Executive Summary

FY17 ended with net revenue of $1.86M (down 12.3% YoY) and net loss of $0.41M (improved from $0.76M loss), driven by affiliate churn (San Antonio exit), hurricane disruptions in Houston, and lower Tyler case volume; gross margin improved to 70% from 68% YoY .
Q4 2017 implied revenue was $0.36M and gross margin ~70%; operating expenses stepped up in Q4 as the company invested in affiliate expansion and commercialization of Quad Video Halo (QVH) .
Management highlighted 780 QVH-documented procedures in 2017, four QVH systems in operation, and continued affiliate expansion (Houston, Odessa, Tyler, and New Mexico), while citing Hurricane Harvey as a major revenue headwind in Houston .
No numeric guidance or Wall Street consensus was available; near-term catalysts are affiliate roll-out and procedure volumes; risks include funding (line of credit due Aug-2018) and regional concentration exposure .

What Went Well and What Went Wrong

What Went Well
- Gross margin improved to 70% for FY17 (vs 68% FY16), reflecting efficiency and mix; annual non-cash charges declined materially ($310k vs $789k) aiding reported losses .
- Commercial progress on QVH: 4 systems in operation, 780 procedures in 2017; sale of one QVH unit recognized in Q3’17 .
- Management message: “Fiscal 2017 marked a year of substantial progress in our commercialization efforts and our national affiliate expansion plans for Quad Video Halo” — Dr. Donovan .
What Went Wrong
- Revenue contraction: FY17 net revenue fell to $1.86M from $2.12M; Tyler case volume down and San Antonio affiliate exited; Houston operations were disrupted by Hurricane Harvey (office closed 2 weeks; partial operations for 2 months) .
- Operating cash flow swung from +$0.20M in 2016 to -$0.15M in 2017, primarily on higher receivables and inventory build (QVH) .
- Going concern and funding: $1.325M drawn on the Wells Fargo revolver (LIBOR+2%) and $225k director note due in 2018; management acknowledged financing needs to support expansion .

Financial Results

Quarterly progression (3M periods; oldest → newest)

Metric	Q2 2017	Q3 2017	Q4 2017 (implied)
Net Revenue ($)	426,064	565,202	363,186 (FY $1,855,615 − 9M $1,492,429)
Cost of Providing Services ($)	140,583	165,350	109,032 (FY $571,769 − 9M $462,737)
Gross Profit ($)	285,481	399,852	254,154 (Rev−Cost)
Gross Margin (%)	67.0% (285,481/426,064)	70.8% (399,852/565,202)	70.0% (254,154/363,186)
R&D ($)	12,203	0	3,485 (FY $15,688 − 9M $12,203)
Op. Gen. & Admin. ($)	417,467	378,063	447,159 (FY $1,624,717 − 9M $1,177,558)
Operating Income (Loss) ($)	(144,189)	21,789	(196,490) (Gross−R&D−OpEx)
Other Income ($)	2,229	666	1,244 (FY $6,357 − 9M $5,113)
Interest Expense ($)	(13,569)	(14,866)	(14,225) (FY $55,722 − 9M $41,497)
Net Income (Loss) ($)	(155,529)	7,589	(208,595) (FY $405,924 − 9M $197,329)
EPS (Basic/Diluted) ($)	(0.01)	0.00	n/a (not separately disclosed)

Annual comparison

Metric	FY 2016	FY 2017
Net Revenue ($)	2,117,078	1,855,615
Cost of Providing Services ($)	689,101	571,769
Gross Profit ($)	1,427,977	1,283,846
Gross Margin (%)	67.4% (1,427,977/2,117,078)	69.2% (1,283,846/1,855,615) and stated “70% in 2017”
Operating, G&A ($)	2,087,266	1,624,717
R&D ($)	45,661	15,688
Other Income ($)	7,057	6,357
Interest Expense ($)	(58,052)	(55,722)
Net Income (Loss) ($)	(755,945)	(405,924)
EPS (Basic/Diluted) ($)	(0.04)	(0.02)

KPIs and operating metrics

KPI	FY 2016	FY 2017
Collections ($)	2,378,793	1,799,201
Cumulative Collections Since Inception ($)	n/a	17,900,000
Non-cash Charges ($)	789,135	309,991
QVH Systems in Operation (units)	n/a	4
Procedures Conducted (count)	n/a	780
Cash from Operations ($)	202,614	(149,806)

Segment breakdown: not applicable; operations discussed by affiliate geography in MD&A without formal segment reporting .

Guidance Changes

No formal quantitative guidance was provided for revenue, margins, OpEx, or tax; management expressed qualitative optimism on commercial progress and affiliate expansion without numeric targets .

Metric	Period	Previous Guidance	Current Guidance	Change
n/a	n/a	n/a	n/a	n/a

Earnings Call Themes & Trends

Note: A Q4/FY17 call was held on Mar 29, 2018, but no transcript was available. Themes below synthesize management disclosures across the Q2 press release, Q3 10-Q, and FY17 8-K.

Topic	Previous Mentions (Q2 2017)	Previous Mentions (Q3 2017)	Current Period (Q4/FY17)	Trend
Affiliate expansion	Plan to expand core funding through affiliates; new COO to drive national roll-out	Active affiliates in Houston, Tyler, Odessa; Lubbock referring to Odessa	Affiliates in Houston, Odessa, Tyler, and New Mexico; focus on entering new states	Improving execution/footprint
QVH commercialization	COO appointed; expected QVH sales ahead	One QVH unit sold in Q3; continued refinement/marketing	4 systems operating; 780 procedures in 2017; positive satisfaction feedback	Building traction
Macro/weather impact	—	—	Hurricane Harvey materially disrupted Houston operations for ~2 months	One-time headwind
Financial discipline	—	Cost controls lowered service cost and OpEx YoY in 9M	Gross margin up to 70%; non-cash charges reduced; OpEx down YoY	Margin improvement
Funding & liquidity	—	Line of credit amended to $1.75M cap; due 8/31/2018	$1.325M drawn on revolver; $225k note due Aug 2018; exploring financing	Funding still required

Management Commentary

“Fiscal 2017 marked a year of substantial progress in our commercialization efforts and our national affiliate expansion plans for Quad Video Halo” — Dr. William Donovan, Chairman & CEO .
“We concluded the year with four Quad Video Halo systems in operation and 780 procedures conducted in 2017… the level of satisfaction among doctors and patients continue to support and validate our entire business model” .
On expansion: “We have affiliate programs in Houston, Odessa, Tyler, and one in New Mexico… focusing our efforts on expanding our footprint by entering new states” .
On headwinds: “One of the major causes of the lower revenues was Hurricane Harvey… Our office in Houston was closed for 2 full weeks and was only partially open for the next 2 months” .
On going forward: “We continue to be optimistic by our commercial progress… encouraged by the opportunities in our target markets” .

Q&A Highlights

A Q4/FY17 investor call was held on Mar 29, 2018; a transcript was not available in the document set. No Q&A details can be provided from primary sources .

Estimates Context

Consensus estimates via S&P Global could not be retrieved for BTTC/SPIN for Q2–Q4 2017 due to access limits; treat consensus as unavailable. As such, no beat/miss comparisons to Street numbers can be made for the quarter.
Given micro-cap OTC coverage and lack of disclosed guidance, investor expectations likely hinged on qualitative expansion progress and trajectory in gross margin and cash generation .

Key Takeaways for Investors

Near-term: The revenue base reset lower in FY17 from affiliate churn and Harvey, but Q3 showed profitability on lower OpEx; Q4 softness reflects storm impact and seasonality. Watch procedure counts and affiliate additions in early 2018 for inflection confirmation .
Medium-term: Gross margin at ~70% with scope for operating leverage if volumes scale through affiliates and QVH commercialization; reduced non-cash charges are a tailwind to reported losses .
Funding risk: Revolver maturity (Aug-2018) and director note ($225k) necessitate either higher collections or refinancing; management indicated pursuit of additional financing to support expansion .
Execution focus: Affiliate expansion outside Texas (New Mexico added) is key to diversify hurricane/regional risk and drive procedure growth; monitor further state entries and QVH unit placements .
No guidance/coverage: Lack of numeric guidance and thin Street coverage elevates event risk around updates; narrative catalysts include affiliate signings, QVH sales, and cash collections progress .
Risk/reward: Operational improvements (margin, OpEx) vs. liquidity and receivable collection timing; concentrated geography amplifies exogenous risk (e.g., weather) .

Sources and Additional Documents Read

FY2017 results 8-K and press release (Q4/FY17): includes financial highlights, hurricane impact, and call details .
FY2017 10-K: full financial statements, MD&A, liquidity, and risk factors .
Q3 2017 10-Q: quarterly P&L, QVH sale, affiliate status, and liquidity .
Q2 2017 8-K press release and Q2 2017 10-Q: P&L and COO appointment (expansion emphasis) .

Estimates note: Consensus estimates were not retrievable from S&P Global for the covered periods; comparisons to Street expectations are therefore unavailable.

Bitech Technologies Corp (BTTC)·Q4 2017 Earnings Summary