Overview

Defense Technologies International Corp. (the “Company”) was incorporated in Delaware in 1998 and changed its name from Canyon Gold Corp. to its current name in 2016 to reflect its expansion into the advanced technology sector. In 2016, the Company entered into a Definitive Agreement with Controlled Capture Systems, LLC (CCS) to acquire the exclusive worldwide rights to CCS’s security technology, patents, products, and improvements.

The Company’s security products are licensed from CCS and designed for personal and collateral protection, including passive security scanning units for walk-through or hand-held use to improve security in schools and other public facilities. The Company’s subsidiary, Passive Security Scan, Inc. (PSSI), was incorporated in 2017 to continue the development and commercialization of the technology.

As of May 2020, the Company’s product offerings include the Passive Portal (screens for weapons only), the Passive Portal with EBT (screens for weapons and elevated body temperature), and the EBT Station (screens for elevated body temperature only).

Forward Looking and Cautionary Statements

This report contains forward-looking statements about the Company’s future financial performance and business events. However, actual results could differ materially from those anticipated due to known and unknown risks, uncertainties, and other factors. The Company does not intend to update any forward-looking statements to conform them to actual results.

Results of Operations

During the three months ended July 31, 2025, the Company did not generate any revenue. Its operating expenses were $187,230, up from $163,517 in the same period in 2024, primarily due to higher general and administrative costs.

The Company incurred $7,065 in interest expenses and $37,529 in loan origination fees in the three-month period ended July 31, 2025, compared to $7,058 in interest expenses and $10,000 in loan origination fees in the same period in 2024. Additionally, the Company recorded a $295,000 loss on notes in 2024.

The change in derivative liability resulted in a loss of $5,109 for the three months ended July 31, 2025, compared to a gain of $8,166 in the same period in 2024. This fluctuation is due to changes in the estimated fair value of the derivative liability related to the conversion features of the Company’s convertible notes payable.

The Company’s net loss before non-controlling interest for the three-month period ended July 31, 2025 was $236,932, compared to a net loss of $467,409 in the same period in 2024. After adjusting for the consolidated subsidiary, the net loss for the three-month period ended July 31, 2025 was $222,164, compared to a net loss of $461,239 in the same period in 2024.

Liquidity and Capital Resources

As of July 31, 2025, the Company had a working capital deficit of $2,299,588, with total current assets of $10,021 and total current liabilities of $2,309,579. The current liabilities include derivative liabilities, convertible notes, payables to related parties, accounts payable and accrued expenses, accrued interest, and various notes payable.

During the three months ended July 31, 2025, the Company used $49,447 in cash for operating activities, compared to $39,391 in the same period in 2024. The Company’s financing activities provided $50,376 in cash, consisting of $39,576 in notes payable from related parties and $10,800 in other notes payable.

The Company’s immediate goal is to secure funding for the completion of the production of the Offender Alert Passive Scan, an advanced passive scanning system for detecting and identifying concealed threats. The Company has built 33 Passive Portal units, with two used in a beta test and five sold in the previous fiscal year. The Company believes it will receive initial orders from school districts upon the successful conclusion of the beta test, which will generate initial revenues.

The Company expects to rely on related party and other lender funding to carry on its operations in the near term and fund its production and sales. The Company also plans to raise additional funds through the sale of securities, stockholder loans, and convertible debt, but there is no guarantee it will be successful in these efforts.

Off-Balance Sheet Arrangements

The Company has no off-balance sheet arrangements that are reasonably likely to have a material effect on its financial condition, results of operations, liquidity, capital expenditures, or capital resources.