What changed in this filing

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Item 1. Business

2026-07-17 compared with 2024-05-29 · 377 added, 474 removed, 13 unchanged (98% of the section changed)

Assistance Devices, LLC was incorporated in the State of Nevada on July 26, 2016, as an LLC and was founded by current President Steve

Reinharz, has 25+ years in various leadership/ownership roles in the security industry and was part of a successful exit

to a global multinational security company in 2004.

Reinharz started his first security integration company in 1996, which he grew

to 30+ employees before closing that company in 2003.

In 2017, Robotic Assistance Devices LLC converted to a C Corporation, Robotic Assistance

Devices, Inc.

(“RAD”), through the issuance of 10,000 common shares to its sole shareholder.

History and Organization

Intelligence Technology Solutions Inc.

(formerly known as On the Move Systems Corp.) (“AITX” or the “Company”)

was incorporated in Florida on March 25, 2010, and reincorporated in Nevada on February 17, 2015.

On August 24, 2018, On the Move Systems

changed its name to Artificial Intelligence Technology Solutions Inc.

2017, AITX acquired all the ownership and equity interests in RAD (the “Acquisition”).

Before the Acquisition, AITX’s

business focus had been transportation services, and AITX was exploring the on-demand logistics market by developing a network of logistics

partnerships.

After the Acquisition, AITX shifted its business focus to align with RAD’s mission.

Since that time, AITX has been

engaged in pursuing the delivery of artificial intelligence (AI) and robotic solutions for operational, security, and monitoring needs.

More specifically, the Company is focused on applying advanced AI-driven technologies, paired with multi-use hardware and supported by

custom software and cloud services, to intelligently automate and integrate a variety of high-frequency security, concierge, and operational

substantially all of AITX’s operations were disposed of with the transaction’s consummation, the Acquisition was treated

as a reverse recapitalization effected by a share exchange for financial accounting and reporting purposes.

AITX recorded no goodwill

or other intangible assets as a result of the Acquisition.

RAD is treated as the accounting acquirer as its stockholders control the

Company after the Acquisition, even though AITX was the legal acquirer.

Therefore, the assets, liabilities, and historical operations

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

solutions are generally offered as a recurring monthly subscription, typically with a minimum 12-month subscription contract.

sells their units and the client that RAD has had longest opts to do this.

RAD’s solutions are expected to earn over 75% gross

margin over the life of each deployed asset when under subscription and over 50% gross margin when sold.

Specifically, RAD provides workflow

automation solutions delivered through a system of hardware, software and cloud services.

All elements of hardware and software design

offered by RAD are 100% designed, developed and owned by RAD.

Reinharz, founder of RAD and single largest equity owner of AITX, became CEO on March 2, 2021.

apply our Artificial Intelligence (AI) technology to solve enterprise problems categorized as expensive, repetitive, difficult to staff,

and outside of the core competencies of our client or prospective client organizations.

short list of basic examples include:

security guard-related functions such as monitoring a parking lot during and after hours and responding appropriately.

This scenario

applies to perimeters, interior yard areas, and related similar environments.

hardware/software with AI-driven responses, simulating and expanding on what legacy or manned solutions could perform.

of common access control functions through technology utilizing facial recognition and machine vision, leapfrogging most legacy solutions

in use today.

first industry focus is the more than $100 billion global security services market.

1 RAD’s current goal is to disrupt

and capture a significant portion of both the human security guard market (over $30 billion) 2 and “physical security”

(video surveillance, access control, visitor management, etc.) market (over $20 billion) through its innovative RAD solution ecosystem.

https://www.statista.com/statistics/323113/distribution-of-the-security-services-market-worldwide/

https://www.statista.com/statistics/294206/revenue-of-security-services-in-the-us/

solutions are unique because they:

with an AI-driven autonomous response utilizing cellular-optimized communications, while easily connecting to a human operator for

a manned response, as needed.

unique hardware purpose-built by RAD for delivery of these solutions.

Various form factors have been customized to deliver this new

functionality.

services through RAD-developed software and cloud services, allowing enterprise IT groups to focus on core competencies instead of

maintenance of complex video and security platforms.

core premise at inception was summarized in its paper titled ‘Autonomous Remote Services’.

On May 15, 2024, AITX updated

it’s mission statement to:

AITX, our mission is to shape the future of security and facility management through the deployment of Autonomous Intelligent Response

(AIR™) technology.

We harness the transformative power of AI and advanced computing to create intelligent, responsive devices and

environments that enhance security, safety, and efficiency.

May 22, 2024, the Company released an update to Autonomous Remote Services paper called Autonomous Intelligent Response that details

the development of relevant technology and the direction of the company.

This can be downloaded here:

Request AIR Manifesto - AITX

- Artificial Intelligence Technology Solutions

owns and operates three (4) wholly-owned subsidiaries.

(the “Company,” “AITX,” “we,” “our,” or “us”)

was incorporated in the State of Florida on March 25, 2010, under the name On the Move Systems Corp., and reincorporated in the State

of Nevada on February 17, 2015.

On August 24, 2018, the Company changed its name to Artificial Intelligence Technology Solutions Inc.

2017, the Company acquired all of the ownership and equity interests in Robotic Assistance Devices, Inc.

(“RAD”), a Nevada

corporation founded by Steven Reinharz, the Company’s current Chief Executive Officer and Chief Technology Officer (the “Acquisition”).

Prior to the Acquisition, the Company’s operations consisted of an early-stage transportation services business that was disposed

of in connection with the Acquisition.

As a result, the Acquisition was accounted for as a reverse recapitalization effected through

a share exchange, with RAD treated as the accounting acquirer.

No goodwill or other intangible assets were recorded in connection with

the Acquisition, and the historical operations reflected in our consolidated financial statements are those of RAD.

the Acquisition, the Company has been engaged in the development, deployment, and commercialization of artificial intelligence and robotic

solutions for security, monitoring, and operational applications.

Reinharz was appointed Chief Executive Officer on March 2, 2021.

of the date of this Annual Report on Form 10-K, the Company conducts substantially all of its operations through five (5) wholly owned

subsidiaries:

Robotic Assistance Devices, Inc.

Robotic Assistance Devices Group, Inc.

Assistance Devices Mobile, Inc.

Robotic Assistance Devices Residential, Inc.

Assistance Devices Lanka (PVT) Ltd.

(“RAD Lanka”), a Sri Lanka entity holding Port City Colombo status that operates as a

wholly owned subsidiary of RAD-G.

The Company anticipates establishing an additional subsidiary, Robotic Assistance Devices Europe (“RAD

Europe”), during fiscal 2027 to support growing business activity in the European Union and to serve as the Company’s cost

center for Genera Data Protection Regulation (GDPR)-compliant services.

is a vertically integrated developer and operator of artificial intelligence-driven security and operational automation solutions.

Company designs, manufactures, deploys, and supports a portfolio of stationary devices, mobile autonomous platforms, and software products

SARA enables our devices to perceive,

decide, communicate, and act autonomously in real time, without continuous human intervention.

Substantially

all of our revenue is generated through recurring monthly subscription contracts, typically with minimum twelve-month initial terms,

under a Solutions-as-a-Service model in which the Company retains ownership of the deployed hardware.

The Company also sells units outright

to a limited number of legacy enterprise customers.

We expect that, over the deployment life of a subscribed unit, gross margin will

exceed 75%, and that gross margin on outright sales will exceed 50% based on average bill of materials costs over the past two years

and related sales and dealer channel pricing that our market has appeared to accept.

customer base spans logistics, healthcare, commercial real estate, manufacturing, retail, education, government, and residential markets,

and includes one Fortune Top 10 enterprise and several additional Fortune 500 enterprises.

As of the date of this report, the Company

has deployed approximately one thousand devices across the United States and Canada, and is in the early stages of European market entry.

Context and Long-Term Vision

views the physical security industry as being in the early stages of the most significant structural transformation in its history.

founder, Steve Reinharz, has written and spoken extensively and is a regular speaker about this transformation since company inception

at industry association events hosted by the two industry leading organizations, SIA (Security Industry Organization) and ASIS (American

Society for Industry Security).

The industry has historically depended on human guard labor, passive video surveillance, and manually

monitored alarm systems—a model substantially unchanged in its fundamentals for more than fifty years.

That model is, in our view,

is undergoing change driven by a variety of factors including increasing challenges with labor and the advent of AI solutions.

labor costs continue to rise faster than commercial security budgets;

qualified personnel are increasingly difficult to recruit and retain;

manual monitoring workflows cannot scale to the volume of cameras and sensors now deployed;

and the response-time performance of human-mediated

systems is incompatible with the speed at which modern threats develop.

industries—logistics, manufacturing, financial services, agriculture—have already passed through the corresponding transition

from mechanized labor (the Third Industrial Revolution) to autonomous, AI-orchestrated workflows (commonly described as the Fourth Industrial

Revolution, or Industry 4.0).

The physical security industry, in management’s view, is now in the first phase of that same transition.

AITX is positioned to be a primary participant in this shift, and a substantial portion of the Company’s strategy, capital allocation,

and product roadmap is oriented around accelerating it.

the Company refers to the long-term outcome of this transition as “RAD Town”—a vision in which AITX’s portfolio

operates as an integrated autonomous-security fabric across a campus, community, or jurisdiction.

In a fully realized RAD Town deployment,

ROAMEO mobile units conduct outdoor patrol;

AVA manages vehicle access at gates and perimeters;

TOM handles credentialed pedestrian and

visitor access at building entries;

stationary ROSA, RIO, and RAM units provide fixed-position coverage of high-value zones;

RADCam protects

residential and small-business endpoints;

and SARA orchestrates all of it as a single agentic layer, escalating to human responders only

when necessary.

RAD Town is not a single named site or development;

it is the design target around which our product roadmap, software

architecture, and partnership strategy are organized.

believe that the companies that capture the largest share of the value created by this transition will be those that combine proprietary

hardware, proprietary AI, a broad partner ecosystem, and operational discipline.

The Company’s strategy is built on each of these

Structure and Sales Channels

Company is organized around four operating subsidiaries focused on commercial product sales and one development and licensing subsidiary.

For purposes of management reporting and strategic capital allocation, we view our commercial activity as proceeding along three principal

sales avenues:

(i) the stationary product portfolio operated through RAD-I;

(ii) the mobile autonomous platform operated through RAD-M;

and (iii) the agentic AI platform and ecosystem partnerships operated through RAD-G.

RAD-R operates a residential product line that is

currently a smaller component of consolidated revenue and is discussed separately below.

believes that RAD-I, on a standalone basis (based on direct and expenses for only stationary solutions and therefore stripped of any

expense not related to stationary solutions and its development), has achieved a point at which its recurring revenue and gross margin

could support positive cash flow operations today.

The Company has elected to continue investing materially in

RAD-M and RAD-G because we believe those investments will produce substantially larger long-term revenue and enterprise value than would

be achievable from RAD-I alone.

The Company’s consolidated results therefore continue to reflect the costs of those investments,

specifically in mobile, residential and agentic solutions.

This positioning reflects management’s view based on internal segment-level

the Company does not separately publish audited standalone financial statements for individual subsidiaries.

Stationary Solutions

Assistance Devices, Inc.

(RAD I) is the primary operating company of AITX.

The company holds the dealer and end-user contracts,

employs all US employees, operates the California and Michigan facilities, and is the primary industry-facing entity of AITX.

I owns all intellectual property related to RADSoC™, RAD Mobile SOC™, RADGuard™, and their core operating architecture.

RAD I owns everything related to AITX’s line of stationary devices and their manufacturing.

RAD I also implements and services

This company’s primary website is radsecurity.com and is updated as developments occur.

Assistance Devices Group, Inc.

(RAD G) is RAD G is an AITX subsidiary, separate from RAD I and RAD M, created for the purposes

of expected future sales through a channel that is incompatible and non-competitive with RAD I’s existing channel.

focused on the development of advanced software and electronics solutions and completed a ‘soft-launch’ of it’s

‘RADPACK’ board in December 2022.

This hardware is a RAD-designed circuit board designed to power all RAD devices.

company will be working to sell it to other manufacturers that want to create security devices but need a hardware/software solution

and want to leverage the investments and network that RAD Inc has built over the years.

The company has started to work with a commission-only

sales person to start to share this solution in the electric vehicle charger industry.

Additional sales materials are under development

and company is working to find it’s first adopter.

It is expected that this market niche could take several years to develop

and as such the company will be looking for clients in the security space and related markets.

The Company anticipates no revenues

from RADG this fiscal year.

This company’s website is radgroup.ai and is updated as developments occur.

(“RAD-I”) operates the Company’s stationary product portfolio.

RAD-I is the largest revenue

contributor within the consolidated group, and its product line represents the most mature, most deployed, and most operationally proven

elements of our portfolio.

RAD-I’s solutions are typically deployed at fixed locations—building entries, gates, perimeters,

parking facilities, and interior chokepoints—and are delivered as recurring subscription services.

current product portfolio includes the following solutions, each of which is integrated with the Company’s SARA agentic AI platform:

(Responsive Observation Security Agent)

is a compact, self-contained stationary security device combining visual analytics, two-way audio engagement, and AI-driven escalation.

ROSA is the Company’s most widely deployed solution and serves as the foundation for several other products in the portfolio.

is used for perimeter and entry-point monitoring, loitering and trespass deterrence, firearm detection, and a range of related applications,

and replaces or substantially reduces the need for guard services at protected locations.

(ROSA Independent Observatory)

is a portable, solar-powered security tower comprising one or two ROSA devices mounted atop a solar trailer assembly.

RIO is designed

for rapid deployment in environments where permanent infrastructure is impractical, including construction sites, retail parking lots,

healthcare campuses, distribution yards, public events, and temporary high-risk locations.

Hundreds of RIO units are actively deployed

across the United States.

(Autonomous Verified Access)

is a vehicle gate access management solution combining license plate recognition, two-way voice interaction, and cloud-based authorization.

AVA is deployed at logistics hubs, gated communities, corporate and industrial campuses, and multi-tenant commercial properties.

is sold both as a standalone subscription and as a component of a broader access platform that includes the Homeowners Association Platform

(“HOAP”), a digital pass and visitor management application used by residential communities.

(The Office Manager)

automates visitor management and front-desk functions at credentialed pedestrian access points.

TOM is deployed across corporate campuses,

multi-tenant commercial facilities, government buildings, and educational institutions.

One of the world’s largest third-party

logistics providers uses TOM to manage visitor intake across its North American distribution network.

and RAM™ (Camera Augmentation Software and Hardware)

is a software platform that adds AI-driven analytics, escalation workflows, and SARA-enabled response to existing third-party IP security

RAM is a complementary hardware module that adds two-way audio, voice interaction, and ROSA-equivalent SARA functionality to

third-party cameras.

ROSS and RAM enable customers to modernize their existing camera infrastructure without full hardware replacement

and provide a low-friction path to broader RAD ecosystem adoption.

Detection Analytic

Company’s firearm detection analytic identifies visible handguns and long guns in real time and is available across RAD-I devices

and through the ROSS platform.

When integrated with SARA, the analytic produces autonomous escalation, voice intervention, administrator

notification, and first-responder outreach within seconds of detection.

The analytic received the American Security Today ASTORS award

for Best Metal/Weapons Detection Solution.

Stationary Solutions

Company expects to introduce additional stationary solutions during fiscal year 2027.

These products are in active development and are

intended to expand RAD-I’s coverage of indoor environments, specialized vertical markets, and high-volume credentialed-access workflows.

The Company will provide additional disclosure regarding specific forthcoming products through press releases and subsequent periodic

filings as they progress to commercial release.

Mobile Autonomous Solutions

Assistance Devices Mobile, Inc.

(RAD M) is RAD M is an AITX subsidiary, separate from RAD I and RAD G, created for the purposes

of future developments, partnerships, and marketing in which the company may engage in the future.

RAD M is focused on the development

of autonomous mobile security and facility management devices, both ground-based and airborne.

RAD M’s first solution, the

ROAMEO™ unmanned ground vehicle, incorporates RAD M technologies related to the development of artificial intelligence based

autonomous driving, perception, and prediction.

ROAMEO features technology from RAD I and RAD G to perform its functions.

believes that it’s developing suite of mobile devices will bring the interactive outdoor, indoor, rugged, commercial security

and facility robots to the market.

These mobile solutions will complement the stationary systems.

The three solutions are the RADDOG™

lineup of quadrupeds and ROAMEO as the outdoor long-running high visibility robot.

Previously mentioned RAD M project referenced

as ‘Mobile 3’ is on indefinite hold as the stated solutions are given all the development resources.

ROAMEO is manufactured,

implemented, and maintained by RAD I.

the focus on the RADDOG lineup pushes the completion of ROAMEO 4.0 into later calendar year 2024.

RAD M will continue developing additional

mobility solutions that RAD I will bring to market.

Company believes strongly that the next ROAMEO will have significant positive financial impact on the Company.

The Company believes

demand for this solution is strong based on continued requests for prospects despite no marketing or promotion.

(“RAD-M”) operates the Company’s mobile autonomous platform business.

second of the Company’s three primary sales avenues and is the principal area in which the Company has invested development capital

over the past several fiscal years.

(Rugged Observation Assistance Mobile Electronic Officer)

is a fully autonomous, outdoor mobile security vehicle designed to conduct routine patrol operations across corporate campuses, distribution

yards, parking facilities, educational and healthcare campuses, municipal parks, and similar large outdoor environments.

ROAMEO operates

without on-site human pilots, relying on the Company’s autonomous navigation stack, on-board sensor suite, cellular and 5G connectivity,

and full integration with the SARA agentic AI platform.

ROAMEO is designed to detect, assess, communicate, escalate, and report autonomously,

and to replace or substantially reduce the cost of mobile guard patrols conducted in vehicles or on foot.

Investment and Deployment Status

estimates that the Company has spent approximately $20 million in the cumulative development of the ROAMEO platform across fiscal years

preceding the fiscal year covered by this report.

This estimate includes cash research and development expenditures, engineering costs,

allocated executive and indirect labor, and other indirect costs reasonably attributable to the ROAMEO program.

The Company does not

separately report segment-level research and development on this basis in its audited consolidated financial statements;

the $20 million

figure reflects management’s internal allocation and view and is provided here to give investors a directionally accurate sense

of the scale of investment that has been made.

the additional engineering, manufacturing, and integration work conducted during the fiscal year ended February 28, 2026, the Company

commenced commercial deployment and recurring billing on two ROAMEO units in May 2026.

Initial deployments are at two enterprise customer

a major logistics operator (previously disclosed by press release) and a healthcare group.

The Company has additional pre-sold

units in its order pipeline and is actively expanding its ROAMEO production capacity to meet demand.

Financial Expectations

has significant expectations for the RAD-M business.

Each ROAMEO deployment is structured as a recurring monthly subscription at a substantially

higher monthly price point than the Company’s stationary products, and the addressable market for outdoor autonomous patrol is

large relative to the Company’s current revenue base .

Management expects that, based on the current sales pipeline and assuming

successful execution of the ROAMEO production ramp, RAD-M will surpass RAD-I’s monthly recurring revenue contribution at some point

as management believes the mobile business has a higher revenue ceiling than stationary solutions.

This is a forward-looking statement;

actual results may differ materially, and the timing and magnitude of RAD-M’s revenue contribution will depend on a range of factors

including production capacity, customer adoption, and the operational performance of deployed units.

See “Cautionary Statement

Regarding Forward-Looking Information” at the front of this report.

Agentic AI and Platform Partnerships

Assistance Devices Group, Inc.

(“RAD-G”) operates the Company’s agentic AI development and platform business.

holds, develops, and commercializes the SARA platform and related AI assets, and is the operating home of the Company’s partnership

and ecosystem strategy.

RAD Lanka, the Company’s Sri Lanka subsidiary, operates as a wholly owned subsidiary of RAD-G.

(Speaking Autonomous Responsive Agent)

is the Company’s proprietary agentic AI platform.

SARA combines large language model architecture, situational logic, voice interaction,

and autonomous action to enable RAD devices—and, increasingly, third-party devices and platforms—to engage with and respond

to security situations in real time.

SARA is embedded in substantially all of the Company’s deployed devices and is the foundational

asset around which RAD-G’s commercial activity is organized.

received Judges’ Choice and Best in Threat Detection and Response Solutions honors in the Security Industry Association New Product

Showcase at ISC West 2025.

In 2026, SARA was again recognized at ISC West in connection with the Company’s integration partnership

with Immix, the leading central station monitoring software platform.

Partnership Strategy

Company’s long-term view is that the value of an agentic AI platform in physical security is determined principally by the breadth

of devices, monitoring platforms, dealers, and end users with which it integrates.

RAD-G is therefore organized around expanding the

SARA ecosystem along five categories of relationship:

platforms and central stations.

The Company’s integration with Immix, announced and

recognized during fiscal 2026, is intended as a model for embedding SARA into the platforms

that already sit at the center of the remote video monitoring industry.

Management views

this category as the highest-leverage opportunity for SARA adoption.

● Third-party

hardware manufacturers.

SARA’s commercial value increases with every additional camera,

sensor, and access control device it can operate.

The Company is actively pursuing licensing

and integration arrangements with hardware vendors across the security industry.

and integrators.

As of the date of this report, the Company’s authorized dealer network

has grown to over one hundred dealers across the United States, Canada, and the European

The dealer channel is one of the Company’s primary growth engines, and RAD-G

supports the channel with SARA-enabled product positioning and joint sales materials.

and Fortune 500 end users.

The Company’s existing enterprise customer base serves as

both a revenue base and a credibility base for SARA adoption.

Deepening relationships within

existing accounts and converting reference deployments into category-defining case studies

is a continuing priority.

regulatory, and policy stakeholders.

As AI-orchestrated security response becomes a more

substantial component of the physical security industry, insurance carriers, municipal regulators,

and standards bodies will increasingly shape the operating environment.

The Company participates

in industry policy efforts, including through Mr.

Reinharz’s role on the Board of the

Security Industry Association and his chairmanship of its Autonomous Working Group.

Sales Funnel and Expectations

based on it’s developing ‘SARA’ solution, has generated substantial industry interest and a relatively substantial

sales funnel.

The solution has won two Security Industry Association (SIA) awards and Steve Reinharz has been asked several times to

speak to various groups and industries about it.

This, combined with various partner relationships, incoming interest, outbound prospect

generation and other sales activities have created a substantial RAD G sales funnel in management’s view for an early-stage AI

platform business.

Management has high expectations for substantial revenue generation in this subsidiary.

This is a forward-looking

statement and actual results may differ materially.

Residential Solutions

Assistance Devices Residential, Inc.

(RAD R) is the AITX entity developed to bring AIR™ to residential products.

announced product is called RADCAM™ and is scheduled to be on the market in 2024.

RAD R uses technology from RAD Inc.

moment it is not known if RAD R will be built into a long term entity of AITX or if it will be sold.

Other AITX are not meant to

main website is aitx.ai.

Company and investor information can be found at this site and it is updated regularly.

- First Commercial Rugged Outdoor Security Robot

Reinharz started RAD in the summer of 2016.

RAD originally partnered with SMP Robotics Systems Corp.

(SMP) and commercialized the SMP

S5 Robot for the security market.

RAD’s commercialization of the platform focused on integrating traditional security industry

manufacturers’ solutions onto the robotics platform.

After two paid proofs-of-concept for large utility companies (under NDA) and

over 18 months of development and testing, RAD began deployments with various Fortune 500 customers.

These deployments were scheduled

to start in October 2017 but were delayed until December 2017 due to various supply chain challenges.

March 2018 it was apparent that S5 platform was not sustainable and RAD began to pull robots out of service.

robots were rejected by customers due to unsatisfactory reliability and some technical flaws that could not be solved, despite full efforts

by SMP and RAD.

RAD now considers this phase of the Company ‘Phase 1’ into robotics.

The Company attempted over 40 deployments

during this period.

has had no contact with SMP Robotics since April 2018.

of RAD’s existing convertible debt was acquired in support of the RAD/SMP robotics program.

This convertible debt has largely been

converted to long-term debt and warrants as shown in these financial filings.

will deliver on AITX’s goal of bringing the first outdoor, rugged, commercial security and facility robot to market.

solution will complement the stationary systems AITX already has operating in physical security applications serving customers in a wide

range of environments.

– RAD’s 2 nd Generation Ecosystem

primary strategy has always been to use AI technology and modern systems to transform the security industry.

Mobile robots, indoor and

outdoor, are a part of that strategy.

However, to ultimately realize the delivery of these solutions, a set of “stationary robots”

required development.

stationary robots launched in April 2018 with the Security Control and Observation Tower (SCOT), development of which began in August

SCOT performs many of the same functions as a stationary human security guard, plus many tasks that human guards cannot, and does

so at approximately 15% of the cost.

There is no known comparable solution available today that blends technology, usability, unique

features, and price.

SCOT received an enthusiastic response from the security market and industry accolades.

SCOT’s positive reception

reinvigorated RAD, which accelerated the development of the software and cloud services that support SCOT.

SCOT runs on the RAD Software

This software suite is a cloud and mobile platform at the heart of all RAD security solutions.

beta version SCOT was first shown to potential customers at the end of February 2018 in an exposition held in Ohio that tested customer

reception and elicited voice-of-the-customer input.

SCOT and the preliminary RAD Software Suite received a favorable customer response.

Customer feedback was incorporated into SCOT, and ideas on SCOT derivatives were added to the hardware development roadmap.

April 2018, at the ISC West, a large annual physical security event held in the United States, SCOT won three awards:

(1) The Security

Industry Association’s (SIA) New Product Award for Law Enforcement/Guarding 3 , (2) A 2018 Secure Campus Award from Campus

Security and Life Safety Magazine, and (3) A ‘Govie’ award for government security solutions from Security Today Magazine.

has since won numerous awards for its solutions, including:

Light My Way™, Secure Campus 2022 Awards, in the categories of ‘Security & Personal Safety Devices’ & ‘Artificial

Intelligence’

SIA’s New Product Showcase recognizes innovative products, services and solutions in electronic physical security, and SCOT™’s

award comes in the Law Enforcement/Guarding Systems category.

Technologies within the program are used in the protection of life and

property in residential, commercial, and institutional settings, displaying SCOT™’s importance in long-range human detection

and acting as a force multiplier for safety and defense against outside threats.

3.0 with STAN™, Security Industry Association NPS Awards, in the category of ‘Access Control Software, Hardware, Devices

and Peripherals’

with RAD Light My Way, CBRE Innovation Challenge 2021, in the category of ‘Best Workplace Experience Solution Award’

180™, American Security Today 2021 ASTORS Awards, in the categories of ‘Best Robotic Perimeter Protection’ & ‘Best

Motion Detection Solution’

& Product Development

product line has continued to develop with both new solutions being added and older solutions being phased out.

Specifically:

is discontinued although 2 units continue to operate and generate revenue for the Company.

Although initial interest was high and

several initial deployments continue to operate as intended the solution did not fulfill expected sales targets and as such it was

decided not to upgrade it to the ‘3.x’ technology.

It has been removed from the price list.

A permanent impairment on

the Scot has been recorded.

& Tom – Wally has been replaced with TOM (‘The Office Manager’) which has many but not all Wally features yet

features stronger processing and related technology.

Wally’s are being removed and replaced with Toms throughout last calendar

year although some Wally’s will continue to operate for a few more years.

Notably, the first Wally installation from 2020 continues

to operate, is expected to operate for more years and is not scheduled for replacement.

is has completed it’s final version 3.1 production at the time of this filing.

Generation 4 has begun production at the time

of this filing (May 2024).

and features the ‘RADPack Millie Gen 3’ control board from RAD G.

This board is expected to

significantly reduce assembly time because it requires a significantly less sophisticated wiring harness.

The board also allows for

better fleet management functionality since the board is 100% designed, programmed by RAD and important features have been included

ROSA Gen4 has 65% less production time than 3.1.

has spawned two significant iterations:

‘RIO’ is a ROSA Independent Observatory, or in other terms, a solar powered trailer with 1 – 2 ROSA units

The current market leader in this space is a company called LiveView, Inc.

The Company estimates this market at around 6,000

new trailer deployments per year and is looking to capture up to 10% - 20% of the market within 2 years.

As of the time of this writing

approximately 200 RIO have been deployed for a variety of clients.

This version has 1 – 2 ROSA attached to a pre-existing pole and powered through that poles lighting power.

since the lights are generally only powered at night ROSA P has the ability to power the ROSA(s) and a battery pack while the lighting

circuit is receiving power.

During daylight, when there is no lighting power, ROSA P provides battery power to the 1 – 2 ROSA.

As the time of this filing several ROSA P are deployed across three different clients.

At the time of this writing approximately

20 iterations are deployed.

has evolved into it’s Generation 4 series.

This series features more responsive and much brighter touchscreen and a significantly

improved 2 way audio system.

AVA deployments continue to be more ‘sticky’ than any other RAD deployment because it becomes

an essential part of regular facility activity since it allows for vehicle ingress and in some cases egress.

AVA has evolved into

Generation 4with the completion of the RADPack Millie Gen 3.

4 th Generation – AIR Powered

AIR™ direction is the basis for the 4 th Generation of hardware and software from the AITX subsidiaries.

this has launched RAD I’s 4 th Generation ROSA™, RIO™ and AVA ™ products.

As of May 2024 the 2024 production

has begun for ROSA and RIO.

AVA 4 th Generation solutions are expected to be in production in June or July.

RAD G core product,

RADPack, features AIR support with version ‘RADPACK Millie Version C’.

This version is built to carry NVIDIA Jetson processors

which is a critical component for AIR.

RAD M devices, specifically RADDOG and ROAMEO, will all feature AIR solutions.

the mobility side the Company has made significant progress.

Specifically:

– version 2 units have been deployed across a number of clients and it was found that the motors are not satisfactory for 100%

reliable use.

Notably one client has had a ROAMEO for many months, it’s solved their security issue and has achieved important

milestones such as 16 hours of perfect autonomous patrols and months of perfect autonomous recharging.

However the Company has decided

to shut the 2.x program in favor of the 3.x program (which is now being called Generation 4 because it has AIR) for these reasons:

The new motors built for 4.x will give much improved performance across the board and this is the type of performance the Company

wants to use in a high volume product.

Specifically the motors allow for minute operation as a stepper motor, allow for fast speeds,

have an integrated safety brake and are suited for safety certifications (critical).

Production costs of ROAMEO 3.x are expected

to be 50% of 2.0 which was considerably expensive and made it impossible to achieve required profit margins.

The sensor package

and user payload on 3.0 is refined and focused for reliability.

ROAMEO 3.x prototype 1 is 80% at the time of this filing although

resources are primarily focused on RADDOG development.

At this moment the Company has achieved sophisticated autonomous navigation

for ROAMEO and other important technical milestones.

Demand and requests for ROAMEO remain high despite not mentioning or promoting

The Company continues work on it and advises that the first prototype should be complete prior to the end of the fiscal year.

A permanent impairment on the version 2 units has been recorded.

2LE – This version launched June 6, 2023, and it’s ‘LE’ denotes that it is specifically designed for law

enforcement applications.

Additional information can be found at raddog.ai.

The company has deployed 1 unit to a Michigan police

Currently the company is developing it’s next version of the RADDOG with it’s manufacturing partner, Unitree.

The Company expects to reveal this version around September 2024 and has committed to produce 100 versions.

has created a variety of front-end and back-end software solutions to power its ecosystem.

RADGUARD is customer-facing software (on the

touchscreens of RAD’s field devices), and management solutions include RADSOC (Security Operations Center) and RADPMC (Property

Management Center).

has developed a variety of utilities that allow automatic over-the-air updates, most of which are within a back-end application called

SCOT Manager and RUPERT (‘RAD Utility, Performance, and Efficiency Reporting Tool’).

has developed Visitor Management, Access Control, and other applications itself instead of seeking to partner with legacy manufacturers.

It is RAD’s opinion that the legacy paradigm in the physical space underserves the markets in terms of cost, functionality, and

recently introduced its own Video Management System into RADSOC, delivering a fully integrated solution that facilitates robust security

and property management capabilities.

the end of the prior fiscal year the company announced ‘ROSS’ which is the company’s video management system.

allows non-RAD cameras to be managed by RADSOC alongside RAD stationary and mobile devices.

It further allows for RADSOC’s analytics

and communication features to be accessible and applied to these non-RAD cameras.

launched it’s Fire Arm Detection (‘FAD’) analytic last fiscal year and closed it’s first ROSS/FAD/ROSA project

with Rosenbaum Yeshiva in New Jersey.

The company has built a modest sales funnel for similar opportunities.

company believes that RAD’s ability to deliver easy-to-use, easy-to-obtain, and easy-to-support software, combined with custom

workflow-automation applications, is key to the company’s success.

Company believes that the R&D work it has completed makes AITX’ vision for a single all encompassing security and property

technology platform complete.

With the addition of the stationary and mobile solutions, plus the ability to integrate existing cameras

into the system, RAD can now provide solutions in almost every situation at a cost less than most others.

RAD continues to develop and

evolve software based on AIR, client requests, new features, scaling and other reasons.

(“RAD-R”) operates the Company’s residential security product business, principally

through the RADCam™ product line.

RADCam is an AI-powered, voice-enabled security camera designed for homeowners, property managers,

and small businesses, and is differentiated from typical residential security cameras by its real-time conversational engagement capability,

supported by SARA in an “SOS” configuration.

financial performance during fiscal 2026 was substantially below Company’s expectations.

The principal cause was the structural

difference between business-to-business (“B2B”) and business-to-consumer (“B2C”) go-to-market economics.

Company’s core operating expertise, sales channel, and customer acquisition model are built around B2B sale cycles.

The B2C residential

market requires a substantially higher level of consumer marketing spend than the Company was prepared to commit during fiscal 2026,

given competing capital priorities.

The business generated an immaterial amount to consolidated revenue.

Notwithstanding

the financial result, management continues to view RADCam as a superior product to comparable solutions available in the residential

security camera market.

The Company has no immediate plans to discontinue service to existing RADCam subscribers or to remove the product

RADCam continues to be available for purchase through radcam.ai, Amazon, and other retail outlets.

Company has modified the Residential software so that it can be deployed through RAD-I into the small-and-medium business and enterprise

markets and be compatible with RAD’s primary solution RADSoC™.

Channels, and Customers

Company sells through three principal channels:

direct enterprise sales, an authorized dealer network, and online retail (in the case

The direct enterprise sales team is led by a Senior Vice President of Sales with multiple direct reports and is supplemented

by the President of RAD and the Company’s Chief Executive Officer in larger and more strategic accounts.

The dealer network, which

has grown to over one hundred authorized dealers across the United States, Canada, and the European Union, addresses small and middle-market

accounts and provides geographic reach that direct enterprise sales cannot economically cover.

Company’s end-user base spans a broad cross-section of industries.

Sales pipeline and deployment activity during fiscal 2026 was

concentrated in logistics and distribution, healthcare, commercial real estate, manufacturing, retail, education, government, and residential

community markets.

has identified that the conversion rate of qualified sales opportunities to deployed clients—which historically lagged behind expectations—improved

during fiscal 2026, principally as a result of (i) the maturity of the Gen 4 hardware platform, (ii) the broader integration of SARA

across the portfolio, (iii) a growing set of reference deployments and case studies, and (iv) targeted investment in dealer enablement.

The Company continues to focus on this conversion rate as a primary operational metric.

Manufacturing

uses various domestic and overseas machine shops for raw material procurement and machining of the required plastic and metal pieces

that build RAD devices.

RAD’s sourcing has redundancy through use of multiple machine shops producing the same products for RAD.

In addition, all pieces within any RAD device can be procured from a choice of suppliers.

margins are based on current small batch production and assembly.

The Company expects that economies of scale will drive greater gross

margin as quantities and efficiencies increase.

has built a strong start-up culture based on performance, sacrifice, and rewards.

Attracting employees who can thrive in this environment

requires a different approach to corporate growth and development.

RAD’s governing philosophy centers around the principles of

“Emotional Intelligence.

Self-awareness, composure, internal motivation, empathy, and social skills are prerequisites for joining

the RAD team, and each candidate interview begins with a review of the foundational elements that comprise RAD culture.

members are open to multitasking and wearing multiple hats, as situations demand.

This allows management to focus on larger goals and

long-term strategies.

We try to ensure that our entire staff shares the same core beliefs and values as the Company, allowing us to adapt

and adjust quickly to changes that might grind other companies to a halt.

Members have been no stranger to the difficulties that face

a startup, including unexpected setbacks, delays in funding, or a cash crunch, but they have persevered with dedication and enthusiasm

for our greater mission.

They have met incredibly tight deadlines, volunteered to make financial sacrifices, and assisted wherever and

however they can.

believe that RAD’s high-EQ work culture creates productive, motivated employees that has allowed the Company to weather the difficult

period of robot deployments and our transition to 4 th generation solutions.

of May 7 ,2024, the company has 97 full-time equivalent employees with 51 being outside the United States

Company is focused on sequential product development while sales grow in order to get close to positive cash flow.

The Company has shared

publicly that it expects to be operationally positive cash flow on a monthly basis towards the end of the 2025 fiscal year.

believes that its experience has shown that the security market is ripe for disruption.

It has captured the interest of many Fortune

500 companies.

The Company believes that no other company operating in the physical security space has the solutions, distribution channel,

reputation, sales or support model to rival RAD in the near term.

In addition, the Company expects that the launch of RAD’s mobile

solutions will significantly increase the gap between it and would-be competitors.

RAD will be a one-stop-shop for proven and comprehensive

mobile and stationary workflow improvement devices and systems.

technology model includes a “new paradigm” for the security industry:

Security in a Box.

Every RAD solution features connection

to the RAD Software Suite, a platform for AI processing, usage analytics, cloud-sided video, communications interface, audit logs, and

Acceptance of RAD Solutions

end-users include one Fortune Top 10 company and a number of other Fortune 500 companies.

RAD is currently deployed in logistics, commercial

real estate, healthcare, amusement, manufacturing and retail industries.

The Company believes that if RAD is ultimately deployed to only

5% of the facilities within any of these industries, the Company will be profitable.

Industry Leadership Role

Reinharz has earned a prominent role as a spokesperson for AI and change in the security industry.

He has lectured and participated in

several panels for some of the security industry’s largest events and organizations.

Reinharz chairs Security Industry Association’s

Autonomous Working Group committee, which is dedicated to helping shape the industry and support progressive legislation.

Most recently,

Reinharz provided a lecture to NYC’s ASIS CPP group that qualified as a continuing education credit.

March 2023 Steve Reinharz was elected to a Board seat for Security Industry Association, Inc (SIA).

SIA is the foremost security group

steering policy, lobbying various governments and promoting education within the security industry.

is expected that Mr.

Reinharz will continue his promotion of the new paradigm for the next few years until adoption is widespread.

To Market Strategy

strategy has been to focus on the creation and support of a strong dealer channel.

RAD has successfully executed this strategy and has

added over 60 qualified dealers to our dealer channel.

The expectations were that this approach affords multiple benefits to RAD with

few downsides and almost all dealers exclusively represent RAD solutions in the area of ai-enabled autonomous devices.

over the past year it’s become clear that the dealer channel has exceptional benefits with a limited number of dealers.

Forward-thinking

dealers that invest the time and energy into RAD have the ability to be successful.

Unfortunately many dealers are happy to sign up and

continue their normal business operations without giving proper efforts to promote RAD solutions to their client bases.

As such the company

has about 20 active dealers with the rest being more opportunistic.

As such the Company has been increasingly focusing on a limited number

of dealers, including a strong and growing relationship with the world’s largest security company, Allied Universal Inc.

AUS and RAD are working on a large roll out to all integration offices as this report is filed.

Furthermore the Company is devoting more

time to direct sales, an area of effort that gives the Company more control over the sales process.

It is expected that going forward

the relationship with active dealers will strengthen while continuing to strengthen direct sales.

may be subject to competition by competitors that have greater operating histories, cash and operational resources than we do.

of March 7, 2024, we have a headcount of 97 fully dedicated full-time equivalents, including 46 RAD Inc.

employees, 28 overseas contractors,

and 23 employees of a Canadian research and development company.

None of our employees are represented by a union.

consider our employee relations to be excellent.

AITX’ principle shareholder owns a minority interest in the Canadian research

and develop company but has not received any compensation of any kind from that company to date.

Accomplishments

and its subsidiaries RAD I, RAD M, RAD G, and RAD R list of accomplishments highlights successes in adding to the strength of its executive

leadership team, expanding its sales and distribution channels, launching new products, while growing its presence, visibility and profile

within its existing marketplaces.

Milestones and accomplishments over the past 12 months include:

and data protection and compliance

Company continues it’s focus on delivery of safe and secure software and systems to its clients.

As such, last year the Company

achieved SOC 2 Report status.

The SOC 2 Report has become a benchmark standard, and now an often-specified requirement, in the software

procurement process.

Established by the American Institute of Certified Public Accountants (AICPA), criteria and reporting principles

are outlined as a means for organizations to create a documented framework of policies and procedures to prove how they manage and secure

data in the cloud and ensure protection of customer privacy and ensure internal communications are suitably handled.

This achievement

reflects the Company’s stated goals of best-in-class data protection and internal processes.

Company has subsequently maintained SOC 2 Type 2 status and has achieved a cyber certification from a Fortune Five company which was

more difficult to obtain than either SOC certifications.

Due to non-disclosure agreements with the Fortune Five company AITX can not

disclose who it is from.

Implementation

of ERP (enterprise resource planning) System - Update

Company’s implementation of NetSuite ERP continued through the year with a successful transition to all accounting and human resources

now fully functionality.

Sales is using some of the CRM features of the ERP but still using a non-ERP platform for management of the

sales funnel.

Production’s use of the ERP significantly increased over the course of the year.

There remain some challenges for

full production implementation related to change management.

Management expects full implementation of the ERP to complete this fiscal

The will allow realization of efficiencies in purchasing, kitting and production.

Dealers Added to Dealer Network

the end of FY 2023 RAD has more than 57 authorized dealers, up from 32 at the beginning of the fiscal year.

These dealers are located

across the United States, Canada, and the EU, with plans for continued expansion.

Dealers include the largest security companies in the

world, including Allied Universal and GardaWorld, which are respectively the largest and 3 rd largest guarding companies in

The ongoing addition of authorized dealers introduces and delivers RAD products to new markets.

sales funnel continues to grow in both quantity and quality.

The sales team has matured and stabilized with a Senior Vice President of

Sales with four full time direct sales reports.

Additional sales drivers are RAD’s President as well as AITX’ CEO.

operations team members are instrumental in encouraging clients to expand existing systems.

the fiscal year ended February 28, 2024 RAD added hundreds sales opportunities to the sales funnel.

Furthermore several end users expanded

their RAD systems with commitments to continue expansion.

RAD’s dealer network also grew although the Company will note that dealer

performance has fallen short of expectations and is being addressed.

An opportunity is mostly defined as an account that is exhibiting

a pain that can be solved by RAD, has a budget, and has reached the point in the sales process where they have a quote they can sign.

has identified that conversion of accounts from opportunities to clients is improving and has identified some of the reasons for the

low conversion rate as well as new tactics to break through these obstacles.

Advanced new technology sales often involve multiple decision-makers

and require a skilled and passionate internal champion.

The security industry breeds risk-averse personnel.

The Company is pressing several

initiatives to change the industry to create an environment where trying new things in the norm as opposed to the exception.

of these efforts are the Security Industry Association’s (SIA) upcoming Town Hall where three Fortune 500 security practitioners

that have implemented new technologies will share their tips for successful internal selling.

AITX will be putting more emphasis on these

efforts this year.

a maturing hardware and software line up, an increasing number of deployments/case studies/success stories, management is excited for

the next year’s sales.

Management feels that ironing out technical and production challenges are well in hand and clearing the

way for a greater volume of deployments.

and Supply Chain

Company performs final assembly, system integration, software loading, and quality assurance for its hardware products at its facility

in Ferndale, Michigan.

Sub-component manufacturing, including machined metal and plastic components, printed circuit boards, and selected

sub-assemblies, is sourced from a network of domestic and international suppliers.

The Company works to, when reasonable, maintain redundant

suppliers for substantially all critical components and has structured its supply chain to mitigate concentration risk.

gross margins to date have been produced under small-batch production conditions.

Management expects margin expansion over time as production

volumes increase and as the Company captures economies of scale, particularly in connection with the ROAMEO production ramp and additional

stationary product introductions.

hardware designs, software, firmware, AI models, and supporting platforms used in the Company’s products are designed, developed,

and owned by the Company and its subsidiaries.

RAD-I owns the principal intellectual property associated with the Company’s stationary

product platform, including the RAD Service Organization Control (SoC) command and control software, the RAD Mobile SoC , the RADGuard

application, and the related operating architecture.

RAD-G owns the SARA platform and the underlying agentic AI assets.

RAD-M owns the

autonomous navigation, fleet management, and ROAMEO-specific platform technology.

Company relies on a combination of trade secret protection, confidentiality and invention-assignment agreements with employees and contractors,

The Company holds registered trademarks on its principal product

The Company does not currently rely materially on patent protection.

Company competes across three distinct but related markets:

traditional guard services and manned monitoring;

legacy passive security

hardware (cameras, access control devices, alarm systems);

and an emerging set of AI-driven security technology companies.

guard and monitoring service providers compete on price and incumbency but are structurally disadvantaged by labor cost inflation and

labor availability constraints.

Legacy hardware vendors compete on installed base and channel breadth but typically lack agentic AI capability

and recurring software economics.

AI-native security technology companies, including a small number of autonomous robotics competitors,

compete on technology positioning, but most lack the integrated hardware-plus-software-plus-AI delivery model that the Company has developed.

believes the Company’s principal competitive advantages are:

(i) the integration of proprietary hardware, software, and the SARA

agentic AI platform under common ownership and development;

(ii) a broad deployed installed base and the operational learning derived

(iii) a recurring-revenue business model that aligns the Company with customer success;

(iv) a growing dealer and integration

partner ecosystem;

and (v) the demonstrated ability to bring complex hardware products from concept to commercial deployment, as evidenced

by the ROAMEO program.

Capital and Culture

of the date of this report, the Company has approximately 135 team members across the United States, Canada, the United Kingdom, and

Asia, including Sri Lanka.

The Company’s Sri Lanka operations are conducted through RAD Lanka, which holds Port City Colombo special

economic zone status, providing tax efficiency and access to a cost-effective, educated technical workforce.

None of the Company’s

employees are represented by a union, and management considers employee relations to be excellent.

Company has built its culture around the principles of emotional intelligence, accountability, and ownership.

Self-awareness, composure,

internal motivation, empathy, and social skill are deliberately weighted in the hiring process.

Team members are expected to operate

with multidisciplinary capability and to adjust scope and focus as the business requires.

This culture is, in management’s view,

a meaningful operational asset:

it allows the Company to move faster than competitors of comparable size, to absorb the inevitable setbacks

of a hardware-and-AI development business, and to retain experienced team members through periods of capital constraint.

Company’s leadership team includes deep experience in security operations, robotics engineering, software development, artificial

intelligence, sales, and capital markets.

Reinharz serves on the Board of the Security Industry Association and chairs its Autonomous

Working Group, and is a frequent speaker and panelist at industry conferences including ISC West and GSX.

Cybersecurity

and Compliance

Company achieved SOC 2 Type 2 status in February 2025 and has maintained SOC 2 Type 2 through annual audits.

has also achieved additional cybersecurity certifications appropriate to its enterprise and government customer base.

SOC 2 Type 2 status

is a benchmark standard, and in many cases a procurement requirement, for enterprise and government software and security purchases,

and the Company’s achievement and maintenance of this status reflects management’s ongoing commitment to data protection

and operational integrity.

Additional disclosure regarding the Company’s cybersecurity program is provided under Item 1C of this

Company’s principal corporate website is www.aitx.ai.

Information regarding the Company’s subsidiaries and products is also

available at www.radsecurity.com (RAD-I), www.radm.ai (RAD-M), www.radgroup.ai (RAD-G), www.radresidential.ai (RAD-R), and www.radcam.ai

(RADCam consumer information).

The Company makes available, free of charge through its website and through the SEC’s EDGAR system

at www.sec.gov, its Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K, and amendments to those

reports, as soon as reasonably practicable after such material is electronically filed with or furnished to the Securities and Exchange

to the Company’s websites in this report are provided for convenience and information only;

the content of those websites is not

incorporated by reference into this report.

Announcements

5 unchanged sentences

AITX News - AITX - Artificial Intelligence Technology Solutions

Shows and Conferences

in previous years, RAD attended several large security industry events including ISC West, GSX, plus dozens of regional conferences with

the purpose of presenting the Company’s solutions to a buying audience and continually loading the sales pipeline with new opportunities.

RAD often utilizes the events for speaking engagements or panel discussions to propel the Company’s ‘thought leadership’

regarding its AI-powered security and safety solutions.

Points of Interest

fiscal year was significant for stabilization of technology, better understanding of the sales process and related challenges, positioning

as a true leader in the industry and the achievement of several high profile deployments.

The Company continues its focus on sales, efficiencies

with the goal of achieving positive cash flow within 18 months.

based on regular conversations with the Company’s largest debt holder, expects no issues regarding pushing out debt deadlines as

it has done so in years past.

Management confirms the support of this lender and notes the most recent non-convertible $ 4m loan facility.

reiterates that the plan continues to be to grow revenues, achieve positive cash flow, reduce debt and prepare for an uplist to Nasdaq.

Management estimates that with continued reasonable performance the company could obtain and maintain profitability while working to

pay down in preparation for Nasdaq uplist targeted for 2026.

Item 3 - Legal Proceedings.

to Item 305(e) of Regulation S-K (§ 229.305(e)), we are not required to provide the information required by this Item as it is a

“smaller reporting company,” as defined by Rule 229.10(f)(1).

UNRESOLVED STAFF COMMENTS

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

What changed 10-K/A

Item 1. Business