AITX Extinguishes Almost $5 Million of Debt, Targets FY Q2 Profit

Core Insights - The company expects to report net profitability for Q2 FY 2026, primarily due to a significant one-time accounting gain from a recent debt settlement [1][2] - The company successfully settled over $4.5 million in legacy debt for less than 10% of the balance owed, which strengthens its balance sheet by reducing overall debt [2][3] Financial Performance - The one-time accounting gain from the debt settlement is anticipated to be the key factor in achieving net profitability for the quarter [2] - In Q1 FY 2026, the company reported a 57% increase in revenue and an 80% increase in gross profit compared to the same period in the prior year [2] Strategic Focus - The company aims to accelerate growth in its core business and achieve sustainable operational profitability [2][3] - The CEO emphasized the importance of expanding high-margin recurring revenue streams to deliver sustained value for shareholders [3] Industry Position - The company, through its subsidiary Robotic Assistance Devices, Inc. (RAD), is redefining the nearly $50 billion security and guarding services industry with its AI-driven Solutions-as-a-Service business model [4] - RAD solutions provide cost savings of 35%-80% compared to traditional manned security services [4] Client Base and Opportunities - RAD has a prospective sales pipeline of over 35 Fortune 500 companies and numerous other client opportunities [6] - The company expects to convert existing sales opportunities into deployed clients, generating a recurring revenue stream [6] Compliance and Credibility - The company's operations and internal controls have been validated through successful completion of its SOC 2 Type 2 audit, enhancing its credibility with enterprise and government clients [5]