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STOCKHOLDERS’ EQUITY (DEFICIT)
 6 Months Ended
Aug. 31, 2026
Equity [Abstract]  
STOCKHOLDERS’ EQUITY (DEFICIT)

13. STOCKHOLDERS’ EQUITY (DEFICIT)

 

Summary or Preferred Stock Activity

 

Series C Convertible, Redeemable Preferred Stock (Temporary Equity)

 

On February 10, 2025, in connection with a Share Purchase Agreement the Company created a new class of Series C Convertible Redeemable with 1,000 authorized shares.

 

In exchange for 306 Series C Convertible Redeemable Preferred Shares (“Series C”), the Company received gross proceeds of $306,000 with net proceeds of $278,580 after paying $6,000 in legal fees and $21,420 in broker fees both charged against paid in capital. The Company must redeem the shares at stated capital of 1,200 per share and a 1.095 premium at 180 days after issuance. The Company recorded the 306 outstanding shares at its redemption value of $402,084 at February 28, 2025, with the offsetting adjustment to paid in capital. During the year the Company issued 12% quarterly dividends in 44 Series C shares with a value of $58,100. The Company failed to redeem the Series C shares on the August 9, 2025, redemption date and a penalty of 114 Series C shares with a value of $149,307 was recorded. In August 2025 the Company redeemed 95 Series C shares for $125,000 including a deemed dividend of $29,871. In September 2025 the Company failed to convert a conversion notice of 96 shares. This conversion was withdrawn in December 2025 and a new conversion for 85 Series C shares with a value of $111,690 including a dividend of $84,690 with a corresponding adjustment to paid in capital. In exchange for the converted Series C shares, the Company issued 1,994,464 common shares. In January 2026, the Company failed to convert a conversion notice of 80 shares. On March 19, 2026 the Company entered into an agreement with the investor whereby the parties agreed to reduce the penalty on the September 2025 and January 2026 failed conversion to 133 Series C shares at a value of $175,140 ( The penalty was reduced from 345 Series C shares to 133 Series C shares) . The parties agreed on the Series C share balance at February 28, 2026 to be 417 series C shares. In addition, the parties agreed to issue an additional 222 Series C shares for proceeds of $200,000 and fees of $22,000. These shares have a redemption value of $291,708. Also on March 19, 2026, the parties agreed to convert 165 Series C shares at a value of $216,810 for 13,550,625 common shares. The shareholder also converted 40 shares at a value of $52,560 for 3,285,000 common shares on May 6, 2026, and 93 shares at a value of $122,202 for 7,637,628 common shares on May 12, 2026. On August 5, 2026 the shareholder converted 62 shares at a redemption value of $81,468 for 20,811,189 common shares and on August 21, 2026 another 47 shares at a redemption value of $61,758 for 21,319,222 common shares. A deemed dividend of $408,877 was recorded on all these conversions. During the six months ended August 31, 2026, dividends of 21 Series C shares having a value of $27,413 were accrued. At August 31, 2026, there were 243 outstanding series C shares with a redemption value of $332,264. At February 28, 2026, there were 417 outstanding series C shares with a redemption value of $547,941.

 

Series F Convertible Preferred Shares

 

Each holder of Series F Convertible Preferred Shares may, at any time and from time to time convert all, but not less than all, of their shares into a number of fully paid and nonassessable shares of common stock determined by multiplying the number of issued and outstanding shares of common stock of the Company on the date of conversion by three and 45 100ths (3.45) on a pro rata basis.

 

Summary of Preferred Stock Warrant Activity

   Number of Series F Preferred Warrants  

Weighted Average

Exercise Price

  

Weighted Average

Remaining Years

 
Outstanding at February 28, 2026   939   $1.00    7.5 
Issued   800    —    10.0 
Exercised   —    —    — 
Forfeited and cancelled   —    —    — 
Outstanding at August 31, 2026   1,739   $1.00    7.9 

 

Along with the promissory notes dated July 30, 2026 for $225,000, August 11, 2026 for $ 200,000 and August 27, 2026 for $225,000 the Company issued 225, 350 and 225, on those respective dates, with a 10 year term and an exercise price of $1.00. A derivative discount of $650,000 was recorded.

 

 

ARTIFICIAL INTELLIGENCE TECHNOLOGY SOLUTIONS INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

 

Summary of Common Stock Activity

 

- The Company decreased authorized common shares from 27,500,000,000 to 12,000,000,000 on March 19, 2026.

 

- On February 5, 2026, the holders of a majority of the voting power of the Company’s outstanding voting securities executed the written consent approving a reverse stock split of the Company’s issued and outstanding Common Stock at a ratio of 1-for-100. This split was deemed effective on March 12, 2026. The common shares have been adjusted to reflect this reverse stock split.

 

- During the six months ended August 31, 2026, the Company issued 123,765,723 common shares with gross proceeds of $1,435,429 and net proceeds of $1,322,722 after issuance costs of $119,307.

 

- During the six months ended August 31, 2026, the Company issued 96,000,000 common shares having a fair value of $1,879,500 on exchange of debt to repay $332,590 in loans payable and $653,400 in accrued interest totaling $985,990 with a loss on settlement of debt of $893,510.

 

- During the six months ended August 31, 2026, the Company issued 35,767,014 common shares having a fair value of $149,992 on conversion of debt to repay $140,000 in loans payable and $9,992 in accrued interest.

 

-Along with the $630,000 loan of March 25, 2026, a refundable commitment fee of 14,100,000 shares was issued. These shares are refundable if the loan was fully repaid by May 5, 2026, and it was. The shares were recorded at par value of $141 with a corresponding adjustment to paid in capital. These shares were returned on July 13, 2026 and an offsetting entry was made.

 

-Along with the $277,778 loan of April 20, 2026, a commitment fee of 5,000,000 common shares having a fair value of $173,500 was issued and recorded as a discount.

 

-Along with the $700,000 loan of May 4, 2026, a commitment fee of 1,250,000 common shares having a fair value of $28,751 is issuable and recorded as a discount. These shares will be issued shortly after filing this 10Q.

 

-Along with the $700,000 loan of May 4, 2026, a commitment fee of 1,250,000 common shares having a fair value of $28,751 is issuable and recorded as a discount. These shares will be issued shortly after filing this 10Q.

 

-In accordance with an Equity Purchase Agreement June 23, 2026 for $10,000,000 , 2,500,000 commitment fee shares at a fair value of $ 16,500 and are included in issuance costs for shares sold under this arrangement.

 

-During the six months ended August 31, 2026, the Series C Preferred shareholder converted 407 Series C Preferred Shares having a value of $534,798 for 66,603,661 common shares with a deemed dividend of $408,877.

 

 

ARTIFICIAL INTELLIGENCE TECHNOLOGY SOLUTIONS INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

 

The common shares issued, issuable and outstanding at August 31, 2026 and February 28, 2026:

Common shares  August 31, 2026   February 28, 2026 
Issued   595,009,245    267,872,804 
Issuable   1,250,000    - 
           
Issued, issuable and outstanding   596,259,245    267,872,804 

 

Summary of Common Stock Warrant Activity

 

For the three months and six months ended August 31, 2026 and August 31, 2025, the Company recorded a total of $33,975 and $94,483, and $160,710 and $160,710 respectively, to stock-based compensation for options and warrants with a corresponding adjustment to additional paid-in capital.

   Number of
Warrants		   Weighted Average
Exercise Price		   Weighted Average
Remaining Years		 
Outstanding at February 28, 2026   470,000   $0.04    1.44 
Issued   —    —    — 
Exercised   —    —    — 
Forfeited and cancelled   —    —    — 
Outstanding at August 31, 2026   470,000   $0.004    0.94 

 

Summary of Common Stock Option Activity -Employee Stock Options

  

    Number of Options    

Weighted Average

Exercise Price

    

Weighted Average

Remaining Years

  
Outstanding at March 1, 2026     1,732,121     $ 2.00       2.10  
Issued     —       —       —  
Exercised     —       —       —  
Forfeited, extinguished and cancelled     —     $ —       —  
Outstanding at August `31, 2026     1,732,121     $ 2.00       1.60  

 

 

ARTIFICIAL INTELLIGENCE TECHNOLOGY SOLUTIONS INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)