Defense Technologies International Reports No Revenue, Net Loss in Q2 2024

Defense Technologies International Corp. reported a challenging financial performance for the three months ended July 31, 2024, with no revenue generated during the period. This marks a continuation of the company's struggle to achieve sales, raising concerns about its ability to sustain operations. The company recorded total expenses of $163,517, an increase from $141,383 in the same period of the previous year. The net loss for the quarter was $(467,409), significantly higher than the $(136,529) loss reported for the same period in 2023. This resulted in a net loss per common share of $(0.03), an improvement from $(0.10) in the prior year.

The company's accumulated deficit as of July 31, 2024, stood at $(17,584,904), with a working capital deficit of $(2,124,771). The total current assets were reported at $8,106 against total current liabilities of $2,132,877. Cash used in operating activities increased to $(39,391) from $(25,203) in the previous year, while cash provided by financing activities rose to $39,727, compared to $25,500 in the same period of 2023.

Strategically, the company has been focused on the development of its Offender Alert Passive Scan system, which aims to detect concealed threats. As of the reporting date, 33 Passive Portal units had been built, with two undergoing beta testing and five sold in the previous fiscal year. The company anticipates initial revenues from school districts following the successful conclusion of these tests.

In terms of capital structure, the company issued 10,686,860 shares of common stock for the conversion of Series B preferred shares during the quarter. Additionally, it issued 10,000,000 shares valued at $400,000 to settle related party debt. The total outstanding shares of common stock as of October 2, 2024, were 30,947,919, alongside 3,327,664 shares of preferred stock.

The company continues to rely on financing from related parties and lenders to address its capital needs, with management planning to issue debt and equity securities to support operations through the fiscal year ending April 30, 2025. However, the company has acknowledged material weaknesses in its internal controls over financial reporting, attributed to limited accounting personnel and inadequate segregation of duties. Despite these challenges, management believes that the financial statements fairly present the company's position and results.