Artificial Intelligence Technology Solutions Inc 10-K/A for FY2022

Artificial Intelligence Technology Solutions Inc. (AITX)

10-K/A 2022-05-31 For: 2022-02-28

Added on April 06, 2026

About this 10-K/A

Artificial Intelligence Technology Solutions Inc filed this 10-K/A on May 31, 2022, covering the fiscal year ended February 28, 2022 (FY2022).

Headline figures

Fiscal year ended February 28, 2022, as reported in this filing, compared with the same period a year earlier where the filing states it.

Revenue: $1.45M; up 301.0% from $360.89K a year earlier
Net loss: $62.2M; compared with a net loss of $5.9M a year earlier
Diluted EPS: -$0.02; compared with -$0.01 a year earlier

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Nevada		27-2343603
(State or other jurisdiction of		(I.R.S. Employer
incorporation or organization)		Identification No.)

10800 Galaxie Avenue, Ferndale, MI		48220
(Address of principal executive offices)		(Zip Code)

Title of each class		Name of each exchange on which registered
Common stock, $0.00001 par value		OTC PINK

Large accelerated filer	[ ]	Accelerated filer	[ ]

Non-accelerated filer	[X]	Smaller reporting company	[X]
		Emerging growth company	[ ]

Exhibit No.		Description of Document
2.1		Stock Purchase Agreement, dated August 28, 2017, by and among the registrant, Steve Reinharz and Robotic Assistance Devices Inc. (incorporated by reference to Exhibit 10.1 to the registrant’s current report on Form 8-K filed with the Commission on August 31, 2017).

3.1		Articles of Incorporation of the registrant filed with the Nevada Secretary of State on September 8, 2014. (incorporated by reference to Exhibit 3.1 to the registrant’s transition report on Form 10-KT filed with the Commission on March 12, 2018).

3.2		Plan and Agreement of Merger of Artificial Intelligence Technology Solutions Inc. (a Florida corporation) and Artificial Intelligence Technology Solutions Inc. (a Nevada corporation). (incorporated by reference to Exhibit 3.2 to the registrant’s transition report on Form 10-KT filed with the Commission on March 12, 2018).

3.3		Bylaws of the registrant (incorporated by reference to Exhibit 3.2 to the registrant’s registration statement on Form S-1 (File No. 333-168530), filed with the Commission on August 4, 2010).

3.4		Certificate of Designations filed with the Nevada Secretary of State on February 8, 2017. (incorporated by reference to Exhibit 3.4 to the registrant’s transition report on Form 10-KT filed with the Commission on March 12, 2018).

3.5		Certificate of Designations filed with the Nevada Secretary of State on May 3, 2017. (incorporated by reference to Exhibit 3.5 to the registrant’s transition report on Form 10-KT filed with the Commission on March 12, 2018).

3.6		Amendment to Certificate of Designations filed with the Nevada Secretary of State on May 3, 2017 (incorporated by reference to Exhibit 3.1 to the registrant’s current report on Form 8-K filed with the Commission on May 12, 2017).

10.1		Preferred Stock Purchase Agreement dated January 31, 2017 and entered into between the Company and Capital Venture Holdings LLC. (incorporated by reference to Exhibit 10.1 to the registrant’s transition report on Form 10-KT filed with the Commission on March 12, 2018).

14.1		Code of Ethics (incorporated by reference to Exhibit 14.1 to the registrant’s registrant statement on Form S-1 (File No. 333-168530), filed with the Commission on August 4, 2010).

21.1		List of Subsidiaries. *

23.1		Consent of Independent Registered Public Accounting Firm. *

31.1		Rule 13(a)-14(a)/15(d)-14(a) Certification of principal executive officer. *

31.2		Rule 13(a)-14(a)/15(d)-14(a) Certification of principal financial and accounting officer. *

32.1		Section 1350 Certification of principal executive officer. *

32.2		Section 1350 Certification of principal financial and accounting officer. *

99.1		Insider Trading Policy (incorporated by reference to Exhibit 99.1 to the registrant’s annual report on Form 10-K filed with the Commission on May 28, 2021).

101.INS		Inline XBRL Instance Document – the instance document does not appear in the Interactive Data File because XBRL tags are embedded within the Inline XBRL document. **
101.SCH		Inline XBRL Taxonomy Extension Schema Document **
101.CAL		Inline XBRL Taxonomy Extension Calculation Linkbase Document **
101.DEF		Inline XBRL Taxonomy Extension Definition Linkbase Document **
101.LAB		Inline XBRL Taxonomy Extension Label Linkbase Document **
101.PRE		Inline XBRL Taxonomy Extension Presentation Linkbase Document **
104		Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101) **

*	Previously filed or furnished with the original Form 10-K Annual Report for 02-28-2022, filed with the Commission on May 27, 2022.
**	filed or furnished herewith.

	ARTIFICIAL INTELLIGENCE TECHNOLOGY SOLUTIONS INC.

Date: May 31, 2022	By:	/s/ Steven Reinharz
		Steven Reinharz
		President, Chief Executive Officer


Date: May 31, 2022	By:	/s/ Anthony Brenz
		Anthony Brenz
		Chief Financial Officer (principal financial and accounting officer)

Signature	Title	Date

/s/ Steven Reinharz	President, Chief Executive Officer and Director (principal executive officer)	May 31, 2022
Steven Reinharz


/s/ Anthony Brenz	Chief Financial Officer (principal financial and accounting officer)	May 31, 2022
Anthony Brenz

Report of Independent Registered Public Accounting Firm	F-2

Consolidated Balance Sheets	F-5

Consolidated Statements of Operations	F-6

Consolidated Statement of Stockholders’ Deficit	F-7-8

Consolidated Statements of Cash Flows	F-9

Notes to the Consolidated Financial Statements	F-10

	—	We read the various instruments, identified the features that impact the accounting for the settlements and extensions, including the grant of warrants as inducements to enter into the extension agreements.

	—	We reviewed the assumptions, methods and models used to calculate the allocation of fair value of the instruments at time of settlement, amendment or extension.

	—	We performed independent calculations on a test basis of specific instruments to evaluate the model used in calculating the settlement loss associated with the note payable and convertible note payable settlements, the amendments to debt provisions associated with the sales of future revenues and the interest expense associated with maturity extensions.

	—	Significant losses and significant cash used in operations in the year end February 28, 2022

	—	We also took into consideration the Company’s need to raise additional debt and equity financing over the next twelve months and the amounts raised as of the time of filing of its financial statements

	February 28, 2022			February 28, 2021
ASSETS
Current assets:
Cash	$	4,648,146		$	1,044,418
Accounts receivable, net		429,469			98,544
Device parts inventory, net		1,530,657			64,071
Prepaid expenses and deposits		442,164			—
Total current assets		7,050,436			1,207,033
Operating lease asset		1,331,605			47,753
Revenue earning devices, net of accumulated depreciation of $434,661 and $229,459, respectively		709,063			273,714
Fixed assets, net of accumulated depreciation of $49,065 and $67,113, respectively		137,952			34,994
Trademarks		28,723			—
Security deposit		21,239			3,859
Total assets	$	9,279,018		$	1,567,353
LIABILITIES AND STOCKHOLDERS' DEFICIT
Current liabilities:
Accounts payable and accrued expenses	$	968,853		$	1,373,838
Advances payable		1,594			1,594
Balance owed WeSecure		—			122,000
Customer deposits		10,000			10,500
Current operating lease liability		254,027			43,894
Current portion of deferred variable payment obligation		325,600			91,587
Current portion of convertible notes payable, net of discount of $0 and $697,276 respectively		3,500			196,224
Loan payable - related party		193,556			904,806
Incentive compensation plan payable		479,500			—
Current portion of loans payable, net of discount of $14,745 and $0		1,004,708			944,614
Vehicle loan - current portion		38,522			38,522
Current portion of accrued interest payable		1,260,271			238,665
Derivative liability		7,587			444,466
Total current liabilities		4,547,718			4,410,710
Non-current operating lease liability		1,057,579			3,859
Loans payable, net of discount of $4,905,076 and $0, respectively		20,309,069			8,867,998
Deferred variable payment obligation		2,525,000			2,525,000
Accrued interest payable		1,816,009			303,473
Vehicle loan		—			—
Total liabilities		30,255,375			16,111,040

Commitments and Contingencies
Stockholders' deficit:
Preferred Stock, undesignated; 15,545,650 shares authorized; no shares issued and outstanding at February 28, 2022 and February 28, 2021, respectively		—			—
Series G Convertible Preferred Stock. $0.001 par value; 100,000 shares authorized, no shares issued and outstanding at February 28, 2022 and February 28, 2021, respectively		—			—
Series E Preferred Stock, $0.001 par value; 4,350,000 shares authorized; 3,350,000 and 4,350,000 shares issued and outstanding, respectively		3,350			4,350
Series F Convertible Preferred Stock, $1.00 par value; 4,350 shares authorized; 2,532 and 2,799 shares issued and outstanding, respectively		2,532			2,799
Common Stock, $0.00001 par value; 5,000,000,000 shares authorized 4,735,210,360 and 3,229,426,884 shares issued and outstanding, respectively		47,353			32,294
Additional paid-in capital		73,015,576			16,764,554
Preferred stock to be issued		99,086			174,070
Accumulated deficit		(94,144,254	)		(31,521,754	)
Total stockholders' deficit		(20,976,357	)		(14,543,687	)
Total liabilities and stockholders' deficit	$	9,279,018		$	1,567,353

	Year Ended February 28, 2022			Year Ended February 28, 2021

Revenues	$	1,447,109		$	360,888

Cost of Goods Sold		472,926			98,167

Gross Profit		974,183			262,721

Operating expenses:
Research and development		2,961,394			378,236
General and administrative		10,905,129			2,748,494
Depreciation and amortization		232,886			120,846
Operating lease cost and rent		275,785			9,461
(Gain) loss on disposal of fixed assets		(29,125	)		553
Total operating expenses		14,346,069			3,257,590

Loss from operations		(13,371,886	)		(2,994,869	)

Other income (expense), net:
Change in fair value of derivative liabilities		372,214			764,025
Interest expense		(16,129,499	)		(3,379,833	)
Loss on settlement of debt		(33,068,313	)		(288,234	)
Total other income (expense), net		(48,825,598	)		(2,904,042	)

Net Loss	$	(62,197,484	)	$	(5,898,911	)

Net loss per share - basic	$	(0.02	)	$	(0.01	)

Net loss per share - diluted	$	(0.02	)	$	(0.01	)

Weighted average common share outstanding - basic		4,029,658,082			1,015,115,270

Weighted average common share outstanding - diluted		4,029,658,082			1,015,115,270


	Series E			Series F					Series G						Additional						Total
	Preferred Stock			Preferred Stock					Preferred Stock			Common Stock			Paid-In			Accumulated			Shareholders'
	Shares	Amount		Shares		Amount			Shares	Amount		Shares	Amount		Capital			Deficit			Deficit

Balance at February 29, 2020	4,350,000	$	4,350	3,450		$	177,520		—	$	—	418,415	$	4	$	4,334,564		$	(25,622,843	)	$	(21,106,405	)
Contributed capital	—		—	—			—		—		—	—		—		(8,809	)		—			(8,809	)
Adjustment to derivative liability	—		—	—			—		—		—	—		—		2,837,687			—			2,837,687
Common stock issued for debt conversion	—		—	—			—		—		—	2,329,798,068		23,298		3,545,388			—			3,568,686
Exercise of warrants	—		—	—			—		—		—	894,210,392		8,942		(8,942	)		—			—
Common shares and warrants issued with promissory notes	—		—	—			—		—		—	5,000,000		50		2,652,265			—			2,652,315
Class F shares issued for services	—		—	110			110		—			—		—		361,974			—			362,084
Cancellation of Series F Preferred Shares	—		—	(816	)		(816	)	—		—	—		—		816			—			—
Issuance of Series F shares as part of debt settlement	—		—	55			55		—		—	—		—		1,151,111			—			1,151,166
Warrants issued as part of debt settlement	—		—	—			—		—		—	—		—		1,898,500			—			1,898,500
Rounding shares	—		—	—			—		—		—	9		—		—			—			—
Net income	—		—	—			—		—		—	—		—		—			(5,898,911	)		(5,898,911	)
Balance at February 28, 2021	4,350,000	$	4,350	2,799		$	176,869		—	$	—	3,229,426,884	$	32,294	$	16,764,554		$	(31,521,754	)	$	(14,543,687	)

	Year Ended February 28, 2022			Year Ended February 28, 2021
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss	$	(62,197,484	)	$	(5,898,911	)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization		232,886			120,846
Inventory provision		65,000			—
(Gain) loss on disposal of fixed assets		(29,125	)		553
Bad debts expense		9,022			24,868
Revenue earning device sold and expensed in cost of sales		3,410			—
Reduction of right of use asset		110,148			—
Accretion of lease liability		122,930			—
Stock based compensation		2,158,050			362,084
Interest expense related to the issuance of warrants for debt extensions		5,415,000			—
Interest expense related to penalties from debt defaults		—			939,705
Change in fair value of derivative liabilities		(372,214	)		(764,025	)
Amortization of debt discounts		7,597,242			201,567
(Gain) loss on settlement of debt		33,068,313			288,234
Increase (decrease) in related party accrued payroll and interest		264,331			294,744
Changes in operating assets and liabilities:
Accounts receivable		(339,947	)		(73,295	)
Prepaid expenses		(442,164	)		—
Deposit on right of use asset		(19,999	)
Device parts inventory		(2,191,571	)		(177,196	)
Accounts payable and accrued expenses		(596,615	)		89,229
Accrued expense, related party		(167,187	)		(7,247	)
Customer deposits		(500	)		500
Operating lease liability payments		(233,078	)		—
Balance owed WeSecure		(122,000	)		(40,500	)
Current portion of deferred variable payment obligations for Payments		234,013
Accrued interest payable		2,606,097			1,565,519
Net cash used in operating activities		(14,825,442	)		(3,073,325	)

CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of fixed assets		(115,493	)		(37,764	)
Acquisition of trademarks		(26,327	)		—
Cash paid for security deposit		(17,380	)		(3,859	)
Proceeds on disposal of fixed assets		30,000			1,000
Net cash used in investing activities		(129,200	)		(40,623	)

CASH FLOWS FROM FINANCING ACTIVITIES:
Share proceeds net of issuance costs		12,521,932			—
Proceeds from convertible notes payable		—			692,650
Repayment of convertible debt		(65,000	)		(250,000	)
Proceeds from deferred variable payment obligation		—			966,000
Proceeds from loans payable		9,426,146			3,603,623
Repayment of loans payable		(516,314	)		(173,881	)
Series G preferred shares redeemed as payment on incentive plan payable		(1,500,000	)		—
Dividend upon redemption of cancelled issuable Series F shares		(500,000	)		—
Cash acquired on consolidation of RAD G		—			(284	)
Net borrowings(repayments) on loan payable - related party		(808,394	)		(693,049	)
Net cash provided by financing activities		18,558,370			4,145,059

Net change in cash		3,603,728			1,031,111

Cash, beginning of period		1,044,418			13,307

Cash, end of period		$4,648,146			$1,044,418

Supplemental disclosure of cash and non-cash transactions:
Cash paid for interest		$225,003			$321,553
Cash paid for income taxes	$	—		$	—

Noncash investing and financing activities:
Right of use asset for lease liability	$	1,374,002		$	56,396
Transfer from device parts inventory to fixed assets	$	659,985		$	—
Net assets on consolidation of RAD G	$	—		$	106,256
Conversion of convertible notes and interest to shares of common stock	$	898,705		$	3,568,686
Release of derivative liability on conversion of convertible notes payable	$	422,272		$	2,837,687
Debt discount from derivative liabilities	$	—		$	143,133
Derivative debt discount on revaluation of loan amendment	$	438,835		$	—
Settlement and exchange of convertible notes payable	$	—		$	7,091,576
Exchange of notes payable for Series F preferred shares	$	6,732,835		$	—
Discount applied to face value of loans	$	6,162,945		$	521,700
Warrants issued as part of debt issuance	$	8,068,822		$	—
Exercise of warrants	$	3,951		$	8,942
Series F preferred shares issued for debt	$	4,000,160		$	—
Cancellation of Series E preferred shares	$	1,000		$	—
Issuance of Series G preferred shares as payment on incentive plan payable	$	1,500,000		$	—
Series F preferred shares converted to common shares	$	3,086		$	—
Series F preferred shares issued on exercise of warrants	$	38		$	—
Opening balance sheet RAD G	$	—		$	8,809

Computer equipment		3 years
Office equipment		4 years
Warehouse equipment		5 years
Demo Devices		4 years
Vehicles		3 years
Leasehold improvements		5 years, the life of the lease

	●	Does the agreement purport, in substance, to be a sale

	●	Does the Company have continuing involvement in the generation of cash flows due the investor

	●	Is the transaction cancellable by either party through payment of a lump sum or other transfer of assets

	●	Is the investors rate of return implicitly limited by the terms of the agreement

	●	Does the Company’s revenue for a reporting period underlying the agreement have only a minimal impact on the investor’s rate of return

	●	Does the investor have recourse relating to payments due

	●	Level 1 – Unadjusted quoted prices in active markets for identical assets or liabilities that are accessible at the measurement date.

	●	Level 2 – Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly. Level 2 inputs include quoted prices for similar assets or liabilities in active markets; quoted prices for identical or similar assets or liabilities in markets that are not active; inputs other than quoted prices that are observable for the asset or liability; and inputs that are derived principally from or corroborated by observable market data by correlation or other means.

	●	Level 3 – Inputs that are unobservable for the asset or liability.

	February 28, 2022			February 28, 2021
Automobile	$	101,680		$	70,896
Demo devices		16,539			3,670
Computer equipment		36,742			23,399
Office equipment		15,312			4,142
Warehouse equipment		11,415			—
Leasehold improvements		5,329			—
		187,017			102,107
Less: Accumulated depreciation		(49,065	)		(67,113	)
	$	137,952		$	34,994

			Fair Value Measurement Using
	Amount at Fair Value		Level 1		Level 2		Level 3
February 28, 2022
Liabilities
Incentive compensation plan payable- revaluation of equity awards payable in Series G shares	$	479,500	$	—	$	—	$	479,500
Derivative liability – conversion features pursuant to convertible notes payable	$	7,587	$	—	$	—	$	7,587

February 28, 2021
Liabilities
Incentive compensation plan payable- revaluation of equity awards payable in Series G shares	$	—	$	—	$	—	$	—
Derivative liability – conversion features pursuant to convertible notes payable	$	444,466	$	—	$	—	$	444,466

	Year Ended February 28, 2022		Year Ended February 28, 2021
Device rental activities	$	592,401	$	304,294
Direct sales of goods and services		854,708		56,594
Revenues	$	1,447,109	$	360,888

Leases	Classification	February 28, 2022		February 28, 2021
Assets
Operating	Operating Lease Assets	$	1,331,605	$	47,753
Liabilities
Current
Operating	Current Operating Lease Liability	$	254,027	$	43,894
Noncurrent
Operating	Noncurrent Operating Lease Liabilities		1,057,579		3,859
Total lease liabilities		$	1,311,606	$	47,753

	February 28, 2022			February 28, 2021
Revenue earning devices	$	1,143,724		$	500,173
Less: Accumulated depreciation		(434,661	)		(226,459	)
	$	709,063		$	273,714

	(1)	The investor would pay up to $400,000 in exchange for a perpetual 4% rate Payment on the Company’s reported quarterly Revenues. At February 29, 2020, $400,000 has been paid to the Company.

	(2)	The investor would pay up to $50,000 in exchange for a perpetual 1.11% rate Payment on the Company’s reported quarterly Revenues. At February 29, 2020, $50,000 has been paid to the Company.

	1)	The rate payment was reduced from 14.25 % to 9.65 %
	2)	The asset disposition % (see below) was reduced from 31 % to 21%

					Balance			Balance
		Interest	Conversion		February 28,			February 28,
Issued	Maturity	Rate	Rate per Share		2022			2021
July 18, 2016	July 18, 2017^*	10%	$0.003	⁽²⁾		3,500			3,500
December 31, 2016	December 31, 2020	8%	35% discount	⁽¹⁾		—			65,000
January 19, 2021	January 19, 2022	12%	$0.04			—			275,000
January 27,2021	January 27, 2022	10%	$0.10	⁽³⁾		—			550,000
						3,500			893,500

Less: current portion of convertible notes payable						(3,500	)		(893,500	)
Less: discount on noncurrent convertible notes payable						—			—
Noncurrent convertible notes payable, net of discount					$	—		$	—

Current portion of convertible notes payable					$	3,500		$	893,500
Less: discount on current portion of convertible notes payable						—			(697,276	)
Current portion of convertible notes payable, net of discount					$	3,500		$	196,224

*	The indicated note was in default as of February 28, 2022. Default interest rate 22%

(1)	The notes are convertible at a discount (as indicated) to the average market price and are accounted for and evaluated under ASC 480 as discussed in Note 3.

(2)	The conversion price is not subject to adjustment from forward or reverse stock splits.

(3)	The per share conversion price into which Principal Amount and interest (including any Default Interest) under this Note shall be convertible into shares of Common Stock hereunder (the “Conversion Price”) shall be equal to $0.10 per share (the “Fixed Conversion Price”); provided, however, that if, the lowest traded price on the date six (6) months from the issue date hereof is below the Fixed Conversion Price, and no default exists, the conversion shall be $0.05 (the “Alternative Fixed Conversion Price”) provided, further, that upon any Event of Default (as defined herein) after the Issue Date, the Conversion Price shall equal the lower of (i) $0.03 (the “Default Fixed Conversion Price”); or (ii) seventy percent (70%) multiplied by the lowest closing price of the Common Stock during the fifteen (15) consecutive Trading Day period immediately preceding the date of the respective event of default (the “Default Conversion Price”); the Company amended this agreement with the lender whereby the conversion rate was changed from $0.10 to $0.03 as a result of a dilutive issuance. This resulted an additional derivative discount of $438,835 and a loss on extinguishment of $360,125.

●	the Company amended the January 27, 2021 agreement with the lender whereby the conversion rate was changed from $0.10 to $0.03 as a result of a dilutive issuance. This resulted a derivative discount of $438,835 and a loss on extinguishment of $360,125.

●	holders of certain convertible notes payable elected to convert a total of $825,000 of principal and $71,955 accrued interest, and $1,750 of fees into 31,042,436 shares of common stock. No gain or loss was recognized on conversions as these conversions occurred within the terms of the agreement that provided for conversion.

●	the conversion rate of the January 19, 2021 note included above was reduced to $0.027 due to the dilutive issuance provision in the January 19, 2021 agreement.

●	The Company entered into a convertible note agreement with a lender on January 27, 2021 with a principal amount of $550,000 received cash proceeds of $463,500 with an original issue discount of $50,000 and issuance fees of $36,500. The note has a one year maturity and bears interest at 10%. The note was issued with a warrant to purchase 8,250,000 shares at an exercise price of $0.10 per share with a 3 year term and having a fair value of $1,149,225 using Black-Scholes with assumptions described in note 13 and 5,000,000 common shares having a fair value of 697,000. After allocating these charges to debt and equity according to their respective values , the initial debt balance net of a debt discount was $70,377 and the adjustment to paid in capital was $310,961.The discounts are being amortized over the term of the loan. In addition for the year ended February 28, 2021, the Company recorded a derivative discount on the embedded conversion feature of $82,162, , amortization expense of $12,401 with an unamortized discount of $467,222 at February 28, 2021.

●	The Company entered into a convertible note agreement with a lender on January 19, 2021 with a principal amount of $275,000 received cash proceeds of $229,150 with an original issue discount of $27,500, and issuance fees of $18,350. The note has a one year maturity and bears interest at 12%. The note was issued with a warrant to purchase 11,000,000 shares at an exercise price of $0.045per share with a 3 year term and having a fair value of $594,000 using Black-Scholes with assumptions described in note 13. The discounts are being amortized over the term of the loan. After allocating these charges to debt and equity according to their respective values , the initial debt balance net of a debt discount was $40,191 and the adjustment to paid in capital of $127,988. Also, for the year ended February 28, 2021, the Company recorded a derivative discount on the embedded conversion feature of $60,971, amortization expense of $8,255 with an unamortized discount of $226,554 at February 28, 2021.

●	The Company recorded $939,705 in penalties as increases on various notes, with a corresponding charge to interest.

●	Holders of certain convertible notes payable elected to convert a total of $2,420,559 of principal and $1,148,127 accrued interest, into 2,329,798,068 shares of common stock. No gain or loss was recognized on conversions as these conversions occurred within the terms of the agreement that provided for conversion.

●	The Company entered into various debt settlement during the year where they settled principal of $556,664 and interest of $260,514 totaling $817,718 for cash payments totaling $770,813.

●	The Company entered into various debt settlement during the year where they exchanged principal of $4,671,030 and interest of $3,042,613 totaling $7,713,643 in exchange for new promissory notes totaling $7,713 ,643 bearing interest at 12% and with three year maturities. In addition as part of the debt exchange the Company issued 805,000,000 warrants with a 3 year term and an exercise price of $0.002 having a fair value using black-scholes of $1,898,500 and 55 Series F Preferred Stock having a fair value of $1,151,166.

							Annual
Date	Maturity	Description		Principal			Interest Rate
June 11, 2018	June 11, 2019	Promissory note	(3)	$	48,000		25%	*
August 10, 2018	September 1, 2018	Promissory note	(4)		—		25%
August 16, 2018	August 16, 2019	Promissory note	(1)		—		25%
August 16, 2018	October 1, 2018	Promissory note	(4)		—		25%
January 31, 2019	June 30, 2019	Promissory note	(2)		78,432		15%	*
January 24, 2019	January 24, 2021	Loan	(8)		—		11%
May 9, 2019	June 30, 2019	Promissory note	(5)		7,850		15%	*
May 31, 2019	June 30, 2019	Promissory note	(6)		86,566		15%	*
June 26, 2019	June 26, 2020	Promissory note	(9)		79,104		15%	*
September 24, 2019	June 24, 2020	Promissory note	(13)		12,000		15%	*
January 30, 2020	January 30, 2021	Promissory note	(15)		11,000		15%	*
February 27, 2020	February 27, 2021	Promissory note	(16)		5,000		15%	*
April 16, 2020	April 16, 2021	Promissory note	(17)		13,000		15%	*
May 12, 2020	May 12, 2021	Promissory note	(18)		43,500		15%	*
May 22, 2020	May 22, 2021	Promissory note	(19)		85,000		15%	*
June 2, 2020	June 2, 2021	Promissory note	(23)		62,000		15%	*
June 9, 2020	June 9, 2021	Promissory note	(24)		31,000		15%	*
June 12, 2020	June 12, 2021	Promissory note	(25)		50,000		15%	*
June 16, 2020	June 16, 2021	Promissory note	(26)		42,000		15%	*
April 3, 2020	April 3, 2021	Promissory note	(20)		—		20%
August 13, 2020	August 13, 2021	Promissory note	(22)		—		20%
September 8, 2020	September 8, 2021	Promissory note	(27)		—		20%
September 15, 2020	September 15, 2022	Promissory note	(28)		300,000		10%
October 6, 2020	March 6, 2023	Promissory note	(29)		150,000		12%
November 12, 2020	November 12, 2023	Promissory note	(30)		110,000		12%
November 23, 2020	October 23, 2022	Promissory note	(31)		65,000		15.5%
November 23, 2020	November 23, 2023	Promissory note	(32)		300,000		15%
December 10, 2020	December 10, 2023	Promissory note	(33)		82,500		12%
December 10, 2020	December 10, 2023	Promissory note	(34)		3,921,168		12%
December 10, 2020	December 10, 2023	Promissory note	(35)		3,054,338		12%
December 10, 2020	December 10, 2023	Promissory note	(36)		165,605		12%
December 14, 2020	December 14, 2023	Promissory note	(37)		310,375		12%
December 14, 2020	December 14, 2023	Promissory note	(38)		—		12%
December 30, 2020	December 30, 2023	Promissory note	(39)		350,000		12%
December 31, 2021	December 31, 2024	Promissory note	(40)		25,000		12%
December 31, 2021	December 31, 2024	Promissory note	(41)		145,000		12%
January 14, 2021	January 14, 2024	Promissory note	(42)		550,000		12%
February 22, 2021	February 22, 2024	Promissory note	(43)		1,650,000		12%
March 1, 2021	March 1, 2024	Promissory note	(10)		6,000,000		12%
March 23, 2021	March 23, 2022	Promissory note	(11)		—		0%
March 23, 2021	March 23, 2022	Promissory note	(12)		—		0%
June 8, 2021	June 8, 2024	Promissory note	(44)		2,750,000		12%
July 12, 2021	July 26, 2026	Promissory note	(45)		4,000,160		7%
September 14, 2021	September 14, 2024	Promissory note	(46)		1,650,000		12%
				$	26,233,598
Less current portion of loans payable					(1,019,453	)
Less discount on loans payable					(4,905,076	)
Loans payable				$	20,309,069

Current portion of loans payable				$	1,019,453
Less discount on loans payable					(14,745	)
Current portion of loans payable, net of discount				$	1,004,708

*	Note is in default. No notice has been given by the note holder to the Company at the time of issuance of these financial statements.

(1)	$12,624 loan repaid during year ended February 28, 2022.

(2)	The note may be pre-payable at any time. The note balance includes 33% original issue discount of $25,882 at issuance.

(3)	Repayable in 12 monthly instalments of $4,562 commencing August 11, 2018 and secured by revenue earning devices having a net book value of at least $48,000. No repayments have been made by the Company and no notices have been received.

(4)	$20,000 loan repaid during the year ended February 28, 2022.

(5)	The note may be pre-payable at any time. The note balance includes 33% original issue discount of $2,590 at issuance.

(6)	The note may be pre-payable at any time. The note balance includes 33% original issue discount of $28,567 at issuance.


(8)	$257,000 Canadian loan. Interest payable every calendar quarter commencing June 30, 2019, if unpaid accrued interest to be paid at maturity. An additional interest amount calculated as 4% of RAD revenues from SCOT rentals for the fiscal years 2020 and 2021 shall be payable March 31, 2020 and March 31, 2021, respectively. Secured by a general security charging all of RAD’s present and after-acquired property in favor of the lender on a first priority basis subject to the following: the lender’s security in this respect shall be postponeable to security in favor of institutional financing obtained by RAD. Additional funding of $26,146 during the quarter ended May 31, 2021. This loan and accrued interest was fully repaid on November 15, 2021 for a cash payment of $443,978. The payment includes $194,804 of loan repayment $55,299 in accrued interest, $18,135 in interest expense, $18,492 in foreign exchange loss and $157,249 in loss on settlement of debt.

(9)	The note may be pre-payable at any time. The note balance includes 33% original issue discount of $26,104 at issuance.

(10)	The unsecured note may be pre-payable at any time. Cash proceeds of $5,400,000 were received. The note balance of $6,000,000 includes an original issue discount of $600,000 and was issued with a warrant to purchase 300,000,000 shares at an exercise price of $0.135 per share with a 3-year term and having a relative fair value of $4,749,005 using Black-Scholes with assumptions described in note 13. The discounts are being amortized over the term of the loan. After allocating these charges to debt and equity according to their respective values, a debt discount of $4,749.005 with a corresponding adjustment to paid in capital for the relative value of the warrant. For the year ended February 28, 2022, the Company recorded amortization expense of $5,349,005 with an unamortized discount of $0 at February 28, 2022. The maturity was extended from March 1, 2022 to March 1, 2024 on February 28, 2022 in exchange for warrants to purchase 150,000,000 shares of common stock at an exercise price of $.0164 and a 3 year term. These warrants have a fair value of $2,850,000 recorded as interest expense with a corresponding adjustment to paid in capital.

(11)	In exchange for 28 Series F preferred shares, the Company issued a noninterest bearing unsecured loan for $2,545,900. A fair value of the loan of $2,267,768 was determined with a debt discount off $278,132. For the year ended February 28, 2022, the Company recorded amortization expense $54,102. On June 2, 2021 the Company exchanged the $2,545,900 debt having a net book value of $2,321,870 for 39,167,693 common shares having a fair value of $2,177,724. The Company recorded a gain on settlement of debt of $144,146.

(12)	In exchange for 55 Series F preferred shares, the Company issued a noninterest bearing unsecured loan for $5,000,875. A fair value of the loan of $4,465,067 was determined with a debt discount off $535,808. For the year ended February 28, 2022, the Company recorded amortization expense of $107,162. On June 2, 2021 the Company exchanged the $5,000,875 debt having a net book value $4,572,229 for 76,936,539 common shares having a fair value of $4,277,672. The Company recorded a gain on settlement of debt of $294,557.

(13)	The note may be pre-payable at any time. The note balance includes an original issue discount of $3,000 at issuance.

Strike price	$0.04 - $0.026
Fair value of Company common stock	$0.0632 - $0.0145
Dividend yield	0.00%
Expected volatility	125.3% - 107.7%
Risk free interest rate	0.15% - 0.13%
Expected term (years)	0.5 - 0.25

Strike price	$0.2899 - $0.0013
Fair value of Company common stock	$0.138 - $0.0013
Dividend yield	0.00%
Expected volatility	355.10% - 196.50%
Risk free interest rate	0.09% - 0.15%
Expected term (years)	0.25 - 1.00

Balance as of February 28, 2021	$	444,466

Derivative discount on loan amendment		438,835
Adjustment to derivative liability due to debt extinguishment		(81,228	)
Release of derivative liability on conversion of convertible notes payable		(422,272	)
Change in fair value of derivative liabilities		(372,214	)
Balance as of February 28, 2022	$	7,587

Balance as of February 29, 2020	$	6,890,688

Release of derivative liability on conversion of convertible notes payable		(2,837,687	)
Debt discount due to derivative liabilities		143,133
Adjustment to derivative liability due to debt settlement		(2,987,643	)
Change in fair value of derivative liabilities		(764,025	)
Balance as of February 28, 2021	$	444,466

	—	40 Series F Preferred Shares and a warrant to purchase 367 Series F Preferred Shares with a five-year term and an exercise price of $1.00 were issued to an investor in exchange for amending their deferred variable payment obligation agreement. The company attributed a fair value based on recent transactions for the Series F Preferred stock and warrants of $33,015,214 and recorded a loss on settlement of debt with a corresponding adjustment to paid in capital.

	—	The warrant holder exercised the warrant in part to acquire 38 Series F Preferred Shares.

	—	The shareholder above converted 78 Series F Preferred Shares into 316,345,908 common shares.

	—	Two Series F Preferred shareholders exchanged 83 Series F Preferred Shares for two promissory notes on March 23, 2021. The notes are non-interest bearing, have a one-year maturity and total $7,546,775. These notes were subsequently exchanged on June 2, 2021 for a total of 116,104.232 common shares.

	—	On July 12, 2021, the former director agreed to surrender his remaining 184 Series F preferred shares in exchange for a note payable from the Company of $4,000,160 bearing interest at 7% per annum with a 5 year term, maturing July 12, 2026.

	—	On August 24, 2021the Series F preferred warrant holder agreed to not exercise his warrant privileges on his remaining 329 warrant shares before September 1, 2023.

	Number of Series F Preferred Warrants		Weighted Average Exercise Price	Weighted Average Remaining Years

Outstanding at March 1, 2021	—		—	—
Issued	367		$1.00	5.00
Exercised	(38	)	$1.00	5.00
Forfeited and cancelled	—		—	—
Outstanding at February 28 2022	329		$1.00	4.50

	—	On July 22, 2020 the board of directors passed a resolution whereby the sole director agreed to return for cancellation, 816 of his 1000 Series F preferred shares to the Company.

	—	On December 1, 2020 the company issued 110 Series F shares having a fair value of $362,084 to a consultant for services previously rendered which was recorded as professional fees with a corresponding adjustment to accrued liabilities.

	—	On December 14, 2020, as part of a debt settlement described in Note 8 , the company issued 55 Series F preferred shares to a lender at a fair value of $1,151,166.

	—	On achievement of objectives 3,4,5 and 8 of the equity awards described below the CEO was granted 1500 Series G Preferred shares which were redeemed immediately for $1,500,000

	—	The Company has accrued $1,979,500 of the equity awards and incentive compensation plan payable with the balance of $479,500 at February 28, 2022 after the $1,500,000 payment above.