What changed in this filing

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Item 1. Financial Statements

2023-10-12 compared with 2023-07-17 · 302 added, 285 removed, 850 unchanged (41% of the section changed)

2 unchanged sentences

CONDENSED CONSOLIDATED BALANCE SHEETS

August 31, 2023

February 28, 2023 *

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15,545,650 shares authorized;

no shares issued and outstanding at May 31, 2023 and February 28, 2023, respectively

no shares issued and outstanding at August 31, 2023 and February 28, 2023, respectively

Series G Convertible Preferred Stock.

$ 0.001 par value;

100,000 shares authorized, no shares issued and outstanding at May 31, 2023 and February 28, 2023, respectively

100,000 shares authorized, no shares issued and outstanding at August 31, 2023 and February 28, 2023, respectively

Series E Preferred Stock, $ 0.001 par value;

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CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

August 31, 2023

August 31, 2022

August 31, 2023

August 31, 2022

Cost of Goods Sold

Operating expenses:

Research and development (including related party charges of $ 882,015 (2022-$ 1,001,734 ))

Research and development (Note 10)

General and administrative

4 unchanged sentences

Other income (expense), net:

Change in fair value of derivative liabilities

Interest expense

Total other income (expense), net

Net income (loss)

Net income (loss) per share - basic

Net income (loss) per share - diluted

Gain (loss) on settlement of debt

Total other expense net

Net loss per share - basic

Net loss per share - diluted

Weighted average common share outstanding - basic

1 unchanged sentence

4,970,040,852

6,266,833,467

4,884,349,362

Weighted average common share outstanding - diluted

1 unchanged sentence

4,970,040,852

6,266,833,467

4,884,349,362

The accompanying notes are an integral part of

1 unchanged sentence

ARTIFICIAL INTELLIGENCE TECHNOLOGY SOLUTIONS INC.

CONDENSED CONSOLIDATED STATEMENT OF SHAREHOLDER’S

CONDENSED CONSOLIDATED STATEMENT OF SHAREHOLDERS’

Preferred Stock

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Issuance of shares, net of $ 117,157 issuance costs

Relative fair value of Series F warrants issued with loans payable

Stock based compensation

Balance at May 31, 2022

4,869,091,936

Issuance of shares, net of $ 95,293 issuance costs

Cashless exercise of warrants

Relative fair value of warrants issued with debt

Cancelled shares

Exchange of 955,000,000 warrants for debt

Shares as payment for services

Balance at August 31, 2022

5,063,354,356

( 102,988,805

The accompanying notes are an integral part of

these unaudited condensed consolidated financial statements.

ARTIFICIAL INTELLIGENCE TECHNOLOGY SOLUTIONS INC.

CONDENSED CONSOLIDATED STATEMENT OF SHAREHOLDERS’

Preferred Stock

Stockholders’

Balance at February 28, 2023

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( 116,808,904

Issuance of shares, net of $ 176,672 issuance costs

Shares as payment for services

Stock based compensation

Balance at August 31, 2023

7,039,806,793

( 121,568,632

The accompanying notes are an integral part of

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CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

CASH FLOWS FROM OPERATING ACTIVITIES:

Net income (loss)

Adjustments to reconcile net loss to net cash used in operating activities:

Six Months Ended

August 31, 2023

Six Months Ended

August 31, 2022

CASH FLOWS USED IN OPERATING ACTIVITIES:

Adjustments to reconcile net income to net cash used in operating activities:

Depreciation and amortization

4 unchanged sentences

Stock based compensation

Change in fair value of derivative liabilities

Amortization of debt discounts

(Gain) loss on settlement of debt

Increase in related party accrued payroll and interest

1 unchanged sentence

Accounts receivable

Prepaid expenses and deposits on inventory

Prepaid expenses

Device parts inventory

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Customer deposits

Operating lease liability payments

Current portion of deferred variable payment obligations for payments

Operating lease liabilities

Current portion of deferred variable payment obligation for payments

Accrued interest payable

Net cash used in operating activities

CASH FLOWS FROM INVESTING ACTIVITIES:

CASH FLOWS USED IN INVESTING ACTIVITIES:

Purchase of fixed assets

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Repayment of loans payable

Net cash provided by (used in) financing activities

Proceeds from convertible debt and warrants issued

Net cash provided by financing activities

Net change in cash

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Noncash investing and financing activities:

Transfer from device parts inventory to fixed assets

Transfer from device parts inventory to revenue earning devices

Exchange of warrants for debt

Discount applied to face value of loans

Series F warrants issued as part of debt issuance

Exercise of warrants

Series F warrants issued as part of debt

Shares issued for services

Cancellation of Series E preferred shares and common shares

The accompanying notes are an integral part of

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Robotic Assistance Devices, LLC (“RAD”),

was incorporated in the State of Nevada on July 26, 2016 as an LLC.

On July 25, 2017, Robotic Assistance Devices LLC converted to a C

Corporation, Robotic Assistance Devices, Inc., through the issuance of 10,000 common shares to its sole shareholder.

was incorporated in the State of Nevada on July 26, 2016 as a Limited Liability Company.

On July 25, 2017, Robotic Assistance Devices

LLC converted to a C Corporation, Robotic Assistance Devices, Inc., through the issuance of 10,000 common shares to its sole shareholder.

On August 28, 2017, AITX completed the acquisition

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AITX’s prior business focus was transportation

services, and AITX was exploring the on-demand logistics market by developing a network of logistics partnerships.

As a result of the

closing of the Acquisition, AITX has succeeded to the business of RAD.

As a result, AITX’s business going forward will consist of

one segment activity which is the delivery of artificial intelligence and robotic solutions for operational, security and monitoring needs.

services, and was exploring the on-demand logistics market by developing a network of logistics partnerships.

As a result of the closing

of the Acquisition, AITX has succeeded to the business of RAD, and AITX’s business going forward will consist of one segment activity,

which is the delivery of artificial intelligence and robotic solutions for operational, security and monitoring needs.

The Acquisition was treated as a reverse recapitalization

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of liabilities that may result from the possible inability of the Company to continue as a going concern.

For the three months ended May 31, 2023, the Company

For the six months ended August 31, 2023, the Company

had negative cash flow from operating activities of $ 6,335,216 .

As of May 31, 2023, the Company has an accumulated deficit of $ 116,808,904 ,

As of August 31, 2023, the Company has an accumulated deficit of $ 121,568,632 ,

and negative working capital of $ 24,615,965 .

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these possible raises may not have dilutive effects.

The Company this fiscal period through to June 30, 2023 has raised an additional

The Company this fiscal quarter through to September 26, 2023 has raised an additional

$ 5.2 million net of issuance costs through the sale of its common shares.

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for a fair presentation of such statements.

The results of operations for the three months ended May 31, 2023 are not necessarily indicative

The results of operations for the six months ended August 31, 2023 are not necessarily indicative

of the results that may be expected for the entire year.

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Loans payable

At May 31, 2023 there were $ 32,427,346 of loans payable,

$ 28,090,506 or 87 % of these loans to companies controlled by one individual.

At February 28, 2023 there were $ 31,254,345 of loans payable

$ 26,540,506 or 85 % of these loans to companies controlled by the same individual.

At August 31, 2023 there were $ 32,200,345 of loans

payable, $ 27,890,506 or 87 % of these loans to companies controlled by one individual.

At February 28, 2023 there were $ 31,254,345 of loans

payable $ 26,540,506 or 85 % of these loans to companies controlled by the same individual.

The Company considers all highly liquid investments

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There was an allowance of $ 59,000 and

$ 39,000 provided as of May 31, 2023 and February 28, 2023, respectively.

For the three months ended May 31, 2023 , two customers account

for 51 % of total accounts receivable .

For the three months ended May 31, 2022 , four customers account for 59 % of total accounts receivable.

$ 39,000 provided as of August 31, 2023 and February 28, 2023, respectively.

For the three months ended August 31, 2023 , two customers

account for 37 % of total accounts receivable .

For the three months ended August 31, 2022 , four customers account for 54 % of total accounts

Device Parts Inventory

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increase in the valuation, such as excess or obsolete inventory, are noted.

As of both May 31, 2023 and February 28, 2023 there was a

valuation reserve of $ 195,000 and $ 195,000 , respectively.

As of August 31, 2023 and February 28, 2023 there was a valuation

reserve of $ 195,000 and $ 195,000 , respectively.

ARTIFICIAL INTELLIGENCE TECHNOLOGY SOLUTIONS INC.

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Depreciation is provided

on the straight-line method based on the estimated useful lives of the respective assets which range from three to five years.

on the straight-line method based on the estimated useful lives of the respective assets which range from two to five years.

Major repairs

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and amortized over the expected useful life or written off if a product is abandoned.

At May 31, 2023 and February 28, 2023, the Company

At August 31, 2023 and February 28, 2023, the Company

had no deferred development costs.

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Customers for additional information.

For the three months ended May 31, 2023 , three customers accounted for 57 % of total revenue.

the three months ended May 31, 2022, two customers accounted for 29 % of total revenue.

For the six months ended August 31, 2023 , two customers accounted for 33 % of total revenue (2022-

Income taxes are accounted for under the asset and

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Company accounts for the financial instrument as permanent equity.

Our CEO and Chairman holds sufficient shares of the

Company’s voting preferred stock that give sufficient voting rights under the articles of incorporation and bylaws of the Company

such that the CEO and Chairman can at any time unilaterally vote to increase the number of authorized shares of common stock of the Company,

without the need to call a general meeting of common shareholders of the Company.

Our Chief Executive Officer/ Chairman holds sufficient

shares of the Company’s voting preferred stock that give sufficient voting rights under the articles of incorporation and bylaws

of the Company such that the CEO/ Chairman can at any time unilaterally vote to increase the number of authorized shares of common stock

of the Company, without the need to call a general meeting of common shareholders of the Company.

Initial Measurement

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Fair Value Measurement Using

August 31, 2023

Incentive compensation plan payable- revaluation of equity awards payable in Series G shares

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conversion to common shares of all convertible instruments only if they are dilutive in nature with regards to earnings per share.

Recently Issued Accounting Pronouncements

Recently Adopted Accounting Standards

2019, the Financial Accounting Standards Board (FASB) issued amended guidance on the accounting and reporting of income taxes.

is intended to simplify the accounting for income taxes by removing exceptions related to certain intraperiod tax allocations and deferred

tax liabilities;

clarifying guidance primarily related to evaluating the step-up tax basis for goodwill in a business combination;

reflecting enacted changes in tax laws or rates in the annual effective tax rate.

The Company adopted the new guidance effective February

There was no impact to the Company’s consolidated financial statements upon adoption.

ARTIFICIAL INTELLIGENCE TECHNOLOGY SOLUTIONS INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

In January 2020,

the FASB issued new guidance intended to clarify certain interactions between accounting standards related to equity securities, equity

method investments and certain derivatives.

The guidance addresses accounting for the transition into and out of the equity method of

accounting and measuring certain purchased options and forward contracts to acquire investments.

The Company adopted the new guidance

effective February 1, 2021.

There was no impact to the Company’s consolidated financial statements upon adoption.

In August 2020,

the FASB issued amended guidance on the accounting for convertible instruments and contracts in an entity’s own equity.

removes the separation model for convertible debt instruments and preferred stock, amends requirements for conversion options to be classified

in equity as well as amends diluted earnings per share (EPS) calculations for certain convertible debt instruments.

The amended guidance

is effective for interim and annual periods in 2022.

The application of the amendments in the new guidance are to be applied either on

a modified retrospective or a retrospective basis.

We are currently assessing the effect that the adoption of this standard will have

on the Company’s consolidated financial statements upon adoption.

Recently Issued Accounting Pronouncements

Recently Issued Accounting Standards Not Yet Adopted

In March 2020,

the FASB issued optional guidance to ease the potential burden in accounting for (or recognizing the effects of) reference rate reform

on financial reporting and subsequently issued clarifying amendments.

The guidance provides optional expedients and exceptions for accounting

for contracts, hedging relationships, and other transactions that reference the London Interbank Offered Rate (LIBOR) or another reference

rate expected to be discontinued because of reference rate reform.

The optional guidance is effective upon issuance and can be applied

on a prospective basis at any time between January 1, 2020 through December 31, 2022.

The Company is currently evaluating the impact

of adoption on its consolidated financial statements.

In October 2021,

the FASB issued amended guidance that requires acquiring entities to recognize and measure contract assets and liabilities in a business

combination in accordance with existing revenue recognition guidance.

The amended guidance is effective for interim and annual periods

in 2023 and is to be applied prospectively.

Early adoption is permitted on a retrospective basis to the beginning of the fiscal year of

The adoption of this guidance will not have a material impact on the Company’s consolidated financial statements for prior

acquisitions;

however, the impact in future periods will be dependent upon the contract assets and contract liabilities acquired in future

business combinations.

In November 2021, the FASB

issued new guidance to increase the transparency of transactions with a government that are accounted for by applying a grant or contribution

accounting model by analogy.

The guidance requires annual disclosures of such transactions to include the nature of the transactions and

the significant terms and conditions, the accounting treatment and the impact to the company’s financial statements.

is effective for annual periods beginning in 2022 and is to be applied on either a prospective or retrospective basis.

The Company is

currently evaluating the impact of adoption on its consolidated financial statements.

In August 2020, the FASB issued ASU 2020-06, Debt

— Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging-Contracts in Entity’s Own Equity (Subtopic

Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity .

Under ASU 2020-06, the embedded

conversion features are no longer separated from the host contract for convertible instruments with conversion features that are not required

to be accounted for as derivatives under Topic 815, or that do not result in substantial premiums accounted for as paid-in capital.

Consequently,

a convertible debt instrument will be accounted for as a single liability measured at its amortized cost, as long as no other features

require bifurcation and recognition as derivatives.

The new guidance also requires the if-converted method to be applied for all convertible

The amendments in ASU 2020-06 are effective for public entities, excluding smaller reporting companies as defined, for fiscal

years beginning after December 15, 2021.

For all other entities, the amendments are effective for fiscal years beginning after December

Early adoption is permitted.

A reporting entity is not permitted to adopt the guidance in an interim period, other than the

first interim period of its fiscal year.

Adoption of the standard requires using either a modified retrospective or a full retrospective

Management is currently evaluating the effect of these provisions on the Company’s financial position and results of operations.

REVENUE FROM CONTRACTS WITH CUSTOMERS

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with negotiated payment terms, generally net 30 days or less, which are invoiced and remain as accounts receivable until collected.

ARTIFICIAL INTELLIGENCE TECHNOLOGY SOLUTIONS INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

The following table presents revenues from contracts

with customers disaggregated by product/service:

Three Months Ended

August 31, 2023

August 31, 2022

August 31, 2023

August 31, 2022

Device rental activities

Direct sales of goods and services

ARTIFICIAL INTELLIGENCE TECHNOLOGY SOLUTIONS INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

We lease certain warehouses, and office space.

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Below is a summary of our lease assets and liabilities

at May 31, 2023 and February 28, 2023.

at August 31, 2023 and February 28, 2023.

Classification

August 31, 2023

February 28, 2023

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and were expensed in general and administrative expenses as incurred.

Operating lease cost and rent was $ 62,542 and $ 69,967

for the three months ended May 31, 2023 and May 31, 2022, respectively.

Rent expense and operating lease cost was $ 62,541

and $ 125,083 for the three and six months ended August 31, 2023, respectively, and $ 63,681 and $ 133,648 for the three and six months ended

August 31, 2022, respectively.

REVENUE EARNING DEVICES

Revenue earning devices consisted of the following:

August 31, 2023

February 28, 2023

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Accumulated depreciation

During the three months ended May 31, 2023 the Company

made total additions to revenue earning devices of $ 444,412 which were transfers from inventory.

During the three months ended May 31,

2022 the Company made total additions to revenue earning devices of $ 174,101 which were transfers from inventory.

During the three and six months ended August 31, 2023

the Company made total additions to revenue earning devices of $ 341,042 and $ 785,464 , respectively, which were transfers from inventory.

During the three and six months ended August 31, 2022 the Company made total additions to revenue earning devices of $ 251,946 and $ 426,047 ,

respectively, which were transfers from inventory.

Depreciation expense was $ 141,614 and $ 264,455 for

the three months ended May 31, 2023, and 2022 respectively.

the three and six months ended August 31, 2023, respectively, and $ 116,125 and $ 187,539 for the three and six months ended August 31,

2022, respectively.

ARTIFICIAL INTELLIGENCE TECHNOLOGY SOLUTIONS INC.

1 unchanged sentence

Fixed assets consisted of the following:

August 31, 2023

February 28, 2023

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Accumulated depreciation

During the three months ended May 31, 2023 the Company

made additions of $ 32,173 of which $ 28,710 were transfers from inventory with remaining additions of $ 3,463 .

During the three months ended

May 31, 2022 the Company made additions of $ 93,730 of which $ 5,516 were transfers from inventory with remaining additions of $ 88,214 .

During the three months ended August 31, 2023, the

Company made additions of $ 75,057 which were transfers from inventory.

During the six months ended August 31, 2023, the Company made additions

of $ 107,230 of which $ 103,767 were transfers from inventory with remaining additions of $ 3,463 .

During the three months ended August 31,

2022, the Company made additions of $ 139,946 of which $ 20,693 were transfers from inventory with remaining additions of $ 118,983 .

the six months ended August 31, 2022, the Company made additions of $ 233,676 of which $ 26,479 were transfers from inventory with remaining

additions of $ 207,197 .

Depreciation expense was $ 49,427 and $ 94,528 for the

three months ended May 31, 2023, and 2021 respectively.

three and six months ended August 31, 2023, respectively, and $ 29,668 and $ 52,249 for the three and six months ended August 31, 2022,

respectively.

DEFERRED VARIABLE PAYMENT OBLIGATION

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party paid for the shares plus the total value of all future Payments.

On November 18, 2019 the Company entered into an arrangement

similar to the (February 1, 2019 agreement above) investor above whereby the investor would advance up to $ 225,000 in exchange for a perpetual

ARTIFICIAL INTELLIGENCE TECHNOLOGY SOLUTIONS INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

On November 18, 2019, the Company entered into another

similar arrangement with the (February 1, 2019) investor above whereby the investor would advance up to $ 225,000 in exchange for a perpetual

2.25 % rate Payment on the Company’s quarterly Revenues (commencing on quarter ending May 31, 2020).

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has advanced $ 109,000 and the investor advanced the $ 116,000 remainder as of May 2020.

ARTIFICIAL INTELLIGENCE TECHNOLOGY SOLUTIONS INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

On December 30, 2019 the Company entered into an arrangement

with a new investor whereby the investor would advance up to $ 100,000 in exchange for a perpetual 1.00 % rate Payment on the Company’s

quarterly Revenues (commencing quarter ended November 30, 2020).

At February 29, 2020 the investor has advanced $50,000 with the remainder

to be advanced no later than June 30, 2020.

If the total investor advances turns out to be less than $100,000, this would not constitute

a breach of the agreement, rather the 1.00% rate would be adjusted on a pro-rata basis.

On April 22, 2020 the Company entered into an arrangement

with the (first May 9, 2019) investor above whereby the investor would advance up to $ 100,000 in exchange for a perpetual 1.00 % rate

Payment on the Company’s quarterly Revenues.

On December 30, 2019, the Company entered into another

similar arrangement with a new investor whereby the investor would advance up to $100,000 in exchange for a perpetual 1.00 % rate Payment

on the Company’s quarterly Revenues (commencing quarter ended November 30, 2020).

At February 29, 2020, the investor has advanced

$50,000 with the remainder to be advanced no later than June 30, 2020.

If the total investor advances turns out to be less than $100,000,

this would not constitute a breach of the agreement, rather the 1.00% rate would be adjusted on a pro-rata basis.

On April 22, 2020, the Company entered into another

similar arrangement with the (first May 9, 2019) investor above whereby the investor would advance up to $ 100,000 in exchange for

a perpetual 1.00 % rate Payment on the Company’s quarterly Revenues.

At May 31, 2020, the investor has fully funded this commitment.

On July 1, 2020 the Company entered into an agreement

with the first investor whereby the investor would pay up to $ 800,000 in exchange for a perpetual 2.75 % rate payment (Payment) on the

Company’s reported quarterly revenue.

These Payments are to be made 90 days after the fiscal quarter with the first payment being

due no later than May 31, 2021.

On July 1, 2020, the Company entered into a similar

agreement with the first investor whereby the investor would pay up to $ 800,000 in exchange for a perpetual 2.75 % rate payment (Payment)

on the Company’s reported quarterly revenue.

These Payments are to be made 90 days after the fiscal quarter with the first payment

being due no later than May 31, 2021.

If the Payments would deplete RAD’s available cash by more than 20%, the payment may be deferred.

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save for the following:

the rate payment is revised to 14.25 % payable on revenues commencing the quarter ended August 31, 2020 and

the Payments are secured by the assets of the Company.

This interest may be secured by UCC filing but is subordinated to equipment

financing on the products the Company leases to its customers.

the rate payment is revised to 14.25 % payable on revenues commencing the quarter ended August 31, 2020.

event of default that we are unable to cure in the time allotted under the agreements, these Payments may be secured with a priority lien

by UCC filing against all of our assets, but is subordinated to equipment financing or leasing agreements on the products the Company

leases to its customers.

In summary of all agreements mentioned above if in

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43.77 % to 33.77%.

The Payments will first become payable on June 30, 2019 (unless otherwise

indicated) based on the quarterly Revenues for the quarter ended May 31, 2019 and will accrue every quarter thereafter.

As of May 31,

2023, the Company has accrued approximately $ 604,811 in Payments, of which $ 388,226 is in arrears.

The Payments first become payable on June 30, 2019

(unless otherwise indicated) based on the quarterly Revenues for the quarter ended May 31, 2019 and accrue every quarter thereafter.

of August 31, 2023, the Company has accrued $ 667,634 in Payments of which $ 431,719 are in arrears.

As of February 28, 2023, the Company

has accrued approximately $ 542,177 in Payments, of which $ 325,600 is in arrears.

On March 1, 2021 the first investor referred to above whose aggregate investment

is $ 1,925,000 revised his agreements as follows:

has accrued $ 542,177 in Payments of which $ 325,600 are in arrears.

No notices have been sent to the Company.

On March 1, 2021, the first investor referred to above whose aggregate

investment is $ 1,925,000 revised his agreements as follows:

The rate payment was reduced from 14.25 % to 9.65 %

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a five-year term and an exercise price of $ 1.00 .

During the three months ended May 31, 2021 the warrant holder exercised warrants to acquire

38 shares of Series F Convertible Preferred Stock.

The company attributed a fair value based on recent transactions for the Series F Preferred

stock and warrants of $ 33,015,214 and recorded a loss on settlement of debt with a corresponding adjustment to paid in capital.

During the three months ended May 31, 2021, the warrant holder exercised warrants to

acquire 38 shares of Series F Convertible Preferred Stock.

The Company attributed a fair value based on recent transactions for the Series

F Preferred stock and warrants of $ 33,015,214 and recorded a loss on settlement of debt with a corresponding adjustment to paid in capital.

ARTIFICIAL INTELLIGENCE TECHNOLOGY SOLUTIONS INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

The Company retains total involvement in the generation

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of this, the Company has determined that the agreements constitute debt agreements.

As of February 28, 2023, and February 28, 2022, the

As of August 31, 2023, and February 28, 2023, the

long-term balances other than Payments already owed is the cash received of $ 2,525,000 and $ 2,525,000 , respectively.

For both the years ended February 28, 2023 and February

28, 2022, the Company has received $ 0 related to the deferred payment obligation as the balance remains $ 2,525,000 at both February 28,

2023 and February 28, 2022.

ARTIFICIAL INTELLIGENCE TECHNOLOGY SOLUTIONS INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

For the three months ended May 31, 2023 and year ended

February 28, 2023 , the Company has received $ 0 related to the deferred payment obligation since there were no new agreements during this

The balance remains $ 2,525,000 at both May 31, 2023 and February 28, 2023.

The Payments first become payable on June 30, 2019

(unless otherwise indicated) based on the quarterly Revenues for the quarter ended May 31, 2019 and accrue every quarter thereafter.

of May 31, 2023, the Company has accrued $ 388,227 in Payments (February 28, 2023 -$ 542,177 ).

At May 31, 2023, and February 28, 2023 the

Company was in default on $ 388,226 and $ 325,600 of those Payments.

No notices have been sent to the Company.

For both the three months and six months ended August

31, 2023 and year ended February 28, 2023, the Company has received $ 0 related to the deferred payment obligation since there were no

new agreements during this period.

The balance remains $ 2,525,000 at both August 31, 2023 and February 28, 2023.

RELATED PARTY TRANSACTIONS

For both the three months ended May 31, 2023 and May

31, 2022 , the Company had no repayments of net advances from its loan payable-related party.

At May 31, 2023, the loan payable-related

For both the three months ended August 31, 2023 and

August 31, 2022 , the Company had no repayments of net advances from its loan payable-related party At August 31, 2023, the loan payable-related

party was $ 260,746 and $ 206,516 at February 28, 2023.

Included in the balance due to the related party at May 31, 2023 is $ 139,250 of

deferred salary and interest, $ 133,000 of which bears interest at 12 %.

At February 28, 2023 there was $ 108,000 of deferred salary with

$ 108,000 bearing interest at 12 %.

The accrued interest included in loan at May 31, 2023 and February 28, 2022 was $ 19,275 and $ 15,660 ,

respectively.

Included in the balance due to the related party at August 31, 2023 is $ 172,265

of deferred salary and interest, $ 145,500 of which bears interest at 12 %.

At February 28, 2023, included in the balance due to the related

party is $ 108,000 of deferred salary with $ 108,000 bearing interest at 12 %.

The accrued interest included in loan at August 31, 2023 and

February 28, 2023 was $ 23,515 and $ 15,660 respectively.

Pursuant to the amended Employment Agreement with

its Chief Executive Officer, for the three months ended May 31, 2023 the Company accrued $ 63,000 (three months ended May 31 2022-$ 161,500 )

of incentive compensation plan payable with a corresponding recognition of stock based compensation due to the expectation of additional

awards being met.

This will be payable in Series G Preferred Shares which are redeemable at the Company’s option at $ 1,000 per share.

At May 31, 2023 and February 28, 2023 there was $ 1,042,000 and $ 979,000 of incentive compensation payable.

During the three months ended May 31, 2023 and 2022,

its Chief Executive Officer, for the three months and six ended August 31, 2023, the Company accrued $ 62,000 (2022-$ 63,000 ) and $ 125,000

(2022-$ 224,500 ) of incentive compensation plan payable with a corresponding recognition of stock based compensation due to the expectation

of additional awards being met.

This will be payable in Series G Preferred Shares which are redeemable at the Company’s option at

$ 1,000 per share.

At August 31, 2023 and February 28, 2023 there was $ 1,104,000 and $ 979,000 of incentive compensation payable.

During the three months ended August 31, 2023 and

2022, the Company was charged $ 777,260 and $ 957,395 , respectively for fees for research and development from a company partially owned

by a principal shareholder.

During the six months ended August 31, 2023 and 2022,

the Company was charged $ 1,659,275 and $ 1,959,129 , respectively for fees for research and development from a company partially owned by

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The remaining total balances of the amounts owed on the vehicle loans were $ 38,522 and $ 38,522

as of May 31, 2022 and February 28, 2022, respectively, of which all were classified as current.

as of August 31, 2023 and February 28, 2023, respectively, of which all were classified as current.

ARTIFICIAL INTELLIGENCE TECHNOLOGY SOLUTIONS INC.

1 unchanged sentence

LOANS PAYABLE

Loans payable at May 31, 2023 consisted of the following:

Loans payable at August 31, 2023 consisted of the

Interest Rate

84 unchanged sentences

Current portion of loans payable, net of discount

This note was transferred from convertible notes payable because in August 2022 it was no longer convertible due to restrictions placed on the lender.

This promissory note was issued as part of a debt settlement whereby $ 2,683,357 in convertible notes and associated accrued interest of $ 1,237,811 totaling $ 3,921,168 was exchanged for this promissory note of $ 3,921,168 , and a warrant to purchase 450,000,000 shares at an exercise price of $ .002 per share and a three-year maturity having a relative fair value of $ 990,000 .

This note is secured by a general security charging all of the Company’s present and after-acquired property.

ARTIFICIAL INTELLIGENCE TECHNOLOGY SOLUTIONS INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

This note was transferred from convertible notes payable because in August 2022 it was no longer convertible due to restrictions placed on the lender.

This promissory note was issued as part of a debt

settlement whereby $ 2,683,357 in convertible notes and associated accrued interest of $ 1,237,811 totaling $ 3,921,168 was exchanged for

this promissory note of $ 3,921,168 , and a warrant to purchase 450,000,000 shares at an exercise price of $ .002 per share and a three-year

maturity having a relative fair value of $ 990,000 .

This note is secured by a general security charging all of the Company’s present

and after-acquired property.

This promissory note was issued as part of a debt settlement whereby $ 1,460,794 in convertible notes and associated accrued interest of $ 1,593,544 totaling $ 3,054,338 was exchanged for this promissory note of $ 3,054,338 , and a warrant to purchase 250,000,000 shares at an exercise price of $ .002 per share and a three-year maturity having a relative fair value of $ 550,000 .

1 unchanged sentence

This promissory note was issued as part of a debt settlement whereby $ 103,180 in convertible notes and associated accrued interest of $ 62,425 totaling $ 165,605 was exchanged for this promissory note of $ 165,605 , and a warrant to purchase 80,000,000 shares at an exercise price of $ .002 per share and a three-year maturity having a fair value of $ 176,000 .

This promissory note was issued as part of a debt

settlement whereby $ 235,000 in convertible notes and associated accrued interest of $ 75,375 totaling $ 310,375 was exchanged for this promissory

note of $ 310,375 , and a warrant to purchase 25,000,000 shares at an exercise price of $ .002 per share and a three-year maturity having

a fair value of $ 182,500 .

This promissory note was issued as part of a debt settlement whereby $ 235,000 in convertible notes and associated accrued interest of $ 75,375 totaling $ 310,375 was exchanged for this promissory note of $ 310,375 , and a warrant to purchase 25,000,000 shares at an exercise price of $ .002 per share and a three-year maturity having a fair value of $ 182,500 .

The note, with an original principal amount of $ 350,000 , may be pre-payable at any time.

2 unchanged sentences

After allocating these charges to debt and equity according to their respective values, a debt discount of $ 271,250 with a corresponding adjustment to paid in capital for the relative fair value of the warrant.

For the three months ended May 31, 2023, the Company recorded amortization expense of $ 39,904 , respectively, with an unamortized discount of $ 153,611 at May 31, 2023.

For the three and six months ended August 31, 2023, the Company recorded amortization expense of $ 52,756 and $ 92,660 , respectively, with an unamortized discount of $ 100,855 at August 31, 2023.

This promissory note was issued as part of a debt settlement whereby $ 9,200 in convertible notes and associated accrued interest of $ 6,944 totaling $ 16,144 was exchanged for this promissory note of $ 25,000 .

6 unchanged sentences

After allocating these charges to debt and equity according to their respective values, a debt discount of $ 380,174 with a corresponding adjustment to paid in capital.

For the three months ended May 31, 2023, the Company recorded amortization expense of $ 51,045 respectively, with an unamortized discount of $ 188,291 at May 31, 2023.

For the three and six months ended August 31, 2023, the Company recorded amortization expense of $ 62,143 and $ 113,188 respectively, with an unamortized discount of $ 126,148 at August 31, 2023.

The note, with an original principal balance of $ 1,650,000 , may be pre-payable at any time.

4 unchanged sentences

These warrants have a fair value of $ 950,000 recorded as interest expense with a corresponding adjustment to paid in capital recorded in the year ended February 28, 2022.

For the three months ended May 31, 2023, the Company recorded amortization expense of $ 159,064 respectively, with an unamortized discount of $ 953,197 at May 31, 2023.

For the three and six months ended August 31, 2023, the Company recorded amortization expense of $ 220,757 and $ 379,821 respectively, with an unamortized discount of $ 732,440 at August 31, 2023.

ARTIFICIAL INTELLIGENCE TECHNOLOGY SOLUTIONS INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

The unsecured note may be pre-payable at any time.

6 unchanged sentences

This note has been fully amortized.

ARTIFICIAL INTELLIGENCE TECHNOLOGY SOLUTIONS INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

The note, with an original principal balance of $ 2,750,000 , may be pre-payable at any time.

4 unchanged sentences

These warrants have a fair value of $ 1,615,000 recorded as interest expense with a corresponding adjustment to paid in capital recorded in the year ended February 28, 2022.

For the three months ended May 31, 2023, the Company recorded amortization expense of $ 154,910 respectively, with an unamortized discount of $ 639,308 at May 31, 2023.

For the three and six months ended August 31, 2023, the Company recorded amortization expense of $ 175,789 and $ 330,699 respectively, with an unamortized discount of $ 463,519 at August 31, 2023.

This loan, with an original principal balance of $ 4,000,160 , was in exchange for 184 Series F preferred shares from a former director.

1 unchanged sentence

The loan is unsecured.

For the three months ended May 31, 2023 there were repayments of $ 27,000 on the note.

The note, with an original principal balance of $ 1,650,000 ,

may be pre-payable at any time.

The note balance includes an original issue discount of $ 150,000 and was issued with a warrant to purchase

250,000,000 shares at an exercise price of $ 0.037 per share with a 3 -year term and having a relative fair value of $ 1,284,783 , The discounts

are being amortized over the term of the loan.

After allocating these charges to debt and equity according to their respective values,

a debt discount of $ 1,284,783 with a corresponding adjustment to paid in capital.

For the three months ended May 31, 2023, the Company

recorded amortization expense of $ 86,930 respectively, with an unamortized discount of $ 1,27,501 at May 31, 2023.

For the three and six months ended August 31, 2023 there were repayments of $ 27,000 and $ 54,000 .

respectively on the note.

The note, with an original principal balance of $ 1,650,000 , may be pre-payable at any time.

The note balance includes an original issue discount of $ 150,000 and was issued with a warrant to purchase 250,000,000 shares at an exercise price of $ 0.037 per share with a 3 -year term and having a relative fair value of $ 1,284,783 , The discounts are being amortized over the term of the loan.

After allocating these charges to debt and equity according to their respective values, a debt discount of $ 1,284,783 with a corresponding adjustment to paid in capital.

For the three and six months ended August 31, 2023, the Company recorded amortization expense of $ 115,344 and $ 202,274 respectively, with an unamortized discount of $ 1,27,501 at August 31, 2023.

Original $ 170,000 note may be pre-payable at any time.

2 unchanged sentences

Secured by a general security charging all of RAD’s present and after-acquired property.

For the three months ended May 31, 2023, the Company recorded amortization expense of $ 5,287 respectively, with an unamortized discount of $ 3,739 at May 31, 2023.

For the three and six months ended August 31, 2023, the Company recorded amortization expense of $ 3,739 and $ 9,026 respectively, with an unamortized discount of $ 0 at August 31, 2023.

This loan has been fully repaid.

A warrant holder exchanged 955,000,000 warrants for a promissory note of $ 3,000,000 , bearing interest at 15 % with a two year maturity.

1 unchanged sentence

Principal and interest due at maturity.

For the three months ended May 31, 2023, the Company recorded amortization expense of $ 4,557 respectively, with an unamortized discount of $ 26,312 at May 31, 2023.

For the three and six months ended August 31, 2023, the Company recorded amortization expense of $ 4,736 and $ 9,293 respectively, with an unamortized discount of $ 21,576 at August 31, 2023.

Original $ 400,000 note may be pre-payable at any time.

2 unchanged sentences

Secured by a general security charging all of RAD’s present and after-acquired property.

For the three months ended May 31, 2023, the Company recorded amortization expense of $ 12,342 respectively, with an unamortized discount of $ 15,479 at May 31, 2023.

For the three and six months ended August 31, 2023, the Company recorded amortization expense of $ 15,479 and $ 27,821 respectively, with an unamortized discount of $ 0 at August 31, 2023.

Original $ 475,000 note may be pre-payable at any time.

2 unchanged sentences

Secured by a general security charging all of RAD’s present and after-acquired property.

For the three months ended May 31, 2023, the Company recorded amortization expense of $ 18,930 respectively, with an unamortized discount of $ 17,799 at May 31, 2023.

For the three and six months ended August 31, 2023, the Company recorded amortization expense of $ 17,799 and $ 36,729 respectively, with an unamortized discount of $ 0 at August 31, 2023.

Original $ 350,000 note may be pre-payable at any time.

2 unchanged sentences

Secured by a general security charging all of the Company’s s present and after-acquired property.

For the three months ended May 31, 2023, the Company recorded amortization expense of $ 12,290 respectively, with an unamortized discount of $ 20,620 at May 31, 2023.

For the three and six months ended August 31, 2023, the Company recorded amortization expense of $ 13,295 and $ 25,585 respectively, with an unamortized discount of $ 7,325 at August 31, 2023.

ARTIFICIAL INTELLIGENCE TECHNOLOGY SOLUTIONS INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

On October 28, 2022 the Company entered into an loan

facility with a lender for up to $ 4,000,000 including an original issue discount of $500,000.

In exchange the Company will issue one series

F Preferred Share, extended 329 series F warrants with a March 1, 2026 maturity to a new October 31, 2033 maturity, and issue up to 10

tranches with each tranche of $400,000, with cash proceeds of $350,000 an original issue discount of $50,000, October 31, 2026 maturity,

and 61 Series F warrants with a October 31, 2033 maturity.

Secured by a general security charging all of the Company’s present and

after-acquired property.

On October 28, 2022 the Company entered into an loan facility with a lender for up to $ 4,000,000 including an original issue discount of $500,000.

In exchange the Company will issue one series F Preferred Share, extended 329 series F warrants with a March 1, 2026 maturity to a new October 31, 2033 maturity, and issue up to 10 tranches with each tranche of $400,000, with cash proceeds of $350,000 an original issue discount of $50,000, October 31, 2026 maturity, and 61 Series F warrants with a October 31, 2033 maturity.

Secured by a general security charging all of the Company’s present and after-acquired property.

At November 30, 2022 the Company has issued 6 tranches as follows:

October 28, 2022, $ 400,000 loan, original issue discount

of $ 50,000 , 61 Series F Preferred Share warrants and 1 Series F Preferred Share having a relative fair value of $299,399.

For the three

months ended May 31, 2023, the Company recorded amortization expense of $ 1,866 respectively, with an unamortized discount of $ 346,157

at May 31, 2023.

November 9, 2022, $ 400,000 loan, original issue discount

of $ 50,000 , 61 Series F Preferred Share warrants having a relative fair value of $299,750.

For the three months ended May 31, 2023, the

Company recorded amortization expense of $$ 1,838 respectively, with an unamortized discount of $ 346,600 at May 31, 2023.

November 10, 2022, $ 400,000 loan, original issue discount

of $ 50,000 , 61 Series F Preferred Share warrants having a relative fair value of $302,020.

For the three months ended May 31, 2023, the

Company recorded amortization expense of $ 16,678 respectively, with an unamortized discount of $ 349,214 at May 31, 2023.

November 15, 2022, $ 400,000 loan, original issue discount

of $ 50,000 , 61 Series F Preferred Share warrants having a relative fair value of $299,959.

For the three months ended May 31, 2023, the

Company recorded amortization expense of $ 1,881 respectively, with an unamortized discount of $ 345,914 at May 31, 2023.

January 11, 2023, $ 400,000 loan, original issue discount

of $ 50,000 , 61 Series F Preferred Share warrants having a relative fair value of $299,959.

For the three months ended May 31, 2023, the

Company recorded amortization expense of $ 1,925 respectively, with an unamortized discount of $ 345,265 at May 31, 2023.

February 6, 2023, $ 400,000 loan, original issue discount

of $ 50,000 , 61 Series F Preferred Share warrants having a relative fair value of $299,959.

For the three months ended May 31, 2023, the

Company recorded amortization expense of $ 1,836 respectively, with an unamortized discount of $ 346,590 at May 31, 2023.

April 5, 2023, $ 400,000 loan, original issue discount

of $ 50,000 , 61 Series F Preferred Share warrants having a relative fair value of $296,245.

For the three months ended May 31, 2023, the

Company recorded amortization expense of $ 751 respectively, with an unamortized discount of $ 345,494 at May 31, 2023.

April 20, 2023, $ 400,000 loan, original issue discount

of $ 50,000 , 61 Series F Preferred Share warrants having a relative fair value of $302,219.

For the three months ended May 31, 2023, the

Company recorded amortization expense of $ 196 respectively, with an unamortized discount of $ 352,023 at May 31, 2023.

May 11, 2023, $ 400,000 loan, original issue discount

of $ 50,000 , 61 Series F Preferred Share warrants having a relative fair value of $348,983.

For the three months ended May 31, 2023, the

Company recorded amortization expense of $ 0 respectively, with an unamortized discount of $ 398,983 at May 31, 2023.

October 28, 2022, $ 400,000 loan, original issue discount of $ 50,000 , 61 Series F Preferred Share warrants and 1 Series F Preferred Share having a relative fair value of $299,399.

For the three and six months ended August 31, 2023, the Company recorded amortization expense of $ 2,472 and $ 4,338 respectively, with an unamortized discount of $ 343,685 at August 31, 2023.

November 9, 2022, $ 400,000 loan, original issue discount of $ 50,000 , 61 Series F Preferred Share warrants having a relative fair value of $299,750.

For the three and six months ended August 31, 2023, the Company recorded amortization expense of $ 2,438 and $ 4,276 respectively, with an unamortized discount of $ 344,162 at August 31, 2023.

November 10, 2022, $ 400,000 loan, original issue discount of $ 50,000 , 61 Series F Preferred Share warrants having a relative fair value of $302,020.

For the three and six months ended August 31, 2023, the Company recorded amortization expense of $ 2,233 and $ 3,900 respectively, with an unamortized discount of $ 346,981 at August 31, 2023.

November 15, 2022, $ 400,000 loan, original issue discount of $ 50,000 , 61 Series F Preferred Share warrants having a relative fair value of $299,959.

For the three and six months ended August 31, 2023, the Company recorded amortization expense of $ 2,489 and $ 4,370 respectively, with an unamortized discount of $ 343,445 at August 31, 2023.

January 11, 2023, $ 400,000 loan, original issue discount of $ 50,000 , 61 Series F Preferred Share warrants having a relative fair value of $299,959.

For the three and six months ended August 31, 2023, the Company recorded amortization expense of $ 2,541 and $ 4,565 respectively, with an unamortized discount of $ 342,724 at August 31, 2023.

February 6, 2023, $ 400,000 loan, original issue discount of $ 50,000 , 61 Series F Preferred Share warrants having a relative fair value of $299,959.

For the three and six months ended August 31, 2023, the Company recorded amortization expense of $ 2,436 and $ 4,272 respectively, with an unamortized discount of $ 344,154 at August 31, 2023.

April 5, 2023, $ 400,000 loan, original issue discount of $ 50,000 , 61 Series F Preferred Share warrants having a relative fair value of $296,245.

For the three and six months ended August 31, 2023, the Company recorded amortization expense of $ 2,523 and $ 3,274 respectively, with an unamortized discount of $ 342,971 at August 31, 2023.

April 20, 2023, $ 400,000 loan, original issue discount of $ 50,000 , 61 Series F Preferred Share warrants having a relative fair value of $302,219.

For the three and six months ended August 31, 2023, the Company recorded amortization expense of $ 2,010 and $ 2,206 respectively, with an unamortized discount of $ 350,013 at August 31, 2023.

May 11, 2023, $ 400,000 loan, original issue discount of $ 50,000 , 61 Series F Preferred Share warrants having a relative fair value of $348,983.

For the three and six months ended August 31, 2023, the Company recorded amortization expense of $ 0 and $ 0 respectively, with an unamortized discount of $ 398,983 at August 31, 2023.

ARTIFICIAL INTELLIGENCE TECHNOLOGY SOLUTIONS INC.

9 unchanged sentences

Forfeited and cancelled

Outstanding at May 31, 2023

During the three months ended May 31, 2023, as part

Outstanding at August 31, 2023

During the six months ended August 31, 2023, as part

of debt issuance the Company issued 183 Series F Preferred Warrants to a lender for a relative fair value of $ 947,447 .

1 unchanged sentence

Summary of Common Stock Activity

For the three months ended May 31, 2023 , the Company

The Company increased authorized common shares from

7,225,000,000 to 10,000,000,000 on August 30, 2023.

For the three months ended August 31, 2023, the Company

issued 903,636,004 common shares with gross proceeds of $ 4,972,795 and net proceeds of $ 4,796,193 after issuance costs of $ 176,672 .

the six months ended August 31, 2023, the Company issued 1,184,565,194 common shares with gross proceeds of $ 6,372,989 and net proceeds

of $ 6,115,032 after issuance costs of $ 257,956 .

In addition for the three and six months ended the Company issued 6,500,000 shares with

a fair value of $ 44,460 as payment for services of $ 83,200 .

A gain on settlement of debt of $ 38,640 has been recorded.

The Company also

issued 12,100,000 previously recorded as issuable shares pursuant to agreements.

The table below represent the common shares issued,

issuable and outstanding at May 31, 2023 and February 28, 2023:

issuable and outstanding at August 31, 2023 and February 28, 2023:

Common shares

August 31, 2023

February 28, 2023

5 unchanged sentences

Summary of Common Stock Warrant Activity

For the three months and six months ended August 31,

2023 and August 31, 2022, the Company recorded a total of $ 50,713 and $ 0 , and $ 103,434 and $ 0 respectively, to stock-based compensation

for options and warrants with a corresponding adjustment to additional paid-in capital.

Summary of Common Stock Warrant Activity

Number of Warrants

3 unchanged sentences

Forfeited and cancelled

Outstanding at May 31, 2023

For the three months ended May 31, 2022 and May 31,

2021, the Company recorded a total of $ 0 and $ 0 , respectively, to stock-based compensation for options and warrants with a corresponding

adjustment to additional paid-in capital.

Summary of Common Stock Option Activity

Number of Warrants

Outstanding at August 31, 2023

ARTIFICIAL INTELLIGENCE TECHNOLOGY SOLUTIONS INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Summary of Common Stock Option Activity -Employee

Stock Options

Number of Options

Weighted Average Exercise Price

2 unchanged sentences

Forfeited, extinguished and cancelled

Outstanding at May 31, 2023

ARTIFICIAL INTELLIGENCE TECHNOLOGY SOLUTIONS INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Outstanding at August 31, 2023

COMMITMENTS AND CONTINGENCIES

29 unchanged sentences

Rent expense and operating lease

cost was $ 62,542 for the three months May 31, 2023 and $ 69,967 for the three months May 31, 2022.

cost was $ 62,541 and $ 125,083 for the three and six months ended August 31, 2023, respectively, and $ 63,681 and $ 133,648 for the three

and six months ended August 31, 2022, respectively.

Summary of rent expense and operating lease cost are recorded over the lease terms on a straight-line basis.

Maturity of Lease Liabilities

May 31, 2029 and after

August 31, 2024

August 31, 2025

August 31, 2026

August 31, 2027

August 31, 2028

August 31, 2029 and after

Total lease payments

6 unchanged sentences

For the Three Months Ended

For the Six Months Ended

Net income (loss) available to common shareholders

1 unchanged sentence

interest expense on convertible debt

Add (less) loss (gain) on settlement of debt

Add (less) loss (gain) on change of derivative liabilities

Net income (loss) adjusted for common stock equivalents

2 unchanged sentences

4,970,040,852

6,266,833,467

4,884,349,362

Net income (loss) per share – basic

Dilutive effect of common stock equivalents:

Convertible Debt

Preferred shares

Weighted average shares – diluted

1 unchanged sentence

4,970,040,852

6,266,833,467

4,884,349,362

Net income (loss) per share – diluted

The anti-dilutive shares of common stock equivalents

for the three months ended May 31, 2023 and 2022 were as follows:

for the three and six months ended August 31, 2023 and 2022 were as follows:

For the Three Months Ended

For the Six Months Ended

Convertible notes and accrued interest

Convertible Series F Preferred Shares

24,286,988,436

Stock options and warrants

1 unchanged sentence

1,237,643,136

24,720,755,887

1,237,643,136

On August 23, 2021, the Company filed amended Series F preferred shares such that Series F preferred shares are not convertible into common stock by a holder until (A) August 23, 2023 or (B) the date on which such a conversion may be required for the purpose of (i) uplisting the Company to a new stock exchange, or (ii) selling more than 50% of the Company’s assets.

Had these Series F preferred shares been convertible at May 31, 2023 and 2022 the dilutive effects would be as follows:

Had these Series F preferred shares been convertible at August 31, 2023 and 2022 the dilutive effects would be as follows:

Series F Preferred shares been convertible the dilutive effects would be as follows:

For the Three Months Ended

For the Three and Six Months Ended

August 31, 2023

August 31, 2022

Convertible Series F Preferred Shares

17,375,422,528

16,798,367,179

SUBSEQUENT EVENTS

Subsequent to May 31, 2023 through to July 14, 2023:

— the Company issued 441,502,460

common shares pursuant to a share purchase agreement for gross proceeds of $ 2,922,520 ,

issuance costs of $ 132,591

and net proceeds of $ 2,789,929 .

Subsequent to August 31, 2023 through to October 12,

— The Company issued 120,905,263 common

shares pursuant to a share purchase agreement for gross proceeds of $ 377,224 , issuance costs of $ 8,569 and net proceeds of $ 368,655 .

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 1. Financial Statements