10-K 1 form10-k.htm
false FY 0001498148 P3Y 0001498148 2023-03-01 2024-02-29 0001498148 2023-08-31 0001498148 2024-05-22 0001498148 2024-02-29 0001498148 2023-02-28 0001498148 us-gaap:SeriesGPreferredStockMember 2024-02-29 0001498148 us-gaap:SeriesGPreferredStockMember 2023-02-28 0001498148 us-gaap:SeriesEPreferredStockMember 2024-02-29 0001498148 us-gaap:SeriesEPreferredStockMember 2023-02-28 0001498148 us-gaap:SeriesFPreferredStockMember 2024-02-29 0001498148 us-gaap:SeriesFPreferredStockMember 2023-02-28 0001498148 us-gaap:SeriesBPreferredStockMember 2024-02-29 0001498148 us-gaap:SeriesBPreferredStockMember 2023-02-28 0001498148 2022-03-01 2023-02-28 0001498148 us-gaap:SeriesEPreferredStockMember us-gaap:PreferredStockMember 2022-02-28 0001498148 us-gaap:SeriesFPreferredStockMember us-gaap:PreferredStockMember 2022-02-28 0001498148 us-gaap:SeriesGPreferredStockMember us-gaap:PreferredStockMember 2022-02-28 0001498148 us-gaap:CommonStockMember 2022-02-28 0001498148 us-gaap:AdditionalPaidInCapitalMember 2022-02-28 0001498148 us-gaap:RetainedEarningsMember 2022-02-28 0001498148 2022-02-28 0001498148 us-gaap:SeriesEPreferredStockMember us-gaap:PreferredStockMember 2023-02-28 0001498148 us-gaap:SeriesFPreferredStockMember us-gaap:PreferredStockMember 2023-02-28 0001498148 us-gaap:SeriesGPreferredStockMember us-gaap:PreferredStockMember 2023-02-28 0001498148 us-gaap:CommonStockMember 2023-02-28 0001498148 us-gaap:AdditionalPaidInCapitalMember 2023-02-28 0001498148 us-gaap:RetainedEarningsMember 2023-02-28 0001498148 us-gaap:SeriesEPreferredStockMember us-gaap:PreferredStockMember 2022-03-01 2023-02-28 0001498148 us-gaap:SeriesFPreferredStockMember us-gaap:PreferredStockMember 2022-03-01 2023-02-28 0001498148 us-gaap:SeriesGPreferredStockMember us-gaap:PreferredStockMember 2022-03-01 2023-02-28 0001498148 us-gaap:CommonStockMember 2022-03-01 2023-02-28 0001498148 us-gaap:AdditionalPaidInCapitalMember 2022-03-01 2023-02-28 0001498148 us-gaap:RetainedEarningsMember 2022-03-01 2023-02-28 0001498148 us-gaap:SeriesEPreferredStockMember us-gaap:PreferredStockMember 2023-03-01 2024-02-29 0001498148 us-gaap:SeriesFPreferredStockMember us-gaap:PreferredStockMember 2023-03-01 2024-02-29 0001498148 us-gaap:SeriesGPreferredStockMember us-gaap:PreferredStockMember 2023-03-01 2024-02-29 0001498148 us-gaap:CommonStockMember 2023-03-01 2024-02-29 0001498148 us-gaap:AdditionalPaidInCapitalMember 2023-03-01 2024-02-29 0001498148 us-gaap:RetainedEarningsMember 2023-03-01 2024-02-29 0001498148 us-gaap:SeriesEPreferredStockMember us-gaap:PreferredStockMember 2024-02-29 0001498148 us-gaap:SeriesFPreferredStockMember us-gaap:PreferredStockMember 2024-02-29 0001498148 us-gaap:SeriesGPreferredStockMember us-gaap:PreferredStockMember 2024-02-29 0001498148 us-gaap:CommonStockMember 2024-02-29 0001498148 us-gaap:AdditionalPaidInCapitalMember 2024-02-29 0001498148 us-gaap:RetainedEarningsMember 2024-02-29 0001498148 AITX:RoboticAssistanceDevicesLLCMember 2017-07-25 0001498148 AITX:RoboticAssistanceDevicesLLCMember us-gaap:SeriesEPreferredStockMember 2017-08-27 2017-08-28 0001498148 AITX:RoboticAssistanceDevicesLLCMember us-gaap:SeriesFPreferredStockMember 2017-08-27 2017-08-28 0001498148 us-gaap:CommonStockMember AITX:EquityFinancingAgreementMember 2023-03-01 2023-03-31 0001498148 srt:ControllerMember 2023-03-01 2024-02-29 0001498148 srt:ControllerMember 2024-02-29 0001498148 srt:ControllerMember 2022-03-01 2023-02-28 0001498148 srt:ControllerMember 2023-02-28 0001498148 us-gaap:AccountsReceivableMember us-gaap:CustomerConcentrationRiskMember AITX:TwoCustomerMember 2023-03-01 2024-02-29 0001498148 us-gaap:AccountsReceivableMember us-gaap:CustomerConcentrationRiskMember AITX:ThreeCustomerMember 2022-03-01 2023-02-28 0001498148 srt:MinimumMember 2024-02-29 0001498148 srt:MaximumMember 2024-02-29 0001498148 AITX:TwoCustomerMember 2024-02-29 0001498148 AITX:TwoCustomerMember 2023-02-28 0001498148 AITX:IncentiveCompensationPlanMember 2023-03-01 2024-02-29 0001498148 AITX:IncentiveCompensationPlanMember 2022-03-01 2023-02-28 0001498148 us-gaap:ComputerEquipmentMember 2024-02-29 0001498148 us-gaap:FurnitureAndFixturesMember 2024-02-29 0001498148 us-gaap:OfficeEquipmentMember 2024-02-29 0001498148 AITX:WarehouseEquipmentMember 2024-02-29 0001498148 AITX:DemoDevicesMember 2024-02-29 0001498148 us-gaap:VehiclesMember 2024-02-29 0001498148 us-gaap:LeaseholdImprovementsMember 2024-02-29 0001498148 us-gaap:FairValueInputsLevel1Member 2024-02-29 0001498148 us-gaap:FairValueInputsLevel2Member 2024-02-29 0001498148 us-gaap:FairValueInputsLevel3Member 2024-02-29 0001498148 us-gaap:FairValueInputsLevel1Member 2023-02-28 0001498148 us-gaap:FairValueInputsLevel2Member 2023-02-28 0001498148 us-gaap:FairValueInputsLevel3Member 2023-02-28 0001498148 AITX:SimpleAgreementForFutureEquityMember 2022-12-23 0001498148 AITX:RoboticAssistanceDevicesLLCMember 2023-03-01 2024-02-29 0001498148 srt:MinimumMember AITX:RoboticAssistanceDevicesLLCMember 2023-03-01 2024-02-29 0001498148 AITX:RoboticAssistanceDevicesLLCMember 2024-02-29 0001498148 AITX:RoboticAssistanceDevicesLLCMember 2022-03-01 2023-02-28 0001498148 AITX:RoboticAssistanceDevicesLLCMember 2023-02-28 0001498148 us-gaap:AutomobilesMember 2024-02-29 0001498148 us-gaap:AutomobilesMember 2023-02-28 0001498148 AITX:DemoDevicesMember 2023-02-28 0001498148 us-gaap:ToolsDiesAndMoldsMember 2024-02-29 0001498148 us-gaap:ToolsDiesAndMoldsMember 2023-02-28 0001498148 us-gaap:MachineryAndEquipmentMember 2024-02-29 0001498148 us-gaap:MachineryAndEquipmentMember 2023-02-28 0001498148 us-gaap:ComputerEquipmentMember 2023-02-28 0001498148 us-gaap:OfficeEquipmentMember 2023-02-28 0001498148 us-gaap:FurnitureAndFixturesMember 2023-02-28 0001498148 AITX:WarehouseEquipmentMember 2023-02-28 0001498148 us-gaap:LeaseholdImprovementsMember 2023-02-28 0001498148 AITX:InvestorsMember 2019-02-01 2019-02-01 0001498148 AITX:InvestorsMember 2020-02-28 2020-02-29 0001498148 AITX:InvestorsMember 2020-02-29 0001498148 AITX:InvestorOneMember 2019-05-08 2019-05-09 0001498148 AITX:InvestorOneMember 2020-02-28 2020-02-29 0001498148 AITX:InvestorTwoMember 2019-05-08 2019-05-09 0001498148 AITX:InvestorTwoMember 2020-02-28 2020-02-29 0001498148 us-gaap:InvestorMember 2023-03-01 2024-02-29 0001498148 us-gaap:InvestorMember 2019-11-18 0001498148 us-gaap:InvestorMember 2019-11-18 2019-11-18 0001498148 us-gaap:InvestorMember 2020-02-29 0001498148 us-gaap:InvestorMember 2019-12-30 2019-12-30 0001498148 us-gaap:InvestorMember 2020-04-21 2020-04-22 0001498148 us-gaap:InvestorMember 2020-06-29 2020-07-01 0001498148 AITX:InvestorFiveMember 2020-06-29 2020-07-01 0001498148 us-gaap:InvestorMember AITX:AgreementMember 2020-08-27 0001498148 us-gaap:InvestorMember AITX:AgreementOneMember 2020-08-27 0001498148 us-gaap:InvestorMember AITX:AgreementTwoMember 2020-08-27 0001498148 us-gaap:InvestorMember 2020-08-27 0001498148 us-gaap:InvestorMember 2020-08-26 2020-08-27 0001498148 AITX:InvestorSixMember 2020-08-27 0001498148 2021-03-01 0001498148 us-gaap:InvestorMember srt:MaximumMember 2021-03-01 2021-03-01 0001498148 us-gaap:InvestorMember srt:MinimumMember 2021-03-01 2021-03-01 0001498148 us-gaap:SeriesFPreferredStockMember 2021-03-01 0001498148 us-gaap:InvestorMember us-gaap:SeriesFPreferredStockMember 2021-03-01 2021-03-01 0001498148 us-gaap:InvestorMember us-gaap:SeriesFPreferredStockMember 2021-05-31 0001498148 us-gaap:InvestorMember us-gaap:SeriesFPreferredStockMember 2021-03-01 2021-05-31 0001498148 AITX:InvestorEightMember 2024-02-29 0001498148 AITX:InvestorEightMember 2023-02-28 0001498148 us-gaap:RelatedPartyMember 2024-02-29 0001498148 us-gaap:RelatedPartyMember 2023-02-28 0001498148 us-gaap:RelatedPartyMember 2023-03-01 2024-02-29 0001498148 us-gaap:RelatedPartyMember 2022-03-01 2023-02-28 0001498148 srt:ChiefExecutiveOfficerMember AITX:EmploymentAgreementMember 2023-03-01 2024-02-29 0001498148 srt:ChiefExecutiveOfficerMember 2024-01-01 2024-01-31 0001498148 srt:ChiefExecutiveOfficerMember AITX:EmploymentAgreementMember 2022-03-01 2023-02-28 0001498148 srt:ChiefExecutiveOfficerMember us-gaap:SeriesGPreferredStockMember 2023-02-28 0001498148 srt:ChiefExecutiveOfficerMember 2023-03-01 2024-02-29 0001498148 2023-12-01 2023-12-31 0001498148 srt:ChiefExecutiveOfficerMember 2022-03-01 2023-02-28 0001498148 AITX:RoboticAssistanceDevicesLLCMember us-gaap:SecuredDebtMember 2016-12-31 0001498148 AITX:RoboticAssistanceDevicesLLCMember us-gaap:SecuredDebtMember 2016-12-01 2016-12-31 0001498148 AITX:RoboticAssistanceDevicesLLCMember us-gaap:SecuredDebtMember 2017-11-30 0001498148 AITX:RoboticAssistanceDevicesLLCMember us-gaap:SecuredDebtMember 2017-11-01 2017-11-30 0001498148 2021-02-28 0001498148 AITX:RoboticAssistanceDevicesLLCMember us-gaap:SecuredDebtMember 2022-03-01 2023-02-28 0001498148 AITX:RoboticAssistanceDevicesLLCMember us-gaap:SecuredDebtMember 2023-02-28 0001498148 AITX:RoboticAssistanceDevicesLLCMember us-gaap:SecuredDebtMember 2022-02-28 0001498148 AITX:RoboticAssistanceDevicesLLCMember us-gaap:SecuredDebtMember 2020-02-29 2020-02-29 0001498148 AITX:RoboticAssistanceDevicesLLCMember us-gaap:SecuredDebtMember 2020-02-29 0001498148 AITX:RoboticAssistanceDevicesLLCMember us-gaap:SecuredDebtMember 2024-02-29 0001498148 AITX:PromissoryNotePayableOneMember 2023-03-01 2024-02-29 0001498148 AITX:PromissoryNotePayableOneMember 2024-02-29 0001498148 AITX:PromissoryNotePayableTwoMember 2023-03-01 2024-02-29 0001498148 AITX:PromissoryNotePayableTwoMember 2024-02-29 0001498148 AITX:PromissoryNotePayableThreeMember 2023-03-01 2024-02-29 0001498148 AITX:PromissoryNotePayableThreeMember 2024-02-29 0001498148 AITX:PromissoryNotePayableFourMember 2023-03-01 2024-02-29 0001498148 AITX:PromissoryNotePayableFourMember 2024-02-29 0001498148 AITX:PromissoryNotePayableFiveMember 2023-03-01 2024-02-29 0001498148 AITX:PromissoryNotePayableFiveMember 2024-02-29 0001498148 AITX:PromissoryNotePayableSixMember 2023-03-01 2024-02-29 0001498148 AITX:PromissoryNotePayableSixMember 2024-02-29 0001498148 AITX:PromissoryNotePayableSevenMember 2023-03-01 2024-02-29 0001498148 AITX:PromissoryNotePayableSevenMember 2024-02-29 0001498148 AITX:PromissoryNotePayableEightMember 2023-03-01 2024-02-29 0001498148 AITX:PromissoryNotePayableEightMember 2024-02-29 0001498148 AITX:PromissoryNotePayableNineMember 2023-03-01 2024-02-29 0001498148 AITX:PromissoryNotePayableNineMember 2024-02-29 0001498148 AITX:PromissoryNotePayableTenMember 2023-03-01 2024-02-29 0001498148 AITX:PromissoryNotePayableTenMember 2024-02-29 0001498148 AITX:PromissoryNotePayableElevenMember 2023-03-01 2024-02-29 0001498148 AITX:PromissoryNotePayableElevenMember 2024-02-29 0001498148 AITX:PromissoryNotePayableTwelveMember 2023-03-01 2024-02-29 0001498148 AITX:PromissoryNotePayableTwelveMember 2024-02-29 0001498148 AITX:PromissoryNotePayableThirteenMember 2023-03-01 2024-02-29 0001498148 AITX:PromissoryNotePayableThirteenMember 2024-02-29 0001498148 AITX:PromissoryNotePayableFourteenMember 2023-03-01 2024-02-29 0001498148 AITX:PromissoryNotePayableFourteenMember 2024-02-29 0001498148 AITX:PromissoryNotePayableFifteenMember 2023-03-01 2024-02-29 0001498148 AITX:PromissoryNotePayableFifteenMember 2024-02-29 0001498148 AITX:PromissoryNotePayableSixteenMember 2023-03-01 2024-02-29 0001498148 AITX:PromissoryNotePayableSixteenMember 2024-02-29 0001498148 AITX:PromissoryNotePayableSeventeenMember 2023-03-01 2024-02-29 0001498148 AITX:PromissoryNotePayableSeventeenMember 2024-02-29 0001498148 AITX:PromissoryNotePayableEighteenMember 2023-03-01 2024-02-29 0001498148 AITX:PromissoryNotePayableEighteenMember 2024-02-29 0001498148 AITX:PromissoryNotePayableNineteenMember 2023-03-01 2024-02-29 0001498148 AITX:PromissoryNotePayableNineteenMember 2024-02-29 0001498148 AITX:PromissoryNotePayableTwentyMember 2023-03-01 2024-02-29 0001498148 AITX:PromissoryNotePayableTwentyMember 2024-02-29 0001498148 AITX:PromissoryNotePayableTwentyOneMember 2023-03-01 2024-02-29 0001498148 AITX:PromissoryNotePayableTwentyOneMember 2024-02-29 0001498148 AITX:PromissoryNotePayableTwentyTwoMember 2023-03-01 2024-02-29 0001498148 AITX:PromissoryNotePayableTwentyTwoMember 2024-02-29 0001498148 AITX:PromissoryNotePayableTwentyThreeMember 2023-03-01 2024-02-29 0001498148 AITX:PromissoryNotePayableTwentyThreeMember 2024-02-29 0001498148 AITX:PromissoryNotePayableTwentyFourMember 2023-03-01 2024-02-29 0001498148 AITX:PromissoryNotePayableTwentyFourMember 2024-02-29 0001498148 AITX:PromissoryNotePayableTwentyFiveMember 2023-03-01 2024-02-29 0001498148 AITX:PromissoryNotePayableTwentyFiveMember 2024-02-29 0001498148 AITX:PromissoryNotePayableTwentySixMember 2023-03-01 2024-02-29 0001498148 AITX:PromissoryNotePayableTwentySixMember 2024-02-29 0001498148 AITX:PromissoryNotePayableTwentySevenMember 2023-03-01 2024-02-29 0001498148 AITX:PromissoryNotePayableTwentySevenMember 2024-02-29 0001498148 AITX:PromissoryNotePayableTwentyEightMember 2023-03-01 2024-02-29 0001498148 AITX:PromissoryNotePayableTwentyEightMember 2024-02-29 0001498148 AITX:PromissoryNotePayableTwentyNineMember 2023-03-01 2024-02-29 0001498148 AITX:PromissoryNotePayableTwentyNineMember 2024-02-29 0001498148 AITX:PromissoryNotePayableThirtyMember 2023-03-01 2024-02-29 0001498148 AITX:PromissoryNotePayableThirtyMember 2024-02-29 0001498148 AITX:PromissoryNotePayableTwoMember 2023-11-28 2023-11-28 0001498148 AITX:PromissoryNotePayableThreeMember 2023-09-01 2023-11-30 0001498148 AITX:PromissoryNotePayableThreeMember 2023-03-01 2023-11-30 0001498148 AITX:PromissoryNotePayableThreeMember 2023-11-28 2023-11-28 0001498148 AITX:PromissoryNotePayableSixMember 2023-11-28 2023-11-28 0001498148 AITX:PromissoryNotePayableSevenMember 2023-11-28 2023-11-28 0001498148 AITX:PromissoryNotePayableEightMember 2023-11-28 2023-11-28 0001498148 AITX:PromissoryNotePayableNineMember 2023-11-28 2023-11-28 0001498148 AITX:PromissoryNotePayableTenMember 2022-02-28 0001498148 AITX:PromissoryNotePayableTenMember 2021-03-01 2022-02-28 0001498148 AITX:PromissoryNotePayableElevenMember 2022-02-28 0001498148 AITX:PromissoryNotePayableThirtyOneMember 2022-02-28 0001498148 AITX:PromissoryNotePayableElevenMember 2021-03-01 2022-02-28 0001498148 AITX:PromissoryNotePayableTwelveMember 2022-02-28 0001498148 AITX:PromissoryNotePayableTwelveMember 2021-03-01 2022-02-28 0001498148 AITX:PromissoryNotePayableThirteenMember srt:DirectorMember us-gaap:SeriesFPreferredStockMember 2023-03-01 2024-02-29 0001498148 AITX:PromissoryNotePayableFifteenMember 2023-11-29 2023-11-29 0001498148 AITX:PromissoryNotePayableSeventeenMember 2023-11-29 2023-11-29 0001498148 AITX:PromissoryNotePayableEighteenMember 2023-11-29 2023-11-29 0001498148 AITX:PromissoryNotePayableNineteenMember 2023-11-29 2023-11-29 0001498148 AITX:PromissoryNotePayableTwentyMember AITX:LenderMember 2022-10-28 0001498148 AITX:PromissoryNotePayableTwentyMember 2022-10-28 0001498148 AITX:PromissoryNotePayableTwentyMember AITX:LenderMember us-gaap:WarrantMember 2022-10-28 0001498148 AITX:PromissoryNotePayableTwentyMember AITX:LenderMember us-gaap:SeriesFPreferredStockMember 2022-10-28 0001498148 AITX:PromissoryNotePayableTwentyMember 2022-10-26 2022-10-28 0001498148 AITX:PromissoryNotePayableTwentyMember AITX:SeriesFWarrantsMember AITX:OctoberThirtyOneTwentyThirtyThreeMember 2022-10-28 0001498148 AITX:PromissoryNotePayableTwentyOneMember 2022-10-28 0001498148 AITX:PromissoryNotePayableTwentyOneMember AITX:SeriesFPreferredshareWarrantsMember 2022-10-28 0001498148 AITX:PromissoryNotePayableTwentyOneMember AITX:SeriesFPreferredSharesMember 2022-10-26 2022-10-28 0001498148 AITX:PromissoryNotePayableTwentyTwoMember 2022-11-09 0001498148 AITX:PromissoryNotePayableTwentyTwoMember AITX:SeriesFPreferredshareWarrantsMember 2022-11-09 0001498148 AITX:PromissoryNotePayableTwentyThreeMember 2022-11-10 0001498148 AITX:PromissoryNotePayableTwentyThreeMember AITX:SeriesFPreferredshareWarrantsMember 2022-11-10 0001498148 AITX:PromissoryNotePayableTwentyFourMember 2022-11-15 0001498148 AITX:PromissoryNotePayableTwentyFourMember AITX:SeriesFPreferredshareWarrantsMember 2022-11-15 0001498148 AITX:PromissoryNotePayableTwentyFiveMember 2023-01-11 0001498148 AITX:PromissoryNotePayableTwentyFiveMember AITX:SeriesFPreferredshareWarrantsMember 2023-01-11 0001498148 AITX:PromissoryNotePayableTwentySixMember 2023-02-06 0001498148 AITX:PromissoryNotePayableTwentySixMember AITX:SeriesFPreferredshareWarrantsMember 2023-02-06 0001498148 AITX:PromissoryNotePayableTwentySevenMember 2023-04-05 0001498148 AITX:PromissoryNotePayableTwentySevenMember AITX:SeriesFPreferredshareWarrantsMember 2023-04-05 0001498148 AITX:PromissoryNotePayableTwentyEightMember 2023-04-20 0001498148 AITX:PromissoryNotePayableTwentyEightMember AITX:SeriesFPreferredshareWarrantsMember 2023-04-20 0001498148 AITX:PromissoryNotePayableTwentyNineMember 2023-05-11 0001498148 AITX:PromissoryNotePayableTwentyNineMember AITX:SeriesFPreferredshareWarrantsMember 2023-05-11 0001498148 AITX:PromissoryNotePayableThirtyMember 2023-10-27 0001498148 AITX:PromissoryNotePayableThirtyMember AITX:SeriesFPreferredshareWarrantsMember 2023-10-27 0001498148 AITX:PromissoryNotePayableThirtyOneMember AITX:LenderMember 2023-11-30 0001498148 AITX:PromissoryNotePayableThirtyOneMember AITX:LenderMember 2023-11-30 2023-11-30 0001498148 AITX:PromissoryNotePayableThirtyMember AITX:LenderMember 2023-11-30 2023-11-30 0001498148 AITX:PromissoryNotePayableThirtyMember AITX:LenderMember 2023-11-30 0001498148 us-gaap:PreferredStockMember 2024-02-29 0001498148 us-gaap:PreferredStockMember AITX:SeriesBConvertibleRedeemablePreferredStockMember 2024-02-29 0001498148 us-gaap:PreferredStockMember 2023-03-01 2024-02-29 0001498148 us-gaap:PreferredStockMember AITX:SeriesFConvertiblePreferredStockMember 2024-02-29 0001498148 us-gaap:PreferredStockMember AITX:SeriesBConvertibleRedeemablePreferredStockMember 2024-04-27 0001498148 us-gaap:PreferredStockMember us-gaap:SeriesFPreferredStockMember us-gaap:SubsequentEventMember 2024-04-30 0001498148 us-gaap:SeriesFPreferredStockMember AITX:LenderMember us-gaap:WarrantMember 2024-02-29 0001498148 us-gaap:SeriesFPreferredStockMember 2022-03-01 2023-02-28 0001498148 us-gaap:SeriesFPreferredStockMember AITX:LenderMember 2023-02-28 0001498148 AITX:UnissuedSeriesFPreferredStockMember 2023-03-01 2024-02-29 0001498148 AITX:UnissuedSeriesFPreferredStockMember 2022-10-28 0001498148 us-gaap:CommonStockMember 2022-07-07 0001498148 us-gaap:CommonStockMember 2022-07-08 0001498148 us-gaap:CommonStockMember 2023-03-18 0001498148 us-gaap:CommonStockMember 2023-03-19 0001498148 us-gaap:CommonStockMember 2023-08-29 0001498148 us-gaap:CommonStockMember 2023-08-30 0001498148 us-gaap:CommonStockMember 2024-03-21 0001498148 us-gaap:CommonStockMember 2024-03-22 0001498148 us-gaap:CommonStockMember AITX:PurchaseAgreementMember us-gaap:InvestorMember 2023-03-01 2024-02-29 0001498148 us-gaap:CommonStockMember AITX:PurchaseAgreementMember us-gaap:InvestorMember 2022-03-01 2023-02-28 0001498148 us-gaap:WarrantMember 2023-02-28 0001498148 us-gaap:WarrantMember 2022-03-01 2023-02-28 0001498148 us-gaap:CommonStockMember AITX:LenderMember 2023-02-28 0001498148 us-gaap:WarrantMember 2023-03-01 2024-02-29 0001498148 us-gaap:WarrantMember 2022-03-01 2023-02-28 0001498148 us-gaap:EmployeeStockOptionMember 2022-03-01 2023-02-28 0001498148 us-gaap:EmployeeStockOptionMember 2023-03-01 2024-02-29 0001498148 us-gaap:CommonStockMember AITX:PurchaseAgreementMember us-gaap:InvestorMember 2024-01-26 2024-01-27 0001498148 us-gaap:WarrantMember 2022-08-30 2022-08-30 0001498148 AITX:PromissoryNoteMember 2022-08-30 2022-08-30 0001498148 AITX:PromissoryNoteMember 2022-08-30 0001498148 2022-08-30 0001498148 2022-08-09 0001498148 AITX:WarrantOneMember 2022-08-09 0001498148 AITX:WarrantTwoMember 2022-08-09 0001498148 AITX:EmployeeStockOptionOneMember 2021-04-09 2021-04-09 0001498148 AITX:EmployeeStockOptionOneMember 2021-04-09 0001498148 AITX:EmployeeStockOptionTwoMember 2021-04-09 2021-04-09 0001498148 AITX:EmployeeStockOptionTwoMember 2021-04-09 0001498148 us-gaap:StockCompensationPlanMember 2023-03-01 2024-02-29 0001498148 AITX:TwentyTwentyOnePlanMember 2022-08-10 2022-08-11 0001498148 AITX:TwentyTwentyOnePlanMember 2021-04-14 0001498148 AITX:IncentivesCompensationPlanMember 2023-09-01 2023-09-01 0001498148 AITX:IncentivesCompensationPlanMember 2023-09-01 2023-09-01 0001498148 AITX:TwentyTwentyThreePlanMember 2023-02-28 2023-02-28 0001498148 AITX:TwentyTwentyTwoPlanMember 2023-02-28 2023-02-28 0001498148 AITX:TwentyTwentyTwoPlanMember 2023-03-01 2024-02-29 0001498148 AITX:TwentyTwentyOnePlanMember 2023-03-01 2024-02-29 0001498148 AITX:IncentivesCompensationPlanMember 2022-09-01 2022-09-01 0001498148 AITX:IncentivesCompensationPlanMember 2022-09-01 2022-09-01 0001498148 us-gaap:EmployeeStockOptionMember 2023-02-28 0001498148 us-gaap:StockCompensationPlanMember 2022-03-01 2023-02-28 0001498148 us-gaap:OptionMember 2022-03-01 2023-02-28 0001498148 AITX:SeriesFPreferredWarrantsMember 2023-02-28 0001498148 AITX:SeriesFPreferredWarrantsMember 2022-03-01 2023-02-28 0001498148 AITX:SeriesFPreferredWarrantsMember 2023-03-01 2024-02-29 0001498148 AITX:SeriesFPreferredWarrantsMember 2024-02-29 0001498148 2021-03-01 2022-02-28 0001498148 srt:MinimumMember us-gaap:MeasurementInputSharePriceMember 2022-08-09 0001498148 srt:MaximumMember us-gaap:MeasurementInputSharePriceMember 2022-08-09 0001498148 AITX:MeasurementInputCommonStockFairValueMember 2022-08-09 0001498148 us-gaap:MeasurementInputExpectedDividendRateMember 2022-08-09 0001498148 srt:MinimumMember us-gaap:MeasurementInputPriceVolatilityMember 2022-08-09 0001498148 srt:MaximumMember us-gaap:MeasurementInputPriceVolatilityMember 2022-08-09 0001498148 us-gaap:MeasurementInputRiskFreeInterestRateMember 2022-08-09 0001498148 us-gaap:MeasurementInputExpectedTermMember 2022-08-09 0001498148 us-gaap:WarrantMember 2022-08-09 2022-08-09 0001498148 us-gaap:EmployeeStockOptionMember 2024-02-29 0001498148 us-gaap:WarrantMember 2022-02-28 0001498148 us-gaap:WarrantMember 2023-03-01 2024-02-29 0001498148 us-gaap:WarrantMember 2024-02-29 0001498148 AITX:TenYearsLeaseAgreementMember 2021-03-09 2021-03-10 0001498148 AITX:FerndaleMichiganMember AITX:TenYearsLeaseAgreementMember 2021-03-09 2021-03-10 0001498148 AITX:FerndaleMichiganMember AITX:TenYearsLeaseAgreementMember 2021-03-10 0001498148 AITX:ThreeYearsLeaseAgreementMember 2021-09-29 2021-09-30 0001498148 AITX:SantaAnaCaliforniaMember AITX:TwoYearsLeaseAgreementMember 2022-01-27 2022-01-28 0001498148 AITX:SantaAnaCaliforniaMember AITX:TwoYearsLeaseAgreementMember 2022-01-28 0001498148 AITX:ThreeYearsLeaseAgreementMember 2024-02-04 2024-02-05 0001498148 AITX:ConvertibleClassFPreferredSharesMember 2023-03-01 2024-02-29 0001498148 AITX:ConvertibleClassFPreferredSharesMember 2022-03-01 2023-02-28 0001498148 us-gaap:EmployeeStockOptionMember 2023-03-01 2024-02-29 0001498148 us-gaap:EmployeeStockOptionMember 2022-03-01 2023-02-28 0001498148 AITX:ConvertibleSeriesFPreferredSharesMember 2023-03-01 2024-02-29 0001498148 AITX:ConvertibleSeriesFPreferredSharesMember 2022-03-01 2023-02-28 0001498148 us-gaap:SubsequentEventMember AITX:SharePurchaseAgreementMember 2024-03-01 2024-05-09 0001498148 us-gaap:SubsequentEventMember AITX:SharePurchaseAgreementMember 2024-03-12 0001498148 us-gaap:SubsequentEventMember AITX:SharePurchaseAgreementMember srt:MinimumMember 2024-03-12 0001498148 us-gaap:SubsequentEventMember AITX:SharePurchaseAgreementMember srt:MaximumMember 2024-03-12 0001498148 AITX:PromissoryNotePayableThirteenMember us-gaap:SubsequentEventMember 2024-03-07 2024-03-08 0001498148 AITX:PromissoryNotePayableThirteenMember us-gaap:SubsequentEventMember 2024-03-08 0001498148 AITX:SecuritiesPurchaseAgreementMember us-gaap:RedeemablePreferredStockMember us-gaap:SubsequentEventMember 2024-04-29 0001498148 AITX:SecuritiesPurchaseAgreementMember us-gaap:RedeemablePreferredStockMember us-gaap:SubsequentEventMember 2024-04-28 2024-04-29 0001498148 us-gaap:SubsequentEventMember 2024-05-14 0001498148 us-gaap:SubsequentEventMember 2024-05-15 0001498148 us-gaap:SubsequentEventMember AITX:SharePurchaseAgreementMember 2024-05-10 2024-05-23 iso4217:USD xbrli:shares iso4217:USD xbrli:shares xbrli:pure AITX:Integer

 

 

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

FORM 10-K

 

ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

 

For the fiscal year ended February 29, 2024

 

or

 

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

 

For the transition period from __________ to __________

 

Commission file number: 000-55079

 

ARTIFICIAL INTELLIGENCE TECHNOLOGY SOLUTIONS INC.

(Exact name of registrant as specified in its charter)

 

Nevada   27-2343603
(State or other jurisdiction of   (I.R.S. Employer
incorporation or organization)   Identification No.)

 

10800 Galaxie Avenue,
Ferndale, MI
  48220
(Address of principal executive offices)   (Zip Code)

 

Registrant’s telephone number, including area code: (877) 787-6268

 

Securities registered pursuant to Section 12(b) of the Act: None

 

Securities registered pursuant to section 12(g) of the Act:

 

Title of each class   Name of each exchange on which registered
Common stock, $0.00001 par value   OTC PINK

 

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.

 

Yes ☒ No

 

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act.

 

☐ Yes ☒ No

 

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

 

Yes ☐ No

 

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).

 

Yes ☐ No

 

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K (§ 229.405 of this chapter) is not contained herein, and will not be contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K.

 

 

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

 

  Large accelerated filer Accelerated filer
  Non-accelerated filer Smaller reporting company
    Emerging growth company

 

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.

 

 

If securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the registrant included in the filing reflect the correction of an error to previously issued financial statements. 

 

 

Indicate by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive-based compensation received by any of the registrant’s executive officers during the relevant recovery period pursuant to §240.10D-1(b). 

 

 

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act).

 

Yes No

 

The aggregate market value of the voting and non-voting common equity held by non-affiliates of the registrant as of August 31, 2023 based upon the closing price reported on such date was approximately $37,637,910. Shares of voting stock held by each officer and director and by each person who, as of August 31, 2023, may be deemed as have beneficially owned more than 10% of the outstanding voting stock have been excluded. This determination of affiliate status is not necessarily a conclusive determination of affiliate status for any other purpose.

 

As of May 22 , 2024, there were 10,318,917,383 shares of the registrant’s common stock issued and outstanding.

 

DOCUMENTS INCORPORATED BY REFERENCE

 

None.

 

 

 

  

 

 

Table of Contents

 

    Page
PART I  
     
Item 1. Business 1
     
Item 1A. Risk Factors 10
     
Item 1B. Unresolved Staff Comments 10
     
Item 2. Properties 10
     
Item 3. Legal Proceedings 10
     
Item 4. Mine Safety Disclosures 10
     
PART II  
     
Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities 10
     
Item 6. Selected Financial Data 28
     
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations 28
     
Item 7A. Quantitative and Qualitative Disclosures About Market Risk 36
     
Item 8. Financial Statements and Supplementary Data 36
     
Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosures 36
     
Item 9A. Controls and Procedures 36
     
Item 9B. Other Information 37
     
PART III  
     
Item 10. Directors, Executive Officers and Corporate Governance 38
     
Item 11. Executive Compensation 40
     
Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters 42
     
Item 13. Certain Relationships and Related Transactions, and Director Independence 43
     
Item 14. Principal Accounting Fees and Services 43
     
PART IV  
     
Item 15. Exhibits, Financial Statement Schedules 44
     
  Signatures 46

 

 ii

 

CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING INFORMATION

 

Certain statements in this report contain or may contain forward-looking statements. These statements, identified by words such as “plan”, “anticipate”, “believe”, “estimate”, “should”, “expect” and similar expressions include our expectations and objectives regarding our future financial position, operating results and business strategy. These statements are subject to known and unknown risks, uncertainties and other factors, which may cause actual results, performance, or achievements to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. These forward-looking statements were based on various factors and were derived utilizing numerous assumptions and other factors that could cause our actual results to differ materially from those in the forward-looking statements. These factors include, but are not limited to, our ability to secure suitable financing to continue with our existing business or change our business and conclude a merger, acquisition or combination with a business prospect, economic, political and market conditions and fluctuations, government and industry regulation, interest rate risk, U.S. and global competition, and other factors. Most of these factors are difficult to predict accurately and are generally beyond our control. You should consider the areas of risk described in connection with any forward-looking statements that may be made herein. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date of this report. Readers should carefully review this report in its entirety, including but not limited to our financial statements and the notes thereto and the risks described in our Annual Report on Form 10-K for the fiscal year ended February 29, 2024. We advise you to carefully review the reports and documents we file from time to time with the Securities and Exchange Commission (the “SEC”), particularly our quarterly reports on Form 10-Q and our current reports on Form 8-K. Except for our ongoing obligations to disclose material information under the Federal securities laws, we undertake no obligation to release publicly any revisions to any forward-looking statements, to report events or to report the occurrence of unanticipated events.

 

 iii

 

PART I

 

ITEM 1. BUSINESS

 

Business Overview

 

Robotic Assistance Devices, LLC was incorporated in the State of Nevada on July 26, 2016, as an LLC and was founded by current President Steve Reinharz. Mr. Reinharz, has 25+ years in various leadership/ownership roles in the security industry and was part of a successful exit to a global multinational security company in 2004. Mr. Reinharz started his first security integration company in 1996, which he grew to 30+ employees before closing that company in 2003. In 2017, Robotic Assistance Devices LLC converted to a C Corporation, Robotic Assistance Devices, Inc. (“RAD”), through the issuance of 10,000 common shares to its sole shareholder.

 

Artificial Intelligence Technology Solutions Inc. (formerly known as On the Move Systems Corp.) (“AITX” or the “Company”) was incorporated in Florida on March 25, 2010, and reincorporated in Nevada on February 17, 2015. On August 24, 2018, On the Move Systems Corp. changed its name to Artificial Intelligence Technology Solutions Inc. (“AITX”).

 

In 2017, AITX acquired all the ownership and equity interests in RAD (the “Acquisition”). Before the Acquisition, AITX’s business focus had been transportation services, and AITX was exploring the on-demand logistics market by developing a network of logistics partnerships. After the Acquisition, AITX shifted its business focus to align with RAD’s mission. Since that time, AITX has been engaged in pursuing the delivery of artificial intelligence (AI) and robotic solutions for operational, security, and monitoring needs. More specifically, the Company is focused on applying advanced AI-driven technologies, paired with multi-use hardware and supported by custom software and cloud services, to intelligently automate and integrate a variety of high-frequency security, concierge, and operational tasks.

 

Since substantially all of AITX’s operations were disposed of with the transaction’s consummation, the Acquisition was treated as a reverse recapitalization effected by a share exchange for financial accounting and reporting purposes. AITX recorded no goodwill or other intangible assets as a result of the Acquisition. RAD is treated as the accounting acquirer as its stockholders control the Company after the Acquisition, even though AITX was the legal acquirer. Therefore, the assets, liabilities, and historical operations reflected in these financial statements are those of RAD as if RAD had always been the reporting company.

 

RAD’s solutions are generally offered as a recurring monthly subscription, typically with a minimum 12-month subscription contract. RAD also sells their units and the client that RAD has had longest opts to do this. RAD’s solutions are expected to earn over 75% gross margin over the life of each deployed asset when under subscription and over 50% gross margin when sold. Specifically, RAD provides workflow automation solutions delivered through a system of hardware, software and cloud services. All elements of hardware and software design offered by RAD are 100% designed, developed and owned by RAD.

 

Steve Reinharz, founder of RAD and single largest equity owner of AITX, became CEO on March 2, 2021.

 

Company Strategies

 

We apply our Artificial Intelligence (AI) technology to solve enterprise problems categorized as expensive, repetitive, difficult to staff, and outside of the core competencies of our client or prospective client organizations.

 

A short list of basic examples include:

 

  1. Typical security guard-related functions such as monitoring a parking lot during and after hours and responding appropriately. This scenario applies to perimeters, interior yard areas, and related similar environments.
     
  2. Integrated hardware/software with AI-driven responses, simulating and expanding on what legacy or manned solutions could perform.
     
  3. Automation of common access control functions through technology utilizing facial recognition and machine vision, leapfrogging most legacy solutions in use today.

 

RAD’s first industry focus is the more than $100 billion global security services market.1 RAD’s current goal is to disrupt and capture a significant portion of both the human security guard market (over $30 billion)2 and “physical security” (video surveillance, access control, visitor management, etc.) market (over $20 billion) through its innovative RAD solution ecosystem.

 

 

1 https://www.statista.com/statistics/323113/distribution-of-the-security-services-market-worldwide/

2 https://www.statista.com/statistics/294206/revenue-of-security-services-in-the-us/

 

 - 1 - 

 

RAD solutions are unique because they:

 

  1. Start with an AI-driven autonomous response utilizing cellular-optimized communications, while easily connecting to a human operator for a manned response, as needed.
     
  2. Use unique hardware purpose-built by RAD for delivery of these solutions. Various form factors have been customized to deliver this new functionality.
     
  3. Deliver services through RAD-developed software and cloud services, allowing enterprise IT groups to focus on core competencies instead of maintenance of complex video and security platforms.

 

AITX core premise at inception was summarized in its paper titled ‘Autonomous Remote Services’. On May 15, 2024, AITX updated it’s mission statement to:

 

At AITX, our mission is to shape the future of security and facility management through the deployment of Autonomous Intelligent Response (AIR™) technology. We harness the transformative power of AI and advanced computing to create intelligent, responsive devices and environments that enhance security, safety, and efficiency. “

 

On May 22, 2024, the Company released an update to Autonomous Remote Services paper called Autonomous Intelligent Response that details the development of relevant technology and the direction of the company. This can be downloaded here: Request AIR Manifesto - AITX - Artificial Intelligence Technology Solutions

 

AITX Subsidiaries

 

AITX owns and operates three (4) wholly-owned subsidiaries.

 

  1. Robotic Assistance Devices, Inc. (RAD I) is the primary operating company of AITX. The company holds the dealer and end-user contracts, employs all US employees, operates the California and Michigan facilities, and is the primary industry-facing entity of AITX. RAD I owns all intellectual property related to RADSoC™, RAD Mobile SOC™, RADGuard™, and their core operating architecture. RAD I owns everything related to AITX’s line of stationary devices and their manufacturing. RAD I also implements and services the devices. This company’s primary website is radsecurity.com and is updated as developments occur.
     
  2. Robotic Assistance Devices Group, Inc. (RAD G) is RAD G is an AITX subsidiary, separate from RAD I and RAD M, created for the purposes of expected future sales through a channel that is incompatible and non-competitive with RAD I’s existing channel. RAD G is focused on the development of advanced software and electronics solutions and completed a ‘soft-launch’ of it’s ‘RADPACK’ board in December 2022. This hardware is a RAD-designed circuit board designed to power all RAD devices. The company will be working to sell it to other manufacturers that want to create security devices but need a hardware/software solution and want to leverage the investments and network that RAD Inc has built over the years. The company has started to work with a commission-only sales person to start to share this solution in the electric vehicle charger industry. Additional sales materials are under development and company is working to find it’s first adopter. It is expected that this market niche could take several years to develop and as such the company will be looking for clients in the security space and related markets. The Company anticipates no revenues from RADG this fiscal year. This company’s website is radgroup.ai and is updated as developments occur.
     
  3. Robotic Assistance Devices Mobile, Inc. (RAD M) is RAD M is an AITX subsidiary, separate from RAD I and RAD G, created for the purposes of future developments, partnerships, and marketing in which the company may engage in the future. RAD M is focused on the development of autonomous mobile security and facility management devices, both ground-based and airborne. RAD M’s first solution, the ROAMEO™ unmanned ground vehicle, incorporates RAD M technologies related to the development of artificial intelligence based autonomous driving, perception, and prediction. ROAMEO features technology from RAD I and RAD G to perform its functions. The company believes that it’s developing suite of mobile devices will bring the interactive outdoor, indoor, rugged, commercial security and facility robots to the market. These mobile solutions will complement the stationary systems. The three solutions are the RADDOG™ lineup of quadrupeds and ROAMEO as the outdoor long-running high visibility robot. Previously mentioned RAD M project referenced as ‘Mobile 3’ is on indefinite hold as the stated solutions are given all the development resources. ROAMEO is manufactured, implemented, and maintained by RAD I.
     
   

Currently the focus on the RADDOG lineup pushes the completion of ROAMEO 4.0 into later calendar year 2024. RAD M will continue developing additional mobility solutions that RAD I will bring to market.

     
    The Company believes strongly that the next ROAMEO will have significant positive financial impact on the Company. The Company believes demand for this solution is strong based on continued requests for prospects despite no marketing or promotion.

 

 - 2 - 

 

  4. Robotic Assistance Devices Residential, Inc. (RAD R) is the AITX entity developed to bring AIR™ to residential products. The first announced product is called RADCAM™ and is scheduled to be on the market in 2024. RAD R uses technology from RAD Inc. At this moment it is not known if RAD R will be built into a long term entity of AITX or if it will be sold. Other AITX are not meant to be sold.

 

AITX’ main website is aitx.ai. Company and investor information can be found at this site and it is updated regularly.

 

Background - First Commercial Rugged Outdoor Security Robot

 

Mr. Reinharz started RAD in the summer of 2016. RAD originally partnered with SMP Robotics Systems Corp. (SMP) and commercialized the SMP S5 Robot for the security market. RAD’s commercialization of the platform focused on integrating traditional security industry manufacturers’ solutions onto the robotics platform. After two paid proofs-of-concept for large utility companies (under NDA) and over 18 months of development and testing, RAD began deployments with various Fortune 500 customers. These deployments were scheduled to start in October 2017 but were delayed until December 2017 due to various supply chain challenges.

 

By March 2018 it was apparent that S5 platform was not sustainable and RAD began to pull robots out of service.

 

The robots were rejected by customers due to unsatisfactory reliability and some technical flaws that could not be solved, despite full efforts by SMP and RAD. RAD now considers this phase of the Company ‘Phase 1’ into robotics. The Company attempted over 40 deployments during this period.

 

RAD has had no contact with SMP Robotics since April 2018.

 

Much of RAD’s existing convertible debt was acquired in support of the RAD/SMP robotics program. This convertible debt has largely been converted to long-term debt and warrants as shown in these financial filings.

 

ROAMEO will deliver on AITX’s goal of bringing the first outdoor, rugged, commercial security and facility robot to market. This mobile solution will complement the stationary systems AITX already has operating in physical security applications serving customers in a wide range of environments.

 

Background – RAD’s 2nd Generation Ecosystem

 

RAD’s primary strategy has always been to use AI technology and modern systems to transform the security industry. Mobile robots, indoor and outdoor, are a part of that strategy. However, to ultimately realize the delivery of these solutions, a set of “stationary robots” required development.

 

These stationary robots launched in April 2018 with the Security Control and Observation Tower (SCOT), development of which began in August 2017. SCOT performs many of the same functions as a stationary human security guard, plus many tasks that human guards cannot, and does so at approximately 15% of the cost. There is no known comparable solution available today that blends technology, usability, unique features, and price. SCOT received an enthusiastic response from the security market and industry accolades. SCOT’s positive reception reinvigorated RAD, which accelerated the development of the software and cloud services that support SCOT. SCOT runs on the RAD Software Suite™. This software suite is a cloud and mobile platform at the heart of all RAD security solutions.

 

A beta version SCOT was first shown to potential customers at the end of February 2018 in an exposition held in Ohio that tested customer reception and elicited voice-of-the-customer input. SCOT and the preliminary RAD Software Suite received a favorable customer response. Customer feedback was incorporated into SCOT, and ideas on SCOT derivatives were added to the hardware development roadmap.

 

In April 2018, at the ISC West, a large annual physical security event held in the United States, SCOT won three awards: (1) The Security Industry Association’s (SIA) New Product Award for Law Enforcement/Guarding3, (2) A 2018 Secure Campus Award from Campus Security and Life Safety Magazine, and (3) A ‘Govie’ award for government security solutions from Security Today Magazine.

 

RAD has since won numerous awards for its solutions, including:

 

RAD Light My Way™, Secure Campus 2022 Awards, in the categories of ‘Security & Personal Safety Devices’ & ‘Artificial Intelligence’

 

 

3 SIA’s New Product Showcase recognizes innovative products, services and solutions in electronic physical security, and SCOT™’s award comes in the Law Enforcement/Guarding Systems category. Technologies within the program are used in the protection of life and property in residential, commercial, and institutional settings, displaying SCOT™’s importance in long-range human detection and acting as a force multiplier for safety and defense against outside threats.

 

 - 3 - 

 

AVA™ 3.0 with STAN™, Security Industry Association NPS Awards, in the category of ‘Access Control Software, Hardware, Devices and Peripherals’

 

ROSA™ with RAD Light My Way, CBRE Innovation Challenge 2021, in the category of ‘Best Workplace Experience Solution Award’

 

ROSA 180™, American Security Today 2021 ASTORS Awards, in the categories of ‘Best Robotic Perimeter Protection’ & ‘Best Motion Detection Solution’

 

ROADMAP & Product Development

 

RAD’s product line has continued to develop with both new solutions being added and older solutions being phased out. Specifically:

 

  SCOT is discontinued although 2 units continue to operate and generate revenue for the Company. Although initial interest was high and several initial deployments continue to operate as intended the solution did not fulfill expected sales targets and as such it was decided not to upgrade it to the ‘3.x’ technology. It has been removed from the price list. A permanent impairment on the Scot has been recorded.
     
  Wally & Tom – Wally has been replaced with TOM (‘The Office Manager’) which has many but not all Wally features yet features stronger processing and related technology. Wally’s are being removed and replaced with Toms throughout last calendar year although some Wally’s will continue to operate for a few more years. Notably, the first Wally installation from 2020 continues to operate, is expected to operate for more years and is not scheduled for replacement.
     
  ROSA is has completed it’s final version 3.1 production at the time of this filing. Generation 4 has begun production at the time of this filing (May 2024). and features the ‘RADPack Millie Gen 3’ control board from RAD G. This board is expected to significantly reduce assembly time because it requires a significantly less sophisticated wiring harness. The board also allows for better fleet management functionality since the board is 100% designed, programmed by RAD and important features have been included by design. ROSA Gen4 has 65% less production time than 3.1.
     
  ROSA has spawned two significant iterations:

 

  RIO version. ‘RIO’ is a ROSA Independent Observatory, or in other terms, a solar powered trailer with 1 – 2 ROSA units on top. The current market leader in this space is a company called LiveView, Inc. The Company estimates this market at around 6,000 new trailer deployments per year and is looking to capture up to 10% - 20% of the market within 2 years. As of the time of this writing approximately 200 RIO have been deployed for a variety of clients.
     
  ROSA P version: This version has 1 – 2 ROSA attached to a pre-existing pole and powered through that poles lighting power. However, since the lights are generally only powered at night ROSA P has the ability to power the ROSA(s) and a battery pack while the lighting circuit is receiving power. During daylight, when there is no lighting power, ROSA P provides battery power to the 1 – 2 ROSA. As the time of this filing several ROSA P are deployed across three different clients. At the time of this writing approximately 20 iterations are deployed.

 

  AVA has evolved into it’s Generation 4 series. This series features more responsive and much brighter touchscreen and a significantly improved 2 way audio system. AVA deployments continue to be more ‘sticky’ than any other RAD deployment because it becomes an essential part of regular facility activity since it allows for vehicle ingress and in some cases egress. AVA has evolved into Generation 4with the completion of the RADPack Millie Gen 3.

 

 - 4 - 

 

RAD’s 4th Generation – AIR Powered

 

AITX’ AIR™ direction is the basis for the 4th Generation of hardware and software from the AITX subsidiaries. Specifically this has launched RAD I’s 4th Generation ROSA™, RIO™ and AVA ™ products. As of May 2024 the 2024 production has begun for ROSA and RIO. AVA 4th Generation solutions are expected to be in production in June or July. RAD G core product, RADPack, features AIR support with version ‘RADPACK Millie Version C’. This version is built to carry NVIDIA Jetson processors which is a critical component for AIR. RAD M devices, specifically RADDOG and ROAMEO, will all feature AIR solutions.

 

On the mobility side the Company has made significant progress. Specifically:

 

  ROAMEO – version 2 units have been deployed across a number of clients and it was found that the motors are not satisfactory for 100% reliable use. Notably one client has had a ROAMEO for many months, it’s solved their security issue and has achieved important milestones such as 16 hours of perfect autonomous patrols and months of perfect autonomous recharging. However the Company has decided to shut the 2.x program in favor of the 3.x program (which is now being called Generation 4 because it has AIR) for these reasons: 1. The new motors built for 4.x will give much improved performance across the board and this is the type of performance the Company wants to use in a high volume product. Specifically the motors allow for minute operation as a stepper motor, allow for fast speeds, have an integrated safety brake and are suited for safety certifications (critical). 2. Production costs of ROAMEO 3.x are expected to be 50% of 2.0 which was considerably expensive and made it impossible to achieve required profit margins. 3. The sensor package and user payload on 3.0 is refined and focused for reliability. ROAMEO 3.x prototype 1 is 80% at the time of this filing although resources are primarily focused on RADDOG development. At this moment the Company has achieved sophisticated autonomous navigation for ROAMEO and other important technical milestones. Demand and requests for ROAMEO remain high despite not mentioning or promoting it. The Company continues work on it and advises that the first prototype should be complete prior to the end of the fiscal year. A permanent impairment on the version 2 units has been recorded.
     
  RADDOG 2LE – This version launched June 6, 2023, and it’s ‘LE’ denotes that it is specifically designed for law enforcement applications. Additional information can be found at raddog.ai. The company has deployed 1 unit to a Michigan police force. Currently the company is developing it’s next version of the RADDOG with it’s manufacturing partner, Unitree. The Company expects to reveal this version around September 2024 and has committed to produce 100 versions.

 

 - 5 - 

 

Software Solutions

 

RAD has created a variety of front-end and back-end software solutions to power its ecosystem. RADGUARD is customer-facing software (on the touchscreens of RAD’s field devices), and management solutions include RADSOC (Security Operations Center) and RADPMC (Property Management Center).

 

RAD has developed a variety of utilities that allow automatic over-the-air updates, most of which are within a back-end application called SCOT Manager and RUPERT (‘RAD Utility, Performance, and Efficiency Reporting Tool’).

 

RAD has developed Visitor Management, Access Control, and other applications itself instead of seeking to partner with legacy manufacturers. It is RAD’s opinion that the legacy paradigm in the physical space underserves the markets in terms of cost, functionality, and integration.

 

RAD recently introduced its own Video Management System into RADSOC, delivering a fully integrated solution that facilitates robust security and property management capabilities.

 

Towards the end of the prior fiscal year the company announced ‘ROSS’ which is the company’s video management system. This allows non-RAD cameras to be managed by RADSOC alongside RAD stationary and mobile devices. It further allows for RADSOC’s analytics and communication features to be accessible and applied to these non-RAD cameras.

 

RAD launched it’s Fire Arm Detection (‘FAD’) analytic last fiscal year and closed it’s first ROSS/FAD/ROSA project with Rosenbaum Yeshiva in New Jersey. The company has built a modest sales funnel for similar opportunities.

 

The company believes that RAD’s ability to deliver easy-to-use, easy-to-obtain, and easy-to-support software, combined with custom workflow-automation applications, is key to the company’s success.

 

The Company believes that the R&D work it has completed makes AITX’ vision for a single all encompassing security and property technology platform complete. With the addition of the stationary and mobile solutions, plus the ability to integrate existing cameras into the system, RAD can now provide solutions in almost every situation at a cost less than most others. RAD continues to develop and evolve software based on AIR, client requests, new features, scaling and other reasons.

 

Manufacturing & Assembly

 

RAD uses various domestic and overseas machine shops for raw material procurement and machining of the required plastic and metal pieces that build RAD devices. RAD’s sourcing has redundancy through use of multiple machine shops producing the same products for RAD. In addition, all pieces within any RAD device can be procured from a choice of suppliers.

 

RAD’s margins are based on current small batch production and assembly. The Company expects that economies of scale will drive greater gross margin as quantities and efficiencies increase.

 

Team and Culture

 

AITX has built a strong start-up culture based on performance, sacrifice, and rewards. Attracting employees who can thrive in this environment requires a different approach to corporate growth and development. RAD’s governing philosophy centers around the principles of “Emotional Intelligence. Self-awareness, composure, internal motivation, empathy, and social skills are prerequisites for joining the RAD team, and each candidate interview begins with a review of the foundational elements that comprise RAD culture.

 

Team members are open to multitasking and wearing multiple hats, as situations demand. This allows management to focus on larger goals and long-term strategies. We try to ensure that our entire staff shares the same core beliefs and values as the Company, allowing us to adapt and adjust quickly to changes that might grind other companies to a halt. Members have been no stranger to the difficulties that face a startup, including unexpected setbacks, delays in funding, or a cash crunch, but they have persevered with dedication and enthusiasm for our greater mission. They have met incredibly tight deadlines, volunteered to make financial sacrifices, and assisted wherever and however they can.

 

We believe that RAD’s high-EQ work culture creates productive, motivated employees that has allowed the Company to weather the difficult period of robot deployments and our transition to 4th generation solutions.

 

 - 6 - 

 

As of May 7 ,2024, the company has 97 full-time equivalent employees with 51 being outside the United States

 

The Company is focused on sequential product development while sales grow in order to get close to positive cash flow. The Company has shared publicly that it expects to be operationally positive cash flow on a monthly basis towards the end of the 2025 fiscal year.

 

Market Environment

 

RAD believes that its experience has shown that the security market is ripe for disruption. It has captured the interest of many Fortune 500 companies. The Company believes that no other company operating in the physical security space has the solutions, distribution channel, reputation, sales or support model to rival RAD in the near term. In addition, the Company expects that the launch of RAD’s mobile solutions will significantly increase the gap between it and would-be competitors. RAD will be a one-stop-shop for proven and comprehensive mobile and stationary workflow improvement devices and systems.

 

RAD’s technology model includes a “new paradigm” for the security industry: Security in a Box. Every RAD solution features connection to the RAD Software Suite, a platform for AI processing, usage analytics, cloud-sided video, communications interface, audit logs, and much more.

 

Customer Acceptance of RAD Solutions

 

RAD end-users include one Fortune Top 10 company and a number of other Fortune 500 companies. RAD is currently deployed in logistics, commercial real estate, healthcare, amusement, manufacturing and retail industries. The Company believes that if RAD is ultimately deployed to only 5% of the facilities within any of these industries, the Company will be profitable.

 

RAD Industry Leadership Role

 

Mr. Reinharz has earned a prominent role as a spokesperson for AI and change in the security industry. He has lectured and participated in several panels for some of the security industry’s largest events and organizations. Mr. Reinharz chairs Security Industry Association’s Autonomous Working Group committee, which is dedicated to helping shape the industry and support progressive legislation. Most recently, Mr. Reinharz provided a lecture to NYC’s ASIS CPP group that qualified as a continuing education credit.

 

In March 2023 Steve Reinharz was elected to a Board seat for Security Industry Association, Inc (SIA). SIA is the foremost security group steering policy, lobbying various governments and promoting education within the security industry.

 

It is expected that Mr. Reinharz will continue his promotion of the new paradigm for the next few years until adoption is widespread.

 

Go To Market Strategy

 

RAD’s strategy has been to focus on the creation and support of a strong dealer channel. RAD has successfully executed this strategy and has added over 60 qualified dealers to our dealer channel. The expectations were that this approach affords multiple benefits to RAD with few downsides and almost all dealers exclusively represent RAD solutions in the area of ai-enabled autonomous devices.

 

However, over the past year it’s become clear that the dealer channel has exceptional benefits with a limited number of dealers. Forward-thinking dealers that invest the time and energy into RAD have the ability to be successful. Unfortunately many dealers are happy to sign up and continue their normal business operations without giving proper efforts to promote RAD solutions to their client bases. As such the company has about 20 active dealers with the rest being more opportunistic. As such the Company has been increasingly focusing on a limited number of dealers, including a strong and growing relationship with the world’s largest security company, Allied Universal Inc. (AUS). AUS and RAD are working on a large roll out to all integration offices as this report is filed. Furthermore the Company is devoting more time to direct sales, an area of effort that gives the Company more control over the sales process. It is expected that going forward the relationship with active dealers will strengthen while continuing to strengthen direct sales.

 

Competition

 

We may be subject to competition by competitors that have greater operating histories, cash and operational resources than we do.

 

 - 7 - 

 

Employees

 

As of March 7, 2024, we have a headcount of 97 fully dedicated full-time equivalents, including 46 RAD Inc. employees, 28 overseas contractors, and 23 employees of a Canadian research and development company. None of our employees are represented by a union.

We consider our employee relations to be excellent. AITX’ principle shareholder owns a minority interest in the Canadian research and develop company but has not received any compensation of any kind from that company to date.

 

Accomplishments & Highlights

 

AITX, and its subsidiaries RAD I, RAD M, RAD G, and RAD R list of accomplishments highlights successes in adding to the strength of its executive leadership team, expanding its sales and distribution channels, launching new products, while growing its presence, visibility and profile within its existing marketplaces. Milestones and accomplishments over the past 12 months include:

 

Cyber and data protection and compliance

 

The Company continues it’s focus on delivery of safe and secure software and systems to its clients. As such, last year the Company achieved SOC 2 Report status. The SOC 2 Report has become a benchmark standard, and now an often-specified requirement, in the software procurement process. Established by the American Institute of Certified Public Accountants (AICPA), criteria and reporting principles are outlined as a means for organizations to create a documented framework of policies and procedures to prove how they manage and secure data in the cloud and ensure protection of customer privacy and ensure internal communications are suitably handled. This achievement reflects the Company’s stated goals of best-in-class data protection and internal processes.

 

The Company has subsequently maintained SOC 2 Type 2 status and has achieved a cyber certification from a Fortune Five company which was more difficult to obtain than either SOC certifications. Due to non-disclosure agreements with the Fortune Five company AITX can not disclose who it is from.

 

Implementation of ERP (enterprise resource planning) System - Update

 

The Company’s implementation of NetSuite ERP continued through the year with a successful transition to all accounting and human resources now fully functionality. Sales is using some of the CRM features of the ERP but still using a non-ERP platform for management of the sales funnel. Production’s use of the ERP significantly increased over the course of the year. There remain some challenges for full production implementation related to change management. Management expects full implementation of the ERP to complete this fiscal year. The will allow realization of efficiencies in purchasing, kitting and production.

 

Authorized Dealers Added to Dealer Network

 

At the end of FY 2023 RAD has more than 57 authorized dealers, up from 32 at the beginning of the fiscal year. These dealers are located across the United States, Canada, and the EU, with plans for continued expansion. Dealers include the largest security companies in the world, including Allied Universal and GardaWorld, which are respectively the largest and 3rd largest guarding companies in the world. The ongoing addition of authorized dealers introduces and delivers RAD products to new markets.

 

Discussion on Sales

 

The sales funnel continues to grow in both quantity and quality. The sales team has matured and stabilized with a Senior Vice President of Sales with four full time direct sales reports. Additional sales drivers are RAD’s President as well as AITX’ CEO. Furthermore operations team members are instrumental in encouraging clients to expand existing systems.

 

In the fiscal year ended February 28, 2024 RAD added hundreds sales opportunities to the sales funnel. Furthermore several end users expanded their RAD systems with commitments to continue expansion. RAD’s dealer network also grew although the Company will note that dealer performance has fallen short of expectations and is being addressed. An opportunity is mostly defined as an account that is exhibiting a pain that can be solved by RAD, has a budget, and has reached the point in the sales process where they have a quote they can sign.

 

 - 8 - 

 

Management has identified that conversion of accounts from opportunities to clients is improving and has identified some of the reasons for the low conversion rate as well as new tactics to break through these obstacles. Advanced new technology sales often involve multiple decision-makers and require a skilled and passionate internal champion. The security industry breeds risk-averse personnel. The Company is pressing several initiatives to change the industry to create an environment where trying new things in the norm as opposed to the exception. An example of these efforts are the Security Industry Association’s (SIA) upcoming Town Hall where three Fortune 500 security practitioners that have implemented new technologies will share their tips for successful internal selling. AITX will be putting more emphasis on these efforts this year.

 

Between a maturing hardware and software line up, an increasing number of deployments/case studies/success stories, management is excited for the next year’s sales. Management feels that ironing out technical and production challenges are well in hand and clearing the way for a greater volume of deployments.

 

Press Announcements

 

During the fiscal year, the Company issued over 100 press releases, the vast majority of them being sales announcements and new authorized dealers being signed. Public events, conferences, awards and new product announcements were also publicized via press releases. All Company press releases can be found here: AITX News - AITX - Artificial Intelligence Technology Solutions

 

Trade Shows and Conferences

 

As in previous years, RAD attended several large security industry events including ISC West, GSX, plus dozens of regional conferences with the purpose of presenting the Company’s solutions to a buying audience and continually loading the sales pipeline with new opportunities. RAD often utilizes the events for speaking engagements or panel discussions to propel the Company’s ‘thought leadership’ regarding its AI-powered security and safety solutions.

 

Additional Points of Interest

 

This fiscal year was significant for stabilization of technology, better understanding of the sales process and related challenges, positioning as a true leader in the industry and the achievement of several high profile deployments. The Company continues its focus on sales, efficiencies with the goal of achieving positive cash flow within 18 months.

 

Management, based on regular conversations with the Company’s largest debt holder, expects no issues regarding pushing out debt deadlines as it has done so in years past. Management confirms the support of this lender and notes the most recent non-convertible $ 4m loan facility.

 

Management reiterates that the plan continues to be to grow revenues, achieve positive cash flow, reduce debt and prepare for an uplist to Nasdaq. Management estimates that with continued reasonable performance the company could obtain and maintain profitability while working to pay down in preparation for Nasdaq uplist targeted for 2026.

 

Legal Proceedings

 

See Item 3 - Legal Proceedings.

 

 - 9 - 

 

ITEM 1A. RISK FACTORS

 

Pursuant to Item 305(e) of Regulation S-K (§ 229.305(e)), we are not required to provide the information required by this Item as it is a “smaller reporting company,” as defined by Rule 229.10(f)(1).

 

ITEM 1B. UNRESOLVED STAFF COMMENTS

 

Not applicable.

 

ITEM 2. PROPERTIES

 

On March 10, 2021 the Company entered into a ten-year lease of a 29,316 square foot building located at 10800 Galaxie Avenue, Ferndale, Michigan 48220. The lease began on May 1, 2021. These premises are being used for offices, manufacturing and distribution. The annual rental cost for this facility is approximately $190,000, plus a proportionate share of operating expenses of approximately $28,000 annually.

 

ITEM 3. LEGAL PROCEEDINGS

 

From time to time, we may become involved in various lawsuits and legal proceedings which arise in the ordinary course of business. Litigation is subject to inherent uncertainties, and an adverse result in these or other matters may arise from time to time that may harm our business. There are no legal proceedings pending at this time.

 

ITEM 4. MINE SAFETY DISCLOSURES

 

Not applicable.

 

PART II

 

ITEM 5. MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASE OF EQUITY SECURITIES

 

Market Information

 

AITX’s common stock began trading on the “Over the Counter” Bulletin Board (“OTC”) under the symbol “AITX” in June 2011 and as AITX on August 24, 2018. The following table sets forth, for the period indicated, the prices of the common stock in the over-the-counter market, as reported and summarized by OTC Markets Group, Inc. On August 24, 2018, the Company undertook a 100:1 reverse stock split and on March 27, 2020 a 10,000:1 reverse split. The share capital has been retrospectively adjusted accordingly to reflect this reverse stock split, except for the conversion price of certain convertible notes as the conversion price is not subject to adjustment from forward and reverse stock splits.

 

These quotations represent inter-dealer quotations, without adjustment for retail markup, markdown, or commission and may not represent actual transactions. There is an absence of an established trading market for the Company’s common stock, as the market is limited, sporadic and highly volatile, which may affect the prices listed below.

 

 - 10 - 

 

   High   Low 
Fiscal Year Ended February 29, 2024:          
Quarter ended February 29, 2024  $0.02   $0.01 
Quarter ended November 30, 2023  $0.02   $0.01 
Quarter ended August 31, 2023  $0.02   $0.01 
Quarter ended May 31, 2023  $0.01   $0.01 
           
Fiscal Year Ended February 28, 2023:          
Quarter ended February 28, 2023  $0.01   $0.00 
Quarter ended November 30, 2023  $0.01   $0.00 
Quarter ended August 31, 2023  $0.02   $0.01 
Quarter ended May 31, 2023  $0.01   $0.01 

 

On May 22, 2024, the closing price per share of the Company’s common stock as quoted on the OTC was $0.0074.

 

Dividends

 

To date, we have not paid dividends on shares of the Company’s common stock and we do not expect to declare or pay dividends on shares of our common stock in the foreseeable future. The payment of any dividends will depend upon our future earnings, if any, AITX’s financial condition, and other factors deemed relevant by its Board of Directors.

 

Holders of Common Stock

 

As of May 22, 2024, there were 100 holders of AITX’s common stock of which 33 were active. The number of foregoing holders does not include beneficial owners of common stock whose shares are held in the names of banks, brokers, nominees or other fiduciaries.

 

Common Stock

 

The Company is authorized to issue 15,000,000,000 shares of common stock, with a par value of $0.00001. The closing price of its common stock on May 22, 2024, as quoted by OTC Markets Group, Inc., was $0.0074. There were 10,318,917,383 shares of common stock issued and outstanding as of May 22, 2024. All shares of common stock have one vote per share on all matters including election of directors, without provision for cumulative voting. The common stock is not redeemable and has no conversion or preemptive rights. The common stock currently outstanding is validly issued, fully paid and non-assessable. In the event of liquidation of the Company, the holders of common stock will share equally in any balance of its assets available for distribution to them after satisfaction of creditors and preferred shareholders, if any. The holders of the Company’s common are entitled to equal dividends and distributions per share with respect to the common stock when, as and if, declared by the Board of Directors from funds legally available.

 

Our Articles of Incorporation, Bylaws, and the applicable statutes of the state of Nevada contain a more complete description of the rights and liabilities of holders of our securities.

 

During the years ended February 29, 2024 and February 28, 2023, there was no modification of any instruments defining the rights of holders of the Company’s common stock and no limitation or qualification of the rights evidenced by the Company’s common stock as a result of the issuance of any other class of securities or the modification thereof.

 

Non-cumulative voting

 

Holders of shares of the Company’s common stock do not have cumulative voting rights, which means that the holders of more than 50% of the outstanding shares, voting for the election of directors, can elect all of the directors to be elected, if they so choose, and, in that event, the holders of the remaining shares will not be able to elect any of our directors.

 

Securities Authorized for Issuance under Equity Compensation Plans

 

On April 14, 2021 the Company adopted an Incentive Stock Option Plan where full details are disclosed in Exhibit 10.1 of the Company’s 8K filing of April 20,2021. Under the plan the Company may grant options to service providers and employees to acquire up to 5,000,000 shares of the Company’s common stock. The options will be under the varying terms and conditions of an agreement but the exercise price cannot be lower than 100% to 110% of the fair value of the stock at date of grant and the term of the grant can be no longer than 5 years. On August 11, 2022 the Company amended the 2021 Plan increasing the maximum number of shares applicable to the 2021 Plan from 5,000,000 to 100,000,000.

 

 - 11 - 

 

On September 1, 2022, the Company as part of the afore-mentioned Incentive Stock Option Plan issued 100,000,000 shares to 64 employees. The shares were issued with an exercise price of $0.02, vest after 4 years with a 5 year term having a fair value of $1,020,000. For the year ended February 28, 2023 the Company recorded $122,050 in stock-based compensation. At February 28, 2023 there remains 95,725,000 options outstanding. . For the year ended February 29, 2024 the Company recorded $198,357 in stock-based compensation. At February 28, 2023 there remains 95,725,000 options outstanding.

 

On September 1, 2023, the Company as an addition to the afore-mentioned Incentive Stock Option Plan issued 114,217,035 shares to 48 employees. The shares were issued with an exercise price of $0.02, vest after 4 years with a 5 year term having a fair value of $593,929. For the year ended February 29, 2024 the Company recorded $74,241 in stock-based compensation.

 

The following table shows the number of shares of common stock that could be issued upon exercise of outstanding options and warrants, the weighted average exercise price of the outstanding options and warrants, and the remaining shares available for future issuance at February 29, 2024.

 

Plan Category  Number of Securities to
be issued upon exercise
of outstanding options,
warrants and rights
   Weighted average
exercise price of
outstanding options,
warrants and rights
   Number of securities
remaining available for
future issuance
 
Equity compensation plans approved by security holders.   188,667.035   $0.02     
                
Equity compensation plans not approved by security holders.            
                
Total   188,667,035   $0.02     

 

Preferred Stock

 

The Company is authorized to issue up to 20,000,000 shares of $0.001 par value preferred stock. The board of directors is authorized to designate any series of preferred stock up to the total authorized number of shares.

 

Series B Convertible, Redeemable Preferred Stock

 

The board of directors has designated 5,000 shares of Series B Convertible, Redeemable Preferred Stock with a par value of $0.001 per share. As of the date of this report, there are no shares of Series B Preferred Stock outstanding. The Series B Convertible Preferred Stock are redeemable at $1,200 per share, rank in priority to common stock and common stock equivalents upon liquidation of the Company, have voting rights on a converted basis and receives quarterly dividends of 8%. Each holder may, at any time and from time to time convert all, but not less than all, of their shares of Series B Convertible, Redeemable Preferred Stock into a number of fully paid and nonassessable shares of common stock determined by dividing the redemption value by the Conversion Price. The Conversion price is equal to the lower of (1) a fixed price equaling the closing bid price of the Common Stock on the trading day immediately preceding the date of the acquisition of the shares and (2) the lowest traded price of the Common Stock during the ten (10) calendar days immediately preceding, but not including, the Conversion Date. Following an event of default,” as defined in the Purchase Agreement, the Conversion price shall equal the lower of: (a) the then applicable Conversion Price; or (b) a price per share equaling eighty five percent (85%) of the lowest traded price for the Company’s common stock during the fifteen (15) Trading Days immediately preceding, but not including, the Conversion Date. Each share of Preferred Stock shall be entitled to receive, and the Corporation shall pay, cumulative dividends of eight percent (8%) per annum, payable quarterly, beginning on the Original Issuance Date and ending on the date that such share of Preferred Share has been converted or redeemed. Dividends may be paid in cash or in shares of Preferred Stock at the discretion of the Company. Any dividends that are not paid a shall continue to accrue and shall entail a late fee, which must be paid in cash, at the rate of 14% per annum or the lesser rate permitted by applicable law which shall accrue and compound daily from the dividend payment date through and including the date of actual payment in full. On the thirtieth day following the issue date of this Preferred Stock the Company shall have the obligation to redeem one-third of the Preferred Stock outstanding for a redemption price equal to the redemption value of each such share of Preferred Stock, plus any accrued but unpaid dividends, plus all other amounts due to the Holder including, but not limited to Late Fees, liquidated damages and the legal fees and expenses of the Holder’s counsel. On the sixtieth (60th) calendar day following the date Preferred Stock is issued, the Corporation shall have the obligation to redeem one-half of the Preferred Stock then outstanding for the redemption price. On the ninetieth (90th) calendar day following the date Preferred Stock is issued, the Corporation shall have the obligation to redeem all of the Preferred Stock then outstanding for the redemption price. From the date of issuance until the date no shares of Series B Preferred Stock are issued and outstanding, unless Holders of at least 75% in Stated Value of the then outstanding shares of Preferred Stock shall have otherwise given prior written consent, the Corporation shall not, and shall not permit any of the Subsidiaries to, directly or indirectly:

 

 - 12 - 

 

(a) other than Permitted Indebtedness, enter into, create, incur, assume, guarantee or suffer to exist any indebtedness for borrowed money of any kind, including but not limited to, a guarantee, on or with respect to any of its property or assets now owned or hereafter acquired or any interest therein or any income or profits therefrom; (b) other than Permitted Liens, enter into, create, incur, assume or suffer to exist any Liens of any kind, on or with respect to any of its property or assets now owned or hereafter acquired or any interest therein or any income or profits therefrom; (c) amend its charter documents, including, without limitation, its articles of incorporation and bylaws, in any manner that materially and adversely affects any rights of the Holder; (d) repay, repurchase or offer to repay, repurchase or otherwise acquire of any shares of its Common Stock, Common Stock Equivalents or Junior Securities, other than as to the Conversion Shares as permitted or required under the Transaction Documents: (e) pay cash dividends or distributions on Junior Securities of the Corporation; f) enter into any transaction with any Affiliate of the Corporation which would be required to be disclosed in any public filing with the Commission, unless such transaction is made on an arm’s-length basis and expressly approved by a majority of the disinterested directors of the Corporation (even if less than a quorum otherwise required for board approval); or(g) enter into any agreement with respect to any of the foregoing.

 

Series E Preferred Stock

 

The Board of Directors has designated 4,350,000 shares of Series E Preferred Stock. As of the date of this report, there are 3,350,000 shares of Series E Preferred Stock outstanding. The Series E Preferred Stock ranks subordinate to the Company’s common stock as to distributions of assets upon liquidation, dissolution or winding up of the Corporation. The Series E preferred stock is non-redeemable, does not have rights upon liquidation of the Company and does not receive dividends. The outstanding shares of Series E Preferred Stock have the right to take action by written consent or vote based on the number of votes equal to twice the number of votes of all outstanding shares of equity instruments with voting rights. As a result, the holders of Series E Preferred Stock have 2/3rds of the voting power of all shareholders at any time corporate action requires a vote of shareholders.

 

Series F Convertible Preferred Stock

 

The Board of Directors has designated 4,350 shares of Series F Convertible Preferred Stock with a par value of $1.00 per share. As of the date of this report, there are 2,533 shares of Series F Convertible Preferred Stock outstanding. The Series F Convertible Preferred Stock is non-redeemable, does not have rights upon liquidation of the Company, does not have voting rights and does not receive dividends. Each holder may, at any time and from time to time convert all, but not less than all, of their shares of Series F Convertible Preferred Stock into a number of fully paid and nonassessable shares of common stock determined by multiplying the number of issued and outstanding shares of common stock of the Company on the date of conversion by three and 45 100ths (3.45) on a pro rata basis. So long as any shares of Series F Convertible Preferred Stock are outstanding, the Company shall not, without first obtaining the approval of the majority of the holders: (a) alter or change the rights, preferences or privileges of any capital stock of the Company so as to affect adversely the Series F convertible preferred stock; (b) create any Senior Securities; (c) create any pari passu Securities; (d) do any act or thing not authorized or contemplated by the Certificate of Designation which would result in any taxation with respect to the Series F Convertible Preferred Stock under Section 305 of the Internal Revenue Code of 1986, as amended, or any comparable provision of the Internal Revenue Code as hereafter from time to time amended, (or otherwise suffer to exist any such taxation as a result thereof).

 

Series G Redeemable Preferred Stock

 

The board of directors has designated 100,000 shares of Series G Preferred Stock. As of the date of this report, there are no shares of Series G Preferred Stock outstanding. The Series G preferred stock does not have voting rights, rank prior to all of the Corporation’s common stock and subordinate and junior to all shares of Series F Preferred Stock and pari passu with any of the Corporation’s preferred stock hereafter issued as to distributions of assets upon dissolution or winding up of the Corporation, whether voluntary or involuntary, and does not receive dividends. At any time, the Corporation may, at its option, redeem for cash out of funds legally available therefor, any or all of the outstanding Preferred Stock (“Optional Redemption”) at $1,000 per share.

 

 - 13 - 

 

Recent Sales of Unregistered Securities

 

The following is a summary of transactions by AITX involving sales of its securities that were not registered under the Securities Act.

 

Date  Transaction (*)  Principal Converted   Interest Converted  

Fees

Converted

  

Total

Amount

Converted

  

Shares

Issued**

 
Number of shares outstanding February 28, 2017                          18 
March 7, 2017  conversion  $1,840   $   $   $1,840    1 
March 22, 2017  conversion   1,971            1,971    1 
March 27, 2017  cancelation***                   (1)
April 3, 2017  conversion   1,487    3,397        4,884    1 
April 7, 2017  conversion   1,000            1,000    1 
April 20, 2017  conversion   920            920    1 
April 24, 2017  conversion   6,876            6,876    1 
April 26, 2017  conversion   1,130            1,130    1 
May 2, 2017  conversion   1,130            1,130    1 
May 4, 2017  conversion   1,240            1,240    1 
May 4, 2017  conversion   8,854            8,854    1 
May 8, 2017  conversion   9,296            9,296    1 
May 12, 2017  conversion   1,432            1,432    1 
May 15, 2017  conversion   11,661            11,661    1 
May 15, 2017  conversion   1,550            1,550    2 
May 18, 2017  conversion   13,629            13,629    2 
May 23, 2017  conversion   9,684    3,059        12,743    1 
May 24, 2017  conversion   1,730            1,730    2 
May 30, 2017  conversion   1,890            1,890    2 
June 7, 2017  conversion   1,985            1,985    2 
June 9, 2017  conversion   2,085            2,085    2 
June 12, 2017  conversion   2,185            2,185    2 
June 14, 2017  conversion   2,295            2,295    2 
June 19, 2017  conversion   2,400            2,400    2 
June 20, 2017  conversion   2,500            2,500    3 
June 20, 2017  conversion   3,000    358        3,358     
June 22, 2017  warrant exercise****                   3 
June 28, 2017  conversion   2,800            2,800    3 
June 28, 2017  warrant exercise****                   3 
July 5, 2017  conversion   3,050            3,050    3 
July 6, 2017  warrant exercise****                   3 
July 7, 2017  warrant exercise****                    
July 7, 2017  conversion   3,400            3,400    3 
July 26, 2017  conversion   3,500            3,500    4 
July 28, 2017  conversion   9,750            9,750    1 
July 28, 2017  conversion   4,000            4,000    4 
August 2, 2017  conversion   75,000            75,000    4 
August 2, 2017  conversion   75,000    2,483        77,483    4 
August 4, 2017  conversion   11,184            11,184     
August 14, 2017  conversion   4,500            4,500    5 
August 21, 2017  conversion   4,700            4,700    5 
August 29, 2017  conversion   4,900            4,900    5 
September 5, 2017  conversion   26,250            26,250    5 
September 18, 2017  conversion   27,250            27,250    5 
September 27, 2017  conversion   29,000            29,000    6 
October 16, 2017  conversion   30,500            30,500    6 
October 16, 2017  conversion   10,000            10,000     
Number of shares outstanding February 28, 2018                          124 

 

 - 14 - 

 

Date  Transaction (*) 

Principal

Converted

  

Interest

Converted

  

Fees

Converted

  

Total

Amount

Converted

  

Shares

Issued**

 
April 16, 2018  conversion   132,160            132,160    6 
April 26, 2018  conversion   14,500        500    15,000    1 
May 1, 2018  conversion   26,250            26,250    3 
May 3, 2018  conversion   5,000            5,000     
May 7, 2018  conversion   27,900            27,900    3 
May 10, 2018  conversion   32,400            32,400    4 
May 11, 2018  conversion   14,500        500    15,000    2 
May 15, 2018  conversion   7,060        500    7,560    2 
May 15, 2018  conversion   8,000            8,000    1 
May 21, 2018  conversion   20,250            20,250    3 
May 22, 2018  conversion   6,075            6,075    1 
May 24, 2018  conversion   13,056    3,300        16,356    2 
May 30, 2018  conversion   8,182            8,182    2 
May 30, 2018  conversion   15,000            15,000    3 
June 7, 2018  conversion   2,922            2,922    1 
June 18, 2018  conversion   17,000            17,000    4 
June 19, 2018  conversion   14,500        500    15,000    3 
June 28, 2018  conversion   18,000            18,000    4 
June 28, 2018  cancellation   (7,060)       (500)   (7,560)   (2)
July 5, 2018  conversion   14,500        500    15,000    4 
July 5, 2018  conversion   8,818            8,818    3 
July 11, 2018  conversion   10,200            10,200    4 
July 11, 2018  conversion   14,500        500    15,000    5 
July 19, 2018  conversion   16,000        500    16,500    5 
July 19, 2018  conversion   11,000    1,366        12,366    4 
July 23, 2018  conversion   14,500        500    15,000    7 
July 25, 2018  conversion   5,000            5,000    2 
July 31, 2018  conversion   11,000    1,455        12,455    6 
August 24, 2018  conversion       15,300        15,300    10 
August 27, 2018  conversion   5,500        500    6,000    10 
August 29, 2018  conversion   4,280        500    4,780    11 
August 30, 2018  conversion   6,000            6,000    10 
August 30, 2018  rounding shares                    
August 31, 2018  conversion   20,000            20,000    11 
August 31, 2018  conversion   7,500        500    8,000    11 
September 5, 2018  conversion   8,800    1,375        10,175    13 
September 5, 2018  conversion   7,800            7,800    13 
September 7, 2018  conversion   7,000        500    7,500    13 
September 12, 2018  conversion   5,355            5,355    15 
September 12, 2018  conversion   6,500        500    7,000    14 
September 13, 2018  conversion   5,395            5,395    13 
September 13, 2018  conversion   3,436        500    3,936    14 
September 18, 2018  conversion   5,670            5,670    19 
September 20, 2018  conversion   3,448        500    3,948    19 
September 21, 2018  conversion   6,720            6,720    19 
September 24, 2018  conversion   5,250            5,250    18 
September 26, 2018  conversion   6,132            6,132    23 
September 28, 2018  conversion   3,084        500    3,584    23 
October 1, 2018  conversion   3,100            3,100    20 
October 3, 2018  conversion   4,030            4,030    26 
October 3, 2018  conversion   2,202        500    2,702    25 
October 5, 2018  conversion   2,750    485        3,235    16 
October 5, 2018  conversion   4,449            4,449    29 
October 8, 2018  conversion   8,835            8,835    105 
October 9, 2018  conversion   4,158        500    4,658    30 

 

 - 15 - 

 

Date  Transaction (*) 

Principal

Converted

  

Interest

Converted

  

Fees

Converted

  

Total

Amount

Converted

  

Shares

Issued**

 
October 10, 2018  conversion   4,988            4,988    29 
October 15, 2018  conversion   5,935            5,935    33 
October 18, 2018  conversion   9,000            9,000    113 
October 19, 2018  conversion   4,400    713        5,113    33 
October 23, 2018  conversion   9,840            9,840    317 
November 1, 2018  conversion   9,400            9,400    94 
November 5, 2018  conversion   6,195            6,195    52 
November 15, 2018  conversion   7,980            7,980    95 
November 27, 2018  conversion   3,850    724        4,574    123 
December 6, 2018  conversion   4,056    797        4,853    141 
December 7, 2018  conversion   2,034            2,034    66 
December 10, 2018  conversion   2,367            2,367    76 
December 10, 2018  conversion   2,333        500    2,833    91 
December 10, 2018  conversion   1,475        500    1,975    91 
December 10, 2018  conversion   3,348            3,348    90 
December 11, 2018  conversion   2,489            2,489    80 
December 11, 2018  conversion   4,340            4,340    140 
December 12, 2018  conversion   3,500            3,500    94 
December 12, 2018  conversion   6,600    1,306        7,906    213 
December 13, 2018  conversion   2,408        500    2,908    134 
December 13, 2018  conversion   3,426            3,426    111 
December 14, 2018  conversion   4,154            4,154    134 
December 18, 2018  conversion   4,368            4,368    141 
December 19, 2018  conversion   3,100        500    3,600    160 
December 19, 2018  conversion   1,000    3,348        4,348    161 
December 20, 2018  conversion                   130 
December 20, 2018  conversion   2,155        500    2,655    169 
December 20, 2018  conversion   3,636            3,636    117 
December 20, 2018  conversion   7,480    1,520        9,000    333 
December 24, 2018  conversion   2,970            2,970    110 
December 26, 2018  conversion   3,213            3,213    143 
December 27, 2018  conversion   1,870    1,381        3,252    120 
December 28, 2018  conversion   3,700        500    4,200    227 
December 31, 2018  conversion   4,869            4,869    216 
December 31, 2018  conversion   5,365            5,365    290 
January 2, 2019  conversion   7,370    1,562        8,932    425 
January 7, 2019  conversion   3,360            3,360    240 
January 7, 2019  conversion   3,944            3,944    290 
January 8, 2019  conversion   4,080            4,080    300 
January 9, 2019  conversion   3,161        500    3,661    317 
January 10, 2019  conversion   3,380            3,380    325 
January 11, 2019  conversion   5,280    1,150        6,430    397 
January 11, 2019  conversion   3,625            3,625    290 
January 14, 2019  conversion   3,400            3,400    340 
January 15, 2019  conversion   4,100            4,100    410 
January 15, 2019  conversion   4,300            4,300    430 
January 17, 2019  conversion   4,800            4,800    480 
January 22, 2019  conversion   4,435            4,435    504 
January 22, 2019  conversion   4,230            4,230    470 
January 23, 2019  conversion   3,816            3,816    530 
January 25, 2019  conversion   3,781            3,781    556 
January 28, 2019  conversion   3,276            3,276    585 
January 29, 2019  conversion   3,690            3,690    615 
January 29, 2019  conversion   3,870            3,870    645 

 

 - 16 - 

 

Date  Transaction (*) 

Principal

Converted

  

Interest

Converted

  

Fees

Converted

  

Total

Amount

Converted

  

Shares

Issued**

 
January 30, 2019  conversion   4,080            4,080    680 
January 31, 2019  conversion   4,500            4,500    750 
January 31, 2019  conversion   4,290            4,290    715 
February 4, 2019  conversion   4,740            4,740    790 
February 5, 2019  cancellation   (2,658)           (2,658)   (17)
February 5, 2019  conversion   4,980            4,980    830 
February 12, 2019  conversion   5,340            5,340    890 
February 14, 2019  conversion   5,236            5,236    935 
February 21, 2019  conversion   4,956            4,956    900 
Number of shares outstanding February 28, 2019                          20,026 
May 6, 2019  conversion   5,768            5,768    1,030 
May 6, 2019  conversion   15,000            15,000    882 
May 6, 2019  conversion   11,900            11,900    992 
May 7, 2019  conversion   6,048            6,048    1,080 
May 7, 2019  conversion   11,900            11,900    992 
May 8, 2019  conversion   6,384            6,384    1,140 
May 8, 2019  conversion   11,800            11,800    983 
May 8, 2019  conversion   7,312        500    7,812    1,240 
May 9, 2019  conversion   12,500            12,500    1,136 
May 10, 2019  conversion   7,200            7,200    655 
May 8, 2019  conversion   4,400            4,400    1,000 
May 13, 2019  conversion   7,493            7,493    1,338 
May 13, 2019  conversion   12,650    3,786        16,436    1,957 
May 21, 2019  conversion   3,281            3,281    586 
May 22, 2019  conversion   11,550    3,526        15,076    2,094 
July 11, 2019  conversion   11,000    3,984        14,984    1,921 
July 25, 2019  conversion   8,584            8,584    2,000 
July 30, 2019  conversion   16,940    6,350        23,290    3,882 
July 31, 2019  conversion   9,872            9,872    2,300 
August 2, 2019  conversion   10,301            10,301    2,400 
August 8, 2019  conversion   21,450    8,170        29,620    4,937 
August 11, 2019  conversion   10,945            10,945    2,550 
August 11, 2019  conversion   5,837            5,837    1,360 
August 12, 2019  conversion   8,800            8,800    2,750 
August 12, 2019  conversion   13,915    5,337        19,252    4,011 
August 13, 2019  conversion   3,528            3,528    1,260 
August 14, 2019  conversion   5,920            5,920    2,960 
August 15, 2019  conversion   12,650    4,877        17,527    5,842 
August 15, 2019  conversion   6,200            6,200    3,100 
August 16, 2019  conversion   8,060            8,060    4,030 
August 19, 2019  conversion   6,784            6,784    4,240 
August 20, 2019  conversion   7,136            7,136    4,460 
August 20, 2019  conversion   12,100    4,705        16,805    7,002 
August 21, 2019  conversion   4,284    5,628        9,912    4,690 
August 22, 2019  conversion       6,348        6,348    5,290 
August 23, 2019  conversion       4,400        4,400    5,500 
August 26, 2019  conversion   7,810    3,068        10,878    9,065 
August 26, 2019  conversion       3,416        3,416    4,270 
August 27, 2019  conversion       2,240        2,240    2,800 
August 29, 2019  conversion       5,344        5,344    6,680 
September 3, 2019  conversion       5,616        5,616    7,020 
September 3, 2019  conversion   6,149    2,449        8,598    14,329 

 

 - 17 - 

 

Date  Transaction (*) 

Principal

Converted

  

Interest

Converted

  

Fees

Converted

  

Total

Amount

Converted

  

Shares

Issued**

 
September 4, 2019  conversion       2,956        2,956    7,390 
September 5, 2019  conversion       3,240        3,240    8,100 
September 6, 2019  conversion       3,560        3,560    8,900 
September 9, 2019  conversion       3,752        3,752    9,380 
September 10, 2019  conversion       3,944        3,944    9,860 
September 10, 2019  conversion   6,826    2,750        9,575    15,959 
September 11, 2019  conversion       4,129        4,129    10,300 
September 12, 2019  conversion   2,447    2,233        4,680    11,700 
September 13, 2019  conversion   4,920            4,920    12,300 
September 16, 2019  conversion   2,818    2,342        5,160    12,900 
September 17, 2019  conversion       2,960        2,960    7,400 
September 18, 2019  conversion       4,760        4,760    11,900 
September 19, 2019  conversion       2,920        2,920    7,300 
September 20, 2019  conversion   202    1,998        2,200    5,500 
September 25, 2019  conversion   4,506    234        4,740    12,600 
October 3, 2019  conversion   5,651    349        6,000    15,000 
October 10, 2019  conversion   3,760    280        4,040    10,100 
October 25, 2019  conversion   2,584    556        3,140    15,700 
November 4, 2019  conversion   2,926    354        3,280    16,400 
November 27, 2019  conversion   2,970    770        3,740    18,700 
January 3, 2020  conversion       2,640        2,640    13,200 
January 27, 2020  conversion   3,360            3,360    16,800 
February 1, 2020  cancellation   (3,360)           (3,360)   (16,800)
February 5, 2020  cancellation       (640)       (640)   (3,200)
February 5, 2020  conversion       4,060        4,060    20,300 
February 29, 2020  rounding shares issuable                   2,946 
Number of shares outstanding February 29, 2020                          418,415 
March 29, 2020  Conversion       2,568        2,568    21,400 
March 30, 2020  Conversion   742        500    1,242    20,700 
March 31, 2020  Conversion       1,013        1,013    21,100 
April 3, 2020  Conversion       936        936    19,500 
April 6, 2020  Conversion   868        500    1,368    22,800 
April 7, 2020  Conversion       1,186        1,186    24,700 
April 7, 2020  Conversion   1,500        500    2,000    25,000 
April 8, 2020  Conversion       1,104        1,104    23,000 
April 13, 2020  Conversion       1,474        1,474    30,700 
April 14, 2020  Conversion       1,272        1,272    26,500 
April 16, 2020  Conversion   1,456        500    1,956    32,600 
April 17, 2020  Conversion       1,613        1,613    33,600 
April 20, 2020  Conversion       1,776        1,776    37,000 
April 20, 2020  Conversion   1,200        500    1,700    23,611 
April 21, 2020  Conversion       1,448        1,448    31,000 
April 23, 2020  Conversion       1,773        1,773    38,500 
April 24, 2020  Conversion       1,392        1,392    43,500 
April 24, 2020  Conversion   1,941        500    2,441    42,420 
April 27, 2020  Conversion       1,469        1,469    45,900 
April 28, 2020  Conversion       781        781    24,400 
April 28, 2020  Conversion       1,376        1,376    43,000 
April 29, 2020  Conversion   2,400        500    2,900    48,333 
April 30, 2020  Conversion       1,408        1,408    44,000 
April 30, 2020  Conversion   2,225        500    2,725    54,500 
May 1, 2020  Conversion       1,792        1,792    56,009 
May 4, 2020  Conversion       1,728        1,728    54,000 
May 4, 2020  Conversion   5,060    2,719        7,779    129,643 

 

 - 18 - 

 

Date  Transaction (*) 

Principal

Converted

  

Interest

Converted

  

Fees

Converted

  

Total

Amount

Converted

  

Shares

Issued**

 
May 4, 2020  Conversion   2,724        500    3,224    71,640 
May 5, 2020  Conversion       2,365        2,365    73,900 
May 6, 2020  Conversion   3,750        500    4,250    78,703 
May 7, 2020  Conversion       2,170        2,170    67,800 
May 7, 2020  Conversion   2,640        500    3,140    78,500 
May 8, 2020  Conversion       1,592        1,592    59,400 
May 11, 2020  Conversion   1,843        500    2,343    90,100 
May 12, 2020  Conversion       2,095        2,095    100,700 
May 12, 2020  Conversion   1,910        500    2,410    95,000 
May 12, 2020  Conversion   4,070    2,208        6,278    201,231 
May 13, 2020  Conversion       2,413        2,413    116,000 
May 14, 2020  Conversion       1,936        1,936    94,000 
May 14, 2020  Conversion   2,698        500    3,198    123,000 
May 14, 2020  Conversion   3,300        500    3,800    121,794 
May 15, 2020  Conversion       1,764        1,764    98,000 
May 15, 2020  Conversion   4,510    2,416        6,926    232,206 
May 18, 2020  Conversion       2,728        2,728    155,000 
May 19, 2020  Conversion       2,546        2,546    148,000 
May 19, 2020  Conversion   3,108        500    3,608    164,000 
May 19, 2020  Conversion   3,108        500    3,608    164,000 
May 19, 2020  Conversion   2,450        500    2,950    121,399 
May 20, 2020  Conversion       2,477        2,477    144,000 
May 21, 2020  Conversion       3,560        3,560    207,000 
May 22, 2020  Conversion   3,600        500    4,100    210,000 
May 22, 2020  Conversion   5,665    3,112        8,777    416,744 
May 25, 2020  Conversion   3,238        500    3,738    230,000 
May 26, 2020  Conversion       3,120        3,120    240,000 
May 27, 2020  Conversion       2,280        2,280    190,000 
May 28, 2020  Conversion       2,148        2,148    179,000 
May 28, 2020  Conversion   6,050    3,347        9,397    522,072 
May 28, 2020  Rounding shares                   9 
May 29, 2020  Conversion   4,000        500    4,500    257,731 
June 1, 2020  Conversion       2,367        2,367    202,000 
June 1, 2020  Conversion   4,380            4,380    300,000 
June 1, 2020  Conversion   8,680            8,680    620,000 
June 3, 2020  Conversion       3,427        3,427    357,000 
June 4, 2020  Conversion   4,372        500    4,872    435,000 
June 4, 2020  Conversion       2,554        2,554    285,000 
June 3, 2020  Conversion   7,095    3,954        11,049    754,703 
June 4, 2020  Conversion   9,744            9,744    870,000 
June 5, 2020  Conversion       3,916        3,916    445,000 
June 8, 2020  Conversion   4,770            4,770    530,000 
June 8, 2020  Conversion       2,980        2,980    487,000 
June 8, 2020  Conversion   6,600    3,700        10,300    1,122,004 
June 9, 2020  Conversion   3,593        500    4,093    535,000 
June 10, 2020  Conversion   4,396        500    4,896    640,000 
June 10, 2020  Conversion       2,472        2,472    404,000 
June 11, 2020  Conversion       2,935        2,935    587,000 
June 11, 2020  Conversion   4,320            4,320    720,000 
June 12, 2020  Conversion   6,600    3,718        10,318    1,433,000 
June 15, 2020  Conversion       3,126        3,126    704,000 
June 15, 2020  Conversion   9,435            9,435    1,700,000 
June 15, 2020  Conversion   4,218        500    4,718    850,000 
June 17, 2020  Conversion       3,135        3,135    825,000 

 

 - 19 - 

 

Date  Transaction (*) 

Principal

Converted

  

Interest

Converted

  

Fees

Converted

  

Total

Amount

Converted

  

Shares

Issued**

 
June 17, 2020  Conversion   4,750            4,750    1,000,000 
June 17, 2020  Conversion   5,830    3,303        9,133    1,902,773 
June 18, 2020  Conversion       2,608        2,608    815,000 
June 18, 2020  Conversion   4,300        500    4,800    1,200,000 
June 19, 2020  Conversion   3,500        500    4,000    1,000,000 
June 19, 2020  Conversion       2,797        2,797    874,000 
June 19, 2020  Conversion   6,490    3,686        10,176    2,119,985 
June 22, 2020  Conversion       4,627        4,627    1,446,000 
June 22, 2020  Conversion   6,930    3,950        10,880    2,266,600 
June 23, 2020  Conversion       5,120        5,120    1,600,000 
June 22, 2020  Conversion   10,000            10,000    2,500,000 
June 23, 2020  Conversion   6,100        500    6,600    1,650,000 
June 23, 2020  Conversion   10,120    5,775        15,895    3,311,362 
June 23, 2020  Conversion   2,488        500    2,988    747,000 
June 24, 2020  Conversion   8,400            8,400    2,100,000 
June 24, 2020  Conversion   17,200            17,200    4,300,000 
June 24, 2020  Conversion   10,120    5,781        15,901    3,312,766 
June 24, 2020  Conversion   1,150        500    1,650    343,750 
June 25, 2020  Conversion       7,040        7,040    2,200,000 
June 25, 2020  Conversion   10,300        500    10,800    2,700,000 
June 25, 2020  Conversion   11,275    6,448        17,723    3,692,421 
June 26, 2020  Conversion       6,400        6,400    2,000,000 
June 29, 1930  Conversion   12,800            12,800    3,200,000 
June 29, 2020  Conversion   3,355    485        3,840    1,200,000 
June 30, 2020  Conversion   4,841    119        4,960    1,550,000 
June 29, 2020  Conversion   13,000    861        13,861    2,887,685 
July 1, 2020  Conversion   12,980        500    13,480    3,370,000 
July 1, 2020  Conversion   22,800            22,800    5,700,000 
July 1, 2020  Conversion   12,485    7,191        19,676    4,099,085 
July 1, 2020  Conversion   5,222    116        5,338    1,668,000 
July 2, 2020  Conversion   7,248    112        7,360    2,300,000 
July 6, 2020  Conversion   16,088            16,088    4,021,875 
July 1, 2020  Conversion   13,250    861        14,111    2,945,058 
July 6, 2020  Conversion   17,600    10,195        27,795    5,790,666 
July 7, 2020  Conversion   7,462    538        8,000    2,500,000 
July 8, 2020  Conversion   6,297    103        6,400    2,000,000 
July 9, 2020  Conversion   18,150    10,550        28,700    5,979,187 
July 9, 2020  Conversion   20,000            20,000    5,000,000 
July 10, 2020  Conversion   9,403    197        9,600    3,000,000 
July 14, 2020  Conversion       10,240        10,240    3,200,000 
July 14, 2020  Conversion   12,000            12,000    3,000,000 
July 14, 2020  Conversion   9,230    370        9,600    3,000,000 
July 14, 2020  Conversion   12,114    7,082        19,196    3,999,234 
July 14, 2020  Conversion   24,000            24,000    6,000,000 
July 14, 2020  Conversion       12,800        12,800    4,000,000 
July 16, 2020  Conversion   22,611    13,782        36,392    7,581,749 
July 17, 2020  Conversion   33,000    18,736        51,736    10,645,130 
July 20, 2020  Conversion       1,600        1,600    500,000 
July 20, 2020  Conversion   32,000            32,000    8,000,000 
July 20, 2020  Conversion   28,600    16,249        44,849    9,237,550 
July 20, 2020  Conversion       10,560        10,560    3,300,000 
July 21, 2020  Conversion       6,400        6,400    2,000,000 
July 22, 2020  Conversion       6,400        6,400    2,000,000 
July 22, 2020  Conversion       24,000        24,000    7,500,000 

 

 - 20 - 

 

Date  Transaction (*) 

Principal

Converted

  

Interest

Converted

  

Fees

Converted

  

Total

Amount

Converted

  

Shares

Issued**

 
July 23, 2020  Conversion       6,400        6,400    2,000,000 
July 24, 2020  Conversion       6,400        6,400    2,000,000 
July 24, 2020  Conversion   9,000            9,000    2,000,000 
July 24, 2020  Conversion   27,500    15,741        43,241    6,863,668 
July 27, 2020  Conversion   16,018    182        16,200    5,000,000 
July 27, 2020  Conversion       22,680        22,680    7,000,000 
July 28, 2020  Conversion   9,150    50        9,200    2,500,000 
July 29, 2020  Conversion   50,032    7,700        57,732    9,785,085 
July 29, 2020  Conversion   10,456    44        10,500    2,500,000 
July 29, 2020  Conversion       29,400        29,400    7,000,000 
July 29, 2020  Conversion   27,500    15,833        43,333    6,878,219 
July 30, 2020  Conversion   10,463    37        10,500    2,500,000 
July 30, 2020  Conversion       29,400        29,400    7,000,000 
July 30, 2020  Conversion   57,750            57,750    11,000,000 
July 30, 2020  Conversion   12,570    30        12,600    3,000,000 
July 31, 2020  Conversion       29,400        29,400    7,000,000 
July 31, 2020  Conversion   23,100    13,330        36,430    7,019,333 
July 31, 2020  Conversion   6,734    66        6,800    2,000,000 
August 3, 2020  Conversion   43,500            43,500    10,000,000 
August 3, 2020  Conversion       29,400        29,400    7,000,000 
August 3, 2020  Conversion       8,500        8,500    2,500,000 
August 4, 2020  Conversion   17,985    10,427        28,412    5,474,293 
August 4, 2020  Conversion        5,800        5,800    2,500,000 
August 5, 2020  Conversion   27,500    13,979        41,479    8,837,286 
August 6, 2020  Conversion   33,741    18,759        52,500    12,500,000 
August 6, 2020  Conversion       17,000        17,000    5,000,000 
August 10, 2020  Conversion   43,294    953        44,247    15,000,000 
August 11, 2020  Conversion   25,850    15,107        40,957    17,065,350 
August 11, 2020  Conversion   12,533    10,000        22,533    11,268,750 
August 12, 2020  Conversion   8,965    5,245        14,210    5,920,900 
August 14, 2020  Conversion   27,500    15,510        43,010    17,920,835 
August 14, 2020  Conversion   16,000            16,000    8,000,000 
August 17, 2020  Conversion       12,000        12,000    6,000,000 
August 19, 2020  Conversion       12,000        12,000    6,000,000 
August 19, 2020  Conversion   26,510    15,040        41,550    17,312,501 
August 27, 2020  Conversion   25,441    10,000    500    35,941    17,970,625 
August 28, 2020  Conversion   41,000            41,000    20,000,000 
August 28, 2020  Conversion   38,500    21,894        60,394    25,164,027 
August 31, 2020  Conversion   39,500        500    40,000    20,000,000 
September 3, 2020  Conversion   44,990    25,974        70,964    29,568,429 
September 4, 2020  Conversion   48,100        500    48,600    27,000,000 
September 10, 2020  Conversion   44,000    19,046        63,046    29,188,067 
September 14, 2020  Conversion   36,000            36,000    20,000,000 
September 16, 2020  Conversion   36,300    15,858        52,158    28,976,854 
September 17, 2020  Conversion   30,000            30,000    20,000,000 
September 21, 2020  Conversion   29,700    13,074        42,774    35,645,000 
September 22, 2020  Conversion   33,500        500    34,000    34,000,000 
September 22, 2020  Conversion   20,000            20,000    20,000,000 
September 25, 2020  Conversion   27,500    12,179        39,679    38,900,867 
September 28, 2020  Conversion   21,000            21,000    30,000,000 
September 28, 2020  Conversion   6,850        500    7,350    15,000,000 
September 29, 2020  Conversion   23,300        500    23,800    34,000,000 
September 30, 2020  Conversion   27,500    12,410        39,910    47,511,901 
October 5, 2020  Conversion   27,500    11,991        39,491    50,630,340 

 

 - 21 - 

 

Date  Transaction (*) 

Principal

Converted

  

Interest

Converted

  

Fees

Converted

  

Total

Amount

Converted

  

Shares

Issued**

 
October 5, 2020  Conversion   17,500            17,500    25,925,926 
October 6, 2020  Conversion   5,881    9,360    500    15,741    24,217,169 
October 6, 2020  Conversion   6,780        500    7,280    16,000,000 
October 8, 2020  Conversion   33,000    14,762        47,762    61,233,329 
October 12, 2020  Conversion   27,500    12,375        39,875    66,458,333 
October 15, 2020  Conversion   41,800    26,711        68,511    114,185,778 
October 15, 2020  Conversion   6,500        500    7,000    20,000,000 
October 21, 2020  Conversion   22,000    10,032        32,032    53,386,667 
October 26, 2020  Conversion   10,000    5,000        15,000    25,000,000 
October 29, 2020  Conversion   44,000    20,298        64,298    107,164,443 
October 29, 2020  Conversion   27,500    14,000        41,500    69,166,666 
November 2, 2020  Conversion   2,500    142        2,642    4,403,700 
November 9, 2020  Conversion   38,500    18,044        56,544    94,239,448 
November 17, 2020  Conversion   38,500    25,450        63,950    106,582,783 
November 24, 2020  Conversion   40,040    26,655        66,695    111,157,519 
December 1, 2020  Conversion   44,660    29,938        74,598    124,330,726 
December 3, 2020  Conversion   38,170    22,938        61,108    101,847,067 
December 10, 2020  Conversion   78,650    47,584        126,234    210,390,074 
December 28, 2020  Warrants               1,190    119,000,000 
January 1, 2021  Warrants               1,250    125,000,000 
January 21, 2021  Warrants               736    73,650,793 
January 14, 2021  Warrants               1,300    130,000,000 
January 20, 2021  Warrants               323    32,338,030 
January 20, 2021  Warrants               1,280    127,992,278 
February 3, 2021  Fees                   5,000,000 
February 10, 2021  Warrants                   75,000,000 
February 16, 2021  Warrants                   14,268,324 
February 16, 2021  Warrants                   130,000,000 
February 19, 2021  Conversion   82,500    27,530        110,030    4,075,191 
February 23, 2021  Warrants                   42,189,696 
February 26, 2021  Warrants                   24,771,271 
Number of shares outstanding February 28, 2021                          3,229,426,884 

 

 - 22 - 

 

Date  Transaction  Consideration  Shares Issued 
March 3, 2021  Conversion of Series F Preferred Shares  40 Series F shares converted   156,978,130 
March 23, 2021  Conversion of Series F Preferred Shares  18 Series F shares converted   74,652,380 
April 8, 2021  Conversion of Series F Preferred Shares  20 Series F shares converted   84,715,488 
June 3, 2021  Exercise of warrants  Cashless exercise of 188,000,000 warrants   182,000,000 
June 15, 2021  Exercise of warrants  Cashless exercise of 11,000,000 warrants   9,975,508 
June 15, 2021  Debt exchange  $2,545,900 in debt exchanged for common shares   39,167,693 
June 15, 2021  Debt Exchange  $5,000,875 in debt exchanged for common shares   76,936,539 
July 21, 2021  Exercise of warrants  Cashless exercise of 112,000,000 warrants   108,276,053 
July 26, 2021  Common stock issued at previous day bid price per note conversion agreement  Convert a note payable including $275,000 of principal, $16,955 of interest, and $1,750 of fees   10,859,436 
August 5, 2021  Common stock issued at previous day bid price per note conversion agreement  Convert a note payable including $550,000 of principal, and $55,000 of interest   20,183,000 
September 16, 2021  Common stock issued pursuant to share purchase agreement at 85% VWAP over previous 5 day period  $0.03 per share for gross proceeds of $601,499 and net proceeds (after issuance costs) of $563,849   19,943,616 
September 24, 2021  Common stock issued pursuant to share purchase agreement at 85% VWAP over previous 5 day period  $0.03 per share for gross proceeds of $770,141 and net proceeds (after issuance costs) of $691,336   24,289,716 
October 7, 2021  Common stock issued pursuant to share purchase agreement at 92% VWAP over previous 3 day period  $0.02 per share for gross proceeds of $1,182,004 and net proceeds (after issuance costs) of $1,170,788   49,000,000 
October 14, 2021  Common stock issued pursuant to share purchase agreement at 85% VWAP over previous 5 day period  $0.02 per share for gross proceeds of $1,155,997 and net proceeds (after issuance costs) of $1,090,557   55,166,929 
October 19, 2021  Exercise of warrants  Cashless exercise of 52,985,075 warrants   50,000,000 
October 25, 2021  Common stock issued pursuant to share purchase agreement at 85% VWAP over previous 5 day period  $0.03 per share for gross proceeds of $2,708,457 and net proceeds (after issuance costs) of $2,600,119   95,368,212 
October 27, 2021  Exercise of warrants  Cashless exercise of 47,014,925 warrants   44,770,776 
November 11, 2021  Common stock issued pursuant to share purchase agreement at 92% VWAP over previous 3 day period  $0.03 per share for gross proceeds of $1,358,600 and net proceeds (after issuance costs) of $1,345,014   50,000,000 
November 24, 2021  Common stock issued pursuant to share purchase agreement at 92% VWAP over previous 3 day period  $0.03 per share for gross proceeds of $1,016,515 and net proceeds (after issuance costs) of $1,006,349   51,400,000 
January 3, 2022  Common stock issued pursuant to share purchase agreement at 85% VWAP over previous 10 day period  $0.01 per share for gross proceeds of $1,275,000 and net proceeds (after issuance costs) of $1,183,725   100,000,000 
January 19, 2022  Common stock issued pursuant to share purchase agreement at 85% VWAP over previous 10 day period  $0.02 per share for gross proceeds of $1,697,110 and net proceeds (after issuance costs) of $1,577,312   100,000,000 
February 8, 2022  Common stock issued pursuant to share purchase agreement at 85% VWAP over previous 10 day period  $0.01 per share for gross proceeds of $1,412,700 and net proceeds (after issuance costs) of $1,312,811   100,000,000 
   Number of shares outstanding February 28, 2022*****      4,733,110,360 

 

 - 23 - 

 

Date  Transaction  Consideration  Shares Issued 
April 6, 2022  Common stock issued pursuant to share purchase agreement at 85% VWAP over previous 10 day period  $0.01 per share for gross proceeds of $1,350,6500 and net proceeds (after issuance costs) of $1,255,104   100,000,000 
May 25, 2022  Common stock issued pursuant to share purchase agreement at 85% VWAP over previous 10 day period  $0.01 per share for gross proceeds of $411,729 and net proceeds (after issuance costs) of $390,4761   33,881,576 
June 6, 2022  Common stock issued pursuant to share purchase agreement at 85% VWAP over previous 10 day period  $0.01 per share for gross proceeds of $292,268 and net proceeds (after issuance costs) of $276,630   23,723,044 
June 15, 2022  Common stock issued pursuant to share purchase agreement at 85% VWAP over previous 10 day period  $0.01 per share for gross proceeds of $317,845 and net proceeds (after issuance costs) of $300,927   28,378,983 
June 27, 2022  Common stock issued pursuant to share purchase agreement at 85% VWAP over previous 10 day period  $0.01 per share for gross proceeds of $292,386 and net proceeds (after issuance costs) of $276,742   26,873,732 
July 8, 2022  Common stock issued pursuant to share purchase agreement at 85% VWAP over previous 10 day period  $0.01 per share for gross proceeds of $221,755 and net proceeds (after issuance costs) of $209,643   22,175,543 
July 11, 2022  Exercise of warrants  Cashless exercise of 8,250,000 warrants   1,688,178 
July 19, 2022  Common stock issued pursuant to share purchase agreement at 85% VWAP over previous 10 day period  $0.01 per share for gross proceeds of $163,167 and net proceeds (after issuance costs) of $153,983   16,059,723 
July 21, 2022  Exercise of warrants  Cashless exercise of 53,128,210 warrants   8,000,001 
August 12, 2022  Common stock issued pursuant to share purchase agreement at 85% VWAP over previous 10 day period  $0.009 per share for gross proceeds of $225,065 and net proceeds (after issuance costs) of $212,787   23,841,632 
August 22, 2022  Common stock issued pursuant to share purchase agreement at 85% VWAP over previous 10 day period  $0.009 per share for gross proceeds of $225,065 and net proceeds (after issuance costs) of $212,787   20,638,478 
August 30, 2022  Common stock issued pursuant to share purchase agreement at 92% VWAP over previous 3 day period  $0.009 per share for gross proceeds of $284,290 and net proceeds (after issuance costs) of $281,280   30,000,000 
August 31, 2022  Cancellation of common stock  Pursuant to an SEC enforcement action against a lender   (17,116,894)
September 7, 2022  Common stock issued pursuant to share purchase agreement at 85% VWAP over previous 10 day period  $0.008 per share for gross proceeds of $167,289 and net proceeds (after issuance costs) of $157,900   20,348,167 
September 19, 2022  Common stock issued pursuant to share purchase agreement at 85% VWAP over previous 10 day period  $0.008 per share for gross proceeds of $147,542 and net proceeds (after issuance costs) of $139,140   18,260,143 
September 30, 2022  Common stock issued pursuant to share purchase agreement at 85% VWAP over previous 5 day period  $0.007 per share for gross proceeds of $103,152 and net proceeds (after issuance costs) of $96,969   14,820,143 
October 12, 2022  Common stock issued pursuant to share purchase agreement at 85% VWAP over previous 10 day period  $0.006 per share for gross proceeds of $80,278 and net proceeds (after issuance costs) of $75,240   12,543,515 
October 20, 2022  Common stock issued pursuant to share purchase agreement at 85% VWAP over previous 10 day period  $0.006 per share for gross proceeds of $94,361 and net proceeds (after issuance costs) of $88,618   17,094,439 
October 31, 2022  Common stock issued pursuant to share purchase agreement at 85% VWAP over previous 10 day period  $0.005 per share for gross proceeds of $89,237 and net proceeds (after issuance costs) of $83,750   17,705,725 
November 9, 2022  Common stock issued pursuant to share purchase agreement at 85% VWAP over previous 10 day period  $0.005 per share for gross proceeds of $72,964 and net proceeds (after issuance costs) of $68,291   14,710,472 

 

 - 24 - 

 

Date  Transaction  Consideration  Shares Issued 
November 17, 2022  Common stock issued pursuant to share purchase agreement at 85% VWAP over previous 10 day period  $0.005 per share for gross proceeds of $80,548 and net proceeds (after issuance costs) of $75,496   15,490,043 
November 22, 2022  Common stock issued pursuant to share purchase agreement at 85% VWAP over previous 10 day period  $0.006 per share for gross proceeds of $354,770 and net proceeds (after issuance costs) of $336,007   66,188,441 
December 7, 2022  Common stock issued pursuant to share purchase agreement at 92% VWAP over previous 3 day period  $0.008 per share for gross proceeds of $231,840 and net proceeds (after issuance costs) of $228,840   30,000,000 
December 9, 2022  Common stock issued pursuant to share purchase agreement at 85% VWAP over previous 10 day period  $0.006 per share for gross proceeds of $207,058 and net proceeds (after issuance costs) of $195,680   32,762,396 
December 20, 2022  Common stock issued pursuant to share purchase agreement at 85% VWAP over previous 10 day period  $0.005 per share for gross proceeds of $139,080 and net proceeds (after issuance costs) of $131,102   25,947,874 
December 29, 2022  Common stock issued pursuant to share purchase agreement at 85% VWAP over previous 10 day period  $0.005 per share for gross proceeds of $135,832 and net proceeds (after issuance costs) of $128,016   28,778,009 
January 9, 2023  Common stock issued pursuant to share purchase agreement at 85% VWAP over previous 10 day period  $0.004 per share for gross proceeds of $123,603 and net proceeds (after issuance costs) of $116,397   27,589,862 
January 17, 2023  Common stock issued pursuant to share purchase agreement at 85% VWAP over previous 10 day period  $0.005 per share for gross proceeds of $118,338 and net proceeds (after issuance costs) of $111,397   23,858,593 
January 20, 2023  Common stock issued pursuant to share purchase agreement at 85% VWAP over previous 10 day period  $0.005 per share for gross proceeds of $214,971 and net proceeds (after issuance costs) of $203,197   40,174,120 
January 27, 2023  Common stock issued pursuant to share purchase agreement at 85% VWAP over previous 10 day period  $0.005 per share for gross proceeds of $303,216 and net proceeds (after issuance costs) of $287,030   46,792,519 
February 6, 2023  Common stock issued pursuant to share purchase agreement at 85% VWAP over previous 10 day period  $0.007 per share for gross proceeds of $387,943 and net proceeds (after issuance costs) of $367,521   60,616,138 
February 10, 2023  Exercise of warrants  Cashless exercise of 47,000,000 warrants   35,618,378 
February 13, 2023  Common stock issued pursuant to share purchase agreement at 85% VWAP over previous 10 day period  $0.007 per share for gross proceeds of $652,837 and net proceeds (after issuance costs) of $619,170   90,071,304 
February 22, 2023  Common stock issued pursuant to share purchase agreement at 85% VWAP over previous 10 day period  $0.006 per share for gross proceeds of $511,317 and net proceeds (after issuance costs) of 484,726   81,316,289 
February 28, 2023  Common stock issued as penalty pursuant to share purchase agreement  Corresponding adjustment to paid in capital   17,500,000 
February 28, 2023  Common stock issued pursuant to share purchase agreement at 85% VWAP over previous 10 day period  $0.005 per share for gross proceeds of $253,832 and net proceeds (after issuance costs) of $240,115   46,660,225 
   Number of shares outstanding February 28, 2023*****      5,836,641,599 

 

 - 25 - 

 

Date  Transaction  Consideration  Shares Issued 
March 13, 2023  Common stock issued pursuant to share purchase agreement at 85% VWAP over previous 10 day period  $0.005 per share for gross proceeds of $161,778 and net proceeds (after issuance costs) of $152,664   29,738,664 
March 23, 2023  Common stock issued pursuant to share purchase agreement at 85% VWAP over previous 10 day period  $0.005 per share for gross proceeds of $135,635 and net proceeds (after issuance costs) of $127,828   27,794,000 
March 31, 2023  Common stock issued pursuant to share purchase agreement at 92% VWAP over previous 3 day period  $0.005 per share for gross proceeds of $117,378 and net proceeds (after issuance costs) of $110,484   25,740,693 
April 12, 2023  Common stock issued pursuant to share purchase agreement at 85% VWAP over previous 10 day period  $0.004 per share for gross proceeds of $119,957 and net proceeds (after issuance costs) of $112,934   26,776,130 
April 18, 2023  Common stock issued pursuant to share purchase agreement at 85% VWAP over previous 10 day period  $0.005 per share for gross proceeds of $151,915 and net proceeds (after issuance costs) of $143,294   32,185,352 
April 26, 2023  Common stock issued pursuant to share purchase agreement at 85% VWAP over previous 10 day period  $0.005 per share for gross proceeds of $110,537 and net proceeds (after issuance costs) of $103,985   20,998,702 
May 8, 2023  Common stock issued pursuant to share purchase agreement at 85% VWAP over previous 10 day period  $0.005 per share for gross proceeds of $93,123 and net proceeds (after issuance costs) of $87,442   19,082,597 
May 15, 2023  Common stock issued pursuant to share purchase agreement at 85% VWAP over previous 10 day period  $0.005 per share for gross proceeds of $84,864 and net proceeds (after issuance costs) of $79,595   16,574,891 
May 18, 2023  Common stock issued pursuant to share purchase agreement at 85% VWAP over previous 10 day period  $0.005 per share for gross proceeds of $101,796 and net proceeds (after issuance costs) of $95,681   19,882,043 
May 24, 2023  Common stock issued pursuant to share purchase agreement at 85% VWAP over previous 10 day period  $0.005 per share for gross proceeds of $116,821 and net proceeds (after issuance costs) of $109,954   22,465,568 
May 24, 2023  Common stock issued pursuant to share purchase agreement at 85% VWAP over previous 10 day period  $0.005 per share for gross proceeds of $206,391 and net proceeds (after issuance costs) of $195,046   39,690,550 
June 2, 2023  Common stock issued for services  Shares having a fair value of $109,200   2,100,000 
June 6, 2023  Common stock issued pursuant to share purchase agreement at 85% VWAP over previous 10 day period  $0.005 per share for gross proceeds of $688,795 and net proceeds (after issuance costs) of $653,331   110,383,893 
June 13, 2023  Common stock issued pursuant to share purchase agreement at 85% VWAP over previous 10 day period  $0.008 per share for gross proceeds of $1,129,846 and net proceeds (after issuance costs) of $1,072,329   141,230,730 
June 23, 2023  Common stock issued pursuant to share purchase agreement at 85% VWAP over previous 10 day period  $0.006 per share for gross proceeds of $482,713 and net proceeds (after issuance costs) of $457,552   77,357,815 
July 11, 2023  Common stock issued pursuant to share purchase agreement at 85% VWAP over previous 10 day period  $0.006 per share for gross proceeds of $621,166 and net proceeds (after issuance costs) of $606,717   112,530,022 
July 24, 2023  Common stock issued for services  Shares having a fair value of $118,400   10,000,000 
July 24, 2023  Common stock issued for services  Shares having a fair value of $44,460   6,500,000 
July 27, 2023  Common stock issued pursuant to share purchase agreement at 85% VWAP over previous 10 day period  $0.005 per share for gross proceeds of $$634,182 and net proceeds (after issuance costs) of $620,473   121,958,014 
August 14, 2023  Common stock issued pursuant to share purchase agreement at 85% VWAP over previous 10 day period  $0.005 per share for gross proceeds of $757,212 and net proceeds (after issuance costs) of $741,044   172,093,823 
August 29, 2023  Common stock issued pursuant to share purchase agreement at 85% VWAP over previous 10 day period  $0.004 per share for gross proceeds of $658,880 and net proceeds (after issuance costs) of $644,678   168,081,707 
September 21, 2023  Common stock issued pursuant to share purchase agreement at 85% VWAP over previous 10 day period  $0.003 per share for gross proceeds of $377,244 and net proceeds (after issuance costs) of $368,655   120,905,263 
October 10, 2023  Common stock issued pursuant to share purchase agreement at 85% VWAP over previous 10 day period  $0.002 per share for gross proceeds of $282,315and net proceeds (after issuance costs) of $269,998   110,279,407 

 

 - 26 - 

 

Date  Transaction  Consideration  Shares Issued 
October 25, 2023  Common stock issued pursuant to share purchase agreement at 85% VWAP over previous 10 day period  $0.002 per share for gross proceeds of
$272,093 and net proceeds (after issuance costs) of $ 260,185
   125,969,163 
November 9, 2023  Common stock issued pursuant to share purchase agreement at 85% VWAP over previous 10 day period  $0.002 per share for gross proceeds of
$255,392 and net proceeds (after issuance costs) of $244,151
   133,016,448 
November 24, 2023  Common stock issued pursuant to share purchase agreement at 92% VWAP over previous 3 day period  $0.002 per share for gross proceeds of $281,453 and net proceeds (after issuance costs) of $269,169   185,166,153 
December 13, 2023  Common stock issued pursuant to share purchase agreement at 85% VWAP over previous 10 day period  $0.002 per share for gross proceeds of $1,007,152 and net proceeds (after issuance costs) of $965,841   381,497,000 
December 29, 2023  Common stock issued pursuant to share purchase agreement at 85% VWAP over previous 10 day period  $0.002 per share for gross proceeds of $516,106 and net proceeds (after issuance costs) of $494,437   258,053,000 
January 16, 2024  Common stock issued pursuant to share purchase agreement at 85% VWAP over previous 10 day period  $0.002 per share for gross proceeds of $775,600 and net proceeds (after issuance costs) of $743,451   312,741,936 
February 1, 2024  Common stock issued pursuant to share purchase agreement at 85% VWAP over previous 10 day period  $0.002 per share for gross proceeds of $552,964 and net proceeds (after issuance costs) of $529,821   276,482,220 
February 16, 2024  Common stock issued pursuant to share purchase agreement at 85% VWAP over previous 10 day period  $0.002 per share for gross proceeds of $589,667 and net proceeds (after issuance costs) of $565,055   294,833,575 
   Number of shares outstanding February 29, 2024      9,238,750,958 

 

* Conversions occur at discounts ranging from 40-50% of average market price

** Shares adjusted for reverse stock splits: 100: 1 on August 24, 2018 and 10,000:1 on March 27, 2020

*** Total proceeds $600

**** Total proceeds $8,922

***** At February 28, 2022 there were 2,100,000 issuable shares

****** At February 28, 2023 there were 12,100,000 issuable shares

 

In connection with the foregoing, the Registrant relied upon the exemption from registration under the Securities Act of 1933, as amended and the rules and regulations of the Securities and Exchange Commission thereunder, in reliance upon Section 4(a)(2) thereof and Regulation D thereunder.

 

Penny Stock Regulations

 

The Securities and Exchange Commission has adopted regulations which generally define “penny stock” to be an equity security that has a market price of less than $5.00 per share. Our Common Stock falls within the definition of penny stock and therefore is subject to rules that impose additional sales practice requirements on broker-dealers who sell such securities to persons other than established customers and accredited investors (generally those with assets in excess of $1,000,000, or annual incomes exceeding $200,000 individually, or $300,000, together with their spouse). For transactions covered by these rules, the broker-dealer must make a special suitability determination for the purchase of such securities and have received the purchaser’s prior written consent to the transaction. Additionally, for any transaction, other than exempt transactions, involving a penny stock, the rules require the delivery, prior to the transaction, of a risk disclosure document mandated by the Securities and Exchange Commission relating to the penny stock market. The broker-dealer must also make a special written determination that the penny stock is a suitable investment for the purchaser and receive the purchaser’s written agreement to the transaction. In addition, the broker-dealer must disclose the commissions payable to both the broker-dealer and the registered representative, current quotations for the securities and, if the broker-dealer is the sole market-maker, the broker-dealer must disclose this fact and the broker-dealer’s presumed control over the market. Finally, monthly statements must be sent disclosing recent price information for the penny stock held in the account and information on the limited market in penny stocks. Consequently, the “penny stock” rules may restrict the ability of broker-dealers to sell our Common Stock and may affect the ability of investors to sell their Common Stock in the secondary market.

 

 - 27 - 

 

In addition to the “penny stock” rules promulgated by the Securities and Exchange Commission, the Financial Industry Regulatory Authority (“FINRA”) has adopted rules that require that in recommending an investment to a customer, a broker-dealer must have reasonable grounds for believing that the investment is suitable for that customer. Prior to recommending speculative low-priced securities to their non-institutional customers, broker-dealers must make reasonable efforts to obtain information about the customer’s financial status, tax status, investment objectives and other information. Under interpretations of these rules, FINRA believes that there is a high probability that speculative low-priced securities will not be suitable for at least some customers. The FINRA requirements make it more difficult for broker-dealers to recommend that their customers buy our common stock, which may limit the investors’ ability to buy and sell our stock.

 

Purchases of Equity Securities by the Registrant and Affiliated Purchasers

 

We have not repurchased any shares of our common stock during the fiscal years ended February 29, 2024 or February 28, 2023.

 

ITEM 6. SELECTED FINANCIAL DATA

 

Not applicable.

 

ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

 

The following discussion of our financial condition and results of operations should be read in conjunction with the consolidated financial statements and the notes to those financial statements that are included elsewhere in this report. Our discussion includes forward-looking statements based upon current expectations that involve risks and uncertainties, such as our plans, objectives, expectations and intentions. Actual results and the timing of events could differ materially from those anticipated in these forward-looking statements as a result of a number of factors, including those set forth under the Risk Factors, Forward-Looking Statements and Business sections in this report. We use words such as “anticipate,” “estimate,” “plan,” “project,” “continuing,” “ongoing,” “expect,” “believe,” “intend,” “may,” “will,” “should,” “could,” and similar expressions to identify forward-looking statements.

 

Overview

 

AITX was incorporated in Florida on March 25, 2010. AITX reincorporated into Nevada on February 17, 2015. AITX’ fiscal year end is February 28 (February 29 during leap year). AITX is located at 10800 Galaxie Ave ,Ferndale Michigan , 48220, and our telephone number is 877-767-6268.

 

 - 28 - 

 

Results of Operations

 

The following table shows our results of operations for the years ended February 29, 2024 and February 28, 2023. The historical results presented below are not necessarily indicative of the results that may be expected for any future period.

 

   Period     
   Year Ended   Year Ended   Change 
   February 29, 2024   February 28, 2023   Dollars   Percentage 
                 
Revenues  $2,227,559   $1,331,956   $895,603    67%
Gross profit   1,096,457    653,883    442,574    68%
Operating expenses   15,085,869    13,344,563    1,741,306    13%
Loss from operations   (13,989,412)   (12,690,680)   (1,298.732)   10%
Other income (expense), net   (6,719,304)   (5,418,777)   (1,300,527)   (24%)
Net loss  $(20,708,716)  $(18,109,457)  $(2,599,259)   14%

 

The following table presents revenues from contracts with customers disaggregated by product/service:

 

   Year Ended   Year Ended   Change 
   February 29, 2024   February 28, 2023   Dollars   Percentage 
Device rental activities  $1,626,207   $754,126   $872,081    116%
Direct sales of goods and services   601,352    577,830    23,522    4%
   $2,227,559   $1,331,956   $895,603    67%

 

Revenue

 

Total revenue for the year ended February 29, 2024 was $2,227,559, which represented an increase of $895,603 compared to total revenue of $1,331,956 for the year ended February 28, 2023. Rental activities increased by $872,071 or 116%, as the Company continues to grow its product line and customer base. Direct sales grew by 4% driven by higher training revenue for the year ended February 29, 2024.

 

Gross profit

 

Total gross profit for the year ended February 29, 2024 was $1,096,457, which represented an increase of $442,574, compared to total gross profit of $653,883 for the year ended February 28, 2023. The increase is a result of the increase in revenues above, and gross profit % which was 49% for the year ended February 29, 2024 was also 49% for the prior year. The Gross profit % was stable as the increase in higher margin rental activities in the product mix, and overhead being allocated over a higher sales base was offset by a higher inventory provision for the permanent impairment in value of two products that the Company will not be continuing.in their current form

 

Operating expenses

 

Operating expenses for the years ended February 29, 2024 and February 28, 2023 comprised of the following:

 

   Period   Change 
  

Year Ended

February 29, 2024

  

Year Ended

February 28, 2023

   Dollars   Percentage 
                 
Research and development  $2,878,134   $3,625,468   $(747,334)   (21%)
General and administrative   10,525,531    8,980,709    1,544,822    17%
Depreciation and amortization   854,047    478,115    375,932    79%
Impairment on revenue earning devices   584,177    -    548,177    - 
Operating lease cost and rent   260,406    260,271    135    0%
(Gain) loss on disposal of fixed assets   (16,426)   -    (16,426)   - 
 Operating expenses  $15,085,869   $13,344,563   $1,741,306    13%

 

 - 29 - 

 

Our operating expenses were comprised of general and administrative expenses, research and development, depreciation and amortization, operating lease and rent and a (gain) loss on disposal of fixed assets. General and administrative expenses consisted primarily of professional services, automobile expenses, advertising, salaries and wages, travel expenses and rent. Our operating expenses during the years ended February 29, 2024 and February 28, 2023 were $15,085,869 and $13,344,563, respectively. The overall $1,741,206 increase in operating expenses was primarily attributable to the following changes in operating expenses:

 

  Research and development expenses decreased by $747,334 as the Company focused on current product development and spent less money on longer term projects.
     
  General and administrative expenses increased by $1,544,822 primarily due to the following changes:

 

  For the year ended February 29, 2024 stock based compensation to CEO in equity awards was $1,521,000 with a charge of $272,599 for the Employee Stock Option Plan (ESOP) all totaling $1,793,599 compare with stock based compensation to CEO in equity awards was $499,500 with $118,500 fees paid to consultants and a charge of $ 122,050 for the ESOP all totaling $740,050 for the year ended February 28, 2023. This represents an increase of $1,053,549 in stock based compensation. The stock based compensation for the CEO is payable in Series G and has been deferred until after a year.
     
  Wages, salaries and payroll levies for the CEO increased by $731,447 in discretionary bonus charged, $537,747 of which is deferred compensation and will not be paid out this year.
     
  Wages, salaries and payroll levies for the staff decreased by $218,382 due to staff reductions early in the fiscal year.
     
 

Professional fees decreased by $117,726 due to decreases in financial reporting and consulting costs.

 

  Office expense increased by $74,476.
     
  Freight, duty and brokerage increased by $154,172 due to higher purchases in 2024.
     
  Advertising and marketing costs decreased by $179,742 as the Company reduced its promotion efforts.
     
  Bad debts expense decreased by $139,989 due to write off of uncollectible accounts in the prior year.
     
  Supplies increased slightly by $11,102.
     
  Trade shows and travel decreased by $111,752 as a result of less promotional and business travel in fiscal 2024.