What changed in this filing

/stocks — the workspaceLOADING

Item 9A. Controls and Procedures

2024-05-28 compared with 2023-06-14 · 1644 added, 1888 removed, 447 unchanged (89% of the section changed)

CONTROLS AND PROCEDURES

Evaluation of Disclosure Controls and Procedures

As of February 28, 2023, we carried out an evaluation,

under the supervision and with the participation of our management, including our principal executive officer and principal financial

officer, of the effectiveness of our disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)).

upon that evaluation, our principal executive officer and principal financial officer concluded that, as of February 28, 2021, our disclosure

controls and procedures were not effective to ensure that information required to be disclosed in reports filed under the Securities Exchange

Act of 1934 is recorded, processed, summarized and reported within the required time periods and is accumulated and communicated to our

management, including our principal executive officer and principal financial officer, as appropriate to allow timely decisions regarding

required disclosure.

Limitations on Systems of Controls

Our management, including our principal executive

officer and principal financial officer, does not expect that our disclosure controls and procedures or our internal controls will prevent

all error or fraud.

A control system, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance

that the objectives of the control system are met.

Further, the design of a control system must reflect the fact that there are resource

constraints and the benefits of controls must be considered relative to their costs.

Due to the inherent limitations in all control systems,

no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, have been detected.

address the material weaknesses identified in our evaluation, we performed additional analysis and other post-closing procedures in an

effort to ensure our consolidated financial statements included in this annual report have been prepared in accordance with generally

accepted accounting principles.

Accordingly, management believes that the financial statements included in this report fairly present

in all material respects our financial condition, results of operations and cash flows for the periods presented.

Management’s Report on Internal Control over Financial Reporting

Our management is responsible for establishing and

maintaining adequate internal control over financial reporting.

Internal control over financial reporting is defined in Rule 13a-15(f)

or 15d-15(f) promulgated under the Securities Exchange Act of 1934 as a process designed by, or under the supervision of, the Company’s

principal executive and principal financial officers and effected by the Company’s board of directors, management and other personnel,

to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external

purposes in accordance with accounting principles generally accepted in the United States of America and includes those policies and procedures

Pertain to the maintenance of records that in reasonable detail accurately and fairly reflect the transactions and dispositions of the assets of the Company;

Provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with accounting principles generally accepted in the United States of America and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company;

Provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.

Because of its inherent limitations, internal control

over financial reporting may not prevent or detect misstatements.

Projections of any evaluation of effectiveness to future periods are

subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies

or procedures may deteriorate.

All internal control systems, no matter how well designed, have inherent limitations.

Therefore, even those

systems determined to be effective can provide only reasonable assurance with respect to financial statement preparation and presentation.

Because of the inherent limitations of internal control, there is a risk that material misstatements may not be prevented or detected

on a timely basis by internal control over financial reporting.

However, these inherent limitations are known features of the financial

reporting process.

Therefore, it is possible to design into the process safeguards to reduce, though not eliminate, this risk.

As of February 28, 2023, management assessed the effectiveness

of our internal control over financial reporting based on the criteria for effective internal control over financial reporting established

in Internal Control-Integrated Framework (2013 framework) issued by the Committee of Sponsoring Organizations of the Treadway Commission

and SEC guidance on conducting such assessments.

Based on that evaluation, they concluded that, during the period covered by this report,

such internal controls and procedures were not effective to detect the inappropriate application of U.S.

GAAP rules as more fully described

This was due to deficiencies that existed in the design or operation of our internal controls over financial reporting that adversely

affected our internal controls and that may be considered to be material weaknesses.

The matters involving internal controls and procedures

that our management considered to be material weaknesses under the criteria established in Internal Control – Integrated Framework

(2013) by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) were:

of Disclosure Controls and Procedures

of February 29, 2024, we carried out an evaluation, under the supervision and with the participation of our management, including our

principal executive officer and principal financial officer, of the effectiveness of our disclosure controls and procedures (as defined

in Exchange Act Rules 13a-15(e) and 15d-15(e)).

Based upon that evaluation, our principal executive officer and principal financial officer

concluded that, as of February 29, 2024, our disclosure controls and procedures were not effective to ensure that information required

to be disclosed in reports filed under the Securities Exchange Act of 1934 is recorded, processed, summarized and reported within the

required time periods and is accumulated and communicated to our management, including our principal executive officer and principal

financial officer, as appropriate to allow timely decisions regarding required disclosure.

on Systems of Controls

management, including our principal executive officer and principal financial officer, does not expect that our disclosure controls and

procedures or our internal controls will prevent all error or fraud.

A control system, no matter how well conceived and operated, can

provide only reasonable, not absolute, assurance that the objectives of the control system are met.

Further, the design of a control

system must reflect the fact that there are resource constraints and the benefits of controls must be considered relative to their costs.

Due to the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues

and instances of fraud, if any, have been detected.

To address the material weaknesses identified in our evaluation, we performed additional

analysis and other post-closing procedures in an effort to ensure our consolidated financial statements included in this annual report

have been prepared in accordance with generally accepted accounting principles.

Accordingly, management believes that the financial statements

included in this report fairly present in all material respects our financial condition, results of operations and cash flows for the

periods presented.

Report on Internal Control over Financial Reporting

management is responsible for establishing and maintaining adequate internal control over financial reporting.

Internal control over

financial reporting is defined in Rule 13a-15(f) or 15d-15(f) promulgated under the Securities Exchange Act of 1934 as a process designed

by, or under the supervision of, the Company’s principal executive and principal financial officers and effected by the Company’s

board of directors, management and other personnel, to provide reasonable assurance regarding the reliability of financial reporting

and the preparation of financial statements for external purposes in accordance with accounting principles generally accepted in the

United States of America and includes those policies and procedures that:

to the maintenance of records that in reasonable detail accurately and fairly reflect the transactions and dispositions of the assets

of the Company;

reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with

accounting principles generally accepted in the United States of America and that receipts and expenditures of the company are being

made only in accordance with authorizations of management and directors of the company;

reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s

assets that could have a material effect on the financial statements.

of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements.

Projections of any evaluation

of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that

the degree of compliance with the policies or procedures may deteriorate.

All internal control systems, no matter how well designed,

have inherent limitations.

Therefore, even those systems determined to be effective can provide only reasonable assurance with respect

to financial statement preparation and presentation.

Because of the inherent limitations of internal control, there is a risk that material

misstatements may not be prevented or detected on a timely basis by internal control over financial reporting.

However, these inherent

limitations are known features of the financial reporting process.

Therefore, it is possible to design into the process safeguards to

reduce, though not eliminate, this risk.

of February 29, 2024, management assessed the effectiveness of our internal control over financial reporting based on the criteria for

effective internal control over financial reporting established in Internal Control-Integrated Framework (2013 framework) issued by the

Committee of Sponsoring Organizations of the Treadway Commission and SEC guidance on conducting such assessments.

Based on that evaluation,

they concluded that, during the period covered by this report, such internal controls and procedures were not effective to detect the

inappropriate application of U.S.

GAAP rules as more fully described below.

This was due to deficiencies that existed in the design or

operation of our internal controls over financial reporting that adversely affected our internal controls and that may be considered

to be material weaknesses.

matters involving internal controls and procedures that our management considered to be material weaknesses under the criteria established

in Internal Control – Integrated Framework (2013) by the Committee of Sponsoring Organizations of the Treadway Commission (COSO)

lack of a functioning audit committee;

of a majority of independent members and a lack of a majority of outside directors on our board of directors;

inadequate segregation of

duties consistent with control objectives;

lack of a majority of independent members and a lack of a majority of outside directors

on our board of directors;

inadequate segregation of duties consistent with control objectives;

management is dominated by a single individual;

use of the inappropriate methodology of allocating

proceeds in certain debt transactions and the expensing timing of the related debt discount;

use of inappropriate fair values in certain

preferred stock issuances and settlements.

The aforementioned material weaknesses were identified by our Chief Executive Officer in connection

with the review of our financial statements as of February 28, 2023.

Management believes that the material weaknesses set

forth above did not have an effect on our financial results.

However, management believes that the lack of a functioning audit committee

and the lack of a majority of outside directors on our board of directors results in ineffective oversight in the establishment and monitoring

of required internal controls and procedures, which could result in a material misstatement in our financial statements in future periods.

This report does not include an attestation report

of our registered public accounting firm regarding internal control over financial reporting.

Management’s report was not subject

to attestation by our registered public accounting firm pursuant to the rules of the Securities and Exchange Commission that permit us

to provide only management’s report in this annual report.

Changes in Internal Control over Financial Reporting

No changes were made to our internal control over

financial reporting during the year ended February 28, 2023 that have materially affected, or are reasonably likely to materially affect,

our internal control over financial reporting.

use of the inappropriate methodology of allocating proceeds in certain debt transactions and the expensing timing of the related debt

use of inappropriate fair values in certain preferred stock issuances and settlements.

The aforementioned material weaknesses

were identified by our Chief Executive Officer in connection with the review of our financial statements as of February 29, 2024.

believes that the material weaknesses set forth above did not have an effect on our financial results.

However, management believes that

the lack of a functioning audit committee and the lack of a majority of outside directors on our board of directors results in ineffective

oversight in the establishment and monitoring of required internal controls and procedures, which could result in a material misstatement

in our financial statements in future periods.

report does not include an attestation report of our registered public accounting firm regarding internal control over financial reporting.

Management’s report was not subject to attestation by our registered public accounting firm pursuant to the rules of the Securities

and Exchange Commission that permit us to provide only management’s report in this annual report.

in Internal Control over Financial Reporting

changes were made to our internal control over financial reporting during the year ended February 28, 2023 that have materially affected,

or are reasonably likely to materially affect, our internal control over financial reporting.

OTHER INFORMATION

DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE

The following table sets forth the names, positions

and ages of our directors and executive officers as of the date of this report.

Our directors serve for one year and until their successors

are elected and qualified.

Our officers are elected by the board of directors to a term of one year and serve until their successor is

duly elected and qualified, or until they are removed from office.

The board of directors has no nominating, auditing or compensation

Steven Reinharz (1)

Chief Executive Officer, Secretary and Director (2)

Anthony Brenz

Chief Financial Officer

Director as of March 2, 2021

All directors hold office until the next annual meeting of stockholders and until their successors have been duly elected and qualified.

Biographical information concerning our director and

executive officers listed above is set forth below.

Steven Reinharz .

RAD was founded by

Reinharz in July of 2016, and he has been continuously employed by RAD and its affiliated companies since that time.

He is the holder

of a majority of our capital stock.

Reinharz has served as a member of the Board of Directors since March 2, 2021 and as our Chief

Executive Officer, Chief Financial Officer, and Secretary of the Company since March 2, 2021 and resigned as our Chief Financial Officer

as of April 26, 2021 upon Anthony Brenz’s appointment as our Chief Financial Officer.

As our Chief Executive Officer and President

Reinharz leverages his extensive knowledge and interest in robotics and artificial intelligence to design and develop robotic

solutions that increase business efficiency and deliver immediate and impressive cost savings.

Reinharz is an active voice in both

the security and artificial intelligence industries.

He started and ran his own security integration company from the age of 24 to 31,

becoming one of California’s leading system integrators.

Reinharz later was part of a team that successfully sold an integrator

to a global security firm for $42 million and has held various other security industry roles.

Reinharz speaks and contributes to panels

at ISC East and West, and ASIS.

Reinharz is a leading member of several industry association committees, mostly through the Security

Industry Association.

Reinharz has called Orange County, California home since 1995, having grown up in Montreal and Toronto.

a dual Bachelor of Science degree in Political Science and Commercial Studies.

Anthony Brenz was appointed as our Chief

Financial Officer on April 26, 2021.

He is an accomplished senior financial and operational executive for over 20 years of experience

in finance and operations, including corporate strategy, procurement and supply chain, human resources, and customer service.

2018 to December 2020, Anthony Brenz was the Vice President/Director Finance of AirBoss Flexible Products Company.

From September 2014

to April 2018, he was the Chief Financial Officer/Vice President of Finance of Thomson Aerospace and Defense (a Parker Meggitt Company).

From August 2012 to September 2014, he was the Vice President/Director of Finance of M B Aeospace US Holdings, Inc.

Anthony Brenz received

a Bachelor of Accountancy from Walsh College in Troy Michigan in 1989 and has been licensed as a Certified Public Accountant in Michigan

There are no family relationships between any of the

executive officers and directors.

Board Committees and Director Independence

Reinharz serves as director, and we do not have

a separately designated audit committee, compensation committee or nominating and corporate governance committee.

The functions of those

committees are being undertaken by our directors.

Since we do not have any independent directors and have only two directors, our

directors believes that the establishment of committees of the Board would not provide any benefits to our company and could be considered

more form than substance.

We currently have an employee director, Mr.

but no independent directors, as such term is defined in the listing standards of The NASDAQ Stock Market, and we do not anticipate appointing

additional directors in the near future.

Our directors are not “audit committee financial experts”

within the meaning of Item 401(e) of Regulation S-K.

As with most small, early stage companies, until such time that the Company further

develops its business, achieves a stronger revenue base and has sufficient working capital to purchase directors and officer’s insurance,

the Company does not have any immediate prospects to attract independent directors.

When the Company is able to expand our Board of Directors

to include one or more independent directors, the Company intends to establish an Audit Committee of our Board of Directors.

intention that one or more of these independent directors will also qualify as an audit committee financial expert.

Our securities are

not quoted on an exchange that has requirements that a majority of our Board members be independent, and the Company is not currently

otherwise subject to any law, rule or regulation requiring that all or any portion of our Board of Directors include “independent”

directors, nor are we required to establish or maintain an Audit Committee or other committee of our Board of Directors.

Procedures for Nominating Directors

There have been no material changes to the procedures

by which security holders may recommend nominees to the Board since the most recently completed fiscal quarter.

We do not have a policy

regarding the consideration of any director candidates that may be recommended by our stockholders, including the minimum qualifications

for director candidates, nor has our sole director established a process for identifying and evaluating director nominees.

adopted a policy regarding the handling of any potential recommendation of director candidates by our stockholders, including the procedures

to be followed.

Our sole director has not considered or adopted any of these policies, as we have never received a recommendation from

any stockholder for any candidate to serve on our Board of Directors.

Given our relative size and lack of directors and officers insurance

coverage, we do not anticipate that any of our stockholders will make such a recommendation in the near future.

While there have been no nominations of additional

directors proposed, in the event such a proposal is made, all current members of our Board will participate in the consideration of director

Director Qualifications

Steve Reinharz is our sole director and was appointed

on March 2, 2021.

He is the founder of our operating company, Robotoc Assistance Devices, Inc.

DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE

following table sets forth the names, positions and ages of our directors and executive officers as of the date of this report.

Our directors

serve for one year and until their successors are elected and qualified.

Our officers are elected by the board of directors to a term

of one year and serve until their successor is duly elected and qualified, or until they are removed from office.

The board of directors

has no nominating, auditing or compensation committees.

Executive Officer, Secretary and Director (2)

Financial Officer

as of March 2, 2021

directors hold office until the next annual meeting of stockholders and until their successors have been duly elected and qualified.

information concerning our director and executive officers listed above is set forth below.

RAD was founded by Mr.

Reinharz in July of 2016, and he has been continuously employed by RAD and its affiliated companies

since that time.

He is the holder of a majority of our capital stock.

Reinharz has served as a member of the Board of Directors since

March 2, 2021 and as our Chief Executive Officer, Chief Financial Officer, and Secretary of the Company since March 2, 2021 and resigned

as our Chief Financial Officer as of April 26, 2021 upon Anthony Brenz’s appointment as our Chief Financial Officer.

Executive Officer and President of RAD, Mr.

Reinharz leverages his extensive knowledge and interest in robotics and artificial intelligence

to design and develop robotic solutions that increase business efficiency and deliver immediate and impressive cost savings.

is an active voice in both the security and artificial intelligence industries.

He started and ran his own security integration company

from the age of 24 to 31, becoming one of California’s leading system integrators.

Reinharz later was part of a team that successfully

sold an integrator to a global security firm for $42 million and has held various other security industry roles.

Reinharz speaks

and contributes to panels at ISC East and West, and ASIS.

Reinharz is a leading member of several industry association committees,

mostly through the Security Industry Association.

Reinharz has called Orange County, California home since 1995, having grown up

in Montreal and Toronto.

He earned a dual Bachelor of Science degree in Political Science and Commercial Studies.

Brenz was appointed as our Chief Financial Officer on April 26, 2021.

He is an accomplished senior financial and operational

executive for over 20 years of experience in finance and operations, including corporate strategy, procurement and supply chain, human

resources, and customer service.

From April 2018 to December 2020, Anthony Brenz was the Vice President/Director Finance of AirBoss Flexible

Products Company.

From September 2014 to April 2018, he was the Chief Financial Officer/Vice President of Finance of Thomson Aerospace

and Defense (a Parker Meggitt Company).

From August 2012 to September 2014, he was the Vice President/Director of Finance of M B Aeospace

US Holdings, Inc.

Anthony Brenz received a Bachelor of Accountancy from Walsh College in Troy Michigan in 1989 and has been licensed

as a Certified Public Accountant in Michigan since 1989.

are no family relationships between any of the executive officers and directors.

Committees and Director Independence

Reinharz serves as director, and we do not have a separately designated audit committee, compensation committee or nominating and corporate

governance committee.

The functions of those committees are being undertaken by our directors.

Since we do not have any independent directors

and have only two directors, our directors believes that the establishment of committees of the Board would not provide any benefits

to our company and could be considered more form than substance.

currently have an employee director, Mr.

Reinharz, but no independent directors, as such term is defined in the listing standards of

The NASDAQ Stock Market, and we do not anticipate appointing additional directors in the near future.

directors are not “audit committee financial experts” within the meaning of Item 401(e) of Regulation S-K.

As with most small,

early stage companies, until such time that the Company further develops its business, achieves a stronger revenue base and has sufficient

working capital to purchase directors and officer’s insurance, the Company does not have any immediate prospects to attract independent

When the Company is able to expand our Board of Directors to include one or more independent directors, the Company intends

to establish an Audit Committee of our Board of Directors.

It is our intention that one or more of these independent directors will also

qualify as an audit committee financial expert.

Our securities are not quoted on an exchange that has requirements that a majority of

our Board members be independent, and the Company is not currently otherwise subject to any law, rule or regulation requiring that all

or any portion of our Board of Directors include “independent” directors, nor are we required to establish or maintain an

Audit Committee or other committee of our Board of Directors.

for Nominating Directors

have been no material changes to the procedures by which security holders may recommend nominees to the Board since the most recently

completed fiscal quarter.

We do not have a policy regarding the consideration of any director candidates that may be recommended by our

stockholders, including the minimum qualifications for director candidates, nor has our sole director established a process for identifying

and evaluating director nominees.

We have not adopted a policy regarding the handling of any potential recommendation of director candidates

by our stockholders, including the procedures to be followed.

Our sole director has not considered or adopted any of these policies,

as we have never received a recommendation from any stockholder for any candidate to serve on our Board of Directors.

Given our relative

size and lack of directors and officers insurance coverage, we do not anticipate that any of our stockholders will make such a recommendation

in the near future.

there have been no nominations of additional directors proposed, in the event such a proposal is made, all current members of our Board

will participate in the consideration of director nominees.

Qualifications

Steve Reinharz is our sole director and was appointed on March 2, 2021.

He is the founder of our operating company, Robotoc Assistance

Devices, Inc.

(see bio on page 33).

Code of Ethics and Business Conduct

We have adopted a code of ethics meeting the requirements

of Section 406 of the Sarbanes-Oxley Act of 2002.

We believe our code of ethics is reasonably designed to deter wrongdoing and promote

honest and ethical conduct;

provide full, fair, accurate, timely, and understandable disclosure in public reports;

comply with applicable

of Ethics and Business Conduct

have adopted a code of ethics meeting the requirements of Section 406 of the Sarbanes-Oxley Act of 2002.

We believe our code of ethics

is reasonably designed to deter wrongdoing and promote honest and ethical conduct;

provide full, fair, accurate, timely, and understandable

disclosure in public reports;

comply with applicable laws;

ensure prompt internal reporting of violations;

and provide accountability for adherence to the provisions of the code of ethics.

Director Compensation

Apart from a settlement paid upon Mr.

Parsons resignation

on June 22, 2021 totaling $265,700 no other compensation was paid for his services as a director.

We reimburse our directors for all reasonable

ordinary and necessary business-related expenses, but we did not pay any other director’s fees or any other cash compensation for

services rendered as a director during the years ended February 28, 2023 and February 28, 2022 to any of the individuals serving on our

Board during that period.

Compliance with Section 16(a) of the Securities

Exchange Act of 1934

Section 16(a) of the Exchange Act requires our executive

officers and directors, and persons who beneficially own more than 10% of a registered class of our equity securities to file with the

SEC initial statements of beneficial ownership, reports of changes in ownership and annual reports concerning their ownership of our common

shares and other equity securities, on Forms 3, 4 and 5 respectively.

Executive officers, directors and greater than 10% stockholders

are required by the SEC regulations to furnish us with copies of all Section 16(a) reports they file.

Based on our review of the copies

of such forms received by us, or written representations that no other reports were required, and to the best of our knowledge, we believe

that all of our officers, directors, and owners of 10% or more of our common stock filed all required Forms 3, 4, and 5.

and provide accountability

for adherence to the provisions of the code of ethics.

reimburse our directors for all reasonable ordinary and necessary business-related expenses, but we did not pay any other director’s

fees or any other cash compensation for services rendered as a director during the years ended February 29, 2024 and February 28, 2023

to any of the individuals serving on our Board during that period.

with Section 16(a) of the Securities Exchange Act of 1934

16(a) of the Exchange Act requires our executive officers and directors, and persons who beneficially own more than 10% of a registered

class of our equity securities to file with the SEC initial statements of beneficial ownership, reports of changes in ownership and annual

reports concerning their ownership of our common shares and other equity securities, on Forms 3, 4 and 5 respectively.

Executive officers,

directors and greater than 10% stockholders are required by the SEC regulations to furnish us with copies of all Section 16(a) reports

Based on our review of the copies of such forms received by us, or written representations that no other reports were required,

and to the best of our knowledge, we believe that all of our officers, directors, and owners of 10% or more of our common stock filed

all required Forms 3, 4, and 5.

EXECUTIVE COMPENSATION

The following table summarizes all compensation recorded

by us in the past two fiscal years for Mr.

Reinharz , our President and Chief Executive Officer , Anthony Brenz, our Chief Financial Officer

and Garret Parsons our former President, Chief Executive Officer and Chief Financial Officer.

following table summarizes all compensation recorded by us in the past two fiscal years for Mr.

Reinharz , our President and Chief Executive

Officer , Anthony Brenz, our Chief Financial Officer and Garret Parsons our former President, Chief Executive Officer and Chief Financial

AND 2023 SUMMARY COMPENSATION TABLE

6 unchanged sentences

Chief Financial Officer (1)

Steven Reinharz was appointed Chief Executive Officer, Chief Financial Officer and Secretary on March 2, 2021.Mr.Reinharz ceased being Chief Financial Officer on June 24, 2021 and on that date appointed Anthony Brenz as Chief Financial Officer

Employment Agreements

On March 1, 2021, Mr.

Parsons entered into a consulting

agreement with us whereby he would provide services for a three-year term.

The consulting agreement sets his annual compensation as $96,000

for the first year, $108,000 for the second year, and $120,000 for the third year.

On June 22, 2021, Mr.

Garett Parsons submitted his

resignation as our director effective as of June 22, 2021 as a result of personal reasons.

In connection with the resignation of Mr.

Parsons entered into a resignation letter agreement which cancels the previous consulting agreement.

Pursuant to the terms

of this letter, Mr.

Parsons will receive, among other things, a lump sum payment equal to $265,700 which was paid in June 2021.This payment

was a settlement as director of the company and not included as executive compensation above.

On April 9, 2021 Mr.

Reinharz entered into an employment

agreement with the Company in connection with his service as Chief Executive Officer.

The agreement began on April 9, 2021 and has a three-year

term, renewable thereafter on an annual basis if neither party files a notice of termination 90 days prior to the term renewal date.

agreement provides for compensation of $240,000 base salary (to be reviewed annually by the Board of Directors) and bonuses to be granted

at the discretion of the Board of Directors.

In addition, the Company will grant stock options to Mr.

Reinharz was appointed Chief Executive Officer, Chief Financial Officer and Secretary on March 2, 2021.Mr.Reinharz ceased being Chief

Financial Officer on June 24, 2021 and on that date appointed Anthony Brenz as Chief Financial Officer

Stock awards are payable in Series G and are included in long term liabilities as they will not be paid out in the current year.

April 9, 2021 Mr.

Reinharz entered into an employment agreement with the Company in connection with his service as Chief Executive Officer.

The agreement began on April 9, 2021 and has a three-year term, renewable thereafter on an annual basis if neither party files a notice

of termination 90 days prior to the term renewal date.

The agreement provides for compensation of $240,000 base salary (to be reviewed

annually by the Board of Directors) and bonuses to be granted at the discretion of the Board of Directors.

In addition, the Company will

grant stock options to Mr.

Reinharz under the following conditions:

Reinharz shall be granted an award of 10,000,000 million shares/options/warrants if Objective #1 is achieved.

the price per share of the Company’s common stock has increased in value to an average of $0.30 for ten (10) days in a thirty-day

trading period.

the price per share of the Company’s common stock has increased in value to an average of $0.30 for ten (10) days in a

thirty-day trading period.

For example, pursuant to a Company Stock Plan, if one is adopted, Mr.

Reinharz may elect to exercise Award #1 on a cash

or cashless basis at an exercise price of $0.15 per share/option/warrant.

Reinharz shall be granted

an award of 30,000,000 million shares/options/warrants if Objective #2 is achieved.

Objective #2 :

per share of the Company’s common stock has increased in value to an average of $0.50 for ten (10) days in a thirty-day trading

Reinharz may elect to exercise Award

#1 on a cash or cashless basis at an exercise price of $0.15 per share/option/warrant.

Reinharz shall be granted an award of 30,000,000 million shares/options/warrants if Objective #2 is achieved.

the price per share of the Company’s common stock has increased in value to an average of $0.50 for ten (10) days in a

thirty-day trading period.

For example, pursuant to a Company Stock Plan, if one is adopted, Mr.

Reinharz may elect to exercise Award #2 on a cash

or cashless basis at an exercise price of $0.25 per share/option/warrant.

On July 12, 2021 the Company and CEO amended the April 9, 2021 Employment

Agreement effective July 1, 2021 whereby the following objectives and awards were added to the two existing ones:

Objective #3 :

Sales in any fiscal quarter exceed the total sales in fiscal year 2021 for the first time.

Five hundred (500) shares of Series G preferred stock.

Objective #4 :

One hundred fifty (150) devices are deployed in the marketplace.

Two hundred fifty (250) shares of Series G preferred stock.

Objective #5 :

Year-to-date sales at any point in fiscal year 2022 exceed One Million Dollars ($1,000,000).

Two hundred fifty (250) shares of Series G preferred stock.

Objective #6 :

The price per share of common stock has increased to and maintains a price of Ten Cents ($0.10) or more for ten (10) days in a thirty (30) day period.

Two hundred fifty (250) shares of Series G preferred stock.

Objective #7 :

The price per share of common stock has increased to and maintains a price of Twenty Cents ($0.20) or more for ten (10) days in a thirty(30) day period.

Five hundred (500) shares of Series G preferred stock.

Objective #8 :

The RAD 3.0 products are launched into the marketplace by November 30, 2022.

Five hundred (500) shares of Series G preferred stock.

Objective #9 :

RAD receives an order for fifty (50) units from a single customer.

Five hundred (500) shares of Series G preferred stock.

The fair value of the first two awards was obtained

through the use of the Monte Carlo method was $69,350 with a charge to stock- based compensation and a corresponding charge to paid in

The fair value of the remaining rewards was determined by calculating the vesting amounts of each reward and then determining

for each reporting period the requisite service rendered and applying that against the cash redemption value of the number of shares of

Series G issuable for each tier in the agreement.

For the period ended February 28, 2023 that amount totaled $499,500 with a charge to

stock-based compensation and a corresponding charge to incentive compensation plan payable.

For the period ended February 28, 2022 that

amount totaled $1,979,500 with a charge to stock-based compensation and a corresponding charge to incentive compensation plan payable.

With the achievement of objectives 3,4,5 and 8 of the equity awards described above the CEO was granted 1,500 Series G Preferred shares

which were redeemed in the reporting period for $1,500,000 in cash.

As part of the grant, the Company is responsible for grossing up the

award value and has accrued additional compensation for the estimated taxes to be paid by the executive.

On April 20,2021 an offer letter was agreed with Anthony

Brenz for a base salary of $180,000, a discretionary quarterly bonus and future participation in the Employee Stock Option Plan.

commenced on April 26, 2021 and Mr.

Brenz was appointed the Company’s Chief Financial Officer on June 24, 2021.

The base salary

was amended to $190,000 on January 1, 2022.

O utstanding Equity Awards at 2022 Fiscal Year-End

The following table provides information concerning

unexercised options, stock that has not vested and equity incentive plan awards for Mr.

Reinharz and Mr Brenz, our sole executive officers

outstanding as of February 28, 2023:

Reinharz may elect to exercise Award

#2 on a cash or cashless basis at an exercise price of $0.25 per share/option/warrant.

July 12, 2021 the Company and CEO amended the April 9, 2021 Employment Agreement effective July 1, 2021 whereby the following objectives

and awards were added to the two existing ones:

in any fiscal quarter exceed the total sales in fiscal year 2021 for the first time.

hundred (500) shares of Series G preferred stock.

hundred fifty (150) devices are deployed in the marketplace.

hundred fifty (250) shares of Series G preferred stock.

sales at any point in fiscal year 2022 exceed One Million Dollars ($1,000,000).

hundred fifty (250) shares of Series G preferred stock.

price per share of common stock has increased to and maintains a price of Ten Cents ($0.10) or more for ten (10) days in a thirty

(30) day period.

hundred fifty (250) shares of Series G preferred stock.

price per share of common stock has increased to and maintains a price of Twenty Cents ($0.20) or more for ten (10) days in a thirty(30)

hundred (500) shares of Series G preferred stock.

RAD 3.0 products are launched into the marketplace by November 30, 2022.

hundred (500) shares of Series G preferred stock.

receives an order for fifty (50) units from a single customer.

hundred (500) shares of Series G preferred stock.

January 31, 2024 the Company added the following Objective effective March 1, 2022:

# 10 In any fiscal quarter, attrition , measured by loss of recurring monthly revenue does not exceed 10%

#10 Two h undred fifty (250) shares of Series G preferred stock.

fair value of the first two awards was obtained through the use of the Monte Carlo method was $69,350 with a charge to stock- based compensation

and a corresponding charge to paid in capital.

The fair value of the remaining rewards was determined by calculating the vesting amounts

of each reward and then determining for each reporting period the requisite service rendered and applying that against the cash redemption

value of the number of shares of Series G issuable for each tier in the agreement.

For the period ended February 29, 2024 that amount

totaled $1,521,000 with a charge to stock-based compensation and a corresponding charge to incentive compensation plan payable.

period ended February 28, 2023 that amount totaled $499,500 with a charge to stock-based compensation and a corresponding charge to incentive

compensation plan payable.

April 20,2021 an offer letter was agreed with Anthony Brenz for a base salary of $180,000, a discretionary quarterly bonus and future

participation in the Employee Stock Option Plan.

Employment commenced on April 26, 2021 and Mr.

Brenz was appointed the Company’s

Chief Financial Officer on June 24, 2021.

The base salary was amended to $190,000 on January 1, 2022.

Equity Awards at 2024 Fiscal Year-End

following table provides information concerning unexercised options, stock that has not vested and equity incentive plan awards for Mr.

Reinharz and Mr Brenz, our sole executive officers outstanding as of February 29, 2024:

OPTION AWARDS

16 unchanged sentences

Anthony Brenz

On April 14, 2021, the Shareholders of Series E Preferred

Stock and the Board of Directors of our Company (“Board”) approved and adopted the 2021 Incentive Stock Plan (the “2021

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.

The purpose of the 2021 Plan is to promote the success

of the Company by authorizing incentive awards to retain Directors, executives, selected Employees and Consultants, and reward participants

for making major contributions to the success of the Company.

The 2021 Plan authorizes the granting of stock options, restricted stock,

restricted stock units, stock appreciation rights and stock awards.

A total of one hundred million (100,000,000) shares of common stock

may be issued under the 2021 Plan.

All awards under the 2021 Plan, whether vested or unvested, are subject to the terms of any recoupment,

clawback or similar policy of the Company in effect from time to time, as well as any similar provisions of applicable law, which could

in certain circumstances require repayment or forfeiture of awards or any shares of stock or other cash or property received with respect

to the awards, including any value received from a disposition of the shares acquired upon payment of the awards.

The 2021 Plan will be

administered by the Board or any Committee authorized by the Board, if applicable, which will have the sole authority to, among other

Anthony Brenz

April 14, 2021, the Shareholders of Series E Preferred Stock and the Board of Directors of our Company (“Board”) approved

and adopted the 2021 Incentive Stock Plan (the “2021 Plan”).

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.

On August 14.32023 the Company further amended

the plan increasing the maximum shares to 200,000,000.

purpose of the 2021 Plan is to promote the success of the Company by authorizing incentive awards to retain Directors, executives, selected

Employees and Consultants, and reward participants for making major contributions to the success of the Company.

The 2021 Plan authorizes

the granting of stock options, restricted stock, restricted stock units, stock appreciation rights and stock awards.

A total of two hundred

million (200,000,000) shares of common stock may be issued under the 2021 Plan.

All awards under the 2021 Plan, whether vested or unvested,

are subject to the terms of any recoupment, clawback or similar policy of the Company in effect from time to time, as well as any similar

provisions of applicable law, which could in certain circumstances require repayment or forfeiture of awards or any shares of stock or

other cash or property received with respect to the awards, including any value received from a disposition of the shares acquired upon

payment of the awards.

The 2021 Plan will be administered by the Board or any Committee authorized by the Board, if applicable, which

will have the sole authority to, among other things:

construe and interpret the 2021 Plan;

make rules and regulations relating to the administration of the 2021 Plan;

make rules and regulations relating to the

administration of the 2021 Plan;

select participants;

and establish the terms and conditions of awards, all in accordance with the terms of the 2021 Plan.

The 2021 Plan will remain in effect

until April 14, 2031, unless sooner terminated by the Board.

Termination will not affect awards then outstanding.

SECURITY OWNERSHIP OF CERTAIN BENEFICIAL

OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS

At May 31, 2023, we had 6,117,570,789 shares of Common

Stock issued and outstanding.

The following table sets forth information regarding the beneficial ownership of our Common Stock as of

May 3, 2023, and reflects:

each of our executive officers;

each of our directors;

all of our directors and executive officers as a group;

each stockholder known by us to be the beneficial owner of more than 5% of our outstanding shares of common stock.

Information on beneficial ownership of securities

is based upon a record list of our stockholders and we have determined beneficial ownership in accordance with the rules of the SEC.

believe, based on the information furnished to us, that the persons and entities named in the table below have sole voting and investment

power with respect to all shares of common stock that they beneficially own, subject to applicable community property laws, except as

otherwise provided below.

and establish the terms and conditions of awards, all in accordance with the terms

of the 2021 Plan.

The 2021 Plan will remain in effect until April 14, 2031, unless sooner terminated by the Board.

Termination will not

affect awards then outstanding.

SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS

May 22, 2024, we had 10,318,917,383 shares of Common Stock issued and outstanding.

The following table sets forth information regarding

the beneficial ownership of our Common Stock as of May 7, 2024, and reflects:

of our executive officers;

of our directors;

of our directors and executive officers as a group;

stockholder known by us to be the beneficial owner of more than 5% of our outstanding shares of common stock.

on beneficial ownership of securities is based upon a record list of our stockholders and we have determined beneficial ownership in

accordance with the rules of the SEC.

We believe, based on the information furnished to us, that the persons and entities named in the

table below have sole voting and investment power with respect to all shares of common stock that they beneficially own, subject to applicable

community property laws, except as otherwise provided below.

Amount and Nature of

10 unchanged sentences

34,433,734,378

Beneficial ownership is determined in accordance with the rules of the Securities and Exchange Commission and generally includes voting or investment power with respect to securities.

Beneficial ownership also includes shares of stock subject to options and warrants currently exercisable or exercisable within 60 days of the date of this table.

In determining the percent of common stock owned by a person or entity as of the date of this Report, (a) the numerator is the number of shares of the class beneficially owned by such person or entity, including shares which may be acquired within 60 days on exercise of warrants or options and conversion of convertible securities, and (b) the denominator is the sum of (i) the total shares of common stock outstanding on as of May 31, 2023 6,117,570,789 shares, and (ii) the total number of shares that the beneficial owner may acquire upon exercise of the derivative securities.

Unless otherwise stated, each beneficial owner has sole power to vote and dispose of its shares.

Based on 6,117,570,789 shares of the Company’s common stock issued and outstanding as of May 31, 2023.

Steve Reinharz is a director and the Company’s Chief Executive Officer, Chief Financial Officer and Secretary as well as the CEO of RAD and is the holder of (i) 3,350,000 shares of our Series E Preferred Stock and, (ii) 2,450 shares of our Series F Convertible Preferred Stock.

Reinharz converted the 2,450 shares of the Company’s Series F Convertible Preferred Stock, he would receive 20,414,041,490 shares of the Company’s common stock, which is included in the chart above as if such conversion has occurred.

Further, 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 common stock.

As a result, the holders of Series E preferred stock has 2/3rds of the voting power of all shareholders at any time corporate action requires a vote of shareholders.

CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

AND DIRECTOR INDEPENDENCE

We do not have a written policy for the review, approval

or ratification of transactions with related parties or conflicted transactions.

When such transactions arise, they are referred to our

board of directors for its consideration.

For the years ended February 28, 2023 and February

28, 2021, the Company made net repayments of $0 and $803,394, respectively, to its loan payable-related party.

At February 28, 2023,

the loan payable-related party was $206,516 and $193,556 at February 28, 2022.

As of February 28, 2023, included in the balance due to

the related party is $108,000 of deferred salary all of which bears interest at 12%.

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

salary with $90,000 bearing interest at 12%.

The accrued interest included at February 28, 2023 was $15,660 (2022- $2,700).

During the year ended February 28, 2023 pursuant to

the amended Employment Agreement with its Chief Executive Officer the Company accrued $499,500 as incentive compensation plan payable

with a corresponding recognition of stock based compensation due to the expectation of additional awards being met.

At February 28, 2023,

the balance of incentive compensation plan payable was $979,000 (2022-$479,500).

This will be payable in Series G Preferred Shares which

are redeemable at the Company’s option at $1,000 per share.

During the year ended February 28, 2022, pursuant

to the amended Employment Agreement with its Chief Executive Officer, the Company issued 1,500 shares of Series G Preferred Shares which

are redeemable at the Company’s option at $1,000 per share and recorded $1,500,000 of stock based compensation.

The Company redeemed

these shares for $1,500,000 and accrued $479,500 as incentive compensation plan payable with a corresponding recognition of stock based

compensation due to the expectation of additional awards being met.

During the years ended February 28, 2023 and February

28, 2022, the Company was charged $3,578,981 and $2,258,819, respectively in consulting fees for research and development to a company

partially owned by a principal shareholder.

The principal shareholder received no compensation from this partially owned research and

development company and the fees were spent on core development projects.

ownership is determined in accordance with the rules of the Securities and Exchange Commission and generally includes voting or investment

power with respect to securities.

Beneficial ownership also includes shares of stock subject to options and warrants currently exercisable

or exercisable within 60 days of the date of this table.

In determining the percent of common stock owned by a person or entity as

of the date of this Report, (a) the numerator is the number of shares of the class beneficially owned by such person or entity, including

shares which may be acquired within 60 days on exercise of warrants or options and conversion of convertible securities, and (b)

the denominator is the sum of (i) the total shares of common stock outstanding on as of May 22, 2024 10,318,917,383shares, and (ii)

the total number of shares that the beneficial owner may acquire upon exercise of the derivative securities.

Unless otherwise stated,

each beneficial owner has sole power to vote and dispose of its shares.

on 10,318,917,383shares of the Company’s common stock issued and outstanding as of May 22, 2024.

Reinharz is a director and the Company’s Chief Executive Officer, Chief Financial Officer and Secretary as well as the CEO

of RAD and is the holder of (i) 3,350,000 shares of our Series E Preferred Stock and, (ii) 2,450 shares of our Series F Convertible

Preferred Stock.

Reinharz converted the 2,450 shares of the Company’s Series F Convertible Preferred Stock, he would

receive 34,433,734,378 shares of the Company’s common stock, which is included in the chart above as if such conversion has

Further, 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 common stock.

As a result, the holders of

Series E preferred stock has 2/3rds of the voting power of all shareholders at any time corporate action requires a vote of shareholders.

CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS AND DIRECTOR INDEPENDENCE

do not have a written policy for the review, approval or ratification of transactions with related parties or conflicted transactions.

When such transactions arise, they are referred to our board of directors for its consideration.

the years ended February 29, 2024 and February 28, 2023, the Company made net repayments of $54,179 and $0, respectively , to its loan

payable-related party.

At February 29, 2024, the loan payable-related party was $257,438 and $206,516 at February 28, 2023.

As of February

29, 2024, included in the balance due to the related party is $140,013 of deferred salary all of which bears interest at 12%.

As of February

28, 2023, included in the balance due to the related party is $108,000 of deferred salary all of which bears interest at 12%.

interest included at February 29, 2024 was $32,468 (February 28, 2023- $15,660).

the year ended February 28, 2023 pursuant to the amended Employment Agreement with its Chief Executive Officer the Company accrued $1,521,000

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

awards being met.

In January 2024 the Company added an Objective 10 which required the accrual of $2,000,000.

There was also a net adjustment

reduction of $479,000 for objectives accrued for but not met.

February 28, 2023, the balance of incentive compensation plan payable was $979,000.

This will be payable in Series G Preferred Shares

which are redeemable at the Company’s option at $1,000 per share.

the year ended February 29, 2024, the Company accrued $538,767 in deferred compensation for the CEO.

This was in accordance with a December

2023 board action allowing for $ 1 million of discretionary compensation.

The Company had already recorded $461,233 in bonus compensation.

There was no deferred compensation for the year ended February 28, 2023, the Company recorded a bonus to the CEO of $280,908.

the years ended February 29, 2024 and February 28, 2023, the Company was charged $2,810,839 and $3,578,981, respectively in consulting

fees for research and development to a company partially owned by a principal shareholder included in research and development expenses.

The principal shareholder received no compensation from this partially owned research and development company and the fees were spent

on core development projects.

As at both February 29, 2024 and February 28, 2023 the balance due to this company was $76,532.

PRINCIPAL ACCOUNTING FEES AND SERVICES

On October 31, 2019 the Board of Directors of the

Company approved and ratified the engagement (“Engagement”) of LJ Soldinger & Associates LLC (“LJ Soldinger”)

as the Company’s new independent registered public accounting firm..

The following table shows the fees that were billed

for the audit and other services provided by LJ Soldinger for the fiscal years ended February 28, 2023 and 2022.

October 31, 2019 the Board of Directors of the Company approved and ratified the engagement (“Engagement”) of LJ Soldinger

& Associates LLC (“LJ Soldinger”) as the Company’s new independent registered public accounting firm..

following table shows the fees that were billed for the audit and other services provided by LJ Soldinger for the fiscal years ended

February 29, 2024 and February 28, 2023.

Audit-Related Fees

2 unchanged sentences

All Other Fees

Audit Fees - This category includes the

audit of our annual financial statements, review of financial statements included in our Quarterly Reports on Form 10-Q and services that

are normally provided by the independent registered public accounting firm in connection with engagements for those fiscal years.

category also includes advice on audit and accounting matters that arose during, or as a result of, the audit or the review of interim

financial statements.

Audit-Related Fees - This category consists

of assurance and related services by the independent registered public accounting firm that are reasonably related to the performance

of the audit or review of our financial statements and are not reported above under “Audit Fees.” The services for the fees

disclosed under this category would include consultation regarding correspondence with the SEC, other accounting consulting and other

audit services.

Tax Fees - This category consists of professional

services rendered by our independent registered public accounting firm for tax compliance and tax advice.

The services for the fees disclosed

under this category include tax return preparation and technical tax advice.

All Other Fees - This category consists

of fees for other miscellaneous items.

As part of its responsibility for oversight of the

independent registered public accountants, the Board has established a pre-approval policy for engaging audit and permitted non-audit

services provided by our independent registered public accountants.

In accordance with this policy, each type of audit, audit-related,

tax and other permitted service to be provided by the independent auditors is specifically described and each such service, together with

a fee level or budgeted amount for such service, is pre-approved by the Board.

All of the services provided by LJ Soldinger described

above were approved by our Board.

The Company’s principal accountant did not engage

any other persons or firms other than the principal accountant’s full-time, permanent employees.

Fees - This category includes the audit of our annual financial statements, review of financial statements included in our Quarterly

Reports on Form 10-Q and services that are normally provided by the independent registered public accounting firm in connection with

engagements for those fiscal years.

This category also includes advice on audit and accounting matters that arose during, or as a result

of, the audit or the review of interim financial statements.

Audit-Related

Fees - This category consists of assurance and related services by the independent registered public accounting firm that are reasonably

related to the performance of the audit or review of our financial statements and are not reported above under “Audit Fees.”

The services for the fees disclosed under this category would include consultation regarding correspondence with the SEC, other accounting

consulting and other audit services.

Fees - This category consists of professional services rendered by our independent registered public accounting firm for tax compliance

and tax advice.

The services for the fees disclosed under this category include tax return preparation and technical tax advice.

Other Fees - This category consists of fees for other miscellaneous items.

part of its responsibility for oversight of the independent registered public accountants, the Board has established a pre-approval policy

for engaging audit and permitted non-audit services provided by our independent registered public accountants.

In accordance with this

policy, each type of audit, audit-related, tax and other permitted service to be provided by the independent auditors is specifically

described and each such service, together with a fee level or budgeted amount for such service, is pre-approved by the Board.

the services provided by LJ Soldinger described above were approved by our Board.

Company’s principal accountant did not engage any other persons or firms other than the principal accountant’s full-time,

permanent employees.

EXHIBITS, FINANCIAL STATEMENT SCHEDULES

(a)(1) Financial Statements

The consolidated financial statements and Report of

Independent Registered Public Accounting Firm are listed in the Index to Financial Statements and Financial Statement Schedules on page

F-1 and included on pages F-2 through F-36.

Financial Statements

consolidated financial statements and Report of Independent Registered Public Accounting Firm are listed in the Index to Financial Statements

and Financial Statement Schedules on page F-1 and included on pages F-2 through F-36.

Financial Statement Schedules

All schedules for which provision is made in the applicable

accounting regulations of the SEC are either not required under the related instructions, are not applicable (and therefore have been

omitted), or the required disclosures are contained in the financial statements included herein.

(3) Exhibits.

Description of Document

schedules for which provision is made in the applicable accounting regulations of the SEC are either not required under the related instructions,

are not applicable (and therefore have been omitted), or the required disclosures are contained in the financial statements included

Stock Purchase Agreement, dated August 28, 2017, by and among the registrant, Steve Reinharz and Robotic Assistance Devices Inc.

18 unchanged sentences

List of Subsidiaries.

Consent of Independent Registered Public Accounting Firm for Form S-3 (333-259260) .

Consent of Independent Registered Public Accounting Firm for Form S-1 (333-271031) .

Consent of Independent Registered Public Accounting Firm.

Rule 13(a)-14(a)/15(d)-14(a) Certification of principal executive officer.

4 unchanged sentences

(incorporated by reference to Exhibit 99.1 to the registrant’s annual report on Form 10-K filed with the Commission on May 28, 2021).

Inline XBRL Instance Document – the instance document does not appear in the Interactive Data File because XBRL tags are embedded within the Inline XBRL document.

Inline XBRL Taxonomy Extension Schema Document *

Inline XBRL Taxonomy Extension Calculation Linkbase Document *

Inline XBRL Taxonomy Extension Definition Linkbase Document *

Inline XBRL Taxonomy Extension Label Linkbase Document *

Inline XBRL Taxonomy Extension Presentation Linkbase Document *

Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101) *

Filed or furnished herewith.

Pursuant to the requirements of

Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the

undersigned, thereunto duly authorized.

ARTIFICIAL INTELLIGENCE TECHNOLOGY SOLUTIONS INC.

June 14, 2023

/s/ Steven Reinharz

XBRL Instance Document – the instance document does not appear in the Interactive Data File because XBRL tags are embedded

within the Inline XBRL document.

XBRL Taxonomy Extension Schema Document *

XBRL Taxonomy Extension Calculation Linkbase Document *

XBRL Taxonomy Extension Definition Linkbase Document *

XBRL Taxonomy Extension Label Linkbase Document *

XBRL Taxonomy Extension Presentation Linkbase Document *

Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101) *

or furnished herewith.

to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed

on its behalf by the undersigned, thereunto duly authorized.

INTELLIGENCE TECHNOLOGY SOLUTIONS INC.

Steven Reinharz

President, Chief Executive Officer

June 14, 2023

/s/ Anthony Brenz

Chief Executive Officer

Anthony Brenz

Chief Financial Officer (principal financial and accounting officer)

Pursuant to the requirements of

the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the

capacities and on the dates indicated.

/s/ Steven Reinharz

President, Chief Executive Officer and Director (principal executive officer)

June 14, 2023

Financial Officer (principal financial and accounting officer)

to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the

registrant and in the capacities and on the dates indicated.

Steven Reinharz

/s/ Anthony Brenz

Chief Financial Officer (principal financial and accounting officer)

June 14, 2023

Chief Executive Officer and Director (principal executive officer)

Anthony Brenz

ARTIFICIAL INTELLIGENCE TECHNOLOGY SOLUTIONS INC.

(FORMERLY ON THE MOVE SYSTEMS CORP.)

INDEX TO CONSOLIDATED FINANCIAL STATEMENTS

Report of Independent Registered Public Accounting Firm

Consolidated Balance Sheets

Consolidated Statements of Operations

Consolidated Statement of Stockholders’ Deficit

Consolidated Statements of Cash Flows

Notes to the Consolidated Financial Statements

Index to Financial Statements

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING

To the Board of Directors and

Stockholders of Artificial Intelligence Technology Solutions, Inc.

Opinion on the Financial Statements

We have audited the accompanying consolidated balance sheets of Artificial

Financial Officer (principal financial and accounting officer)

INTELLIGENCE TECHNOLOGY SOLUTIONS INC.

and subsidiaries (the “Company”) as of February 28, 2023 and 2022, and the related

consolidated statements of operations, stockholders’ deficit, and cash flows for each of the years in the two years ended February

28, 2023, and the related notes (collectively referred to as the financial statements).

In our opinion, the financial statements present

fairly, in all material respects, the financial position of the Company as of February 28, 2023 and 2022, and the results of its operations

and its cash flows for each of the years in the two years ended February 28, 2023, in conformity with accounting principles generally

accepted in the United States of America.

Explanatory Paragraph – Going Concern

The accompanying consolidated financial statements have been prepared assuming

that the Company will continue as a going concern.

As more fully explained in Note 1, which includes management’s plans in regards

to this uncertainty, the Company had a net loss of approximately $18 million, an accumulated deficit of approximately $112 million and

stockholders’ deficit of approximately $32 million as of and for the year ended February 28, 2023, and therefore there is substantial

doubt about the ability of the Company to continue as a going concern.

Management’s plans in regard to these matters are described

ON THE MOVE SYSTEMS CORP.)

TO CONSOLIDATED FINANCIAL STATEMENTS

of Independent Registered Public Accounting Firm

Balance Sheets

Statements of Operations

Statement of Stockholders’ Deficit

Statements of Cash Flows

to the Consolidated Financial Statements

OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

the Board of Directors and

of Artificial Intelligence Technology Solutions, Inc.

on the Financial Statements

have audited the accompanying consolidated balance sheets of Artificial Intelligence Technology Solutions, Inc.

and its subsidiaries

(the “Company”) as of February 29, 2024 and February 28, 2023, and the related consolidated statements of operations, stockholders’

deficit, and cash flows for each of the years in the two-year period ended February 29, 2024, and the related notes (collectively referred

to as the financial statements).

In our opinion, the financial statements present fairly, in all material respects, the financial position

of the Company as of February 29, 2024, and February 28, 2023, and the results of its operations and its cash flows for each of the years

in the two-year period ended February 29, 2024, in conformity with accounting principles generally accepted in the United States of America.

Doubt about the Company’s Ability to Continue as a Going Concern

accompanying financial statements have been prepared assuming that the Company will continue as a going concern.

As discussed in Note

1 to the financial statements, the Company had a net loss of approximately $20.7 million, an accumulated deficit of approximately $133.0

million and stockholders’ deficit of approximately $40.2 million as of and for the year ended February 29, 2024, which raises substantial

doubt about its ability to continue as a going concern.

Management’s plans in regard to these matters are also described in Note

The financial statements do not include any adjustments that might result from the outcome of this uncertainty.

Basis for Opinion

These financial statements are the responsibility

of the Company’s management.

Our responsibility is to express an opinion on the Company’s financial statements based on our

We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are

required to be independent with respect to the Company in accordance with the U.S.

federal securities laws and the applicable rules and

regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards

of the PCAOB.

Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements

are free of material misstatement, whether due to error or fraud.

The Company is not required to have, nor were we engaged to perform,

an audit of its internal control over financial reporting.

As part of our audits, we are required to obtain an understanding of internal

control over financial reporting, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal

control over financial reporting.

financial statements are the responsibility of the Company’s management.

Our responsibility is to express an opinion on the Company’s

financial statements based on our audits.

We are a public accounting firm registered with the Public Company Accounting Oversight Board

(United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S.

federal securities

laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

conducted our audits in accordance with the standards of the PCAOB.

Those standards require that we plan and perform the audit to obtain

reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud.

is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting.

As part of our audits,

we are required to obtain an understanding of internal control over financial reporting, but not for the purpose of expressing an opinion

on the effectiveness of the Company’s internal control over financial reporting.

Accordingly, we express no such opinion.

Our audits included performing procedures to assess

the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond

to those risks.

Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements.

Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating

the overall presentation of the financial statements.

We believe that our audits provide a reasonable basis for our opinion.

Critical Audit Matters

Critical audit matters are matters arising from the

current period audit of the financial statements that were communicated or required to be communicated to the audit committee and that

(1) relate to accounts or disclosures that material to the financial statements and (2) involved our especially challenging, subjective,

or complex judgments.

audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error

or fraud, and performing procedures that respond to those risks.

Such procedures included examining, on a test basis, evidence regarding

the amounts and disclosures in the financial statements.

Our audits also included evaluating the accounting principles used and significant

estimates made by management, as well as evaluating the overall presentation of the financial statements.

We believe that our audits

provide a reasonable basis for our opinion.

Audit Matters

audit matters are matters arising from the current period audit of the financial statements that were communicated or required to be

communicated to the audit committee and that (1) relate to accounts or disclosures that are material to the financial statements and

(2) involved our especially challenging, subjective, or complex judgments.

We determined that there were no critical audit matters.

/s/ L J Soldinger Associates, LLC

Deer Park, Illinois

June 14, 2023

We have served as the Company’s auditor since 2019.

PCAOB Audit ID:

Index to Financial Statements

ARTIFICIAL INTELLIGENCE TECHNOLOGY SOLUTIONS INC.

CONSOLIDATED BALANCE SHEETS

L J Soldinger Associates, LLC

Park, Illinois

9, 2024, except for Note 17, as to which the date is May 28, 2024

have served as the Company’s auditor since 2019.

INTELLIGENCE TECHNOLOGY SOLUTIONS INC.

BALANCE SHEETS

February 29, 2024

6 unchanged sentences

Operating lease asset

Revenue earning devices, net of accumulated depreciation of $ 778,839 and $ 434,661 , respectively

Revenue earning devices, net of accumulated depreciation of $ 952,844 and $ 779,839 ,

Fixed assets, net of accumulated depreciation of $ 349,878 and $ 182,002 , respectively

8 unchanged sentences

Current portion of deferred variable payment obligation

Current portion of convertible notes payable, net of discount of $ 0 and $ 0 , respectively

Loan payable - related party

Incentive compensation plan payable

Deferred compensation for CEO

Current portion of loans payable, net of discount of $ 688,598 and $ 1,651,597

1 unchanged sentence

Current portion of accrued interest payable

Derivative liability

Total current liabilities

2 unchanged sentences

Deferred variable payment obligation

Incentive compensation plan payable

Accrued interest payable

4 unchanged sentences

15,535,000 shares authorized;

no shares issued and outstanding at February 28, 2023 and February 28, 2022, respectively

Series G Convertible Preferred Stock.

no shares issued

and outstanding at February 29, 2024 and February 28, 2023, respectively

Series B Convertible, Redeemable Preferred Stock.

$ 0.001 par value;

100,000 shares authorized, no shares issued and outstanding at February 28, 2023 and February 28, 2022, respectively

8 % cumulative

dividend payable quarterly,$ 1,200 stated value, 5,000 shares authorized, no shares issued and outstanding at February 29, 2024 and

February 28, 2023, respectively

Series G Redeemable Preferred Stock.

$ 0.001 par value;

100,000 shares authorized,

no shares issued and outstanding at February 29, 2024 and February 28, 2023, respectively

Series E Preferred Stock, $ 0.001 par value;

4 unchanged sentences

2,533 and 2,533 shares issued and outstanding, respectively

Preferred Stock value

Common Stock, $ 0.00001 par value;

7,225,000,000 shares authorized 5,848,741,599 and 4,735,210,360 shares issued, issuable and outstanding, respectively

15,000,000,000 shares authorized 9,238,750,958

and 5,848,741,599 shares issued, issuable and outstanding, respectively

Additional paid-in capital

2 unchanged sentences

( 132,962,427 )

( 112,253,711 )

Total stockholders’ deficit

( 40,199,557 )

( 31,843,001 )

Total liabilities and stockholders’ deficit

The accompanying notes are an integral part of

these consolidated financial statements.

Index to Financial Statements

ARTIFICIAL INTELLIGENCE TECHNOLOGY SOLUTIONS INC.

CONSOLIDATED STATEMENTS OF OPERATIONS

accompanying notes are an integral part of these consolidated financial statements.

INTELLIGENCE TECHNOLOGY SOLUTIONS INC.

STATEMENTS OF OPERATIONS

February 29, 2024

2 unchanged sentences

Operating expenses:

Research and development

Research and development (note 9)

General and administrative

Depreciation and amortization

Impairment on revenue earning devices

Operating lease cost and rent

2 unchanged sentences

Loss from operations

( 13,989,412 )

( 12,690,680 )

Other income (expense), net:

1 unchanged sentence

Interest expense

( 6,758,044 )

( 5,426,364 )

Gain (loss) on settlement of debt

Total other income (expense), net

Net loss per share - basic

Net loss per share - diluted

Weighted average common share outstanding - basic

( 6,719,304 )

( 5,418,777 )

Weighted average common share outstanding - diluted

$ ( 20,708,716 )

$ ( 18,109,457 )

The accompanying notes are an integral part of

these consolidated financial statements.

Index to Financial Statements

ARTIFICIAL INTELLIGENCE TECHNOLOGY SOLUTIONS INC.

CONSOLIDATED STATEMENT OF STOCKHOLDERS’ DEFICIT

FOR THE YEARS ENDED FEBRUARY 28, 2023 AND FEBRUARY

Net loss per share - basic

Net loss per share - diluted

Weighted average common share outstanding – basic and diluted

7,080,914,317

5,091,857,082

accompanying notes are an integral part of these consolidated financial statements.

INTELLIGENCE TECHNOLOGY SOLUTIONS INC.

STATEMENT OF STOCKHOLDERS’ DEFICIT

THE YEARS ENDED FEBRUARY 29, 2024 AND FEBRUARY 28, 2023

Preferred Stock

4 unchanged sentences

4,735,210,360

Cancellation of Series E Shares

Series F Preferred Shares issued with amendment agreement

Series F Preferred Shares Warrants issued with amendment agreement

Series F Preferred Shares cancelled in exchange for promissory notes

Series F preferred shares issued on exercise of warrants

Series F Preferred Shares converted to common shares

Redemption of 19 Issuable Series F shares

Exchange of Series F Preferred Shares for debt

Issuance of Series G preferred as equity awards per employment agreement

Redemption of Series G shares as compensation payment

Adjustment to derivative liability

Common stock issued for debt conversion

Exercise of warrants

Exchange of debt for common shares

Stock based compensation on issuable shares

$ ( 94,144,254 )

$ ( 20,976,357 )

Issuance of shares net of $ 447,858 issuance costs

1,057,841,576

Cashless exercise of 108,378,210 warrants

Cashless exercise of warrants

Penalty shares issued pursuant to a share purchase agreement

Relative fair value of Series F warrants issued with debt

Relative fair value of warrants issued with debt

Warrants issued as part of debt

Warrants as issuance cost

Warrants as consideration for debt extensions

Stock based compensation

Fair value of 955,000,000 warrants cancelled for debt issuance

( 2,960,500 )

Shares issued for services

Cancelled shares

( 17,116,894 )

Stock based compensation - employee stock option plan

( 18,109,457 )

Balance at February 28, 2023

5,848,741,599

Index to Financial Statements

$ ( 112,253,711 )

$ ( 31,843,001 )

Preferred Stock

4 unchanged sentences

5,848,741,599

$ ( 112,253,711 )

$ ( 31,843,001 )

5,848,741,599

$ ( 112,253,711 )

$ ( 31,843,001 )

Issuance of shares net of $ 457,060 issuance costs

3,383,509,359

Cashless exercise of 108,378,210 warrants

Penalty shares issued pursuant to a share purchase agreement

Issuance of shares, net of issuance costs

3,383,509,359

Relative fair value of Series F warrants issued with debt

Relative fair value of warrants issued with debt

Fair value of 955,000,000 warrants cancelled for debt issuance

Shares issued for services

Cancelled shares

Stock based compensation - employee stock option plan

( 20,708,716 )

Balance at February 29, 2024

1 unchanged sentence

$ ( 132,962,427 )

The accompanying notes are an integral part of

these consolidated financial statements.

Index to Financial Statements

ARTIFICIAL INTELLIGENCE TECHNOLOGY SOLUTIONS INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

$ ( 40,199,557 )

9,238,750,958

$ ( 132,962,427 )

$ ( 40,199,557 )

INTELLIGENCE TECHNOLOGY SOLUTIONS INC.

STATEMENTS OF CASH FLOWS

February 29, 2024

1 unchanged sentence

CASH FLOWS FROM OPERATING ACTIVITIES:

$ ( 20,708,716 )

$ ( 18,109,457 )

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

Depreciation and amortization

Impairment on revenue earning devices

Inventory provision

1 unchanged sentence

Bad debts expense

Revenue earning device sold and expensed in cost of sales

Reduction of right of use asset

1 unchanged sentence

Stock based compensation

Interest expense related to the issuance of warrants for debt extensions

Interest expense related to penalties from debt defaults

Change in fair value of derivative liabilities

5 unchanged sentences

Prepaid expenses

Deposit on right of use asset

Device parts inventory

( 3,549,121 )

( 1,161,047 )

Accounts payable and accrued expenses

2 unchanged sentences

Operating lease liability payments

Balance owed WeSecure

Current portion of deferred variable payment obligations for Payments

1 unchanged sentence

Net cash used in operating activities

( 12,951,743 )

( 12,577,395 )

CASH FLOWS FROM INVESTING ACTIVITIES:

1 unchanged sentence

Purchase of investment

Acquisition of trademarks

Cash paid for security deposit

Reimbursement of security deposit

Proceeds on disposal of fixed assets

4 unchanged sentences

Repayment of convertible debt

Net borrowings loan payable-related party

Proceeds from loans payable

Repayment of loans payable

Series G preferred shares redeemed as payment on incentive plan payable

Dividend upon redemption of cancelled issuable Series F shares

Net borrowings(repayments) on loan payable - related party

( 1,763,009 )

Net cash provided by financing activities

Net change in cash

( 3,708,387 )

Cash, beginning of period

6 unchanged sentences

Transfer from device parts inventory to fixed assets

Conversion of convertible notes and interest to shares of common stock

Release of derivative liability on conversion of convertible notes payable

Derivative debt discount on revaluation of loan amendment

Exchange of notes payable for Series F preferred shares

Proceeds of fixed asset disposition to loan payable ,

related party

Shares issued for services

Deferred compensation

Discount applied to face value of loans

Warrants issued as part of debt issuance

Exchange of warrants for debt

Series F warrants issued along with debt

Exchange of common share warrants for debt

Refund on abandoned trademarks

1 unchanged sentence

Exercise of warrants

Series F preferred shares issued for debt

Cancellation of Series E preferred shares

Issuance of Series G preferred shares as payment on incentive plan payable

Series F preferred shares converted to common shares

Series F preferred shares issued on exercise of warrants

The accompanying notes are an integral part of

these consolidated financial statements.

Index to Financial Statements

ARTIFICIAL INTELLIGENCE TECHNOLOGY SOLUTIONS INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

accompanying notes are an integral part of these consolidated financial statements.

INTELLIGENCE TECHNOLOGY SOLUTIONS INC.

TO THE CONSOLIDATED FINANCIAL STATEMENTS

GENERAL INFORMATION AND GOING CONCERN

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, Artificial Intelligence Technology Solutions Inc., changed

its name from On the Move Systems Corp (“OMVS”).

Robotic Assistance Devices, LLC (“RAD”),

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

On August 28, 2017, AITX completed the acquisition

of RAD (the “Acquisition”), whereby AITX acquired all the ownership and equity interest in RAD for 3,350,000 shares of AITX

Series E Preferred Stock and 2,450 shares of Series F Convertible Preferred Stock.

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, in which AITX purchased all of the outstanding shares of capital

stock 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.

The Acquisition was treated as a reverse recapitalization

effected by a share exchange for financial accounting and reporting purposes since substantially all of AITX’s operations were disposed

of as part of the consummation of the transaction.

Therefore, no goodwill or other intangible assets were recorded by AITX 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.

As a result, the assets and liabilities and the historical operations that are reflected in these financial

statements are those of RAD as if RAD had always been the reporting company.

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, Artificial Intelligence

Technology Solutions Inc., changed its name from On the Move Systems Corp (“OMVS”).

Assistance Devices, LLC (“RAD”), was incorporated in the State of Nevada on July 26, 2016 as a 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.

August 28, 2017, AITX completed the acquisition of RAD (the “Acquisition”), whereby AITX acquired all the ownership and equity

interest in RAD for 3,350,000 shares of AITX Series E Preferred Stock and 2,450 shares of Series F Convertible Preferred Stock.

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, in which AITX purchased all of

the outstanding shares of capital stock 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.

Acquisition was treated as a reverse recapitalization effected by a share exchange for financial accounting and reporting purposes since

substantially all of AITX’s operations were disposed of as part of the consummation of the transaction.

Therefore, no goodwill

or other intangible assets were recorded by AITX 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.

As a result, the assets and liabilities and the historical

operations that are reflected in these financial statements are those of RAD as if RAD had always been the reporting company.

accompanying consolidated financial statements have been prepared assuming that the Company will continue as a going concern.

The accompanying

financial statements do not include any adjustments to reflect the possible future effects on the recoverability and classification of

assets or the amounts and classifications of liabilities that may result from the possible inability of the Company to continue as a

going concern.

The accompanying consolidated financial statements

have been prepared assuming that the Company will continue as a going concern.

The accompanying financial statements do not include any

adjustments to reflect the possible future effects on the recoverability and classification of assets or the amounts and classifications

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

For the year ended February 28, 2023, the Company

had negative cash flow from operating activities of $ 12,577,395 .

As of February 28, 2023 the Company has an accumulated deficit of $ 112,253,711

and negative working capital of $ 12,610,601 .

Management does not anticipate having positive cash flow from operations in the near future.

These factors raise substantial doubt about the Company’s ability to continue as a going concern for the twelve months following

the issuance of these financial statements.

The Company does not have the resources at this time

to repay all its credit and debt obligations, make any payments in the form of dividends to its shareholders or fully implement its business

the year ended February 29, 2024, the Company had negative cash flow from operating activities of $ 12,951,743 .

As of February 29, 2024

the Company has an accumulated deficit of $ 132,962,427 and negative working capital of $ 18,099,085 .

Management does not anticipate having

positive cash flow from operations in the near future.

These factors raise substantial doubt about the Company’s ability to continue

as a going concern for the twelve months following the issuance of these financial statements.

Company does not have the resources at this time to repay all its credit and debt obligations, make any payments in the form of dividends

to its shareholders or fully implement its business plan.

Without additional capital, the Company will not be able to remain in business.

At the same time management points to its successful

history with maintaining Company operations and reminds all with reasonable confidence this will continue.

Management has plans

to address the Company’s financial situation as follows:

Management is committed to raise either non-dilutive

funds or minimally dilutive funds.

There is no assurance that these funds will be able to be raised nor can we provide assurance that

these possible raises may not have dilutive effects.

In March 2023, the Company entered into an equity financing agreement whereby an

investor will purchase up to $ 30,000,000 of the Company’s common stock at a discount over a two-year period.

and April the Company reduced personnel that were working on far-future solutions as well as other department reductions.

Combined with

other cost cutting measures management estimates it reduced the monthly expense burn by $ 200,000 - $ 300,000 with little impact on short

and medium term operations.

Management believes that it has the necessary support to continue operations by continuing its funding methods

in the following ways :

growing revenues ,equity proceeds and non-convertible debt.

Management has had many recent conversations with

the Company’s primary debt holder and believes that the non-convertible debt on the balance sheet will be extended.

Management notes

that non-convertible debt on the books has been extended by this debt holder twice in the past and notes that this debt holder has been

a strong supporter of the Company.

Index to Financial Statements

ARTIFICIAL INTELLIGENCE TECHNOLOGY SOLUTIONS INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

At the same time management points to its successful history with maintaining Company operations and reminds all with reasonable confidence

this will continue.

Management has plans to address the Company’s financial situation as follows:

is committed to raise either non-dilutive funds or minimally dilutive funds.

There is no assurance that these funds will be able to be

raised nor can we provide assurance that these possible raises may not have dilutive effects.

In March 2023, the Company entered into

an equity financing agreement whereby an investor will purchase up to $ 30,000,000 of the Company’s common stock at a discount over

a two-year period.

There remains approximately $ 21 million left to issue under this arrangement..

Management believes that it has the

necessary support to continue operations by continuing its funding methods in the following ways :

growing revenues ,through equity proceeds,

and issuing non-convertible debt.

Management has had many recent conversations with the Company’s primary debt holder and believes

that the non-convertible debt on the balance sheet will be extended.

Management notes that non-convertible debt on the books has been

extended by this debt holder twice in the past and notes that this debt holder has been a strong supporter of the Company.

INTELLIGENCE TECHNOLOGY SOLUTIONS INC.

TO THE CONSOLIDATED FINANCIAL STATEMENTS

ACCOUNTING POLICIES

Basis of Presentation and Consolidation

The accompanying financial statements have been prepared

in accordance with generally accepted accounting principles in the United States (“GAAP”) and in conformity with the instructions

on Form 10-K of Regulation S-X and the related rules and regulations of the Securities and Exchange Commission (“SEC”).

audited consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries, Robotic Assistance Devices,

Inc., Robotic Assistance Devices Group , Inc, Robotic Assistance Devices Mobile , Inc.

, On the Move Experience, LLC and OMV Transports,

All significant intercompany accounts and transactions have been eliminated in consolidation.

Use of Estimates

In order to prepare financial statements in conformity

with accounting principals generally accepted in the United States, management must make estimates , judgements and assumptions that affect

the amounts reported in the financial statements and determine whether contingent assets and liabilities, if any, are disclosed in the

financial statements.

The ultimate resolution of issues requiring these estimates and assumptions could differ significantly from resolution

currently anticipated by management and on which the financial statements are based.

The most significant estimates included in these

consolidated financial statements are those associated with the assumptions used to value equity instruments used in debt settlements,

amendments and extensions.

of Presentation and Consolidation

accompanying financial statements have been prepared in accordance with generally accepted accounting principles in the United States

(“GAAP”) and in conformity with the instructions on Form 10-K of Regulation S-X and the related rules and regulations of

the Securities and Exchange Commission (“SEC”).

The audited consolidated financial statements include the accounts of the

Company and its wholly-owned subsidiaries, Robotic Assistance Devices, Inc., Robotic Assistance Devices Group , Inc, Robotic Assistance

Devices Mobile , Inc.

, On the Move Experience, LLC and OMV Transports, LLC.

All significant intercompany accounts and transactions have

been eliminated in consolidation.

order to prepare financial statements in conformity with accounting principals generally accepted in the United States, management must

make estimates , judgements and assumptions that affect the amounts reported in the financial statements and determine whether contingent

assets and liabilities, if any, are disclosed in the financial statements.

The ultimate resolution of issues requiring these estimates

and assumptions could differ significantly from resolution currently anticipated by management and on which the financial statements

The most significant estimates included in these consolidated financial statements are those associated with the assumptions

used to value equity instruments used in debt settlements, amendments and extensions.

Reclassifications

amounts in the Company’s consolidated financial statements for prior periods have been reclassified to conform to the current period

presentation.

These reclassifications have not changed the results of operations of prior periods.

Concentrations

Loans payable

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

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

At February 28, 2022 there were $ 26,233,598 of

loans payable $ 21,709,459 or 83 % of these loans to companies controlled by the same individual.

The Company considers all highly liquid investments

with an original maturity of three months or less to be cash equivalents.

Cash and cash equivalents consist of cash on deposit with banks

and money market instruments.

The Company places its cash and cash equivalents with high-quality, U.S.

financial institutions and, to

date has not experienced losses on any of its balances.

Accounts Receivable

Accounts receivable are comprised of balances due

from customers, net of estimated allowances for credit losses.

In determining collectability, historical trends are evaluated, and specific

customer issues are reviewed on a periodic basis to arrive at appropriate allowances.

There was an allowance of $ 39,000 and $ 33,890 provided

as of February 28, 2023 and February 28, 2022, respectively.

For the year ended February 28, 2023 , two customers account for 48 % of total

accounts receivable .

For the year ended February 28, 2022 , three customers account for 63 % of total accounts receivable.

Device Parts Inventory

Device parts inventory is stated at the lower of cost

or net realizable value using the weighted average cost method.

The Company records a valuation reserve for obsolete and slow-moving inventory,

relying principally on specific identification of such inventory.

The Company uses these device parts in the assembly of revenue earning

devices (and demo devices) as well as research and development.

Depending on use, the Company will transfer the parts to the corresponding

asset or expense if used in research and development.

A charge to income is taken when factors that would result in a need for an increase

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

At February 28, 2023 and at February 28, 2022 there was a valuation

reserve of $ 195,000 and $ 65,000 , respectively.

Index to Financial Statements

ARTIFICIAL INTELLIGENCE TECHNOLOGY SOLUTIONS INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

Revenue Earning Devices

Revenue earning devices are stated at cost.

is provided on a straight-line basis over the estimated useful life of 48 months.

The Company continually evaluates revenue earning devices

to determine whether events or changes in circumstances have occurred that may warrant revision of the estimated useful life or whether

the devices should be evaluated for possible impairment.

The Company uses a combination of the undiscounted cash flows and market approaches

in assessing whether an asset has been impaired.

The Company measures impairment losses based upon the amount by which the carrying amount

of the asset exceeds the fair value.

Fixed assets are stated at cost.

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.

Major repairs

or improvements are capitalized.

Minor replacements and maintenance and repairs which do not improve or extend asset lives are expensed

Computer equipment

Furniture and fixtures

Office equipment

Warehouse equipment

Leasehold improvements

February 29, 2024 there were $ 32,796,345 of loans payable, $ 28,540,506 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 one individual.

Company considers all highly liquid investments with an original maturity of three months or less to be cash equivalents.

Cash and cash

equivalents consist of cash on deposit with banks and money market instruments.

The Company places its cash and cash equivalents with

high-quality, U.S.

financial institutions and, to date has not experienced losses on any of its balances.

receivable are comprised of balances due from customers, net of estimated allowances for credit losses.

In determining collectability,

historical trends are evaluated, and specific customer issues are reviewed on a periodic basis to arrive at appropriate allowances.

was an allowance of $ 68,000 and $ 39,000 provided as of February 29, 2024 and February 28, 2023, respectively.

For the year ended February

29, 2024 , three customers account for 72 % of total accounts receivable .

For the year ended February 28, 2023 , three customers account

for 48 % of total accounts receivable.

Parts Inventory

parts inventory is stated at the lower of cost or net realizable value using the weighted average cost method.

The Company records a

valuation reserve for obsolete and slow-moving inventory, relying principally on specific identification of such inventory.

uses these device parts in the assembly of revenue earning devices (and demo devices) as well as research and development.

on use, the Company will transfer the parts to the corresponding asset or expense if used in research and development.

A charge to income

is taken when factors that would result in a need for an increase in the valuation, such as excess or obsolete inventory, are noted.

At February 29, 2024 and at February 28, 2023 there was a valuation reserve of $ 959,000 and $ 195,000 , respectively.

INTELLIGENCE TECHNOLOGY SOLUTIONS INC.

TO THE CONSOLIDATED FINANCIAL STATEMENTS

Earning Devices

earning devices are stated at cost.

Depreciation is provided on a straight-line basis over the estimated useful life of 48 months.

Company continually evaluates revenue earning devices to determine whether events or changes in circumstances have occurred that may

warrant revision of the estimated useful life or whether the devices should be evaluated for possible impairment.

The Company uses a

combination of the undiscounted cash flows and market approaches in assessing whether an asset has been impaired.

The Company measures

impairment losses based upon the amount by which the carrying amount of the asset exceeds the fair value.

assets are stated at cost.

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 .

Major repairs or improvements are capitalized.

Minor replacements and maintenance and repairs

which do not improve or extend asset lives are expensed currently.

OF FIXED ASSETS STATED AT COST

years, the life of the lease

The Company periodically evaluates the fair value

of fixed assets whenever events or changes in circumstances indicate that its carrying amounts may not be recoverable.

Upon retirement

or other disposition of fixed assets, the cost and related accumulated depreciation are removed from the accounts and the resulting gain

or loss, if any, is recognized in income.

Research and Development

Research and development costs are expensed in the

period they are incurred in accordance with ASC 730, Research and Development unless they meet specific criteria related

to technical, market and financial feasibility, as determined by Management, including but not limited to the establishment of a clearly

defined future market for the product, and the availability of adequate resources to complete the project.

If all criteria are met, the

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

At February 28, 2023 and February

28, 2022, the Company had no deferred development costs.

Contingencies

Occasionally, the Company may be involved in claims

and legal proceedings arising from the ordinary course of its business.

The Company records a provision for a liability when it believes

that it is both probable that a liability has been incurred, and the amount can be reasonably estimated.

If these estimates and assumptions

change or prove to be incorrect, it could have a material impact on the Company’s consolidated financial statements.

Company periodically evaluates the fair value of fixed assets whenever events or changes in circumstances indicate that its carrying

amounts may not be recoverable.

Upon retirement or other disposition of fixed assets, the cost and related accumulated depreciation are

removed from the accounts and the resulting gain or loss, if any, is recognized in income.

and Development

and development costs are expensed in the period they are incurred in accordance with ASC 730, Research and Development unless

they meet specific criteria related to technical, market and financial feasibility, as determined by Management, including but not limited

to the establishment of a clearly defined future market for the product, and the availability of adequate resources to complete the project.

If all criteria are met, the costs are deferred and amortized over the expected useful life or written off if a product is abandoned.

At February 29, 2024 and February 28, 2023, the Company had no deferred development costs.

Contingencies

are inherently unpredictable, and the assessments of the value can involve a series of complex judgments about future events and can rely

heavily on estimates and assumptions.

Sales of Future Revenues

The Company has entered into transactions, as more

fully described in footnote 10, in which it has received funding from investors in exchange for which it will make payments to those investors

based on the level of sales of certain revenue categories, generally based on a percentage of sales for those certain revenues.

determines whether these agreements constitute sales of future revenues or are in substance debt based on the facts and circumstances

of each agreement, with the following primary criteria determinative of whether the agreement constitutes a sale of future revenues or

Index to Financial Statements

ARTIFICIAL INTELLIGENCE TECHNOLOGY SOLUTIONS INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

Does the agreement purport, in substance, to be a sale

Does the Company have continuing involvement in the generation of cash flows due the investor

Is the transaction cancellable by either party through payment of a lump sum or other transfer of assets

Is the investors rate of return implicitly limited by the terms of the agreement

Does the Company’s revenue for a reporting period underlying the agreement have only a minimal impact on the investor’s rate of return

Does the investor have recourse relating to payments due

In the event a transaction is determined to be a sale

of future revenues, it is recorded as deferred revenue and amortized using the sum-of-the-revenue method.

In the event a transaction is

determined to be debt, it is recorded as debt and amortized using the effective interest method.

As of the date of these financial statements,

the Company has determined that all such agreements are debt.

Revenue Recognition

ASU 2014-09, “Revenue from Contracts

with Customers (Topic 606)” , supersedes the revenue recognition requirements and industry specific guidance under Revenue

Recognition (Topic 605) .

Topic 606 requires an entity to recognize revenue when it transfers promised goods or services to customers

in an amount that reflects the consideration the entity expects to be entitled to in exchange for those goods or services.

Topic 606 defines

a five-step process that must be evaluated and, in doing so, it is possible more judgment and estimates may be required within the revenue

recognition process than required under existing accounting principles generally accepted in the United States of America (“U.S.

GAAP”) including identifying performance obligations in the contract, estimating the amount of variable consideration to include

in the transaction price and allocating the transaction price to each separate performance obligation..

For the year ended February 28,

2023 , two customers accounted for 45 % of total revenue (2022- 43 %).

Income taxes are accounted for under the asset and

liability method.

Deferred tax assets and liabilities are recognized when items of income and expense are recognized in the financial

statements in different periods than when recognized in the tax return.

Deferred tax assets arise when expenses are recognized in the

financial statements before the tax returns or when income items are recognized in the tax return prior to the financial statements.

tax assets also arise when operating losses or tax credits are available to offset tax payments due in future years.

Deferred tax liabilities

arise when income items are recognized in the financial statements before the tax returns or when expenses are recognized in the tax return

prior to the financial statements.

Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable

income in the years in which those temporary differences are expected to be recovered or settled.

The effect on deferred tax assets and

liabilities of a change in tax rates is recognized in income in the period that includes the enactment date.

On December 22, 2017, the Tax Cuts and Jobs Act (“Tax

Act”) was signed into law.

ASC 740, Accounting for Income Taxes requires companies to recognize the effects of changes in tax laws

and rates on deferred tax assets and liabilities and the retroactive effects of changes in tax laws in the period in which the new legislation

The Company’s gross deferred tax assets were revalued based on the reduction in the federal statutory tax rate from

A corresponding offset has been made to the valuation allowance, and any potential other taxes arising due to the Tax Act

will result in reductions to the Company’s net operating loss carryforward and valuation allowance.

The Company will continue to

analyze the Tax Act to assess its full effects on the Company’s financial results, including disclosures, for the Company’s

fiscal year ending February 28, 2023, but the Company does not expect the Tax Act to have a material impact on the Company’s consolidated

Occasionally,

the Company may be involved in claims and legal proceedings arising from the ordinary course of its business.

The Company records a provision

for a liability when it believes that it is both probable that a liability has been incurred, and the amount can be reasonably estimated.

If these estimates and assumptions change or prove to be incorrect, it could have a material impact on the Company’s consolidated

financial statements.

Lease agreements are evaluated to determine if they

are sales/finance leases meeting any of the following criteria at inception:

(a) transfer of ownership of the underlying asset;

option that is reasonably certain of being exercised;

life of the underlying asset;

or (d) if the present value of the sum of lease payments and any residual value guaranteed by the lessee

that has not already been included in lease payments in accordance with ASC 842-10-30-5(f) equals or exceeds substantially all of the

fair value of the underlying asset.

Index to Financial Statements

ARTIFICIAL INTELLIGENCE TECHNOLOGY SOLUTIONS INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

If at its inception, a lease meets any of the four

lease criteria above, the lease is classified by the Company as a sales/finance;

and if none of the four criteria are met, the lease is

classified by the Company as an operating lease.

Operating lease payments are recognized as an expense

in the income statement on a straight-line basis over the lease term, whereby an equal amount of rent expense is attributed to each period

during the term of the lease, regardless of when actual payments are made.

This generally results in rent expense in excess of cash payments

during the early years of a lease and rent expense less than cash payments in the later years.

The difference between rent expense recognized

and actual rental payments is recorded as deferred rent and included in liabilities.

Distinguishing Liabilities from Equity

The Company relies on the guidance provided by ASC

Topic 480, Distinguishing Liabilities from Equity , to classify certain redeemable and/or convertible instruments.

first determines whether a financial instrument should be classified as a liability.

The Company will determine the liability classification

if the financial instrument is mandatorily redeemable, or if the financial instrument, other than outstanding shares, embodies a conditional

obligation that the Company must or may settle by issuing a variable number of its equity shares.

Once the Company determines that a financial instrument

should not be classified as a liability, the Company determines whether the financial instrument should be presented between the liability

section and the equity section of the balance sheet (“temporary equity”).

The Company will determine temporary equity classification

if the redemption of the financial instrument is outside the control of the Company (i.e.

Contingencies are inherently unpredictable, and the assessments of the value can involve a series of complex judgments

about future events and can rely heavily on estimates and assumptions.

INTELLIGENCE TECHNOLOGY SOLUTIONS INC.

TO THE CONSOLIDATED FINANCIAL STATEMENTS

of Future Revenues

Company has entered into transactions, as more fully described in footnote 10, in which it has received funding from investors in exchange

for which it will make payments to those investors based on the level of sales of certain revenue categories, generally based on a percentage

of sales for those certain revenues.

The Company determines whether these agreements constitute sales of future revenues or are in substance

debt based on the facts and circumstances of each agreement, with the following primary criteria determinative of whether the agreement

constitutes a sale of future revenues or debt:

the agreement purport, in substance, to be a sale

the Company have continuing involvement in the generation of cash flows due the investor

the transaction cancellable by either party through payment of a lump sum or other transfer of assets

the investors rate of return implicitly limited by the terms of the agreement

the Company’s revenue for a reporting period underlying the agreement have only a minimal impact on the investor’s rate

the investor have recourse relating to payments due

the event a transaction is determined to be a sale of future revenues, it is recorded as deferred revenue and amortized using the sum-of-the-revenue

In the event a transaction is determined to be debt, it is recorded as debt and amortized using the effective interest method.

As of the date of these financial statements, the Company has determined that all such agreements are debt.

2014-09, “Revenue from Contracts with Customers (Topic 606)” , supersedes the revenue recognition requirements and

industry specific guidance under Revenue Recognition (Topic 605) .

Topic 606 requires an entity to recognize revenue when it transfers

promised goods or services to customers in an amount that reflects the consideration the entity expects to be entitled to in exchange

for those goods or services.

Topic 606 defines a five-step process that must be evaluated and, in doing so, it is possible more judgment

and estimates may be required within the revenue recognition process than required under existing accounting principles generally accepted

in the United States of America (“U.S.

GAAP”) including identifying performance obligations in the contract, estimating the

amount of variable consideration to include in the transaction price and allocating the transaction price to each separate performance

For the year ended February 29, 2024 , three customers accounted for 56 % of total revenue and for the year ended February

28, 2023 , two customers accounted for 45 % of total revenue.

taxes are accounted for under the asset and liability method.

Deferred tax assets and liabilities are recognized when items of income

and expense are recognized in the financial statements in different periods than when recognized in the tax return.

Deferred tax assets

arise when expenses are recognized in the financial statements before the tax returns or when income items are recognized in the tax

return prior to the financial statements.

Deferred tax assets also arise when operating losses or tax credits are available to offset

tax payments due in future years.

Deferred tax liabilities arise when income items are recognized in the financial statements before

the tax returns or when expenses are recognized in the tax return prior to the financial statements.

Deferred tax assets and liabilities

are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected

to be recovered or settled.

The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the

period that includes the enactment date.

December 22, 2017, the Tax Cuts and Jobs Act (“Tax Act”) was signed into law.

ASC 740, Accounting for Income Taxes requires

companies to recognize the effects of changes in tax laws and rates on deferred tax assets and liabilities and the retroactive effects

of changes in tax laws in the period in which the new legislation is enacted.

The Company’s gross deferred tax assets were revalued

based on the reduction in the federal statutory tax rate from 35% to 21% .

A corresponding offset has been made to the valuation allowance,

and any potential other taxes arising due to the Tax Act will result in reductions to the Company’s net operating loss carryforward

and valuation allowance.

The Company will continue to analyze the Tax Act to assess its full effects on the Company’s financial

results, including disclosures, for the Company’s fiscal year ending February 29, 2024, but the Company does not expect the Tax

Act to have a material impact on the Company’s consolidated financial statements.

agreements are evaluated to determine if they are sales/finance leases meeting any of the following criteria at inception:

of ownership of the underlying asset;

(b) purchase option that is reasonably certain of being exercised;

than a major part of the remaining estimated economic life of the underlying asset;

or (d) if the present value of the sum of lease payments

and any residual value guaranteed by the lessee that has not already been included in lease payments in accordance with ASC 842-10-30-5(f)

equals or exceeds substantially all of the fair value of the underlying asset.

INTELLIGENCE TECHNOLOGY SOLUTIONS INC.

TO THE CONSOLIDATED FINANCIAL STATEMENTS

at its inception, a lease meets any of the four lease criteria above, the lease is classified by the Company as a sales/finance;

if none of the four criteria are met, the lease is classified by the Company as an operating lease.

lease payments are recognized as an expense in the income statement on a straight-line basis over the lease term, whereby an equal amount

of rent expense is attributed to each period during the term of the lease, regardless of when actual payments are made.

This generally

results in rent expense in excess of cash payments during the early years of a lease and rent expense less than cash payments in the

The difference between rent expense recognized and actual rental payments is recorded as deferred rent and included in liabilities.

Distinguishing

Liabilities from Equity

Company relies on the guidance provided by ASC Topic 480, Distinguishing Liabilities from Equity , to classify certain redeemable

and/or convertible instruments.

The Company first determines whether a financial instrument should be classified as a liability.

Company will determine the liability classification if the financial instrument is mandatorily redeemable, or if the financial instrument,

other than outstanding shares, embodies a conditional obligation that the Company must or may settle by issuing a variable number of

its equity shares.

the Company determines that a financial instrument should not be classified as a liability, the Company determines whether the financial

instrument should be presented between the liability section and the equity section of the balance sheet (“temporary equity”).

The Company will determine temporary equity classification if the redemption of the financial instrument is outside the control of the

Company (i.e.

at the option of the holder).

Otherwise, the

Company accounts for the financial instrument as permanent equity.

Our CEO and Chairman holds sufficient shares of the

Company’s voting 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.

Initial Measurement

The Company records its financial instruments classified

as liability, temporary equity or permanent equity at issuance at the fair value, or cash received.

Subsequent Measurement – Financial Instruments

Classified as Liabilities

The Company records the fair value of its financial

instruments classified as liabilities at each subsequent measurement date.

The changes in fair value of its financial instruments classified

as liabilities are recorded as other income (expenses).

Fair Value of Financial Instruments

ASC Topic 820, Fair Value Measurements and

Disclosures (“ASC Topic 820”) provides a framework for measuring fair value in accordance with generally accepted

accounting principles.

ASC Topic 820 defines fair value as the price that

would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement

ASC Topic 820 establishes a fair value hierarchy that distinguishes between (1) market participant assumptions developed based on

market data obtained from independent sources (observable inputs) and (2) an entity’s own assumptions about market participant assumptions

developed based on the best information available in the circumstances (unobservable inputs).

The fair value hierarchy consists of three broad levels,

which gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1) and the lowest

priority to unobservable inputs (Level 3).

The three levels of the fair value hierarchy under ASC Topic 820 are described as follows:

Index to Financial Statements

ARTIFICIAL INTELLIGENCE TECHNOLOGY SOLUTIONS INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

Level 1 – Unadjusted quoted prices in active markets for identical assets or liabilities that are accessible at the measurement date.

Level 2 – Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly.

Otherwise, the Company accounts for the financial instrument as permanent equity.

CEO and Chairman holds sufficient shares of the Company’s voting 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.

Company records its financial instruments classified as liability, temporary equity or permanent equity at issuance at the fair value,

or cash received.

Measurement – Financial Instruments Classified as Liabilities

Company records the fair value of its financial instruments classified as liabilities at each subsequent measurement date.

in fair value of its financial instruments classified as liabilities are recorded as other income (expenses).

Value of Financial Instruments

Topic 820, Fair Value Measurements and Disclosures (“ASC Topic 820”) provides a framework for measuring fair value

in accordance with generally accepted accounting principles.

Topic 820 defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction

between market participants at the measurement date.

ASC Topic 820 establishes a fair value hierarchy that distinguishes between (1)

market participant assumptions developed based on market data obtained from independent sources (observable inputs) and (2) an entity’s

own assumptions about market participant assumptions developed based on the best information available in the circumstances (unobservable

INTELLIGENCE TECHNOLOGY SOLUTIONS INC.

TO THE CONSOLIDATED FINANCIAL STATEMENTS

fair value hierarchy consists of three broad levels, which gives the highest priority to unadjusted quoted prices in active markets for

identical assets or liabilities (Level 1) and the lowest priority to unobservable inputs (Level 3).

The three levels of the fair value

hierarchy under ASC Topic 820 are described as follows:

1 – Unadjusted quoted prices in active markets for identical assets or liabilities that are accessible at the measurement date.

2 – Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly

or indirectly.

Level 2 inputs include quoted prices for similar assets or liabilities in active markets;

quoted prices for identical or similar assets or liabilities in markets that are not active;

inputs other than quoted prices that are observable for the asset or liability;

quoted prices for identical

or similar assets or liabilities in markets that are not active;

inputs other than quoted prices that are observable for the asset

or liability;

and inputs that are derived principally from or corroborated by observable market data by correlation or other means.

Level 3 – Inputs that are unobservable for the asset or liability.

Measured on a Recurring Basis

The following table presents information about our

liabilities measured at fair value on a recurring basis, aggregated by the level in the fair value hierarchy within which those measurements

3 – Inputs that are unobservable for the asset or liability.

on a Recurring Basis

following table presents information about our liabilities measured at fair value on a recurring basis, aggregated by the level in the

fair value hierarchy within which those measurements fell:

OF LIABILITIES MEASURED AT FAIR VALUE

Fair Value Measurement Using

February 29, 2024

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

Incentive compensation plan payable –

revaluation of equity awards payable in Series G shares

February 28, 2023

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

Derivative liability – conversion features pursuant to convertible notes payable

The carrying amounts of the Company’s financial

assets and liabilities, such as cash, accounts receivable, prepaid expenses and advances, accounts payable and accrued expenses, approximate

their fair values because of the short maturity of these instruments.

Earnings (Loss) per Share

Basic earnings (loss) per share (“EPS”)

is computed by dividing net income (loss) available to common shareholders (numerator) by the weighted average number of shares outstanding

(denominator) during the period.

Diluted EPS give effect to all dilutive potential common shares outstanding during the period using the

treasury stock method and convertible preferred stock using the if-converted method.

In computing diluted EPS, the average stock price

for the period is used to determine the number of shares assumed to be purchased from the exercise of stock options and/or warrants.

EPS excluded all dilutive potential shares if their effect is anti-dilutive.

Basic loss per common share is computed based on the

weighted average number of shares outstanding during the period.

Diluted loss per share is computed in a manner similar to the basic loss

per share, except the weighted-average number of shares outstanding is increased to include all common shares, including those with the

potential to be issued by virtue of convertible debt and other such convertible instruments.

Diluted loss per share contemplates a complete

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

Index to Financial Statements

ARTIFICIAL INTELLIGENCE TECHNOLOGY SOLUTIONS INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

Recently Issued Accounting Pronouncements

Adopted Accounting Standards

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

The guidance 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;

and 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.

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.

Incentive compensation plan payable – revaluation

of equity awards payable in Series G shares

Company recorded stock based compensation of $ 1,521,000 and $ 499,500 for the years ended February 29, 2024 and February 28, 2023 with

corresponding adjustments to incentive compensation plan payable.

carrying amounts of the Company’s financial assets and liabilities, such as cash, accounts receivable, prepaid expenses and advances,

accounts payable and accrued expenses, approximate their fair values because of the short maturity of these instruments.

(Loss) per Share

earnings (loss) per share (“EPS”) is computed by dividing net income (loss) available to common shareholders (numerator)

by the weighted average number of shares outstanding (denominator) during the period.

Diluted EPS give effect to all dilutive potential

common shares outstanding during the period using the treasury stock method and convertible preferred stock using the if-converted method.

In computing diluted EPS, the average stock price for the period is used to determine the number of shares assumed to be purchased from

the exercise of stock options and/or warrants.

Diluted EPS excluded all dilutive potential shares if their effect is anti-dilutive.

loss per common share is computed based on the weighted average number of shares outstanding during the period.

Diluted loss per share

is computed in a manner similar to the basic loss per share, except the weighted-average number of shares outstanding is increased to

include all common shares, including those with the potential to be issued by virtue of convertible debt and other such convertible instruments.

Diluted loss per share contemplates a complete conversion to common shares of all convertible instruments only if they are dilutive in

nature with regards to earnings per share.

INTELLIGENCE TECHNOLOGY SOLUTIONS INC.

TO THE CONSOLIDATED FINANCIAL STATEMENTS

Issued Accounting Pronouncements

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.

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 815-40) :

Accounting for Convertible Instruments and Contracts in an Entity’s

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 instruments.

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 15, 2023.

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 approach.

Management is currently evaluating the effect of these provisions on

the Company’s financial position and results of operations

REVENUE FROM CONTRACTS WITH CUSTOMERS

Revenue is earned primarily from two sources:

sales of goods or services and 2) short-term rentals.

Direct sales of goods or services are accounted for under Topic 606, and short-term

rentals are accounted for under Topic 842 which was adopted.

is earned primarily from two sources:

1) direct sales of goods or services and 2) short-term rentals.

Direct sales of goods or services

are accounted for under Topic 606, and short-term rentals are accounted for under Topic 842 which was adopted.

On March 1, 2019.

As disclosed in the revenue recognition section of

Note 2 – Accounting Polices, the Company adopted Topic 606 in accordance with the effective date on March 1, 2018.

Note 2 includes

disclosures regarding the Company’s method of adoption and the impact on the Company’s financial statements.

Revenue is recognized

on direct sales of goods or services when it transfers promised goods or services to customers in an amount that reflects the consideration

the entity expects to be entitled to in exchange for those goods or services.

Index to Financial Statements

ARTIFICIAL INTELLIGENCE TECHNOLOGY SOLUTIONS INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

Upon adoption of Topic 842, also referred to above

in Note 2, the Company accounts for revenue earned from rental activities where an identified asset is transferred to the customer and

the customer has the ability to control that asset for periods greater than one year.

To date none of the lease agreements entered into

have been for periods longer than one year or greater, and the Company has availed itself of the practical expedient to exclude such leases

from ASC 84 2accountiong and instead has accounted for these leases under ASC 606.

The following table presents revenues from contracts

with customers disaggregated by product/service:

disclosed in the revenue recognition section of Note 2 – Accounting Polices, the Company adopted Topic 606 in accordance with the

effective date on March 1, 2018.

Note 2 includes disclosures regarding the Company’s method of adoption and the impact on the Company’s

financial statements.

Revenue is recognized on direct sales of goods or services when it transfers promised goods or services to customers

in an amount that reflects the consideration the entity expects to be entitled to in exchange for those goods or services.

INTELLIGENCE TECHNOLOGY SOLUTIONS INC.

TO THE CONSOLIDATED FINANCIAL STATEMENTS

adoption of Topic 842, also referred to above in Note 2, the Company accounts for revenue earned from rental activities where an

identified asset is transferred to the customer and the customer has the ability to control that asset for periods greater than one

To date none of the lease agreements entered into have been for periods longer than one year or greater, and the Company has

availed itself of the practical expedient to exclude such leases from ASC 842 accounting and instead has accounted for these leases

under ASC 606.

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

OF REVENUES FROM CONTRACTS WITH CUSTOMERS

February 29, 2024

2 unchanged sentences

Direct sales of goods and services

We lease certain warehouses, and office space.

with an initial term of 12 months or less are not recorded on the balance sheet;

we recognize lease expense for these leases on a straight-line

basis over the lease term.

For lease agreements entered into or reassessed after the adoption of Topic 842, we did not combine lease and

non-lease components.

There is no lease renewal.

The depreciable life of

assets and leasehold improvements are limited by the expected lease term, unless there is a transfer of title or purchase option reasonably

certain of exercise.

Below is a summary of our lease assets and liabilities

at February 28, 2023 and February 28, 2022.

lease certain warehouses, and office space.

Leases with an initial term of 12 months or less are not recorded on the balance sheet;

recognize lease expense for these leases on a straight-line basis over the lease term.

For lease agreements entered into or reassessed

after the adoption of Topic 842, we did not combine lease and non-lease components.

is no lease renewal.

The depreciable life of assets and leasehold improvements are limited by the expected lease term, unless there is

a transfer of title or purchase option reasonably certain of exercise.

is a summary of our lease assets and liabilities at February 29, 2024 and February 28, 2023.

OF LEASE ASSETS AND LIABILITIES

Classification

5 unchanged sentences

Total lease liabilities

As most of our leases do not provide an implicit

rate, we use our incremental borrowing rate of 10% which for the leases noted above was based on the information available at commencement

date in determining the present value of lease payments.

We compare against loans we obtain to acquire physical assets and not loans we

obtain for financing.

The loans we obtain for financing are generally at significantly higher rates and we believe that physical space

or vehicle rental agreements are in line with physical asset financing agreements.

CAM charges were not included in operating lease expense

and were expensed in general and administrative expenses as incurred.

Operating lease cost and rent was $ 260,271 and $ 275,785

for both the twelve months ended February 28, 2023 and February 28, 2022, respectively.

Index to Financial Statements

ARTIFICIAL INTELLIGENCE TECHNOLOGY SOLUTIONS INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

On December 23, 2022 the Company entered into a Simple

Agreement for Future Equity (SAFE) contract to invest $ 50,000 to acquire shares of a company’s capital stock at a discount.

REVENUE EARNING ROBOTS

Revenue earning robots consisted of the following:

As most of our leases do not provide an implicit rate, we use our incremental borrowing rate of 10% which for the leases noted above

was based on the information available at commencement date in determining the present value of lease payments.

We compare against loans

we obtain to acquire physical assets and not loans we obtain for financing.

The loans we obtain for financing are generally at significantly

higher rates and we believe that physical space or vehicle rental agreements are in line with physical asset financing agreements.

charges were not included in operating lease expense and were expensed in general and administrative expenses as incurred.

lease cost and rent was $ 260,406 and $ 260,271 for both the twelve months ended February 29, 2024 and February 28, 2023, respectively.

INTELLIGENCE TECHNOLOGY SOLUTIONS INC.

TO THE CONSOLIDATED FINANCIAL STATEMENTS

December 23, 2022 the Company entered into a Simple Agreement for Future Equity (SAFE) contract to invest $ 50,000 to acquire shares of

a company’s capital stock at a discount.

REVENUE EARNING DEVICES

earning devices consisted of the following:

EARNING DEVICES CONSISTED OF THE FOLLOWING

February 29, 2024

2 unchanged sentences

Accumulated depreciation

During the year ended February 28, 2023, the Company

made total additions to revenue earning devices of $ 871,334 which was transferred from inventory.

During the year ended February 28, 2022,

the Company made total additions to revenue earning devices of $ 647,116 including $ 647,116 in inventory transfers.

During the year ended

February 28, 2022, the company disposed of a revenue earning device having a net book value of $ 3,255 for revenues of $ 30,600 and included

the $ 3,255 in cost of goods sold.

Depreciation expense for these devices was $ 345,178

and $ 208,510 for the years ended February 28, 2023 and February 28, 2022, respectively.

Fixed assets consisted of the following:

the year ended February 29, 2024, the Company made total additions to revenue earning devices of $ 2,166,081 which were transferred from

The Company wrote- off assets with a value 748,243 and related accumulated depreciation $ 490,295 with a net book value of

$ 257,948 as a permanent impairment on revenue devices along with finished goods inventory on assets not yet deployed of $ 326,180 for

a total permanent impairment on revenue earning devices of $ 584,177 .

During the year ended February 28, 2023, the Company made total

additions to revenue earning devices of $ 871,334 which were transferred from inventory.

There was no permanent impairment on revenue

earning services for the year ended February 28, 2023.

expense for these devices was $ 681,042 and $ 345,178 for the years ended February 29, 2024 and February 28, 2023, respectively.

assets consisted of the following:

OF FIXED ASSETS

February 29, 2024

6 unchanged sentences

Leasehold improvements

Fixed assets gross

Accumulated depreciation

During the year ended February 28, 2023, the Company

made additions to fixed assets of $ 258,402 and also additions through inventory transfers of $ 52,471 .

During the year ended February 28, 2022, the Company

made additions to fixed assets of $ 115,493 , additions through inventory transfers of $ 12,868 and the Company sold a vehicle having a net

book value of $ 875 for fair value proceeds of $ 30,000 and recorded a gain on disposal of fixed assets of $ 29,125 .

Depreciation expense was $ 132,937 and $ 24,376 for

the years ended February 28, 2023 and February 28, 2022, respectively.

Index to Financial Statements

ARTIFICIAL INTELLIGENCE TECHNOLOGY SOLUTIONS INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

Fixed assets, net of

accumulated depreciation

the year ended February 29, 2024, the Company made additions to fixed assets of $ 22,165 and also additions through inventory transfers

of $ 125,340 and the Company sold a vehicle having a net book value of $ 4,574 for fair value proceeds of $ 21,000 and recorded a gain on

disposal of fixed assets of $ 16,426 .

The $ 21,000 proceeds were applied to loan payable -related party.

the year ended February 28, 2023, the Company made additions to fixed assets of $ 258,402 and also additions through inventory transfers

of $ 52,471 .

expense was $ 190,747 and $ 132,937 for the years ended February 29, 2024 and February 28, 2023, respectively.

INTELLIGENCE TECHNOLOGY SOLUTIONS INC.

TO THE CONSOLIDATED FINANCIAL STATEMENTS

DEFERRED VARIABLE PAYMENT OBLIGATION

On February 1, 2019 the Company entered into an agreement

with an investor whereby the investor would pay up to $ 900,000 in exchange for a perpetual 9 % rate payment (Payments) on the Company’s

reported quarterly revenue from operations excluding any gains or losses from financial instruments (Revenues).

At February 29, 2020 the

investor has advanced the full $900,000.

On May 9, 2019 the Company entered into two similar

arrangements with two investors:

The investor would pay up to $ 400,000 in exchange for a perpetual 4 % rate Payment on the Company’s reported quarterly Revenues.

February 1, 2019 the Company entered into an agreement with an investor whereby the investor would pay up to $ 900,000 in exchange for

a perpetual 9 % rate payment (Payments) on the Company’s reported quarterly revenue from operations excluding any gains or losses

from financial instruments (Revenues).

At February 29, 2020 the investor has advanced the full $ 900,000 .

May 9, 2019 the Company entered into two similar arrangements with two investors:

investor would pay up to $ 400,000 in exchange for a perpetual 4 % rate Payment on the Company’s reported quarterly Revenues.

At February 29, 2020, $ 400,000 has been paid to the Company.

The investor would pay up to $ 50,000 in exchange for a perpetual 1.11 % rate Payment on the Company’s reported quarterly Revenues.

investor would pay up to $ 50,000 in exchange for a perpetual 1.11 % rate Payment on the Company’s reported quarterly Revenues.

At February 29, 2020, $ 50,000 has been paid to the Company.

These variable payments (Payments) are to be made

30 days after the end of each fiscal quarter.

If the Payments would deplete RAD’s available cash by more than 30%, the Payments

may be deferred for up to 12 months after the quarterly report at an interest rate of 6% per annum on the unpaid amount.

In the event that at least 10% of the assets of the

Company are sold by the Company, the investors would be entitled to the fair market value (FMV) of all future Payments associated with

the assets sold as determined by an independent valuator to be chosen by the investors.

The FMV cannot exceed 30% of the total asset disposition

price defined as the total price paid for the assets plus all future Payments associated with the assets sold.

In the event that the common

or preferred shares are sold by the Company to a third party as to effect a change in control, then the investors must be paid the FMV

of all future Payments in one lump payment.

The FMV cannot exceed 30% of the share disposition price defined as the total price the third

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

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).

At February 29, 2020 the investor

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

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 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.

The investor had agreed to pay $100,000 per month over an 8 month period with the first payment due July 2020 and the final payment no

later than February 28, 2021.

As at August 31, 2020 the investor had fully funded the $800,000 commitment

On August 27, 2020 the Company and the first investor

referred to above consolidated the three separate agreements of February 1, 2019 for $900,000, November 18, 2019 for $225,000 and July

1, 2020 for $800,000 into a new agreement for a total of $ 1,925,000 .

This new agreement is for similar terms as the above agreements

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.

Index to Financial Statements

ARTIFICIAL INTELLIGENCE TECHNOLOGY SOLUTIONS INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

In summary of all agreements mentioned above if in

the event that at least 10 % of the assets of the Company are sold by the Company, the investors would be entitled to the fair market value

(FMV) of all future Payments associated with the assets sold as determined by an independent valuator to be chosen by the investors.

FMV cannot exceed 43.77% of the total asset disposition price defined as the total price paid for the assets plus all future Payments

variable payments (Payments) are to be made 30 days after the end of each fiscal quarter.

If the Payments would deplete RAD’s available

cash by more than 30%, the Payments may be deferred for up to 12 months after the quarterly report at an interest rate of 6% per annum

on the unpaid amount .

the event that at least 10% of the assets of the Company are sold by the Company, the investors would be entitled to the fair market

value (FMV) of all future Payments associated with the assets sold as determined by an independent valuator to be chosen by the investors.

The FMV cannot exceed 30% of the total asset disposition price defined as the total price paid for the assets plus all future Payments

associated with the assets sold.

1 unchanged sentence

a change in control, then the investors must be paid the FMV of all future Payments in one lump payment.

The FMV cannot exceed 43.77%

of the share disposition price defined as the total price the third party paid for the shares plus the total value of all future Payments.

As of March 1, 2021 as a result of the amendment with the first investor noted below.

This aggregate asset disposition % was reduced from

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 February 28, 2023, the Company has accrued approximately $542,1777 in Payments, of which $325,600 is in arrears.

The FMV cannot exceed 30% of

the share disposition price defined as the total price the third party paid for the shares plus the total value of all future Payments .

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).

At February 29, 2020 the investor has advanced $ 109,000 and the investor advanced the $ 116,000 remainder

as of May 2020.

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.

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.

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.

The investor had agreed to pay $100,000 per month over an 8 month period with the

first payment due July 2020 and the final payment no later than February 28, 2021.

As at August 31, 2020 the investor had fully funded

the $800,000 commitment

August 27, 2020 the Company and the first investor referred to above consolidated the three separate agreements of February 1, 2019 for

$ 900,000 , November 18, 2019 for $ 225,000 and July 1, 2020 for $ 800,000 into a new agreement for a total of $ 1,925,000 .

This new agreement

is for similar terms as the above agreements 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.

INTELLIGENCE TECHNOLOGY SOLUTIONS INC.

TO THE CONSOLIDATED FINANCIAL STATEMENTS

summary of all agreements mentioned above if in the event that at least 10 % of the assets of the Company are sold by the Company, the

investors would be entitled to the fair market value (FMV) of all future Payments associated with the assets sold as determined by an

independent valuator to be chosen by the investors.

The FMV cannot exceed 43.77% of the total asset disposition price defined as the

total price paid for the assets plus all future Payments associated with the assets sold.

In the event that the common or preferred shares

are sold by the Company to a third party as to effect a change in control, then the investors must be paid the FMV of all future Payments

in one lump payment.

The FMV cannot exceed 43.77% of the share disposition price defined as the total price the third party paid for

the shares plus the total value of all future Payments.

As of March 1, 2021 as a result of the amendment with the first investor noted

This aggregate asset disposition % was reduced from 43.77 % to 33.77%

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 February 29, 2024, the Company has accrued approximately $ 904,377 in Payments,

of which $ 542,176 is in arrears.

As of February 28, 2023, the Company has accrued approximately $ 542,177 in Payments, of which $ 325,600

is in arrears.

No notices have been received by the Company.

March 1, 2021 the first investor referred to above whose aggregate investment is $ 1,925,000 revised his agreements as follows:

rate payment was reduced from 14.25 % to 9.65 %

asset disposition % (see below) was reduced from 31 % to 21 %

consideration for the above changes, the investor received 40 Series F Convertible Preferred Stock and a warrant to purchase 367 shares

of its Series F Convertible Preferred Stock with 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.

Company retains total involvement in the generation of cash flows from these revenue streams that form the basis of the payments to be

made to the investors under this agreement.

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

As of February 29, 2024, 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.

both the years ended February 29, 2024 and February 28, 2023, 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.

INTELLIGENCE TECHNOLOGY SOLUTIONS INC.

TO THE CONSOLIDATED FINANCIAL STATEMENTS

RELATED PARTY TRANSACTIONS

the years ended February 29, 2024 and February 28, 2023, the Company made net repayments of $ 54,179 and $ 0 , respectively , to its loan

payable-related party.

At February 29, 2024, the loan payable-related party was $ 257,438 and $ 206,516 at February 28, 2023.

As of February

28, 2022, the Company has accrued approximately $325,600 in Payments, of which $90,300 is in arrears.

No notices have been received by

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 %

The asset disposition % (see below) was reduced from 31 % to 21 %

In consideration for the above changes, the investor

received 40 Series F Convertible Preferred Stock and a warrant to purchase 367 shares of its Series F Convertible Preferred Stock with

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.

The Company retains total involvement in the generation

of cash flows from these revenue streams that form the basis of the payments to be made to the investors under this agreement.

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

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

CONVERTIBLE NOTES PAYABLE

Convertible notes payable consisted of the following:

Rate per Share

July 18, 2016

July 18, 2017 *

August 9, 2022

August 9, 2023

current portion of convertible notes payable

discount on noncurrent convertible notes payable

Noncurrent convertible notes payable, net of discount

Current portion of convertible notes payable

discount on current portion of convertible notes payable

Current portion of convertible notes payable, net of discount

Index to Financial Statements

ARTIFICIAL INTELLIGENCE TECHNOLOGY SOLUTIONS INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

This note was in default as of February 28, 2022.

Default interest rate 22%

The conversion price was not subject to adjustment from forward or reverse stock splits.

Effective in August 2022 this note (and accrued interest) was no longer convertible.

Subject to adjustment for dilutive issuances

During the years ended February 28, 2023 and February

28, 2022, the Company incurred original issue discounts of $ 75,000 and $ 0 , respectively, and debt discounts (and relative fair value debt

discounts) from derivative liabilities of $ $ 393,949 and $ 438,835 , respectively, related to both new and re-valued convertible notes payable.

These amounts are included in discounts on convertible notes payable and are being amortized to interest expense over the life of the

convertible notes payable.

During the years ended February 28, 2023 and February 28, 2022, the Company recognized interest expense related

to the amortization of debt discount of $ 524,699 and $ 775,986 , respectively.

All the notes above are unsecured.

29, 2024, included in the balance due to the related party is $ 140,013 of deferred salary all of which bears interest at 12 %.

As of February

28, 2023, the Company had total accrued interest payable of $ 28,104 , all of which is classified as current.

As of February 28, 2022, the

Company had total accrued interest payable of $ 28,104 , all of which is classified as current.

See description below for details of the

convertible notes issued during the years ended February 28, 2022 and February 28, 2021.

Convertible notes issued

During the year ended February 28, 2023, the Company

had the following convertible note activity:

The Company transferred the above July 18, 2016 $3,500 note to loans payable as the note was no longer convertible.

This was a result of an SEC action against the debt holder who was also a common stockholder.

On August 9, 2022 the Company entered into a new convertible note for $750,000 with a one year

maturity, interest rate of 12%, with a warrant (Warrant 1) to purchase 47,000,000 common shares with a five year maturity and an

exercise price of $0.01, and an additional warrant (Warrant 2) to purchase 47,000,000 common shares with a five

year maturity and an exercise price of $0.008 to be cancelled and extinguished if the note balance is $375,000 or less by

The Company received $619,250 in cash proceeds, recorded an original issue discount of $75,000, recognized

$393,949 based on a relative fair value calculation as debt discount with a corresponding adjustment to paid-in capital for the

attached warrants, and transaction fees of $55,750.

The discount is amortized over the term of the loan.

This note and related

accrued interest have been fully repaid at February 28, 2023.

The Company determined that the embedded conversion

features which result in a variable conversion rate, in the convertibles notes described below should be accounted for as derivative liabilities

as a result of their variable conversion rates.

During the year ended February 28, 2022, the Company

had the following convertible note activity:

the Company amended the January 27, 2021 agreement with the lender whereby the conversion rate was changed from $0.10 to $0.03 as a result of a dilutive issuance.

This resulted a derivative discount of $438,835 and a loss on extinguishment of $360,125.

holders of certain convertible notes payable elected to convert a total of $825,000 of principal and $71,955 accrued interest, and $1,750 of fees into 31,042,436 shares of common stock.

No gain or loss was recognized on conversions as these conversions occurred within the terms of the agreement that provided for conversion.

the conversion rate of the January 19, 2021 note included above was reduced to $0.027 due to the dilutive issuance provision in the January 19, 2021 agreement.

Index to Financial Statements

ARTIFICIAL INTELLIGENCE TECHNOLOGY SOLUTIONS INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

RELATED PARTY TRANSACTIONS

For the years ended February 28, 2023 and February

28, 2022, the Company made net repayments of $ 0 and $ 803,394 , respectively, to its loan payable-related party.

At February 28, 2023,

the loan payable-related party was $ 206,516 and $ 193,556 at February 28, 2022.

As of February 28, 2023, included in the balance due to

the related party is $ 108,000 of deferred salary all of which bears interest at 12 %.

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

salary with $ 90,000 bearing interest at 12 %.

The accrued interest included at February 28, 2023 was $ 15,660 (2022- $ 2,700 ).

During the year ended February 28, 2023 pursuant to

the amended Employment Agreement with its Chief Executive Officer the Company accrued $ 499,500 as incentive compensation plan payable

with a corresponding recognition of stock based compensation due to the expectation of additional awards being met.

At February 28, 2023,

the balance of incentive compensation plan payable was $ 979,000 (2022-$ 479,500 ).

This will be payable in Series G Preferred Shares which

are redeemable at the Company’s option at $ 1,000 per share.

During the year ended February 28, 2022, pursuant

to the amended Employment Agreement with its Chief Executive Officer, the Company issued 1,500 shares of Series G Preferred Shares which

are redeemable at the Company’s option at $ 1,000 per share and recorded $ 1,500,000 of stock based compensation.

The Company redeemed

these shares for $ 1,500,000 and accrued $ 479,500 as incentive compensation plan payable with a corresponding recognition of stock based

compensation due to the expectation of additional awards being met.

During the years ended February 28, 2023 and February

28, 2022, the Company was charged $ 3,578,981 and $ 2,258,819 , respectively in consulting fees for research and development to a company

partially owned by a principal shareholder.

28, 2023, included in the balance due to the related party is $ 108,000 of deferred salary all of which bears interest at 12 %.

interest included at February 29, 2024 was $ 32,468 (February 28, 2023- $ 15,660 ).

the year ended February 28, 2023 pursuant to the amended Employment Agreement with its Chief Executive Officer the Company accrued $ 1,521,000

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

awards being met.

In January 2024 the Company added an Objective 10 which required the accrual of $ 2,000,000 .

There was also a net adjustment

reduction of $ 479,000 for objectives accrued for but not met.

February 28, 2023, the balance of incentive compensation plan payable was $ 979,000 .

This will be payable in Series G Preferred Shares

which are redeemable at the Company’s option at $ 1,000 per share.

the year ended February 29, 2024, the Company accrued $ 538,767 in deferred compensation for the CEO.

This was in accordance with a December

2023 board action allowing for $ 1 million of discretionary compensation.

The Company had already recorded $ 461,233 in bonus compensation.

There was no deferred compensation for the year ended February 28, 2023, the Company recorded a bonus to the CEO of $ 280,908 .

the years ended February 29, 2024 and February 28, 2023, the Company was charged $ 2,810,839

and $ 3,578,981 ,

respectively in consulting fees for research and development to a company partially owned by a principal shareholder included in

research and development expenses.

The principal shareholder received no compensation from this partially owned research and

development company and the fees were spent on core development projects.

As at both February 29, 2024 and February 28, 2023 the

balance due to this company was $ 76,532 .

OTHER DEBT – VEHICLE LOANS

In December 2016, RAD entered into a vehicle loan

for $ 47,704 secured by the vehicle.

The loan is repayable over 5 years maturing November 9, 2021, and repayable $ 1,019 per month including

interest and principal.

In November 2017, RAD entered into another vehicle loan secured by the vehicle for $ 47,661 .

The loan is repayable

over 5 years, maturing October 24, 2022 and repayable at $ 923 per month including interest and principal.

The principal repayments made

were $0 for both the year ended February 28, 2022 and February 28, 2021.

Regarding the second vehicle loan, the vehicle was returned at

the end of fiscal 2019 and the car was subsequently sold by the lender for proceeds of $ 21,907 which went to reduce the outstanding balance

December 2016, RAD entered into a vehicle loan for $ 47,704 secured by the vehicle.

The loan is repayable over 5 years maturing November

9, 2021, and repayable $ 1,019 per month including interest and principal.

In November 2017, RAD entered into another vehicle loan secured

by the vehicle for $ 47,661 .

The loan is repayable over 5 years, maturing October 24, 2022 and repayable at $ 923 per month including interest

and principal.

The principal repayments made were $ 0 for both the year ended February 28, 2022 and February 28, 2021.

Regarding the second

vehicle loan, the vehicle was returned at the end of fiscal 2019 and the car was subsequently sold by the lender for proceeds of $ 21,907

which went to reduce the outstanding balance of the loan.

A loss of $ 3,257 was recorded as well.

A balance of $ 21,578 remains on this vehicle loan at both February 28, 2023 and February

For the first vehicle loan, the vehicle was retired in 2020, the proceeds of the disposal of $ 18,766 was applied against the

balance of the loan with a $ 5,515 gain on the remaining asset value of $ 13,251 .

A balance of $ 16,944 remains on this vehicle loan at both

February 28, 2023 and February 28, 2022.

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

as of February 28, 2023 and February 28, 2022, respectively, of which all were classified as current.

Index to Financial Statements

ARTIFICIAL INTELLIGENCE TECHNOLOGY SOLUTIONS INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

A balance of $ 21,578 remains on this

vehicle loan at both February 28, 2023 and February 29, 2022.

For the first vehicle loan, the vehicle was retired in 2020, the proceeds

of the disposal of $ 18,766 was applied against the balance of the loan with a $ 5,515 gain on the remaining asset value of $ 13,251 .

balance of $ 16,944 remains on this vehicle loan at both February 28, 2023 and February 28, 2022.

The remaining total balances of the

amounts owed on the vehicle loans were $ 38,522 and $ 38,522 as of February 29, 2024 and February 28, 2023, respectively, of which all

were classified as current.

INTELLIGENCE TECHNOLOGY SOLUTIONS INC.

TO THE CONSOLIDATED FINANCIAL STATEMENTS

LOANS PAYABLE

Loans payable at February 28, 2023 consisted of the

payable at February 29, 2024 consisted of the following:

OF LOANS PAYABLE

Interest Rate

July 18, 2016

July 18, 2017

Promissory note

June 11, 2018

June 11, 2019

Promissory note

January 31, 2019

June 30, 2019

Promissory note

June 30, 2019

Promissory note

June 30, 2019

Promissory note

June 26, 2019

June 26, 2020

Promissory note

September 24, 2019

June 24, 2020

Promissory note

January 30, 2020

January 30, 2021

Promissory note

February 27, 2020

February 27, 2021

Promissory note

April 16, 2020

April 16, 2021

Promissory note

3 unchanged sentences

Promissory note

June 12, 2020

June 12, 2021

Promissory note

June 16, 2020

June 16, 2021

Promissory note

September 15, 2020

September 15, 2022

Promissory note

October 6, 2020

March 6, 2023

Promissory note

November 12, 2020

November 12, 2023

Promissory note

November 23, 2020

October 23, 2022

Promissory note

November 23, 2020

November 23, 2023

Promissory note

December 10, 2020

December 10, 2023

Promissory note

December 10, 2020

December 10, 2023

Promissory note

December 10, 2020

December 10, 2023

Promissory note

December 10, 2020

December 10, 2023

Promissory note

December 14, 2020

December 14, 2023

Promissory note

December 30, 2020

December 30, 2023

Promissory note

December 31, 2021

December 31, 2024

Promissory note

December 31, 2021

December 31, 2024

Promissory note

January 14, 2021

January 14, 2024

Promissory note

February 22, 2021

February 22, 2024

Promissory note

March 1, 2021

March 1, 2024

Promissory note

July 12, 2021

July 26, 2026

Promissory note

September 14, 2021

September 14, 2024

Promissory note

July 28, 2022

July 28, 2023

Promissory note

August 30, 2022

August 30,2024

Promissory note

September 7, 2022

September 7, 2023

Promissory note

September 8, 2022

September 8, 2023

Promissory note

October 13, 2022

October 13, 2023

Promissory note

October 28, 2022

October 31, 2026

Promissory note

November 9, 2022

October 31, 2026

Promissory note

November 10, 2022

October 31, 2026

Promissory note

November 15, 2022

October 31, 2026

Promissory note

January 11, 2023

October 31,2026

Promissory note

February 6, 2023

October 31,2026

Promissory note

Purchase Agreement

current portion of loans payable

( 13,879,479 )

discount on non-current loans payable

( 4,118,334 )

Non-current loans payable, net of discount

2 unchanged sentences

Current portion of loans payable, net of discount

Index to Financial Statements

ARTIFICIAL INTELLIGENCE TECHNOLOGY SOLUTIONS INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

Default interest rate 22 %

Loans with a principal balance of $ 1,661,953 along with associated accrued interest of $ 342,138 totaling $ 2,004,091 were paid in March 2022, with a remaining accrued liability of $ 62,979 .

Original $ 78,432 note may be pre-payable at any time.

The note balance includes 33 % original issue discount of $ 25,882 at issuance.

The loan and accrued interest were fully paid in March 2022.

Repayable in 12 monthly instalments of $ 4,562 commencing August 11, 2018 and secured by revenue earning devices having a net book value of at least $ 48,000 .

The loan and accrued interest were fully paid in March 2022.

Original $ 7,850 note may be pre-payable at any time.

The note balance includes 33 % original issue discount of $ 2,590 at issuance.

The loan and accrued interest were fully paid in March 2022.

Original $ 86,567 note may be pre-payable at any time.

The note balance includes 33 % original issue discount of $ 28,567 at issuance.

The loan and accrued interest were fully paid in March 2022.

Original $ 79,104 note may be pre-payable at any time.

The note balance includes 33 % original issue discount of $ 26,104 at issuance.

The loan and accrued interest were fully paid in March 2022.

Original $ 12,000 note may be pre-payable at any time.

The note balance includes an original issue discount of $ 3,000 at issuance.

The loan and accrued interest were fully paid in March 2022.

Original $ 11,000 note may be pre-payable at any time.

The note balance includes an original issue discount of $ 2,450 at issuance.

The loan and accrued interest were fully paid in March 2022.

Original $ 5,000 note may be pre-payable at any time.

The note balance includes an original issue discount of $ 1,200 at issuance.

The loan and accrued interest were fully paid in March 2022.

Original $ 13,000 note may be pre-payable at any time.

The note balance includes an original issue discount of $ 3,850 at issuance.

The loan and accrued interest were paid in March 2022.

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

Cash proceeds of $ 5,400,000 were received.

The note balance of $ 6,000,000 includes an original issue discount of $ 600,000 and was issued with a warrant to purchase 300,000,000 shares at an exercise price of $ 0.135 per share with a 3 -year term and having a relative fair value of $ 4,749,005 using Black-Scholes with assumptions described in note 13.

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 $ 4,749,005 with a corresponding adjustment to paid in capital for the relative value of the warrant.

For both the years ended February 28, 2023, the Company recorded amortization expense of $ 0 with an unamortized discount of $ 0 at February 28, 2023.

The maturity was extended from March 1, 2022 to March 1, 2024 on February 28, 2022 in exchange for warrants to purchase 150,000,000 shares of common stock at an exercise price of $ .0164 and a 3 year term.

These warrants have a fair value of $ 2,850,000 recorded as interest expense with a corresponding adjustment to paid in capital recorded in the year ended February 28, 2022.

Original $ 43,500 note may be pre-payable at any time.

The note balance includes an original issue discount of $ 8,000 at issuance.

The loan and accrued interest were fully paid in March 2022.

Original $ 85,000 note may be pre-payable at any time.

The note balance includes an original issue discount of $ 15,000 at issuance.

The loan and accrued interest were fully paid in March 2022.

Original $ 62,000 note may be pre-payable at any time.

The note balance includes an original issue discount of $ 12,000 at issuance.

The loan and accrued interest were fully paid in March 2022.

Original $ 31,000 note may be pre-payable at any time.

The note balance includes an original issue discount of $ 6,000 at issuance.

The loan and accrued interest were fully paid in March 2022.

Index to Financial Statements

ARTIFICIAL INTELLIGENCE TECHNOLOGY SOLUTIONS INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

Original $ 50,000 note may be pre-payable at any time.

The note balance includes an original issue discount of $ 10,000 at issuance.

The loan and accrued interest were fully paid in March 2022.

Original $ 42,000 note may be pre-payable at any time.

The note balance includes an original issue discount of $ 7,000 at issuance.

The loan and accrued interest were fully paid in March 2022.

Original $ 300,000 note may be pre-payable at any time.

The note balance includes an original issue discount of $ 50,000 .

Interest payable monthly, principal due at maturity.

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

The loan and accrued interest were fully paid in March 2022.

Original principal of $ 150,000 and interest repayable in 28 monthly instalments commencing December 6, 2020, the first 6 months at $ 2,000 per month, the remaining 22 payments at $ 8,500 per month.

Secured by revenue earning devices.

The loan and accrued interest were fully paid in March 2022.

Original $ 110,000 note may be pre-payable at any time.

The note balance includes an original issue discount of $ 10,000 and was issued with a warrant to purchase 70,000,000 shares at an exercise price of $ 0.00165 per share, with a 3 -year term and having a relative fair value of $ 41,176 .

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 $ 41,176 with a corresponding adjustment to paid in capital.

The loan and accrued interest were fully paid in March 2022.

Original principal of $ 65,000 and interest repayable in 21 monthly instalments of $ 4,060 commencing February 23, 2021.

Secured by revenue earning devices.

The loan and accrued interest were fully paid in March 2022.

Original $ 300,000 note may be pre-payable at any time.

The note balance includes an original issue discount of $ 25,000 and was issued with a warrant to purchase 230,000,000 shares at an exercise price of $ 0.00165 per share with a 3 -year term and having a relative fair value of $ 125,814 .

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 $ 125,814 with a corresponding adjustment to paid in capital for the relative value of the warrant.

The loan and accrued interest were fully paid in March 2022.

Original $ 82,500 note may be pre-payable at any time.

The note balance includes an original issue discount of 7,500 and was issued with a warrant to purchase 100,000,000 shares at an exercise price of $ 0.002 per share with a 3 -year term and having a relative fair value of $ 54,545 .

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 $ 54,545 with a corresponding adjustment to paid in capital for the relative value of the warrant.

The loan and accrued interest were fully paid in March 2022.

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 .

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 $ 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 .

Index to Financial Statements

ARTIFICIAL INTELLIGENCE TECHNOLOGY SOLUTIONS INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

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

The note balance includes an original issue discount of $ 35,000 and was issued with a warrant to purchase 50,000,000 shares at an exercise price of $ 0.025 per share with a 3 -year term and having a relative fair value of $ 271,250 .

INTELLIGENCE TECHNOLOGY SOLUTIONS INC.

TO THE CONSOLIDATED FINANCIAL STATEMENTS

note was transferred from convertible notes payable because in August 2022 it was no longer convertible due to restrictions placed

on the lender.

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.

On November 28, 2023, the parties

extended the maturity date from December 10, 2023 to March 1, 2025 with all other terms and conditions remaining the same .

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 .

This note is secured

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

$ 100,000 and $ 300,000 has been repaid

the three and nine months ended November 30, 2023.

The balance at November 30,2023 is now $ 2,754,338 .

On November 28, 2023, the parties

extended the maturity date from December 10, 2023 to March 1, 2025 with all other terms and conditions remaining the same .

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 .

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 loan is presently in default and the Company

is working on a extension with the lender.

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

The note balance includes an original issue

discount of $ 35,000 and was issued with a warrant to purchase 50,000,000 shares at an exercise price of $ 0.025 per share with a 3 -year

term and having a relative fair value of $ 271,250 .

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 $ 271,250 with a corresponding adjustment to paid in capital for the relative fair value of the warrant.

For the year ended February 28, 2023, the Company recorded amortization expense of $ 83,338 , with an unamortized discount of $ 193,515 at February 28, 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 .

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 $ 79,500 in convertible notes and associated accrued interest of $ 28,925 totaling $ 108,425 was exchanged for this promissory note of $ 145,000 .

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

The note, with an original principal amount of $ 550,000 , may be pre-payable at any time.

The note balance includes an original issue discount of $ 250,000 and was issued with a warrant to purchase 50,000,000 shares at an exercise price of $ 0.025 per share with a 3 -year term and having a relative fair value of $ 380,174 .

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 year ended February 29, 2024, the Company recorded amortization

expense of $ 120,023 , with an unamortized discount of $ 73,491 at February 29, 2024.

On November 28, 2023, the parties extended the

maturity date from December 10, 2023 to March 1, 2025 with all other terms and conditions remaining the same.

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 .

This note is secured by a general security charging all of the

Company’s present and after-acquired property.

On November 28, 2023, the parties extended the maturity date from January 1,

2024 to March 1, 2025 with all other terms and conditions remaining the same.

promissory note was issued as part of a debt settlement whereby $ 79,500 in convertible notes and associated accrued interest of $ 28,925

totaling $ 108,425 was exchanged for this promissory note of $ 145,000 .

This note is secured by a general security charging all of

the Company’s present and after-acquired property.

On November 28, 2023, the parties extended the maturity date from January

1, 2024 to March 1, 2025 with all other terms and conditions remaining the same.

note, with an original principal amount of $ 550,000 , may be pre-payable at any time.

The note balance includes an original issue

discount of $ 250,000 and was issued with a warrant to purchase 50,000,000 shares at an exercise price of $ 0.025 per share with a

3 -year term and having a relative fair value of $ 380,174 .

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 $ 380,174 with a corresponding adjustment to paid in capital.

For the year ended February 28, 2023, the Company recorded amortization expense of $ 127,897 , respectively, with an unamortized discount of $ 239,336 at February 28, 2023.

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 100,000,000 shares at an exercise price of $ 0.135 per share with a 3 -year term and having a relative fair value of $ 1,342,857 .

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 year ended February 29, 2024, the Company recorded amortization expense of $ 148,493 , with an unamortized

discount of $ 90,443 at February 29, 2024.

On November 28, 2023, the parties extended the maturity date from January 14, 2024 to March

1, 2025 with all other terms and conditions remaining the same.

INTELLIGENCE TECHNOLOGY SOLUTIONS INC.

TO THE CONSOLIDATED FINANCIAL STATEMENTS

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 100,000,000 shares at an exercise price of $ 0.135 per share with a

3 -year term and having a relative fair value of $ 1,342,857 .

The discount and warrant 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 $ 1,342,857 with a corresponding adjustment to paid in capital for the relative fair value of the warrant.

For the year ended February 28, 2023, the Company recorded amortization expense of $ 2,995,719 , with an unamortized discount of $ 1,112,261 at February 28, 2023.

The maturity date was extended from February 22, 2022 to February 22, 2024 on February 28, 2022 in exchange for warrants to purchase 50,000,000 at an exercise price of $ .0164 and a 3 year term.

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.

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

The note balance includes an original issue discount of $ 50,000 and was issued with a warrant to purchase 170,000,000 shares at an exercise price of $ 0.064 per share with a 3 -year term and having a relative fair value of $ 2,035,033 .

After allocating these charges to debt and equity according to their respective values, a debt discount of $ 1,342,857 with a corresponding

adjustment to paid in capital for the relative fair value of the warrant.

The maturity date was extended from February 22, 2022 to

February 22, 2024 on February 28, 2022 in exchange for warrants to purchase 50,000,000 at an exercise price of $ .0164 and a 3 -year

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 year ended February 29, 2024, the Company recorded amortization expense of

$ 559,061 , with an unamortized discount of $ 553,199 at February 29, 2024.

On November 28, 2023, the parties extended the maturity

date from February 22, 2024 to March 1, 2025 with all other terms and conditions remaining the same.

unsecured note may be pre-payable at any time.

Cash proceeds of $ 5,400,000 were received.

The note balance of $ 6,000,000 includes

an original issue discount of $ 600,000 and was issued with a warrant to purchase 300,000,000 shares at an exercise price of $ 0.135

per share with a 3 -year term and having a relative fair value of $ 4,749,005 using Black-Scholes with assumptions described in note

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 $ 2,035,033 with a corresponding adjustment to paid in capital.

For the year ended February 28, 2023, the Company recorded amortization expense of $ 455,527 , with an unamortized discount of $ 794,218 at February 28, 2023.

The maturity date was extended from June 8, 2022 to June 8, 2024 on February 28, 2022 in exchange for warrants to purchase 85,000,000 at an exercise price of $ .0164 and a 3 year term.

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.

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

After allocating these charges to debt and equity according to their

respective values, a debt discount of $ 4,749,005 with a corresponding adjustment to paid in capital for the relative value of the

The maturity was extended from March 1, 2022 to March 1, 2024 on February 28, 2022 in exchange for warrants to purchase

150,000,000 shares of common stock at an exercise price of $ .0164 and a 3 year term.

These warrants have a fair value of $ 2,850,000

recorded as interest expense with a corresponding adjustment to paid in capital recorded in the year ended February 28, 2022.

note has been fully amortized.

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

The note balance includes an original issue

discount of $ 50,000 and was issued with a warrant to purchase 170,000,000 shares at an exercise price of $ 0.064 per share with a

3 -year term and having a relative fair value of $ 2,035,033 .

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 $ 2,035,033 with a corresponding adjustment

to paid in capital.

The maturity date was extended from June 8, 2022 to June 8, 2024 on February 28, 2022 in exchange for warrants

to purchase 85,000,000 at an exercise price of $ .0164 and a 3 year term.

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.

ended February 29, 2024, the Company recorded amortization expense of $ 756,550 , with an unamortized discount of $ 37,668 at February

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

The interest and principal are payable at maturity.

The loan is unsecured.

For the year ended February 28, 2023 there was repayments $ 115,800 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 year ended February 28, 2023, the Company recorded amortization expense of $ 188,002 , with an unamortized discount of $ 1,214,431 at February 28, 2023.

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

Index to Financial Statements

ARTIFICIAL INTELLIGENCE TECHNOLOGY SOLUTIONS INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

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

For the year ended February 29, 2024 there were repayments

of $ 108,000 on the note.

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 year ended February 29, 2024, the Company recorded amortization expense of $ 575,036 , with an unamortized

discount of $ 639,395 at February 29, 2024.

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

The note balance includes an original issue discount of $ 20,000 .

Principal and interest due at maturity.

Principal and interest

due at maturity.

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

For the year ended February 28, 2023, the Company recorded amortization expense of $ 10,974 , with an unamortized discount of $ 9,026 at February 28, 2023.

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

The note balance includes an original issue discount of $ 50,000 .

For the year ended

February 29, 2024, the Company recorded amortization expense of $ 9,026 , with an unamortized discount of $ 0 at February 29, 2024.

On November 29, 2023, the parties extended the maturity date from July 28, 2023 to March 1, 2025 with all other terms and conditions

remaining the same.

INTELLIGENCE TECHNOLOGY SOLUTIONS INC.

TO THE CONSOLIDATED FINANCIAL STATEMENTS

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

The fair value of the warrants was determined to be $ 2,960,500 with a corresponding adjustment to paid-in capital and a debt discount

of $ 39,500 which will be amortized over the term of the loan.

Principal and interest due at maturity.

For the year ended February

29, 2024, the Company recorded amortization expense of $ 19,333 , with an unamortized discount of $ 11,535 at February 29, 2024.

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

The note balance includes an original issue discount of $ 50,000 .

Principal and interest

due at maturity.

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

For the year ended February 28, 2023, the Company recorded amortization expense of $ 22,179 with an unamortized discount of $ 27,821 at February 28, 2023.

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.

The fair value of the warrants was determined to be $ 2,960,500 with a corresponding adjustment to paid-in capital and a debt discount of $ 39,500 which will be amortized over the term of the loan.

Principal and interest due at maturity.

For the year ended February 28, 2023, the Company recorded amortization expense of $ 8,632 , with an unamortized discount of $ 30,868 at February 28, 2023.

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

For the year ended

February 29, 2024, the Company recorded amortization expense of $ 27,821 , with an unamortized discount of $ 0 at February 29, 2024.

On November 29, 2023, the parties extended the maturity date from September 7, 2023 to March 1, 2025 with all other terms and conditions

remaining the same.

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

The note balance includes an original issue discount of $ 75,000 .

Principal and interest due at maturity.

Principal and interest

due at maturity.

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

For the year ended February 28, 2023, the Company recorded amortization expense of $ 38,271 with an unamortized discount of $ 32,909 at February 28, 2023.

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

For the year ended

February 29, 2024, the Company recorded amortization expense of $ 36,739 , with an unamortized discount of $ 0 at February 29, 2024.

On November 29, 2023, the parties extended the maturity date from September 8, 2023 to March 1, 2025 with all other terms and conditions

remaining the same.

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

The note balance includes an original issue discount of $ 50,000 .

Principal and interest due at maturity.

Principal and interest

due at maturity.

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

For the year ended February 28, 2023, the Company recorded amortization expense of $ 17,091 with an unamortized discount of $ 46,407 at February 28, 2023.

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 trance 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.

ended February 28, 2023, the Company recorded amortization expense of $ 1,375 with an unamortized discount of $ 348,024 at February 28,

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

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

For the year ended February 28, 2023, the

Company recorded amortization expense of $ 1,312 with an unamortized discount of $ 348,438 at February 28, 2023.

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

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

For the year ended February 28, 2023, the

Company recorded amortization expense of $ 1,139 with an unamortized discount of $ 350,881 at February 28, 2023.

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

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

For the year ended February 28, 2023, the

Company recorded amortization expense of $ 2,143 with an unamortized discount of $ 347,815 at February 28, 2023.

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

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

For the year ended February 28, 2023, the

Company recorded amortization expense of $ 802 with an unamortized discount of $ 347,189 at February 28, 2023.

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

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

For the year ended February 28, 2023, the

Company recorded amortization expense of $ 100 with an unamortized discount of $ 348,426 at February 28, 2023.

Index to Financial Statements

ARTIFICIAL INTELLIGENCE TECHNOLOGY SOLUTIONS INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

DERIVATIVE LIABILITIES

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

Company revalued the fair value of all of the Company’s derivative liabilities associated with the conversion features on the convertible

notes payable and determined that it had a total derivative liability of $ 0 , and $ 7,587 , respectively.

For the year ended February 28,

2023, the Company recorded a change in fair value of derivative liabilities of $ 0 and $ 3,595 , respectively and a gain on settlement of

debt (with a corresponding adjustment to derivative liabilities) of $ 0 and $ 3,992 , respectively.

For the year ended February 28, 2022,

the Company recorded a change in fair value of derivative liabilities of $ 372,214 and a gain on settlement of debt (with a corresponding

adjustment to derivative liabilities) of $ 81,228 , respectively.

year ended February 29, 2024, the Company recorded amortization expense of $ 32,910 , with an unamortized discount of $ 0 at February

On November 29, 2023, the parties extended the maturity date from October 13, 2023 to March 1, 2025 with all other terms

and conditions remaining the same.

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.

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

At February 29, 2024 the Company has

issued all 10 tranches totaling $ 4,000,000 as follows:

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 year ended February 29, 2024, the Company recorded amortization expense of $ 11,950 , with an

unamortized discount of $ 336,074 at February 29, 2024.

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 year ended February 29, 2024, the Company recorded amortization expense of $ 11,799 , with an unamortized discount of $ 336,639

at February 29, 2024.

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 year ended February 29, 2024, the Company recorded amortization expense of $ 10,897 , with an unamortized discount of $ 339,984

at February 29, 2024.

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 year ended February 29, 2024, the Company recorded amortization expense of $ 12,025 , with an unamortized discount of $ 335,790

at February 29, 2024.

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 year ended February 29, 2024, the Company recorded amortization expense of $ 12,252 , with an unamortized discount of $ 334,937

at February 29, 2024.

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 year ended February 29, 2024, the Company recorded amortization expense of $ 11,790 , with an unamortized discount of $ 336,636

at February 29, 2024.

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 year ended February 29, 2024, the Company recorded amortization expense of $ 11,015 , with an unamortized discount of $ 335,230

at February 29, 2024.

INTELLIGENCE TECHNOLOGY SOLUTIONS INC.

TO THE CONSOLIDATED FINANCIAL STATEMENTS

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 year ended February 29, 2024, the Company recorded amortization expense of $ 8,618 , with an unamortized discount of $ 343,601 at

February 29, 2024.

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 year ended February 29, 2024, the Company recorded amortization expense of $ 174 , with an unamortized discount of $ 398,809 at

February 29, 2024.

27 2023, $ 400,000 loan, original issue discount of $ 50,000 , 61 Series F Preferred Share warrants having a relative fair value of $ 261,759 .

For the year ended February 29, 2024, the Company recorded amortization expense of $ 8,661 , with an unamortized discount of $ 303,098 at

February 29, 2024.

November 30, 2023, the Company entered into an agreement where the lender will buy pay the Company $ 350,000 in exchange for thirteen

future monthly payments of $36,750 commencing on April 30,2024 through to April 30, 2025 totaling $ 477,750 .

The effective interest

rate is 35 % per annum.

As the proceeds were received on December 1, 2023 , this loan was recorded on December 1, 2023.

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

Default rate of 15 % per annum calculated daily

on any missed monthly payment.

STOCKHOLDERS’ DEFICIT

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 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.

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.

a result, the holder of Series E Preferred Stock has 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;

any Senior Securities;

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.

B Convertible, Redeemable Preferred Stock

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

(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

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 (60 th ) 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 (90 th ) 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:

(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;

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;

including, without limitation, its articles of incorporation and bylaws, in any manner that materially and adversely affects any rights

of the Holder;

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.

INTELLIGENCE TECHNOLOGY SOLUTIONS INC.

TO THE CONSOLIDATED FINANCIAL STATEMENTS

E Preferred Stock

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 holder of Series E Preferred Stock has 2/3rds of the voting power of all shareholders

at any time corporate action requires a vote of shareholders.

F Convertible Preferred Stock

board of directors has designated 4,350 shares of Series F Convertible Preferred Stock with a par value of $ 1.00 per share.

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;

(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 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.

shares are redeemable at $ 1,000 per share The Series G preferred stock does not have voting rights, does not have rights upon liquidation

of the Company and does not receive dividends.

Summary of Preferred Stock Activity

Series E Preferred Stock

During the year ended February 28, 2023 there was

no Series E share activity.

During the year ended February 28, 2022 Series E shareholders

had the following activity:

A shareholder cancelled 1,000,000 Class E shares.

The company recorded an adjustment to paid in capital.

Index to Financial Statements

ARTIFICIAL INTELLIGENCE TECHNOLOGY SOLUTIONS INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

Series F Preferred Shares

Each holder of Series F Convertible Preferred Shares

may, at any time and from time to time convert all, but not less than all, of their shares 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.

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.

Summary or Preferred Stock Activity

During the year ended February 28, 2023 Series F shareholders

had the following activity:

(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).

G Preferred Stock

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 shares are redeemable at $ 1,000 per share The Series G preferred stock does not have voting

rights, does not have rights upon liquidation of the Company and does not receive dividends.

of Preferred Stock Activity

INTELLIGENCE TECHNOLOGY SOLUTIONS INC.

TO THE CONSOLIDATED FINANCIAL STATEMENTS

B Convertible, Redeemable Preferred Stock

April 27, 2024, in connection with a Share Purchase Agreement the Company created a new class Of Series B Convertible Redeemable with

5,000 authorized shares.

F Convertible Preferred Stock

holder of Series F Convertible Preferred Shares may, at any time and from time to time convert all, but not less than all, of their shares

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.

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.

On April 30, 2024 the Company increased

authorized to 10,000 Series F Preferred Shares.

or Preferred Stock Activity

the year ended February 29, 2024 Series F shareholders had the following activity:

total of 244 Series F Preferred Stock Warrants issued along with debt to a lender.

the year ended February 28, 2023 Series F shareholders had the following activity:

Series F Preferred Share and a total of 366 Series F Preferred Stock Warrants issued along with debt to a lender.

During the year ended February 28, 2022 Series F shareholders

had the following activity:

40 Series F Preferred Shares and a warrant to purchase 367 Series F Preferred Shares with a five-year term and an exercise price of $ 1.00 were issued to an investor in exchange for amending their deferred variable payment obligation agreement.

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.

The warrant holder exercised the warrant in part to acquire 38 Series F Preferred Shares.

The shareholder above converted 78 Series F Preferred Shares into 316,345,908 common shares.

Two Series F Preferred shareholders exchanged 83 Series F Preferred Shares for two promissory notes on March 23, 2021.

The notes are non-interest bearing, have a one-year maturity and total $7,546,775.

These notes were subsequently exchanged on June 2, 2021 for a total of 116,104.232 common shares.

On July 12, 2021, the former director agreed to surrender his remaining 184 Series F preferred shares in exchange for a note payable from the Company of $4,000,160 bearing interest at 7% per annum with a 5 year term, maturing July 12, 2026.

On August 24, 2021the Series F preferred warrant holder agreed to not exercise his warrant privileges on his remaining 329 warrant shares before September 1, 2023.

Unissued Series F Preferred Stock

At both February 28, 2023 and February 28, 2022 there

remains 46 issuable Series F preferred stock at a value of $99,086.

During the year ending February 28, 2022 the Company

redeemed (through cancellation) 19 shares of issuable Series F preferred stock having a value of $ 74,984 for $500,000, with the difference

of $425,016 recorded as a dividend.

On October 28, 2022 as part of a $4,000,000 loan facility (described in Note 12) the Company extended

the maturity date of the 329 existing Series F Preferred Warrants currently held by the lender to October 31, 2033 from October 31, 2026.

Summary of Preferred Stock Warrant Activity

Schedule of Summary of stock Option Activity

Series F Preferred Stock

both February 29, 2024 and February 28, 2023 there remains 46 issuable Series F preferred stock at a value of $ 99,086 .

October 28, 2022 as part of a $ 4,000,000 loan facility (described in Note 11) the Company extended the maturity date of the 329 existing

Series F Preferred Warrants currently held by the lender to October 31, 2033 from October 31, 2026.

of Preferred Stock Warrant Activity

OF PREFERRED STOCK WARRANT ACTIVITY

Number of Series F Preferred Warrants

4 unchanged sentences

Outstanding at February 29, 2024

Index to Financial Statements

ARTIFICIAL INTELLIGENCE TECHNOLOGY SOLUTIONS INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

Series G Preferred Stock

During the year ended February 28, 2023 there was

no Series G share activity.

During the year ending February 28, 2022 Series G

shareholders had the following activity:

On achievement of objectives 3,4,5 and 8 of the equity awards described below the CEO was granted 1500 Series G Preferred shares which were redeemed immediately for $1,500,000

The Company has accrued $ 1,979,500 of the equity awards and incentive compensation plan payable with the balance of $479,500 at February 28, 2022 after the $1,500,000 payment above.

Summary of Common Stock Activity

The Company increased authorized common shares from

5,000,000,000 to 6,000,000,000 on July 8, 2022 and again increased authorized common shares from 6,000,000,000 to 7,225,000,000 on March

Summary of Common Stock Activity

During the year ended, February 28, 2023, common shareholders

had the following activity:

the Company issued 1,057,841,576 common shares with gross proceeds of $ 8,21,027 and net proceeds of $ 7,771,169 after issuance costs of $ 447,858 .

the Company issued 17,500,000 common shares as penalty to an investor pursuant to a share purchase agreement.

the Company issued 45,306,557 shares through the cashless exercise of 108,378,210 warrants.

the Company cancelled 17,116,894 shares as a result of an SEC enforcement action against a lender and issued 10,000,000 shares for $ 118,500 as payment for services.

During the year ending February 28, 2022, common shareholders

had the following activity:

A Series F Preferred shareholder converted 78 Series F Preferred Shares for 316,345,998 common shares.

holders of certain convertible notes payable elected to convert a total of $ 825,000 of principal and $ 71,955 accrued interest, and $ 1,750 of fees into 31,042,436 shares of common stock.

in June 2021, lenders exchanged debt having a face value of $ 7,546,775 and a net book value of $ 6,894,099 for 116,104,232 common shares having a fair value of $ 6,455,396 .

A gain on settlement of debt of $ 438,703 was recorded.

the Company entered into an investor relations contract whereby 2,100,000 shares are issuable as of February 28, 2022.

Stock based compensation of $ 109,200 was recorded in the period ended February 28, 2022.

the Company issued 645,168,473 common shares with gross proceeds of $ 13,108,624 and cash proceeds of $ 12,521,932 after issuance costs of $ 586,692

warrant holders exercised warrants to acquire 411,000,000 shares on a cashless basis for 395,022,447 common shares with a corresponding adjustment to paid in capital.

The table below represent the common shares issued,

issuable and outstanding at February 28, 2023 and February 28, 2022:

INTELLIGENCE TECHNOLOGY SOLUTIONS INC.

TO THE CONSOLIDATED FINANCIAL STATEMENTS

of Common Stock Activity

Company increased authorized common shares from 5,000,000,000 to 6,000,000,000 on July 8, 2022, from 6,000,000,000 to 7,225,000,000 on

March 19, 2023 from 7,225,000,000 to 10,000,000,000 on August 30, 2023, and from 10,000,000,000 to 12,500,000,000 on March 22, 2024.

of Common Stock Activity

the year ended, February 29, 2024, common shareholders had the following activity:

Company issued 3,383,509,359 common shares with gross proceeds of $ 8,21,027 and net proceeds of $ 11,282,955 after issuance costs

of $ 457,060 .

Company issued 6,500,000 common shares for services with a fair value of $ 44,460 .

the year ended, February 28, 2023, common shareholders had the following activity:

Company issued 1,057,841,576 common shares with gross proceeds of $ 8,21,027 and net proceeds of $ 7,771,169 after issuance costs of

Company issued 17,500,000 common shares as penalty to an investor pursuant to a share purchase agreement.

Company issued 45,306,557 shares through the cashless exercise of 108,378,210 warrants.

Company cancelled 17,116,894 shares as a result of an SEC enforcement action against a lender and issued 10,000,000 shares for $ 118,500

as payment for services.

table below represent the common shares issued, issuable and outstanding at February 29, 2024 and February 28, 2023:

OF COMMON SHARES ISSUED, ISSUABLE AND OUTSTANDING

Common shares

6 unchanged sentences

5,848,741,599

Index to Financial Statements

ARTIFICIAL INTELLIGENCE TECHNOLOGY SOLUTIONS INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

Summary of Warrant and Stock Option Activity

INTELLIGENCE TECHNOLOGY SOLUTIONS INC.

TO THE CONSOLIDATED FINANCIAL STATEMENTS

of Warrant and Stock Option Activity

OF WARRANT AND STOCK OPTION ACTIVITY

Weighted Average

Exercise Price

Weighted Average

Remaining Years

Outstanding at February 29, 2022

2 unchanged sentences

Forfeited and cancelled

Outstanding at February 28, 2022

( 955,000,000 )

( 108,378,210 )

Outstanding at February 28, 2023

Forfeited and cancelled

1 unchanged sentence

Outstanding at February 29, 2024

Required dilution adjustment per warrant agreement

For the years ended February 28, 2023 and February

28, 2022, the Company recorded a total of $ 0 and $ 0 , respectively on stock-based payments for warrants with a corresponding adjustment

to additional paid-in capital.

For the years ended February 28, 2023 and February 28, 2022 the

Company recorded a total of $ 240,550 and $ 1,678,550 respectively, to stock-based compensation for options, and shares with a

corresponding adjustment to additional paid-in capital.

In addition the Company recorded other stock based compensation of $ 499,500

and $ 479,500 , respectively with a corresponding adjustment to incentive compensation plan payable, payable in Series G Preferred

shares which have not yet been issued.

During the year ended February 28, 2023 warrant holders

had the following activity:

On August 30, 2022 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.

The fair value of the warrants was determined to be 2,960,500 with a corresponding adjustment to paid-in capital and a debt discount of $ 39,500 which will be amortized over the term of the loan.

On August 9, 2022 as part of a debt issuance the Company issued two 47,000,000 warrants at an exercise price of $ 0.01 and $ 0.008 per share, respectively both with a 5 -year term and with a total relative fair value of $ 393,949 all using a Monte Carlo simulation to include reset events, exercise at maturity, and cashless exercise features with assumptions described below:

of valuation techniques

$ 0.008 - $ 0.01

Fair value of Company’s common stock

Dividend yield

Expected volatility

88.2 % - 90.00 %

Risk free interest rate

Expected term (years)

Cashless exercise of 108,378,210 warrants for 45,306,557 common shares

During the year ended February 28, 2022 warrant holders

had the following activity:

warrant holders exercised warrants to acquire 411,000,000 shares on a cashless basis for 395,022,447 common shares with a corresponding adjustment to paid in capital.

in conjunction with debt disclosed in Note 11 (44), the Company issued warrants to a lender to purchase 170,000,000 shares at an exercise price of $0.064 per share with a 3-year term and having a relative fair value of $2,035,033, in conjunction with debt disclosed in Note 11 (10), the Company issued warrants to a lender to purchase 300,000,000 shares at an exercise price of $0.135 per share with a 3-year term and having a relative fair value of $4,749,005,and in conjunction with debt disclosed in Note 11 (46), the Company issued warrants to a lender 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 all using the Black-Scholes model with assumptions described below:

Index to Financial Statements

ARTIFICIAL INTELLIGENCE TECHNOLOGY SOLUTIONS INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

of valuation techniques for warrants

$ 0.135 - $ 0.037

Fair value of Company’s common stock

$ 0.146 - $ 0.0071

Dividend yield

Expected volatility

411.0 % - 403.33 %

Risk free interest rate

0.43 % - 0.27 %

Expected term (years)

in conjunction with debt extensions on notes payable disclosed in Note 12 (10, 43, 44), the Company issued warrants to a lender to purchase a total 285,000,000 shares at an exercise price of $ 0.164 per share with a 3 -year term and having an aggregate fair value of $ 5,415,000 , recorded as interest with a corresponding adjustment to paid in capital all using the Black-Scholes model with assumptions described below:

(1) Required dilution

adjustment per warrant agreement

the years ended February 29, 2024 and February 28, 2023, the Company recorded a total of $ 0 and $ 0 , respectively on stock-based payments

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

the years ended February 29, 2024 and February 28, 2022 the Company recorded a total of $ 272,559 and $ 240,550 respectively, to stock-based

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

In addition the Company recorded other

stock based compensation of ($ 479,000 ) and $ 499,500 , respectively with a corresponding adjustment to incentive compensation plan payable,

payable in Series G Preferred shares which have not yet been issued.

the year ended February 29, 2024 warrant holders had the following activity:

January 27, 2024 warrants to acquire 13,621,790 shares expired.

the year ended February 28, 2023 warrant holders had the following activity:

August 30, 2022 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.

The fair value of the warrants was determined to be 2,960,500 with a corresponding adjustment to paid-in capital

and a debt discount of $ 39,500 which will be amortized over the term of the loan.

August 9, 2022 as part of a debt issuance the Company issued two 47,000,000 warrants at an exercise price of $ 0.01 and $ 0.008 per

share, respectively both with a 5-year term and with a total relative fair value of $ 393,949 all using a Monte Carlo simulation to

include reset events, exercise at maturity, and cashless exercise features with assumptions described below:

OF FAIR VALUE ASSUMPTIONS OF WARRANTS

Fair value of Company’s common stock

3 unchanged sentences

Expected term (years)

As share issuance costs to a broker the company issued warrants to acquire a total of 3,324,212 shares with a fair value of $ 21,929 recorded against share proceeds with a corresponding adjustment to paid in capital all using the Black-Scholes model with assumptions described below:

$ 0.041 - $ 0.029

exercise of 108,378,210 warrants for 45,306,557 common shares

INTELLIGENCE TECHNOLOGY SOLUTIONS INC.

TO THE CONSOLIDATED FINANCIAL STATEMENTS

of Common Stock Option Activity

of CEO Compensation Grant

April 9, 2021 the Company entered into an Employment Agreement with Chief Executive Officer, Steven Reinharz with a three- year term

under the following terms whereby stock option awards will be granted if certain conditions are met:

stock option award (option 1) will be granted to the employee to purchase 10,000,000 shares at an exercise price of $ $ 0.15 per share

if the trading share price of the Company reaches an average of $ 0.30 per share for ten days over a 30 day trading period.

stock option award (option 2) will be granted to the employee to purchase 30,000,000 shares at an exercise price of $ $ 0.25 per share

if the trading share price of the Company reaches an average of $ 0.50 per share for ten days over a 30 day trading period.

in any fiscal quarter exceed the total sales in fiscal year 2021 for the first time.

hundred (500) shares of Series G preferred stock.

hundred fifty (150) devices are deployed in the marketplace.

hundred fifty (250) shares of Series G preferred stock.

sales at any point in fiscal year 2022 exceed One Million Dollars ($1,000,000).

hundred fifty (250) shares of Series G preferred stock.

price per share of common stock has increased to and maintains a price of Ten Cents ($0.10) or more for ten (10) days in a thirty

(30) day period.

hundred fifty (250) shares of Series G preferred stock.

price per share of common stock has increased to and maintains a price of Twenty Cents ($0.20) or more for ten (10) days in a thirty

(30) day period.

hundred (500) shares of Series G preferred stock.

RAD 3.0 products are launched into the marketplace by November 30, 2021.

hundred (500) shares of Series G preferred stock.

receives an order for fifty (50) units from a single customer.

hundred (500) shares of Series G preferred stock.

January 31, 2024 the Company added the following Objective effective Martch 1, 2022:

Objective # 10

In any fiscal quarter,

attrition , measured by loss of recurring monthly revenue does not exceed 10%

Two h undred fifty

(250) shares of Series G preferred stock.

fair value of the first two awards was obtained through the use of the Monte Carlo method was $ 69,350 with a charge to stock- based compensation

and a corresponding charge to paid in capital.

The fair value of the remaining rewards was determined by calculating the vesting amounts

of each reward and then determining for each reporting period the requisite service rendered and applying that against the cash redemption

value of the number of shares of Series G issuable for each tier in the agreement.

For the period ended February 29, 2024 that amount

totaled $ 1,521,000 with a charge to stock-based compensation and a corresponding charge to incentive compensation plan payable.

period ended February 28, 2023 that amount totaled $ 499,500 with a charge to stock-based compensation and a corresponding charge to incentive

compensation plan payable.

INTELLIGENCE TECHNOLOGY SOLUTIONS INC.

TO THE CONSOLIDATED FINANCIAL STATEMENTS

April 14, 2021, the Shareholders of Series E Preferred Stock and the Board of Directors of our Company (“Board”) approved

and adopted the 2021 Incentive Stock Plan (the “2021 Plan”).

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.

On August 14, 2023 the Company further amended

the plan increasing the maximum shares to 200,000,000.

purpose of the 2021 Plan is to promote the success of the Company by authorizing incentive awards to retain Directors, executives, selected

Employees and Consultants, and reward participants for making major contributions to the success of the Company.

The 2021 Plan authorizes

the granting of stock options, restricted stock, restricted stock units, stock appreciation rights and stock awards.

A total of two hundred

million ( 200,000,000 ) shares of common stock may be issued under the 2021 Plan.

All awards under the 2021 Plan, whether vested or unvested,

are subject to the terms of any recoupment, clawback or similar policy of the Company in effect from time to time, as well as any similar

provisions of applicable law, which could in certain circumstances require repayment or forfeiture of awards or any shares of stock or

other cash or property received with respect to the awards, including any value received from a disposition of the shares acquired upon

payment of the awards.

The 2021 Plan will be administered by the Board or any Committee authorized by the Board, if applicable, which

will have the sole authority to, among other things:

construe and interpret the 2021 Plan;

make rules and regulations relating to the

administration of the 2021 Plan;

select participants;

and establish the terms and conditions of awards, all in accordance with the terms

of the 2021 Plan.

The 2021 Plan will remain in effect until April 14, 2031, unless sooner terminated by the Board.

Termination will not

affect awards then outstanding.

the year ended February 29, 2024 the Company had the following common stock option activity:

September 1, 2023, the Company as an addition to the afore-mentioned Incentive Stock Option Plan issued 114,217,035 shares to 48

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

using the Black-Scholes model with assumptions described below:

OF COMMON STOCK OPTION ACTIVITY ASSUMPTIONS

Fair value of Company’s common stock

$ 0.039 - $ 0.028

Dividend yield

Expected volatility

35.30 - 35.90 %

Risk free interest rate

0.46 - 0.95 %

Expected term (years)

Summary of Common Stock Option Activity

Summary of CEO Compensation Grant

On April 9, 2021 the Company entered into an Employment

Agreement with Chief Executive Officer, Steven Reinharz with a three- year term under the following terms whereby stock option awards

will be granted if certain conditions are met:

A stock option award (option 1) will be granted to the employee to purchase 10,000,000 shares at an exercise price of $ $ 0.15 per share if the trading share price of the Company reaches an average of $ 0.30 per share for ten days over a 30 day trading period.

A stock option award (option 2) will be granted to the employee to purchase 30,000,000 shares at an exercise price of $ $ 0.25 per share if the trading share price of the Company reaches an average of $ 0.50 per share for ten days over a 30 day trading period.

Objective #3 :

Sales in any fiscal quarter exceed the total sales in fiscal year 2021 for the first time.

Five hundred (500) shares of Series G preferred stock.

Objective #4 :

One hundred fifty (150) devices are deployed in the marketplace.

Two hundred fifty (250) shares of Series G preferred stock.

Objective #5 :

Year-to-date sales at any point in fiscal year 2022 exceed One Million Dollars ($1,000,000).

Two hundred fifty (250) shares of Series G preferred stock.

Index to Financial Statements

ARTIFICIAL INTELLIGENCE TECHNOLOGY SOLUTIONS INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

Objective #6 :

The price per share of common stock has increased to and maintains a price of Ten Cents ($0.10) or more for ten (10) days in a thirty (30) day period.

Two hundred fifty (250) shares of Series G preferred stock.

Objective #7 :

The price per share of common stock has increased to and maintains a price of Twenty Cents ($0.20) or more for ten (10) days in a thirty (30) day period.

Five hundred (500) shares of Series G preferred stock.

Objective #8 :

The RAD 3.0 products are launched into the marketplace by November 30, 2021.

Five hundred (500) shares of Series G preferred stock.

Objective #9 :

RAD receives an order for fifty (50) units from a single customer.

Five hundred (500) shares of Series G preferred stock.

The fair value of the first two awards was obtained

through the use of the Monte Carlo method was $ 69,350 with a charge to stock- based compensation and a corresponding charge to paid in

The fair value of the remaining rewards was determined by calculating the vesting amounts of each reward and then determining

for each reporting period the requisite service rendered and applying that against the cash redemption value of the number of shares of

Series G issuable for each tier in the agreement.

For the period ended February 28, 2023 that amount totaled $ 499,500 with a charge to

stock-based compensation and a corresponding charge to incentive compensation plan payable.

For the period ended February 28, 2022 that

amount totaled $ 1,979,500 with a charge to stock-based compensation and a corresponding charge to incentive compensation plan payable.

With the achievement of objectives 3,4,5 and 8 of the equity awards described above the CEO was granted 1,500 Series G Preferred shares

which were redeemed in the reporting period for $ 1,500,000 in cash.

As part of the grant, the Company is responsible for grossing up the

award value and has accrued additional compensation for the estimated taxes to be paid by the executive.

On April 14, 2021, the Shareholders of Series E Preferred

Stock and the Board of Directors of our Company (“Board”) approved and adopted the 2021 Incentive Stock Plan (the “2021

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.

The purpose of the 2021 Plan is to promote the success

of the Company by authorizing incentive awards to retain Directors, executives, selected Employees and Consultants, and reward participants

for making major contributions to the success of the Company.

The 2021 Plan authorizes the granting of stock options, restricted stock,

restricted stock units, stock appreciation rights and stock awards.

A total of one hundred million (100,000,000) shares of common stock

may be issued under the 2021 Plan.

All awards under the 2021 Plan, whether vested or unvested, are subject to the terms of any recoupment,

clawback or similar policy of the Company in effect from time to time, as well as any similar provisions of applicable law, which could

in certain circumstances require repayment or forfeiture of awards or any shares of stock or other cash or property received with respect

to the awards, including any value received from a disposition of the shares acquired upon payment of the awards.

The 2021 Plan will be

administered by the Board or any Committee authorized by the Board, if applicable, which will have the sole authority to, among other

construe and interpret the 2021 Plan;

make rules and regulations relating to the administration of the 2021 Plan;

select participants;

and establish the terms and conditions of awards, all in accordance with the terms of the 2021 Plan.

The 2021 Plan will remain in effect

until April 14, 2031, unless sooner terminated by the Board.

Termination will not affect awards then outstanding.

During the year ended February 28, 2023 the Company

had the following common stock option activity:

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 using the Black-Scholes model with assumptions described below:

Index to Financial Statements

ARTIFICIAL INTELLIGENCE TECHNOLOGY SOLUTIONS INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

Company recorded $ 74,241 in stock-based compensation on the 2023 plan which represents the current expense over the vesting period.

addition the company recorded $ 198,357 stock based compensation on the 2022 options , so for the year ended February 29, 2024 the Company

recorded a total of $ 272,599 in stock based compensation with a corresponding increase in paid up capital.

the original 2021 plan, options to purchase 21,275,000 shares were forfeited due to employee terminations

the year ended February 28, 2023 the Company had the following common stock option activity:

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 using

the Black-Scholes model with assumptions described below:

OF COMMON STOCK OPTION ACTIVITY ASSUMPTIONS

Fair value of Company’s common stock

3 unchanged sentences

Expected term (years)

The Company recorded $ 122,050 in stock-based compensation

which represents the current expense over the vesting period.

Options to purchase 4,275,000 shares were forfeited due to employee terminations

During the year ended February 28, 2022 the Company

had no common stock option activity:

Company recorded $ 122,050 in stock-based compensation which represents the current expense over the vesting period.

to purchase 4,275,000 shares were forfeited due to employee terminations

INTELLIGENCE TECHNOLOGY SOLUTIONS INC.

TO THE CONSOLIDATED FINANCIAL STATEMENTS

of Common Stock Option Activity

SUMMARY OF COMMON STOCK OPTION ACTIVITY

4 unchanged sentences

Forfeited, extinguished and cancelled

Outstanding at November 30, 2022

( 4,275,000 )

Outstanding at February 28, 2023

Number of Warrants

Weighted Average Exercise Price

Weighted Average Remaining Years

Outstanding at March 1, 2023

Forfeited, extinguished and cancelled

( 21,275,000 )

Outstanding at February 29, 2024

COMMITMENTS AND CONTINGENCIES

Occasionally, the Company may be involved in claims

and legal proceedings arising from the ordinary course of its business.

The Company records a provision for a liability when it believes

that is both probable that a liability has been incurred, and the amount can be reasonably estimated.

If these estimates and assumptions

change or prove to be incorrect, it could have a material impact on the Company’s condensed consolidated financial statements.

Contingencies

are inherently unpredictable, and the assessments of the value can involve a series of complex judgments about future events and can rely

heavily on estimates and assumptions.

The related legal costs are expensed as incurred.

Operating Lease

On December 18, 2020, the Company entered into a 15-month

lease agreement for office space at 18009 Sky Park Circle Suite E, Irvine CA, 92614, commencing on December 18, 2020 through to March

31, 2022 with a minimum base rent of $ 3,859 per month.

Occasionally,

the Company may be involved in claims and legal proceedings arising from the ordinary course of its business.

The Company records a provision

for a liability when it believes that is both probable that a liability has been incurred, and the amount can be reasonably estimated.

If these estimates and assumptions change or prove to be incorrect, it could have a material impact on the Company’s condensed

consolidated financial statements.

Contingencies are inherently unpredictable, and the assessments of the value can involve a series

of complex judgments about future events and can rely heavily on estimates and assumptions.

related legal costs are expensed as incurred.

March 10, 2021, the Company entered into a 10 year lease agreement for q manufacturing facility at 10800 Galaxie Avenue, Ferndale, Michigan,

48220, commencing on May 1, 2021 through to April 30, 2031 with a minimum base rent of $ 15,880 per month.

The base rent increase by 3%

per annum commencing May 1, 2024.

The Company paid a security deposit of $ 15,880 .

On March 10, 2021, the Company entered into a 10 year

lease agreement for q manufacturing facility at 10800 Galaxie Avenue, Ferndale, Michigan, 48220, commencing on May 1, 2021 through to

April 30, 2031 with a minimum base rent of $ 15,880 per month.

The base rent increase by 3% per annum commencing May 1, 2024.

paid a security deposit of $ 15,880 .

On September 30, 2021, the Company entered into a

3-year lease agreement for a vehicle commencing September 30, 2021 through to April 30, 2031 with a minimum base rent of $1,538 per month.

September 30, 2021, the Company entered into a 3-year lease agreement for a vehicle commencing September 30, 2021 through to September

30, 2024 with a minimum base rent of $ 1,538 per month.

The Company paid a down payment of $ 18,462 .

On January 28, 2022, the Company entered into a 2-year

lease agreement for office space at 1516 E Edinger, Santa Ana, California, 92705, commencing on February 1, 2022 through to January 31,

January 28, 2022, the Company entered into a 2-year lease agreement for office space at 1516 E Edinger, Santa Ana, California, 92705,

commencing on February 1, 2022 through to January 31, 2024 with a minimum base rent of $ 1,500 per month.

The Company paid a security

deposit of $ 1,500 .

This lease expired on January 31, 2024 and was not renewed.

February 5, 2024, the Company entered into a 3-year lease agreement for a vehicle commencing February 5, 2024 through to February 5,

2027 with a minimum base rent of $ 1,223 per month.

The Company paid a security deposit of $ 1,500 .

The Company’s leases are accounted for as operating

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

Rent expense and operating lease

cost was $ 260,271 and $ 275,785 for the years ended February 28, 023 and February 28, 2022, respectively.

Index to Financial Statements

ARTIFICIAL INTELLIGENCE TECHNOLOGY SOLUTIONS INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

The Company paid a down payment of $ 9,357 .

Company’s leases are accounted for as operating leases.

Rent expense and operating lease cost are recorded over the lease terms

on a straight-line basis.

Rent expense and operating lease cost was $ 260,406 and $ 260,271 for the years ended February 29, 2024 and February

28, 2023, respectively.

INTELLIGENCE TECHNOLOGY SOLUTIONS INC.

TO THE CONSOLIDATED FINANCIAL STATEMENTS

OF MATURITY OF OPERATING LEASE LIABILITIES

Maturity of Lease Liabilities

5 unchanged sentences

February 28, 2030 and after

2030 and after

Total lease payments

1 unchanged sentence

EARNINGS (LOSS) PER SHARE

The net income (loss) per common share amounts were

determined as follows:

net income (loss) per common share amounts were determined as follows:

SCHEDULE OF NET INCOME (LOSS) PER COMMON SHARE

For the Year Ended

Net income (loss) available to common shareholders

$ ( 20,708,716 )

$ ( 18,109,457 )

Effect of common stock equivalents

2 unchanged sentences

Net income (loss) adjusted for common stock equivalents

( 20,708,716 )

( 18,065,977 )

Weighted average shares - basic

6 unchanged sentences

Net income (loss) per share – diluted

The anti-dilutive shares of common stock equivalents

for the years ended February 28, 2023 and February 28, 2022 were as follows :

anti-dilutive shares of common stock equivalents for the years ended February 29, 2024 and February 28, 2023 were as follows:

SCHEDULE OF ANTI-DILUTIVE SHARES OF COMMON

STOCK EQUIVALENTS

For the Year Ended

Convertible notes and accrued interest

Convertible Class F Preferred Shares *

Stock options and warrants

Class F Preferred Shares *

31,873,690,805

Stock options and warrants

32,362,953,501

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 February 28, 2023 and 2022 the dilutive effects would be as follows:

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

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 February 29, 2024 and February 28, 2023 the dilutive effects would be as follows:

For the Year Ended

February 29 and February 28

Convertible Series F Preferred Shares

20,178,158,517

Anti-dilutive shares of common stock

20,178,158,517

Index to Financial Statements

ARTIFICIAL INTELLIGENCE TECHNOLOGY SOLUTIONS INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

The Company has adopted ASC 740-10, “ Income

Taxes” , which requires the use of the liability method in the computation of income tax expense and the current and deferred

income taxes payable (deferred tax liability) or benefit (deferred tax asset).

Valuation allowances are established when necessary to

reduce deferred tax assets to the amount expected to be realized.

The income tax expense (benefit) consisted of the

following for the fiscal years ended February 28, 2023 and February 28, 2022:

Schedule of income tax expense

INTELLIGENCE TECHNOLOGY SOLUTIONS INC.

TO THE CONSOLIDATED FINANCIAL STATEMENTS

Company has adopted ASC 740-10, “ Income Taxes” , which requires the use of the liability method in the computation

of income tax expense and the current and deferred income taxes payable (deferred tax liability) or benefit (deferred tax asset).

allowances are established when necessary to reduce deferred tax assets to the amount expected to be realized.

income tax expense (benefit) consisted of the following for the fiscal years ended February 29, 2024 and February 28, 2023:

SCHEDULE OF INCOME TAX EXPENSES (BENEFIT)

February 29, 2024

2 unchanged sentences

Total deferred

Deferred income taxes reflect the net tax effects

of temporary differences between the carrying amount of assets and liabilities for financial reporting purposes and the amounts used for

income tax purposes.

The following is a reconciliation of the expected statutory federal income

tax provision to the actual income tax benefit for the fiscal years ended February 28, 2023 and February 28, 2022:

Schedule of federal statutory income tax

income taxes reflect the net tax effects of temporary differences between the carrying amount of assets and liabilities for financial

reporting purposes and the amounts used for income tax purposes.

following is a reconciliation of the expected statutory federal income tax provision to the actual income tax benefit for the fiscal

years ended February 29, 2024 and February 28, 2023:

SCHEDULE OF EXPECTED STATUTORY FEDERAL INCOME TAX PROVISION

February 29, 2024

Federal statutory rate

$ ( 4,349,000 )

State income tax benefit, net of federal benefit

4 unchanged sentences

Federal statutory rate

$ ( 3,803,000 )

State income tax benefit, net of federal benefit

Non deductible interest

Non deductible settlement losses

Non deductible stock based compensation

Non deductible changes in fair value of instruments

Other non deductible expenses

Change in valuation allowance

For the year ended February 28, 2023 and February

28, 2022, the expected tax benefit, temporary timing differences and long-term timing differences are calculated at the 21 % statutory

Index to Financial Statements

ARTIFICIAL INTELLIGENCE TECHNOLOGY SOLUTIONS INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

Significant components of the Company’s deferred

tax assets and liabilities were as follows for the fiscal years February 28, 2023 and February 28, 2022:

Schedule of deferred income tax assets

the years ended February 29, 2024 and February 28, 2023, the expected tax benefit, temporary timing differences and long-term timing

differences are calculated at the 21 % statutory rate.

INTELLIGENCE TECHNOLOGY SOLUTIONS INC.

TO THE CONSOLIDATED FINANCIAL STATEMENTS

components of the Company’s deferred tax assets and liabilities were as follows for the fiscal years February 29, 2024 and February

SCHEDULE OF COMPONENTS OF DEFERRED TAX

ASSETS AND LIABILITIES

February 29, 2024

2 unchanged sentences

Net operating loss carryforwards

Debt discount

Total deferred tax assets

Deferred tax liabilities:

3 unchanged sentences

Less valuation allowance

( 17,116,115 )

( 12,651,115 )

Net deferred tax assets (liabilities)

The Company has incurred losses since inception, therefore,

the Company has no federal tax liability.

Additionally there are limitations imposed by certain transactions which are deemed to

be ownership changes which occurred in the Company on August 28, 2017.

The net deferred tax asset generated by the loss carryforward

has been fully reserved.

The cumulative net operating loss carryforward was approximately $ 44,448,800 at February 28, 2023 and $ 28,200,000

at February 28, 2022, that is available for carryforward for federal income tax purposes and begin to expire in 2030 .

Although the Company has tax loss carry-forwards,

there is uncertainty as to utilization prior to their expiration.

Accordingly, the future income tax asset amounts have been fully

reserved by a valuation allowance.

The Company has maintained a full valuation allowance

against its deferred tax assets at February 28, 2023 and February 28, 2022.

A valuation allowance is required to be recorded when it is

more likely than not that some portion or all of the net deferred tax assets will not be realized.

Since the Company cannot be assured

of realizing the net deferred tax asset, a full valuation allowance has been provided.

The Company does not have any uncertain tax positions

at February 28, 2023 and February 28, 2022 that would affect its effective tax rate.

The Company does not anticipate a significant change

in the amount of unrecognized tax benefits over the next twelve months.

Because the Company is in a loss carryforward position, the Company

is generally subject to US federal and state income tax examinations by tax authorities for all years for which a loss carryforward is

If and when applicable, the Company will recognize interest and penalties as part of income tax expense.

The Company’s tax returns for the years ended

February 28, 2022, and February 28, 2021, and February 29, 2020 are open for examination under Federal statute of limitations.

Index to Financial Statements

ARTIFICIAL INTELLIGENCE TECHNOLOGY SOLUTIONS INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

Company has incurred losses since inception, therefore, the Company has no federal tax liability.

Additionally there are limitations

imposed by certain transactions which are deemed to be ownership changes which occurred in the Company on August 28, 2017.

The net deferred

tax asset generated by the loss carryforward has been fully reserved.

The cumulative net operating loss carryforward was approximately

$ 61,973,800 at February 29, 2024 and $ 44,448,800 at February 28, 2023, that is available for carryforward for federal income tax purposes

and begin to expire in 2030 .

the Company has tax loss carry-forwards, there is uncertainty as to utilization prior to their expiration.

Accordingly, the future income

tax asset amounts have been fully reserved by a valuation allowance.

Company has maintained a full valuation allowance against its deferred tax assets at February 29, 2024 and February 28, 2023.

allowance is required to be recorded when it is more likely than not that some portion or all of the net deferred tax assets will not

Since the Company cannot be assured of realizing the net deferred tax asset, a full valuation allowance has been provided.

Company does not have any uncertain tax positions at February 29, 2024 and February 28, 2023 that would affect its effective tax rate.

The Company does not anticipate a significant change in the amount of unrecognized tax benefits over the next twelve months.

the Company is in a loss carryforward position, the Company is generally subject to US federal and state income tax examinations by tax

authorities for all years for which a loss carryforward is available.

If and when applicable, the Company will recognize interest and

penalties as part of income tax expense.

Company’s tax returns for the years ended February 28, 2023, and February 28, 2022, and February 29, 2021 are open for examination

under Federal statute of limitations.

INTELLIGENCE TECHNOLOGY SOLUTIONS INC.

TO THE CONSOLIDATED FINANCIAL STATEMENTS

SUBSEQUENT EVENTS

Subsequent to February 28, 2023 through to June 5,

— the Company issued 280,929,190 common

shares pursuant to a share purchase agreement for gross proceeds of $ 1,400,194 , issuance costs of $ 81,285 and cash proceeds of $ 1,318,909 .

— on March 19 ,2023 the shareholders

approved an increase to its authorized common stock by 1,225,000,000 shares

— on March 22, 2023 the Company entered

into an Equity Financing Agreement whereby an investor shall invest up to $30,000,000 over the course of twenty four (24) month at a purchase

price of eighty percent (80%) of the lowest trade price in the 9 day preceding period.

If the average Closing Price for the Common Stock

during the three (3) trading days preceding a purchase is equal to or greater than one cent ($.01) per share, the applicable purchase

price shall equal eighty five percent (85%) of the lowest trade price in the 9 day preceding period.

Following an up-list to the NASDAQ

or an equivalent national exchange by the Company, the purchase price shall equal ninety percent (90%) of the lowest Volume Weighted Average

Price (“VWAP”) for the Common Stock during the 9 day preceding period subject to a floor of $4.50 per share, below which the

Company shall not be required to sell shares.

In conjunction with the above agreement, the Company entered into a Registration Rights

to February 29, 2024 through to May 9, 2024,

the Company issued 705,166,425 common shares pursuant to a share purchase agreement for gross proceeds of $ 1,298,639 , issuance costs

of $ 55,021 and cash proceeds of $ 1,243,618 .

on March 12 ,2024 the shareholders approved an increase to its authorized common stock by 2,500,000,000 shares for 10,000,000 shares

to 12,500,000 shares.

On March 8, 2024, the Company entered into an agreement where the lender will buy pay the Company $ 350,000 in exchange for thirteen future

monthly payments of $ 36,750 commencing on August 8,2024 through to August 8,2025 totaling $ 477,750 .

The effective interest rate is 35 %

This agreement is secured by a general security charging all of RAD’s present and after-acquired property.

of 15 % per annum calculated daily on any missed monthly payment.

On April 29, 2024 , the Company entered into a Securities Purchase Agreement for 300 Series B Convertible , Redeemable Preferred Shares.

The Company will receive $ 300,000 less $ 10,000 in legal fees.

In addition as a commitment fee the Company issued an additional 20 Series

B Convertible, Redeemable Preferred Shares.

The shares have a redemption value of $ 1,200 per share.

The Company must redeem one third

of these shares or 106 2/3 for $108,000 in 30, days and each 30 days thereafter until all the shares are redeemed at 90 days.

must pay an 8 % dividend from issue date to redemption date.

OTHER SUBSEQUENT EVENTS

Subsequent to May 9, 2024 through to May 23, 2024,

— On May 15, 2024 the Company increased authorized common shares from 12,500,000,000 to 15,000,000,000 .

— the Company issued

375,000,000 common shares pursuant to a share purchase agreement for gross proceeds of $ 1,500,000 , issuance costs of $ 61,025 and cash

proceeds of $ 1,438,975 .

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-K

Item 9A. Controls and Procedures