What changed in this filing

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Item 2. Management’s Discussion and Analysis

2026-01-14 compared with 2025-10-15 · 111 added, 115 removed, 98 unchanged (70% 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, 2025 and August

following discussion of our financial condition and results of operations for the three and nine months ended November 30, 2025 and November

30, 2024 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, 2025 and 2024

following table shows our results of operations for the three months ended August 31, 2025 and 2024.

of Operations for the Three Months Ended November 30, 2025, and 2024

following table shows our results of operations for the three months ended November 30, 2025, and 2024.

The historical results presented

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

Three Months Ended

November 30, 2025

Three Months Ended

November 30, 2024

Operating expenses

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Other income (expense), net

Net Income (Loss)

$ (4,730,800 )

$ (3,703,974 )

$ (1,026,826 )

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

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Direct sales of goods and services

revenue for the three-month period ended August 31, 2025 was $1,888,749 which represented an increase of $544,566 compared to total revenue

of $1,344,183 for the three months ended August 31, 2024.

Rental activities increased by 59% over the prior year’s quarter and

direct sales decreased by 31% as the Company continues to grow its core business of rental activities.

gross profit for the three-month period ended August 31, 2025 was $1,344,865, which represented an increase of $343,444 compared to gross

profit of $1,001,091 for the three months ended August 31, 2024.

Total revenues

revenue for the three-month period ended November 30, 2025, was $2,010,158 which represented an increase of $259,190 compared to total

revenue of $1,750,968 for the three months ended November 30, 2024.

There has been a 15% 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, 2025, was $1,173,830, which represented an increase of $126,622 compared to

gross profit of $1,173,830 for the three months ended November 30, 2024.

The gross profit increased due to the higher sales.

The gross profit

% of 71% for the three-month period ended August 31, 2024 was slightly lower than the gross profit % of 74% for the prior year’s

profit % of 65% for the three-month period ended November 30, 2025, was slightly lower than the gross profit % of 67% for the prior year’s

corresponding period.

Research and development

General and administrative

Depreciation and amortization

Operating lease cost and rent

and development

and administrative

and amortization

lease cost and rent

operating expenses

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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, 2025 and August 31, 2024, were $3,654,024 and $3,614,965, respectively.

Our operating expenses during the three-month period ended November 30, 2025, and November 30, 2024, were $3,931,952 and $3,476,728,

respectively.

The overall increase of $455,224 was primarily attributable to the following changes in operating expenses of:

and administrative expenses decreased by $131,995.

In comparing the three months ended August 31, 2025 and August 31, 2024 the decrease

in G&A was primarily due to decreases in freight of $210,259 and installation costs of $110,074.

These increases were partially

offset by an increase in wages and salaries of $177,744.

and development increased by $242,304 due to an increase in software development.

and administrative expenses increased by $3,782.

There were no significant changes.

and development increased by $517,925 as the Company continues to develop new hardware and software solutions.

and amortization decreased by $60,903 due to changes in estimates for the allocation of revenue earning devices not in use.

lease cost and rent decreased by $389.

lease cost and rent increased by $3,420 due to one more lease in the current period.

Income (Expense)

income (expense) consisted of interest and gain on settlement of debt .

Other income (expense) during the three months ended August

31, 2025 and August 31, 2024, was $3,072,223 and ($1,316,449), respectively.

The $4,388,672 increase in other income was primarily attributable

to the gain on settlement of debt of $4,370,185 in the current year and the corresponding lower interest charges on the reduced debt.

had net income of $763,064 for the three months ended August 31, 2025, compared to a net loss of $3,930,323 for the three months ended

August 31, 2024.

The increase in net income of $4,693,388 is a result of higher gross profit and higher other income (expense) from the

gain on settlement of debt.

of Operations for the Six Months Ended August 31, 2025 and 2024

following table shows our results of operations for the six months ended August 31, 2025 and 2024 The historical results presented below

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

Operating expenses

Loss from operations

Other income (expense), net

$ (3,830,953 )

$ (8,124,682 )

income (expense) during the three months ended November 30, 2024, and November 30, 2023, was ($2,099,300) and ($1,401,076), respectively.

The $698,224 increase in other expense was due to higher interest expense and a loss on settlement of debt.

had a net loss of $4,730,800 for the three months ended November 30, 2025, compared to a net loss of $3,703,974 for the three months

ended November 30, 2024.

The increase in net loss of $1,026,826 is due to a number of factors:

higher research and development expenses

partially offset by higher gross profit in the three months ended November 30, 2025.

of Operations for the Nine Months Ended November 30, 2025, and 2024

following table shows our results of operations for the nine months ended November 30, 2025, and 2024.

The historical results presented

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

from operations

income (expense), net

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

Device rental activities

Direct sales of goods and services

revenue for the six-month period ended August 31, 2025 was $3,743,586 which represented an increase of $891,941 compared to total revenue

of $2,526,983 for the six months ended August 31, 2024.

This increase is a result of an increase in rental sales of $1,276,323 which

was reduced slightly by a decrease in direct sales of $50,720.

The Company’s focus is on higher margin rental activities.

gross profit for the six-month period ended August 31, 2025 was $2,578,366 which represented an increase of $891,941, compared to gross

profit of $1,686,425 for the six months ended August 31, 2024.

rental activities

sales of goods and services

revenue for the nine-month period ended November 30, 2025, was $5,753,744 which represented an increase of $1,475,793 compared to total

revenue of $4,277,951 for the nine months ended November 30, 2024.

This 34% increase was because of higher rental activities partially

offset by lower direct sales for the year to date November 30, 2025.

gross profit for the nine-month period ended November 30, 2025, was $3,878,818 which represented an increase of $1,018,563, compared

to gross profit of $2,860,255 for the nine months ended November 30, 2024.

The gross profit increased due to the higher sales.

The gross profit %

was 69% for the six month period ended August 31, 2025 and 67% for the six month period ended August 31, 2024.

Research and development

General and administrative

Depreciation and amortization

Operating lease cost and rent

profit percentage of 67% for the nine-month period ended November 30, 2025, was slightly lower than the gross profit percentage of 69%

for the prior year’s corresponding period.

and development

and administrative

and amortization

lease cost and rent

Operating expenses

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expenses and consultants.

Our operating expenses during the six-month period ended August 31, 2025 and August 31, 2024, were $8,066,193

and $7,133,555, respectively.

Our operating expenses during the six-month period ended November 30, 2025 and November 30, 2024, were $11,998,145and

$10,610,283, respectively.

The overall increase of $1,387,862 was primarily attributable to the following changes in operating expenses

and administrative expenses increased by $383,807.

In comparing the six months ended August 31, 2025 and August 31, 2024 the increase

may be partially explained by the following increases:

wages and salaries by $307,260, commissions by $135,559 and marketing by $103,785.44.

In comparing the nine months ended November 30, 2025, and November 30, 2024 the

increase may be partially explained by the following increases:

wages and salaries by $337,125, sub-contractors by $265,245 and office

expenses by $88,545.

These were partially offset by decreases in the following accounts:

installation costs by $79,310 and freight by $84,373.

installation costs by $85,402, professional

fees by $58,326, repairs and maintenance by $39,911 and freight by $63,997.

and development increased by $1,207,138 due to an increase in software development and new products such as the ROAMEO.

and amortization decreased by $202,320 due to due to changes in estimates for the allocation of revenue earning devices not in use.

lease cost and rent decreased by $4,183 due to one less lease.

lease cost and rent decreased by $763 due to the reduction of one lease offset by the addition of another.

Income (Expense)

income (expense) during the six months ended August 31, 2025 and August 31, 2024, was $1,656,874 and ($2,677,552), respectively.

$4,334,426 increase in other income was primarily to the gain on settlement of debt of $4,370,185 in the current year and the corresponding

lower interest charges on the reduced debt.

had a net loss of $3,830,953 for the six months ended August 31, 2025, compared to a net loss of $8,124,682 for the six months ended

August 31, 2024.

The decrease in net loss of $1,190,237 is a result of higher gross profit and higher other income (expense) from the

gain on settlement of debt.

income (expense) during the nine months ended November 30, 2025, and November 30, 2024, was ($442,426) and ($4,078,628), respectively.

The $3,636,202 decrease in other expense was primarily attributable to the gain on settlement of debt of $3,740,185 offset by an increase

in interest expense.

had a net loss of $8,561,753 for the nine months ended November 30, 2025, compared to a net loss of $11,828,656 for the nine months

ended November 30, 2024.

The decrease in net loss of $3,266,903 is due to a number of factors:

higher gross profit and lower other

expenses (due to gain on settlement of debt) offset by higher operating expenses for the nine months ended November 30,

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, 2025, we had a cash balance of $323,021, accounts receivable of $931,219, device parts inventory of $1,075,239 and $9,191,674

of November 30, 2025, we had a cash balance of $143,801, accounts receivable of $1,306,020, device parts inventory of $1,138,333 and

$17,117,268 in current liabilities.

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

taking proactive measures to reduce operating expenses and drive growth in revenue.

We are taking proactive measures to reduce operating expenses and drive growth in revenue.

successful outcome of future activities cannot be determined at this time and there is no assurance that, if achieved, we will have sufficient

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

Current assets

Current liabilities

Working capital

$ (6,409,368 )

$ (2,548,138 )

of August 31, 2025 and February 28, 2025, we had a cash balance of $323,021 and $865,975, respectively.

of November 30, 2025 and February 28, 2025, we had a cash balance of $143,801 and $865,975, respectively.

of Cash Flows

Summary of Cash Flows

Net cash used in operating activities

$ (5,400,554 )

$ (6,433,906 )

Net cash used in investing activities

Net cash provided by financing activities

cash used in operating activities

cash used in operating activities for the six months ended August 31, 2025 was $5,400,554 which included a net loss of $3,830,953 non-cash

activity such as the bad debts expense of $71,482, reduction of right of use asset of $68,809, accretion of lease liability $53,778,

stock based compensation of $160,710, gain on settlement of debt of $4,370,185, change in operating assets and liabilities of $1,222,817,

amortization of debt discount of $143,217, increase in related party accrued payroll and interest of $67,575 and depreciation and amortization

of $1,012,196 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, 2025 was $10,420, $8,422 for the purchase of fixed assets, and

$1,998 for acquisition of trademarks.

cash provided by financing activities

cash provided by financing activities was $4,868,020 for the six months ended August 31, 2025.

This consisted of share proceeds net of

issuance costs of 4,362,349, proceeds from loans payable of $1,050,671, reduced by repayments on loans payable of $420,000 and redemption

of Series C redeemable convertible preferred shares of $125,000.

cash used in operating activities.

cash used in operating activities for the nine months ended November 30, 2025, was $7,451,163 which included a net loss of $8,561,753,

non-cash activity such as the bad debts expense of $141,482, reduction of right of use asset of $104,585, accretion of lease liability

$79,294, stock based compensation of $241,065,penalty added to face value of loan of $16,560, gain on settlement of debt of $3,740,185,

change in operating assets and liabilities of $2,301,738, amortization of debt discount of $301,615, increase in related party accrued

payroll and interest of $108,619 and depreciation and amortization of $1,555,817 to derive the uses of cash in operations.

cash used in investing activities.

cash used in investing activities for the nine months ended November 30, 2025, was $12,861 which was the purchase of fixed assets of

$10,863, and $1,998 for acquisition of trademarks.

cash provided by financing activities.

cash provided by financing activities was $6,741,850 for the nine months ended November 30, 2025.

This consisted of share proceeds net

of issuance costs of 5,219,853, proceeds from loans payable of $2,375,671, reduced by repayments on loans payable of $728,604 and the

redemption of Series C redeemable convertible preferred shares of $125,000.

Sheet Arrangements

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Party Transactions

both the three months and six months ended August 31, 2025 and August 31, 2024, the Company had no repayments of net advances from its

loan payable-related party.

At August 31, 2025 the loan payable-related party was $396,940 and $329,635 at February 28, 2025.

in the balance due to the related party at August 31, 2025 is $320,408 of deferred salary and interest, $225,013 of which bears interest

both the three months and nine months ended November 30, 2025 and November 30, 2024, the Company had no repayments of net advances from

its loan payable-related party.

At November 30, 2025, the loan payable-related party was $437,984 and $329,635 at February 28, 2025.

Included in the balance due to the related party at November 30, 2025 is $361,452 of deferred salary and interest, $239,600 of which

bears interest at 12%.

As of February 28, 2025, included in the balance due to the related party is $252,833 of deferred salary and interest,

$190,013 of which bears interest at 12%.

The accrued interest included in the loan at August 31, 2025, and February 28, 2025, was $63,501, and

$51,575, respectively.

the six months ended August 31, 2025, the Company paid out gross payments to the CEO of $1,504,917 offset by a bonus accrual of $500,000,

The accrued interest included in the loan at November 30, 2025, and February 28, 2025, was $70,689,

and $51,575, respectively.

the nine months ended November 30, 2025, the Company paid out gross payments to the CEO of $1,560,370 offset by a bonus accrual of

$750,000, which yields a net change of $810,370 relating to deferred compensation for CEO.

This was all in accordance with a December 2023 board

action allowing for $1 million of annual discretionary compensation as well as a February 28, 2025.

The balance of deferred compensation

for CEO was $1,197,683 and $2,202,600 at August 31, 2025, and February 28, 2025, respectively

the three and six months ended August 31, 2025, the Company accrued $0 (three and six months ended August 31 2024-$0) of incentive compensation

plan payable to the CEO .

This will be payable in Series G Preferred Shares which are redeemable at the Company’s option at $1,000

At August 31, 2025, and February 28, 2025, there was $4,000,000 and $4,000,000 of incentive compensation payable.

the three months ended August 31, 2025 and 2024, the Company was charged $598,277 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, 2025 and 2024, the Company was charged $1,335,152 and $1,289,830, respectively for fees for research

This was all in accordance with a

December 2023 board action allowing for $1 million of annual discretionary compensation as well as a February 28, 2025, board action

which provided an additional $1.5 million in compensation.

The balance of deferred compensation for CEO was $1,392,230 and

$2,202,600 at November 30, 2025, and February 28, 2025, respectively

the three and nine months ended November 30, 2025, the Company accrued $0 (three and nine months ended November 30, 2024-$0) of incentive

compensation plan payable to the CEO.

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

option at $1,000 per share.

At November 30, 2025, and February 28, 2025, there was $4,000,000 and $4,000,000 of incentive compensation

the three months ended November 30, 2025, and 2024, the Company was charged $655,721 and $556,175, respectively for fees for research

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

the nine months ended November 30, 2025, and 2024, the Company was charged $1,990,873 and $1,846,005, respectively for fees for research

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

The principal shareholder received no compensation from this

partially owned research and development company and the fees were spent on core development projects.

As at both August 31, 2025, and

February 28, 2025, the balance due to this company was $160,557 and $76,532, respectively.

As at both November 30, 2025,

and February 28, 2025, the balance due to this company was $76,532.

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