What changed in this filing

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Item 1. Financial Statements

2024-10-15 compared with 2024-07-15 · 449 added, 413 removed, 926 unchanged (48% of the section changed)

2 unchanged sentences

CONSOLIDATED BALANCE SHEETS

August 31, 2024

Current assets:

Accounts receivable, net

Share proceeds receivable

Device parts inventory, net

4 unchanged sentences

Fixed assets, net of accumulated depreciation of $ 434,043 and $ 349,878 , respectively

Convertible note receivable

Investment at cost

23 unchanged sentences

$ 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

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

Stockholders’ deficit:

1 unchanged sentence

15,535,000 shares authorized;

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

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

100,000 shares authorized, no shares issued and outstanding at August 31, 2024 and February 29, 2024, respectively

Series E Preferred Stock, $ 0.001 par value;

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Total liabilities and stockholders’ deficit

Derived from audited information

from audited information

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

1 unchanged sentence

CONSOLIDATED STATEMENTS OF OPERATIONS

Three Months Ended

August 31, 2024

August 31, 2023

August 31, 2024

August 31, 2023

Purchases and overhead

Depreciation and amortization

Cost of Goods Sold

Operating expenses:

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

Research and development (Note 9)

General and administrative

5 unchanged sentences

( 3,045,252 )

( 5,447,130 )

( 5,994,227 )

Other income (expense), net:

2 unchanged sentences

( 1,753,216 )

Total other income (expense), net

( 2,671,032 )

( 3,359,432 )

Net income (loss)

Gain (loss) on settlement of debt

Total other expense net

( 1,316,449 )

( 1,714,476 )

Net income (loss) per share - basic

Net income (loss) per share - diluted

( 2,677,552 )

( 3,320,692 )

$ ( 3,930,323 )

$ ( 4,759,728 )

$ ( 8,124,682 )

$ ( 9,314,919 )

Net loss per share - basic

Net loss per share - diluted

Weighted average common share outstanding - basic

1 unchanged sentence

6,568,957,612

10,531,991,040

6,266,833,467

Weighted average common share outstanding - diluted

1 unchanged sentence

6,568,957,612

10,531,991,040

6,266,833,467

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

20 unchanged sentences

$ ( 34,079,117 )

Issuance of shares, net of $ 176,672

issuance costs

Shares as payment for

Stock based compensation

( 4,759,728 )

Balance at August 31, 2023

7,039,806,793

$ ( 121,568,632 )

$ ( 33,947,549 )

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

INTELLIGENCE TECHNOLOGY SOLUTIONS INC.

CONSOLIDATED STATEMENT OF SHAREHOLDERS’ DEFICIT

Temporary Equity

8 unchanged sentences

$ ( 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 )

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

( 4,175,535 )

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

( 4,175,535 )

12 unchanged sentences

$ ( 45,912,103 )

Issuance of shares, net of $ 195,656 issuance costs

1,330,610,802

Issuance of shares, net of issuance costs

1,330,610,802

Debt exchanged for common stock

Series F Preferred Shares exchanged for debt

Series B Preferred shares issued as dividend

Redemption of Series B Preferred shares

Stock based compensation

( 3,930,323 )

Balance at August 31,2024

11,706,671,042

$ ( 145,686,020 )

$ ( 45,470,363 )

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

1 unchanged sentence

CONSOLIDATED STATEMENTS OF CASH FLOWS

CASH FLOWS FROM OPERATING ACTIVITIES:

Net income (loss)

Six Months Ended

August 31, 2024

Six Months Ended

August 31, 2023

CASH FLOWS USED IN OPERATING ACTIVITIES:

$ ( 8,124,682 )

$ ( 9,314,919 )

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

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

Depreciation and amortization

5 unchanged sentences

Amortization of debt discounts

(Gain) loss on settlement of debt

Increase in related party accrued payroll and interest

1 unchanged sentence

Accounts receivable

Prepaid expenses and deposits on inventory

Prepaid expenses

Device parts inventory

2 unchanged sentences

Customer deposits

Operating lease liability payments

Current portion of deferred variable payment obligations for payments

Deferred compensation for CEO

Operating lease liabilities

Current portion of deferred variable payment obligation for payments

Accrued interest payable

2 unchanged sentences

( 6,335,216 )

CASH FLOWS FROM INVESTING ACTIVITIES:

CASH FLOWS USED IN INVESTING ACTIVITIES:

Purchase of fixed assets

Acquisition of trademarks

Convertible note receivable

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

Net cash provided by (used in) financing activities

Proceeds on issuance of Series B shares

Redemption of Series B shares

Net cash provided by financing activities

Net change in cash

5 unchanged sentences

Noncash investing and financing activities:

Transfer from device parts inventory to fixed assets

Transfer from device parts inventory to revenue earning devices

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

Series F warrants issued as part of debt issuance

Exchange of Series F preferred stock for note payable

Exchange of note payable for common stock

Series B preferred shares issued as dividend

Series F warrants issued as part of debt

Shares issued for services

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

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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

the six months ended August 31, 2024, the Company had negative cash flow from operating activities of $ 6,433,906 .

As of August 31, 2024,

the Company has an accumulated deficit of $ 145,686,020 , and negative working capital of $ 32,990,606 Management does not anticipate having

positive cash flow from operations in the near future.

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

In March 2023, the Company entered into

In July 2024, 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

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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.

The results of operations for the six months

ended August 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

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

used to value preferred stock.

used to value preferred stock and derivative liabilities.

Reclassifications

3 unchanged sentences

Concentrations

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.

August 31, 2024 there were $ 33,163,345 of loans payable, $ 28,743,506 or 87 % of these loans to companies controlled by one individual.

At 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.

7 unchanged sentences

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.

was an allowance of $ 48,000 and $ 68,000 provided as of August 31, 2024 and February 29, 2024, respectively.

For the three months ended

August 31, 2024, two customers account for 55 % of total accounts receivable.

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

account for 37 % of total accounts receivable.

Parts Inventory

6 unchanged sentences

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.

As of August 31, 2024 and February 29, 2024 there was a valuation reserve of $ 1,070,000 and $ 959,000 , respectively.

INTELLIGENCE TECHNOLOGY SOLUTIONS INC.

16 unchanged sentences

OF FIXED ASSETS STATED AT COST

Computer equipment and software

Office equipment

Manufacturing equipment

Warehouse equipment

Leasehold improvements

5 years, the life of the

equipment and software

Manufacturing

years, the life of the lease

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

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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.

At August 31, 2024 and February 29, 2024, the Company had no deferred development costs.

Contingencies

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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 agreement purport, in substance, to be a sale

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

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

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

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

the investor have recourse relating to payments due

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

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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.

For the six months

ended August 31, 2024 , two customers accounted for 67 % of total revenue (2023- 33 %).

taxes are accounted for under the asset and liability method.

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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, 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

3 unchanged sentences

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

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hierarchy under ASC Topic 820 are described as follows:

INTELLIGENCE TECHNOLOGY SOLUTIONS INC.

TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

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.

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;

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.

2 – Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly

or indirectly.

Level 2 inputs include quoted prices for similar assets or liabilities in active markets;

quoted prices for identical

or similar assets or liabilities in markets that are not active;

inputs other than quoted prices that are observable for the asset

or liability;

and inputs that are derived principally from or corroborated by observable market data by correlation or other means.

3 – Inputs that are unobservable for the asset or liability.

on a Recurring Basis

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OF LIABILITIES MEASURED AT FAIR VALUE

Value Measurement Using

Fair Value Measurement Using

August 31, 2024

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

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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.

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.

Issued Accounting Standards Not Yet Adopted

August 2020, the FASB issued ASU 2020-06, Debt — Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and

Hedging-Contracts in Entity’s Own Equity (Subtopic 815-40) :

Accounting for Convertible Instruments and Contracts in an Entity’s

Under ASU 2020-06, the embedded conversion features are no longer separated from the host contract for convertible instruments

with conversion features that are not required to be accounted for as derivatives under Topic 815, or that do not result in substantial

premiums accounted for as paid-in capital.

Consequently, a convertible debt instrument will be accounted for as a single liability measured

at its amortized cost, as long as no other features require bifurcation and recognition as derivatives.

The new guidance also requires

the if-converted method to be applied for all convertible instruments.

The amendments in ASU 2020-06 are effective for public entities,

excluding smaller reporting companies as defined, for fiscal years beginning after December 15, 2021.

For all other entities, the amendments

are effective for fiscal years beginning after December 15, 2023.

Early adoption is permitted.

A reporting entity is not permitted to

adopt the guidance in an interim period, other than the first interim period of its fiscal year.

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

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OF REVENUES FROM CONTRACTS WITH CUSTOMERS

Three Months Ended

August 31, 2024

August 31, 2023

August 31, 2024

August 31, 2023

Device rental activities

10 unchanged sentences

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.

is a summary of our lease assets and liabilities at August 31, 2024 and February 29, 2024.

OF LEASE ASSETS AND LIABILITIES

Classification

August 31, 2024

February 29, 2024

10 unchanged sentences

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.

expense and operating lease cost was $ 62,967 and $ 124,980 for the three and six months ended August 31, 2024, respectively, and $ 62,541

and $ 125,083 for the three and six months ended August 31, 2023, respectively.

REVENUE EARNING DEVICES

1 unchanged sentence

OF REVENUE EARNING DEVICES

August 31, 2024

February 29, 2024

2 unchanged sentences

( 1,513,990 )

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.

the three and six months ended August 31, 2024 the Company made total additions to revenue earning devices of $ 602,358 and $ 1,730,533 ,

respectively, which were transfers from inventory.

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

to revenue earning devices of $ 341,042 and $ 785,464 , respectively, which were transfers from inventory.

OF DEPRECIATION AND AMORTIZATION

Depreciation and Amortization

Three Months Ended

August 31, 2024

Three Months Ended

August 31 2023

Six Months Ended

August 31, 2024

Six Months Ended

August 31 2023

Cost of Goods Sold

Operating expenses

Total Depreciation and Amortization

INTELLIGENCE TECHNOLOGY SOLUTIONS INC.

2 unchanged sentences

OF FIXED ASSETS

August 31, 2024

February 29, 2024

9 unchanged sentences

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

the three months ended August 31, 2024, the Company made additions of $ 22,097 of which $ 17,505 were transfers from inventory with remaining

additions of $ 4,592 .

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

During the six months ended August 31, 2024, the Company made additions of $ 74,274 of which $ 50,550 were transfers

from inventory with remaining additions of $ 23,724 .

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

During the three months ended August 31, 2023, the Company made additions of $ 75,057

which were transfers from inventory.

During the six months ended August 31, 2023, the Company made additions of $ 107,230 of which $ 103,767

were transfers from inventory with remaining additions of $ 3,463 .

expense was $ 42,844 and $ 84,165 for the three and six months ended August 31, 2024, respectively, and $ 49,427 and $ 94,528 for the three

and six months ended August 31, 2023, respectively.

DEFERRED VARIABLE PAYMENT OBLIGATION

4 unchanged sentences

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.

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.

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.

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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,

2020, the investor has fully funded this commitment.

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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.

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

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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 August 31, 2024, the Company has accrued $ 1,315,264 in Payments of which $ 667,633

are in arrears.

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.

No 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 asset disposition % (see below) was reduced from

rate payment was reduced from 14.25 % to 9.65 %

asset disposition % (see below) was reduced from 31 % to 21 %

consideration for the above changes, the investor received 40 Series F Convertible Preferred Stock and a warrant to purchase 367 shares

10 unchanged sentences

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

As of August 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,

both the three months and six months ended August 31, 2023 and year ended February 28, 2023, the Company has received $ 0 related to the

deferred payment obligation since there were no new agreements during this period.

The balance remains $ 2,525,000 at both August 31,

2024 and February 29, 2024.

RELATED PARTY TRANSACTIONS

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.

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

party At August 31, 2024 the loan payable-related party was $ 279,589 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 %.

the related party at August 31, 2024 is $ 203,057 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.

interest included in loan at August 31, 2024 and February 29, 2024 was $ 41,549 and $ 32,468 , respectively.

to the amended Employment Agreement with its Chief Executive Officer, for the three months and six ended August 31, 2023, the Company

accrued $ 0 (2023-$ 62,000 ) and $ 0 (2023-$ 125,000 ) 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 August 31, 2024 and February 29, 2024 there was $ 2,500,000 and $ 2,500,000 of incentive

compensation payable.

August 31, 2024 deferred compensation for CEO was $ 204,091 .

For the 6 months ended August 31, 2024,the net change was a decrease of $ 334,676

comprising of cash repayment of $ 505,000 offset by accruals and adjustments of $ 170,324 .

At February 29, 2024 deferred compensation for

CEO was $ 538,767 .

the three months ended August 31, 2024 and 2023, the Company was charged $ 777,260 and $ 777,260 , respectively for fees for research and

development from a company partially owned by a principal shareholder.

the six months ended August 31, 2024 and 2023, the Company was charged $ 1,289,830 and $ 1,659,275 , respectively for fees for research

and development from a company partially owned by a principal shareholder.

OTHER DEBT – VEHICLE LOAN

17 unchanged sentences

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

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

classified as current.

2 unchanged sentences

LOANS PAYABLE

payable at May 31, 2024 consisted of the following:

payable at August 31, 2024 consisted of the following:

OF LOANS PAYABLE

13 unchanged sentences

December 14, 2020

December 14, 2023

March 1, 2027

Promissory note

72 unchanged sentences

Purchase Agreement

August 8, 2024

August 8, 2025

Exchange Agreement

current portion of loans payable

5 unchanged sentences

Current portion of loans payable, net of discount

INTELLIGENCE TECHNOLOGY SOLUTIONS INC.

TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

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

2 unchanged sentences

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

22 unchanged sentences

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 .

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.

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.

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.

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

For the three and six months ended August 31, 2024, the Company recorded amortization expense of $ 2,439 and $ 3,954 , respectively,

with an unamortized discount of $ 4,445 at August 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

10 unchanged sentences

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.

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 .

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.

On March 1, 2024, the unamortized relative fair value discount of $ 80,284 was removed with a corresponding adjustment to accumulated

A $ 10,559 unamortized discount remained.

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 .

For the three and six months ended August 31, 2024, the Company

recorded amortization expense of $ 3,117 and $ 5,053 , respectively, with an unamortized discount of $ 5,506 at August 31, 2024.

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

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

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.

On March 1, 2024, the unamortized relative fair value discount of $ 497,614 was removed

with a corresponding adjustment to accumulated deficit.

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.

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 .

three and six months ended August 31, 2024, the Company recorded amortization expense of $ 16,759 and $ 26,243 , respectively, with

an unamortized discount of $ 29,342 at August 31, 2024.

unsecured note may be pre-payable at any time.

24 unchanged sentences

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.

This note was

extended to June 8, 2025.

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.

For the three and six months ended August 31, 2024, the

Company recorded amortization expense of $ 1,239 and $ 1,339 , respectively, with an unamortized discount of $ 2,782 at August 31, 2024.

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

1 unchanged sentence

The loan is unsecured.

For the three 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

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.

For the three and six months ended August 31, 2024 there

were repayments of $ 9,000 and $ 36,000 , respectively on the note.

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 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

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.

For the three and six months ended August 31, 2024, the Company recorded amortization

expense of $ 14,301 and $ 19,928 , respectively, with an unamortized discount of $ 46,918 at August 31, 2024.

This note was extended to September

6 unchanged sentences

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.

note has been fully amortized .

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.

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.

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

This note was extended to August 30, 2025.

22 unchanged sentences

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 .

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

$ 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 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.

an original issue discount of $ 50,000 , October 31, 2026 maturity, and 61 Series F warrants with a October 31, 2033 maturity.

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

At February 29, 2024 the Company has

issued all 10 tranches totaling $ 4,000,000 as follows:

28, 2022, $ 400,000 loan, original issue discount of $ 50,000 , 61 Series F Preferred Share warrants and 1 Series F Preferred Share

having a relative fair value of $ 299,399 .

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

For the three and six months ended

August 31, 2024, the Company recorded amortization expense of $ 6,455 and $ 7,065 , respectively, with an unamortized discount of $ 40,827

at August 31, 2024.

INTELLIGENCE TECHNOLOGY SOLUTIONS INC.

TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

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 .

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

accumulated deficit.

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.

For the three and six months ended August 31, 2024, the Company recorded amortization expense of $ 6,294 and $ 7,097 , respectively, with

an unamortized discount of $ 41,029 at August 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

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.

For the three and six months ended August 31, 2024, the Company recorded amortization

expense of $ 6,238 and $ 7,119 , respectively, with an unamortized discount of $ 41,171 at August 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

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.

For the three and six months ended August 31, 2024, the Company recorded amortization

expense of $ 6,262 and $ 7,076 , respectively, with an unamortized discount of $ 40,900 at August 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

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.

For the three and six months ended August 31, 2024, the Company recorded amortization

expense of $ 6,266 and $ 7,096 , respectively, with an unamortized discount of $ 41,028 at August 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

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.

For the three and six months ended August 31, 2024, the Company recorded amortization

expense of $ 6,314 and $ 7,130 , respectively, with an unamortized discount of $ 41,174 at August 31, 2024.

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

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

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.

For the three and six months ended August 31, 2024, the Company recorded amortization

expense of $ 6,305 and $ 7,135 , respectively, with an unamortized discount of $ 41,274 at August 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

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.

For the three and six months ended August 31, 2024, the Company recorded amortization

expense of $ 6,484 and $ 7,186 , respectively, with an unamortized discount of $ 41,591 at August 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

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.

For the three and six months ended August 31, 2024, the Company recorded amortization

expense of $ 7,269 and $ 7,350 , respectively, with an unamortized discount of $ 42,628 at August 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

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.

For the three and six months ended August 31, 2024, the Company recorded amortization

expense of $ 5,876 and $ 7,163 , respectively, with an unamortized discount of $ 41,448 at August 31, 2024.

INTELLIGENCE TECHNOLOGY SOLUTIONS INC.

TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

November 30, 2023, the Company entered into an agreement where the lender will buy pay the Company $ 350,000 in exchange for thirteen

4 unchanged sentences

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.

The Company has repaid $ 147,000 and $ 53,000 in accrued interest

in July to account for the missed the April and August 2024 payments not made in agreement with the lender.

No notices have been

March 8, 2024, the Company entered into another agreement where the lender will buy pay the Company $ 350,000 in exchange for thirteen

3 unchanged sentences

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

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

The August 2024 payment has not been made but will be resolved with

No notices have been sent.

August 8, 2024, a Series F preferred shareholder exchanged 20 Series F the preferred shares for a $ 400,000 note payable.

22, 2022 the lender exchanged $ 200,000 of note principal for 57,142,857 common shares.

The common shares were issued in September

The note balance at August 31, 2024 is $ 200,000 .

STOCKHOLDERS’ EQUITY (DEFICIT)

1 unchanged sentence

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.

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 date.

On May 30, June 28 and July 28,

2024 the Company then issued total dividends of 4.32 shares of Series B Convertible Redeemable Preferred Shares having a value of $ 5,188

and fully redeemed the outstanding 324 Series B shares for $ 389,189 including deemed dividends of $ 89,189 which represents the redemption

value over the purchase cost of the shares.

August 31, 2024 there are 0 Series B Convertible Redeemable Preferred Shares outstanding.

F Convertible Preferred Shares

the six months ended August 31, 2024, a Series F preferred shareholder exchanged 20 Series F preferred shares for a $ 400,000 note payable.

(see Note 12).

The Company record an adjustment to the par value of the shares of $ 20 , paid -in capital for the carrying value of the

shares of $ 65,793 with the remaining amount of $ 334,187 a deemed dividend.

of Preferred Stock Warrant Activity

OF PREFERRED STOCK WARRANT ACTIVITY

Number of Series F Preferred Warrants

Weighted Average Exercise Price

Weighted Average Remaining Years

Exercise Price

Remaining Years

Outstanding at March 1, 2023

Forfeited and cancelled

Outstanding at May 31, 2024

Outstanding at August 31, 2024

INTELLIGENCE TECHNOLOGY SOLUTIONS INC.

TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

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

Company increased authorized common shares from 12,500,000,000 to 15,000,000,000 on October 4, 2024.

the three months ended August 31, 2024, the Company issued 1,330,610,802 common shares with gross proceeds of $ 4,687,016 and net proceeds

of $ 4,491,360 after issuance costs of $ 195,656 .

For the six months ended August 31, 2024, the Company issued 2,410,777,227 common shares

with gross proceeds of $ 7,485,654 and net proceeds of $ 7,173,953 after issuance costs of $ 311,701 .

In addition, for the three and six

months ended the Company issued 57,142,857 issuable shares as payment for $ 200,000 pf principle on a note payable.

(see Note 12)

table below represent the common shares issued, issuable and outstanding at August 31, 2024 and February 29, 2024:

OF COMMON SHARES ISSUED,ISSUABLE AND OUTSTANDING

Common shares

August 31, 2024

February 29, 2024

11,649,528,185

9,238,750,958

Issued, issuable and outstanding

11,706,671,042

9,238,750,958

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.

the three months and six months ended August 31, 2024 and August 31, 2023, the Company recorded a total of $ 83,323 and $ 50,713 , and $ 166,646

and $ 103,434 respectively, to stock-based compensation for options and warrants with a corresponding adjustment to additional paid-in

OF COMMON STOCK WARRANT ACTIVITY

Number of Warrants

Weighted Average Exercise Price

Weighted Average Remaining Years

Exercise Price

Outstanding at March 1, 2024

Forfeited and cancelled

Outstanding at May 31, 2024

INTELLIGENCE TECHNOLOGY SOLUTIONS INC.

TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Outstanding at August 31, 2024

of Common Stock Option Activity -Employee Stock Options

1 unchanged sentence

Number of Options

Weighted Average Exercise Price

Weighted Average Remaining Years

Exercise Price

Outstanding at March 1, 2024

1 unchanged sentence

( 3,011,029 )

Outstanding at May 31, 2024

Outstanding at August 31, 2024

INTELLIGENCE TECHNOLOGY SOLUTIONS INC.

TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

COMMITMENTS AND CONTINGENCIES

13 unchanged sentences

The Company paid a security deposit of $ 15,880 .

September 30, 2021, the Company entered into a 3-year lease agreement for a vehicle commencing September 30, 2021 through to September

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.

4 unchanged sentences

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,

4 unchanged sentences

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.

Rent expense and operating lease cost was $ 62,967 and $ 124,980 for the three and six months ended August 31,

2024, respectively, and 62,541 and $ 125,083 for the three and six months ended August 31, 2023, respectively.

OF MATURITY OF OPERATING LEASE LIABILITIES

Maturity of Lease Liabilities

May 31, 2030 and after

2030 and after

August 31, 2025

August 31, 2026

August 31, 2027

August 31, 2028

August 31, 2029

August 31, 2030 and after

Total lease payments

6 unchanged sentences

For the Three Months Ended

Net income (loss) available to common shareholders

For the Six Months Ended

$ ( 3,930,323 )

$ ( 4,759,728 )

Effect of common stock equivalents

interest expense on convertible debt

Net income (loss) adjusted for common stock equivalents

$ ( 8,124,682 )

$ ( 9,314,919 )

Dividend on Series B shares

Deemed dividend on redemption of Series F shares

Net loss available to common shareholders

( 4,325,343 )

( 4,759,728 )

( 8,548,558 )

( 9,314,919 )

Weighted average shares – basic

1 unchanged sentence

6,568,957,612

10,531,991,040

6,266,833,467

Net income (loss) per share – basic

Dilutive effect of common stock equivalents:

Convertible notes and accrued interest

Convertible Series F Preferred Shares

Stock options and warrants

Weighted average shares – diluted

1 unchanged sentence

6,568,957,612

10,531,991,040

6,266,833,467

Net income (loss) per share – diluted

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

anti-dilutive shares of common stock equivalents for the three and six months ended August 31, 2024 and 2032 were as follows:

SCHEDULE OF ANTI-DILUTIVE SHARES OF COMMON

1 unchanged sentence

For the Three Months Ended

May 31, 2023*

For the Six Months Ended

Convertible notes and accrued interest

Convertible Series F Preferred Shares

40,388,015,095

Convertible Redeemable Series B Preferred Shares

24,286,988,436

40,388,015,095

24,286,988,436

Stock options and warrants

40,874,266,762

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

24,720,755,887

Anti-dilutive shares of common stock

40,874,266,762

24,720,755,887

SUBSEQUENT EVENTS

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

to August 31, 2024:

The Company issued 335,000,000 common shares pursuant to a share purchase agreement for gross proceeds of $ 850,551 , issuance costs of

$ 37,097 and net proceeds of $ 813,454 .

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 .

The Board of Directors approved to increase authorized common shares from 12,500,000,000 to 15,000,000,000 on October 4, 2024.

On September 24, 2024 a prospective lender filed a claim against the Company for an alleged breach of a non-binding term sheet entered

into on June 7, 2024.

The Company and its counsel believe the claim is without merit and will contest it vigorously.

Accordingly, the

Company has made no accruals.

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