and clinics and hospitals that are using our ecosystem. And as we integrate telehealth and as we integrate all of these from the back end, we will be able to offer this as a virtual cardiac service that patients who are coming into the ecosystem can actually consume through referrals and come into the ecosystem outside as opposed to purely delivering services through the clinics. So we're taking this a step further beyond this as well by combining AI with data and predictive capabilities to create better and faster analytics and data delivery with the next steps involved being more pervasive and better forms of patient monitoring and lifestyle management. And so what I mean by that is We are aligning AI with telehealth and all of these data ecosystems so that we can actually see what's going on with the patient so we can deliver faster data and that delivers faster care delivery. As these new capabilities launch, you will hear me using the term ecosystem more and more in my presentations. We are building a toolkit for cardiologists that can transform their patient care from periodic monitoring to a more complete system with holistic monitoring, all of which is reimbursable. giving doctors the ability to see and react to cardiac conditions at a level not previously possible. We envision biotracy becoming the largest complex cardiac cloud platform from diagnostics all the way to disease and lifestyle management. Through our efforts, we have the opportunity to build a great long-term business. But just as importantly, we have the ability to positively impact the lives of millions who live every day with cardiac disease. And at this point, I would like to open up the call for questions.
spk08: Thank you, sir. If you would like to ask a question, please signal by pressing star one on your telephone keypad if you're using a speakerphone please make sure your mute function is off to allow your signal to reach our equipment. A voice prompt on your phone line will indicate when your line is open, please state your name before posing your question again press star one to ask a question and we'll pause for just one moment to allow everyone an opportunity to signal.
spk09: And we'll take our first question. Oh, hello.
spk04: This is Alan Clay from Maxim. Congratulations on the quarter. On the chronic care business that you're rolling out, talk a little about how you think about what this opportunity is to yourself over time. And there's other companies that are pursuing chronic care. So why do you win? And then second, on BioTray, which the FDA is reviewing now, could you maybe, if there's any update on that? Thank you.
spk02: Thank you, Alan. Absolutely. So let's deal with the first part about chronic care. So our approach and how we think about chronic care and how do we think about it as a line item from a company perspective, So chronic care management, the entry point, as I talked about on my call, comes from BioFlux. So we diagnose the patient, we get a diagnosis, now they are essentially a chronic patient. And whenever they have an issue or they go outside of range, they end up back at diagnostics. So chronic care is a natural extension of what we're doing, except now we can track the patient on a monthly basis because it supplements. And so the way we think about it from a company perspective is that The doctor's already using our ecosystem for diagnostics, so it's an expansion, and it's going to allow us to penetrate deeper within the existing accounts. It's going to start small, but it's really about penetration rates. It's hard for me to really talk about what penetration rates we think we're going to get. I think that the size of our ecosystem is so big that even if we get small penetration, like you're talking 5%, 10%, it's a massive increase in terms of revenue because you're talking about $15 to $20 a month for the rest of the patient's life if they go into the care management system. And so when you're talking about 1,500 cardiologists, that's approximately 3 million patient lives that we have access to, and you talk 5% or 10% of them, you're talking about 150,000 to 300,000 patients that are in care management on a monthly basis. So the way I think about it is I think it's a massive opportunity. I think it's complementary in supplement to the bioflux diagnostics. It enhances our bioflux diagnostics, and bioflux enhances cardiac management. So, you know, the opportunity is exciting. I will, you know, like I said, it's hard for me to say exactly penetration rates and whatnot, but we are testing chronic care right now. And over the next couple quarters, we will be announcing data and updates, and so it'll be easier to understand and line it up. But I do believe that it's going to become eventually just as big, if not bigger, than our BioFlux business. The second part of your question, which was how do we differentiate from somebody else, and how do we work in comparison to some of the other people who are doing chronic care? Chronic care in cardiac really does not exist. It's, you know, Livongo did it in diabetes. In cardiac, there really is no provider. And so what you have is you have a bunch of people that are trying to collect a number of off-the-shelf devices, integrate them into some sort of software, and get them into a cardiologist's office. The BioFlux, which is a key product inside of the clinic, is the entry point, and there's very few players in real-time high-end diagnostics. And I bring this up because the two are really tied. So if you go to a cardiology clinic or a hospital or a multi-care group, you've got these nurses and these doctors logging into multiple systems. So they're using bioelectricity for diagnostics, they're using an EMR for patient management. If they have somebody for chronic care management, they're logging into another system. For remote patient monitoring, they're logging into a third system. And for telemedicine, they're logging into a fourth system. Since everything begins with diagnostics, our competitive advantage is actually bioflux, because everything is, and now the nurse is not switching between four systems, they're logging into one system, and they're delivering care, and they're delivering chronic care, they're delivering diagnostics, they're delivering telemedicine, everything from one ecosystem. And so the fact that we are doing diagnostics is our differentiator, because anybody else in chronic care has no diagnostics, and that is the differentiation. And your third question, which was about the BioTray, we have had communication with the FDA. We're talking to them probably next week as well. Everything is in order. It's obviously when there was that scare about Delta, there's some reprioritization in the FDA. They have to respond to us within, the clock was 180 days from the last time we communicated with them, so they have to respond to us before the end of the year. So we're still pretty confident on that. It's just things have, you know, the cycle at FDA, and then you've also got that whole issue of resources and whatnot that's going on around the country, and it's impacted the FDA quite significantly because of reprioritization and all of that. So we're confident. We're in communication with them. They have to respond to us by the end of the year, and, you know, again, you'll hear updates as we get them.
spk04: Thank you. I'll jump back in the queue to follow up with questions. I'll let other people go now. Thank you.
spk09: And we'll take our next question. Hi.
spk05: This is Chet White. I just wanted to ask a little bit of color about this new concept you brought to bear on the concept of ecosystem. And I was wondering if you could give some perspective on, you mentioned that it's something that can also attract new patients to the doctors. And it's sounding a little bit more like a Doximity type of ecosystem with the doctors up in the cloud and with telemedicine and exposing these doctors to new patients. you know, while you did a pretty clean job in comparing yourself to the Livongo and diabetes versus cardiac, could you do something just to give us a flavor for this new concept of ecosystem and maybe compare it to some of the peers out there that you see and how you're different?
spk02: Yeah, sure. So, you know, I talked a little bit about, you know, why Teladoc acquired Livongo, right? Because it was about retention rate. And you know, doximity and these guys. So most of the telemedicines out there, so you talk about doximity, doctor on demand, and so on and so forth, these telemedicine providers are really dealing with urgent care one-off visits, right? So, you know, young family, they have a kid that has a fever, you have a rash, a skin issue or something like that, and you end up doing a video call and you have a one-off visit, right? but you're not going there regularly. Well, the moment you get into the chronic conditions, you actually need to deal with your specialist or your general practitioner or your internist on a regular basis. You have to run diagnostic tests, blood work, et cetera. And so what ends up happening is that you don't get that retention rate, right? Those patients, the moment they get into the chronic, they disappear. They go out of the ecosystem and they end up at a specialist center. And I bring this up because Where we fit in today is we fit into the specialty center. So we're sitting there in this cardiology network. They're using our product for diagnostics. Then they're going to be using it for chronic care and so on and so forth. But that's for existing patients within the practice. Well, the transformation, what I talk about the ecosystem to kind of link that is, well, we have all of this data and we have all of this understanding of what type of patients are in a specialty center. So what is the first thing that you do if your internist or your GP says, hey, Waqas, you have a cardiac issue. I'm going to refer you to a cardiologist. The first thing I'm going to do is I'm going to Google that cardiologist and I'm going to look at the reviews and what's going on with that cardiologist. If I'm on Doctor on Demand or on Teladoc and, again, I'm going towards the specialty requirement, I need to go and see a specialist, which means I need to go physically see someone, and I've got to run tests. Again, same thing. I'm going to Google what is going on with that doctor, what is their reviews and whatnot. Well, this is where we can capture those patients and hunt for them from a digital marketing perspective because based off of our ecosystem, we know, A, what patients are going to eventually come there, and then, B, we can invite them into that ecosystem. And what I mean by that is we can say, hey, You're looking for a cardiologist. Why don't you come to one of these five cardiologists that are within range of where you live? And we want to do that. Why? Because, A, it gets them into our ecosystem where we know that if they go to a cardiologist who's using our product, diagnostics is going to be done in BioFlux. If they get diagnosed, we know that they're going to go into chronic care. And if they're in chronic care, then we know that they are in the ecosystem and they will continue. Now, that, again, makes it even stickier in terms of our relationship with the cardiologist. And so that's where I say that in 18 months, you're going to see a big transformation of biotricity. There's a huge opportunity. And right now, we aren't even really focused on bringing people from the outside into the ecosystem because we're busy building the ecosystem. So I would say, and I talk about this before, and I talked about this when we did our NASDAQ listing, is that I see the company going through two transformations. The first transformation is the one that's going to happen over the next 12 to 18 months, which is all about growth, expansion of the product portfolio, and the development of the ecosystem. And then after that, it's going to be, okay, well, we've got all of this ecosystem. How do we bring people who we know are going to end up at a cardiologist somewhere, but into our ecosystem of cardiologists? Does that make sense?
spk05: Absolutely. It sounds kind of a potential linear growth pattern today and acceleration of that with more growth focus and growth capital. But this second phase sounds a little bit more kind of exponential in terms of a little bit more not traditional Salesforce door-by-door, but more broad-based marketing to the kind of on a B2C basis.
spk02: That's exactly right. And we understand cost of acquisitions. We've done experiments. So a lot of these things that we're talking about, we've really studied all of this stuff. I talked about earlier in the call where I said people are saying, okay, you're talking about all of this stuff. Is this whiteboard concepts? No, these are all developed ideas, developed technology. So when we are talking about these things, it's because we've actually analyzed. We've done some homework on it. We've studied it. We understand it. you know, how to bring users in, what are users doing, how are they looking for cardiologists, what is the pattern? So we study that, and that's where we align everything that we're building.
spk05: Got it. Excellent. And just one quick follow-up on that. Could you just comment briefly on the capital strategy going forward in terms of additional capital or additional leverage and things like that?
spk02: Yeah, absolutely. So as I sort of talked about earlier in the call, you know, We have the strongest balance sheet that we've ever had. We did a very good financing. I talked about how well the management team manages burn and focuses on growth. We have the capital that we need to execute on our strategy over the next year, year and a half and expand on our sales force. We've already started deploying that capital. For the foreseeable future, we have no intent on raising any kind of equity dollars. We have no interest in doing anything that's going to be dilutive to the company. And our focus is really taking the capital that we have brought in, deploying it, expanding, growing from here, and showing that growth. And then from there, when we have seen the fruits of that execution, and we've created value for the company, we will go through a future growth cycle beyond that timeline. So in the short term and in the foreseeable future, no change on the capital strategy, no plan on raising any capital. We are very happy with where we are, and we're very excited about our plans over the next 12 to 18 months.
spk05: And any concept of leverage in the balance sheet or debt?
spk02: So we may look at those concepts. Like I said, when people are thinking about capitalization strategy and how to deploy capital, we have a strong balance sheet. We don't want to put anything that kind of messes up that balance sheet or messes up with equity. If there are opportunities to – supplement our equity capital strategy with something like inventory financing and things like that, which allows us to free up capital that we use for inventory without messing with our equity or anything related to dilution, then of course we would explore those. But as I said, we are very happy with where we are at. We will of course always look to stretch the dollar And if we can free up some capital, like I said, in this particular context, like inventory financing where it's not touching dilution, it's not equity-linked whatsoever and very traditional old plain vanilla, then yes, we would do that because then we can take that capital and redeploy it towards further sales expansion.
spk09: Got it. Thank you very much. And moving on to our next caller.
spk03: Hi, this is Spencer Kirschman in for Kevin Deedy with HC Wainwright. Congrats on a good quarter given all the headwinds that were faced. I was just curious on your growth plan for the future in terms of your sales force right now, the headcount, and then any kind of color you can provide on plans to actually expand past the 23 current states.
spk02: Yeah, absolutely. So we actually don't really talk about our Salesforce size just because it's a dynamic thing and it's something that we don't disclose. But what I will say is we've already started expanding. So the moment we finished our capital release, we immediately started and we've been hiring over the last little while. In terms of expansion from 23 states – So the idea, of course, our dream and our focus is to get to 50 states, but we are not chasing states. We're more interested in talent. And what I mean by that is you may find a state that you really want to be in, but if you can't find the right type of talent, if you can't find an A-plus talent, then I'm not going to go and hire B talent just because I want to have that state. there are many states where we can put in multiple reps. For example, the New York metropolitan area, we have two reps there, but we could put five reps in that area, and it still may not be enough, versus going in and saying, hey, I really want to be in Washington State, so I'm going to force myself because I want that 50-state geography. So the plan is, for sure and expand that footprint as wide as possible, but with the focus on talent.
spk08: Thank you. There are no further questions at this time. Gentlemen, we'll turn the conference back over to you for any additional or closing remarks.
spk01: Thank you. I wanted just to thank everybody that joined us on the call today.
spk02: And to summarize, we are very excited over the next 18 months about what's going to come and this transformation that we're having as a company at Biotricity. And I want to leave you guys with a few very important thoughts, if I had to summarize everything in this call and everything that we spoke about. One is we are capitalized way better than we ever have had been in the future, in the past. And that positions us to execute on our plan. And I think for investors, institutional, open market, investors that came into the deal, you really need a company to be capitalized in order to track them and make sure that they can execute on what they are saying that they can do. And so we have that capital and we also have a track record of knowing how to successfully expand and apply our business model. And I don't mean to oversimplify that, but we have a product that works. It's used by 1,500 cardiologists over 23 states. So now the question is, how do we continue to do that successfully across 50 states? And that's by continuing to do what we have done and deploying the capital that we brought in effectively as we have shown that we can do. And the third piece, which we talked a lot about, is really this implementation of our product portfolio, because that's a layered on growth strategy. Everything we talk about, triple-digit growth this year, next year, and the year after, this is based on just the bioflux. So everything else we are talking about is a complementary, but it's an enhancement on our growth plans. It'll accelerate our growth. It's not a concept. It's already been developed. So every quarter over the next 12 to 18 months, you will see us working towards and executing that strategy. And so from an investment perspective, investors have really two things to watch out for, you know, taking capital and how we're deploying that capital and executing and growing on our base business and be how we are bringing this ecosystem alive and implementing that and selling into the existing accounts. And why that is so important is because that second part, if all we did was continue to do what we've done over the last two years and execute that product portfolio, we will do fantastic and investors will do fantastic from a growth trajectory perspective because the captivated audience and the customer base that we already have, it's already there, it exists, and we're selling into it. So we've already, you know, I talked about it earlier, we've incurred that cost of acquisition, so now we're increasing the lifetime value. of those customers by selling into those accounts. So those are the closing remarks that I wanted to leave everybody with, and I think that it's important because when investors think about a company, it's always about do you have the capital to execute? Do you have a strategy that has proven itself? Yes, we do. Do you have a way to enhance it? We've got a product portfolio. And then how are you going to launch that product portfolio, and do you have a business model for it? And as we've said before, and we've said on multiple calls, Everything that we do at Biotricity is a recurring revenue model in the healthcare space aligned with reimbursement. We do not put something out into the market. We do not look at something from a product perspective that doesn't line up with reimbursement and with physician economics. So with that, I want to thank everybody. We are super excited. We're so glad that you joined us today. We're so glad that you've taken an interest in our story.
spk01: We hope to continue to wow you over the quarters to come.
spk08: Thank you, sir. That does conclude today's conference. We thank you for your participation. You may now disconnect.
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