What changed in this filing

/stocks — the workspaceLOADING

Item 2. Management’s Discussion and Analysis

2024-01-16 compared with 2023-10-12 · 104 added, 109 removed, 135 unchanged (61% of the section changed)

39 unchanged sentences

Results of Operations for the Three Months Ended

August 31, 2023 and 2022

November 30, 2023 and 2022

The following table shows our results of operations

for the three months ended August31, 2022 and 2021.

for the three months ended November 30, 2023 and 2022.

The historical results presented below are not necessarily indicative of the results

that may be expected for any future period.

August 31, 2023

August 31, 2022

November 30, 2023

November 30, 2022

Operating expenses

3 unchanged sentences

with customers disaggregated by product/service:

August 31, 2023

August 31, 2022

November 30, 2023

November 30, 2022

Device rental activities

Direct sales of goods and services

Total revenue for the three-month period ended August

31, 2023 was $386,363 which represented an increase of $118,879 compared to total revenue of $267,484 for the three months ended August

This increase is a result of higher rental sales in the current year’s quarter.

Rental activities increased by 51% over

the prior year’s quarter as the Company continues to grow its core business.

Total revenue for the three-month period ended November

30, 2023 was $596,980 which represented an increase of $194,581 compared to total revenue of $402,399 for the three months ended November

This increase is a result of higher rental activities in the current year’s quarter due to 84 new deployments this quarter.

Total gross profit for the three-month period ended

August 31, 2023 was $297,349, which represented an increase of $64,079 compared to gross profit of $233,270 for the three months ended

August 31, 2022.

The gross profit increased due to the higher sales..

The gross profit % of 77% for the three-month period ended August

31, 2023 was lower than the gross profit % of 87% for the prior year’s corresponding period.

November 30, 2023 was $461,066, which represented an increase of $184,627 compared to gross profit of $276,439 for the three months ended

November 30, 2022.

The gross profit increased due to the higher sales and higher proportion of rental activities at higher margins than

direct sales.

The gross profit % of 77% for the three-month period ended November 30, 2022 was higher than the gross profit % of 69% for

the prior year’s corresponding period.

Operating Expenses

August 31, 2023

August 31, 2022

November 30, 2023

November 30, 2022

Research and development

8 unchanged sentences

Our operating expenses during the three-month

period ended August 31, 2023 and August 31, 2022, were $3,342,601 and $3,411,702, respectively.

The overall decrease of $69,101 was primarily

attributable to the following changes in operating expenses of:

General and administrative expenses increased by $56,029.

In comparing the three months ended August 31, 2023 and August 31, 2022 the decrease in G&A was primarily due to decreases in wages and salaries of $130,629 due to reduction in force, stock-based compensation of $68,727, office expenses of $12,885, travel $43,876, and bad debts expense of $31,270 due to fewer slow payers.

These decreases were partially offset by an increase in professional fees of $173,170 mostly due compliance and audit fees increase and other G&A increases.

Research and development decreased by $169,238 due to a reduction in funding on development of future products.

Depreciation and amortization increased by $45,248 due to large increases in revenue earning

devices, demo devices, tooling and computer equipment.

Operating lease cost and rent decreased by $1,140.

period ended November 30, 2023 and November 30, 2022, were $2,847,017 and $3,090,941, respectively.

The overall decrease of $244,924 was

primarily attributable to the following changes in operating expenses of:

General and administrative expenses decreased by $114,721.

In comparing the three months ended November 30, 2023 and November 30, 2022 this decrease was primarily due to the following decreases:

stock based compensation by $28,598, sales and marketing by $79,451, travel by $30,478, insurance $35,606 and bad debts expense $77,135.

These were partially offset by increases in the following accounts:

subcontractors by $37,415, wages and salaries $72,071 and other G& A increases.

Research and development decreased by $256,187 due to due to a reduction in funding on development of future products.

Depreciation and amortization increased by $122,908 due to large increases in revenue earning devices, demo devices, tooling and computer equipment.

Operating lease cost and rent increased by $3,076 due to one less lease in the current period.

Other Income (Expense)

Other income (expense) consisted of interest.

income (expense) during the three months ended August 31, 2023 and August 31, 2022, was ($1,714,476) and ($994,433), respectively.

$720,043 increase in other expense was primarily attributable to the increase in interest and amortization of debt due to higher loans.

Other income (expense) during the three months ended

November 30, 2023 and November 30, 2022, was ($1,581,533) and ($1,271,158), respectively.

The $310,375 increase in other expense was primarily

attributable to the increase in interest and debt amortization expense which is a result of higher loans in 2023.

We had a net loss of $3,966,484 for the three months

ended August 31, 2023, compared to a net loss of $4,172,865 for the three months ended August 31, 2022.

The increase in net loss of $586,863

is primarily a result of higher other expenses consisting of interest and debt amortization costs.

This increase was partially offset

by higher gross profit and lower operating expenses.

Results of Operations for the Six Months Ended

August 31, 2023 and 2022

ended November 30, 2023, compared to a net loss of $4,085,660 for the three months ended November 30, 2022.

The decrease in net loss of

$119,176 is due to a number of factors:

higher gross profit and lower general and administrative and other expense offset by higher other

expenses in the three months ended November 30, 2023.

Results of Operations for the Nine Months Ended

November 30, 2023 and 2022

The following table shows our results of operations

for the six months ended August 31, 2023 and 2022.

for the nine months ended November 30, 2023 and 2022.

The historical results presented below are not necessarily indicative of the results

that may be expected for any future period.

August 31, 2023

August 31, 2022

November 30, 2023

November 30, 2022

Operating expenses

3 unchanged sentences

with customers disaggregated by product/service:

August 31, 2023

August 31, 2022

November 30, 2023

November 30, 2022

Device rental activities

Direct sales of goods and services

Total revenue for the six-month period ended August

31, 2023 was $771,571 which represented an increase of $118,930 compared to total revenue of $652,641 for the six months ended August

This increase is a result of higher rental sales as the Company deployed 81more units when comparing these periods.

Total gross profit for the six-month period ended

August 31, 2023 was $591,046 which represented an increase of $266,343, compared to gross profit of $324,703 for the six months ended

August 31, 2022.

The gross profit increased due to the higher sales and higher margin sales.

The gross profit % of 77% for the six month

period ended August 31, 2023 was higher than the gross profit % of 50% for the prior year’s corresponding period.

The direct sales

for the six months ended August 31, 2023 consisted of higher proportion of training revenue at higher gross profit vs unit sales for the

six months ended August 31, 2022.

The gross profit % of 77% for the six month period ended August 31, 2023 was higher than the gross profit

% of 50% for the prior year’s corresponding period.

Total revenue for the nine-month period ended November

30, 2023 was $1,368,551 which represented an increase of $313,511 compared to total revenue of $1,055,040 for the nine months ended November

This 30% increase was because of higher rental activities due to 220 new deployments year to date November 30, 2023.

Total gross profit for the nine-month period ended

November 30, 2023 was 1,052,112 which represented an increase of $450,970, compared to gross profit of $601,142 for the nine months ended

November 30, 2022.

The gross profit increased due to the 30% higher sales and higher proportion of rental activities at higher margins

than direct sales.

The gross profit % of 77% for the nine-month period ended November 30, 2023 was higher than the gross profit % of 57%

for the prior year’s corresponding period.

Operating Expenses

August 31, 2023

August 31, 2022

November 30, 2023

November 30, 2022

Research and development

3 unchanged sentences

Operating expenses

General and administrative expenses consisted primarily

of professional services, automobile expenses, advertising, salaries and wages, travel expenses and consultants.

Our operating expenses

during the six-month period ended August 31, 2023 and August 31, 2022, were $6,585,273 and $6,999,791, respectively.

The overall decrease

of $ 414,518 was primarily attributable to the following changes in operating expenses of:

General and administrative

expenses consisted primarily of professional services, automobile expenses, advertising, salaries and wages, travel expenses and consultants.

Our operating expenses during the six-month period ended November 30, 2023 and November 30, 2022, were $9,431,292 and $10,090,732, respectively.

The overall decrease of $659 ,440 was primarily attributable to

the following changes in operating expenses of:

General and administrative expenses decreased by $ 338,651 .

In comparing the six months ended August 31, 2023 and August 31, 2022 the decrease may be partially explained by the following decreases:

wages and salaries by $181,156, stock based compensation by $114,506, subcontractors by $26,541, sales and marketing by $49,346, travel by $39,971, investor relations stock agents and regulatory expenses by $35,772, bad debts expense $120,270 and office expense by $19,972.

These were partially offset by increases in the following account:

professional fees by $259,677 and other G& A increases.

In comparing the six months ended November 30, 2023 and November 30, 2022 the decrease may be partially explained by the following decreases:

wages and salaries by $18,426, stock based compensation by $143,104, sales and marketing by $128,797, travel by $70,449 and bad debts expense $197,405.

These were partially offset by increases in the following accounts:

professional fees by $68,350, subcontractors by $63,956 , dues and subscriptions by $ $25,977 and other G& A increases.

Research and development decreased by $557,493 due to a reduction in funding on development of future products.

2 unchanged sentences

Other Income (Expense)

Other income (expense) during the six months ended

August 31, 2023 and August 31, 2022, was ($3,320,692) and ($2,169,463), respectively.

Other income (expense) during the nine months ended

November 30, 2023 and November 30, 2022, was ($4,902,225) and (3,440,621), respectively.

The 1,461,604 increase in other expense was primarily

attributable to the increase in interest and debt amortization expense which is a result of higher loans in 2023.

We had a net loss of 9,314,919 for the six months

ended August 31, 2023, compared to a net loss of $8,844,551 for the six months ended August 31, 2022.

We had a net loss of $13,281,405 for the nine months

ended November 30, 2023, compared to a net loss of $12,930,211 for the nine months ended November 30, 2022.

The increase in net loss of

$351,194 is primarily a result of higher other expenses consisting of interest and debt amortization costs.

This increase was partially offset

by higher gross profit and lower operating expenses

This increase was partially

offset by higher gross profit and lower operating expenses.

Liquidity, Capital Resources and Cash Flows

6 unchanged sentences

of liabilities that may be necessary should we be unable to continue as a going concern.

As of August 31, 2023, we had a cash balance of $1,512,112,

As of November 30, 2023, we had a cash balance of

$97,478, accounts receivable of $505,438, device parts inventory of $2,220,159 and $16,459,125 in current liabilities.

At the current cash consumption

rate, we will need to consider additional funding sources going forward.

We are taking proactive measures to reduce operating expenses

and drive growth in revenue.

At the current

cash consumption rate, we will need to consider additional funding sources going forward.

We are taking proactive measures to reduce operating

expenses and drive growth in revenue.

The successful outcome of future activities cannot

4 unchanged sentences

liabilities and working capital (deficit) for the periods indicated:

August 31, 2023

November 30, 2023

February 28, 2023

2 unchanged sentences

Working capital

As of August 31, 2023 and February 28, 2023, we had

a cash balance of $1,512,112 and $939,759, respectively.

As of November 30, 2023 and February 28, 2023, we

had a cash balance of $97,478 and $939,759, respectively.

Summary of Cash Flows

August 31, 2023

August 31, 2022

November 30, 2023

November 30, 2022

Net cash used in operating activities

2 unchanged sentences

Net cash used in operating activities.

Net cash used in operating activities for the six

months ended August 31, 2023 was $6,335,216 which included a net loss of $9,314,919, non-cash activity such as the bad debts expense of

$24,730, reduction of right of use asset of $58,220, accretion of lease liability $66,864, stock based compensation of $228,434, gain

Net cash used in operating activities for the nine

months ended November 30, 2023 was $9,378,427 which included a net loss of $13,281,405, non-cash activity such as the bad debts expense

of $26,730, reduction of right of use asset of $88,378, accretion of lease liability $99,248, stock based compensation of $337,896, gain

on settlement of debt of ($38,740) , change in operating assets and liabilities of $966,052, amortization of debt discount of $1,755,897,

2 unchanged sentences

Net cash used in investing activities.

Net cash used in investing activities for the six

months ended August 31, 2023 was $3,463, which was the purchase of fixed assets,

Net cash used in investing activities for the nine

months ended November 30, 2023 was $10,044 which was the purchase of fixed assets of $13,903 offset by reimbursement of security deposit

Net cash provided by financing activities.

Net cash provided by financing activities was $8,546,100

for the six months ended August 31, 2023.

This consisted of share proceeds net of issuance costs of 6,115,032, proceeds from loans payable

of $1,050,000, reduced by repayments on loans payable of $254,000.

for the nine months ended November 30, 2023.

This consisted of share proceeds net of issuance costs of 7,527,190, proceeds from loans

payable of $1,400,000, reduced by repayments on loans payable of $381,000.

Off-Balance Sheet Arrangements

3 unchanged sentences

Related Party Transactions

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 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.

For both the three months ended November 30, 2023

and November 30, 2022 , the Company had no repayments of net advances from its loan payable-related party At November 30, 2023, the loan

payable-related party was $299,286 and $206,516 at February 28, 2023.

Included in the balance due to the related party at November 30,

2023 is $222,754 of deferred salary and interest, $183,625 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

November 30, 2023 and February 28, 2023 was $28,267 and $15,660 respectively.

Pursuant to the amended Employment Agreement with

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

its Chief Executive Officer, for the three months and nine ended November 30, 2023, the Company accrued $62,000 (2022-$138,000) and $187,000

(2022-$362,500) of incentive compensation plan payable with a corresponding recognition of stock based compensation due to the expectation

2 unchanged sentences

$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

At November 30, 2023 and February 28, 2023 there was $1,166,000 and $979,000 of incentive compensation payable.

During the three months ended November 30, 2023 and

2022, the Company was charged $526,723 and $794,460, 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

a principal shareholder.

During the nine months ended November 30, 2023 and

2022, the Company was charged $2,185,998 and $2,735,589, respectively for fees for research and development from a company partially owned

by a principal shareholder.

QUANTITATIVE AND QUALITATIVE DISCLOSURES

2 unchanged sentences

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 2. Management’s Discussion and Analysis