What changed in this filing

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Item 1. Financial Statements

2024-07-15 compared with 2024-01-16 · 1016 added, 884 removed, 323 unchanged (85% of the section changed)

FINANCIAL STATEMENTS

ARTIFICIAL INTELLIGENCE TECHNOLOGY SOLUTIONS INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

November 30, 2023

February 28, 2023 *

INTELLIGENCE TECHNOLOGY SOLUTIONS INC.

CONSOLIDATED BALANCE SHEETS

Current assets:

16 unchanged sentences

Loan payable - related party

Incentive compensation plan payable

Deferred compensation for CEO

Current portion of loans payable, net of discount of $ 65,629 and $ 688,598

5 unchanged sentences

Deferred variable payment obligation

Incentive compensation plan payable

Accrued interest payable

1 unchanged sentence

Commitments and Contingencies

Redeemable Preferred Stock (Temporary Equity):

Series B Convertible, Redeemable Preferred Stock.

$ 0.001 par value;

8 % cumulative dividend payable quarterly, $ 1,200 stated value, 5,000 shares authorized, 215 and 0 shares issued and outstanding at May 31, 2024 and February 29, 2024, respectively

Stockholders’ deficit:

1 unchanged sentence

15,535,000 shares authorized;

no shares issued and outstanding at November 30, 2023 and February 28, 2023, respectively

Series G Convertible Preferred Stock.

no shares issued and outstanding at May 31, 2024 and February 29, 2024, respectively

Series G Redeemable Preferred Stock.

$ 0.001 par value;

100,000 shares authorized, no shares issued and outstanding at November 30, 2023 and February 28, 2023, respectively

100,000 shares authorized, no shares issued and outstanding at May 31, 2024 and February 29, 2024, 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;

6 unchanged sentences

Total stockholders’ deficit

( 45,912,103 )

( 40,199,557 )

Total liabilities and stockholders’ deficit

Derived from audited information

The accompanying notes are an integral part of

these unaudited condensed consolidated financial statements.

ARTIFICIAL INTELLIGENCE TECHNOLOGY SOLUTIONS INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

November 30, 2023

November 30, 2022

November 30, 2023

November 30, 2022

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

INTELLIGENCE TECHNOLOGY SOLUTIONS INC.

CONSOLIDATED STATEMENTS OF OPERATIONS

Three Months Ended

Cost of Goods Sold

Operating expenses:

Research and development (Note 10)

Research and development (including related party charges of $ 631,584 (2023-$ 882,015 ))

General and administrative

3 unchanged sentences

Loss from operations

( 2,833,256 )

( 2,948,977 )

Other income (expense), net:

Change in fair value of derivative liabilities

Interest expense

Gain (loss) on settlement of debt

( 1,361,103 )

( 1,606,216 )

Total other income (expense), net

Net income (loss) per share - basic

Net income ( loss) per share - diluted

Weighted average common share outstanding - basic

( 1,361,103 )

( 1,606,216 )

Net income (loss)

$ ( 4,194,359 )

$ ( 4,555,193 )

Weighted average common share outstanding - diluted

Net income (loss) per share - basic

Net income (loss) per share - diluted

Weighted average common share outstanding - basic

9,882,118,105

5,964,709,322

Weighted average common share outstanding - diluted

9,882,118,105

5,964,709,322

The accompanying notes are an integral part of

these unaudited condensed consolidated financial statements.

ARTIFICIAL INTELLIGENCE TECHNOLOGY SOLUTIONS INC.

CONDENSED CONSOLIDATED STATEMENT OF SHAREHOLDERS’

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

INTELLIGENCE TECHNOLOGY SOLUTIONS INC.

CONSOLIDATED STATEMENT OF SHAREHOLDERS’ DEFICIT

Temporary Equity

Shareholder’s Deficit

Preferred Stock

Stockholders’

Preferred Stock

Shareholders’

Balance at February 28, 2023

5,848,741,599

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

Balance at May 31, 2022

$ ( 112,253,711 )

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

Cashless exercise of warrants

Relative fair value of warrants issued with debt

Cancelled shares

Exchange of 955,000,000 warrants for debt

Shares as payment for services

Balance at August 31, 2022

$ ( 31,843,001 )

( 102,988,805

Issuance of shares, net of $ 81,285 issuance costs

Relative fair value of Series F warrants issued with debt

Relative fair value of warrants issued with debt

Balance at November 30, 2022

Stock based compensation

( 4,555,193 )

The accompanying notes are an integral part of

these unaudited condensed consolidated financial statements.

ARTIFICIAL INTELLIGENCE TECHNOLOGY SOLUTIONS INC.

CONDENSED CONSOLIDATED STATEMENT OF SHAREHOLDERS’

Balance at May 31, 2023

6,129,670,789

$ ( 116,808,904 )

$ ( 34,079,117 )

Temporary Equity

Shareholder’s Deficit

Preferred Stock

Stockholders’

Preferred Stock

Shareholders’

Balance at February 29, 2024

1 unchanged sentence

$ ( 132,962,427 )

$ ( 40,199,557 )

9,238,750,958

$ ( 132,962,427 )

$ ( 40,199,557 )

Cumulative Effect Adjustment RFVdiscount per adoption of ASU 2020-06 at March 1, 2024

( 4,175,535 )

Issuance of shares, net of $ 116,046 issuance costs

Relative fair value of Series F warrants issued with loans payable

1,080,166,425

Issuance of shares, net of issuance costs

1,080,166,425

Issuance of Series B Preferred Shares

Series B Preferred Shares issued as commitment fee

Series B Preferred shares issued as dividend

Redemption of Series B Preferred shares

Stock based compensation

( 4,194,359 )

Balance at May 31, 2024

1 unchanged sentence

$ ( 141,361,177 )

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

Shares as payment for services

Stock based compensation

Balance at August 31, 2023

$ ( 45,912,103 )

10,318,917,383

Issuance of shares, net of $ 56,320 issuance costs

Relative fair value of Series F warrants issued with debt

Stock based compensation

Balance at November 30, 2023

$ ( 141,361,177 )

$ ( 45,912,103 )

Issuance of shares, net of issuance costs

The accompanying notes are an integral part of

these unaudited condensed consolidated financial statements.

ARTIFICIAL INTELLIGENCE TECHNOLOGY SOLUTIONS INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

Nine Months Ended

November 30, 2023

Nine Months Ended

November 30, 2022

CASH FLOWS USED IN OPERATING ACTIVITIES:

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

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

INTELLIGENCE TECHNOLOGY SOLUTIONS INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

CASH FLOWS FROM OPERATING ACTIVITIES:

Net income (loss)

$ ( 4,194,359 )

$ ( 4,555,193 )

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

Depreciation and amortization

4 unchanged sentences

Stock based compensation

Change in fair value of derivative liabilities

Amortization of debt discounts

(Gain) loss on settlement of debt

Increase in related party accrued payroll and interest

1 unchanged sentence

Accounts receivable

Prepaid expenses

Prepaid expenses and deposits on inventory

Device parts inventory

( 1,070,087 )

Accounts payable and accrued expenses

Customer deposits

Operating lease liabilities

Current portion of deferred variable payment obligation for payments

Operating lease liability payments

Current portion of deferred variable payment obligations for payments

Accrued interest payable

Net cash used in operating activities

CASH FLOWS USED IN INVESTING ACTIVITIES:

( 3,045,831 )

( 2,991,003 )

CASH FLOWS FROM INVESTING ACTIVITIES:

Purchase of fixed assets

Acquisition of trademarks

Reimbursement of security deposit

Net cash (used in) investing activities

1 unchanged sentence

Share proceeds net of issuance costs

Proceeds on issuance of Series B shares

Redemption of Series B shares

Proceeds from loans payable

Repayment of loans payable

Proceeds from convertible debt and warrants issued

Net cash provided by financing activities

Net cash provided by (used in) financing activities

Net change in cash

5 unchanged sentences

Noncash investing and financing activities:

Transfer from device parts inventory to revenue earning devices

Shares issued for services

Exchange of warrants for debt

Transfer from device parts inventory to fixed assets

Cumulative Effect Adjustment RFV discount per adoption of ASU 2020-06 at March 1, 2024

Series B preferred shares issued as dividend

Discount applied to face value of loans

Warrants issued as part of debt

Exercise of warrants

Series F preferred shares and warrants issued for debt

Cancellation of Series E preferred shares and common shares

The accompanying notes are an integral part of

these unaudited condensed consolidated financial statements.

ARTIFICIAL INTELLIGENCE TECHNOLOGY SOLUTIONS INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Series F warrants issued as part of debt issuance

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

INTELLIGENCE TECHNOLOGY SOLUTIONS INC.

TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

GENERAL INFORMATION

Artificial Intelligence Technology Solutions Inc.

(“AITX” or the “Company”) was incorporated in Florida on March 25, 2010 and reincorporated in Nevada on February

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 Limited Liability Company.

On July 25, 2017, Robotic Assistance Devices

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

On August 28, 2017, AITX completed the acquisition

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

As a result of the closing

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

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

The Acquisition was treated as a reverse recapitalization

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.

(“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 Limited Liability Company.

On July 25, 2017, Robotic Assistance Devices LLC converted to a C Corporation, Robotic Assistance Devices, Inc., through the issuance

of 10,000 common shares to its sole shareholder.

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 was exploring the on-demand logistics market by developing a network of logistics

partnerships.

As a result of the closing of the Acquisition, AITX has succeeded to the business of RAD, and AITX’s business going

forward will consist of one segment activity, which is the delivery of artificial intelligence and robotic solutions for operational,

security and monitoring needs.

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.

GOING CONCERN

The accompanying unaudited 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 nine months ended November 30, 2023, the Company had negative cash

flow from operating activities of $ 9,378,427 .

As of November 30, 2023, the Company has an accumulated deficit of $ 125,535,116 , and negative

working capital of $ 12,944,810 .

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

These factors

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

accompanying unaudited 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 three months ended May 31, 2024, the Company had negative cash flow from operating activities of $ 3,045,831 .

As of May 31, 2024,

the Company has an accumulated deficit of $ 141,361,177 , and negative working capital of $ 25,655,546 .

Management does not anticipate having

positive cash flow from operations in the near future.

These factors raise a 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.

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 $ 12,500,000 of the Company’s common stock at a discount over a two-year period.

and April 2023 the Company reduced personnel that were working on far-future solutions as well as other department reductions.

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.

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.

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.

The Company year to date November 30, 2023 has raised an

additional $ 7.5 million net of issuance costs through the sale of its common shares and an additional $ 1.4 million through the

issuance of debt.

The Company has raised an additional $ 1.5 million net of issuance costs through the sale of its common shares

subsequent to quarter end through to reporting date.

ARTIFICIAL INTELLIGENCE TECHNOLOGY SOLUTIONS INC.

NOTES TO CONDENSED 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 $ 16 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 CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

ACCOUNTING POLICIES

Basis of Presentation and Consolidation

The accompanying unaudited condensed consolidated

financial statements have been prepared in accordance with generally accepted accounting principles in the United States (“GAAP”)

and in conformity with the condensing instructions on Form 10-Q and Rule 8-03 of Regulation S-X and the related rules and regulations

of the Securities and Exchange Commission (“SEC”) and should be read in conjunction with the audited financial statements

and notes thereto in the Company’s latest Annual Report filed with the SEC on Form 10-K as filed on June 14, 2023.

The unaudited

condensed 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 On the

OMV Transports, LLC.

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

The unaudited consolidated

financial statements reflect all adjustments, consisting of normal recurring accruals, which are, in the opinion of management, necessary

for a fair presentation of such statements.

The results of operations for the nine months ended November 30, 2023 are not necessarily

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

Use of Estimates

In order to prepare financial statements in conformity

with accounting principles 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 preferred stock and derivative liabilities.

of Presentation and Consolidation

accompanying unaudited condensed consolidated financial statements have been prepared in accordance with generally accepted accounting

principles in the United States (“GAAP”) and in conformity with the condensing instructions on Form 10-Q and Rule 8-03 of

Regulation S-X and the related rules and regulations of the Securities and Exchange Commission (“SEC”) and should be read

in conjunction with the audited financial statements and notes thereto in the Company’s latest Annual Report filed with the SEC

on Form 10-K/A as filed on May 29, 2024.

The unaudited condensed 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., and Robotic Assistance Devices Residential, Inc..

All significant intercompany accounts and transactions have been eliminated

in consolidation.

The unaudited consolidated financial statements reflect all adjustments, consisting of normal recurring accruals, which

are, in the opinion of management, necessary for a fair presentation of such statements.

The results of operations for the three months

ended May 31, 2024, are not necessarily indicative of the results that may be expected for the entire year.

order to prepare financial statements in conformity with accounting principles 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 preferred stock.

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 November 30, 2023 there were $ 32,473,345 of loans

payable, $ 28,190,506 or 87 % of these loans to companies controlled by one individual.

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

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

The Company considers all highly liquid investments

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 uncollectible accounts.

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 $ 61,000 and

$ 39,000 provided as of November 30, 2023 and February 28, 2023, respectively.

For the three months ended November 30, 2023 , three customers

account for 61 % of total accounts receivable .

For the three months ended November 30, 2022, two customers account for 62 % of total accounts

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.

As of November 30, 2023 and February 28, 2023 there was a

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

ARTIFICIAL INTELLIGENCE TECHNOLOGY SOLUTIONS INC.

NOTES TO CONDENSED 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 two 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

Fixed assets consisted of the following:

May 31, 2024 there were $ 33,119,346 of loans payable, $ 28,890,506 or 87 % of these loans to companies controlled by one individual.

February 29, 2024 there were $ 32,796,345 of loans payable, $ 28,540,506 or 87 % of these loans to companies controlled by the same 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 uncollectible accounts.

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 $ 81,000 and $ 68,000 provided as of May 31, 2024 and February 29, 2024, respectively.

For the three months ended May

31, 2024, two customers account for 57 % of total accounts receivable .

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

for 51 % 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.

As of May 31, 2024, and February 29, 2024, there was a valuation reserve of $ 1,169,000 and $ 959,000 , respectively.

INTELLIGENCE TECHNOLOGY SOLUTIONS INC.

TO CONDENSED 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 two 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

Computer equipment and software

3 unchanged sentences

Leasehold improvements

5 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 November 30, 2023 and February 28, 2023, 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.

5 years, the life of 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.

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 May 31, 2024 and February 29, 2024, 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 8, 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

ARTIFICIAL INTELLIGENCE TECHNOLOGY SOLUTIONS INC.

NOTES TO CONDENSED 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 is 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.

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.

The Company adopted Topic 606 on March 1, 2018, using

the modified retrospective method.

Under the modified retrospective method, prior period financial positions and results will not be adjusted.

There was no cumulative effect adjustment recognized as a result of this adoption.

Refer to Note 4 – Revenue from Contracts with

Customers for additional information.

For the nine months ended November 30, 2023, four customers accounted for

58 % of total revenue and for the nine months ended November 30, 2022, two customers accounted for 41 % of total revenue.

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, 2024, 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.

ARTIFICIAL INTELLIGENCE TECHNOLOGY SOLUTIONS INC.

NOTES TO CONDENSED 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.

of Future Revenues

Company has entered into transactions, as more fully described in footnote 8, 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:

INTELLIGENCE TECHNOLOGY SOLUTIONS INC.

TO CONDENSED 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 is 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

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

The Company adopted Topic 606 on March 1, 2018, using the modified retrospective method.

Under the modified retrospective

method, prior period financial positions and results will not be adjusted.

There was no cumulative effect adjustment recognized as a

result of this adoption.

Refer to Note 4 – Revenue from Contracts with Customers for additional information.

For the three months

ended May 31, 2024, two customers accounted for 65 % of total revenue and for the three months ended May 31, 2023, three customers accounted

for 57 % 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 28, 2025, 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 CONDENSED 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 Chief Executive Officer/ Chairman holds sufficient

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

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

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

Initial Measurement

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:

ARTIFICIAL INTELLIGENCE TECHNOLOGY SOLUTIONS INC.

NOTES TO CONDENSED 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.

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;

Otherwise, the Company accounts for the financial instrument as permanent equity.

Chief Executive Officer/ Chairman holds sufficient shares of the Company’s voting preferred stock that give sufficient voting rights

under the articles of incorporation and bylaws of the Company such that the CEO/ Chairman can at any time unilaterally vote to increase

the number of authorized shares of common stock of the Company, without the need to call a general meeting of common shareholders of

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 CONDENSED 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:

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.

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;

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

Fair Value Measurement Using

November 30, 2023

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.

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

Value Measurement Using

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

1 unchanged sentence

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

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.

ARTIFICIAL INTELLIGENCE TECHNOLOGY SOLUTIONS INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Recently Issued Accounting Pronouncements

Recently Issued Accounting Standards Not Yet Adopted

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

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

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

Under ASU 2020-06, the embedded

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

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

Consequently,

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

require bifurcation and recognition as derivatives.

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

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

years beginning after December 15, 2021.

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 CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Issued Accounting Pronouncements

Issued Accounting Standards Adopted

In August 2020, the FASB issued ASU 2020-06, Debt — Debt with Conversion

and Other Options (Subtopic 470-20) and Derivatives and Hedging-Contracts in Entity’s Own Equity (Subtopic 815-40) :

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

Under ASU 2020-06, the embedded conversion features are

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

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

Consequently, a convertible

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

and recognition as derivatives.

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

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

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.

The Company adopted the standard using a modified retrospective approach.

The adjustment to the Company’s accumulated

deficit at March 1, 2024 was $ 4,175,535 with a corresponding adjustment to loans payable.

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 addresses lease accounting and was adopted on March 1, 2019).

As disclosed in the revenue recognition section of

Note 3 – Accounting Polices, the Company adopted Topic 606 in accordance with the effective date on March 1, 2018.

Note 3 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.

After adopting Topic 842, also referred to above in

Note 3, the Company is accounting 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.

The Company recognizes revenue from its device rental activities when persuasive evidence

of a contract exists, the performance obligations have been satisfied, the transaction price is fixed or determinable and collection is

reasonably assured.

Performance obligations associated with device rental transactions are satisfied over the rental period.

Rental periods

are short-term in nature.

Therefore, the Company has elected to apply the practical expedient which eliminates the requirement to disclose

information about remaining performance obligations.

Payments are due from customers at the completion of the rental, except for customers

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

The following table presents revenues from contracts

with customers disaggregated by product/service:

November 30, 2023

November 30, 2022

November 30, 2023

November 30, 2022

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 addresses lease accounting and was

adopted on March 1, 2019).

disclosed in the revenue recognition section of Note 3 – Accounting Polices, the Company adopted Topic 606 in accordance with the

effective date on March 1, 2018.

Note 3 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.

adopting Topic 842, also referred to above in Note 3, the Company is accounting 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.

The Company recognizes revenue from its

device rental activities when persuasive evidence of a contract exists, the performance obligations have been satisfied, the transaction

price is fixed or determinable and collection is reasonably assured.

Performance obligations associated with device rental transactions

are satisfied over the rental period.

Rental periods are short-term in nature.

Therefore, the Company has elected to apply the practical

expedient which eliminates the requirement to disclose information about remaining performance obligations.

Payments are due from customers

at the completion of the rental, except for customers with negotiated payment terms, generally net 30 days or less, which are invoiced

and remain as accounts receivable until collected.

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

OF REVENUES FROM CONTRACTS WITH CUSTOMERS

Three Months Ended

Device rental activities

Direct sales of goods and services

ARTIFICIAL INTELLIGENCE TECHNOLOGY SOLUTIONS INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

We lease certain warehouses, and office space.

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 November 30, 2023 and February 28, 2023.

INTELLIGENCE TECHNOLOGY SOLUTIONS INC.

TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

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 May 31, 2024 and February 29, 2024.

OF LEASE ASSETS AND LIABILITIES

Classification

November 30, 2023

February 29, 2024

3 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.

Rent expense and operating lease cost was $ 64,081 and $ 189,164 for the

three and nine months ended November 30, 2023, respectively, and $ 61,005 and $ 194,653 for the three and nine months ended November 30,

2022, respectively.

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 $ 62,013 and $ 62,542 for the three months ended May 31, 2024 and May 31, 2023, respectively.

REVENUE EARNING DEVICES

Revenue earning devices consisted of the following:

November 30, 2023

earning devices consisted of the following:

OF REVENUE EARNING DEVICES

February 29, 2024

1 unchanged sentence

Accumulated depreciation

During the three and nine months ended November 30,

2023 the Company made total additions to revenue earning devices of $ 521,037 and $ 1,306,501 , respectively, which were transfers from inventory.

During the three and nine months ended November 30, 2022 the Company made total additions to revenue earning devices of $ 199,047 and $ 625,094 ,

respectively, which were transfers from inventory.

Depreciation expense was $ 165,370 and $ 429,825 for

the three and nine months ended November 30, 2023, respectively, and $ 54,418 and $ 241,957 for the three and nine months ended November

30, 2022, respectively.

ARTIFICIAL INTELLIGENCE TECHNOLOGY SOLUTIONS INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Fixed assets consisted of the following:

November 30, 2023

( 1,209,072 )

the three months ended May 31, 2024, the Company made total additions to revenue earning devices of $ 1,128,175 which were transfers from

During the three months ended May 31, 2023, the Company made total additions to revenue earning devices of $ 444,412 which

were transfers from inventory.

expense was $ 256,228 and $ 122,841 for the three months ended May 31, 2024, and 2023 respectively.

INTELLIGENCE TECHNOLOGY SOLUTIONS INC.

TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

assets consisted of the following:

OF FIXED ASSETS

February 29, 2024

5 unchanged sentences

Leasehold improvements

Fixed assets gross

Accumulated depreciation

During the three months ended November 30, 2023, the

Company made additions of $ 22,101 , $ 11,661 which were transfers from inventory with remaining additions of $ 10,440 .

During the nine months

ended November 30, 2023, the Company made additions of $ 129,331 of which $ 115,428 were transfers from inventory with remaining additions

of $ 13,903 .

During the three months ended November 30, 2022, the Company made additions of $ 31,365 of which $ 19,961 were transfers from

inventory with remaining additions of $ 11,404 .

During the nine months ended November 30, 2022, the Company made additions of $ 265,041

of which $ 47,440 were transfers from inventory with remaining additions of $ 217,601 .

Depreciation expense was $ 50,393 and $ 144,921 for

the three and nine months ended November 30, 2023, respectively, and $ 38,437 and $ 90,686 for the three and nine months ended November

30, 2022, respectively.

Fixed assets, net of

accumulated depreciation

the three months ended May 31, 2024, the Company made additions of $ 52,177 of which $ 33,045 were transfers from inventory with remaining

additions of $ 19,132 .

During the three months ended May 31, 2023, the Company made additions of $ 32,173 of which $ 28,710 were transfers

from inventory with remaining additions of $ 3,463 .

expense was $ 41,321 and $ 45,101 for the three months ended May 31, 2024, and 2023 respectively.

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.

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.

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.

ARTIFICIAL INTELLIGENCE TECHNOLOGY SOLUTIONS INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

On November 18, 2019, the Company entered into another

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

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

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.

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

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

leases to its customers.

In summary of all agreements mentioned above if in

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

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:

would pay up to $ 400,000 in exchange for a perpetual 4 % rate Payment on the Company’s reported quarterly Revenues.

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.

At February 29,

2020, $ 50,000 has been paid to the Company.

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

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 .

INTELLIGENCE TECHNOLOGY SOLUTIONS INC.

TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

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

At February 29, 2020, the investor has advanced $ 50,000 with the remainder to be advanced no later than June 30, 2020.

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.

Upon an event of default that we are unable to cure in the time allotted under the agreements, these

Payments may be secured with a priority lien by UCC filing against all of our assets, but is subordinated to equipment financing or leasing

agreements on the products the Company leases to its customers.

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 first become payable on June 30, 2019 (unless otherwise indicated) based on the quarterly Revenues for the quarter ended May

31, 2019 and accrue every quarter thereafter.

As of May 31, 2024, the Company has accrued $ 1,096,700 in Payments of which $ 604,811 are

As of February 29, 2024, the Company has accrued approximately $ 904,377 in Payments, of which $ 542,176 is in arrears.

notices have been sent to the Company.

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 Payments first become payable on June 30, 2019 (unless otherwise indicated)

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

As of November 30, 2023, the Company

has accrued $ 764,702 in Payments of which $ 497,149 are in arrears.

As of February 28, 2023, the Company has accrued $ 542,177 in Payments

of which $ 325,600 are in arrears.

No notices have been sent to the Company.

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

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

The rate payment was reduced from 14.25 % to 9.65 %

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.

ARTIFICIAL INTELLIGENCE TECHNOLOGY SOLUTIONS INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

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 November 30, 2023, and February 28, 2023, the

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

For both the three months and nine months ended November

30, 2023 and year ended February 28, 2023, the Company has received $ 0 related to the deferred payment obligation since there were no

new agreements during this period.

The balance remains $ 2,525,000 at both November 30, 2023 and February 28, 2023.

The asset disposition % (see below) was reduced from

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.

INTELLIGENCE TECHNOLOGY SOLUTIONS INC.

TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

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 May 31, 2024, and February 29, 2024, the long-term balances other than Payments already owed is the cash received of $ 2,525,000

and $ 2,525,000 , respectively.

both the three months ended May 31, 2024, and year ended February 29, 2024, the Company has received $ 0 related to the deferred payment

obligation since there were no new agreements during this period.

The balance remains $ 2,525,000 at both May 31, 2024 and February 29,

RELATED PARTY TRANSACTIONS

For both the three months ended November 30, 2023

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

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

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

2023 is $ 222,754 of deferred salary and interest, $ 183,625 of which bears interest at 12 %.

At February 28, 2023, included in the balance

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

The accrued interest included in loan at

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

Pursuant to the amended Employment Agreement with

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

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

of additional awards being met.

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

$ 1,000 per share.

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

During the three months ended November 30, 2023 and

2022, the Company was charged $ 526,723 and $ 794,460 , respectively for fees for research and development from a company partially owned

by a principal shareholder.

During the nine months ended November 30, 2023 and

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

by a principal shareholder.

both the three months ended May 31, 2024 and May 31, 2023 , the Company had no repayments of net advances from its loan payable-related

At May 31, 2024, the loan payable-related party was $ 275,013 and $ 257,438 at February 29, 2024.

Included in the balance due to

the related party at May 31, 2024 is $ 198,481 of deferred salary and interest, $ 152,513 of which bears interest at 12 %.

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 %.

interest included in loan at May 31, 2024 and February 29, 2024 was $ 36,974 and $ 32,468 , respectively.

to the amended Employment Agreement with its Chief Executive Officer, for the three months ended May 31, 2024 the Company accrued $ 0

(three months ended May 31 2023-$ 63,000 ) of incentive compensation plan payable with a corresponding recognition of stock based compensation

due to the expectation of additional awards being met.

This will be payable in Series G Preferred Shares which are redeemable at the

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

At May 31, 2024 and February 29, 2024 there was $ 2,500,000 and $ 2,500,000 of incentive compensation

the three months ended May 31, 2024 and 2023, the Company was charged $ 631,584 and $ 882,015 , respectively for fees for research and development

from a company partially owned by a principal shareholder.

OTHER DEBT – VEHICLE LOAN

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, 2021 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, 2022 and February 28, 2021.

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

as of November 30, 2023 and February 28, 2023, respectively, of which all were classified as current.

ARTIFICIAL INTELLIGENCE TECHNOLOGY SOLUTIONS INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

A balance of $ 21,578 remains on this

vehicle loan at both February 28, 2021 and February 29, 2020.

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, 2022 and February 28, 2021.

The remaining total balances of the

amounts owed on the vehicle loans were $ 38,522 and $ 38,522 as of May 31, 2024 and February 29, 2024, respectively, of which all were

classified as current.

INTELLIGENCE TECHNOLOGY SOLUTIONS INC.

TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

LOANS PAYABLE

Loans payable at November 30, 2023 consisted of the

payable at May 31, 2024 consisted of the following:

OF LOANS PAYABLE

Interest Rate

76 unchanged sentences

Promissory note

May 11, 20 23

October 31, 2026

4 unchanged sentences

November 30, 2023

October 31, 2025

April 30, 2025

Purchase Agreement

March 8, 2024

August 8, 2025

Purchase Agreement

current portion of loans payable

( 17,619,985 )

discount on non-current loans payable

3 unchanged sentences

Current portion of loans payable, net of discount

Funds received December 1 , 2023, after reporting period.

ARTIFICIAL INTELLIGENCE TECHNOLOGY SOLUTIONS INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

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

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

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

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.

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.

$ 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.

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 .

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 .

March 1, 2024 the Company adjusted the relative fair value unamortized discount on the above notes by $ 4,175,535 with a corresponding

adjustment to accumulated deficit to apply ASU 2020-06.

note was transferred from convertible notes payable because in August 2022 it was no longer convertible due to restrictions placed

on the lender.

INTELLIGENCE TECHNOLOGY SOLUTIONS INC.

TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

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 $ 0.002 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.

$ 300,000 has been repaid during the

year ended 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 $ 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 .

The maturity date was extended from December 10,

2023 to December 10, 2024 on February 29, 2024 and a fee of $ 22,958 was paid and charged to interest expense .

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 .

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 three and nine months ended November 30, 2023, 2023, the Company recorded amortization expense of $ 12,878 and $ 105,538 , respectively, with an unamortized discount of $ 31,106 at November 30, 2023.

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.

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.

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.

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.

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.

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.

On March 1, 2024, the unamortized

relative fair value discount of $ 65,092 was removed with a corresponding adjustment to accumulated deficit.

A $ 8,399 unamortized

discount remained.

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 .

For the three months ended May 31, 2024, the Company recorded amortization expense of $ 1,515 ,

with an unamortized discount of $ 6,884

at May 31, 2024.

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 three and nine months ended November 30, 2023, 2023, the Company recorded amortization expense of $ 16,718 and $ 129,906 respectively, with an unamortized discount of $ 50,493 at November 30, 2023.

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.

ARTIFICIAL INTELLIGENCE TECHNOLOGY SOLUTIONS INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

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.

On March 1, 2024, the unamortized relative fair value discount of $ 80,284 was

removed with a corresponding adjustment to accumulated deficit.

A $ 10,559 unamortized discount remained.

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 .

For the three months ended May 31, 2024, the Company recorded amortization expense of $ 1,936 ,

with an unamortized discount of $ 8,623

at May 31, 2024.

INTELLIGENCE TECHNOLOGY SOLUTIONS INC.

TO CONDENSED 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.

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.

For the three and nine months ended November 30, 2023, the Company recorded amortization expense of $ 82,499 and $ 462,320 respectively, with an unamortized discount of $ 426,061 at November 30, 2023.

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.

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

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.

March 1, 2024, the unamortized relative fair value discount of $ 497,614 was removed with a corresponding adjustment to accumulated

A $ 55,585 unamortized discount remained.

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 .

For the three months ended May 31, 2024, the Company recorded amortization expense of $ 9,484 ,

with an unamortized discount of $ 46,101

at May 31, 2024.

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 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 $ 4,749,005 with a corresponding adjustment to paid in capital for the relative value of the warrant..

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.

This note has been fully amortized.

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 $ 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.

This note was again extended to March 1, 2025.

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.

For the three and nine months ended November 30, 2023, 2023, the Company recorded amortization expense of $ 199,482 and $ 530,181 respectively, with an unamortized discount of $ 264,037 at November 30, 2023.

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

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.

On March 1, 2024, the unamortized relative fair value discount of $ 33,547

was removed with a corresponding adjustment to accumulated deficit.

A $ 4,121 unamortized discount remained.

For the three

months ended May 31, 2024, the Company recorded amortization expense of $ 100 , with an unamortized discount of $ 4,021 at May 31,

This note was extended to June 8, 2025.

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 three and nine months ended November 30, 2023 there were repayments of $ 27,000 and $ 81,000 .

respectively on the note.

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

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

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

For the three and nine months ended November 30, 2023, 2023, the Company recorded amortization expense of $ 146,393 and $ 348,667 respectively, with an unamortized discount of $ 865,764 at November 30, 2023.

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

For the three and nine months ended November 30, 2023

there were repayments of $ 27,000 and $ 81,000 , respectively 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

Principal and interest due at maturity.

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.

On March 1, 2024, the unamortized relative fair value discount of $ 572,549 was

removed with a corresponding adjustment to accumulated deficit.

A $ 66,846 unamortized discount remained.

For the three months ended

May 31, 2024, the Company recorded amortization expense of $ 5,627 ,

with an unamortized discount of $ 61,219

at May 31, 2024.

This note was extended to September 14, 2025.

$ 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.

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

For the three and nine months ended November 30, 2023, the Company recorded amortization expense of $ 0 and $ 9,026 respectively, with an unamortized discount of $ 0 at November 30, 2023.

This loan is in default.

No notices have been sent by lender.

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.

ARTIFICIAL INTELLIGENCE TECHNOLOGY SOLUTIONS INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

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 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.

This note has been fully amortized .

INTELLIGENCE TECHNOLOGY SOLUTIONS INC.

TO CONDENSED 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 three and nine months ended November 30, 2023, the Company recorded amortization expense of $ 4,923 and $ 14,216 respectively, with an unamortized discount of $ 16,552 at November 30, 2023.

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

On March 1, 2024, the unamortized relative fair value discount of $ 11,535

was removed with a corresponding adjustment to accumulated deficit.

This note has been fully amortized.

This note was extended to August

$ 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.

Principal and interest

due at maturity.

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

For the three and nine months ended November 30, 2023, the Company recorded amortization expense of $ 0 and $ 27,821 respectively, with an unamortized discount of $ 0 at November 30, 2023.

This loan is in default.

No notices have been sent by lender.

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.

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

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

This note has been fully amortized .

$ 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 three and nine months ended November 30, 2023, the Company recorded amortization expense of $ 0 and $ 36,729 respectively, with an unamortized discount of $ 0 at November 30, 2023.

This loan is in default.

No notices have been sent by lender.

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.

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

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

This note has been fully amortized .

$ 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 three and nine months ended November 30, 2023, the Company recorded amortization expense of $ 13,295 and $ 25,585 respectively, with an unamortized discount of $ 0 at November 30, 2023.

This loan is in default.

No notices have been sent by lender.

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.

ARTIFICIAL INTELLIGENCE TECHNOLOGY SOLUTIONS INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

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

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

29, 2023, the parties extended the maturity date from October 13, 2023 to March 1, 2025 with all other terms and conditions remaining

This note has been fully amortized .

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

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

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

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

For the three and nine months ended November 30, 2023, the Company recorded amortization expense of $ 3,274 and $ 7,613 respectively, with an unamortized discount of $ 340,411 at November 30, 2023.

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

For the three and nine months ended November 30, 2023, 2023, the Company recorded amortization expense of $ 3,234 and $ 7,510 respectively, with an unamortized discount of $ 340,929 at November 30, 2023.

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

For the three and nine months ended November 30, 2023, the Company recorded amortization expense of $ 2,991 and $ 6,891 respectively, with an unamortized discount of $ 343,990 at November 30, 2023.

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

For the three nine months ended November 30, 2023, the Company recorded amortization expense of $ 3,295 and $ 7,665 respectively, with an unamortized discount of $ 340,151 at November 30, 2023.

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

For the three and nine months ended November 30, 2023, the Company recorded amortization expense of $ 3,355 and $ 7,821 respectively, with an unamortized discount of $ 339,368 at November 30, 2023.

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

For the three and nine months ended November 30, 2023, the Company recorded amortization expense of $ 3,231 and $ 7,503 respectively, with an unamortized discount of $ 340,923 at November 30, 2023.

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

For the three and nine months ended November 30, 2023, the Company recorded amortization expense of $ 3,335 and $ 6,608 respectively, with an unamortized discount of $ 339,637 at November 30, 2023.

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

For the three and nine months ended November 30, 2023, the Company recorded amortization expense of $ 2,723 and $ 4,930 respectively, with an unamortized discount of $ 347,290 at November 30, 2023.

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

For the three and nine months ended November 30, 2023, the Company recorded amortization expense of $ 0 and $ 0 respectively, with an unamortized discount of $ 398,983 at November 30, 2023.

October 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 three and nine months ended November 30, 2023, the Company recorded amortization expense of $ 2,044 and $ 2,044 respectively, with an unamortized discount of $ 309,715 at November 30, 2023.

On 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 will be recorded next quarter.

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 .

On March 1, 2024, the unamortized relative fair value discount of $ 286,775 was removed with a corresponding adjustment to

accumulated deficit.

A $ 47,892 unamortized discount remained.

For the three months ended May 31, 2024, the Company recorded amortization

expense of $ 610 ,

with an unamortized discount of $ 47,282 at

May 31, 2024.

9, 2022, $ 400,000

loan, original issue discount of $ 50,000

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

On March 1, 2024, the unamortized relative fair value discount of $ 288,513 was removed with a corresponding adjustment to

accumulated deficit.

A $ 48,126 unamortized discount remained.

For the three months ended May 31, 2024, the Company recorded

amortization expense of $ 803 ,

with an unamortized discount of $ 47,323

at May 31, 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 .

On March 1, 2024, the unamortized relative fair value discount of $ 291,694 was removed with a corresponding adjustment to

accumulated deficit.

A $ 48,290 unamortized discount remained.

For the three months ended May 31, 2024, the Company recorded

amortization expense of $ 791 ,

with an unamortized discount of $ 47,499

at May 31, 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 .

On March 1, 2024, the unamortized relative fair value discount of $ 287,814 was removed with a corresponding adjustment to

accumulated deficit.

A $ 47,976 unamortized discount remained.

For the three months ended May 31, 2024, the Company recorded

amortization expense of $ 814 ,

with an unamortized discount of $ 47,162

at May 31, 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 .

On March 1, 2024, the unamortized relative fair value discount of $ 286,813 was removed with a corresponding adjustment to

accumulated deficit.

A $ 48,124 unamortized discount remained.

For the three months ended May 31, 2024, the Company recorded

amortization expense of $ 830 ,

with an unamortized discount of $ 47,294

at May 31, 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 .

On March 1, 2024, the unamortized relative fair value discount of $ 288,342 was removed with a corresponding adjustment to

accumulated deficit.

A $ 48,294 unamortized discount remained.

For the three months ended May 31, 2024, the Company recorded

amortization expense of $ 806 ,

with an unamortized discount of $ 47,488

at May 31, 2024.

INTELLIGENCE TECHNOLOGY SOLUTIONS INC.

TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

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 .

On March 1, 2024, the unamortized relative fair value discount of $ 286,821 was removed with a corresponding adjustment to

accumulated deficit.

A $ 48,409 unamortized discount remained.

For the three months ended May 31, 2024, the Company recorded

amortization expense of $ 830 ,

with an unamortized discount of $ 47,579

at May 31, 2024.

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 .

On March 1, 2024, the unamortized relative fair value discount of $ 294,824 was removed with a corresponding adjustment to

accumulated deficit.

A $ 48,777 unamortized discount remained.

For the three months ended May 31, 2024, the Company recorded

amortization expense of $ 702 ,

with an unamortized discount of $ 48,075

at May 31, 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 .

On March 1, 2024, the unamortized relative fair value discount of $ 348,831 was removed with a corresponding adjustment to

accumulated deficit.

A $ 49,978 unamortized discount remained.

For the three months ended May 31, 2024, the Company recorded

amortization expense of $ 81 ,

with an unamortized discount of $ 49,897

at May 31, 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 .

On March 1, 2024, the unamortized relative fair value discount of $ 254,487 was removed with a corresponding adjustment to

accumulated deficit.

A $ 48,611 unamortized discount remained.

For the three months ended May 31, 2024, the Company recorded

amortization expense of $ 1,287 ,

with an unamortized discount of $ 47,324

at May 31, 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.

Secured by 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.

ARTIFICIAL INTELLIGENCE TECHNOLOGY SOLUTIONS INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

of 15 % per annum calculated daily on any missed monthly payment.

The Company has missed the April and May 2024 payments and is in

discussions with lender to remedy this.

No notices have been sent.

March 8, 2024 , the Company entered into another 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 80, 2025 totaling $ 477,750 .

The effective interest

rate is 35 % per annum.

Secured by 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

INTELLIGENCE TECHNOLOGY SOLUTIONS INC.

TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

STOCKHOLDERS’ EQUITY (DEFICIT)

Summary or Preferred Stock Activity

No preferred stock activity during the period.

Summary of Preferred Stock Warrant Activity

or Preferred Stock Activity

B Convertible, Redeemable Preferred Stock (Temporary Equity)

April 27, 2024, in connection with a Share Purchase Agreement the Company created a new class Of Series B Convertible Redeemable

Preferred Shares with 5,000 authorized shares.

The Company received gross proceeds of $ 300,000 with net proceeds of $ 278,000 less

$ 10,000 in legal fees and 12,000 in broker fees both charged against paid in capital.

In addition, as a commitment fee the Company

issued an additional 20 Series B Convertible Redeemable Preferred Shares, with a fair value of $ 24,000 charged to paid in capital.

The shares have a redemption value of $ 1,200 per share.

The Company must redeem one third of these shares in 30, days and each 30

days thereafter until all the shares are redeemed at 90 days.

The Company must also pay an 8 % dividend from issue date to redemption

On May 30, the Company issued a dividend of 2.14 shares Series B Convertible Redeemable Preferred Shares having a value of $

2,568 and redeemed 107.38 Series B shares for $ 128,856 including a deemed dividend of $ 28,856 which represents the redemption value

over the purchase cost of the shares.

May 31, 2024 there remains 215 Series B Convertible Redeemable Preferred Shares having a value of $ $ 257,712 in Temporary Equity.

of Preferred Stock Warrant Activity

OF PREFERRED STOCK WARRANT ACTIVITY

Number of Series F Preferred Warrants

3 unchanged sentences

Forfeited and cancelled

Outstanding at November 30, 2023

During the nine months ended November 30, 2023, as

part of debt issuance the Company issued 244 Series F Preferred Warrants to a lender for a relative fair value of $ 1,209,206 .

Summary of Common Stock Activity

The Company increased authorized common shares from

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

For the three months ended November 30, 2023, the

Company issued 675,336,434 common shares with gross proceeds of $ 1,468,477 and net proceeds of $ 1,412,158 after issuance costs of $ 56,320 .

For the nine months ended November 30, 2023, the Company

issued 1,859,901,628 common shares with gross proceeds of 7,841,466 and net proceeds of $ 7,527,190 after issuance costs of $ 314,276 .

addition the Company issued 6,500,000 shares with a fair value of $ 44,460 as payment for services of $ 83,200 .

A gain on settlement of

debt of $ 38,640 has been recorded.

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

The table below represent the common shares issued,

issuable and outstanding at November 30, 2023 and February 28, 2023:

Common shares

November 30, 2023

February 28, 2023

7,715,143,227

5,836,641,599

Issued, issuable and outstanding

7,715,143,227

5,848,741,599

Summary of Common Stock Warrant Activity

For the three months and nine months ended November 30, 2023 and November

30, 2022, the Company recorded a total of $ 47,462 and $ 0 , and $ 150,896 and $ 0 respectively, to stock-based compensation for options and

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

Summary of Common Stock Warrant Activity

Outstanding at May 31, 2024

of Common Stock Activity

the three months ended May 31, 2024, the Company issued 1,080,166,425 common shares with gross proceeds of 2,789,639 and net proceeds

of $ 2,682,593 after issuance costs of $ 116,046 .

of Common Stock Warrant Activity

the three months ended May 31, 2024 and May 31, 2023, the Company recorded a total of $ 47,462 and $ 0 respectively, to stock-based compensation

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

OF COMMON STOCK WARRANT ACTIVITY

Number of Warrants

1 unchanged sentence

Weighted Average Remaining Years

Outstanding at February 28, 2023

Outstanding at March 1, 2024

Forfeited and cancelled

Outstanding at November 30, 2023

ARTIFICIAL INTELLIGENCE TECHNOLOGY SOLUTIONS INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Summary of Common Stock Option Activity -Employee

Stock Options

Outstanding at May 31, 2024

INTELLIGENCE TECHNOLOGY SOLUTIONS INC.

TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

of Common Stock Option Activity -Employee Stock Options

OF COMMON STOCK OPTION ACTIVITY

Number of Options

1 unchanged sentence

Weighted Average Remaining Years

Outstanding at February 28 , 2023

Outstanding at March 1, 2024

Forfeited, extinguished and cancelled

Outstanding at August 31, 2023

( 3,011,029 )

Outstanding at May 31, 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 a 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 leases.

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

Rent expense and operating lease cost was

$ 64,081 and $ 189,164 for the three and nine months ended November 30, 2023, respectively, and $ 61,005 and $ 194,653 for the three and nine

months ended November 30, respectively.

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

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 $ 62,013 and $ 62,542 for the three months ended May 31, 2024 and May

31, 2023, respectively.

OF MATURITY OF OPERATING LEASE LIABILITIES

Maturity of Lease Liabilities

November 30, 2024

November 30, 2025

November 30, 2026

November 30, 2027

November 30, 2028

November 30, 2029 and after

May 31, 2030 and after

2030 and after

Total lease payments

Present value of lease liabilities

ARTIFICIAL INTELLIGENCE TECHNOLOGY SOLUTIONS INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

INTELLIGENCE TECHNOLOGY SOLUTIONS INC.

TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

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 Three Months Ended

For the Nine Months Ended

Net income (loss) available to common shareholders

$ ( 4,194,359 )

$ ( 4,555,193 )

Effect of common stock equivalents

interest expense on convertible debt

amortization of debt discount

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

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

Net income (loss) adjusted for common stock equivalents

Weighted average shares – basic

( 4,194,359 )

( 4,555,193 )

Weighted average shares – basic

9,882,118,105

1 unchanged sentence

Net income (loss) per share – basic

Dilutive effect of common stock equivalents:

Convertible Debt

Preferred shares

Weighted average shares – diluted

1 unchanged sentence

5,964,709,322

6,606,988,956

4,969,080,176

Net income (loss) per share – diluted

The anti-dilutive shares of common stock equivalents for the three and

nine months ended November 30, 2023 and 2022 were as follows:

anti-dilutive shares of common stock equivalents for the three months ended May 31, 2024 and 2023 were as follows:

SCHEDULE OF ANTI-DILUTIVE SHARES OF COMMON

STOCK EQUIVALENTS

For the Three Months Ended

For the Nine Months Ended

Convertible notes and accrued interest

May 31, 2023*

Convertible Series F Preferred Shares

35,600,264,971

26,617,244,133

Convertible Redeemable Series B Preferred Shares

Stock options and warrants

36,146,449,661

1,237,643,136

27,045,911,584

1,237,643,136

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

Had these Series F preferred shares been convertible at November 30, 2023 and 2022 the dilutive effects would be as follows:

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

For the Three and Nine Months Ended

November 30, 2023

November 30, 2022

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 November 30, 2023 and 2022 the dilutive effects would be as follows:

For the Three Months Ended

Convertible Series F Preferred Shares

21,147,364,222

Anti-dilutive shares of common stock

21,147,364,222

SUBSEQUENT EVENTS

Subsequent to November 30, 2023 through to January

— The Company issued 639,550 common shares

pursuant to a share purchase agreement for gross proceeds of $ 1,523,258 , issuance costs of $ 62,980 and net proceeds of $ 1,460,278 .

June and July 2024, the Company issued 838,844,221

common shares pursuant to a share purchase agreement for gross proceeds of $ 3,261,225 ,

issuance costs of $ 130,449

and net proceeds of $ 3,127,701 .

In June 2024,

the Company issued an 8 % dividend Series B Convertible Redeemable Preferred Shares of 1.39 shares having a value $ 1,668 and redeemed

108.08 shares for $ 129,670 which includes a dividend of $ 29,670 .

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

What changed 10-Q

Item 1. Financial Statements