What changed in this filing

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Item 2. Management’s Discussion and Analysis

2025-01-14 compared with 2024-10-15 · 120 added, 110 removed, 119 unchanged (66% of the section changed)

1 unchanged sentence

Forward-Looking

following discussion of our financial condition and results of operations for the three and six months ended August 31, 2024 and August

following discussion of our financial condition and results of operations for the three and nine months ended November 30, 2024 and November

30, 2023 should be read in conjunction with our unaudited consolidated financial statements and the notes to those statements that are

35 unchanged sentences

Discussion and Analysis

of Operations for the Three Months Ended August 31, 2024 and 2023

following table shows our results of operations for the three months ended August 31, 2024 and 2023.

of Operations for the Three Months Ended November 30, 2024, and 2023

following table shows our results of operations for the three months ended November 30, 2024, and 2023.

The historical results presented

below are not necessarily indicative of the results that may be expected for any future period.

August 31, 2024

August 31, 2023

Three Months Ended

November 30, 2024

Three Months Ended

November 30, 2023

Operating expenses

4 unchanged sentences

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

August 31, 2024

August 31, 2023

November 30, 2024

November 30, 2023

Device rental activities

Direct sales of goods and services

revenue for the three-month period ended August 31, 2024 was $1,344,183 which represented an increase of $957,820 compared to total revenue

of $386,363 for the three months ended August 31, 2023.

Rental activities increased by 210% over the prior year’s quarter and direct

sales by $235,465 as the Company continues to grow its core business.

gross profit for the three-month period ended August 31, 2024 was $559,218, which represented an increase of $373,444 compared to gross

profit of $185,774 for the three months ended August 31, 2023.

The gross profit increased due to the higher sales.

The gross profit %

of 42% for the three-month period ended August 31, 2024 was lower than the gross profit % of 48% for the prior year’s corresponding

August 31, 2024

August 31, 2023

revenue for the three-month period ended November 30, 2024, was $1,750,968 which represented an increase of $1,153,988 compared to total

revenue of $596,980 for the three months ended November 30, 2023.

There has been a large increase in revenues as a result of higher rental

activities growing each quarter through the deployment of new revenue earning devices.

gross profit for the three-month period ended November 30, 2024, was $1,173,830, which represented an increase of $826,594 compared to

gross profit of 347,236 for the three months ended November 30, 2023.

The gross profit increased due to the higher sales and higher proportion

of rental activities at higher margins than direct sales.

The gross profit % of 67% for the three-month period ended November 30, 2023,

was higher than the gross profit % of 58% for the prior year’s corresponding period.

Three Months Ended

November 30, 2024

Three Months Ended

November 30, 2023

Research and development

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Operating lease cost and rent

Operating expenses

operating expenses were comprised of general and administrative expenses, research and development, and depreciation.

1 unchanged sentence

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

Our operating expenses during the three-month period ended August 31, 2024 and August 31, 2023, were $3,173,092 and $3,231,026, respectively.

The overall decrease of $57,934 was primarily attributable to the following changes in operating expenses of:

Our operating expenses during the three-month period ended November 30, 2024, and November 30, 2023, were $3,476,728 and $2,732,187,

respectively.

The overall increase of $744,541 was primarily attributable to the following changes in operating expenses of:

and administrative expenses increased by $724,500.

In comparing the three months ended August 31, 2024 and August 31, 2023 the increase

in G&A was primarily due to increases in wages and salaries of $348,837 and subcontractors of $46,581.

These increases were partially

offset by decreases in:

professional fees of $170,274, stock-based compensation of $58,984, production supplies of $19,712, marketing

of $19,712, freight of $4,362 and travel of $79,408

and development decreased by $117,138 due to a reduction in funding on development of future products.

and amortization increased by $28,926 due to increases in revenue earning devices, demo devices, warehouse equipment and computer

lease cost and rent increased by $426.

In comparing the three months ended November 30, 2024, and November 30, 2023,

this increase was primarily due to the following increases:

wages and salaries $421,996, commissions by $65,064, repairs and maintenance

by $158,813 and RMC costs by $108,919.

These were partially offset by decreases in other G& A accounts.

and development increased by $21,919 as the Company continues to develop new hardware and software solutions..

and amortization increased by $4,328 due to small increases in demo devices, and warehouse equipment.

lease cost and rent decreased by $6,206 due to one less lease in the current period.

Income (Expense)

income (expense) consisted of interest.

Other income (expense) during the three months ended August 31, 2024 and August 31, 2023, was

($1,316,449) and ($1,714,476), respectively.

The $398,027 decrease in other expense was primarily attributable to the application of

ASU-2020 06 in the current year which resulted in lower amortization expense.

had a net loss of $3,930,323 for the three months ended August 31, 2024, compared to a net loss of $4,759,728 for the three months ended

August 31, 2023.

The decrease in net loss of $829,405 is primarily a result of higher gross profit and lower other expense.

of Operations for the Six Months Ended August 31, 2024 and 2023

following table shows our results of operations for the six months ended August 31, 2024 and 2023.

The historical results presented below

are not necessarily indicative of the results that may be expected for any future period.

August 31, 2024

August 31, 2023

income (expense) during the three months ended November 30, 2024, and November 30, 2023, was ($1,401,076) and ($1,581,533), respectively.

The $180,457 decrease in other expense was primarily attributable to the application of ASU-2020 06 in the current year which resulted

in lower amortization expense.

had a net loss of $3,703,974 for the three months ended November 30, 2024, compared to a net loss of $3,966,484 for the three months

ended November 30, 2023.

The decrease in net loss of $262,510 is due to a number of factors:

higher gross profit offset and lower other

expenses offset by higher general and administrative in the three months ended November 30, 2024.

of Operations for the Nine Months Ended November 30, 2024, and 2023

following table shows our results of operations for the nine months ended November 30, 2024, and 2023.

The historical results presented

below are not necessarily indicative of the results that may be expected for any future period.

Nine Months Ended

November 30, 2024

Nine Months Ended

November 30, 2023

Operating expenses

4 unchanged sentences

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

August 31, 2024

August 31, 2023

November 30, 2024

November 30, 2023

Device rental activities

Direct sales of goods and services

revenue for the six-month period ended August 31, 2024 was $2,526,983 which represented an increase of $1,755,412 compared to total revenue

of $771,571 for the six months ended August 31, 2023.

This increase is a result of an increase in rental sales of $1,464,742 as

the Company deployed more units as well as an increase in direct sales of $290,670.

gross profit for the six-month period ended August 31, 2024 was $1,244,552 which represented an increase of $862,045, compared to gross

profit of $382,507 for the six months ended August 31, 2023.

The gross profit increased due to the higher sales.

The gross profit % was

49% for both the six month period ended August 31, 2024 and 2023.

August 31, 2024

August 31, 2023

revenue for the nine-month period ended November 30, 2024, was $4,277,951 which represented an increase of $2,909,400 compared to total

revenue of $1,368,551 for the nine months ended November 30, 2023.

This 213% increase was because of higher rental activities due to

272 new deployments year to date November 30, 2023.

gross profit for the nine-month period ended November 30, 2024, was 2,860,255 which represented an increase of $2,130,512, compared to

gross profit of $729,743 for the nine months ended November 30, 2023.

The gross profit increased due to the 213% higher sales and higher

proportion of rental activities at higher margins than direct sales.

The gross profit percentage of 67% for the nine-month period ended

November 30, 2024, was higher than the gross profit percentage of 53% for the prior year’s corresponding period.

Nine Months Ended

November 30, 2024

Nine Months Ended

November 30, 2023

Research and development

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expenses and consultants.

Our operating expenses during the six-month period ended August 31, 2024 and August 31, 2023, were $6,691,682

Our operating expenses during the six-month period ended November 30, 2024 and November 30, 2023, were $10,610,283

and $9,108,923, respectively.

1 unchanged sentence

and administrative expenses increased by $1,796,613.

In comparing the six months ended August 31, 2024 and August 31, 2023 the increase

may be partially explained by the following decreases:

wages and salaries by $478,383, subcontractors by $94,505, professional fees

by $173,272, commissions by $110,694.

freight by $121,524, installation costs by$85,403, and RMC costs by $164,710.

These were partially

offset by decreases in the following accounts:

professional fees by $144,064, stock-based compensation by $91,382, travel by $66,762,

repairs and maintenance by $66,478, sales and marketing by $41,630, production supplies by $38,244 and other general and administrative

and development decreased by $368,185 due to a reduction in funding on development of future products.

and amortization increased by $52,994 due to the acquisition of revenue earning devices, demo devices, warehouse equipment and computer

lease cost and rent decreased by $103.

In comparing the nine months ended November 30, 2024, and November 30, 2023

the increase may be partially explained by the following increases:

wages and salaries by $900,370, subcontractors by $143,935, insurance

by $82,352, freight and duty by $117,773, installation expenses by $100,768, repairs and maintenance by $90,355 RMC costs by $273,629,

dues and subscriptions by $30,146, and office expenses $38,246.

These were partially offset by decreases in the following accounts:

professional fees by $84,522, stock-based compensation by $87,927 and other G& A decreases.

and development decreased by $346,266 due to a reduction in funding on development of future products especially in the first two

quarters of the current year.

and amortization increased by $57,322 due to the acquisition of demo devices, computer equipment and warehouse equipment.

lease cost and rent decreased by $6,309 due to one less lease in the current period.

Income (Expense)

income (expense) during the six months ended August 31, 2024 and August 31, 2023, was ($2,677,552) and ($3,320,692), respectively.

$643,140 decrease in other expense was primarily attributable to the application of ASU-2020 06 in the current year which resulted in

lower amortization expense.

had a net loss of $8,124,682 for the six months ended August 31, 2024, compared to a net loss of $9,314,919 for the six months ended

August 31, 2023.

The decrease in net loss of $1,190,237 is a result of higher gross profit and a reduction on other expense.

income (expense) during the nine months ended November 30, 2024, and November 30, 2023, was ($4,078,628) and (4,902,225), respectively.

The $823,597 decrease in other expense was primarily attributable to the application of ASU-2020 06 in the current year which resulted

in lower amortization expense.

had a net loss of $11,828,656 for the nine months ended November 30, 2024, compared to a net loss of $13,281,405 for the nine months

ended November 30, 2023.

The decrease in net loss of $1,452,749 is due to a number of factors:

higher gross profit offset and lower other

expenses offset by higher general and administrative in the nine months ended November 30, 2024.

Capital Resources and Cash Flows

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relating to the recovery of assets or the classification of liabilities that may be necessary should we be unable to continue as a going

of August 31, 2024, we had a cash balance of $543,133, accounts receivable of $650,293, device parts inventory of $2,063,229 and $37,080,711in

current liabilities.

of November 30, 2024, we had a cash balance of $84,231, accounts receivable of $1,249,792, device parts inventory of $1,883,530 and $41,294,464

in current liabilities.

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

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following table summarizes total current assets, liabilities and working capital (deficit) for the periods indicated:

November 30, 2024

February 29, 2024

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$ (18,099,085 )

of August 31, 2024 and February 29, 2024, we had a cash balance of $543,133 and $105,926, respectively.

of November 30, 2024 and February 29, 2024, we had a cash balance of $84,231 and $105,926, respectively.

of Cash Flows

Summary of Cash Flows

August 31, 2024

August 31, 2023

November 30, 2024

November 30, 2023

Net cash used in operating activities

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cash used in operating activities.

cash used in operating activities for the six months ended August 31, 2024 was $6,433,906 which included a net loss of $8,124,682

cash used in operating activities for the nine months ended November 30, 2024, was $8,894,284 which included a net loss of $11,828,656,

non-cash activity such as the bad debts expense of $37,995, inventory provision of $150,000, reduction of right of use asset of $91,152,

$63,821, accretion of lease liability $61,159, stock based compensation of $166,646, loss on settlement of debt of $6,520, change in

operating assets and liabilities of $472,840, amortization of debt discount of $129,333, increase in related party accrued payroll

and interest of $22,151 and depreciation and amortization of $645,311 to derive the uses of cash in operations.

accretion of lease liability $90,165, stock based compensation of $249,868, loss on settlement of debt of $6,520, change in operating

assets and liabilities of $1,030,529, amortization of debt discount of $198,696, increase in related party accrued payroll and interest

of $39,976 and depreciation and amortization of $1,039,371 to derive the uses of cash in operations.

cash used in investing activities.

cash used in investing activities for the six months ended August 31, 2024 was $77,868, $23,724 for the purchase of fixed assets, $4,144

cash used in investing activities for the nine months ended November 30, 2024, was $77,868 which was the purchase of fixed assets of

$23,724, $4,144 for acquisition of trademarks and $50,000 for a convertible note receivable.

cash provided by financing activities.

cash provided by financing activities was $6,948,981 for the six months ended August 31, 2024.

This consisted of share proceeds net of

issuance costs of 6,893,169, proceeds from loans payable of $350,000, reduced by repayments on loans payable of $183,000, proceeds on

the issuance of Series B redeemable convertible preferred shares of $278,000 reduced by redemption of those same Series B redeemable

cash provided by financing activities was $8,950,457 for the nine months ended November 30, 2024.

This consisted of share proceeds net

of issuance costs of 8,894,645, proceeds from loans payable of $350,000, reduced by repayments on loans payable of $183,000, proceeds

on the issuance of Series B redeemable convertible preferred shares of $278,000 reduced by redemption of those same Series B redeemable

convertible preferred shares of $389,188.

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Accounting Policies and Estimates

accounting policies and estimates are further discussed in our Annual Report on Form 10-K for the year ended February 29, 2024,

as filed on May 29, 2024.

accounting policies and estimates are further discussed in our Annual Report on Form 10-K for the year ended February 29, 2024, as filed

on May 29, 2024.

Party Transactions

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 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 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

both the three months ended November 30, 2024 and November 30, 2023 , the Company had no repayments of net advances from its loan payable-related

At November 30, 2024, the loan payable-related party was $297,414 and $257,438 at February 29, 2024.

Included in the balance due

to the related party at November 30, 2024 is $222,754 of deferred salary and interest, $183,625 of which bears interest at 12%.

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%.

The accrued interest included in loan at November 30, 2024 and February 29, 2024 was $28,267 and $32,468 respectively.

to the amended Employment Agreement with its Chief Executive Officer, for the three months and six ended November 30, 2024, the Company

accrued $0 (2023-$62,000) and $0 (2023-$187,000) of incentive compensation plan payable with a corresponding recognition of stock based

2 unchanged sentences

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

At November 31, 2024 and February 29, 2024 there was $2,500,000 and $2,500,000 of

incentive compensation payable.

November 30, 2024 deferred compensation for CEO was $598,635.

For the nine months ended November 30, 2024, the net change was an increase

of $59,868 comprising of net cash repayments and adjustments of $195,000 offset by accruals of $700,082.

At February 29, 2024 deferred

compensation for CEO was $538,767.

the three months ended November 30, 2024 and 2023, the Company was charged $556,175 and $526,723, respectively for fees for research

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

the nine months ended November 30, 2024 and 2023, the Company was charged $1,846,005 and $2,185,998, respectively for fees for research

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

QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

1 unchanged sentence

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

What changed 10-Q

Item 2. Management’s Discussion and Analysis