Quarterly Report for Quarter Ending April 30, 2025 (Form 10-Q)

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.

THE FOLLOWING DISCUSSION OF OUR PLAN OF OPERATION AND RESULTS OF OPERATIONS SHOULD BE READ IN CONJUNCTION WITH THE FINANCIAL STATEMENTS AND RELATED NOTES TO THE FINANCIAL STATEMENTS INCLUDED ELSEWHERE IN THIS REPORT. THIS DISCUSSION CONTAINS FORWARD-LOOKING STATEMENTS THAT RELATE TO FUTURE EVENTS OR OUR FUTURE FINANCIAL PERFORMANCE. THESE STATEMENTS INVOLVE KNOWN AND UNKNOWN RISKS, UNCERTAINTIES AND OTHER FACTORS THAT MAY CAUSE OUR ACTUAL RESULTS, LEVELS OF ACTIVITY, PERFORMANCE OR ACHIEVEMENTS TO BE MATERIALLY DIFFERENT FROM ANY FUTURE RESULTS, LEVELS OF ACTIVITY, PERFORMANCE OR ACHIEVEMENTS EXPRESSED OR IMPLIED BY THESE FORWARD-LOOKING STATEMENTS. THESE FORWARD-LOOKING STATEMENTS ARE SUBJECT TO NUMEROUS RISKS AND UNCERTAINTIES, INCLUDING OUR ABILITY TO COMMERCIALIZE NEW PRODUCTS, HIRE AND RETAIN KEY PERSONNEL, AND SECURE SUFFICIENT FUNDING TO EXECUTE OUR GROWTH PLAN. IF OUR ASSUMPTIONS REGARDING PLANNED EXPENDITURES OR REVENUE GENERATION PROVE INACCURATE, WE MAY NEED TO ADJUST OUR STRATEGIC TIMELINE OR RESOURCE ALLOCATION,WHILE WE BELIEVE THESE PATENTS PROVIDE MEANINGFUL PROTECTION FOR CERTAIN ASPECTS OF OUR TECHNOLOGY, THERE IS NO GUARANTEE THAT THEY WILL PREVENT ALL COMPETITORS FROM DEVELOPING SIMILAR PRODUCTS, FAILURE TO COMPLY WITH THE FAMILY EDUCATIONAL RIGHTS AND PRIVACY ACT ("FERPA") COULD LIMIT OR DELAY OUR ABILITY TO DEPLOY SAFESCHOOL™ IN CERTAIN JURISDICTIONS, IMPACT CUSTOMER ADOPTION, OR EXPOSE THE COMPANY TO REGULATORY RISK AND OTHER FACTORS INCLUDE, AMONG OTHERS, THOSE LISTED UNDER "FORWARD-LOOKING STATEMENTS" AND "RISK FACTORS" AND THOSE INCLUDED ELSEWHERE IN THIS REPORT.

Overview

Effective April 24, 2025, we completed a strategic rebranding initiative, changing our corporate name from Healthcare Integrated Technologies, Inc. to SafeSpace Global Corporation, in addition to changing our stock ticker from HITC to SSGC. Both name and stock symbol change were approved by FINRA on April 23, 2025. This name change reflects our expanded mission to deliver life-saving ambient, multimodal AI technology solutions across a wide range of environments beyond healthcare, including schools, transit systems, correctional facilities, and commercial infrastructure. With operations spanning the United States, Europe, Singapore, and India, the rebranding supports SafeSpace's evolution into a technology-driven global enterprise dedicated to protecting lives wherever people live, learn, travel, or work. We believe that this transformation strengthens our market positioning and aligns our corporate identity with our broadened strategic vision.

We are currently marketing the following products and solutions, including our initial product, SafeSpace® Fall Monitoring, which utilizes advanced AI monitoring tools to enhance resident safety in senior living, reduce the risk of injuries, and improve overall care efficiency. Additionally, we have expanded our services and offerings beyond senior living facilities, into schools and transportation where we've recently launched these innovative solutions:

	●	SafeFace™ Access Control - An advanced solution that leverages facial recognition to automatically and instantly unlock doors for registered staff and visitors, integrating seamlessly with your existing maglock system for a completely keyless and no badge entry.
	●	SafeFace™ Time Compliance - A platform that monitors staff movements, rounds, and care tasks in real time, delivering actionable insights to leadership. These insights enable more informed decision-making and help streamline daily operations.
	●	SafeGuard™ Wander Protection - Strategically-placed facial recognition cameras that trigger alerts when an at-risk resident is seen outside your secured unit, reducing immediate jeopardy situations and litigation.
	●	SafeTrace™ Rapid Investigations - An innovative investigation solution-simply select a face to instantly retrieve video clips of that individual across your facilities, anytime. Local data storage ensures security and cost efficiency, saving countless hours in investigations.
	●	SafeSchool™ - Designed to address growing concerns around school safety by proactively detecting weapons and identifying persons of concern through real-time AI-based monitoring. The SafeSchool™ multimodal ambient AI solution is designed to help protect students during school hours while offering peace of mind to guardians. The SafeSchool™ product offers proactive protection that cameras on their own cannot provide. Our software proactively alerts when weapons are detected or persons of concern (i.e. predators or non-custodial parents) are sighted, offering immediate situational awareness to deter a tragedy. We are actively working with external advisors, school administrators, and legal counsel to ensure that SafeSchool™ is deployed in a FERPA-compliant manner. We view FERPA compliance as a priority and are committed to aligning the SafeSchool™ offering with applicable privacy laws.

To support the delivery and commercialization of these solutions, management has appointed a new Chief Technology Officer (CTO) and engaged a specialized team of consultants. These strategic investments are intended to accelerate product development, improve time-to-market, and create long-term shareholder value by establishing sustainable revenue streams.

Intellectual Property

We have been granted two U.S. patents that further reinforce our proprietary technology portfolio:

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US Patent No. 11,587,423, titled Fall Validation with Privacy-Aware Monitoring, is an advanced system for detecting, confirming, and mitigating falls while prioritizing user privacy. Leveraging AI, audio, and selective image capture, it delivers reliable fall detection without invasive surveillance.

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US Patent No. 11,886,950, titled System and Method for Assessing and Verifying the Validity of a Transaction is a transaction validation system that uses AI and multi-sensor data to ensure compliance across healthcare, logistics, and industrial operations. It redefines accountability and safety by proactively identifying anomalies and verifying processes.

We believe these patents enhance our competitive position in the AI-based monitoring sector and reflect our commitment to protecting both privacy and lives.

Strategy

SafeSpace Global Corporation is executing a focused growth strategy led by a world-class team of executives with deep experience in scaling innovative companies. Our leadership team combines proven operational expertise with a mission-driven commitment to safety and impact. Our primary objective is to expand the adoption of our life-saving ambient, multimodal AI technology across both existing and emerging verticals. These include senior living, education, transportation, and corrections-with future expansion planned into commercial infrastructure and high-risk institutional settings. To support this growth, we have strengthened our development team with senior IT architects, AI specialists, and systems engineers who are accelerating product innovation and market deployment on a global scale. A key pillar of this strategy is our dedicated sales force, which brings both deep domain knowledge and a shared commitment to leveraging ambient AI to save lives. This integrated team is actively driving customer engagement, market penetration, and adoption of our multimodal safety solutions across diverse environments.

Financial and Operating Results

As of the date of this filing, the Company has approximately $8,000,000 in cash and cash equivalents from recent private placements. Management believes this adequately supports the Company's five-year strategic plan enabling strategic initiatives, such as acquisitions, investments in advanced AI technology, and the expansion of its technology development team. SafeSpace Global Corporation remains committed to driving innovation in healthcare technology, with a focus on solutions that enhance safety, efficiency, and patient outcomes across various care settings.

Highlighted achievements for the nine months ending April 30, 2025 include:

	●	On August 23, 2024, we appointed Micheal "Coach" Burt to our Board of Directors.
	●	On October 1, 2024, we appointed Timothy R. Brady as Fractional Chief Financial Officer and on December 1, 2024, appointed him to full-time Chief Financial Officer.
	●	On November 5, 2024, we announced the appointment of Caleb Dixon as Chief Customer Officer to focus on enhancing customer engagement and satisfaction. Mr. Dixon's title was recently changed to Director of Customer Success.
	●	On December 9, 2024, we announced the appointment of Theo Davies as Vice President of Sales Enablement & International Expansion and on April 17, 2025, we announced that Theo Davies was appointed as our new Chief Revenue Officer (CRO).
	●	On December 18, 2024, we announced the engagement of Katie Piperata as a Senior Living Consultant for the Company's Healthcare division.
	●	On December 30, 2024, we announced the promotion of Dustin Hillis to President and Chief Strategy Officer.

	●	On January 7, 2025, we announced that Justin Freishtat joined in a capital advisory role with Investor Relations.
	●	On March 14, 2025, we appointed Anthony Chapman to our Board of Directors.
	●	On April 10, 2025, we announced that Anand Ijju joined as our Chief Technology Officer (CTO).
	●	On April 15, 2025, we announced that Sasidhar Valluru was appointed as our Director of Global Product Delivery.
	●	On April 15, 2025, we appointed FKP Advisors LLC, as a non-independent member, to the Board of Directors. FKP Advisors LLC board seat will be on a rotational basis with Larry Kloess III serving in the first year, followed by Jim Fitzgerald in the second year, and Ben Pope in the third year.
	●	We received $10,172,074 in net proceeds from the sale of our common stock at an average price of $0.116 per share during the nine months ending April 30, 2025.

Results of Operations

Three Months Ending April 30, 2025 Compared to the Three Months Ending April 30, 2024

Revenues

Our business did not produce revenue during the three-month period ending April 30, 2025. We recognized $60,283 of revenue from fees from our contract for the three-month period ending April 30, 2024.

Operating Expenses

The table below presents a comparison of our operating expenses for the three months ending April 30, 2025 and 2024:

		For the Three Months Ending April 30,
		2025				2024				$ Variance				%Variance
Officers' compensation		$	148,164			$	86,861			$	61,303				71	%
Salaries and wages			47,335				-				47,335				-
Bonuses and incentives			122,645				-				122,645				-
Contract labor			95,892				-				95,892				-
Professional fees			190,975				15,405				175,570				1,140	%
Insurance			14,997				-				14,997				-
Software development			76,200				7,006				69,194				988	%
Sales technology support			50,710				-				50,710				-
Travel and entertainment			65,607				13,499				52,108				386	%
Advertising and marketing			73,783				3,196				70,587				2,209	%
Rent expense			20,749				-				20,749				-
Office expense			21,560				-				21,560				-
Other			10,609				2,115				8,494				402	%
Total selling, general & administrative			939,226				128,082				811,144				633	%
Stock-based compensation			363,555				78,361				285,194				364	%
Amortization			122,002				55,697				66,305				119	%
Total Operating Expenses		$	1,424,783			$	262,140			$	1,162,643				444	%

Officers' Compensation - Officers' compensation increased $61,303, or 71%, over the prior period primarily due to the addition of the President & Chief Strategy Officer, increased pay for the Chief Financial Officer and Chief Executive Officer compared to the previous period and the addition of our Chief Revenue Officer. Additionally, the Company's officers accepted voluntary pay reductions in the prior comparable period.

Salaries and wages - Salaries and wages increased $47,335 over the prior period and is attributable to the addition of new finance, accounting and administrative personnel.

Bonuses and incentives - Bonuses and incentives increased $122,645 over the prior period and is attributable to bonuses and incentive payments for the addition of new officers and personal.

Contract labor - Contract labor increased $95,892 over the prior period and is attributable to the addition of new finance, accounting and administrative personnel.

Professional Fees - Professional fees increased $175,570, or 1,140% over the same period in the prior year primarily due to increased legal and accounting fees and the addition of a grant writing consultant.

Insurance - Insurance expense increased $14,997 over the prior period and is attributable to no insurance expenses during the three months ending April 30, 2024.

Software Development - Software development expenses increased $69,194, or 988% over the same period in the prior year due to an increase in the use of independent contractors and consultants for specific development projects.

Sales technology support- Sales technology support expense increased $50,710 over the prior period and is attributable to no sales support expenses during the three months ending April 30, 2024.

Travel and entertainment - Travel and entertainment expense increased $52,108 over the same period in the prior year. The increase is primarily due to increased business travel by the senior management team.

Advertising and Marketing - Advertising and marketing costs increased $70,587, or 2,209% over the same period in the prior year due to increased promotional activities.

Rent expense - Rent expense increased $20,749 over the same period in the prior year due to no rent expense in the prior year.

Office expense - Office expense increased $21,560 primarily due to increases in office expense activity over the same period in the prior year.

Other - Other expenses increased $8,494 over the same period in the prior year primarily due to limited activity during the three months ending April 30, 2024.

Stock-based Compensation - Stock-based compensation expense increased $285,194 from the same period in the prior year. The increase results from the amortization of the grant date fair value of new restricted stock awards.

Amortization - Amortization expenses increased $66,305, or 119% over the same period in the prior year, primarily due to a reduction in the estimated useful life from three years to two years of software development costs.

Other Income (Expense)

The table below presents a comparison of our other income (expense) for the three months ending April 30, 2025 and 2024:

		For the Three Months Ending April 30,
		2025				2024				$ Variance				%Variance
Gain (loss) on extinguishment of debt		$	113,645			$	-			$	113,645				-
Interest expense			(6,872	)			(13,361	)			6,489				(49	)%
Interest income			7,367				-				7,367				-
Total		$	114,140			$	(13,361	)		$	127,501				(954	)%

Gain (loss) on extinguishment of debt - Gain (loss) on extinguishment of debt increased $113,645 over the same period in the prior year due to holders exchanging 5% Convertible Promissory Notes plus accrued interest through the conversion date at a conversion price of $0.50 per share, the settlement of the Note Payable to Acorn Management Partners offset by a loss for the unamortized issuance costs from Platinum Note 4.

Interest expense - Interest expense decreased $6,489, or 49%, over the same period in the prior year due to aa decrease in the average outstanding debt balance during the same period in the prior year.

Interest income - Interest income increased $7,367 over the same period in the prior year due to no interest income in the prior year.

Nine Months Ending April 30, 2025 Compared to the Nine Months Ending April 30, 2024

Revenues

Our business did not produce revenue during the nine-month period ending April 30, 2025. We recognized $82,052 of revenue for fees from our contract for the nine-month period ending April 30, 2024.

Operating Expenses

The table below presents a comparison of our operating expenses for the nine months ending April 30, 2025 and 2024:

		For the Nine Months Ending April 30,
		2025				2024				$ Variance				%Variance
Officers' compensation		$	426,082			$	260,582			$	165,500				64	%
Salaries and wages			47,335				-				47,335				-
Bonuses and incentives			122,645				-				122,645				-
Contract labor			162,845				-				162,845				-
Professional fees			311,688				69,905				241,783				346	%
Insurance			14,997				-				14,997				-
Software development			148,791				15,287				133,504				873	%
Sales technology support			50,710				-				50,710				-
Travel and entertainment			150,750				14,551				136,199				936	%
Advertising and marketing			164,040				5,864				158,176				2,697	%
Rent expense			46,326				-				46,326				-
Office expense			79,180				-				79,180				-
Other			27,851				4,047				23,804				588	%
Total selling, general & administrative			1,753,240				370,236				1,383,004				374	%
Stock-based compensation			1,244,302				104,196				1,140,106				1,094	%
Amortization			299,953				167,091				132,862				80	%
Impairment of intangibles			46,225				-				46,225				-
Total Operating Expenses		$	3,343,720			$	641,523			$	2,702,197				421	%

Officers' compensation - Officers' compensation increased $165,500 over the prior period primarily due to the addition of the President & Chief Strategy Officer, increased pay for the Chief Financial Officer and Chief Executive Officer compared to the previous period and the addition of our Chief Revenue Officer. Additionally, the Company's officers accepted voluntary pay reductions in the prior comparable period.

Salaries and wages - Salaries and wages increased $47,335 over the prior period and is attributable to the addition of new finance, accounting and administrative personnel.

Bonuses and incentives - Bonuses and incentives increased $122,645 over the prior period and is attributable to bonuses and incentive payments for the addition of new officers and personal.

Contract labor - Contract labor increased $162,845 over the prior period and is attributable to the addition of new finance, accounting and administrative personnel.

Professional Fees - Professional fees increased $241,783, or 346% over the same period in the prior year primarily due to increased legal and accounting fees and the addition of a grant writing consultant.

Insurance - Insurance expense increased $14,997 over the prior period and is attributable to no insurance expenses during the three months ending April 30, 2024.

Software Development - Software development expenses increased $133,504, or 873% over the same period in the prior year due to an increase in the use of independent contractors and consultants for specific development projects.

Sales technology support - Sales technology support expense increased $50,710 over the prior period and is attributable to no sales support expenses during the nine months ending April 30, 2024.

Travel and entertainment - Travel and entertainment expense increased $136,199 over the same period in the prior year. The increase is primarily due to increased business travel by the senior management team.

Advertising and Marketing - Advertising and marketing costs increased $158,176 over the same period in the prior year due to increased promotional activities.

Rent expense - Rent expense increased $46,326 over the same period in the prior year due to no rent expense in the prior year.

Office expense - Office expense increased $79,180 primarily due to increases in office expense activity over the same period in the prior year.

Other - Other expenses increased $23,804 over the same period in the prior year primarily due to limited activity during the nine months ending April 30, 2024.

Stock-based Compensation - Stock-based compensation expense increased $1,140,106 from the same period in the prior year. The increase results from the amortization of the grant date fair value of new restricted stock awards.

Amortization - Amortization expenses increased $132,862, or 80% over the same period in the prior year, primarily due to a reduction in the estimated useful life from three years to two years of software development costs.

Impairment of intangibles - Impairment of intangibles increased $46,225 over the same period in the prior year. The impairment expense relates to the abandonment of certain patent applications and the establishment of an impairment reserve on active patent applications.

Other Income (Expense)

The table below presents a comparison of our other income (expense) for the Nine months ended April 30, 2025 and 2024:

		For the Nine Months Ended April 30,
		2025				2024				$ Variance				%Variance
Gain (loss) on extinguishment of debt		$	113,645			$	-			$	113,645				-
Interest expense			(38,509	)			(39,410	)			(901	)			(2	)%
Interest income			7,367				-				7,367				-
Total		$	82,503			$	(39,410	)		$	(121,913	)			(309	)%

Gain (loss) on extinguishment of debt - Gain (loss) on extinguishment of debt increased $113,645 over the same period in the prior year due to holders exchanging 5% Convertible Promissory Notes plus accrued interest through the conversion date at a conversion price of $0.50 per share, the settlement of the Note Payable to Acorn Management Partners offset by a loss for the unamortized issuance costs from Platinum Note 4.

Interest expense - Interest expense increased $901, or 2%, over the same period in the prior year due to aa decrease in the average outstanding debt balance during the same period in the prior year.

Interest income - Interest income increased $7,367 over the same period in the prior year due to no interest income in the prior year.

Liquidity and Capital Resources

Working Capital

The following table summarizes our working capital for the interim period ended April 30, 2025 and fiscal year ended July 31, 2024:

		April 30, 2025				July 31, 2024
Current assets		$	8,203,253			$	222,584
Current liabilities			(255,792	)			(1,022,522	)
Working capital surplus (deficiency)		$	7,947,461			$	(799,938	)

Current assets for the interim period ending April 30, 2025 increased $7,980,669 as compared to the fiscal year ended July 31, 2024. The increase is primarily due to the receipt of $10,171,074 in net proceeds from the sale of our common stock at an average price of $0.116 per share during the nine months ending April 30, 2025.

Current liabilities for the interim period ending April 30, 2025 decreased $766,730 as compared to the fiscal year ended July 31, 2024. The decrease is primarily due to decreases in accounts payable and accrued expenses and a reduction in the Notes payable and Notes payable, related party.

Net Cash Used by Operating Activities

We currently do not have a revenue source and will continue to have negative cash flow from operations for the near future. The factors in determining operating cash flows are largely the same as those that affect net earnings, except for non-cash expenses such as depreciation and amortization, stock-based compensation, and impairment of intangibles, which affect earnings but do not affect operating cash flow. Net cash used by operating activities was $1,754,005 for the nine months ended April 30, 2025, as compared to net cash used by operating activities of $198,352 for the nine months ended April 30, 2024. The increase in cash used by operating activities is primarily attributable to an increase in operating costs and the payment of accounts payable and accrued expenses, related party items.

Net Cash Used by Investing Activities

We did not incur net cash used in investing activities during the reporting period. However, management anticipates approximately $250,000 in capitalized software development costs during the remainder of the current fiscal year, and an additional $500,000 in the next fiscal year to support ongoing product innovation..

Net Cash Provided by Financing Activities

Net cash provided by financing activities was $9,709,787 for the nine months ending April 30, 2025, which represents a $9,511,816 increase over the same period in the prior year. The increase is primarily due to the receipt of $10,172,074 in net proceeds from the sale of our common stock at an average price of $0.116 per share during the nine months ending April 30, 2025.

Critical Accounting Policies and Estimates

Our interim consolidated financial statements and related public financial information are based on the application of U.S. GAAP. U.S. GAAP requires the use of estimates; assumptions, judgments and subjective interpretations of accounting principles that have an impact on the assets, liabilities, revenues and expense amounts reported. These estimates can also affect supplemental information contained in our external disclosures including information regarding contingencies, risk and financial condition. We believe our use of estimates and underlying accounting assumptions adhere to U.S. GAAP and are consistently and conservatively applied. We base our estimates on historical experience and on various other assumptions that we believe to be reasonable under the circumstances. Actual results may differ materially from these estimates under different assumptions or conditions. We continue to monitor significant estimates made during the preparation of our financial statements.

Our significant accounting policies are summarized in Note 1 of our interim consolidated financial statements.

There have been no material changes to our critical accounting policies and estimates from the information provided in Item 7, "Management's Discussion and Analysis of Financial Condition and Results of Operations," included in our July 31, 2024 Annual Report.

We believe the following critical policies impact our more significant judgments and estimates used in preparation of our interim consolidated financial statements.

Business Combinations

We account for business combinations under the acquisition method of accounting. The acquisition method requires that the acquired assets and liabilities, including contingencies, be recorded at fair value determined on the acquisition date and that changes thereafter be reflected in income (loss). The estimation of fair values of the assets and liabilities assumed involves several estimates and assumptions that could differ materially from the actual amounts recorded. The results of the acquired businesses are included in our results from operations beginning from the day of acquisition.

Risk and Uncertainties

Factors that could affect our future operating results and cause actual results to vary materially from management's expectation include, but are not limited to: our ability to maintain and secure adequate capital to fund our operations and fully develop our product(s); our ability to source strong opportunities with sufficient risk adjusted returns; acceptance of the terms and conditions of our licenses and/or the acceptance of our royalties and fees; the nature and extent of competition from other companies that may reduce market share and create pressure on pricing and investment return expectations; changes in the projects in which we plan to invest which result from factors beyond our control, including, but not limited to, a change in circumstances, capacity and economic impacts; changes in laws, regulations, accounting, taxation, and other requirements affecting our operations and business. Negative developments in these or other risk factors could have a significant adverse effect on our financial position, results of operations and cash flows.

Use of Estimates

The preparation of consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. We base our estimates on experience and various other assumptions that are believed to be reasonable under the circumstances. We evaluate our estimates and assumptions on a regular basis and actual results may differ from those estimates.

Fair Value of Financial Instruments

Fair value is defined as the price that would be received to sell an asset, or paid to transfer a liability, in an orderly transaction between market participants. A fair value hierarchy has been established for valuation inputs that gives the highest priority to quoted prices in active markets for identical assets or liabilities and the lowest priority to unobservable inputs. The fair value hierarchy is as follows:

Level 1 Inputs - Unadjusted quoted prices in active markets for identical assets or liabilities that the reporting entity can access at the measurement date.

Level 2 Inputs - Inputs other than quoted prices included in Level 1 that are observable for the asset or liability, either directly or indirectly. These might include quoted prices for similar assets or liabilities in active markets, quoted prices for identical or similar assets or liabilities in markets that are not active, inputs other than quoted prices that are observable for the asset or liability (such as interest rates, volatilities, prepayment speeds, credit risks, etc.) or inputs that are derived principally from or corroborated by market data by correlation or other means.

Level 3 Inputs - Unobservable inputs for determining the fair values of assets or liabilities that reflect an entity's own assumptions about the assumptions that market participants would use in pricing the assets or liabilities.

Financial instruments consist of cash and cash equivalents, accounts receivable, accounts payable and borrowings. The fair value of current financial assets and current financial liabilities approximates their carrying value because of the short-term maturity of these financial instruments.

Intangible Assets

Intangible assets consist of patents, our website and the costs of software developed for internal use. Certain payroll and stock-based compensation costs incurred are allocated to the intangible assets. We determine the amount of costs to be capitalized based on the time spent by employees or outside contractors on the projects. Intangible assets are amortized over their expected useful life on a straight-line basis. We evaluate the useful lives of these assets on an annual basis and test for impairment whenever events or changes in circumstances occur that could impact the recoverability of these assets. If the estimate of an intangible asset's remaining life is changed, the remaining carrying value of the intangible asset is amortized prospectively over the revised remaining useful life.

Impairment of Long-Lived Assets

Long-lived assets such as property, equipment and identifiable intangibles are reviewed for impairment at least annually or whenever facts and circumstances indicate that the carrying value may not be recoverable. When required, impairment losses on assets to be held and used are recognized based on the fair value of the asset. The fair value is determined based on estimates of future cash flows, market value of similar assets, if available, or independent appraisals, if required. If the carrying amount of the long-lived asset is not recoverable, an impairment loss is recognized for the difference between the carrying amount and fair value of the asset.

Derivative Liability

Options, warrants, convertible notes, or other contracts, if any, are evaluated to determine if those contracts, or embedded components of those contracts, qualify as derivatives to be separately accounted for in accordance with Financial Accounting Standards Board ("FASB") Accounting Standards Codification ("ASC") Topic 815, "Derivatives and Hedging," (paragraph 815-10-05-4 and Section 815-40-25). The result of this accounting treatment is that the fair value of the embedded derivative is marked-to-market each balance sheet date and recorded as either an asset or a liability. The change in fair value is recorded in the consolidated statements of operations as other income or expense. Upon conversion, exercise or cancellation of a derivative instrument, the instrument is marked to fair value at the date of conversion, exercise, or cancellation and then the related fair value is reclassified to equity.

In circumstances where the embedded conversion option in a convertible instrument is required to be bifurcated, and there are also other embedded derivative instruments in the convertible instrument that are required to be bifurcated, the bifurcated derivative instruments are accounted for as a single, compound derivative instrument.

The classification of derivative instruments, including whether such instruments should be recorded as liabilities or as equity, is re-assessed at the end of each reporting period. Equity instruments that are initially classified as equity that become subject to reclassification are reclassified to liability at the fair value of the instrument on the reclassification date. Derivative instrument liabilities will be classified in the balance sheet as current or non-current based on whether or not net-cash settlement of the derivative instrument is expected within 12 months of the balance sheet date.

The Company adopted Section 815-40-15 of the FASB ASC ("Section 815-40-15") to determine whether an instrument (or an embedded feature) is indexed to the Company's own stock. Section 815-40-15 provides that an entity should use a two- step approach to evaluate whether an equity-linked financial instrument (or embedded feature) is indexed to its own stock, including evaluating the instrument's contingent exercise and settlement provisions.

We utilize a binomial option pricing model to compute the fair value of the derivative liability and to mark to market the fair value of the derivative at each balance sheet date. We record the change in the fair value of the derivative as other income or expense in the consolidated statements of operations.

Revenue Recognition

Revenue is recognized under ASC 606, "Revenue from Contracts with Customers" using the modified retrospective method. Under this method, the Company follows the five-step model provided by ASC Topic 606 in order to recognize revenue in the following manner: 1) Identify the contract; 2) Identify the performance obligations of the contract; 3) Determine the transaction price of the contract; 4) Allocate the transaction price to the performance obligations; and 5) Recognize revenue. An entity recognizes revenue for the transfer of promised goods or services to customers in an amount that reflects the consideration for which the entity expects to be entitled in exchange for those goods or services. The Company's revenue recognition policies remained unchanged as a result of the adoption of ASC 606, and there were no significant changes in business processes or systems.

Stock-Based Compensation

The Company accounts for stock-based compensation in accordance with ASC Topic 718, "Compensation - Stock Compensation" ("ASC 718") which establishes financial accounting and reporting standards for stock-based employee compensation. It defines a fair value-based method of accounting for an employee stock option or similar equity instrument. The Company accounts for compensation cost for stock option plans, if any, in accordance with ASC 718.

Stock-based payments, excluding restricted stock, are valued using a Black-Scholes option pricing model. Grants of stock-based payment awards issued to non-employees for services rendered have been recorded at the fair value of the stock-based payment, which is the more readily determinable value. The grants are amortized on a straight-line basis over the requisite service periods, which is generally the vesting period. If an award is granted, but vesting does not occur, any previously recognized compensation cost is reversed in the period related to the termination of service. Stock-based compensation expenses are included in cost of goods sold or selling, general and administrative expenses, depending on the nature of the services provided, in the consolidated statements of operations. Stock-based payments issued to placement agents are classified as a direct cost of a stock offering and are recorded as a reduction in additional paid in capital.

The Company recognizes all forms of stock-based payments, including stock option grants, warrants and restricted stock grants, at their fair value on the grant date, which are based on the estimated number of awards that are ultimately expected to vest.

Capital Resources

We had no material commitments for capital expenditures as of April 30, 2025.

Off-Balance Sheet Arrangements

The Company has no off-balance sheet arrangements as of April 30, 2025.