Deep losses and going-concern risk at Defense Technologies (DTII)
Defense Technologies International Corp. reports quarterly results showing continued losses, no revenue, and a severe liquidity shortfall. For the six months ended October 31, 2025, the company recorded a net loss of $382,106 attributable to the company and had $63 in cash.
As of October 31, 2025, current liabilities were $2,477,014 against current assets of $7,662, creating a working capital deficit of $2,469,352 and a total stockholders’ deficit of $2,469,352. Management discloses that recurring losses, an accumulated deficit of $18,439,015 and lack of revenues raise substantial doubt about the company’s ability to continue as a going concern.
Positive
- None.
Negative
- Severe liquidity and leverage pressure: As of October 31, 2025, cash was only $63 against current liabilities of $2,477,014, including $215,392 of convertible debt, $541,288 of notes payable and $937,877 due to related parties, creating a $2,469,352 working capital deficit.
- Going-concern uncertainty: Management reports no revenues through October 31, 2025, a cumulative deficit of $18,439,015 and states these conditions raise substantial doubt about the company’s ability to continue as a going concern.
- Persistent operating losses with no revenue: The company generated no revenue in the three and six months ended October 31, 2025 and recorded net losses attributable to the company of $159,942 for the quarter and $382,106 year-to-date.
Insights
Ongoing losses, almost no cash, and a formal going-concern warning highlight significant financial risk.
Defense Technologies International reported no revenue for the three and six months ended
The balance sheet shows cash of only
Management explicitly states that recurring losses, no established revenue source, and the working capital deficit raise “substantial doubt” about continuing as a going concern. They plan to rely on issuing debt and equity and support from related parties. Subsequent filings may show whether new financings or revenues help alleviate these pressures.
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
(Mark One)
For the Quarterly Period Ended
For the transition period from to
Commission File Number
(Exact name of registrant as specified in its charter) |
| ||
(State of Incorporation) |
| (I.R.S. Employer Identification Number) |
(Address of principal executive offices)
(
(Registrant’s telephone number, including area code)
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the past 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.
Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company
Large accelerated filer | ☐ | Accelerated filer | ☐ |
☒ | Smaller reporting company | ||
|
| Emerging Growth Company |
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes
As of February 9, 2026, there were
DEFENSE TECHNOLOGIES INTERNATIONAL CORP.
FORM 10-Q
FOR THE THREE AND SIX-MONTH PERIODS ENDED OCTOBER 31, 2025 AND 2024
TABLE OF CONTENTS
| PART I — FINANCIAL INFORMATION |
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Item 1. | Financial Statements: |
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| Condensed Consolidated Balance Sheets as of October 31, 2025 (Unaudited) and April 30, 2025 (Audited) |
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| Condensed Consolidated Statements of Operations for the Three and Six Month Periods Ended October 31, 2025 and 2024 (Unaudited) |
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| Condensed Consolidated Statements of Stockholders’ Deficit for the Six Months Ended October 31, 2025 and 2024 (Unaudited) |
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| Condensed Consolidated Statements of Cash Flows for the Six Month Periods Ended October 31, 2025 and 2024 (Unaudited) |
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| Notes to Condensed Consolidated Financial Statements |
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Item 2. | Management's Discussion and Analysis of Financial Condition and Results of Operations |
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Item 3. | Quantitative and Qualitative Disclosures about Market Risk |
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Item 4. | Controls and Procedures |
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| PART II — OTHER INFORMATION |
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Item 1. | Legal Proceedings |
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Item 1A. | Risk Factors |
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Item 2 | Unregistered Sales of Equity Securities and Use of Proceeds. |
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Item 3. | Defaults upon Senior Securities |
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Item 4. | Mine Safety Disclosure |
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Item 5. | Other Information |
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Item 6. | Exhibits |
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| Signatures |
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| 2 |
| Table of Contents |
PART I — FINANCIAL INFORMATION
Item 1. Financial Statements
Defense Technologies International Corp. and Subsidiary
Condensed Consolidated Balance Sheets
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| October 31, 2025 |
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ASSETS |
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Current assets: |
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Cash |
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Inventory |
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Total current assets |
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Total assets |
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Current liabilities: |
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Accounts payable and accrued expense |
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Accrued licenses agreement payable |
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Accrued interest and fees payable |
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Convertible notes payable, net of discount |
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Derivative liabilities |
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Payables – related parties |
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Customer deposits |
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Stock payable |
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Notes payable |
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Note payable- related party |
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Total current liabilities |
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Total liabilities |
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Commitments and Contingencies |
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Stockholders’ deficit: |
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Preferred stock, $ |
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Series B – |
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Series D – |
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Common stock, $ |
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Additional paid-in capital |
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Accumulated deficit |
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Total |
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Non-controlling interest |
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Total stockholders’ deficit |
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Total liabilities and stockholders’ deficit |
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See notes to condensed consolidated financial statements
| 3 |
| Table of Contents |
Defense Technologies International Corp. and Subsidiary
Condensed Consolidated Statements of Operations
As of October 31,
(Unaudited)
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Expenses: |
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Consulting |
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General and administrative |
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Total expenses |
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Loss from operations |
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Other income (expense): |
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Gain on debt settlement |
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Interest and other income (expense) |
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Gain (loss) on accounts payable |
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Loss on origination fee |
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Loss on notes |
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Gain (loss) on derivative liability |
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Total other income (expense) |
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Income (loss) before income taxes |
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Provision for income taxes |
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Net income (loss) before non-controlling interest |
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Non- controlling interest in net loss of the consolidated subsidiary |
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Net income (loss) attributed to the Company |
| $ | ( | ) |
| $ |
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Net income (loss) per common share: Basic |
| $ | ( | ) |
| $ |
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| $ | ( | ) |
| $ | ( | ) | |
Net income(loss) per common share: Diluted |
| $ | ( | ) |
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Weighted average common shares outstanding: Basic |
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Weighted average common shares outstanding: Diluted |
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See notes to condensed consolidated financial statements
| 4 |
| Table of Contents |
Defense Technologies International Corp. and Subsidiary
Condensed Consolidated Statements of Stockholders’ Deficit
For the Three and Six Months Ended October 31, 2025 and 2024
(Unaudited)
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| Preferred stock |
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| Common Stock |
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| Additional Paid-In |
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| Accumulated |
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| Non-Controlling |
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| Total Stockholders’ |
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| Shares |
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| Amount |
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| Interest |
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Balance at April 30, 2024 |
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Common stock issued for B preferred conversion |
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Common stock issued for D preferred conversion |
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Common stock issued for accrued expense – RP |
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Common stock issued for services |
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Dividend on series D preferred |
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Net loss |
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Balance at July 31, 2024 |
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Series B shares issued for accrued expenses |
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Series B shares issued for accrued expenses-RP |
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Settlement on debt |
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Dividend on series D preferred |
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Net income (loss) |
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Balance at October 31, 2024 |
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Balance at April 30, 2025 |
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Preferred Shares issued for debt conversion |
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Common stock issued for D preferred conversion |
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Dividend on series D preferred |
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Net loss |
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Balance at July 31, 2025 |
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Common stock for D series conversion |
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Loss on notes |
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Dividend on D series preferred |
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Net loss |
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Balance at October 31, 2025 |
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See notes to condensed consolidated financial statements
| 5 |
| Table of Contents |
Defense Technologies International Corp and Subsidiaries
Condensed Consolidated Statements of Cash Flows
(Unaudited)
|
| Six Months Ended October 31, |
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Cash flows from operating activities: |
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Net loss |
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Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities: |
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Common stock issued for service |
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(Gain) loss on derivative liability |
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Loss on notes |
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Debt settlement |
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Loan origination fee |
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Gain on debt extinguishment |
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Change in operating assets and liabilities: |
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Increase (decrease) in accounts payable and accrued expenses |
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Increase in payables – related parties |
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Net cash provided by (used in) operating activities |
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Cash flows from financing activities |
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Proceeds from notes payable- related party |
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Proceeds from notes payable |
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Repayment on notes payable |
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Net cash provided by financing activities |
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Net increase (decrease) in cash |
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Cash at beginning of period |
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Cash at end of period |
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Supplement Disclosures |
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Interest Paid |
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Income tax Paid |
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Noncash financing and investing activities |
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Common stock issued for conversion of Series A preferred |
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| $ |
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Interest accrued on preferred shares |
| $ |
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| $ |
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Series B preferred issued for conversion of notes payable |
| $ |
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Series B preferred issued for accrued expense |
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| $ |
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Series B preferred issued for accrued expense- related parties |
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| $ |
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See notes to condensed consolidated financial statements
| 6 |
| Table of Contents |
Defense Technologies International Corp. and Subsidiary
Notes to Condensed Consolidated Financial Statements
As of October 31, 2025
(Unaudited)
NOTE - 1: BASIS OF PRESENTATION AND ORGANIZATION
Defense Technologies International Corp. (the "Company ") was incorporated in the State of Delaware on May 27, 1998. Effective June 15, 2016, the Company changed its name to Defense Technologies International Corp. from Canyon Gold Corp. to more fully represent the Company's expansion goals into the advanced technology sector.
On October 19, 2016, the Company entered into a Definitive Agreement with Controlled Capture Systems, LLC (“CCS”), representing the inventor of the technology and assets previously acquired by DTC, that included a new exclusive Patent License Agreement and Independent Contractor agreement. Under the license agreement with CCS, the Company acquired the world-wide exclusive rights and privileges to the CCS security technology, patents, products and improvements. The Company agreed to pay CCS an initial licensing fee of $
Effective January 12, 2017, Passive Security Scan, Inc. ("PSSI") was incorporated in the state of Utah as subsidiary controlled by the Company. The Company transferred to PSSI its exclusive world-wide license to the defense, detection and protection security products previously acquired by the Company.
On June 28, 2022 the Company’s
Basis of Presentation
These condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States. The Company’s fiscal year end is April 30.
The interim condensed consolidated financial statements have been prepared without audit in accordance with accounting principles generally accepted in the United States for interim financial information and with the instructions to Securities and Exchange Commission (“SEC”) Form 10-Q. They do not include all the information and footnotes required by generally accepted accounting principles for complete financial statements. Therefore, these unaudited interim condensed consolidated financial statements should be read in conjunction with the Company’s audited financial statements and notes thereto for the year ended April 30, 2025 included in its Annual Report on Form 10-K filed with the SEC.
The interim condensed consolidated financial statements included herein are unaudited; however, they contain all normal recurring accruals and adjustments that, in the opinion of management, are necessary to present fairly the Company’s consolidated financial position as of October 31, 2025, the consolidated results of its operations and its consolidated cash flows for the six months ended October 31, 2025 and 2024. The results of operations for any interim period are not necessarily indicative of the results to be expected for the full fiscal year.
Consolidation and Non-Controlling Interest
These consolidated financial statements include the accounts of the Company, and its majority-owned subsidiary, PSSI, from its formation on January 12, 2017 to date. All inter-company transactions and balances have been eliminated.
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Inventory
Inventories are stated at the lower of cost using the first-in, first-out (FIFO) cost method of accounting. Inventories as of October 31, 2025 consist of parts used in assembly of the units being sold plus work in progress and finished goods. As of October 31, 2025 and April 30, 2025 the value of the inventory was $
Equipment
Equipment is carried at the cost of acquisition and depreciated over the estimated useful lives of the assets. Costs associated with repair and maintenance is expensed as incurred. Costs associated with improvements which extend the life, increase the capacity or improve the efficiency of our property and equipment are capitalized and depreciated over the remaining life of the related asset. Gains and losses on dispositions of equipment are reflected in operations. Depreciation is provided using the straight-line method over the estimated useful lives of the assets.
Use of Estimates
The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from those estimates.
Impairment of Long-Lived Assets
We continually monitor events and changes in circumstances that could indicate carrying amounts of long-lived assets may not be recoverable. When such events or changes in circumstances are present, we assess the recoverability of long-lived assets by determining whether the carrying value of such assets will be recovered through undiscounted expected future cash flows. If the total of the future cash flows is less than the carrying amount of those assets, we recognize an impairment loss based on the excess of the carrying amount over the fair value of the assets. Assets to be disposed of are reported at the lower of the carrying amount or the fair value less costs to sell.
Net Income (Loss) per Common Share
Basic net income or loss per common share is calculated by dividing the Company’s net income or loss by the weighted average number of common shares outstanding during the period. Diluted net income or loss per common share is calculated by dividing the Company’s net income or loss by sum of the weighted average number of common shares outstanding and the dilutive potential common share equivalents then outstanding. Potential dilutive common share equivalents consist of shares issuable upon exercise of outstanding stock options and warrants, using the treasury stock method and the average market price per share during the period, and conversion of convertible debt, using the if converted method. As of October 31, 2025, the Company had potential shares issuable under convertible preferred shares and convertible debt for a total of
Segment Reporting
In November 2023, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU) No 2023-07 Segment Reporting This amendment is an update on all public entities that are required to report segment information in accordance with Topic 280 Segment Reporting. The amendment improves reportable segment disclosure requirements, primarily through enhanced disclosures about significant segment expenses. The ASU on an annual and interim bases requires disclosure of significant revenue and expenses on segmented basis. In addition to the measurements that are most consistent with the measurement principles under generally accepted accounting principles (GAAP), a public entity is not precluded from reporting additional measures of a segment’s profit or loss that are used by the CODM in assessing segment performance and deciding how to allocate resources. The Company operates as a single reportable revenue segment under ASC 280, consistent with the management approach. The Company segments expenses into Research and development, consulting and general and administrative expense. The Chief Operating Decision Maker (CODM), identified as the Chief Executive Officer, reviews financial performance and allocates resources on a consolidated basis. The Company’s operations are centered around the sale of its passive portals which represents the sole source of revenue.
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Although there are several other new accounting pronouncements issued or proposed by the FASB, which the Company has adopted or will adopt, as applicable, the Company does not believe any of these accounting pronouncements has had or will have a material impact on its consolidated financial position or results of operations.
NOTE - 2: GOING CONCERN
These condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America applicable to a going concern. Through October 31, 2025, the Company had no revenues, has accumulated deficit of $
Management plans to continue to provide for the Company's capital needs during the year ending April 30, 2026 by issuing debt and equity securities and by the continued support of its related parties. The condensed consolidated financial statements do not include any adjustments relating to the recoverability and classification of recorded asset amounts or amounts and classification of liabilities that might be necessary should the Company be unable to continue in existence.
NOTE - 3: RELATED PARTY TRANSACTIONS
Management and administrative services are currently compensated as per a Service Agreement between the Company and its Chief Executive Officer and Director executed on April 25, 2016 and a Service Agreement with the subsidiary PSSI executed on January 12, 2017, a Service Agreement between the Company and a Director executed on May 20, 2016, and an Administration Agreement with a related party executed on March 15, 2011 and renewed on May 1, 2017 and renewed in August 21, 2020 plus the assumption of a Service Agreement with the subsidiary PSSI assumed on January 12, 2017 and renewed on August 21, 2020, whereby the fee is based on services provided and invoiced by the related parties on a monthly basis and the fees are paid in cash when possible or with common stock. The Company also, from time to time, has some of its expenses paid by related parties with the intent to repay. These types of transactions, when incurred, result in payables to related parties in the Company’s consolidated financial statements as a necessary part of funding the Company’s operations.
On May 1, 2022, the Company entered into a loan agreement with EMAC Handels AG for short term loans up to $
During the six months ending October 31,2024 the Company issued
During the six months ending October 31,2024 the Company issued
During the six months ending October 31, 2024 the Company issued
As of October 31, 2025, and April 30, 2025, the Company had payable balances due to related parties totaling $
NOTE - 4: NOTES PAYABLE
On March 5, 2018, the Company subsidiary PSSI entered into a note agreement with Premium Marketing Associates, LLC for $
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On July 18, 2018, the Company entered into a promissory note of $
On May 1, 2022, the Company entered into a loan agreement with EMAC Handels AG for short term loans up to $
On July 11, 2024 the Company issued a promissory note for $
On December 13, 2024 the Company issued a note for $
On May 6, 2025 the Company issued a promissory note for $
On May 27, 2025 the Company issued a promissory note for $
On June 26, 2025 the Company issued a promissory note for $
On July 29, 2025 the Company issued a promissory note for $
On August 12, 2025 the Company issued a promissory note for $
On September 16, 2025, the Company issued a promissory note for $
The Company periodically receives advances from RAB Investments. The advances are payable on demand and bear no interest. As of October 31, 2025, the outstanding balance due from the Company was $
As of October 31, 2025, and April 30, 2025 the outstanding balances of notes payable were $
NOTE - 5: CONVERTIBLE DEBT
On March 10, 2016, the Company entered into a convertible promissory note for $
On August 3, 2016, the Company entered into a convertible promissory note with an institutional investor for $
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On October 4, 2018, the Company entered into an agreement with RAB Investments AG to consolidate all RAB outstanding notes issued by the Company prior to October 31, 2018. Under the terms of the agreement the Company agreed to accept a six percent interest to be calculated on all the notes since their inception. The agreement resulted in a new note for $
During the six months ending October 31, 2024 the Company issued
As of October 31, 2025, and April 30, 2025, the convertible debt outstanding, net of discount, was $
NOTE - 6: FAIR VALUE MEASUREMENTS AND DERIVATIVE LIABILITIES
As defined in (Financial Accounting Standards Board ASC 820), fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date (exit price). The Company utilized the market data of similar entities in its industry or assumptions that market participants would use in pricing the asset or liability, including assumptions about risk and the risks inherent in the inputs to the valuation technique. These inputs can be readily observable, market corroborated, or generally unobservable. The Company classifies fair value balances based on the observability of those inputs. FASB ASC 820 establishes a fair value hierarchy that prioritizes the inputs used to measure fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (level 1 measurement) and the lowest priority to unobservable inputs (level 3 measurement).
The three levels of the fair value hierarchy are as follows:
Level 1 – | Quoted prices are available in active markets for identical assets or liabilities as of the reporting date. Active markets are those in which transactions for the asset or liability occur in sufficient frequency and volume to provide pricing information on an ongoing basis. Level 1 primarily consists of financial instruments such as exchange-traded derivatives, marketable securities and listed equities. |
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Level 2 - | Pricing inputs are other than quoted prices in active markets included in level 1, which are either directly or indirectly observable as of the reported date and includes those financial instruments that are valued using models or other valuation methodologies. These models are primarily industry-standard models that consider various assumptions, including quoted forward prices for commodities, time value, volatility factors, and current market and contractual prices for the underlying instruments, as well as other relevant economic measures. Substantially all of these assumptions are observable in the marketplace throughout the full term of the instrument, can be derived from observable data or are supported by observable levels at which transactions are executed in the marketplace. Instruments in this category generally include non-exchange-traded derivatives such as commodity swaps, interest rate swaps, options and collars. |
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Level 3 – | Pricing inputs include significant inputs that are generally less observable from objective sources. These inputs may be used with internally developed methodologies that result in management’s best estimate of fair value. |
As of October 31, 2025, the Company believes the amounts reported for cash, payables, accrued liabilities and amounts due to related parties approximate their fair values due to the nature or duration of these instruments.
The following table represents the change in the fair value of the derivative liabilities during the six months ended October 31, 2025:
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Balance at April 30, 2025 |
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Balance at October 31, 2025 |
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The estimated fair value of the derivative liabilities at October 31, 2025 was calculated using the Binomial Lattice pricing model with the following assumptions:
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NOTE - 7: EQUITY
Common Stock
On April 26, 2022, the Company filed an amendment to the Articles of Incorporation increasing the authorized shares of common stock to
During the six months ending October 31, 2024 the Company issued
During the six months ending October 31, 2024 the Company issued
During the six months ending October 31, 2024 the Company issued
During the six months ending October 31, 2024 the Company issued
During the six months period ended October 31, 2025, the Company issued
Preferred Stock
The Company has
On April 26, 2022, the Company filed an amendment to the Articles of Incorporation increasing the authorized shares of common stock to
During the six months ending October 31, 2024 the Company issued
During the six months ending October 31, 2024 the Company issued
During the six months ending October 31, 2024 the Company issued
During the six months period ended October 31, 2025, the Company issued
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As of October 31, 2025, the Company has
NOTE - 8: COMMITMENTS AND CONTINGENCIES
The Company has the following material commitments as of October 31, 2025:
| a) | Administration Agreement with EMAC Handel’s AG, renewed effective May 1, 2017 for a period of three years and amended May 1, 2021. Monthly fee for administration services of $ |
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| b) | Service Agreement signed April 25, 2016 with Merrill W. Moses, President, Director and CEO, for services of $ |
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| c) | Administration and Management Agreement of PSSI signed January 12, 2017 with EMAC Handel Investments AG, for general fees of $ |
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| d) | Service Agreement of PSSI signed January 12, 2017 with Merrill W. Moses, President, Director and CEO, for services of $ |
On May 30, 2018, the Company and Control Capture Systems, LLC amended their license agreement as follows.
| · | Royalty payments of |
| · | All payment will be in US dollars or stock of the Company and or its subsidiary. The value of the stock will be a discount to market of |
| · | Invoices for parts and materials will be billed separate of the license fees noted above. |
NOTE - 9: SUBSEQUENT EVENTS
On January 29, 2026 the Company issued a note for $
The Company has evaluated subsequent events to determine events occurring after October 31, 2025 through the filing of this report that would have a material impact on the Company’s financial results or require disclosure other than those noted above.
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Item 2: Management's Discussion and Analysis of Financial Condition and Results of Operations
Overview
The following information should be read in conjunction with the condensed consolidated financial statements and notes thereto appearing elsewhere in this Form 10-Q.
Defense Technologies International Corp. (the "Company ") was incorporated in the State of Delaware on May 27, 1998. Effective June 15, 2016, the Company changed its name to Defense Technologies International Corp. from Canyon Gold Corp. to more fully represent the Company's expansion goals into the advanced technology sector.
On October 19, 2016, the Company entered into a Definitive Agreement with Controlled Capture Systems, LLC (“CCS”), representing the inventor of the technology and assets previously acquired by DTC, that included a new exclusive Patent License Agreement and Independent Contractor agreement. Under the license agreement with CCS, the Company acquired the world-wide exclusive rights and privileges to the CCS security technology, patents, products, and improvements. The Company agreed to pay CCS an initial licensing fee of $25,000 and to pay ongoing royalties as defined in the Definitive Agreement.
On May 30, 2018, the Company and Control Capture Systems, LLC amended their license agreement as follows (1) Royalty payments of 5% of gross sale from the license agreement will be calculated and paid quarterly with a minimum of $12,500 paid each quarter (2) All payment will be in US dollars or stock of the Company and its subsidiary. The value of the stock will be a discount to market of 25% of the average trading price for the 10 days prior to conversion. The number of shares received by Control Capture prior to any reverse split are anti-dilutive.
Effective January 12, 2017, Passive Security Scan, Inc. ("PSSI") was incorporated in the state of Utah as subsidiary controlled by the Company. The Company transferred to PSSI its exclusive world-wide license to the defense, detection and protection security products previously acquired by the Company. The Company owns 79.8% of PSSI with 20.2% acquired by several individuals and entities. The Company plans to continue the development of the technology. All sales and marketing activities are through PSSI.
The extent to which the COVID-19 pandemic may directly or indirectly impact our business, financial condition, and results of operations is highly uncertain and subject to change. We considered the potential impact of the COVID-19 pandemic on our estimates and assumptions and there was not a material impact to our consolidated financial statements as of and for the three months ended July 31, 2024.
The Company’s security products are licensed from CCS and developed by the company designed for personal and collateral protection. Products derived from this technology are intended to provide passive security scanning units for either walk-through or hand-held use to improve security for schools and other public facilities. Passive Portal units use electromagnets and do not emit anything (such as x-rays) through the subject. We have also completed a prototype with optional “Digital Imaging,” which will give the user of the scanner the ability to recall the entire traffic passing through the scanner at any time thereafter.
As of May 19, 2020, the Company added an IR Camera for detection of elevated body temperatures and is presently offering these products:
| · | PASSIVE PORTAL – Screens for Weapons only; |
| · | PASSIVE PORTAL with EBT – Screens for Weapons and elevated body temperature; |
| · | EBT Station – Screens for elevated body temperature only. |
Forward Looking and Cautionary Statements
This report contains forward-looking statements relating to future events or our future financial performance. In some cases, you can identify forward-looking statements by terminology such as “may,” “will,” “should,” “expect,” “intend,” “plan,” “anticipate,” “believe,” “estimate,” “predict,” “potential,” “continue,” or similar terms, variations of such terms or the negative of such terms. These statements are only predictions and involve known and unknown risks, uncertainties and other factors. Although forward-looking statements, and any assumptions upon which they are based, are made in good faith and reflect our current judgment, actual results could differ materially from those anticipated in such statements. Except as required by applicable law, including the securities laws of the United States, we do not intend to update any of the forward-looking statements to conform these statements to actual results.
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Results of Operations
During the three and six months ended October 31, 2025 and 2024, the Company did not receive any revenue.
Our operating expenses for the three and six months ended October 31, 2025, were $142,182 and $329,412 compared to $366,065 and $529,582 for the same periods in 2024. The variance was due primarily to lower consulting costs, which were $80,000 and $180,250 compared to $219,292 and $336,792 for the same periods in 2024; along with lower general and administrative costs of $62,182 and $149,162 compared to $146,773 and $192,790 in the same periods in 2024.
Interest expenses incurred in the three and six month periods ended October 31, 2025, were $6,253 and $13,318 compared to $7,096 and $14,154 for the same periods in 2024. A loan origination fee of $5,000 and $42,529 was incurred during the three and six months ended October 31, 2025, compared to $5,000 during the six months in 2024, along with a loss on notes of $5,000 being incurred during the period in 2024. The Company had a gain on debt settlement of $723,065 in the three and six months periods in 2024 along with a loss on accounts payable of $250,000 for the six months period in 2024.
Change in derivative liability resulted in a loss of $16,359 and $21,467 for the three and six months period ended October 31, 2025, compared to a loss of $709 for the three months period and gain of $7,457 during the six months period for the same period in 2024. We estimate the fair value of the derivative for the conversion feature of our convertible notes payable using the American Binominal Lattice pricing model at the inception of the debt, at the date of conversions to equity, cash payments and at reporting date, recording a derivative liability, debt discount and a gain or loss on change in derivative liability as applicable. These estimates are based on multiple inputs, including the market price of our stock, interest rates, our stock price volatility, and variable conversion prices based on market prices as defined in the respective loan agreements. These inputs are subject to significant changes from period to period; therefore, the estimated fair value of the derivative liability will fluctuate from period to period and the fluctuation may be material.
Total other income and expense for the three and six month periods ended October 31, 2025 was a loss of $29,112 and $78,814, compared to other income of $394,195 and other loss of $73,214 for the same periods in 2024.
Net loss before non-controlling interest for the three and six month periods ended October 31, 2025, were a net loss of $171,294 and $408,226 compared to a net income of $394,195 and net loss of $73,214 for the same periods in 2024. After adjusting for our consolidated subsidiary, net loss for the three and six-month period ended October 31, 2025 was a net loss of $159,942 and $382,106 compared to a net income of $398,527 and net loss of $62,712 for the same periods in 2024.
Liquidity and Capital Resources
At October 31, 2025 the Company had total current assets of $7,662 and total current liabilities of $2,477,014 resulting in a working capital deficit of $2,469,352. Included in our current liabilities and working capital deficit at October 31, 2025 are derivative liabilities totaling $53,333 related to the conversion features of certain of our convertible notes payable, convertible notes of $215,392, net of discount, payables due related parties of $937,877, accounts payable and accrued expense of $197,596, accrued interest and fees payable of $233,491, notes payable related parties $183,662 and notes payables of $541,288. We anticipate that in the short term, operating funds will continue to be provided by related parties and other lenders.
During the six months period ended October 31, 2025, net cash used in operating activities was $93,577 compared to cash used of $40,603 in the same period in 2024. Net cash used in the six months period in 2025 consisted of net loss of $408,226, change in payables to related parties of $190,669, increase in accounts payable of $63,484, along with loss on notes of $29,629, loss on derivative of $21,467, loss on notes of $29,629, debt settlement of $1,500 and Loan origination fees of $7,900.
During the six months ended October 31, 2025 net cash provided by financing activities was $92,147 consisting of proceeds from notes payable related parties of 41,803 and notes payable of $80,400 offset by repayment of notes payable of $30,056. We have had no revenue and have paid expenses and costs with proceeds from the issuance of securities as well as by loans from investor, stockholders and other related parties.
Our immediate goal is to provide funding for the completion of the production of the Offender Alert Passive Scan licensed from CCS. The Offender Alert Passive Scan is an advanced passive scanning system for detecting and identifying concealed threats.
We believe a related party and other lenders will provide sufficient funds to carry on general operations in the near term and fund DTC’s production and sales. We expect to raise additional funds from the sale of securities, stockholder loans and convertible debt. However, we may not be successful in our efforts to obtain financing to carry out our business plan.
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See the notes to our condensed consolidated financial statements for a discussion of recently issued accounting pronouncements that we have either implemented or that may have a material future impact on our financial position or results of operations.
Off-Balance Sheet Arrangements
We have no off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that is material to stockholders.
Item 3. Quantitative and Qualitative Disclosures About Market Risk.
This item is not required for a smaller reporting company.
Item 4. Controls and Procedures.
Evaluation of Disclosure Controls and Procedures. As of the end of the period covered by this report, we conducted an evaluation, under the supervision and with the participation of our management including our principal executive officer and principal financial officer, of the effectiveness of the design and operation of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934) (“Exchange Act”). Based on this evaluation, the principal executive officer and principal financial officer concluded that, as of the end of the period covered by this report, our disclosure controls and procedures were not effective in ensuring that information required to be disclosed by us in the reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in applicable rules and forms and that such information is accumulated and communicated to our management, including our principal executive officer and principal financial officer, in a manner that allows timely decisions regarding required disclosures.
We operate with a limited number of accounting and financial personnel. Although we retain the services of an experienced certified public accountant, we have been unable to implement proper segregation of duties over certain accounting and financial reporting processes, including timely and proper documentation of material transactions and agreements. We believe these control deficiencies represent material weaknesses in internal control over financial reporting.
Despite the material weaknesses in financial reporting noted above, we believe that our consolidated financial statements included in this report fairly present our financial position, results of operations and cash flows as of and for the periods presented in all material respects.
Changes in Internal Control over Financial Reporting. There was no change in our internal control over financial reporting (as defined in Rule 13a-15(f) under the Exchange Act) during our most recently completed fiscal quarter that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.
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PART II — OTHER INFORMATION
Item 1. Legal Proceedings
There are no material pending legal proceedings to which we are a party or to which any of our property is subject and, to the best of our knowledge, no such actions against us are contemplated or threatened.
Item 1A. Risk Factors
This item is not required for a smaller reporting company.
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
During the six months period ended October 31, 2025, the Company issued 3,383,876 shares of common stock with a value of $33,839 for the conversion of 29 preferred D shares.
Item 3. Defaults Upon Senior Securities
This item is not applicable.
Item 4. Mine Safety Disclosure
This item is not applicable.
Item 5. Other Information
Not applicable
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Item 6. Exhibits
The following exhibits are filed as part of this report:
Exhibit No. |
| Description of Exhibit |
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31.1 |
| Section 302 Certification of Chief Executive Officer and Chief Financial Officer |
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32.1 |
| Section 1350 Certification of Chief Executive Officer and Chief Financial Officer |
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101 INS* |
| XBRL Instance Document |
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101SCH* |
| XBRL Taxonomy Extension Schema |
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101 CAL* |
| XBRL Taxonomy Extension Calculation Linkbase |
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101 DEF* |
| XBRL Taxonomy Extension Definition Linkbase |
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101 LAB* |
| XBRL Taxonomy Extension Label Linkbase |
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101 PRE* |
| XBRL Taxonomy Extension Presentation Linkbase |
* The XBRL related information in Exhibit 101 shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to liability of that section and shall not be incorporated by reference into any filing or other document pursuant to the Securities Exchange Act of 1933, as amended, except as shall be expressly set forth by specific reference in such filing or document.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
| DEFENSE TECHNOLOGIES INTERNATIONAL CORP. |
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Date: February 9, 2026 | By: | /s/ Merrill W. Moses |
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| Merrill W. Moses |
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| Chief Executive Officer |
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| Acting Chief Financial Officer |
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FAQ
What were Defense Technologies International (DTII) revenues and profits for the quarter ended October 31, 2025?
What is Defense Technologies International (DTII)’s cash and working capital position as of October 31, 2025?
Does Defense Technologies International (DTII) have a going-concern warning in its latest 10-Q?
How much debt does Defense Technologies International (DTII) report, including related-party obligations?
What were the main drivers of DTII’s loss for the six months ended October 31, 2025?
How is Defense Technologies International (DTII) funding its operations according to the 10-Q?
