60 unchanged sentences
In accordance with ASC 606, we recognize revenue, net of discounts, for our generator sets at the time of product delivery and acceptance to the domestic distributor (i.e., point-in-time), which also corresponds to the passage of legal title to the customer and the satisfaction of our performance obligations to the customer.
−Removed: Inventories are valued at the lower of cost (first-in, first-out) or net realizable value, on an average cost basis.
−Removed: We regularly review inventory components for excess or obsolete inventory based on estimated future usage and sales.
−Removed: When evidence exists that the net realizable value of inventory is lower than its cost, the difference is recognized as a loss in the period in which it occurs.
−Removed: Once inventory is written down, it creates a new cost basis that may not be subsequently written up.
Derivative Financial Instruments
8 unchanged sentences
Results of Operations
−Removed: Three months ended May 31, 2026, compared to three months ended May 31, 2025
−Removed: Net revenue was $2 for the three months ended May 31, 2026, compared to $185 for the three months ended May 31, 2025.
−Removed: 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.
−Removed: 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 2027.
+Added: Three months ended August 31, 2026, compared to three months ended August 31, 2025
+Added: Net revenue was $34 for the three months ended August 31, 2026, compared to $0 for the three months ended August 31, 2025.
+Added: Revenues continue to be negatively impacted by generally low resources for our legacy products and our shift to developing and producing the prototype for our new product line.
+Added: We cannot confidently project the timing or amount of revenue we can expect until the prototype is completed, which should be in Fiscal 2027.
Cost of Goods
−Removed: Cost of goods sold was $0 in the three months ended May 31, 2026, compared to $25 for the three months ended May 31, 2025.
+Added: Cost of goods sold was $11 in the three months ended August 31, 2026, compared to $0 for the three months ended August 31, 2025.
Engineering, Research and Development
−Removed: Engineering, research and development expenses were $386 in the three months ended May 31, 2026, compared to $353 for the three months ended May 31, 2025.
+Added: Engineering, research and development expenses were $396 in the three months ended August 31, 2026, compared to $336 for the three months ended August 31, 2025.
The increase is primarily attributable to the purchase of engineering software and program licenses.
Selling, General and Administrative Expense
−Removed: Selling, general and administrative expenses for the three months ended May 31, 2026, were $468 compared to $484 for the three months ended May 31, 2025, a decrease of $16 or 3%.
+Added: Selling, general and administrative expenses for the three months ended August 31, 2026, were $556, down from $578 for the three months ended August 31, 2025, a decrease of $22 or 4%.
The decrease is primarily attributable to lower professional services fees, offset by higher travel and meeting expenses and increased health insurance premiums during the period.
Other Income (Expense) and Interest Expense
−Removed: Interest expense decreased by $114 to $480 for the three months ended May 31, 2026, as compared to $594 for the three months ended May 31, 2025.
−Removed: The Company estimated the fair value of the conversion option derivative liability using a Black-Scholes option pricing model and recorded changes in the fair value of the derivative liability of $7,028 and $1,570 for the three months ended May 31, 2026 and 2025, respectively.
−Removed: We recorded net losses of $8,408 and $2,841 for the three months ended May 31, 2026 and 2025, respectively.
−Removed: Our net loss increased due to lower gross profit, higher operating expenses, and changes in the fair value of our derivative liability.
+Added: Interest expense decreased by $198 to $471 for the three months ended August 31, 2026, as compared to $669 for the three months ended August 31, 2025.
+Added: The Company estimated the fair value of the conversion option derivative liability using a Black-Scholes option pricing model and recorded changes in the fair value of the derivative liability of $4,796 and $(3,181) for the three months ended August 31, 2026 and 2025, respectively.
+Added: We recorded a net income of $3,396 for the three months ended August 31, 2026, as compared to a net loss of $4,764 for the three months ended August 31, 2025.
+Added: Our net loss decreased because gross profit increased and gain from the change in fair value of our derivative liability.
+Added: Six months ended August 31, 2026, compared to six months ended August 31, 2025
+Added: Net revenue was $36 for the six months ended August 31, 2026, compared to $185 for the six months ended August 31, 2025.
+Added: Revenues continue to be negatively impacted by generally low resources for our legacy products and our shift to developing and producing the prototype for our new product line.
+Added: We cannot confidently project the timing or amount of revenue we can expect until the prototype is completed, which we expect in Fiscal 2027.
+Added: Cost of Goods
+Added: Cost of goods sold was $11 in the six months ended August 31, 2026, compared to $25 for the six months ended August 31, 2025.
+Added: Engineering, Research and Development
+Added: Engineering, research and development expenses were $782 in the six months ended August 31, 2026, compared to $689 for the six months ended August 31, 2025.
+Added: The increase is primarily attributable to the purchase of engineering software and program licenses.
+Added: Selling, General and Administrative Expense
+Added: Selling, general and administrative expenses for the six months ended August 31, 2026, were $1,024 compared to $1,062 for the six months ended August 31, 2025, a decrease of $38 or 4%.
+Added: The decrease is primarily attributable to lower professional services fees, offset by higher travel and meeting expenses and increased health insurance premiums during the period.
+Added: Other Income (Expense) and Interest Expense
+Added: Interest expense decreased by $312 to $951 for the six months ended August 31, 2026, as compared to $1,263 for the six months ended August 31, 2025.
+Added: The Company estimated the fair value of the conversion option derivative liability using a Black-Scholes option pricing model and recorded changes in the fair value of the derivative liability of $2,232 and $4,751 for the six months ended August 31, 2026 and 2025, respectively.
+Added: We recorded net losses of $5,012 and $7,605 for the six months ended August 31, 2026 and 2025, respectively.
+Added: Our net loss decreased due to lower gross profit, higher operating expenses, and changes in the fair value of our derivative liability.
Liquidity and Capital Resources
−Removed: For the three months ended May 31, 2026, we recorded a net loss of $8,408, used cash in operations of $719, and, as of May 31, 2026, had a shareholders’ deficit of $53,566.
+Added: For the six months ended August 31, 2026, we recorded a net loss of $5,012, used $1,569 in cash for operations, and, as of August 31, 2026, had a shareholders’ deficit of $50,289.
In addition, notes payable with an aggregate balance of $5,446 had reached maturity and were past due.
1 unchanged sentence
In addition, the Company’s independent registered public accounting firm, in its report on the Company’s February 28, 2026, audited financial statements, raised substantial doubt about the Company’s ability to continue as a going concern.
−Removed: Prior to Fiscal 2026, to maintain liquidity, we relied on external sources of financing, principally equity and private indebtedness.
+Added: Prior to Fiscal 2026, we relied on external financing, principally equity and private indebtedness, to maintain liquidity.
We have no bank line of credit and will require additional debt or equity financing to fund ongoing operations.
−Removed: Based on a cash flow analysis conducted by management, we estimate that we will need an additional $5,246 to maintain existing operations for Fiscal 2027 and to increase shipment volume to customers.
+Added: Based on management’s cash flow analysis, we estimate we will need an additional $3,000 to maintain existing operations for Fiscal 2027 and increase shipment volume to customers.
We cannot assure the reader that additional financing will be available, nor that the commercial targets will be met in the amounts required to keep the business operating.
4 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.