What changed in this filing

/stocks — the workspaceLOADING

Item 2. Management’s Discussion and Analysis

2026-10-20 compared with 2026-07-14 · 251 added, 128 removed, 57 unchanged (87% of the section changed)

1 unchanged sentence

Forward-Looking

following discussion of our financial condition and results of operations for the three months ended May 31, 2026 and May 31, 2025 should

be read in conjunction with our unaudited consolidated financial statements and the notes to those statements that are included elsewhere

in this report.

Our discussion includes forward-looking statements based upon current expectations that involve risks and uncertainties,

such as our plans, objectives, expectations and intentions.

Actual results and the timing of events could differ materially from those

anticipated in these forward-looking statements as a result of a number of factors, including those set forth under Item 1A.

appearing in our Annual Report on Form 10-K for the year ended February 28, 2026, as filed on June 9, 2026 with the SEC.

such as “anticipate,” “estimate,” “plan,” “project,” “continuing,” “ongoing,”

“expect,” “believe,” “intend,” “may,” “will,” “should,” “could,”

and similar expressions to identify forward-looking statements.

following discussion of our financial condition and results of operations for the three and six months ended August 31, 2026 and August

31, 2025 should be read in conjunction with our unaudited consolidated financial statements and the notes to those statements that are

included elsewhere in this report.

Our discussion includes forward-looking statements based upon current expectations that involve risks

and uncertainties, such as our plans, objectives, expectations and intentions.

Actual results and the timing of events could differ materially

from those anticipated in these forward-looking statements as a result of a number of factors, including those set forth under Item 1A.

Risk Factors appearing in our Annual Report on Form 10-K for the year ended February 28, 2026, as filed on June 9, 2026 with the SEC.

We use words such as “anticipate,” “estimate,” “plan,” “project,” “continuing,”

“ongoing,” “expect,” “believe,” “intend,” “may,” “will,” “should,”

“could,” and similar expressions to identify forward-looking statements.

expressly indicated or the context requires otherwise, the terms “AITX”, the “Company”, “we”, “us”,

and “our” refer to Artificial Intelligence Technology Solutions Inc.

was incorporated in Florida on March 25, 2010.

AITX reincorporated into Nevada on February 17, 2015.

AITX’s fiscal year end is

February 28 (February 29 during leap year).

AITX is located at 10800 Galaxie Ave., Ferndale Michigan, 48220, and our telephone number

is 877-767-6268.

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

to staff, and outside of the core competencies of the client organization.

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.

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.

encourage everyone to ensure they have the most up to date news by visiting AITX at AITX News - AITX - Artificial Intelligence Technology

was incorporated in Florida on March 25, 2010, under the name On the Move Systems Corp., and reincorporated into Nevada on February 17,

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

AITX’s fiscal year

end is February 28 (February 29 during leap year).

AITX’s principal executive offices are located at 10800 Galaxie Avenue, Ferndale,

Michigan 48220, and our telephone number is (877) 787-6268.

mission is to apply artificial intelligence to solve enterprise problems that are expensive, repetitive, difficult to staff, and outside

the core competencies of the client organization.

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

our wholly owned subsidiaries, principally Robotic Assistance Devices, Inc.

(“RAD”), we design, manufacture, deploy, and

support a portfolio of stationary devices, mobile autonomous platforms, and software products powered by SARA™ (Speaking Autonomous

Responsive Agent), our proprietary agentic AI platform.

SARA enables our devices to perceive, decide, communicate, and act in real time,

escalating to human operators only when needed.

Our long-term design target for the portfolio, which we refer to as “RAD Town,”

is described in Item 1 of our Annual Report on Form 10-K for the fiscal year ended February 28, 2026 (the “Annual Report”).

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;

we also sell units outright to

a limited number of enterprise customers.

Device rental revenue represented approximately 89% of total revenue for the three months ended

August 31, 2026.

view our commercial activity as proceeding along three principal sales avenues, each conducted through a dedicated wholly owned subsidiary

and each integrated with SARA:

solutions (RAD-I).

Robotic Assistance Devices, Inc.

operates our stationary product portfolio,

including ROSA™, our most widely deployed device;

RIO™, a portable solar-powered

security tower;

AVA™, a vehicle gate access solution;

TOM™, a visitor and front-desk

management solution;

and ROSS™ and RAM™, which add SARA-enabled analytics and

response to existing third-party cameras.

These solutions are typically deployed at building

entries, gates, perimeters, parking facilities, and interior chokepoints, and RAD-I remains

the largest contributor to consolidated revenue.

autonomous solutions (PURSUON).

Our mobile autonomous platform business is centered on

ROAMEO™, a fully autonomous outdoor security patrol vehicle that operates without on-site

human pilots.

In August 2026, Robotic Assistance Devices Mobile, Inc.

was renamed Pursuon

PURSUON remains wholly owned by the Company, and RAD is the

exclusive reseller of ROAMEO.

Commercial deployment and recurring billing of ROAMEO commenced

in May 2026, and as of August 31, 2026, two ROAMEO units were deployed and generating recurring

AI platform and partnerships (RAD-G).

Robotic Assistance Devices Group, Inc.

holds, develops,

and commercializes the SARA platform and operates our platform partnership strategy with

monitoring platforms and central stations, third-party hardware manufacturers, dealers and

integrators, and enterprise end users.

During the quarter, RAD stationary devices completed

user acceptance testing and became available on the production environment of Immix, a central

station monitoring software platform, following the integration announced in March 2026.

Robotic Assistance Devices Lanka (Private) Limited, our Sri Lanka subsidiary, operates as

a wholly owned subsidiary of RAD-G and provides engineering and production capacity.

solutions are differentiated because they:

Begin with an AI-driven

autonomous response through SARA, and escalate to a human operator only when needed.

Run on hardware purpose-built

by RAD and assembled at our facility in Ferndale, Michigan, in form factors designed for each application.

Are delivered through RAD-developed

software and cloud services, allowing enterprise IT and security teams to focus on their core competencies instead of maintaining

complex video and security platforms.

sell business-to-business through a direct enterprise sales team and an authorized dealer network of more than one hundred dealers across

the United States, Canada, and the European Union, which addresses small and middle-market accounts and provides geographic reach that

direct sales cannot economically cover.

As of August 31, 2026, we had approximately 1,000 devices deployed, primarily in the United States

and Canada, with early deployments in Europe.

Our customer base spans logistics, healthcare, commercial real estate, manufacturing, retail,

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

We have maintained

SOC 2 Type 2 status since February 2025.

principal corporate website is www.aitx.ai, where our press releases and SEC filings are available.

Information on our websites is not

incorporated by reference into this report.

Discussion and Analysis

of Operations for the Three Months Ended May 31, 2026 and 2025

following table shows our results of operations for the three months ended May 31, 2026 and 2025.

The historical results presented below

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

of Operations for the Three Months Ended August 31, 2026 and 2025

following table shows our results of operations for the three months ended August 31, 2026 and 2025.

The historical results presented

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

Three Months Ended

2 unchanged sentences

Loss from operations

Other expense, net

$ (5,715,838 )

Other income (expense),

Net Income (Loss)

$ (6,838,473 )

1 unchanged sentence

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

Three Months Ended

Device rental activities

Direct sales of goods and services

revenue for the three-month period ended May 31, 2026 was $1,831,202which represented a decrease of $23,635 or 1% compared to total revenue

of 1,854,837 for the three months ended May 31, 2025.

The decrease in revenue was attributable to a significant drop in the sales for

one major customer due to their internal cost cutting initiatives.

This major customer previously represented about 48% of the Company’s

revenues for the three months ended May 31, 2025 represented 21% of the Company’s revenues for the three months ended May 31, 2026.

The Company managed to mitigate this reduction by gaining new customers and diversifying its customer base.

For the three months ended

May 31, 2026, two customers accounted for 36% of total revenue and for the three months ended May 31, 2025, two customers accounted for

65% of total revenue.

The Company expects to see sales growth through new mobile products and software starting in the second quarter

of this fiscal year.

The mobile products will see a slow steady rollout over the fiscal year due to the capital intensive nature of these

gross profit for the three-month period ended May 31, 2026 was $1,183,824which represented a decrease of $49,677 compared to gross profit

of $1,233,501 for the three months ended May 31, 2025.

The decrease is consistent with the decrease in revenues as well as changes in

The gross profit % of 65% for the three-month period ended May 31, 2026 compared with the gross profit % of 67% for the

three month period ended May 31, 2025.

Operating Expenses

Three Months Ended

Direct sales of goods

revenue for the three-month period ended August 31, 2026 was $1,985,604 which represented an increase of $96,855 compared to total

revenue of $1,888,749 for the three months ended August 31, 2025.

Rental activities increased by 2% over the prior year’s

quarter and direct sales increased by 14%.

Rental activities small increase is attributable to the loss of business from one

customer, who due to its own cost cutting initiatives which began in December 2025, went from contributing to 46% of the

Company’s revenues in 2025, to 18% of the Company’s revenues in 2026.

The Company managed to increase its revenues from

other customers by approximately $617,000 to overcome this lost revenue and end up with 5% growth over the prior year’s

gross profit for the three-month period ended August 31, 2026 was $1,063,301, which represented an decrease of $281,564 compared to gross

profit of $1,344,865 for the three months ended August 31, 2025.

The gross profit decreased due to an inventory write down of $270,987.

The Company was not able to realize sales on this product due to the high cost of developing and selling to a new retail market.

Company has decided to rather focus on software initiatives instead.

The gross profit % of 54% for the three-month period ended August

31, 2026 was lower than the gross profit % of 71% for the prior year’s corresponding period.

Without the inventory write down the

2026 gross profit would have been 67% which is more consistent with the prior year but still slightly lower due to overhead allocations

and different product mix.

Research and development

1 unchanged sentence

Depreciation and amortization

Operating lease cost and rent

Operating lease cost and

Operating expenses

2 unchanged sentences

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 May 31, 2026 and May 31, 2025, were $3,893,188 and $4,412,170, respectively.

The overall decrease of $518,982 was primarily attributable to the following changes in operating expenses of:

Our operating expenses during the three-month period ended August 31, 2026 and August 31, 2025, were $3,743,697and $3,654,024, respectively.

The overall increase of $89,674 was primarily attributable to the following changes in operating expenses of:

and administrative expenses decreased by $55,559.

In comparing the three months ended May 31, 2026 and May 31, 2025 this decrease

was primarily due to the following decreases:

wages and salaries by $227,585, professional fees by $45,167, stock based compensation

by $19,847, production supplies by $45,525, RMC costs by $59,948, marketing by $53,486, freight and duty costs by $49,508 and dues

and subscriptions by $27,858.

These costs were partially offset by increases in subcontractor by $198,837 and with other net G&

A account decreases.

and development decreased by $202,026 due to a decrease in software development as the product is being released.

In comparing the three months ended August 31, 2026 and August 31, 2025 the decrease

in G&A was primarily due to decreases in:

wages and salaries of $95,188, stock-based compensation of $46,380, and travel $53,262.

These increases were partially offset by increase in:

professional fees of $77,716, repairs and maintenance of $49,065 ,office expenses

of $8,603 and with other net G& A account increases.

and development increased by $142,957 due to an increase in software development.

and amortization decreased by $2,474 due to changes in estimates for the allocation of revenue earning devices not in use.

lease cost and rent increased by $4,749.

Income (Expense)

income (expense) consisted of interest , change in fair value of derivatives, and gains (losses) on settlement of debt .

(expense) during the three months ended August 31, 2026 and August 31, 2025, was (4,158,077) and $3,072,223, respectively.

The $7,230,300

increase in other expense was primarily attributable to the gain on settlement of debt of $4,370,185 in the prior year as well as increases,

in interest expense , amortization of discounts including new derivative discounts, derivative liability loss and losses on debt settlements.

income (loss)

had a net loss of $6,838,473 for the three months ended August 31, 2026, compared to net income of $763,064 for the three months ended

August 31, 2025.

The increase in net loss of $7,601,539 is a result of lower gross profit and higher other expense.

of Operations for the Six Months Ended August 31, 2026 and 2025

following table shows our results of operations for the six months ended August 31, 2026 and 2025 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),

$ (12,554,310 )

$ (3,830,953 )

$ (8,723,357 )

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

Device rental activities

Direct sales of goods

revenue for the six-month period ended August 31, 2026 was $3,816,806 which represented an increase of $73,220 compared to total revenue

of $3,743,586 for the six months ended August 31, 2025.

Rental activities increased by 2% over the prior year’s six-month period

and direct sales increased by 4%.

Rental activities small increase is attributable to the loss of business from one customer, who due

to its own cost cutting initiatives which began in December 2025, went from contributing to 47% of the Company’s revenues in 2025,

to 19% of the Company’s revenues in 2026.

The Company managed to increase its revenues from other customers by approximately $1,094,000

to overcome this lost revenue and end up with 2% growth over the prior year’s six-month period.

gross profit for the six-month period ended August 31, 2026 was $2,247,125 which represented a decrease of $331,241, compared to gross

profit of $2,578,366 for the six months ended August 31, 2025.

The gross profit decreased due to an inventory write down of $270,987.

The Company was not able to realize sales on this product due to the high cost of developing and selling to a new retail market.

Company has decided to rather focus on software initiatives instead.

The gross profit % of 59% for the six-month period ended August

31, 2026 was lower than the gross profit % of 69% for the prior year’s corresponding period.

Without the inventory write down the

2026 gross profit would have been 66% which is more consistent with the prior year but still slightly lower due to overhead allocations

and different product mix.

Research and development

General and administrative

Depreciation and amortization

Operating lease cost and

Operating expenses

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

expenses and consultants.

Our operating expenses during the six-month period ended August 31, 2026 and August 31, 2025, were $7,636,884

and $8,066,193, respectively.

The overall decrease of $429,309 was primarily attributable to the following changes in operating expenses

and administrative expenses decreased by $380,193.

In comparing the six months ended August 31, 2026 and August 31, 2025 the increase

may be partially explained by the following decreases:

wages and salaries by $322,332, travel by $21,500, stock-based compensation

by $66,727, and RMC costs by $123,940.

These were partially offset by increases in the following accounts:

office expenses by $112,470,

professional fees by $32,549 commission by $14,858 and with other net G& A account increases.

and development decreased by $59,069 due to a shift in personnel from R&D paid to a company partially owned by a principal shareholder

, to more cost efficient outside contractors.

and amortization decreased by $3,949.

lease cost and rent increased by $9,153 due to one new lease in 2026.

expense during the three months ended May 31, 2026 and May 31, 2025, was $3,006,474 and $1,415,349, respectively.

lease cost and rent increased by $13,902 due to an increase in short term leases.

Income (Expense)

income (expense) during the six months ended August 31, 2026 and August 31, 2025, was (7,164,551) and $1,656,874, respectively.

The $8,821,425

increase in other expense was primarily attributable to a $885,525 increase in interest expense due to an approximately $338,000 increase

in debt discount amortization expense, an approximately $204,000 increase in interest on DVPO balance with the balance due to the switch

to some notes (see Note 11) to compounding interest and interest on approximately $2.7 million increase in loans payable.

loss on settlement was on the exchange of loans payable and accrued interest for the three months ended May 31, 2026

had a net loss of $5,715,838 for the three months ended May 31, 2026, compared to a net loss of $4,594,018 for the three months ended

May 31, 2025.

The increase in net loss of $1,121,820 is due to a number of factors:

higher other expenses is reduced by lower operating

expenses for the three months ended May 31, 2026.

Liquidity, Capital Resources and Cash Flows

Management believes that we will continue to incur

losses for the immediate future.

Therefore, we will need additional equity or debt financing until we can achieve profitability and positive

cash flows from operating activities, if ever.

These conditions raise substantial doubt about our ability to continue as a going concern.

Our unaudited condensed consolidated financial statements do not include and adjustments relating to the recovery of assets or the classification

of liabilities that may be necessary should we be unable to continue as a going concern.

of May 31, 2026, we had a cash balance of $94,643, accounts receivable (net) of $974,897, device parts inventory(net) of $1,378,950 and

increase in other expense was primarily to the gain on settlement of debt of $4,370,185 in the prior year as well as increases, in interest

expense , amortization of discounts including new derivative discounts, derivative liability loss and losses on debt settlements.

had a net loss of $12,554,310 for the six months ended August 31, 2026, compared to a net loss of $3,830,953 for the six months ended

August 31, 2025.

The increase in net loss of $8,723,357 is a result of lower gross profit and higher other expense.

Capital Resources and Cash Flows

believes that we will continue to incur losses for the immediate future.

Therefore, we will need additional equity or debt financing

until we can achieve profitability and positive cash flows from operating activities, if ever.

These conditions raise substantial doubt

about our ability to continue as a going concern.

Our unaudited condensed consolidated financial statements do not include and adjustments

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, 2026, we had a cash balance of $220,275, accounts receivable of $947,146, device parts inventory of $1,261,080 and $58,906,967

in current liabilities.

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

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

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

1 unchanged sentence

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

February 28, 2026

Current assets

3 unchanged sentences

$ (17,017,745 )

of May 31, 2026 and February 28, 2026, we had a cash balance of $94,643 and $109,043, respectively.

of August 31, 2026 and February 28, 2026, we had a cash balance of $220,275 and $109,043, respectively.

of Cash Flows

Three Months Ended

August 31, 2026

August 31, 2025

Net cash used in operating activities

4 unchanged sentences

cash used in operating activities.

cash used in operating activities for the three months ended May 31, 2026 was $2,759,307 which included a net loss of $5,715,838, non-cash

activity such as bad debts expense of $70,000, reduction of right of use asset of $38,013, accretion of lease liability $23,281, stock

based compensation of $60,508, change in operating assets and liabilities of $1,255,482, amortization of debt discount of $385,493, decrease

in related party accrued payroll and interest of $129,687 and depreciation and amortization of $545,841 to derive the uses of cash in

cash used in operating activities for the six months ended August 31, 2026 was $4,820,842 which included a net loss of $12,554,310 non-cash

activity such as , inventory provision $270,987 ,bad debts expense of $40,000, reduction of right of use asset of $77,960, accretion

of lease liability $44,627, stock based compensation of $94,483, loss on settlement of debt $893,510, derivative discount in excess of

fair value of debt $1,270,038, change in fair value of derivative liabilities $225,092, change in operating assets and liabilities of

$2,782,608, amortization of debt discount of $1,036,482, decrease in related party accrued payroll and interest of $117,239 and depreciation

and amortization of $1,114,920 to derive the uses of cash in operations.

cash used in investing activities.

cash used in investing activities for the three months ended May 31, 2026 was $16,438 which was the purchase of fixed assets of $15,600

and an acquisition of trademark of $838.

cash used in investing activities for the six months ended August 31, 2026 was $16,438 and consisted of $15,600 for the purchase of fixed

assets, and $838 for acquisition of trademarks.

cash provided by financing activities.

cash provided by financing activities for the three months ended May 31, 2026 was $2,761,345.

cash provided by financing activities was $4,948,512 for the six months ended August 31, 2026.

This consisted of share proceeds net of

issuance costs of $823,480 , proceeds on the issuance of Series C Preferred Shares of $200,000, proceeds from loans payable of $2,714,028

reduced by repayments on loans payable of $976,163.

issuance costs of 1,332,722, proceeds from loans payable of $4,594,328, proceeds from Series C redeemable convertible preferred shares

of $200,000 and reduced by repayments on loans payable of $1,178,538.

Sheet Arrangements

3 unchanged sentences

Party Transactions

both the three months ended May 31, 2026, and May 31, 2025, the Company had repayments of net advances of $129,687 and $0, respectively.

At May 31, 2026, the loan payable-related party was $331,946 and $461,633 at February 28, 2026.

Included in the balance due to the related

party at May 31, 2026, is $255,414 of deferred salary and interest, $157,513 of which bears interest at 12%.

As of February 28, 2026,

included in the balance due to the related party is $285,638 of deferred salary all of which bears interest at 12%.

The accrued interest

included in the loan at May 31, 2026, and February 28, 2026, was $84,956, and $79,268, respectively.

the three months ended May 31, 2026, the Company paid out gross payments to the CEO of $71,105 offset by a bonus accrual of $250,000,

which yields a net change of $178,895 relating to deferred compensation for CEO.

the three months ended August 31, 2026, the Company had net advances from its loan payable-related party of $12,448 and for the six months

ended August 31, 2026, the Company had net repayments from its loan payable-related party of 117,239.

For the three months and six months

ended August 31, 2025 , the Company had no repayments of net advances from its loan payable-related party.

At August 31, 2026 the loan

payable-related party was $344,394 and $461,633 at February 28, 2026.

Included in the balance due to the related party at August 31,

2026 is $267,862 of deferred salary and interest, $159,263 of which bears interest at 12%.

As of February 28, 2026, included in the balance

due to the related party is $285,638 of deferred salary all of which bears interest at 12%.

The accrued interest included in the loan

at August 31, 2026, and February 28, 2026, was $89,699, and $79,268, respectively.

the six months ended August 31, 2026, the Company paid out gross payments to the CEO of $359,888 offset by a bonus accrual of $500,000,

which yields a net increase of $140,112 relating to deferred compensation for CEO.

This was all in accordance with a December 2023 board

1 unchanged sentence

$1.5 million in compensation.

During the three months ended May 31, 2025, the Company paid out gross payments to the CEO of $1,496,687

offset by a bonus accrual of $250,000, which yielded a net change of $1,246,687 relating to deferred compensation for CEO.

of deferred compensation for CEO was $1,990,751 and $1,811,856 at May 31, 2026, and February 28, 2026, respectively

the three months ended May 31, 2026, the Company accrued $0 (three months ended May 31, 2025-$0) of incentive compensation plan payable

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

On May 31, 2026, and February 28, 2026, there was $5,500,000 and $5,500,000 incentive compensation payable.

the three months ended May 31, 2026, and 2025, the Company was charged $390,130 and $736,875, respectively for fees for research and

The balance of deferred compensation for CEO was $1,951,968 and $1,811,856 at August 31, 2026, and February

28, 2026, 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,

which yields a net change of $1,004,917 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 three and six months ended August 31, 2026, the Company accrued $0 (three and six months ended August 31 2025-$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, 2026, and February 28, 2026, there was $5,500,000 and $5,500,000 of incentive compensation payable.

the three months ended August 31, 2026 and 2025, the Company was charged $555,186 and $598,277, respectively for fees for research and

development from a company partially owned by a principal shareholder.

the six months ended August 31, 2026 and 2025, the Company was charged $945,316 and $1,335,152, 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 May 31, 2026, and February 28, 2026,

As at both August 31, 2026, and February

28, 2026, the balance due to this company was $76,532 and $160,557, respectively.

2 unchanged sentences

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