Executive Summary

Q3 2018 revenue was $0.562M, essentially flat year over year (-0.6%), and down sequentially from Q2 ($0.605M); gross profit fell to $0.352M as gross margin compressed versus both Q2 and Q3’17, yielding a net loss of $0.054M (vs. $0.023M profit in Q2, and $0.008M profit in Q3’17) .
Management highlighted the launch of Quad Video Halo (QVH) SaaS/HaaS subscriptions: $22,935 was recorded as deferred revenue in Q3, with recognition to begin Oct 1 (Q4), and two additional clinics signed—creating a new recurring revenue stream into Q4 2018 and beyond .
Operations benefited from higher case volumes at newer sites (Las Cruces, NM; Odessa, TX), but expenses rose (notably bad debt), and interest costs persisted as the company extended its Wells Fargo revolver (LIBOR+2%, $1.49M drawn at 9/30) to Aug 31, 2019 .
No formal financial guidance or Wall Street consensus estimates were available; focus near term is on Q4 revenue lift from QVH subscriptions and continued collections, with a going‑concern emphasis until liquidity/collections strengthen .

What Went Well and What Went Wrong

What Went Well
- QVH monetization starts in Q4: “we have recorded $22,935 in deferred revenue… deposit is for one of the SaaS and HaaS subscription agreements… deferred revenue will start being recognized on October 1 resulting in fourth quarter QVH revenue” .
- Network momentum: management reported “two additional clinics” signed for QVH, with an announcement planned later in the quarter, expanding potential recurring subscription revenue .
- Nine‑month performance improved: YTD revenue up 21% to $1.801M, gross profit up 16% to $1.189M, and YTD net income positive $0.059M versus a loss in the prior year (signals trajectory despite a soft Q3) .
What Went Wrong
- Margin pressure and loss in Q3: gross profit fell and the quarter posted a net loss of $0.054M versus profits in Q2 and Q3’17, reflecting higher costs and expense items (including bad debt) .
- Higher bad debt expense: YTD and quarterly provisions increased (e.g., $115k bad debt in Q3), pressuring operating results despite revenue stability .
- Leadership turnover during the quarter: COO Jeffrey A. Cronk resigned (remained on the Board), adding execution risk amid commercialization efforts .

Financial Results

Metric (USD)	Q3 2017	Q2 2018	Q3 2018
Net Revenue	$565,202	$604,709	$561,706
Cost of Providing Services	$165,350	$207,608	$210,101
Gross Profit	$399,852	$397,101	$351,605
Operating, General & Administrative	$378,063	$358,619	$394,539
Operating Income (Loss)	$21,789	$38,482	$(42,934)
Net Income (Loss)	$7,589	$22,619	$(54,116)
Basic & Diluted EPS	$0.00	$0.00	$0.00
Weighted Avg Shares	20,161,317	20,215,882	20,222,775

Notes:

Management attributes revenue strength this year to higher case volumes at Las Cruces (NM) and Odessa (TX) affiliates; however, higher expense items (e.g., bad debt) and cost structure compressed profitability in Q3 .
No material QVH product/service revenue in Q3; the first QVH subscription revenue will be recognized starting Q4 2018 per deferred revenue recorded .

KPIs and Balance Sheet/Operational Metrics

KPI (USD unless noted)	Q1 2018	Q2 2018	Q3 2018
Affiliated Diagnostic Centers (count)	4 (Houston, Tyler, Odessa, Las Cruces)	4	4
Deferred Revenue (QVH)	$0	$0	$22,935
Cash	$57,911	$64,656	$47,588
Line of Credit (Outstanding)	$1,325,000	$1,375,000	$1,490,000
Notes Payable (Outstanding)	$200,000	$190,000	$90,000
Total Net A/R (Current + LT)	$3,508,222	$3,628,216	$3,628,737
Allowance for Doubtful Accounts	$143,415	$191,288	$51,209

Revenue Mix/Disclosure

Company disclosed no material QVH sales/services in Q3; service revenues remain the material portion (variable consideration methodology, 48% discount used) .

Guidance Changes

Metric	Period	Previous Guidance	Current Guidance	Change
QVH Subscription Revenue (SaaS/HaaS)	Q4 2018	None	Begin recognizing $22,935 deferred revenue starting Oct 1; additional clinics signed for QVH subscriptions	New revenue stream
Company-Level Financial Guidance	FY/Q4	None	None provided	Maintained (no formal guidance)

Earnings Call Themes & Trends

Note: No Q3 2018 earnings call transcript was available in filings. Company hosted a webinar; a replay was referenced but the transcript is not in the filing set. Themes below reflect disclosures across press releases and 10‑Qs.

Topic	Previous Mentions (Q1 & Q2 2018)	Current Period (Q3 2018)	Trend
QVH commercialization (SaaS/HaaS)	Anticipated recognizing QVH sales in remaining 2018; refining and marketing QVH 3.0	Deferred revenue recorded ($22,935) for QVH subscription; revenue recognition begins in Q4; two more clinics signed	Positive – commercialization transitions to revenue in Q4
Affiliate expansion/case volume	Added Las Cruces (NM) affiliate; higher case volume boosted revenue	Higher volumes at NM and Odessa referenced as drivers, though Q3 flat y/y	Stable to modestly positive (volume)
Liquidity/financing	Revolver balance $1.325M–$1.375M; LIBOR+2%	Revolver extended to 8/31/2019; $1.49M outstanding at Q3; LIBOR+2%; Board member guaranty, lien on guarantor assets	Stable access; cost persists
Bad debt/collections	Bad debt expense present; collections dynamics inherent to legal-case cycle	Q3 bad debt of $115k; recoveries on previously written‑off receivables helped somewhat	Mixed – elevated provision this quarter
Leadership/organization	—	COO resigned for personal reasons; remains on Board	Slight execution risk
Macro/weather	2017 hurricane disruption noted as prior headwind	No new macro issues disclosed	Neutral

Management Commentary

“While the third quarter was flat compared to the prior year with regards to revenues, we remain encouraged with our revenue growth and the overall financial and operating results during the first nine months of this year.”
“Although the third quarter did have a small loss, we continued to invest in our infrastructure and sales and marketing efforts for the Quad Video Halo.”
“We have recorded $22,935 in deferred revenue… for one of the SaaS and HaaS subscription agreements… The deferred revenue will start being recognized on October 1 resulting in fourth quarter QVH revenue…. [We] have signed up two additional clinics with an announcement to be made later this quarter.”

Q&A Highlights

No Q3 2018 earnings call transcript was filed; the company hosted a webinar and referenced a replay link, but a transcript is not available in filings to extract Q&A themes or guidance clarifications .

Estimates Context

Wall Street consensus estimates (S&P Global) for BTTC were not available for Q3 2018, and the company provided no formal guidance. As a result, comparisons vs. consensus are not presented here .

Key Takeaways for Investors

Q3 softness but YTD momentum: Despite a modest Q3 loss and margin compression, nine‑month revenue and gross profit growth with positive YTD net income suggest operational progress driven by new affiliate volumes .
New recurring revenue catalyst in Q4: QVH SaaS/HaaS subscriptions begin revenue recognition in Q4; additional clinics signed increase forward revenue visibility—watch Q4 run‑rate and churn/expansion .
Liquidity adequate but watch cash conversion: Revolver extended to Aug 2019 with $1.49M outstanding and cash at $0.048M—collections cadence and working‑capital discipline remain critical given the legal‑settlement driven model and going‑concern emphasis .
Cost and credit discipline needed: Elevated bad debt expense weighed on Q3; monitoring allowance levels, recoveries, and any policy changes around case selection/discounts is key for margins .
Execution focus on QVH and network: Commercial rollout, clinic onboarding, and product-market fit for QVH subscriptions will likely drive the narrative and multiples more than legacy service volumes near term .
Governance/leadership: COO departure introduces modest execution risk; continuity on the Board mitigates but investors should watch operating cadence through Q4/Q1 .

Citations

Q3 2018 8‑K press release and call details:
Q3 2018 Form 10‑Q (financials, MD&A, liquidity, going concern):
Q2 2018 8‑K press release and 10‑Q:
Q1 2018 8‑K press release and 10‑Q:
Line‑of‑credit/guaranty exhibits:
Leadership change 8‑K:

Notes on estimates: S&P Global consensus estimates were not available for BTTC for Q3 2018; the company provided no formal guidance in filings .

Bitech Technologies Corp (BTTC)·Q3 2018 Earnings Summary