What changed in this filing

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Item 2. Management’s Discussion and Analysis

2025-01-21 compared with 2024-10-22 · 75 added, 71 removed, 220 unchanged (40% of the section changed)

MANAGEMENT’S DISCUSSION AND

ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (Amounts in thousands, except share and per share amounts)

MANAGEMENT’S DISCUSSION AND ANALYSIS

OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (Amounts in thousands, except share and per share amounts)

Forward Looking Statements

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the following:

Our ability to generate positive cash flow from operations;

Our ability to obtain additional financing to fund our operations;

The impact of economic, political and market conditions on us and our customers;

The impact of unfavorable results of legal proceedings;

Our exposure to potential liability arising from possible errors and omissions, breach of fiduciary duty, breach of duty of care, waste of corporate assets and/or similar claims that may be asserted against us;

Our ability to compete effectively against competitors offering different technologies;

Our business development and operating development;

Our expectations of growth in demand for our products;

Other risks described under the heading “Risk Factors” in Part II, Item 1A of this Quarterly Report on Form 10-Q and those risks discussed in our other filings with the Securities and Exchange Commission, including those risks discussed under the caption “Risk Factors” in our Annual Report on Form 10-K for the year ended February 29, 2024, issued on June 4, 2024 (as the same may be updated from time to time in subsequent quarterly reports), which discussion is incorporated herein by this reference.

ability to generate positive cash flow from operations;

ability to obtain additional financing to fund our operations;

impact of economic, political and market conditions on us and our customers;

impact of unfavorable results of legal proceedings;

exposure to potential liability arising from possible errors and omissions, breach of fiduciary duty, breach of duty of care, waste of

corporate assets and/or similar claims that may be asserted against us;

ability to compete effectively against competitors offering different technologies;

business development and operating development;

expectations of growth in demand for our products;

risks described under the heading “Risk Factors” in Part II, Item 1A of this Quarterly Report on Form 10-Q and those risks

discussed in our other filings with the Securities and Exchange Commission, including those risks discussed under the caption “Risk

Factors” in our Annual Report on Form 10-K for the year ended February 29, 2024, issued on June 4, 2024 (as the same may be updated

from time to time in subsequent quarterly reports), which discussion is incorporated herein by this reference.

We do not intend to update or revise any forward-looking

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We are also currently in discussions for usage of our technology for numerous wind turbines applications.

In fiscal 2024 and first quarter of fiscal 2025

we have significantly increased our engineering capabilities with having hired experts’ engineers in thermo dynamics (Ph.D.), electromagnetic

motor design (Ph.D.) Power electronics & control (Ph.D.) and mechanical design (M.S.M.E).

We have also acquired the latest in advance

engineering tools such as Ansys Maxwell finite elements, MATLAB and 3-D solid work.

Our engineering, research and development costs for

the three months ended August 31, 2024, were approximately $98.4.

In fiscal 2024 and first nine months of fiscal

2025 we have significantly increased our engineering capabilities with having hired experts’ engineers in thermo dynamics (Ph.D.),

electromagnetic motor design (Ph.D.) Power electronics & control (Ph.D.) and mechanical design (M.S.M.E).

We have also acquired the

latest in advance engineering tools such as Ansys Maxwell finite elements, MATLAB and 3-D solid work.

Our engineering, research and development

costs for the nine months ended November 30, 2024, were approximately $745

In Fiscal 2020 stockholders of the Company successfully

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Results of Operations

Three months ended August 31, 2024, compared

to three months ended August 31, 2023

Three months ended November 30, 2024, compared

to three months ended November 30, 2023

Net revenue was $0 for the three-months ended

August 31, 2024, compared to $0 for the three-months ended August 31, 2023.

Revenues continue to be negatively impacted due to a generally

low level of resources on our legacy products as well as our shift to the development and production of the prototype for our new product

We cannot project with confidence the timing or amount of revenue that we can expect until the prototype is completed, which should

be in Fiscal 2025.

November 30, 2024, compared to $47 for the three-months ended November 30, 2023.

Revenues continue to be negatively impacted due to a

generally low level of resources on our legacy products as well as our shift to the development and production of the prototype for our

new product line.

We cannot project with confidence the timing or amount of revenue that we can expect until the prototype is completed,

which should be in Fiscal 2025.

Cost of goods sold was $0 in the three-months

ended August 31, 2024, compared to $80 for the three-months ended August 31, 2023.

The gross loss and related gross margin loss were largely

influenced by the low volume of shipments in this quarter which reduced our ability to fully absorb fixed operating costs.

ended November 30, 2024, compared to $99 for the three-months ended November 30, 2023.

The gross loss and related gross margin loss were

largely influenced by the low volume of shipments in this quarter which reduced our ability to fully absorb fixed operating costs.

Engineering, research and development expenses

were $239 in the three-months ended August 31, 2024, compared to $287 for the three-months ended August 31, 2023.

were $196 in the three-months ended November 30, 2024, compared to $33 for the three-months ended November 30, 2023

Selling, general and administration (“SG&A”)

expenses for the three months ending August 31, 2024, were $2,255 as compared to $342 for the three months ending August 31, 2023, an

expenses for the three months ending November 30, 2024, were $673 as compared to $494 for the three months ending November 30, 2023, an

increased by $179 or 36%.

The increase in SG&A was due to increased headcount and pay increases, and $1,601 in stock-based compensation,

which did not occur in the prior year period.

The increase in SG&A was due to increased headcount and pay increases.

Interest expense decreased by $147 to $479 from

$412 for the three months ending August 31, 2024, and 2023 respectively.

Six months ended August 31, 2024, compared

to six months ended August 31, 2023

Net revenue was $50 for the six-months ended August

31, 2024, compared to $10 for the six-months ended August 31, 2023.

Revenues continue to be negatively impacted due to a generally low

level of resources on our legacy products as well as our shift to the development and production of the prototype for our new product

$332 for the three months ending November 30, 2024, and 2023 respectively.

Nine months ended November 30, 2024, compared

to nine months ended November 30, 2023

Net revenue was $50 for the nine-months ended

November 30, 2024, compared to $57 for the nine-months ended November 30, 2023.

Revenues continue to be negatively impacted due to a generally

low level of resources on our legacy products as well as our shift to the development and production of the prototype for our new product

We cannot project with confidence the timing or amount of revenue that we can expect until the prototype is completed, which should

be in Fiscal 2025.

Cost of goods sold was $29 in the six months ended

August 31, 2024, compared to $95 for the six-months ended August 31, 2023.

This resulted in a gross profit of $21 compared to a gross

loss of $85 for the six-months ended August 31, 2023.

The cost of goods sold in the six-months ended August 31, 2024, included an increase

in the inventory reserve of $20.

The gross loss and related gross margin for the six-months ended August 31, 2023 were largely influenced

by the low volume of shipments in this quarter which reduced our ability to fully absorb fixed operating costs.

Cost of goods sold was $29 in the nine months

ended November 30, 2024, compared to $194 for the nine-months ended November 30, 2023.

This resulted in a gross profit of $21 compared

to a gross loss of $137 for the nine-months ended November 30, 2023.

The cost of goods sold in the nine-months ended November 30, 2024,

included an increase in the inventory reserve of $20.

The gross loss and related gross margin for the nine-months ended November 30, 2023

were largely influenced by the low volume of shipments in this quarter which reduced our ability to fully absorb fixed operating costs.

Engineering, research and development expenses

were $549 in the six-months ended August 31, 2024, compared to $494 for the six-months ended August 31, 2023.

were $745 in the nine-months ended November 30, 2024, compared to $528 for the nine-months ended November 30, 2023.

Selling, general and administration (“SG&A”)

expenses for the six months ending August 31, 2024, were $2,629 as compared to $850 for the six months ending August 31, 2023, an increased

by $1,779 or 209%.

expenses for the nine months ending November 30, 2024, were $3,302 as compared to $1,344 for the nine months ending November 30, 2023,

an increased by $1,958 or 146%.

The increase in SG&A was due to increased headcount and pay increases, and $1,601 in stock-based compensation,

which did not occur in the prior period.

Interest expense decreased by $276 to $564 from

$840 for the six months ending August 31, 2024, and 2023 respectively.

Interest expense increased by $128 to $1,043 from

$1,171 for the nine months ending November 30, 2024, and 2023 respectively.

Liquidity and Capital Resources

Going Concern

During the six-month period ended August 31, 2024,

the Company recognized net loss of $21,648 from operation and used cash in operating activities of $1,619.

As of August 31, 2024, the

Company also has a shareholder deficit of $39,770 and notes payable totaling $5,315 are also past due.

During the nine-month period ended November 30,

2024, the Company recognized loss from operations of $4,026 and used cash in operating activities of $2,483.

As of November 30, 2024,

the Company also has a shareholder deficit of $39,451 and notes payable totaling $5,315 are also past due.

These factors raise substantial

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being able to obtain new sources of funding to support these actions in the upcoming fiscal year.

At August 31, 2024, we had cash of $15, compared

At November 30, 2024 we had cash of $21, compared

to cash of approximately $124 at February 29, 2024.

Subsequent to August 31, 2024, the Company issued 2,876,070 shares of common stock

Subsequent to November 30, 2024, the Company issued 920,000 shares of common stock

in exchange for cash proceeds of approximately $230,000.

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$3,000 of which was originally to be paid in June 2022,

and subsequently extended to August 1, 2023.

and subsequently extended to November 1, 2023.

Beginning in January 2023, interest began to accrue on the unpaid balance at a rate of

6%, compounded annually.

All amounts, including all accrued interest and deferred forbearance fees, are to be paid no later than eight years

from the date of the initial payment.

As of the date of this report, the Company has not yet paid the full $3,000 installment due to Kopple;

All amounts, including all accrued interest and deferred forbearance fees, are to be paid no later than eight

years from the date of the initial payment.

As of the date of this report, the Company has not yet paid the full $3,000 installment due

having only made a partial payment of $150 in June 2022.

In March 2024, the Company and Kopple again amended the note payable.

The amendment

(i) replaced the requirement to pay the $3,850 past due principal balance with the requirement to pay $2,000 due December

15, 2024, effectively extending the payment of $1,850 to future periods;

The amendment (i) replaced the requirement to pay the $3,850 past due principal balance with the requirement to pay $2,000 due

December 15, 2024, effectively extending the payment of $1,850 to future periods;

(ii) increased the stated interest rate to 10%;

added a fee of $15 monthly until the Company makes a principal payment of $2 million by December 2024;

(iv) effective August

30, 2024, the Company will grant Kopple a conversion right that gives Kopple the option to be able to convert the note payable into equity

of the Company at a conversion price of the lower of $1.00 per share or 50% of the 10 day volume weighted average

price of the Company’s common stock;

(iii) added a fee of $15 monthly until the Company makes a principal payment of $2 million by December 2024;

(iv) effective

November 30, 2024, the Company will grant Kopple a conversion right that gives Kopple the option to be able to convert the note payable

into equity of the Company at a conversion price of the lower of $1.00 per share or 50% of the 10 day volume weighted

average price of the Company’s common stock;

(v) during Fiscal 2025, will require the Company to pay 20% of all collected revenues

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March 31, 2031.

The installment payment of $ 2.0 million, which became due in December 2024, was extended to February 27, 2025.

Legal Proceedings” and

“Part IV, Item 15, Notes 9 and 17 to the Financial Statements” included in the Company’s Annual Report on Form 10-K

filed with the SEC on August 31, 2024 for information regarding the dispute and settlement with Mr.

filed with the SEC on November 30, 2024 for information regarding the dispute and settlement with Mr.

Kopple regarding these transactions.

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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