Defense Technologies International (DTII) Q1 2025: no revenue, heavy deficit and going concern warning

Rhea-AI Filing Summary

Defense Technologies International Corp. reported another quarter with no revenue for the three months ended July 31, 2025 and a net loss attributable to the company of $222,164, narrower than the $461,239 loss a year earlier, mainly because the prior-year period included a large loss on notes.

Cash was only $2,422 and total assets were $10,021, while current liabilities reached $2,309,579, leaving a stockholders’ deficit of $2,299,558 and an accumulated deficit of $18,271,717. Management discloses “substantial doubt” about the company’s ability to continue as a going concern, citing the absence of revenue and a significant working capital deficit.

The company continues to fund operations through promissory notes and related-party financing, including several new short-term notes in 2025, and ongoing conversions of preferred stock into common shares, which increase the share count. Internal controls over financial reporting are described as having material weaknesses due to limited accounting staff and segregation of duties issues.

Positive

• None.

Negative

• Going concern uncertainty: Management states that the absence of revenue, an accumulated deficit of $18,271,717, and a large working capital deficit raise “substantial doubt” about the company’s ability to continue as a going concern.
• Highly leveraged, deficit balance sheet: As of July 31, 2025, current liabilities of $2,309,579 and total stockholders’ deficit of $2,299,558 sit against total assets of only $10,021.
• Reliance on costly short-term and related-party financing: The company depends on notes payable (including several new discounted promissory notes in 2025) and $838,708 of related-party payables, with limited cash of $2,422.
• Ongoing dilution from preferred conversions: During the quarter, 1,628,667 common shares were issued for conversion of Series D preferred stock, and further Series D conversions are disclosed as subsequent events.
• Material weaknesses in internal controls: Management reports ineffective disclosure controls and procedures and material weaknesses in internal control over financial reporting due to limited accounting personnel and segregation-of-duties issues.

Insights

Small-cap credit and distress analyst

Persistent losses, no revenue, and heavy short-term debt create clear going concern risk.

Defense Technologies International ended the quarter with no revenue and a net loss attributable to the company of $222,164 for the three months ended July 31, 2025. While this is smaller than the prior year’s $461,239 loss, the improvement stems largely from the absence of a one-time $295,000 loss on notes recorded in 2024, not from stronger operations.

The balance sheet is highly strained: total assets were just $10,021 versus current liabilities of $2,309,579, producing a stockholders’ deficit of $2,299,558. Notes payable totaled $511,288, convertible debt (net of discount) was $215,391, payables to related parties were $838,708, and there was a derivative liability of $36,974 as of July 31, 2025. Management explicitly states that the lack of revenue, accumulated deficit of $18,271,717, and working capital deficit raise “substantial doubt” about the company’s ability to continue as a going concern.

Financing relies on related parties and new short-term promissory notes, several of which carry original issue discounts, increasing effective borrowing costs. Equity is also being used as a financing tool; during the quarter, 1,628,667 common shares were issued upon conversion of 14 Series D preferred shares valued at $16,287, with additional Series D conversions disclosed after quarter-end. Internal control over financial reporting is acknowledged to have material weaknesses due to limited staff and inadequate segregation of duties, which can increase the risk of reporting errors even though management believes the reported figures are fairly stated.

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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)

☒    QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the Quarterly Period Ended July 31, 2025

☐    TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from            to            

Commission File Number 000-54851

DEFENSE TECHNOLOGIES INTERNATIONAL CORP.

(Exact name of registrant as specified in its charter)

Delaware		99-0363802
(State of Incorporation)		(I.R.S. Employer Identification Number)

2683 Via De La Valle, Suite G418, Del Mar CA 92014

(Address of principal executive offices)

(800) 520-9485

(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. Yes ☒     No ☐

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). Yes ☒    No ☐

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	☐
Non-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 ☐   No ☒    

As of December 5, 2025, there were 37,531,767 shares of the registrant’s common stock, 2,535,135 Series A preferred and  1,200,254 Series B preferred and 531 Series D preferred: $0.0001 par value, outstanding.

DEFENSE TECHNOLOGIES INTERNATIONAL CORP.

FORM 10-Q

TABLE OF CONTENTS

	PART  I    —   FINANCIAL INFORMATION	Page
Item 1.	Financial Statements:
	Condensed Consolidated Balance Sheets as of July 31, 2025 (Unaudited) and April 30, 2025 (Audited)	3
	Condensed Consolidated Statements of Operations for the Three-Month Periods Ended July 31, 2025 and 2024 (Unaudited)	4
	Condensed Consolidated Statements of Shareholders’ Deficit for the Three  Months Ended July 31, 2025 and 2024 (Unaudited)	5
	Condensed Consolidated Statements of Cash Flows for the Three-Month Periods Ended July 31, 2025 and 2024 (Unaudited)	6
	Notes to Condensed Consolidated Financial Statements	7
Item 2.	Management's Discussion and Analysis of Financial Condition and Results of Operations	15
Item 3.	Quantitative and Qualitative Disclosures about Market Risk	18
Item 4.	Controls and Procedures	18
	PART II   —   OTHER INFORMATION
Item 1.	Legal Proceedings	19
Item 1A.	Risk Factors	19
Item 2	Unregistered Sales of Equity Securities and Use of Proceeds.	19
Item 3.	Defaults upon Senior Securities	19
Item 4.	Mine Safety Disclosure	19
Item 5.	Other Information	19
Item 6.	Exhibits	20
	Signatures	21

2

Table of Contents

PART I — FINANCIAL INFORMATION

Item 1. Financial Statements

Defense Technologies International Corp. and Subsidiary
Condensed Consolidated Balance Sheets
		July  31, 2025				April 30, 2025
		(Unaudited)				(Audited)
ASSETS
Current assets:
Cash		$	2,422			$	1,493
Inventory			7,599				7,599
Total current assets							9,092
Total assets		$	10,021			$	9,092
Current liabilities:
Accounts payable and accrued expense		$	206,213			$	172,082
Accrued licenses agreement payable			37,500				25,000
Accrued interest and fees payable			227,238				220,521
Convertible notes payable, net of discount			215,391				185,762
Derivative liability			36,974				31,866
Payables – related parties			838,708				747,208
Customer deposits			40,375				40,375
Stock payable			24,000				24,000
Notes payable			511,288				476,312
Note payable- related party			171,892				161,092
Total current liabilities			2,309,579				2,084,218
Total liabilities		$	2,309,579			$	2,084,218
Commitments and Contingencies			-				-
Stockholders’ deficit:
Preferred stock, $0.0001 par value; 20,000,000 shares authorized, Series A – 2,535,135 and 2,535,135 shares issued and outstanding, respectively			253				253
Series B –1,200,254 and 1,100,254 shares issued and outstanding, respectively			120				110
Series D – 579 and 600 shares issued and outstanding, respectively			-				-
Common stock, $0.0001 par value; 600,000,000 shares authorized, 35,776,558 and 34,147,881 shares issued and outstanding, respectively			3,579				3,416
Additional paid-in capital			16,343,852				16,324,169
Accumulated deficit			(18,271,717	)			(18,042,197	)
Total			(1,923,913	)			(1,714,249	)
Non-controlling interest			(375,645	)			(360,877	)
Total stockholders’ deficit			(2,299,558	)			(2,075,126	)
Total liabilities and stockholders’ deficit		$	10,021			$	9,092

See notes to condensed consolidated financial statements

3

Table of Contents

Defense Technologies International Corp. and Subsidiary

Condensed Consolidated Statements of Operations

As of July 31,

(Unaudited)

		Three Months
		2025				2024
Expenses:
Consulting		$	100,250			$	117,500
General and administrative			86,980				46,017
Total expenses			187,230				163,517
Loss from operations			(187,230	)			(163,517	)
Other income (expense):
Interest and other income (expense)			(7,065	)			(7,058	)
Loan origination fee			(37,529	)			(10,000	)
Loss on notes			-				(295,000	)
Gain (loss) on derivative liability			(5,108	)			8,166
Total other income (expense)			(49,702	)			(303,892	)
Income (loss) before income taxes			(236,932	)			(467,409	)
Provision for income taxes			-				-
Net income (loss) before non-controlling interest			(236,932	)			(467,409	)
Non- controlling interest in net loss of the consolidated subsidiary			14,768				6,170
Net income (loss) attributed to the Company		$	(222,164	)		$	(461,239	)
Net income (loss) per common share: Basic and dilutive		$	(0.00	)		$	(0.10	)
Weighted average common shares outstanding:
Basic and dilutive			34,255,266				17,986,515

See notes to condensed consolidated financial statements

4

Table of Contents

Defense Technologies International Corp. and Subsidiary

Condensed Consolidated Statements of Shareholders’ Deficit

For the Three  Months Ended July 31, 2025 and 2024

 (Unaudited) 

		Preferred stock								Common Stock								Additional Paid-In				Accumulated				Non-Controlling				Total Stockholders’
		Shares				Amount				Shares				Amount				Capital				Deficit				Interest				Deficit
Balance at April 30, 2024			4,396,363			$	439				9,729,878			$	974			$	15,067,580			$	(17,116,309	)		$	(315,046	)		$	(2,362,362	)
Common stock issued for B preferred conversion			(1,068,686	)			(107	)			10,686,860				1,069				(962	)			-				-
Common stock issued for D preferred conversion			(7	)			-				431,181				43				(43	)							-				-
Common stock issued for accrued expense – RP			-				-				10,000,000				1,000				694,000				-				-				695,000
Common stock issued for services			-				-				100,000				10				9,990				-				-				10,000
Dividend on series D preferred			-				-				-				-				7,356				(7,356	)			-				-
Net loss			-				-				-				-				-				(461,239	)			(6,170	)			(467,409	)
Balance at July 31, 2024			3,327,664				332				30,947,919				3,096				15,777,921				(17,584,904	)			(321,216	)			(2,124,771	)
Balance at April 30, 2025			3,635,950			$	363				34,147,881			$	3,416			$	16,324,169			$	(18,042,197	)		$	(360,877	)		$	(2,075,126	)
Preferred shares issued for debt conversion			100,000				10				-				-				12,490				-				-				12,500
Common stock issued for D preferred conversion			(14	)							1,628,667				163				(163	)			-				-				-
Dividend on series D preferred			-				-				-				-				7,356				(7,356	)			-				-
Net loss			-				-				-				-				-				(222,164	)			(14,768	)			(236,932	)
Balance at July 31, 2025			3,735,936			$	373				35,776,558			$	3,579			$	16,343,852			$	(18,271,717	)		$	(375,645	)		$	(2,299,558	)

See notes to condensed consolidated financial statements

5

Table of Contents

Defense Technologies International Corp and Subsidiaries

Condensed Consolidated Statements of Cash Flows

(Unaudited)

		Three Months Ended July 31,
		2025				2024
Cash flows from operating activities:
Net loss		$	(236,932	)		$	(467,409	)
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities:
Common stock issued for service for service			-				10,000
(Gain) loss on derivative liability			5,108				(8,166	)
Debt discount			29,629
Loan origination fee			7,900				10,000
Loss on notes			-				295,000
Change in operating assets and liabilities:
Increase (decrease) in accounts payable and accrued expenses			53,348				(66,975	)
Increase in payables – related parties			91,500				188,159
Net cash provided by (used in) operating activities			(49,447	)			(39,391	)
Cash flows from financing activities
Proceeds from notes payable- related party			39,576				(273	)
Proceeds from notes payable			10,800				40,000
Net cash provided by financing activities			50,376				39,727
Net increase (decrease) in cash			929				336
Cash at beginning of period			1,493				171
Cash at end of period		$	2,422			$	507
Supplement Disclosures
Interest Paid			-				-
Income tax Paid			-				-
Noncash financing and investing activities
Interest accrued on preferred shares		$	7,356				7,356
Common stock issued for conversion of notes		$	16,287				-
Series B preferred issued for notes payable		$	12,500				-

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 July 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 $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 or its subsidiary. The value of the stock will be a discount to the 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 (3)Invoices for parts and materials will be billed separate of the license fees noted above.

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 currently owns 76.28% of PSSI with 23.72% acquired by several individuals and entities.  The Company’s unique technology works precisely to specifications as required by our technology and as confirmed in the market. All sales and marketing activities will be executed through PSSI.

On June 28, 2022 the Company’s common shares were reversed with each shareholder receiving one share of common stock for each 500 shares held before the reverse split. The number of shares throughout  the disclosure have been retrospectively adjusted  to represent the number of shares after the reverse split.

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 July 31, 2025, the consolidated results of its operations and its consolidated cash flows for the three months ended July 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.

7

Table of Contents

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.

Inventory

Inventories are stated at the lower of cost using the first-in, first-out (FIFO) cost method of accounting. Inventories as of July 31, 2025 consist of parts used in assembly of the units being sold plus work in progress and finished goods. As of July 31, 2025 and April 30, 2025 the value of the inventory was $7,599.  

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 July 31, 2025, the Company had potential shares issuable under convertible preferred shares of  37,353,890 and convertible debt of 532,262 for a total of 37,886,152.

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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.

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 July 31, 2025, the Company had no revenues, has accumulated deficit of $18,271,717 and a working capital deficit of $2,229,558 and expects to incur further losses in the development of its business. The Company has not yet established an ongoing source of revenue sufficient to cover operating costs, which raises substantial doubt about its ability to continue as a going concern. The financial statements do not include any adjustment that might result from the outcome of this uncertainty.

Management plans to continue to provide for the Company's capital needs during the year ending April 30, 2025 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: INVESTMENTS

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 for 17,500 shares of PSSI valued at $378,600 for 76.28% of PSSI. The balance of PSSI was acquired by four individuals and entities. The Company plans to continue the development of the technology and conduct all sales and marketing activities in PSSI. The investment was impaired as of April 30, 2019.

NOTE -4:  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.

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On May 1, 2022, the Company entered into a loan agreement with EMAC Handels AG  for short term loans up to $100,000. The loans bear interest at 6% per annum. As of July 31, 2025, the outstanding balance on the loan agreement was $122,127 plus accrued interest.

During the three months ending July 31,2024 the  Company issued 10,686,860 shares of common  stock for the conversion of 1,068,686 of Series B preferred shares.

During the three months ending July 31,2024 the Company issued 10,000,000 with a value of $400,000 for the payment of related party debt.

As of July 31, 2025 and April 30, 2025, the Company had payable balances due to related parties totaling $838,708 and  $ 747,208, respectively.

NOTE – 5:  NOTES PAYABLE

On March 5, 2018, the Company subsidiary PSSI entered into a note agreement with Premium Marketing Associates, LLC for $25,000. The funds were designated for use in a marketing agreement with the Edward Fitzgerald Group for raising funds for PSSI. The note was to be repaid from investment fund generated by the Fitzgerald group plus 15% of the funds generated are paid to the investor.

On July 18, 2018, the Company entered into a promissory note of $114,226.26 with interest rate of 8% per annum with Haynie & Company the Company’s former auditors. Under the terms of the agreement commencing August 15, 2018 the Company is to pay Haynie $5,000 per month. In addition, the Company shall pay the noteholder 20% of any funding event of private or public equity. On July 11, 2022, the Company negotiated a settlement of $37,500 with an initial payment of $30,000 and the balance due of  $7,500 thirty days after the initial payment. As of July 31, 2025 the $7,500 had not been paid leaving the balance due on the note of $20,042.

On May 1, 2022, the Company entered into a loan agreement with EMAC Handels AG  for short term loans up to $100,000.  The loans bear interest at 6% per annum.  As of July 31, 2025, the outstanding balance on the loan agreement was $122,137 plus accrued interest.

On July 11, 2024 the Company issued a promissory note for $50,000, The note matures in one year from issuance and bears interest at 10% per annum.  The note has an initial discount of $10,000 and is not convertible.

On May 6, 2025  the Company issued a promissory note for $12,000. The note matures July 11, 2025. The note has an initial discount of $2,000 and is not convertible.

On May 27, 2025  the Company issued a promissory note for $12,000. The note matures July 11, 2025. The note has an initial discount of $2,000 and is not convertible.

On June 26, 2025  the Company issued a promissory note for $9,400. The note matures July 11, 2025. The note has an initial discount of $1,900 and is not convertible.

On July 29, 2025  the Company issued a promissory note for $12,000. The note matures September 10, 2025. The note has an initial discount of $2,000 and is not convertible.

As of July 31, 2025 and April 30, 2025 the outstanding balances of notes payable  was $511,288 and $476,312,  respectively.

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NOTE – 6:  CONVERTIBLE DEBT

On March 10, 2016, the Company entered into a convertible promissory note for $17,000 with ACM Services GmbH, which bears interest at an annual rate of 6% and is convertible into shares of the Company’s common stock at $0.05 per share.  The Company recorded a debt discount and a beneficial conversion feature of $17,000 at the inception of the note. As of July 31, 2025 the balance of the notes was $7,000 plus interest.

On August 3, 2016, the Company entered into a convertible promissory note with an institutional investor for $25,000, which bears interest at an annual rate of 12% and matures on February 4, 2017.  The note holder has the right, after a period of 180 days of the note, to convert the note and accrued interest into shares of the common stock of the Company at a discounted price per share equal to 50% to 65% of the market price of the Company’s common stock, depending upon the stock’s liquidity as determined by the note holder’s broker. On March 20, 2017, the lender converted $12,500 principal into 1,000,000 shares of the Company’s common stock. As of July 31, 2025, the note has a balance of $12,500 plus interest and is currently in default.

On February 16, 2018 Passive Security Scan Inc, a subsidiary of the Company, issued a $20,000  convertible  note to Stuart Young. The note bears interest at 6% and is convertible after 6 months from the date of the note into stock of either PSSI or the Company at 50% discount to the 10-day trailing trading value of the Company’s common stock.

On March 5, 2018, the Company subsidiary PSSI entered into a note agreement with Premium Marketing Associates, LLC for $25,000.The funds were designated for use in a marketing agreement with the Edward Fitzgerald Group for raising funds for PSSI. The note was to be repaid from investment fund generated by the Fitzgerald group plus 15% of the funds generated are paid to the investor.

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 $330,626 which included the additional interest and retired the original notes.

As of July 31, 2025,  the outstanding balance of the note were $197,085 plus interest.

As of July 31, 2025, and April 30, 2025, the convertible debt outstanding, net of discount, was $215,391 and $185,762, respectively.

NOTE – 7:  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).

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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.
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.
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 July 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 three months ended July 31, 2025:

		Level 1				Level 2				Level 3
Balance at April 30, 2025		$	-			$	-			$	31,866
Change in fair value of derivative liability			-				-				5,108
Balance at July 31, 2025		$	-			$	-			$	36,974

The estimated fair value of the derivative liabilities at July 31, 2025 was calculated using the Binomial Lattice pricing model with the following assumptions:

Risk-free interest rate			4.50
Expected life in years			0.10
Dividend yield			0	%
Expected volatility			241.00	%

NOTE – 8: 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 600,000,000 with a par value of $0.0001 and the total number of preferred shares at 20,000,000, par value $0.0001.

During the three months ending July 31, 2024 the  Company issued 10,686,860 shares of common  stock for the conversion of 1,068,686 of Series B preferred shares.

During the three months ending July 31, 2024 the Company issued 100,000 shares of common stock with a value of $10,000 for the payment of consulting fees.

During the three months ending July 31, 2024 the Company issued 431,181 shares of common stock  for the conversion of 7 shares of series D preferred shares.

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During the three months ending July 31, 2024 the Company issued 10,000,000 with a value of $400,000 for the payment of related party debt. As part of the conversion the Company recognized a loss on notes of $295,000.

During the three months ended July 31, 2025, the Company issued 1,628,667 shares of common stock for the conversion of 14 series D preferred with a value of $16,287.

Preferred Stock

The Company has 20,000,000 shares of $0.0001 par value preferred stock authorized and has designated a Series A preferred stock, a Series B preferred stock, a series C preferred stock and a series D preferred stock. The Company has authorized 5,000,000 series A and B shares each plus 1,500,000 each of series C and D  preferred shares  Each share of the Series A preferred stock is convertible into ten common shares and carries voting rights on the basis of 100 votes per share.  Each share of the Series B preferred stock is convertible into ten common shares and carries no voting rights. Each of the Series C preferred shares are non-voting and are convertible to common stock as a “Blank Check” designation with terms and conditions as set by the board of directors. Each of the series D preferred shares are non-voting and may be converted into common shares as a Blank Check” designation with the terms and conditions as set forth  by the board of directors

On April 26, 2022, the Company filed an amendment to the Articles of Incorporation increasing the authorized shares of common stock to 600,000,000 with a par value of $0.0001 and the total number of preferred shares at 20,000,000, par value $0.0001.

During the three months ending July 31,2024 the  Company issued 10,686,860 shares of common  stock for the conversion of 1,068,686 of Series B preferred shares.

During the three months ended July 31, 2025 the Company converted a note for $12,500 into 100,000 shares of series B Preferred stock.

During the three months ended July 31, 2025, the Company issued 1,628,667 shares of common stock for the conversion of 14 series D preferred with a value of $16,287.

As of July 31, 2025 the Company has 3,735,920 shares of preferred stock consisting of; 2,535,135 Series A shares, 1,200,254 Series B shares and 546 Series D preferred share issued and outstanding. The conversion price for the 546 series D shares issued is $0.50 or 80% of the lowest trading price 20 days prior to conversion,

NOTE – 9:  COMMITMENTS AND CONTINGENCIES

The Company has the following material commitments as of July 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 $7,500, office rent of $250 and office supplies of $125. Extraordinary expenses are invoiced by EMAC on a quarterly basis. The fee may be paid in cash and or with common stock.

b)   Service Agreement signed April 25, 2016 with Merrill W. Moses, President, Director and CEO, for services of $7,500 per month beginning May 2016 and the issuance of 233 restricted common shares of the Company. The fees may be paid in cash and or with common stock.

c)   Administration and Management Agreement of PSSI signed January 12, 2017 with EMAC Handel Investments AG, for general fees of $7,500 per month, office rent of $250 and telephone of $125 beginning January 2017 and amended May 1, 2021, the issuance of 2,000 common shares of PSSI and a 12% royalty calculated on defines sales revenues payable within 10 days after the monthly sales.

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  d)     Service Agreement of PSSI signed January 12, 2017 with Merrill W. Moses, President, Director and CEO, for services of $2,500 per month beginning February 2017 and the issuance of 333 common shares of PSSI.

On May 30, 2018, the Company and Control Capture Systems, LLC amended their license agreement as follows.

	·	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.
	·	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 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.
	·	Invoices for parts and materials will be billed separate of the license fees noted above.

NOTE  10:  SUBSEQUENT EVENTS

On August 12 2025,  the Company issued a promissory note for $18,000. The note matures September 10, 2025. The note has an initial discount of $3,000 and is not convertible.

On September 5, 2025 the Company issued 1,755,209 shares of common stock with a value of $17,552 for the conversion of 15 preferred D shares.

On September 16, 2025 the Company issued a promissory note for $12,000.The note matured on October 15, 2025.  The note has an initial discount of $2,000 and is not convertible.

On November 6, 2025 the Company issued a promissory note for $12,000.The note matures on December 15, 2025.  The note has an initial discount of $2,000 and is not convertible.

The Company has evaluated subsequent events to determine events occurring after July 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 or 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 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.

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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.

Results of Operations

During the three  months ended July 31, 2025, the Company did not receive any revenue.

Our operating expenses for the three months ended July 31, 2025 was $187,230 compared to $163,517 for the same period in 2024. The variance was due primarily to lower consulting costs, which were $100,250 compared to $117,500 for the same period in 2024; offset by higher general and administrative costs of $86,980 for the three months periods ending July 31, 2025 compared to $46,017 in the same period in 2024.

Interest expenses incurred in the three months  periods ended July 31, 2025 was $7,065 compared to interest expense of $7,058 for the three-month periods in 2024. Loan origination fees of $37,529 was incurred as of July 31, 2025 compared to$10,000 in 2024, along with a loss on notes of $295,000 being incurred during the period in 2024.

Change in derivative liability resulted in a loss of 5,109 for the three months period ended July 31, 2025 compared to a gain of $8,166 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-month periods ended  July 31, 2025 was other expense of $49,702, compared to other expense of $303,892 for the same periods  in 2024.

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

Liquidity and Capital Resources

At July 31, 2025 the Company had total current assets of $10,021 and total current liabilities of $2,309,579 resulting in a working capital deficit of $2,299,588. Included in our current liabilities and working capital deficit at July 31, 2025 are derivative liabilities totaling $36,974 related to the conversion features of certain of our convertible notes payable, convertible notes of $215,391, net of discount, payables due related parties of $838,708, accounts payable and accrued expense of $206,213, accrued interest of $227,238, notes payable related parties $171,892 and notes payables of $511,288. We anticipate that in the short term, operating funds will continue to be provided by related parties and other lenders.

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During the three months ended July 31, 2025, net cash used in operating activities was $49,447 compared to cash used of $39,391in the same period in 2024. Net cash used in the three-month 2025 period consisted of net loss of $236,932, change in payables to related parties of  $91,500 and increase in accounts payable of $53,348.

During the three months ended July 31, 2025 net cash provided by financing activities was $50,376 consisting of notes payable related parties of $39,576 and notes payable of $10,800.  We have had no revenue and 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 have built 33 Passive Portal units, two of which were used in the previously announced BETA Test at a school near Austin Tx and 5 were sold in the previous fiscal year. The units have been tested multiple times and performed with a 100% success every time. We are confident that upon the successful conclusion of the Beta Test, we will receive the first orders from school districts that will generate initial revenues to the Company.

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.

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.

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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 three months ended July 31, 2025, the Company issued 1,628,667 shares of common stock for the conversion of 14 series D preferred with a value of $16,287.

On September 5, 2025, the Company issued 1,755,209 shares of common stock with a value of $17,552 for the conversion of 15 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
31.1		Section 302 Certification of Chief Executive Officer and Chief Financial Officer
32.1		Section 1350 Certification of Chief Executive Officer and Chief Financial Officer
101 INS*		XBRL Instance Document
101SCH*		XBRL Taxonomy Extension Schema
101 CAL*		XBRL Taxonomy Extension Calculation Linkbase
101 DEF*		XBRL Taxonomy Extension Definition Linkbase
101 LAB*		XBRL Taxonomy Extension Label Linkbase
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.
Date: December 5, 2025	By:	/s/ Merrill W. Moses
		Merrill W. Moses
		Chief Executive Officer
		Acting Chief Financial Officer

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FAQ

What were Defense Technologies International (DTII)’s revenues and net loss for the quarter ended July 31, 2025?

For the three months ended July 31, 2025, Defense Technologies International reported no revenue and a net loss attributable to the company of $222,164, compared with a net loss of $461,239 in the same period of 2024.

What is the financial condition of Defense Technologies International (DTII) as of July 31, 2025?

As of July 31, 2025, the company had total assets of $10,021, current liabilities of $2,309,579, and a total stockholders’ deficit of $2,299,558. Cash was $2,422, and the accumulated deficit was $18,271,717, reflecting a very weak balance sheet.

Does Defense Technologies International (DTII) face going concern risks?

Yes. Management states that the lack of revenue, significant accumulated deficit, and working capital deficit raise substantial doubt about the company’s ability to continue as a going concern. The financial statements do not include adjustments that might result if the company cannot continue operations.

How is Defense Technologies International (DTII) funding its operations?

The company is funding operations primarily through debt and related-party financing. As of July 31, 2025, notes payable totaled $511,288, convertible debt (net of discount) was $215,391, and payables to related parties were $838,708. Several new short-term promissory notes were issued in 2025.

Is Defense Technologies International (DTII) issuing new shares or experiencing dilution?

Yes. During the three months ended July 31, 2025, the company issued 1,628,667 shares of common stock for the conversion of 14 Series D preferred shares valued at $16,287. A subsequent event notes an additional 1,755,209 common shares issued upon conversion of 15 Series D preferred shares.

What internal control issues did Defense Technologies International (DTII) report?

Management concluded that disclosure controls and procedures were not effective as of July 31, 2025. Material weaknesses include limited accounting and financial staff and inadequate segregation of duties, although management believes the financial statements fairly present results.

What products is Defense Technologies International (DTII) developing?

The company, through its subsidiary PSSI, develops passive security scanning systems, including the Passive Portal, Passive Portal with elevated body temperature (EBT) detection, and an EBT Station. These products are designed to detect concealed threats and elevated body temperatures without emitting radiation through the subject.