10-Q/A

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q /A

Amendment No. 1

[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934

FOR THE QUARTERLY PERIOD ENDED NOVEMBER 30, 2018

OR

[_] TRANSITION REPORT UNDER SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934

FOR THE TRANSITION PERIOD FROM _______________ TO _______________

COMMISSION FILE NUMBER: 0-55079

ARTIFICIAL INTELLIGENCE TECHNOLOGY SOLUTIONS INC.

(Exact name of registrant as specified in its charter)

Nevada	27-2343603
(State or other jurisdiction of Incorporation or organization)	(I.R.S. Employer Identification Number)
701 North Green Valley Parkway, Suite 200 Henderson, Nevada	89074
(Address of principal executive offices)	(Zip code)

(702) 990-3271

(Registrant’s telephone number, including area code)

ON THE MOVE SYSTEMS CORP.

(Former name, former address and former fiscal year, if changed since last report)

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 preceding 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 [X]   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 [X]   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, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer	[_]	Accelerated filer	[_]
Non-accelerated filer	[X]	Smaller reporting company	[X]
		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 [X]

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date: 200,261,790 shares of common stock were issued and outstanding as of April 20, 2019.

EXPLANATORY NOTE

The purpose of this Amendment No. 1 to the Registrant’s Quarterly Report on Form 10-Q for the quarterly period ended November 30, 2018 (“Form 10-Q”) is to submit Exhibit 101 to the Form 10-Q in accordance with Rule 405 of Regulation S-T. Exhibit 101 consists of the Interactive Data Files from the Registrant’s Form 10-Q for the quarterly period ended November 30, 2018, filed with the Securities and Exchange Commission on May 3, 2019.

Additionally, we corrected two small rounding differences on the totals on page 23.

		PAGE
PART I	FINANCIAL INFORMATION
ITEM 1.	Financial Statements	3
	Consolidated Balance Sheets as of November 30, 2018 and February 28, 2018 (Unaudited)	3
	Consolidated Statements of Operations for the Three and Nine Months Ended November 30, 2018 and 2017 (Unaudited)	4
	Consolidated Statements of Cash Flows for the Nine Months Ended November 30, 2018 and 2017 (Unaudited)	5
	Notes to the Consolidated Financial Statements (Unaudited)	6
ITEM 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	25
ITEM 3.	Quantitative and Qualitative Disclosures About Market Risk	30
ITEM 4.	Controls and Procedures	30
PART II	OTHER INFORMATION
ITEM 1.	Legal Proceedings	31
ITEM 1A.	Risk Factors	31
ITEM 2.	Unregistered Sales of Equity Securities and Use of Proceeds	31
ITEM 3.	Defaults Upon Senior Securities	31
ITEM 4.	Mine Safety Disclosures	31
ITEM 5.	Other Information	31
ITEM 6.	Exhibits	31
SIGNATURES		32

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PART 1 – FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

ARTIFICIAL INTELLIGENCE TECHNOLOGY SOLUTIONS INC.

(FORMERLY ON THE MOVE SYSTEMS CORP.)

CONSOLIDATED BALANCE SHEETS

(Unaudited)

	November 30, 2018			February 28, 2018
ASSETS
Current assets:
Cash	$	17,551		$	24,773
Accounts receivable		28,879			28,000
Device parts inventory		241,435			316,113
Prepaid expenses and deposits		21,078			83,103
Note receivable		—			40,000
Total current assets		308,943			491,989
Revenue earning devices, net of accumulated depreciation of $28,434 and $0, respectively		201,524			—
Fixed assets, net of accumulated depreciation of $79,870 and $36,632, respectively		111,719			158,205
Intangible assets, net		46,426			56,248
Security deposit		30,216			30,141
Total assets	$	698,828		$	736,583
LIABILITIES AND STOCKHOLDERS’ DEFICIT
Current liabilities:
Accounts payable and accrued expenses	$	1,635,626		$	487,243
Advances payable		1,594			1,594
Balance due on acquisition of WeSecure		25,000			25,000
Customer deposits		10,000			10,000
Current portion of convertible notes payable, net of discount of $1,729,420 and $3,418,637, respectively		4,506,747			2,117,946
Loan payable - related party		717,615			316,142
Loans payable		339,402			—
Vehicle loan - current portion		17,830			17,830
Current portion of accrued interest payable		1,300,530			694,592
Derivative liability		6,152,561			31,113,844
Total current liabilities		14,706,905			34,784,191
Convertible notes payable, net of discount of $345,439 and $505,039, respectively		219,561			95,060
Accrued interest payable		85,344			55,917
Vehicle loan		50,675			64,332
Total liabilities		15,062,485			34,999,500
Shareholders’ deficit:
Preferred Stock, undesignated; 15,645,650 shares authorized; no shares issued and outstanding		—			—
Series E Preferred Stock, $0.001 par value; 4,350,000 shares authorized; 4,350,000 and 3,350,000 shares issued and outstanding ,respectively		4,350			4,350
Series F Convertible Preferred Stock, $1.00 par value; 4,350 shares authorized; 3,450 and 2,450 shares issued and outstanding, respectively		3,450			3,450
Common Stock, $0.001 par value; 480,000,000 shares authorized 16,252,014 and 1,250,046  shares issued and outstanding, respectively		16,252			1,250
Additional paid-in capital		3,558,028			1,232,062
Preferred stock to be issued		174,070			—
Accumulated deficit		(18,119,807	)		(35,504,029	)
Total shareholders’ deficit		(14,363,657	)		(34,262,917	)
Total liabilities and shareholders’ deficit	$	698,828		$	736,583

The accompanying notes are an integral part of these unaudited consolidated financial statements.

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ARTIFICIAL INTELLIGENCE TECHNOLOGY SOLUTIONS INC.

(FORMERLY ON THE MOVE SYSTEMS CORP.)

CONSOLIDATED STATEMENTS OF OPERATIONS

(UNAUDITED)

	Three Months Ended November 30, 2018			Three Months Ended November 30, 2017			Nine Months Ended November 30, 2018			Nine Months Ended November 30, 2017
Revenues	$	38,864		$	63,632		$	65,705		$	98,632
Cost of Goods Sold		—			45,000			35,454			45,000
Gross Profit		38,864			18,632			30,251			53,632
Operating expenses:
Research and development		300,881			216,679			534,012			306,312
General and administrative		800,384			855,707			3,082,656			1,585,697
Depreciation and amortization		31,489			41,095			82,902			74,789
Loss on impairment of fixed assets		—			32,322			4,739			125,264
Total operating expenses		1,132,754			1,145,803			3,704,309			2,092,062
Loss from operations		(1,093,890	)		(1,127,171	)		(3,674,058	)		(2,038,430	)
Other income (expense), net:
Change in fair value of derivative liabilities		10,223,431			(4,246,903	)		26,216,071			(3,495,662	)
Interest expense		(1,604,169	)		(4,597,875	)		(5,288,927	)		(7,446,670	)
Gain on settlement of debt		185,746			1,175,028			131,136			1,175,028
Total other income (expense), net		8,805,008			(7,669,750	)		21,058,280			(9,767,304	)
Net income (loss)	$	7,711,118		$	(8,796,921	)	$	17,384,222		$	(11,805,734	)
Net income (loss) per share:
Basic	$	0.86		$	(7.41	)	$	4.32		$	(28.92	)
Diluted	$	(0.00	)	$	(7.41	)	$	(0.01	)	$	(28.92	)
Weighted average common share outstanding:
Basic		8,949,875			1,186,924			4,028,324			408,206
Diluted		1,280,062,970			1,186,924			1,247,050,203			408,206

The accompanying notes are an integral part of these unaudited consolidated financial statements.

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ARTIFICIAL INTELLIGENCE TECHNOLOGY SOLUTIONS INC.

(FORMERLY ON THE MOVE SYSTEMS CORP.)

CONSOLIDATED STATEMENTS OF CASH FLOWS

(UNAUDITED)

	Nine Months Ended November 30, 2018			Nine Months Ended November 30, 2017
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income (loss)	$	17,384,222		$	(11,805,734	)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization		82,902			74,789
Provision for note receivable		40,000			—
Loss on impairment of fixed assets		4,739			125,264
Stock based compensation		632,972			—
Change in fair value of derivative liabilities		(26,216,071	)		3,495,662
Interest expense related to derivative liability in excess of face value of debt		751,522			6,524,664
Amortization of  debt discounts		3,649,219			691,607
Gain on settlement of debt		(131,136	)		(1,175,028	)
Changes in operating assets and liabilities:
Accounts receivable		(879	)		(20,222	)
Deposits on robots		—			(230,170	)
Prepaid expenses		62,025			—
Device parts inventory		74,678			(107,870	)
Accounts payable and accrued expenses		1,371,979			66,048
Accrued interest payable		615,547			139,212
Customer deposits		—			(10,000	)
Net cash used in operating activities		(1,678,281	)		(2,231,778	)
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of fixed assets		(232,858	)		(245,102	)
Cash proceeds from WESecure transaction		—			17,000
Cash paid for security deposit		(75	)		(25,747	)
Cash acquired in reverse capitalization		—			2,022
Net cash used in investing activities		(232,933	)		(251,827	)
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from convertible notes payable, net		1,132,608			1,492,500
Principal payments on convertible notes payable		(125,000	)		(50,000	)
Proceeds from loans payable		336,490			—
Repayment of loans payable		(1,992	)		—
Net borrowings on loan payable - related party		401,473			237,948
Loan from OMVS to RAD prior to the reverse recapitalization		—			752,500
Proceeds from vehicle loan		—			47,661
Repayment of vehicle loan		(13,657	)		(6,591	)
Proceeds from sale of preferred shares		174,070			—
Net cash provided by financing activities		1,903,992			2,474,018
Net change in cash		(7,222	)		(9,587	)
Cash, beginning of period		24,773			56,907
Cash, end of period	$	17,551		$	47,320
Supplemental disclosure of cash and non-cash transactions:
Cash paid for interest	$	4,687		$	22,320
Cash paid for taxes	$	—		$	—
Noncash investing and financing activities:
Transfer of devices from deposits to revenue earning devices	$	—		$	341,280
Debt discount from derivative liabilities	$	1,309,900		$	2,033,475
Conversion of convertible notes and interest to shares of common stock	$	1,707,996		$	123,000
Settlement and exchange of convertible notes payable	$	183,766		$	300,000
Capitalization of accrued interest to convertible notes payable	$	67,272		$	—

The accompanying notes are an integral part of these unaudited consolidated financial statements.

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ARTIFICIAL INTELLIGENCE TECHNOLOGY SOLUTIONS INC.

(FORMERLY ON THE MOVE SYSTEMS CORP.)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

1. GENERAL INFORMATION

Artificial Intelligence Technology Solutions Inc. (formerly known as On the Move Systems Corp.) (“AITX” or the “Company”) was incorporated in Florida on March 25, 2010 and reincorporated in Nevada on February 17, 2015. On August 24, 2018, Artificial Intelligence Technology Solutions Inc., changed its name from On the Move Systems Corp (“OMVS”).

Robotic Assistance Devices, LLC (“RAD”), was incorporated in the State of Nevada on July 26, 2016 as a LLC. On July 25, 2017, Robotic Assistance Devices LLC converted to a C Corporation, Robotic Assistance Devices, Inc. through the issuance of 10,000 common shares to its sole shareholder.

On August 28, 2017, AITX completed the acquisition of RAD (the “Acquisition”), whereby AITX acquired all the ownership and equity interest in RAD for 3,350,000 shares of AITX Series E Preferred Stock and 2,450 shares of Series F Convertible Preferred Stock. AITX’s prior business focus was transportation services, and AITX was exploring the on-demand logistics market by developing a network of logistics partnerships. As a result of the closing of the Acquisition, AITX has succeeded to the business of RAD, in which AITX purchased all of the outstanding shares of capital stock of RAD. As a result, AITX’s business going forward will consist of one segment activity which is the delivery of artificial intelligence and robotic solutions for operational, security and monitoring needs.

The Acquisition was treated as a reverse recapitalization effected by a share exchange for financial accounting and reporting purposes since substantially all of AITX’s operations were disposed of as part of the consummation of the transaction. Therefore, no goodwill or other intangible assets were recorded by AITX as a result of the Acquisition. RAD is treated as the accounting acquirer as its stockholders control the Company after the Acquisition, even though AITX was the legal acquirer.  As a result, the assets and liabilities and the historical operations that are reflected in these financial statements are those of RAD as if RAD had always been the reporting company.

2. GOING CONCERN

The accompanying unaudited consolidated financial statements have been prepared assuming that the Company will continue as a going concern. The accompanying financial statements do not include any adjustments to reflect the possible future effects on the recoverability and classification of assets or the amounts and classifications of liabilities that may result from the possible inability of the Company to continue as a going concern.

For the nine months ended November 30, 2018, the Company had negative cash flow from operating activities of $1,678,281. As of November 30, 2018, the Company has an accumulated deficit of $18,119,807, and negative working capital of $14,397,962. Management does not anticipate having positive cash flow from operations in the near future. These factors raise a substantial doubt about the Company’s ability to continue as a going concern for the twelve months following the issuance of these financial statements.

The Company does not have the resources at this time to repay its credit and debt obligations, make any payments in the form of dividends to its shareholders or fully implement its business plan. Without additional capital, the Company will not be able to remain in business.

Management has plans to address the Company’s financial situation as follows:

In the near term, management plans to continue to focus on raising the funds necessary to implement the Company’s business plan. Management will continue to seek out debt financing to obtain the capital required to meet the Company’s financial obligations. There is no assurance, however, that lenders will continue to advance capital to the Company or that the new business operations will be profitable. The possibility of failure in obtaining additional funding and the potential inability to achieve profitability raises substantial doubts about the Company’s ability to continue as a going concern.

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ARTIFICIAL INTELLIGENCE TECHNOLOGY SOLUTIONS INC.

(FORMERLY ON THE MOVE SYSTEMS CORP.)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

3. ACCOUNTING POLICIES

Basis of Presentation and Consolidation

The accompanying unaudited consolidated financial statements have been prepared in accordance with generally accepted accounting principles in the United States (“GAAP”) and in conformity with the instructions on Form 10-Q and Rule 8-03 of Regulation S-X and the related rules and regulations of the Securities and Exchange Commission (“SEC”) and should be read in conjunction with the audited financial statements and notes thereto in the Company’s latest Annual Report filed with the SEC on Form 10-K. The unaudited consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries, Robotic Assistance Devices, Inc., On the Move Experience, LLC and OMV Transports, LLC. All significant intercompany accounts and transactions have been eliminated in consolidation. The unaudited consolidated financial statements reflect all adjustments, consisting of normal recurring accruals, which are, in the opinion of management, necessary for a fair presentation of such statements. The results of operations for the three and nine months ended November 30, 2018 are not necessarily indicative of the results that may be expected for the entire year.

Cash

The Company considers all highly liquid investments with an original maturity of three months or less to be cash equivalents. Cash and cash equivalents consist of cash on deposit with banks and money market instruments. The Company places its cash and cash equivalents with high-quality, U.S. financial institutions and, to date has not experienced losses on any of its balances.

Accounts Receivable

Accounts receivable are comprised of balances due from customers, net of estimated allowances for uncollectible accounts. In determining collectability, historical trends are evaluated, and specific customer issues are reviewed on a periodic basis to arrive at appropriate allowances.

Device Parts Inventory

Device parts inventory is stated at the lower of cost or market using the weighted average cost method. The Company records a valuation reserve for obsolete and slow-moving inventory, relying principally on specific identification of such inventory. The Company uses these device parts in the assembly of revenue earning devices (and demo devices) as well as research and development. Depending on use, the Company will transfer the parts to the corresponding asset or expense if used in research and development.  A charge to income is taken when factors that would result in a need for an increase in the valuation, such as excess or obsolete inventory, are noted.

Revenue Earning Devices

Revenue earning devices are stated at cost. Depreciation is provided on a straight-line basis over the estimated useful life of 48 months. The Company continually evaluates revenue earning devices to determine whether events or changes in circumstances have occurred that may warrant revision of the estimated useful life or whether the devices should be evaluated for possible impairment. The Company uses a combination of the undiscounted cash flows and market approaches in assessing whether an asset has been impaired. The Company measures impairment losses based upon the amount by which the carrying amount of the asset exceeds the fair value.

Fixed Assets

Fixed assets are stated at cost. Depreciation is provided on the straight-line method based on the estimated useful lives of the respective assets which range from three to five years. Major repairs or improvements are capitalized. Minor replacements and maintenance and repairs which do not improve or extend asset lives are expensed currently.

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ARTIFICIAL INTELLIGENCE TECHNOLOGY SOLUTIONS INC.

(FORMERLY ON THE MOVE SYSTEMS CORP.)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

Demo Devices	4 years
Vehicles	3 years
Computer equipment	3 years
Office equipment	4 years
Leasehold improvements	5 years, the life of the lease

The Company periodically evaluates the fair value of fixed assets whenever events or changes in circumstances indicate that its carrying amounts may not be recoverable. Upon retirement or other disposition of fixed assets, the cost and related accumulated depreciation are removed from the accounts and the resulting gain or loss, if any, is recognized in income.

Intangible Assets

The Company’s intangible assets are stated at cost and amortized on a straight-line basis over their five year expected useful life. The Company periodically determines if there is any impairment in value every year.

Research and Development

Research and development costs are expensed in the period they are incurred in accordance with ASC 730, Research and Development unless they meet specific criteria related to technical, market and financial feasibility, as determined by Management, including but not limited to the establishment of a clearly defined future market for the product, and the availability of adequate resources to complete the project. If all criteria are met, the costs are deferred and amortized over the expected useful life or written off if a product is abandoned. At November 30, 2018 and February 28, 2018, the Company had no deferred development costs.

Contingencies

Occasionally, the Company may be involved in claims and legal proceedings arising from the ordinary course of its business. The Company records a provision for a liability when it believes that it is both probable that a liability has been incurred, and the amount can be reasonably estimated. If these estimates and assumptions change or prove to be incorrect, it could have a material impact on the Company’s consolidated financial statements. Contingencies are inherently unpredictable, and the assessments of the value can involve a series of complex judgments about future events and can rely heavily on estimates and assumptions.

Revenue Recognition 

ASU 2014-09, “Revenue from Contracts with Customers (Topic 606)”, supersedes the revenue recognition requirements and industry specific guidance under Revenue Recognition (Topic 605). Topic 606 requires an entity to recognize revenue when it transfers promised goods or services to customers in an amount that reflects the consideration the entity expects to be entitled to in exchange for those goods or services. Topic 606 defines a five-step process that must be evaluated and, in doing so, it is possible more judgment and estimates may be required within the revenue recognition process than required under existing accounting principles generally accepted in the United States of America (“U.S. GAAP”) including identifying performance obligations in the contract, estimating the amount of variable consideration to include in the transaction price and allocating the transaction price to each separate performance obligation. The Company adopted Topic 606 on March 1, 2018, using the modified retrospective method. Under the modified retrospective method, prior period financial positions and results will not be adjusted. There was no cumulative effect adjustment recognized as a result of this adoption. While the Company does not expect fiscal year 2019 net earnings to be materially impacted by revenue recognition timing changes, Topic 606 requires certain changes to the presentation of revenues and related expenses beginning March 1, 2018. Refer to Note 4 – Revenue from Contracts with Customers for additional information.

Income Taxes

On July 25, 2017, Robotic Assistance Devices LLC converted to a C Corporation, Robotic Assistance Devices, Inc., through the issuance of 10,000 common shares to its sole shareholder. Prior to the conversion on July 25, 2017, income taxes are not provided in the financial statements as presented as RAD was an LLC and the income or loss flowed through to the shareholder for the two months ended February 28, 2017. Thereafter, income taxes are accounted for under the asset and liability method from that date forward. Deferred income tax assets and liabilities are determined based on differences between financial reporting and tax bases of assets and liabilities, and net operating loss and other tax credit carry-forwards. These items are measured using the enacted tax rates and laws that will be in effect when the differences are expected to reverse. The Company will record a valuation allowance to reduce the deferred income tax assets to the amount that is more likely than not to be realized.

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ARTIFICIAL INTELLIGENCE TECHNOLOGY SOLUTIONS INC.

(FORMERLY ON THE MOVE SYSTEMS CORP.)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

Leases

Lease agreements are evaluated to determine if they are capital leases meeting any of the following criteria at inception: (a) transfer of ownership; (b) bargain purchase option; (c) the lease term is equal to 75 percent or more of the estimated economic life of the leased property; or (d) the present value at the beginning of the lease term of the minimum lease payments, excluding that portion of the payments representing executory costs such as insurance, maintenance, and taxes to be paid by the lessor, including any profit thereon, equals or exceeds 90 percent of the excess of the fair value of the leased property to the lessor at lease inception over any related investment tax credit retained by the lessor and expected to be realized by the lessor.

If at its inception, a lease meets any of the four lease criteria above, the lease is classified by the Company as a capital lease; and if none of the four criteria are met, the lease is classified by the Company as an operating lease.

Operating lease payments are recognized as an expense in the income statement on a straight-line basis over the lease term, whereby an equal amount of rent expense is attributed to each period during the term of the lease, regardless of when actual payments are made. This generally results in rent expense in excess of cash payments during the early years of a lease and rent expense less than cash payments in the later years. The difference between rent expense recognized and actual rental payments is recorded as deferred rent and included in liabilities.

Distinguishing Liabilities from Equity

The Company relies on the guidance provided by ASC Topic 480, Distinguishing Liabilities from Equity, to classify certain redeemable and/or convertible instruments. The Company first determines whether a financial instrument should be classified as a liability. The Company will determine the liability classification if the financial instrument is mandatorily redeemable, or if the financial instrument, other than outstanding shares, embodies a conditional obligation that the Company must or may settle by issuing a variable number of its equity shares.

Once the Company determines that a financial instrument should not be classified as a liability, the Company determines whether the financial instrument should be presented between the liability section and the equity section of the balance sheet (“temporary equity”). The Company will determine temporary equity classification if the redemption of the financial instrument is outside the control of the Company (i.e. at the option of the holder). Otherwise, the Company accounts for the financial instrument as permanent equity.

Initial Measurement

The Company records its financial instruments classified as liability, temporary equity or permanent equity at issuance at the fair value, or cash received.

Subsequent Measurement – Financial Instruments Classified as Liabilities

The Company records the fair value of its financial instruments classified as liabilities at each subsequent measurement date. The changes in fair value of its financial instruments classified as liabilities are recorded as other income (expenses).

Fair Value of Financial Instruments

ASC Topic 820, Fair Value Measurements and Disclosures (“ASC Topic 820”) provides a framework for measuring fair value in accordance with generally accepted accounting principles.

ASC Topic 820 defines fair value as 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. ASC Topic 820 establishes a fair value hierarchy that distinguishes between (1) market participant assumptions developed based on market data obtained from independent sources (observable inputs) and (2) an entity’s own assumptions about market participant assumptions developed based on the best information available in the circumstances (unobservable inputs).

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ARTIFICIAL INTELLIGENCE TECHNOLOGY SOLUTIONS INC.

(FORMERLY ON THE MOVE SYSTEMS CORP.)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

The fair value hierarchy consists of three broad levels, which gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1) and the lowest priority to unobservable inputs (Level 3). The three levels of the fair value hierarchy under ASC Topic 820 are described as follows:

● Level 1 – Unadjusted quoted prices in active markets for identical assets or liabilities that are accessible at the measurement date.

● Level 2 – Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly. Level 2 inputs 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; and inputs that are derived principally from or corroborated by observable market data by correlation or other means.

● Level 3 – Inputs that are unobservable for the asset or liability.

Measured on a Recurring Basis

The following table presents information about our liabilities measured at fair value on a recurring basis, aggregated by the level in the fair value hierarchy within which those measurements fell:

	Amount at		Fair Value Measurement Using
	Fair Value		Level 1		Level 2		Level 3
November 30, 2018
Liabilities
Derivative liability – conversion features pursuant to convertible notes payable	$	6,152,561	$	—	$	—	$	6,152,561
February 28, 2018
Liabilities
Derivative liability – conversion features pursuant to convertible notes payable	$	31,113,844	$	—	$	—	$	31,113,844

See Note 13 for specific inputs used in determining fair value.

The carrying amounts of the Company’s financial assets and liabilities, such as cash, accounts receivable, prepaid expenses and advances, accounts payable and accrued expenses, approximate their fair values because of the short maturity of these instruments.

Earnings (Loss) per Share

Basic earnings (loss) per share (“EPS”) is computed by dividing net income (loss) available to common shareholders (numerator) by the weighted average number of shares outstanding (denominator) during the period. Diluted EPS give effect to all dilutive potential common shares outstanding during the period using the treasury stock method and convertible preferred stock using the if-converted method. In computing diluted EPS, the average stock price for the period is used to determine the number of shares assumed to be purchased from the exercise of stock options and/or warrants. Diluted EPS excluded all dilutive potential shares if their effect is anti-dilutive.

Basic loss per common share is computed based on the weighted average number of shares outstanding during the period. Diluted loss per share is computed in a manner similar to the basic loss per share, except the weighted-average number of shares outstanding is increased to include all common shares, including those with the potential to be issued by virtue of convertible debt and other such convertible instruments. Diluted loss per share contemplates a complete conversion to common shares of all convertible instruments only if they are dilutive in nature with regards to earnings per share.

- 10 -

ARTIFICIAL INTELLIGENCE TECHNOLOGY SOLUTIONS INC.

(FORMERLY ON THE MOVE SYSTEMS CORP.)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

Recently Adopted Accounting Pronouncements

See discussion of the adoption of ASU 2014-09, “Revenue from Contracts with Customers (Topic 606)”, above.

In August 2016, the Financial Accounting Standards Board (“FASB”) Accounting Standards Update (“ASU”) 2016-15, “Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments” (“ASU 2016-15”). ASU 2016-15 will make eight targeted changes to how cash receipts and cash payments are presented and classified in the statement of cash flows. ASU 2016-15 is effective for fiscal years beginning after December 15, 2017. The Company adopted this standard on March 1, 2018, on a retrospective basis.  There was no impact of the standard on the Company’s consolidated financial statements.

In November 2016, the FASB issued ASU 2016-18, “Statement of Cash Flows (Topic 230)”, requiring that the statement of cash flows explain the change in the total cash, cash equivalents, and amounts generally described as restricted cash or restricted cash equivalents. This guidance is effective for fiscal years, and interim reporting periods therein, beginning after December 15, 2017, with early adoption permitted. The Company adopted this standard on March 1, 2018, on a retrospective basis.  There was no impact of the standard on the Company’s consolidated financial statements.

In May 2017, the FASB issued ASU 2017-09, Modification Accounting for Share-Based Payment Arrangements. The standard amends the scope of modification accounting for share-based payment arrangements and provides guidance on the types of changes to the terms or conditions of share-based payment awards to which an entity would be required to apply modification accounting under ASC 718. The new standard is effective for fiscal years beginning after December 15, 2017. There was no impact on the financial statements of adopting this new standard on March 1, 2018.

Recently Issued Accounting Pronouncements

In February 2016, the FASB issued ASU No. 2016-02, Leases (Topic 842), which is effective for public entities for annual reporting periods beginning after December 15, 2018. Under ASU 2016-02, lessees will be required to recognize the following for all leases (with the exception of short-term leases) at the commencement date: 1) a lease liability, which is a lessee’s obligation to make lease payments arising from a lease, measured on a discounted basis, and 2) a right-of-use asset, which is an asset that represents the lessee’s right to use, or control the use of, a specified asset for the lease term. The Company is currently evaluating the effects of ASU 2016-02 on its financial statements for both lessees and lessors.

In July 2017, the FASB issued ASU 2017-11, Earnings Per Share (Topic 260), Distinguishing Liabilities from Equity (Topic 480) and Derivatives and Hedging (Topic 815): I. Accounting for Certain Financial Instruments with Down Round Features; II. Replacement of the Indefinite Deferral for Mandatorily Redeemable Financial Instruments of Certain Nonpublic Entities and Certain Mandatorily Redeemable Noncontrolling Interests with a Scope Exception. Part I of this update addresses the complexity of accounting for certain financial instruments with down round features. Down round features are features of certain equity-linked instruments (or embedded features) that result in the strike price being reduced on the basis of the pricing of future equity offerings. Current accounting guidance creates cost and complexity for entities that issue financial instruments (such as warrants and convertible instruments) with down round features that require fair value measurement of the entire instrument or conversion option. Part II of this update addresses the difficulty of navigating Topic 480, Distinguishing Liabilities from Equity, because of the existence of extensive pending content in the FASB Accounting Standards Codification. This pending content is the result of the indefinite deferral of accounting requirements about mandatorily redeemable financial instruments of certain nonpublic entities and certain mandatorily redeemable noncontrolling interests. The amendments in Part II of this update do not have an accounting effect. This ASU is effective for fiscal years, and interim periods within those years, beginning after December 15, 2018. The Company is currently assessing the potential impact of adopting ASU 2017-11 on its consolidated financial statements and related disclosures.

In September 2016, the FASB issued ASU 2016-13, Financial Instruments-Credit Losses. ASU 2016-13 was issued to provide more decision-useful information about the expected credit losses on financial instruments and changes the loss impairment methodology. ASU 2016-13 is effective for reporting periods beginning after December 15, 2019 using a modified retrospective adoption method. A prospective transition approach is required for debt securities for which an other-than-temporary impairment had been recognized before the effective date. The Company is currently assessing the impact this accounting standard will have on its financial statements and related disclosures.

- 11 -

ARTIFICIAL INTELLIGENCE TECHNOLOGY SOLUTIONS INC.

(FORMERLY ON THE MOVE SYSTEMS CORP.)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

Subsequent Events

The Company has evaluated all transactions through the date the consolidated financial statements were issued for subsequent event disclosure.

4. REVENUE FROM CONTRACTS WITH CUSTOMERS

Revenue is earned primarily from two sources: 1) direct sales of goods or services and 2) short-term rentals. Direct sales of goods or services are accounted for under Topic 606, and short-term rentals are accounted for under Topic 840 (which addresses lease accounting and will be updated after the adoption of Topic 842 on March 1, 2019) as operating leases.

As disclosed in the revenue recognition section of Note 3 – Accounting Polices, the Company adopted Topic 606 in accordance with the effective date on March 1, 2018. Note 3 includes disclosures regarding the Company’s method of adoption and the impact on the Company’s financial statements. Revenue is recognized on direct sales of goods or services when it transfers promised goods or services to customers in an amount that reflects the consideration the entity expects to be entitled to in exchange for those goods or services.

Upon adoption of Topic 842, also referred to above in Note 3, the Company plans to account for revenue earned from rental activities where an identified asset is transferred to the customer and the customer has the ability to control that asset, will be accounted for under this topic. The Company is currently evaluating the effects of Topic 842 on its financial statements.

The Company recognizes revenue from its device rental activities when persuasive evidence of a contract exists, the performance obligations have been satisfied, the transaction price is fixed or determinable and collection is reasonably assured. Performance obligations associated with device rental transactions are satisfied over the rental period. Rental periods are short-term in nature. Therefore, the Company has elected to apply the practical expedient which eliminates the requirement to disclose information about remaining performance obligations. Payments are due from customers at the completion of the rental, except for customers with negotiated payment terms, generally net 30 days or less, which are invoiced and remain as accounts receivable until collected.

The following table presents revenues from contracts with customers disaggregated by product/service:

	Three Months Ended November 30, 2018		Nine Months Ended November 30, 2018
Device rental activities	$	38,864	$	65,295
Direct sales of goods and services		—		410
	$	38,864	$	65,705

5. PREPAID EXPENSES AND DEPOSITS

Prepaid expenses and deposits on device parts expected to be received within one year were comprised of the following:

	November 30, 2018		February 28, 2018
Prepaid insurance	$	21,078	$	22,076
Prepaid travel		—		10,488
Prepaid trade show expenses		—		50,539
	$	21,078	$	83,103

- 12 -

ARTIFICIAL INTELLIGENCE TECHNOLOGY SOLUTIONS INC.

(FORMERLY ON THE MOVE SYSTEMS CORP.)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

6. REVENUE EARNING DEVICES

Revenue earning devices consisted of the following:

	November 30, 2018			February 28, 2018
Revenue earning devices	$	229,958		$	—
Less: Accumulated depreciation		(28,434	)		—
	$	201,524		$	—

During the nine months ended November 30, 2018, the Company made total additions to revenue earning devices of $229,958.

During the nine months ended November 30, 2017, the Company made total additions to revenue earning robots of $38,653.  Due to several revenue earning robots becoming non-operational during the nine months ended November 30, 2017, the Company wrote down revenue earning robots with a net book value of $82,855 to $0 as loss on impairment of fixed assets.

Depreciation expense was $13,646 and $28,434 for the three and nine months ended November 30, 2018, respectively, and $21,350 and $35,056 for the three and nine months ended November 30, 2017 respectively.

7. FIXED ASSETS

Fixed assets consisted of the following:

	November 30, 2018			February 28, 2018
Automobile	$	136,318		$	136,318
Computer equipment		20,262			17,361
Office equipment		5,680			11,829
Leasehold improvements		29,329			29,329
		191,589			194,837
Less: Accumulated depreciation		(79,870	)		(36,632	)
	$	111,719		$	158,205

During the nine months ended November 30, 2018, the Company made additions to fixed assets of $2,900 and wrote -off fixed assets having a net book value of $4,739 and recorded a corresponding loss on impairment of fixed assets.

During the nine months ended November 30, 2017, the Company acquired total fixed assets of $206,449.  Due to several demo robots becoming non-operational during the nine months ended November 30, 2017, the Company wrote down fixed assets with a net book value of $42,409 to $0 as loss on impairment of fixed assets.

Depreciation expense was $14,748 and $44,646 for the three and nine months ended November 30, 2018, respectively, and $17,695 and $37,683 for the three and nine months ended November 30, 2017, respectively.

- 13 -

ARTIFICIAL INTELLIGENCE TECHNOLOGY SOLUTIONS INC.

(FORMERLY ON THE MOVE SYSTEMS CORP.)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

8. INTANGIBLE ASSETS

Intangible assets consisted of the following:

	November 30, 2018			February 28, 2018
Customer lists and relationships	$	61,901		$	61,901
Less accumulated amortization		(15,475	)		(5,653	)
	$	46,426		$	56,248

On October 2, 2017, the Company acquired goods and other intangibles through an asset purchase agreement with WeSecure Robotics, Inc. (“WeSecure”) in exchange for $125,000 payable in 5 monthly $25,000 installments commencing in October 2017 and ending February 2018. The intangible asset primarily consisted of customer relationships and lists acquired as a part of the asset purchase agreement. The Company is treating this transaction as a business combination under ASU 2017-01 – Business Combinations: Clarifying the Definition of a Business.

Under the asset purchase agreement, the two principals of WeSecure were also hired on an at will basis: one as a sales director for a salary of $8,000 per month and the other as a consultant at $1,000 per month. The salary has been committed to until September 1, 2019, regardless of employment within the Company, In addition, the two principals will receive collectively a commission of $500/month for each SMP robot rented by an identified customer for one year, as long as the customer stays with the Company for two years and an additional year of commission if the two principals remain employed with the Company through September 1, 2020. They will also receive a commission of 5% of net revenues on sales to identified customers for non-SMP robots for 2 years.  In addition, the Company agreed to issue 4,500 options to the two principals to purchase shares its common stock at an exercise price of $5.00 per share that vest on October 2, 2021.

The purchase price was allocated to the following assets as a part of this transaction:

Assets Acquired:
Cash	$	17,000
Robots, parts, and equipment		46,099
Intangible assets		61,901
Total assets acquired	$	125,000

Amortization expense was $3,095 and $9,822 for the three and nine months ended November 30, 2018, respectively, and $2,050 for both the three and nine months ended November 30, 2017.

At both November 30, 2018 and February 28, 2018, the balance due on acquisition to WeSecure was $25,000. The acquisition was to be fully paid by February 28, 2018 per the agreement, however no notices have been sent.

9. NOTE RECEIVABLE

On March 13, 2017, the Company loaned $40,000 to a third party vendor. The note bore interest at 18% per annum and was payable on April 13, 2017. The note was not repaid by the due date. The note was subsequently amended to bear interest of 2% per month plus a $10,000 fee. It was payable on December 31, 2017 and is secured in senior rank on all assets of the borrower. The Company evaluated the note receivable to determine whether its lending activities create a variable interest entity that would require consolidation and determined that it does not create a variable interest entity. Based on the current information available, the Company recorded a full allowance for this note of $40,000, during March 2018 with a corresponding adjustment to bad debt expense.

- 14 -

ARTIFICIAL INTELLIGENCE TECHNOLOGY SOLUTIONS INC.

(FORMERLY ON THE MOVE SYSTEMS CORP.)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

10. CONVERTIBLE NOTES PAYABLE

Convertible notes payable consisted of the following:

				Balance	Balance
		Interest	Conversion	November 31,	February 28,
Issued	Maturity	Rate	Rate per Share	2018	2018
February 28, 2011	February 26, 2013 *	7%	$0.015	$32,600	$32,600
January 31, 2013	February 28, 2017 *	10%	$0.010	119,091	119,091
May 31, 2013	November 30, 2016 *	10%	$0.010	261,595	261,595
August 31, 2014	November 30, 2016 *	10%	$0.002	355,652	355,652
November 30, 2014	November 30, 2016 *	10%	$0.002	103,950	103,950
February 28, 2015	February 28, 2017 *	10%	$0.001	63,357	63,357
May 31, 2015	August 31, 2017*	10%	$1.000	65,383	65,383
August 31, 2015	August 31, 2017*	10%	$0.300	91,629	91,629
November 30, 2015	November 30, 2018	10%	$0.300	269,791	269,791
February 29, 2016	February 28, 2019	10%	60% discount(2)	95,245	95,245
May 31, 2016	May 31, 2019	10%	$0.003	35,100	35,100
July 18, 2016	July 18, 2017*	10%	$0.003	3,500	3,500
December 31, 2016	December 31, 2020	8%	35% discount(2)	65,000	65,000
January 15, 2017	January 15, 2021	8%	35% discount(2)	50,000	50,000
January 15, 2017	January 15, 2021	8%	35% discount(2)	100,000	100,000
January 16, 2017	January 16, 2021	8%	35% discount(2)	150,000	150,000
March 8, 2017	March 8, 2020	10%	40% discount (2)	100,000	100,000
March 9, 2017	March 9, 2021	8%	35% discount(2)	50,000	50,000
March 21, 2017	March 21, 2018	8%	40% discount(2)	—	30,000
April 4, 2017	December 4, 2017	10%	40% discount(2)	—	12,066
April 19, 2017	April 19, 2018*	15%	50% discount(2)	96,250	96,250
April 20, 2017	January 30, 2018	8%	40% discount (1)	—	28,000
April 26, 2017	April 26, 2018*	0%	$0.001	68	67
May 1, 2017	May 1, 2021	8%	35% discount(2)	50,000	50,000
May 4, 2017	May 4, 2018*	8%	40% discount(2)	131,450	150,000
May 15, 2017	May 15, 2018*	0%	$0.001	1,280	1,280
May 17, 2017	May 17, 2020	10%	40% discount (1)	85,000	85,000
June 7, 2017	June 7, 2018*	8%	40% discount(2)	191,750	200,000
June 16, 2017	June 16, 2018*	0%	$0.001	750	750
July 6, 2017	July 6, 2018*	8%	40% discount(2)	200,000	200,000
August 8, 2017	August 8, 2018*	8%	40% discount(2)	125,000	125,000
July 28, 2017	July 28, 2018	15%	50% discount(2)	—	116,875
August 29, 2017	August 29, 2018*	15%	50% discount(2)	147,500	247,500
September 1, 2017	September 1, 2018*	0%	lower of 50% discount/$0.005(2)	62,000	187,000
September 12, 2017	September 12, 2018	8%	40% discount(2)	—	128,000
September 25, 2017	September 25, 2018	15%	50% discount(2)	—	398,750
October 4, 2017	May 4, 2018*	8%	40% discount(2)	150,000	150,000
October 16, 2017	October 16, 2018*	15%	50% discount(2)	319,366	345,000
November 22, 2017	November 22 ,2018*	15%	50% discount(2)	500,250	500,250
December 28, 2017	December 28 ,2017*	10%	40% discount(2)	28,150	60,500
December 29, 2017	December 29 ,2018	15%	50% discount(2)	330,000	330,000
January 9, 2018	January 9,2019	8%	40% discount(2)	82,500	82,500
January 30, 2018	January 30, 2019	15%	50% discount(2)	300,000	300,000
February 21, 2018	February 21,2019	15%	50% discount(2)	300,000	300,000
March 14, 2018	March 14, 2019	10%	40% discount(2)	50,000	—
March 16, 2018	March 16, 2019	15%	50% discount(2)	—	—
June 7, 2017	June 9 ,2019	8%	40% discount(2)	200,000	—
April 9, 2018	April 9, 2019	15%	50% discount(2)	55,000	—
March 21, 2017	March 21, 2018*	8%	40% discount(2)	2,870	—
March 21, 2017	March 21, 2018*	8%	40% discount(2)	40,000	—
April 17, 2018	April 17, 2019	8%	45% discount(2)	—	—
April 20, 2018	April 20, 2019	8%	40% discount(2)	49,904	—
May 2, 2018	December 2, 2018	10%	40% discount(2)	77,000	—
May 4, 2018	May 4, 2019	12%	50% discount(2)	89,545	—
May 14, 2018	December 14, 2018	10%	50% discount(2)	33,542	—
May 23, 2018	May 23, 2019	10%	50% discount(2)	110,000	—
June 6, 2018	June 6,2019	15%	50% discount(2)	296,279	—
June 19, 2018	March 19, 2019	15%	50% discount(2)	96,407	—
July 6, 2017	June 9, 2019	8%	40% discount(2)	95,000	—
August 1, 2018	August 1, 2019	15%	50% discount(2)	32,500	—
August 23, 2018	August 23, 2019	8%	45% discount(2)	86,634	—
September 13, 2018	June 30, 2019	12%	45% discount(2)	53,000	—
September 17, 2018	March 17, 2019	10%	50% discount(2)	4,945	—
September 20, 2018	September 20, 2019	15%	50% discount(2)	39,350	—
September 24, 2018	June 24, 2019	8%	40% discount(2)	44,000	—
August 8, 2017	June 9, 2019	8%	40% discount(2)	125,000	—
November 1, 2018	August 15, 2019	12%	45% discount(2)	53,000	—
November 26, 2018	May 26, 2019	10%	50% discount(2)	53,984	—
				6,801,167	6,136,681
Less: current portion of convertible notes payable				(6,236,167)	(5,536,582)
Less: discount on noncurrent convertible notes payable				(345,439)	(505,039)
Noncurrent convertible notes payable, net of discount				$219,561	$95,060
Current portion of convertible notes payable				$6,236,167	$5,536,582
Less: discount on current portion of convertible notes payable				(1,729,420)	(3,418,637)
Current portion of convertible notes payable, net of discount				$4,506,747	$2,117,946

- 15 -

ARTIFICIAL INTELLIGENCE TECHNOLOGY SOLUTIONS INC.

(FORMERLY ON THE MOVE SYSTEMS CORP.)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

__________

*	The indicated notes were in default as of November 30, 2018.
(1)	The note is convertible beginning six months after the date of issuance.
(2)	The notes are convertible at a discount (as indicated) to the average market price and are accounted for and evaluated under ASC 480 as discussed in Note 3.
(3)	The conversion price is not subject to adjustment from forward or reverse stock splits.

During the three months ended November 30, 2018 and 2017, the Company incurred original issue discounts of $16,250 and $229,500, respectively, and debt discounts from derivative liabilities of $385,891 and $1,468,475, respectively, related to new convertible notes payable. These amounts are included in discounts on convertible notes payable and are being amortized to interest expense over the life of the convertible notes payable. During the three months ended November 30, 2018 and 2017, the Company recognized interest expense related to the amortization of debt discount of $1,296,997 and $691,607, respectively.

During the nine months ended November 30, 2018 and 2017, the Company incurred original issue discounts of $79,103 and $229,500, respectively, and debt discounts from derivative liabilities of $1,309,900 and $2,043,475, respectively, related to new convertible notes payable. These amounts are included in discounts on convertible notes payable and are being amortized to interest expense over the life of the convertible notes payable. During the nine months ended November 30, 2018 and 2017, the Company recognized interest expense related to the amortization of debt discount of $3,649,219 and $691,607, respectively. The Company recorded penalty interest of $221,055 during the nine months ended November 30, 2018 that is payable upon maturity if not already converted or settled prior to maturity.

All the notes above are unsecured. As of November 30, 2018, the Company had total accrued interest payable of $1,385,874, of which $1,300,530 is classified as current and $85,344 is classified as noncurrent.

See description below for description of the convertible notes issued during the nine months ended November 30, 2018.

Convertible notes issued

The Company determined that the embedded conversion features in the convertibles notes described below should be accounted for as derivative liabilities as a result of their variable conversion rates.

On January 5, 2018, the Company issued a convertible promissory note to an investor with an aggregate principal amount of $250,000, due on January 5, 2019 for cash proceeds of $225,000 payable in tranches, with an original issue discount of $25,000. Each tranche matures one year after disbursement. The promissory note is convertible into common shares of the Company and a conversion price equal to 60% of the lowest trading price of the Company’s common stock for the last 25 trading days prior to conversion, and has a 10% per annum interest rate commencing on January 5, 2018. On March 14, 2018, this note was amended to include the issuance of warrants to purchase 333,333 shares of the Company’s common stock with an exercise price of $0.15 with a 3-year maturity, and to change the date of the note to March 14, 2018, coinciding with the payment of the first tranche of $50,000 including cash proceeds of $43,000, fees of $2,000 and an original issue discount of $5,000.

On March 1, 2018, the Company issued a convertible redeemable note to an investor with an aggregate principal amount of $95,000, due on March 1, 2019 for cash proceeds of $95,000. The promissory note is convertible into units of the Company comprised of one share of common stock and one warrant to purchase a share of common stock with a three-year maturity and a conversion price equal to 50% of the lowest bid price of the Company’s common stock for the last 40 trading days prior to conversion, and has a 15% per annum interest rate.

In March 2018 and April 2018, an investor paid the Company $200,000 in exchange for a June 7, 2017 back-end note for $200,000, whose maturity was extended to June 9, 2019. The note is convertible into common shares of the Company and a conversion price equal to 60% of the lowest trading price of the Company’s common stock for the last 20 trading days prior to conversion, and has an 8% per annum interest rate.

On April 9, 2018, the Company issued a convertible redeemable note to an investor with an aggregate principal amount of $55,000, due on April 9, 2019 for cash proceeds of $55,000. The promissory note is convertible into units of the Company comprised of one share of common stock and one warrant to purchase a share of common stock with a three-year maturity and a conversion price equal to 50% of the lowest bid price of the Company’s common stock for the last 40 trading days prior to conversion, and has a 15% per annum interest rate.

- 16 -

ARTIFICIAL INTELLIGENCE TECHNOLOGY SOLUTIONS INC.

(FORMERLY ON THE MOVE SYSTEMS CORP.)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

In April 2018, the Company received $76,000 of proceeds from an investor for two back-end notes with a total principal amount of $80,000, including original issue discounts of $4,000 and a one-year maturity. The back-end notes are convertible into common shares of the Company at a conversion price equal to 60% of the lowest trading price of the Company’s common stock for the last 20 trading days prior to conversion, and have an 8% per annum interest rate.

On May 2, 2018, the Company received $70,000 of proceeds from an investor for a promissory note with a principal amount of $77,000, including an original issue discounts of $7,000 and an eight-month maturity. The promissory note is convertible into common shares of the Company at a conversion price equal to 60% of the lowest trading price of the Company’s common stock for the last 20 trading days prior to conversion, and has a 10% per annum interest rate.

On May 4, 2018, the Company received $71,500 of proceeds from an investor for a promissory note with a principal amount of $82,500, including an original issue discounts of $11,000 and a one-year maturity. The promissory note is convertible into common shares of the Company at a conversion price equal to 50% of the lowest trading price of the Company’s common stock for the last 20 trading days prior to conversion, and has a 12% per annum interest rate.

On May 23, 2018, the Company received $90,108 of proceeds from an investor for a promissory note with a principal amount of $110,000, including an original issue discounts of $19,892 and an eight-month maturity. The promissory note is convertible into common shares of the Company at a conversion price equal to 50% of the lowest trading price of the Company’s common stock for the last 40 trading days prior to conversion, and has a 10% per annum interest rate.

In July and August 2018, the Company received $85,000 of proceeds from an investor for a back-end note date July 6, 2017 principal amount of $95,000, including an original issue discounts of $10,000 and a twelve-month maturity. The promissory note is convertible into common shares of the Company at a conversion price equal to 60% of the lowest trading price of the Company’s common stock for the last 20 trading days prior to conversion, and has an 8% per annum interest rate.

In July and August 2018, the Company received $32,500 of proceeds from an investor for a promissory note with a principal amount of $32,500, and a one-year maturity. The promissory note is convertible into common shares of the Company at a conversion price equal to 50% of the lowest trading price of the Company’s common stock for the last 20 trading days prior to conversion, and has a 15% per annum interest rate commencing on August 1, 2018.

On September 13, 2018, the Company received $50,000 of proceeds from an investor for a promissory note with a principal amount of $53,000, including an original issue discounts of $3,000 and a nine-month maturity. The promissory note is convertible into common shares of the Company at a conversion price equal to 45% of the lowest trading price of the Company’s common stock for the last 20 trading days prior to conversion, and has a 12% per annum interest rate.

On September 20, 2018, the Company received $39,350 of proceeds from an investor for a promissory note with a principal amount of $39,350 and a one-year maturity. The promissory note is convertible into common shares of the Company at a conversion price equal to 50% of the lowest trading price of the Company’s common stock for the last 20 trading days prior to conversion, and has a 15% per annum interest rate.

On September 24, 2018, the Company received $40,000 of proceeds from an investor for a promissory note with a principal amount of $44,000, including an original issue discounts of $4,000 and a nine-month maturity. The promissory note is convertible into common shares of the Company at a conversion price equal to 40% of the lowest trading price of the Company’s common stock for the last 20 trading days prior to conversion, and has a 8% per annum interest rate.

On November 1, 2018, the Company received $50,000 of proceeds from an investor for a promissory note with a principal amount of $53,000, including an original issue discounts of $3,000 maturing August 15, 2019. The promissory note is convertible into common shares of the Company at a conversion price equal to 45% of the lowest trading price of the Company’s common stock for the last 20 trading days prior to conversion, and has a 12% per annum interest rate.

On November 30, 2018, the Company received $118,750 of proceeds from an investor for a back-end promissory note dated August 8, 2017 with a principal amount of $125,000, including an original issue discounts of $6,250 maturing June 9, 2019. The promissory note is convertible into common shares of the Company at a conversion price equal to 40% of the lowest trading price of the Company’s common stock for the last 20 trading days prior to conversion, and has a 8% per annum interest rate.

- 17 -

ARTIFICIAL INTELLIGENCE TECHNOLOGY SOLUTIONS INC.

(FORMERLY ON THE MOVE SYSTEMS CORP.)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

During the nine months ended November 30, 2018, the Company also had the following convertible note activity:

● A debt holder transferred debt of $344,040, including accrued interest, to third parties who exchanged it for new convertible notes totaling $344,040, $100,000 with a one-year maturity, maturing on April 17, 2019, bearing interest at 8% per annum and are convertible into common shares of the Company at a conversion price equal to 50% of the lowest bid price of the Company’s common stock for the last 40 trading days prior to conversion; $144,404, with a one-year maturity, maturing on April 20, 2019, bearing interest at 8% per annum, and are convertible into common shares of the Company at a conversion price equal to 60% of the lowest bid price of the Company’s common stock for the last 30 trading days prior to conversion; and $100,000 with an eight-month maturity, maturing on December 14, 2018, bearing interest at 10% per annum, and are convertible into common shares of the Company at a conversion price equal to 55% of the lowest bid price of the Company’s common stock for the last 30 trading days prior to conversion. A gain on settlement of debt of $268,145 was recorded that includes the amount of associated derivative liability that was written-off.

● A debt holder transferred debt of $299,200, including accrued interest, to third parties who exchanged it for a replacement convertible note totaling $299,200, a one-year maturity, maturing on September 25, 2018, and bearing interest at 15% per annum. The replacement convertible note is convertible into units of the Company comprised of one share of common stock and one warrant to purchase a share of common stock with a three-year maturity and a conversion price equal to 50% of the lowest bid price of the Company’s common stock for the last 40 trading days prior to conversion. A loss on settlement of debt of $484,484 was recorded that includes the amount of associated derivative liability that was written-off.

● A debt holder transferred debt of $132,149, including accrued interest, to third parties who exchanged it for a replacement convertible note totaling $132,149, with an eight-month maturity, maturing on March 19, 2019, bearing interest at 15% per annum, and are convertible into common shares of the Company at a conversion price equal to 50% of the lowest bid price of the Company’s common stock for the last 40 trading days prior to conversion. A gain on settlement of debt of $71,100 was recorded that includes the amount of associated derivative liability that was written-off.

● The Company exchanged a replacement note issued on April 17, 2018 with a principal of $100,000 and a one-year maturity, maturing on April 17, 2019, and bearing interest at 8% per annum for another replacement note issued on August 23, 2018 with a principal of $100,000 and a one-year maturity, maturing on August 23, 2019, and bearing interest at 8% per annum, and are convertible into common shares of the Company at a conversion price equal to 55% of the lowest bid price of the Company’s common stock for the last 30 trading days prior to conversion.  A gain on settlement of debt of $90,629 was recorded that includes the amount of associated derivative liability that was written-off.

● A debt holder transferred debt of $103,984, including accrued interest, to third parties who exchanged it for new convertible notes totaling $344,040: $50,000 with a six-month maturity, maturing on March 17, 2019, bearing interest at 10% per annum, and are convertible into common shares of the Company at a conversion price equal to 50% of the lowest bid price of the Company’s common stock for the last 20 trading days prior to conversion; $53,984, with a six-month maturity, maturing on May 26, 2019, bearing interest at 10% per annum, and are convertible into common shares of the Company at a conversion price equal to 50% of the lowest bid price of the Company’s common stock for the last 20 trading days prior to conversion. A gain on settlement of debt of $121,305 was recorded that includes the amount of associated derivative liability that was written-off.

● The Company settled a September 1, 2017 note for repayment $125,000, and a gain of $64,441 was recorded due to the associated derivative liability that was written-off.

● During the nine months ended November 30, 2018, holders of certain convertible notes payable elected to convert a total of $690,193 of principal and $24,715 accrued interest, and $5,000 of fees into 15,001,414 shares of common stock and warrants to purchase 1,288,765 shares of common stock (see Note 15 for detail of warrants issued). No gain or loss was recognized on conversions as they occurred within the terms of the agreement that provided for conversion.

- 18 -

ARTIFICIAL INTELLIGENCE TECHNOLOGY SOLUTIONS INC.

(FORMERLY ON THE MOVE SYSTEMS CORP.)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

11. RELATED PARTY TRANSACTIONS

For the nine months ended November 30, 2018, the Company received advances of $401,473 from its loan payable with a related party. The loan payable is non-interest bearing, unsecured and payable upon demand. At November 30, 2018, the balance due to this related party was $502,106, and $316,142 at February 28, 2018.

During the three and nine months ended November 30, 2018, the Company paid $288,143 and $484,251 in consulting fees for research and development to a company owned by a principal shareholder. At November 30, 2018, the balance due to this related party was $215,509, and $0 at February 28, 2018.

12. OTHER DEBT – VEHICLE LOAN

In December 2016, RAD entered into a vehicle loan for $47,704 secured by the vehicle. The loan is repayable over 5 years maturing November 9, 2021, and repayable $1,019 per month including interest and principal. In November 2017, RAD entered into another vehicle loan secured by the vehicle for $47,661. The loan is repayable over 5 years, maturing October 24, 2022 and repayable at $923 per month including interest and principal. The principal repayments were $13,657 and $6,591 for the nine months ended November 30, 2018 and 2017, respectively. The balances of the amounts owed on the vehicle loan were $68,505 and $82,162 as of November 30, 2018 and February 28, 2018, respectively, of which $17,830 and $17,830 were classified as current and $50,675 and $64,332 as long-term, respectively.

13. LOANS PAYABLE

Loans payable consisted of the following:

						Annual
						Interest
Date	Maturity	Type		Principal		Rate
June 11, 2018	June 11, 2019	Promissory note	(3)	$	48,000	25%	*
June 20, 2018	August 20, 2018	Promissory note			50,000	20%	*
July 30, 2018	December 1, 2018	Promissory note	(2)		12,000	15%	*
August 10, 2018	September 1, 2018	Promissory note			10,000	25%	*
August 16, 2018	August 16, 2019	Promissory note	(1)		25,000	25%	*
August 16, 2018	October 1, 2018	Promissory note			10,000	25%	*
August 23, 2018	October 20, 2018	Promissory note			20,000	20%	*
September 14, 2018	November 14, 2018	Promissory note			50,000	20%	*
October 10, 2018	October 10, 2019	Promissory note	(6)		7,500	20%
October 11, 2018	October 11, 2019	Promissory note	(7)		23,000	20%
October 18, 2018	December 1, 2018	Promissory note	(5)		11,000	0%
November 8, 2018	March 15, 2019	Merchant sales agreement	(4)		18,902	(4)
November 8, 2018	Demand	Demand secured loan	(8)		54,000	25%
				$	339,402

__________

*	Note is in default. No notice has been given by the note holder.
(1)	Repayable in 12 monthly installments of $2,376 commencing on September 16, 2018, and secured by the revenue earning devices of the Company having a net book value of at least $25,000. No repayments have been made by the Company and no notices have been received.
(2)	Including an original issue discount of $3,000.
(3)	Repayable in 12 monthly installments of $4,562 commencing August 11, 2018, and secured by the revenue earning devices of the Company having a net book value of  at least $48,000. No repayments have been made by the Company and no notices have been received.
(4)	Repayable at $166 per day, including fees and interest of $5,850. Balance consists of original proceeds received of $20,850 less repayment of $1,948.
(5)	Including an original issue discount of $900.
(6)	Repayable in 10 monthly installments of $900 commencing January 10, 2019, and secured by the revenue earning devices of the Company having a net book value of  at least $186,000.

- 19 -

ARTIFICIAL INTELLIGENCE TECHNOLOGY SOLUTIONS INC.

(FORMERLY ON THE MOVE SYSTEMS CORP.)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

(7)	Principal repayable in one year. Interest repayable in 10 monthly installments of $460 commencing January 11, 2019, and secured by the revenue earning devices of the Company having a net book value of at least $186,000.
(8)	Demand loan, with a 5% fee in addition to the 25% per annum interest is due when repaid. If the Company is unable to repay the loan when the demand is made, an additional 10% interest is levied on any unpaid amounts.  Secured by the revenue earning devices of the Company having a net book value of at least $186,000.

14. DERIVATIVE LIABILITES

As of November 30, 2018, the Company revalued the fair value of all of the Company’s derivative liabilities associated with the conversion features on the convertible notes payable and determined that it had a total derivative liability of $6,152,561.

The Company estimated the fair value of the derivative liabilities using the Monte-Carlo model using the following key assumptions during the nine months November 30, 2018:

Strike price	$1.00 - $0.001
Fair value of Company common stock	$0.3375 - $0.0110
Dividend yield	0.00%
Expected volatility	424% - 102%
Risk free interest rate	1.20% - 2.59%
Expected term (years)	0.00 - 3.66

During the three and nine months ended November 30, 2018, the Company released $233,178 and $990,400, respectively, of the Company’s derivative liability to equity due to the conversions of principal and interest on the associated notes.

The changes in the derivative liabilities (Level 3 financial instruments) measured at fair value on a recurring basis for the nine months ended November 30, 2018 were as follows:

Balance as of February 28, 2018	$	31,113,844
Release of derivative liability on conversion of convertible notes payable		(990,400	)
Debt discount due to derivative liabilities		1,309,900
Derivative liability in excess of face value of debt recorded to interest expense		751,522
Increase in derivative liability due to debt settlement		183,766
Change in fair value of derivative liabilities		(26,216,071	)
Balance as of November 30, 2018	$	6,152,561

15. SHAREHOLDERS’ EQUITY (DEFICIT)

Summary of Preferred Stock Activity

During the nine months ended November 30, 2018, the Company received $174,070 for the sale of 65 Series F preferred shares. As of the reporting date, these shares have not been issued and are included in preferred stock to be issued on the balance sheet.

Summary of Common Stock Activity

On August 24, 2018, the Company undertook a 100:1 reverse stock split. The share capital has been retrospectively adjusted accordingly to reflect this reverse stock split, except for the conversion price of certain convertible notes as the conversion price is not subject to adjustment from forward and reverse stock splits (see Note 10).

During the nine months ended November 30, 2018, the Company issued 15,001,414 shares of its common stock for the conversion of debt and related interest and fees totaling $719,908 including $690,193 for of principal, $24,715 interest, $5,000 in fees in connection with debt converted during the period, as well as the release of the related derivative liability (see Note 14).

- 20 -

ARTIFICIAL INTELLIGENCE TECHNOLOGY SOLUTIONS INC.

(FORMERLY ON THE MOVE SYSTEMS CORP.)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

Summary of Stock Option Activity

As part of the asset purchase agreement described in Note 8, the Company issued 4,500 options to purchase shares at an exercise price of $5.00 per share that vest on October 2, 2021.

The options have a grant date fair value of $27,843, based on the Black-Scholes Option Pricing model with the following assumptions:

Strike price	$0.05
Fair value of Company’s common stock	$0.06
Dividend yield	0.00%
Expected volatility	303.81%
Risk free interest rate	1.94%
Expected term (years)	4.00

The Company will amortize the $27,843 over the four-year term on a straight-line basis as stock-based compensation. For the three and nine-months periods ended November 30, 2018, the Company amortized $1,741 and $5,221, respectively, to stock-based compensation with a corresponding adjustment to additional paid-in capital. At November 30, 2018, the unamortized expense was $19,782 and the intrinsic value was $0.

	Number of Options	Weighted Average Exercise Price	Weighted Average Remaining Years
Outstanding at March 1, 2018	4,500	$   5.00	2.84
Granted	—
Exercised	—
Forfeited and cancelled	—
Outstanding at November 30, 2018	4,500	$   5.00	2.84

During the nine months ended November 30, 2018, the Company issued the following warrants:

● On April 16, 2018, the Company issued warrants to purchase 64,000 shares of the Company’s common stock in connection with its issuance of 64,000 shares of the Company’s common stock to an investor. The warrants have an exercise price of $2.00 per share and a three-year term.

● On June 6, 2018, the Company issued warrants to purchase 6,640 shares of the Company’s common stock in connection with its issuance of 6,640 shares of the Company’s common stock to an investor. The warrants have an exercise price of $0.44 per share and a three-year term.

● On August 24, 2018, the Company issued warrants to purchase 102,000 shares of the Company’s common stock in connection with its issuance of 102,000 shares of the Company’s common stock to an investor. The warrants have an exercise price of $0.15 per share and a three-year term.

● In September and October 2018, the Company issued warrants to purchase 1,116,125 shares of the Company’s common stock in connection with its issuance of 1,116,125 shares of the Company’s common stock to an investor. The warrants have an exercise price ranging from $0.015-$0.035 per share and a three-year term.

- 21 -

ARTIFICIAL INTELLIGENCE TECHNOLOGY SOLUTIONS INC.

(FORMERLY ON THE MOVE SYSTEMS CORP.)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

The Company also issued 2,500 warrants with an exercise price of $3.00 per share and a 3-year term on June 11, 2018, and 3,333 warrants with an exercise price of $15.00 and a three year term on March 14, 2018 in connection with loan payables (see Note 13).

	Number of Warrants	Weighted Average Exercise Price	Weighted Average Remaining Years
Outstanding at March 1, 2018	—	$       —	—
Issued	1,294,598	0.19	2.79
Exercised	—	—	—
Forfeited and cancelled	—	—	—
Outstanding at November 30, 2018	1,294,598	$    0.19	2,79

The above warrants have an aggregate grant date fair value of $627,751, based on the Black-Scholes Option Pricing model with the following assumptions:

Strike price	$0.02 - $3.00
Fair value of Company’s common stock	$0.05- $7.00
Dividend yield	0.00%
Expected volatility	305.71% - 341.5%
Risk free interest rate	2.52% - 2.94%
Expected term (years)	3.00 - 5.00

For the nine months ended November 30, 2018, the Company recorded a total of $632,972 to stock-based compensation for options and warrants with a corresponding adjustment to additional paid-in capital.

16. COMMITMENTS AND CONTINGENCIES

Litigation

Occasionally, the Company may be involved in claims and legal proceedings arising from the ordinary course of its business. The Company records a provision for a liability when it believes that is both probable that a liability has been incurred, and the amount can be reasonably estimated. If these estimates and assumptions change or prove to be incorrect, it could have a material impact on the Company’s consolidated financial statements. Contingencies are inherently unpredictable, and the assessments of the value can involve a series of complex judgments about future events and can rely heavily on estimates and assumptions.

In February 2016, the Company received notice that it had been sued in the Clark County District Court of Nevada. The plaintiff alleges that the Company obtained certain trade secrets through a third party also named in the suit. An arbitration was conducted on May 9, 2017, and the Plaintiff filed a Notice of Trial de Novo, seeking a review of the merit dismissal. The outcome of this matter is uncertain and there is no specific timeline available as of the date of this filing.

Operating Lease

The Company’s principal facility is located in Orange County, California. The lease agreement includes, escalating lease payments, renewal provisions and other provisions. The lease began in April 2017 and expires in March 2022. Rent expense is recorded over the lease terms on a straight-line basis.  The security deposit of $25,747 was recorded as a long-term asset as of August 31, 2017.

The Company also leases premises in Northern California. The lease began in August 2017 and expires in August 2020. The security deposit of $5,126 was paid on September 1, 2017. The Company shares premises with a supplier, who is the co-lessee. Through agreement with the supplier, the Company agreed to pay 75% of the lease costs and the supplier agreed to pay 25%.

- 22 -

ARTIFICIAL INTELLIGENCE TECHNOLOGY SOLUTIONS INC.

(FORMERLY ON THE MOVE SYSTEMS CORP.)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

On February 1, 2018, the Company entered into an additional lease for premises for a robotic control center. The lease runs from February 1, 2018 to January 31, 2021 for $550 per month.

The Company’s leases are accounted for as operating leases. Rent expense is recorded over the lease terms on a straight-line basis. Rent expense was $30,155 and $89,917 for the three and nine months ended November 30, 2018. Rent expense was $31,834 and $58,056 for the three and nine months ended November 30, 2017.

At November 30, 2018, the Company’s future minimum payments are as follows:

Twelve Months Ended	Amount
November 30, 2019	$	105,792
November 30, 2020		96,922
November 30, 2021		58,495
November 30, 2022		19,314
	$	280,523

17. EARNINGS (LOSS) PER SHARE

The net income (loss) per common share amounts were determined as follows:

	For the Three Months Ended						For the Nine Months Ended
	November 30,						November 30,
	2018			2017			2018			2017
Numerator:
Net income (loss) available to common shareholders	$	7,711,118		$	(8,796,921	)	$	17,384,222		$	(11,805,734	)
Effect of common stock equivalents
Add:  interest expense on convertible debt		316,411			—			726,595			—
Less: gain on change of derivative liabilities		(10,223,431	)		—			(26,216,071	)		—
Net income (loss) adjusted for common stock equivalents	$	( 2,195,902	)	$	(8,796,921	)	$	(8,105,254	)	$	(11,805,734	)
Denominator:
Weighted average shares – basic		8,949,875			1,186,924			4,028,324			408,206
Dilutive effect of common stock equivalents:
Stock options and warrants		432,324			—			299,404			—
Convertible debt		1,214,611,324			—			1,186,653,028			—
Preferred shares		56,069,447			—			56,069,447			—
Denominator:
Weighted average shares – diluted		1,280,062,970			1,186,9274			1,247,050,203			408,206
Net income (loss) per share – basic	$	0.86		$	(7.41	)	$	4.32		$	(28.92	)
Net income (loss) per share – diluted	$	(0.00	)	$	(7.41	)	$	(0.01	)	$	(28.92	)

- 23 -

ARTIFICIAL INTELLIGENCE TECHNOLOGY SOLUTIONS INC.

(FORMERLY ON THE MOVE SYSTEMS CORP.)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

The anti-dilutive shares of common stock equivalents for the three and nine months ended November 30, 2018 and 2017 were as follows:

	For the Three Months Ended				For the Nine Months Ended
	November 30,				November 30,
	2018		2017		2018		2017
Stock options and warrants		71,833		—		71,833		—
Convertible debt		—		230,167		—		230,167
Preferred stock		—		4,312,650		—		4,312,650
Total		71,833		4,542,817		71,833		4,542,817

18. SUBSEQUENT EVENTS

Subsequent to November 30, 2018, convertible note holders converted $202,621 of principal, $11,122 interest and $3,500 in fees into 184,181,276 shares of the Company’s common stock.

In addition, an investor canceled 171,500 shares relating to an October 2018 conversion. The Company reinstated the $2,658 of principal relating to this transaction.

Subsequent to November 30, 2018, the Company issued warrants to purchase 19,141,711 shares of the Company’s common stock in connection with its issuance of 19,141,711 shares of the Company’s common stock to an investor as a part of a debt conversion.

The above warrants have an aggregate grant date fair value of $111,678, based on the Black-Scholes Option Pricing model with the following assumptions:

Strike price	$0.001 - $0.0031
Fair value of Company’s common stock	$0.004- $0.01
Dividend yield	0.00%
Expected volatility	334.0% - 335.5%
Risk free interest rate	2.46% - 2.78%
Expected term (years)	3.00

On December 7, 2018, the Company received the balance of $95,000 of proceeds from an investor for a $200,000 back-end note dated July 6, 2017 with an original principal amount of $105,000, including an original issue discount of $10,000, and maturing June 9, 2019. The note’s original maturity was July 6, 2018, but this maturity was extended on December 19, 2018.  The other installments, totaling $95,000 (including an original issue discount of $10,000), on this note were received July and August 2018. The back-end note is convertible into common shares of the Company at a conversion price equal to 60% of the lowest trading price of the Company’s common stock for the last 20 trading days prior to conversion, and has an 8% per annum interest rate.

On February 1, 2019 the Company entered into an agreement with an investor whereby the investor would pay up to $900,000 (including a $92,000 payment made in January 2019) in exchange for a perpetual 9% royalty on the Company’s reported quarterly revenue. These royalty payments are to be made 90 days after the fiscal quarter. If the royalty payments would deplete RAD’s available cash by more than 20%, the payment may be deferred. The investor has agreed to pay the remaining $808,000 over an eleven-month period in minimum $60,000 monthly installments, commencing February 1, 2019. If the total investment turns out to be less than $900,000, this would not constitute a breach of the agreement, rather the royalty rate would be adjusted on a pro-rata basis.

- 24 -

ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Forward-Looking Statements

The following discussion of our financial condition and results of operations for the three and nine months ended November 30, 2018 and November 30, 2017 should be read in conjunction with our unaudited consolidated financial statements and the notes to those statements that are included elsewhere in this report. Our discussion includes forward-looking statements based upon current expectations that involve risks and uncertainties, such as our plans, objectives, expectations and intentions. Actual results and the timing of events could differ materially from those anticipated in these forward-looking statements as a result of a number of factors, including those set forth under Item 1A. Risk Factors appearing in our Annual Report on Form 10-K/A for the year ended February 28, 2018, as filed on June 22, 2018 with the SEC as well as Form 8-K as filed with the SEC on August 31, 2017. We use words such as “anticipate,” “estimate,” “plan,” “project,” “continuing,” “ongoing,” “expect,” “believe,” “intend,” “may,” “will,” “should,” “could,” and similar expressions to identify forward-looking statements.

Unless expressly indicated or the context requires otherwise, the terms “AITX”, the “Company”, “we”, “us”, and “our” refer to Artificial Intelligence Technology Solutions Inc.

Overview

Artificial Intelligence Technology Solutions Inc. (formerly On the Move Systems Corp.) was incorporated in Florida on March 25, 2010 and reincorporated in Nevada on February 17, 2015. On August 24, 2018 AITX changed its name from On the Move Systems Corp. (“OMVS”).

Robotic Assistance Devices, LLC (“RAD”), was incorporated in the State of Nevada on July 26, 2016 as a LLC. On July 25, 2017, Robotic Assistance Devices LLC converted to a C Corporation, Robotic Assistance Devices, Inc. through the issuance of its 10,000 authorized common shares to its sole shareholder.

On August 28, 2017, AITX completed the acquisition of RAD (the “Acquisition”), whereby AITX acquired all the ownership and equity interest in RAD for 3,350,000 shares of AITX Series E Preferred Stock and 2,450 shares of Series F Convertible Preferred Stock. AITX’s prior business focus was transportation services, and AITX was exploring the on-demand logistics market by developing a network of logistics partnerships. As a result of the closing of the Acquisition, AITX has succeeded to the business of RAD, in which AITX purchased all of the outstanding shares of capital stock of RAD. As a result, AITX’s business going forward will consist of one segment activity which is the delivery of artificial intelligence and robotic solutions for operational, security and monitoring needs.

The Acquisition was treated as a reverse recapitalization effected by a share exchange for financial accounting and reporting purposes since substantially all of AITX’s operations were disposed of as part of the consummation of the transaction. Therefore, no goodwill or other intangible assets were recorded by AITX as a result of the Acquisition. RAD is treated as the accounting acquirer as its stockholders control the Company after the Acquisition, even though AITX was the legal acquirer.  As a result, the assets and liabilities and the historical operations that are reflected in these financial statements are those of RAD as if RAD had always been the reporting company.

Results of Operations for the Three Months Ended November 30, 2018 and 2017

The following table shows our results of operations for the three months ended November 30, 2018 and 2017. The historical results presented below are not necessarily indicative of the results that may be expected for any future period.

- 25 -

	Period						Change
	Three Months Ended November 30, 2018			Three Months Ended November 30, 2017			Dollars			Percentage
Revenues	$	38,864		$	63,632		$	(24,768	)	(39%	)
Gross profit		38,864			18,632			20,232		109%
Operating expenses		1,132,754			1,145,803			(13,049	)	(1%	)
Loss from operations		(1,093,890	)		(1,127,171	)		33,281		(3%	)
Other income (expense), net		8,805,008			(7,669,750	)		16,474,758		(215%	)
Net loss	$	7,711,118		$	(8,796,921	)	$	16,508,039		(188%	)

Revenue

Total revenue for the three-month period ended November 30, 2018 was $38,864 which represented a decrease of $24,768, compared to total revenue of $63,632 for the period ended November 30, 2017. The decrease resulted from the 2017 sale of a revenue earning device for $45,000 that was acquired in the acquisition of WeSecure’s assets, costing $45,000; thus affecting gross profit below.

Gross profit

Total gross profit for the three-month period ended November 30, 2018 was $38,864, which represented an increase of $20,232, compared to total gross profit of $18,632 for the three months ended November 30, 2017. The increase resulted from the cost of goods on the above-mentioned 2017 sale of the WeSecure asset.

Operating Expenses

	Period				Change
	Three Months Ended November 30, 2018		Three Months Ended November 30, 2018		Dollars			Percentage
Research and development	$	300,881	$	216,679	$	84,202	)	39%
General and administrative		800,384		855,707		(55,323	)	(6%	)
Depreciation and amortization		31,489		41,095		(9,606	)	(23%	)
Loss on impairment of fixed assets		—		32,322		(32,322	)	(100%	)
Total operating expenses	$	1,132,754	$	1,145,803	$	(13,049	)	(1%	)

Our operating expenses were comprised of general and administrative expenses, research and development, depreciation and a loss on impairment of fixed assets. General and administrative expenses consisted primarily of professional services, automobile expenses, advertising, salaries and wages, travel expenses and rent. Our operating expenses during the three-month period ended November 30, 2018 and November 30, 2017, were $1,132,754 and $1,145,803, respectively. The overall decrease of $13,049 was primarily attributable to the following changes in operating expenses of:

● General and administrative expenses decreased by $55,323, primarily due to decreases in office and marketing expenses, totaling $222,000, partially offset by increases in salaries of approximately $92,000. The Company had 5 more employees in 2018, compared to 2017, and spent more on office and marketing in 2017 as this was its first year of operations. This was partially offset by increases in professional fees.

● Research and development increased by $84,202 due to higher fees paid to consultants in 2018.

● Depreciation and amortization decreased by $9,606 due to higher additions to fixed assets in 2017.  Loss on impairment of fixed assets decreased by $32,322, because of old revenue earning devices that were written off in 2017.

- 26 -

Other Income (Expense)

Other income (expense) consisted of the change of fair value of derivative instruments and interest. Other income (expense) during the three months ended November 30, 2018 and November 30, 2017, was $8,805,008 and ($7,669,750), respectively. The $16,474,758 increase in other income was primarily attributable to the change in the fair value of derivatives, interest expense, including interest expense related to derivative liability in excess of the face value of debt) and loss on settlement of debt. Fair value of derivatives was largely affected by the decrease in the market price of the Company’s common stock during the current period.

● Change in fair value of derivative liabilities increased by $14,470,334 due to the re-valuation of derivative liability on convertible notes based on the change in the market price of the Company’s common stock.

● Interest expense decreased by $2,993,706 due to a decrease in interest expense related to the derivative liability in excess of debt, partially offset by an increase in interest expense on debt.

● Gain on settlement of debt decreased by $989,282 due to a decrease in the number and amount of debt settlements this quarter over the prior year’s quarter.

Net Loss

We had net income of $7,711,118 for the three months ended November 30, 2018, compared to a net loss of $8,796,921 for the three months ended November 30, 2017. The change is primarily the result of the change in the fair value of the derivative liabilities and other items discussed above.

Results of Operations for the Nine Months Ended November 30, 2018 and 2017

The following table shows our results of operations for the six months ended November 30, 2018 and November 30, 2017. The historical results presented below are not necessarily indicative of the results that may be expected for any future period.

	Period						Change
	Nine Months Ended November 30, 2018			Nine Months Ended November 30, 2017			Dollars			Percentage
Revenues	$	65,705		$	98,632		$	(32,927	)	(33%	)
Gross profit		30,251			53,632			(23,381	)	(44%	)
Operating expenses		3,704,309			2,092,062			1,612,247		77%
Loss from operations		(3,674,058	)		(2,038,430	)		(1,635,628	)	80%
Other income (expense), net		21,058,280			(9,767,304	)		30,825,584		(316%	)
Net loss	$	17,384,222		$	(11,805,734	)	$	29,189,956		(247%	)

Revenue

Total revenue for the nine-month period ended November 30, 2018 was $65,705, which represented a decrease of $32,927, compared to total revenue of $98,632 for the nine-month period ended November 30, 2017. The decrease resulted from the 2017 sale of a revenue earning device for $45,000 that was acquired in the acquisition of WeSecure’s assets, costing $45,000 thus affecting gross profit below which was partially offset by slightly higher rental revenues in 2018.

Gross profit

Total gross profit for the nine-month period ended November 30, 2018 was $30,251, which represented a decrease of $23,831, compared to total gross profit of $53,632 for the nine months ended November 30, 2017. The decrease resulted from the cost of goods on the above-mentioned 2017 sale of the WeSecure asset.

- 27 -

Operating Expenses

	Period				Change
	Nine Months Ended November 30, 2018		Nine Months Ended November 30, 2018		Dollars			Percentage
Research and development	$	534,012	$	306,312	$	227,700		74%
General and administrative		3,082,656		1,585,697		1,496,959		94%
Depreciation and amortization		82,902		74,789		8,113		11%
Loss on impairment of fixed assets		4,739		125,264		(120,525	)	(96%	)
Total operating expenses	$	3,704,309	$	2,092,062	$	1,612,247		77%

Our operating expenses were comprised of general and administrative expenses, research and development, depreciation and a loss on impairment of fixed assets. General and administrative expenses consisted primarily of professional services, automobile expenses, advertising, salaries and wages, travel expenses and rent. Our operating expenses during the nine-month period ended November 30, 2018 and 2017 were $3,704,309 and $2,092,062, respectively. The overall increase of $1,612,247 in operating expenses was primarily attributable to the following increases in operating expenses of:

● General and administrative expenses – $1,496,959 primarily due to the increase in stock-based compensation due to the issuance of warrants during the nine months ended November 30, 2018 of $632,972, higher salary and wages of approximately $211,363 due to an increase in staff from in staff from 8 to 15 people, professional fees increased by $371,571 in 2018 due to increased accounting costs, with the remainder of the increases the result of the start of RAD and AITX’s combined operations in 2018, compared to only RAD’s operations that were starting up in 2017.

● Research and development increased by $227,700 due to higher consulting fees paid in 2018 for the development of new devices.

● Depreciation and amortization increased by $8,113 due to higher additions to fixed assets in 2018.

● Loss on impairment of fixed assets decreased by $120,525 because the old revenue earning devices were written-off in 2017.

Other Income (Expense)

Other income (expense) consisted of the change of fair value of derivative instruments and interest expense. Other income (expense) during the nine months ended November 30, 2018 and 2017, was $21,058,280 and ($9,767,304), respectively. The $30,825,584 increase in other income was primarily attributable to the change in the fair value of derivatives and interest expense, including interest expense related to derivative liability in excess of the face value of debt and loss on settlement of debt. Fair value of derivatives was largely affected by the decrease in the market price of the Company’s common stock during the current period.

● Change in fair value of derivative liabilities increased by $29,711,733 due to the re-valuation of derivative liability on convertible notes based on the change in the market price of the Company’s common stock.

● Interest expense decreased by $2,157,743 due to a decrease in interest expense related to the derivative liability in excess of debt, partially offset by an increase in interest expense on debt.

● Gain on settlement of debt decreased by $1,043,982 due to a decrease in the number and amount of debt settlements this year over last year.

Net Income (Loss)

We had a net income of $17,384,222 for the nine months ended November 30, 2018, compared to net loss of $11,805,734 for the nine months ended November 30, 2017. The change is primarily the result of the change in the fair value of the derivative liabilities and other items discussed above.

- 28 -

Liquidity, Capital Resources and Cash Flows

Management believes that we will continue to incur losses for the immediate future. Therefore, we will need additional equity or debt financing until we can achieve profitability and positive cash flows from operating activities, if ever. These conditions raise substantial doubt about our ability to continue as a going concern. Our unaudited consolidated financial statements do not include and adjustments relating to the recovery of assets or the classification of liabilities that may be necessary should we be unable to continue as a going concern. For the nine months ended November 30, 2018, we have generated revenue and are trying to achieve positive cash flows from operations.

As of November 30, 2018, we had a cash balance of $17,551, accounts receivable of $28,879 and $14,706,905 in current liabilities. At the current cash consumption rate, we may need to consider additional funding sources going forward. We are taking proactive measures to reduce operating expenses and drive growth in revenue.

The successful outcome of future activities cannot be determined at this time and there is no assurance that, if achieved, we will have sufficient funds to execute our intended business plan or generate positive operating results.

Capital Resources

The following table summarizes total current assets, liabilities and working capital (deficit) for the periods indicated:

	November 30, 2018			February 28, 2018
Current assets	$	308,943		$	491,989
Current liabilities(1)		14,706,905			34,784,191
Working capital (deficit)	$	(14,397,962	)	$	(34,292,202	)

________

(1) As of November 30, 2018 and February 28, 2018, current liabilities included approximately $6.1 million and $31.1 million, respectively, of derivative liabilities that are expected to be settled in shares of the Company in accordance with the various conversion terms.

As of November 30, 2018 and February 28, 2018, we had a cash balance of $17,551 and $24,773, respectively.

Summary of Cash Flows

	For the Nine Months Ended November 30, 2018			For the Nine Months Ended November 30, 2018
Net cash used in operating activities	$	(1,678,281	)	$	(2,231,778	)
Net cash used in investing activities	$	(232,933	)	$	(251,827	)
Net cash provided by financing activities	$	1,903,992		$	2,474,018

Net cash used in operating activities.

Net cash used in operating activities for the nine months ended November 30, 2018 was $1,678,281, which included a net income of $17,384,222, non-cash activity such as the change in fair value of derivative liabilities of $26,216,071, gain on settlement of debt of $131,136, change in operating assets of $1,911,729, interest expense related to derivative liabilities in excess of face value of debt of $751,522, amortization of debt discount of $3,649,219, penalties from debt defaults of $221,055, loss on impairment of fixed assets $4,739, stock-based compensation of $632,972,  and depreciation and amortization of $82,902 to derive the uses of cash in operations.

Net cash used in investing activities.

Net cash used in investing activities for the nine months ended November 30, 2018 was $232,933. This consisted primarily of the purchase of fixed assets of $232,858.

Net cash provided by financing activities.

Net cash provided by financing activities was $1,903,992 for the nine months ended November 30, 2018. This consisted of proceeds from convertible notes payable of $1,132,608, proceeds from loans payable $336,490, net borrowings from loan payable – related party of $401,473, and proceeds from the sale of preferred stock of $174,070, offset by principal payments on convertible notes of $125,000 and payments of vehicle loans of $13,657.

- 29 -

Off-Balance Sheet Arrangements

None.

Critical Accounting Policies and Estimates

Critical accounting policies and estimates are further discussed in our Annual Report on Form 10-K/A for the year ended February 28, 2018 filed with the SEC on June 22, 2018 and should be read in conjunction with the Original filing on Form 10-K filed with the SEC on June 14, 2018.

Related Party Transactions

For the nine months ended November 30, 2018, the Company received net advances of $401,473 from its loan payable with a related party. At November 30, 2018, the balance due to the related party was $502,106, and $316,142 at February 28, 2018.

During the nine months ended November 30, 2018, the Company accrued a total of $215,509 in consulting fees for research and development to a company owned by a principal shareholder.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Not applicable for a smaller reporting company.

ITEM 4. CONTROLS AND PROCEDURES

Management’s Report on Internal Control over Financial Reporting

We carried out 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 our disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) as of November 30, 2018. Based upon that evaluation, our principal executive officer and principal financial officer concluded that, as of November 30, 2018, our disclosure controls and procedures were not effective to ensure that information required to be disclosed in reports filed by us under the Securities Exchange Act of 1934 is recorded, processed, summarized and reported within the required time periods and is accumulated and communicated to our management, including our principal executive officer and principal financial officer, as appropriate to allow timely decisions regarding required disclosure.

1.

As of November 30, 2018, we did not maintain effective controls over our control environment. Specifically, we have not developed and effectively communicated to our employees our accounting policies and procedures. This has resulted in inconsistent practices. Further, the Board of Directors does not currently have any independent members and no director qualifies as an audit committee financial expert as defined in Item 407(d)(5)(ii) of Regulation S-K. Since these entity level programs have a pervasive effect across the organization, management has determined that these circumstances constitute a material weakness.

2.

As of November 30, 2018, we did not maintain effective controls over financial statement disclosure. Specifically, controls were not designed and in place to ensure that all disclosures required were originally addressed in our financial statements. Accordingly, management has determined that this control deficiency constitutes a material weakness.

Our management, including our principal executive officer and principal financial officer, who is the same person, does not expect that our disclosure controls and procedures or our internal controls will prevent all error or fraud. A control system, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met. Further, the design of a control system must reflect the fact that there are resource constraints and the benefits of controls must be considered relative to their costs. Due to the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, have been detected.

Change in Internal Controls over Financial Reporting

There was no change in our internal controls over financial reporting that occurred during the period covered by this report, which has materially affected, or is reasonably likely to materially affect, our internal controls over financial reporting.

- 30 -

PART II — OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

On October 12, 2015, we received notice that the Company had been sued in the United States District Court for the Central District of California. The plaintiff alleges that we obtained certain trade secrets through a third party also named in the suit. The case was dismissed in December 2015 for lack of jurisdiction.

In February 2016, we received notice that the Company had been sued in the Clark County District Court of Nevada. The plaintiff alleges that we obtained certain trade secrets through a third party also named in the suit. We believe the suit is without merit and intend to vigorously defend it. An Arbitration was conducted on May 9, 2017, Plaintiff filed a Notice of trial de Novo, seeking a review of the merit dismissal. It is counsel’s opinion this Trial de Novo is without merit and the Company should prevail.

ITEM 1A. RISK FACTORS

This item is not applicable to smaller reporting companies.

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

Each issuance of securities was issued without registration in reliance of the exemption from registration Section 3(a)9 of the Securities Act of 1933.

ITEM 3. DEFAULTS UPON SENIOR SECURITIES

The Company has not defaulted upon senior securities.

ITEM 4. MINE SAFETY DISCLOSURES

Not applicable to the Company.

ITEM 5. OTHER INFORMATION

None.

ITEM 6. EXHIBITS

3.1	Articles of Incorporation (1)
3.2	Bylaws (2)
14	Code of Ethics (2)
21	Subsidiaries of the Registrant (3)
31.1	Rule 13(a)-14(a)/15(d)-14(a) Certification of principal executive officer and principal financial and accounting officer. (3)
32.1	Section 1350 Certification of principal executive officer and principal financial accounting officer. (3)
101	XBRL data files of Financial Statement and Notes contained in this Quarterly Report on Form 10-Q. (3) (4)

__________

(1)	Incorporated by reference to our Form 10-KT file with the Securities and Exchange Commission on March 12, 2018.
(2)	Incorporated by reference to our Form S-1 filed with the Securities and Exchange Commission on August 4, 2010.
(3)	Filed or furnished herewith.
(4)	In accordance with Regulation S-T, the Interactive Data Files in Exhibit 101 to the Quarterly Report on Form 10-Q shall be deemed “furnished” and not “filed.”

- 31 -

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.

	Artificial Intelligence Technology Solutions Inc.
Date: May 21, 2019	BY: /s/ Garett Parsons
	Garett Parsons
	President, Chief Executive Officer, Chief Financial Officer, Principal Accounting Officer, Treasurer and Director

- 32 -

EX-21

Exhibit 21.1

Artificial Intelligence Technology Solutions Inc.

Subsidiaries

Name	Jurisdiction of Incorporation
On the Move Experience, LLC	Texas
On the OMV Transports, LLC	Texas
Robotic Assistance Devices, Inc.	Nevada

EX-31

Exhibit 31.1

RULE 13A-14(A)/15D-14(A) CERTIFICATION

I, Garett Parsons, certify that:

1. I have reviewed this Amendment No. 1 to Form 10-Q for the period ended November 30, 2018 of Artificial Intelligence Technology Solutions Inc.

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. I am responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15-d-15(f)) for the registrant and have:

a. Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b. Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c. Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d. Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a. All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b. Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: May 21, 2019	BY: /s/ Garett Parsons
	Garett Parsons
	President, Chief Executive Officer, Chief Financial Officer, Principal Accounting Officer, Treasurer and Director

EX-32

Exhibit 32.1

SECTION 1350 CERTIFICATION

In connection with Amendment No. 1 to the quarterly report of Artificial Intelligence Technology Solutions Inc. (the “Company”) on Form 10-Q for the period ended November 30, 2018 as filed with the Securities and Exchange Commission (the “Report”), I, Garett Parsons, President of the Company, certify, pursuant to 18 U.S.C. SS. 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:

1.	The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
2.	The information contained in the Report fairly presents, in all material respects, the financial condition and result of operations of the Company.

Date: May 21, 2019	BY: /s/ Garett Parsons
	Garett Parsons
	President, Chief Executive Officer, Chief Financial Officer, Principal Accounting Officer, Treasurer and Director

A signed original of this written statement required by Section 906, or other document authenticating, acknowledging, or otherwise adopting the signature that appears in typed form within the electronic version of this written statement has been provided to the Company and will be retained by the Company and furnished to the Securities and Exchange Commission or its staff upon request.

XML

Document and Entity Information - shares	9 Months Ended
	Nov. 30, 2018	Apr. 20, 2019
Document And Entity Information
Entity Registrant Name	Artificial Intelligence Technology Solutions Inc.
Entity Central Index Key	0001498148
Document Type	10-Q
Trading Symbol	AITX
Document Period End Date	Nov. 30, 2018
Amendment Flag	false
Current Fiscal Year End Date	--02-28
Entity's Reporting Status Current	Yes
Entity Filer Category	Non-accelerated Filer
Entity Small Business	true
Entity Emerging Growth Company	false
Entity Ex Transition Period	false
Entity Common Stock, Shares Outstanding		200,261,790
Document Fiscal Period Focus	Q3
Document Fiscal Year Focus	2019

XML

CONSOLIDATED BALANCE SHEETS (Unaudited) - USD ($)	Nov. 30, 2018	Feb. 28, 2018
Current assets:
Cash	$ 17,551	$ 24,773
Accounts receivable	28,879	28,000
Device parts inventory	241,435	316,113
Prepaid expenses and deposits	21,078	83,103
Note receivable		40,000
Total current assets	308,943	491,989
Revenue earning devices, net of accumulated depreciation of $28,434 and $0, respectively	201,524
Fixed assets, net of accumulated depreciation of $79,870 and $36,632, respectively	111,719	158,205
Intangible asset, net	46,426	56,248
Security deposit	30,216	30,141
Total assets	698,828	736,583
Current liabilities:
Accounts payable and accrued expenses	1,635,626	487,243
Advances payable	1,594	1,594
Balance due on acquisition of WeSecure	25,000	25,000
Customer deposits	10,000	10,000
Current portion of convertible notes payable, net of discount of $1,729,420 and $3,418,637, respectively	4,506,747	2,117,946
Loan payable - related party	717,615	316,142
Loans payable	339,402
Vehicle loan - current portion	17,830	17,830
Current portion of accrued interest payable	1,300,530	694,592
Derivative liability	6,152,561	31,113,844
Total current liabilities	14,706,905	34,784,191
Convertible notes payable, net of discount of $345,439 and $505,039, respectively	219,561	95,060
Accrued interest payable	85,344	55,917
Vehicle loan	50,675	64,332
Total liabilities	15,062,485	34,999,500
Shareholders' deficit:
Preferred Stock, undesignated; 15,645,650 shares authorized; no shares issued and outstanding
Series E Preferred Stock, $0.001 par value; 4,350,000 shares authorized; 4,350,000 and 3,350,000 shares issued and outstanding ,respectively	4,350	4,350
Series F Convertible Preferred Stock, $1.00 par value; 4,350 shares authorized; 3,450 and 2,450 shares issued and outstanding, respectively	3,450	3,450
Common Stock, $0.001 par value; 480,000,000 shares authorized 16,252,014 and 1,250,046 shares issued and outstanding, respectively	16,252	1,250
Additional paid-in capital	3,558,028	1,232,062
Preferred stock to be issued	174,070
Accumulated deficit	(18,119,807)	(35,504,029)
Total shareholders' deficit	(14,363,657)	(34,262,917)
Total liabilities and shareholders' deficit	$ 698,828	$ 736,583

XML

CONSOLIDATED BALANCE SHEETS (Unaudited) (Parenthetical) - USD ($)	Nov. 30, 2018	Feb. 28, 2018
Statement of Financial Position [Abstract]
Accumulated depreciation, Revenue earning devices	$ 28,434	$ 0
Accumulated depreciation of fixed assets	79,870	36,632
Discount of current portion of convertible notes payable	1,729,420	3,418,637
Discount of convertible notes payable	$ 345,439	$ 505,039
Preferred stock, undesignated, authorized	15,645,650	15,645,650
Preferred stock, undesignated, issued	0	0
Preferred stock, undesignated, outstanding	0	0
Series E Preferred Stock, par value (in dollars per share)	$ 0.001	$ 0.001
Series E Preferred Stock, authorized	4,350,000	4,350,000
Series E Preferred Stock, issued	4,350,000	3,350,000
Series E Preferred Stock, outstanding	4,350,000	3,350,000
Series F Preferred Stock, par value (in dollars per share)	$ 1.00	$ 1.00
Series F Preferred Stock, authorized	4,350	4,350
Series F Preferred Stock, issued	3,450	2,450
Series F Preferred Stock, outstanding	3,450	2,450
Common stock, par value (in dollars per shares)	$ 0.001	$ 0.001
Common stock, authorized	480,000,000	480,000,000
Common stock, issued	16,252,014	1,250,046
Common stock, outstanding	16,252,014	1,250,046

XML

CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED) - USD ($)	3 Months Ended		9 Months Ended
	Nov. 30, 2018	Nov. 30, 2017	Nov. 30, 2018	Nov. 30, 2017
Income Statement [Abstract]
Revenues	$ 38,864	$ 63,632	$ 65,705	$ 98,632
Cost of goods sold		45,000	35,454	45,000
Gross Profit	38,864	18,632	30,251	53,632
Operating expenses:
Research and development	300,881	216,679	534,012	306,312
General and administrative	800,384	855,707	3,082,656	1,585,697
Depreciation and amortization	31,489	41,095	82,902	74,789
Loss on impairment of fixed assets		32,322	4,739	125,264
Total operating expenses	1,132,754	1,145,803	3,704,309	2,092,062
Loss from operations	(1,093,890)	(1,127,171)	(3,674,058)	(2,038,430)
Other income (expense), net:
Change in fair value of derivative liabilities	10,223,431	(4,246,903)	26,216,071	(3,495,662)
Interest expense	(1,604,169)	(4,597,875)	(5,288,927)	(7,446,670)
Gain on settlement of debt	185,746	1,175,028	131,136	1,175,028
Total other income (expense), net	8,805,008	(7,669,750)	21,058,280	(9,767,304)
Net income (loss)	$ 7,711,118	$ (8,796,921)	$ 17,384,222	$ (11,805,734)
Net income (loss) per share:
Basic (in dollars per share)	$ 0.86	$ (7.41)	$ 4.32	$ (28.92)
Diluted (in dollars per share)	$ 0.00	$ (7.41)	$ (0.01)	$ (28.92)
Weighted average common share outstanding:
Basic (in shares)	8,949,875	1,186,924	4,028,324	408,206
Diluted (in shares)	1,280,062,970	1,186,924	1,247,050,203	408,206

XML

CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) - USD ($)	9 Months Ended
	Nov. 30, 2018	Nov. 30, 2017
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income (loss)	$ 17,384,222	$ (11,805,734)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization	82,902	74,789
Provision for note receivable	40,000
Loss on impairment of fixed assets	4,739	125,264
Stock-based compensation	632,972
Change in fair value of derivative liabilities	(26,216,071)	3,495,662
Interest expense related to derivative liability in excess of face value of debt	751,522	6,524,664
Amortization of debt discounts	3,649,219	691,607
Gain on settlement of debt	(131,136)	(1,175,028)
Changes in operating assets and liabilities:
Accounts receivable	(879)	(20,222)
Deposits on robots		(230,170)
Prepaid expenses	62,025
Device parts inventory	74,678	(107,870)
Accounts payable and accrued expenses	1,371,979	66,048
Accrued interest payable	615,547	139,212
Customer deposits		(10,000)
Net cash used in operating activities	(1,678,281)	(2,231,778)
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of fixed assets	(232,858)	(245,102)
Cash proceeds from WESecure transaction		17,000
Cash paid for security deposit	(75)	(25,747)
Cash acquired in reverse capitalization		2,022
Net cash used in investing activities	(232,933)	(251,827)
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from convertible notes payable, net	1,132,608	1,492,500
Principal payments on convertible notes payable	(125,000)	(50,000)
Proceeds from loans payable	336,490
Repayment of loans payable	(1,992)
Net borrowings on loan payable - related party	401,473	237,948
Loan from OMVS to RAD prior to the reverse recapitalization		752,500
Proceeds from vehicle loan		47,661
Repayment of vehicle loan	(13,657)	(6,591)
Proceeds from sale of preferred shares	174,070
Net cash provided by financing activities	1,903,992	2,474,018
Net change in cash	(7,222)	(9,587)
Cash, beginning of period	24,773	56,907
Cash, end of period	17,551	47,320
Supplemental disclosure of cash and non-cash transactions:
Cash paid for interest	4,687	22,320
Cash paid for taxes
Noncash investing and financing activities:
Transfer of devices from deposits to revenue earning devices		341,280
Debt discount from derivative liabilities	1,309,900	2,033,475
Conversion of convertible notes and interest to shares of common stock	1,707,996	123,000
Settlement and exchange of convertible notes payable	183,766	300,000
Capitalization of accrued interest to convertible notes payable	$ 67,272

XML

GENERAL INFORMATION

9 Months Ended

Nov. 30, 2018

Organization, Consolidation and Presentation of Financial Statements [Abstract]

GENERAL INFORMATION

1. GENERAL INFORMATION 

Artificial Intelligence Technology Solutions Inc. (formerly known as On the Move Systems Corp.) (“AITX” or the “Company”) was incorporated in Florida on March 25, 2010 and reincorporated in Nevada on February 17, 2015. On August 24, 2018, Artificial Intelligence Technology Solutions Inc., changed its name from On the Move Systems Corp (“OMVS”). 

Robotic Assistance Devices, LLC (“RAD”), was incorporated in the State of Nevada on July 26, 2016 as a LLC. On July 25, 2017, Robotic Assistance Devices LLC converted to a C Corporation, Robotic Assistance Devices, Inc. through the issuance of 10,000 common shares to its sole shareholder. 

On August 28, 2017, AITX completed the acquisition of RAD (the “Acquisition”), whereby AITX acquired all the ownership and equity interest in RAD for 3,350,000 shares of AITX Series E Preferred Stock and 2,450 shares of Series F Convertible Preferred Stock. AITX’s prior business focus was transportation services, and AITX was exploring the on-demand logistics market by developing a network of logistics partnerships. As a result of the closing of the Acquisition, AITX has succeeded to the business of RAD, in which AITX purchased all of the outstanding shares of capital stock of RAD. As a result, AITX’s business going forward will consist of one segment activity which is the delivery of artificial intelligence and robotic solutions for operational, security and monitoring needs. 

The Acquisition was treated as a reverse recapitalization effected by a share exchange for financial accounting and reporting purposes since substantially all of AITX’s operations were disposed of as part of the consummation of the transaction. Therefore, no goodwill or other intangible assets were recorded by AITX as a result of the Acquisition. RAD is treated as the accounting acquirer as its stockholders control the Company after the Acquisition, even though AITX was the legal acquirer.  As a result, the assets and liabilities and the historical operations that are reflected in these financial statements are those of RAD as if RAD had always been the reporting company.

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GOING CONCERN

9 Months Ended

Nov. 30, 2018

Going Concern

GOING CONECRN

2. GOING CONCERN 

The accompanying unaudited consolidated financial statements have been prepared assuming that the Company will continue as a going concern. The accompanying financial statements do not include any adjustments to reflect the possible future effects on the recoverability and classification of assets or the amounts and classifications of liabilities that may result from the possible inability of the Company to continue as a going concern. 

For the nine months ended November 30, 2018, the Company had negative cash flow from operating activities of $1,678,281. As of November 30, 2018, the Company has an accumulated deficit of $18,119,807, and negative working capital of $14,397,962. Management does not anticipate having positive cash flow from operations in the near future. These factors raise a substantial doubt about the Company’s ability to continue as a going concern for the twelve months following the issuance of these financial statements. 

The Company does not have the resources at this time to repay its credit and debt obligations, make any payments in the form of dividends to its shareholders or fully implement its business plan. Without additional capital, the Company will not be able to remain in business. 

Management has plans to address the Company’s financial situation as follows: 

In the near term, management plans to continue to focus on raising the funds necessary to implement the Company’s business plan. Management will continue to seek out debt financing to obtain the capital required to meet the Company’s financial obligations. There is no assurance, however, that lenders will continue to advance capital to the Company or that the new business operations will be profitable. The possibility of failure in obtaining additional funding and the potential inability to achieve profitability raises substantial doubts about the Company’s ability to continue as a going concern.

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ACCOUNTING POLICIES

9 Months Ended

Nov. 30, 2018

Accounting Policies [Abstract]

ACCOUNTING POLICIES

3. ACCOUNTING POLICIES 

Basis of Presentation and Consolidation 

The accompanying unaudited consolidated financial statements have been prepared in accordance with generally accepted accounting principles in the United States (“GAAP”) and in conformity with the instructions on Form 10-Q and Rule 8-03 of Regulation S-X and the related rules and regulations of the Securities and Exchange Commission (“SEC”) and should be read in conjunction with the audited financial statements and notes thereto in the Company’s latest Annual Report filed with the SEC on Form 10-K. The unaudited consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries, Robotic Assistance Devices, Inc., On the Move Experience, LLC and OMV Transports, LLC. All significant intercompany accounts and transactions have been eliminated in consolidation. The unaudited consolidated financial statements reflect all adjustments, consisting of normal recurring accruals, which are, in the opinion of management, necessary for a fair presentation of such statements. The results of operations for the three and nine months ended November 30, 2018 are not necessarily indicative of the results that may be expected for the entire year.

Cash 

The Company considers all highly liquid investments with an original maturity of three months or less to be cash equivalents. Cash and cash equivalents consist of cash on deposit with banks and money market instruments. The Company places its cash and cash equivalents with high-quality, U.S. financial institutions and, to date has not experienced losses on any of its balances. 

Accounts Receivable 

Accounts receivable are comprised of balances due from customers, net of estimated allowances for uncollectible accounts. In determining collectability, historical trends are evaluated, and specific customer issues are reviewed on a periodic basis to arrive at appropriate allowances. 

Device Parts Inventory 

Device parts inventory is stated at the lower of cost or market using the weighted average cost method. The Company records a valuation reserve for obsolete and slow-moving inventory, relying principally on specific identification of such inventory. The Company uses these device parts in the assembly of revenue earning devices (and demo devices) as well as research and development. Depending on use, the Company will transfer the parts to the corresponding asset or expense if used in research and development.  A charge to income is taken when factors that would result in a need for an increase in the valuation, such as excess or obsolete inventory, are noted. 

Revenue Earning Devices 

Revenue earning devices are stated at cost. Depreciation is provided on a straight-line basis over the estimated useful life of 48 months. The Company continually evaluates revenue earning devices to determine whether events or changes in circumstances have occurred that may warrant revision of the estimated useful life or whether the devices should be evaluated for possible impairment. The Company uses a combination of the undiscounted cash flows and market approaches in assessing whether an asset has been impaired. The Company measures impairment losses based upon the amount by which the carrying amount of the asset exceeds the fair value. 

Fixed Assets 

Fixed assets are stated at cost. Depreciation is provided on the straight-line method based on the estimated useful lives of the respective assets which range from three to five years. Major repairs or improvements are capitalized. Minor replacements and maintenance and repairs which do not improve or extend asset lives are expensed currently. 

Demo Devices	4 years
Vehicles	3 years
Computer equipment	3 years
Office equipment	4 years
Leasehold improvements	5 years, the life of the lease

The Company periodically evaluates the fair value of fixed assets whenever events or changes in circumstances indicate that its carrying amounts may not be recoverable. Upon retirement or other disposition of fixed assets, the cost and related accumulated depreciation are removed from the accounts and the resulting gain or loss, if any, is recognized in income. 

Intangible Assets 

The Company’s intangible assets are stated at cost and amortized on a straight-line basis over their five year expected useful life. The Company periodically determines if there is any impairment in value every year. 

Research and Development 

Research and development costs are expensed in the period they are incurred in accordance with ASC 730, Research and Development unless they meet specific criteria related to technical, market and financial feasibility, as determined by Management, including but not limited to the establishment of a clearly defined future market for the product, and the availability of adequate resources to complete the project. If all criteria are met, the costs are deferred and amortized over the expected useful life or written off if a product is abandoned. At November 30, 2018 and February 28, 2018, the Company had no deferred development costs. 

Contingencies 

Occasionally, the Company may be involved in claims and legal proceedings arising from the ordinary course of its business. The Company records a provision for a liability when it believes that it is both probable that a liability has been incurred, and the amount can be reasonably estimated. If these estimates and assumptions change or prove to be incorrect, it could have a material impact on the Company’s consolidated financial statements. Contingencies are inherently unpredictable, and the assessments of the value can involve a series of complex judgments about future events and can rely heavily on estimates and assumptions. 

Revenue Recognition  

ASU 2014-09, “Revenue from Contracts with Customers (Topic 606)”, supersedes the revenue recognition requirements and industry specific guidance under Revenue Recognition (Topic 605). Topic 606 requires an entity to recognize revenue when it transfers promised goods or services to customers in an amount that reflects the consideration the entity expects to be entitled to in exchange for those goods or services. Topic 606 defines a five-step process that must be evaluated and, in doing so, it is possible more judgment and estimates may be required within the revenue recognition process than required under existing accounting principles generally accepted in the United States of America (“U.S. GAAP”) including identifying performance obligations in the contract, estimating the amount of variable consideration to include in the transaction price and allocating the transaction price to each separate performance obligation. The Company adopted Topic 606 on March 1, 2018, using the modified retrospective method. Under the modified retrospective method, prior period financial positions and results will not be adjusted. There was no cumulative effect adjustment recognized as a result of this adoption. While the Company does not expect fiscal year 2019 net earnings to be materially impacted by revenue recognition timing changes, Topic 606 requires certain changes to the presentation of revenues and related expenses beginning March 1, 2018. Refer to Note 4 – Revenue from Contracts with Customers for additional information. 

Income Taxes 

On July 25, 2017, Robotic Assistance Devices LLC converted to a C Corporation, Robotic Assistance Devices, Inc., through the issuance of 10,000 common shares to its sole shareholder. Prior to the conversion on July 25, 2017, income taxes are not provided in the financial statements as presented as RAD was an LLC and the income or loss flowed through to the shareholder for the two months ended February 28, 2017. Thereafter, income taxes are accounted for under the asset and liability method from that date forward. Deferred income tax assets and liabilities are determined based on differences between financial reporting and tax bases of assets and liabilities, and net operating loss and other tax credit carry-forwards. These items are measured using the enacted tax rates and laws that will be in effect when the differences are expected to reverse. The Company will record a valuation allowance to reduce the deferred income tax assets to the amount that is more likely than not to be realized.

Leases 

Lease agreements are evaluated to determine if they are capital leases meeting any of the following criteria at inception: (a) transfer of ownership; (b) bargain purchase option; (c) the lease term is equal to 75 percent or more of the estimated economic life of the leased property; or (d) the present value at the beginning of the lease term of the minimum lease payments, excluding that portion of the payments representing executory costs such as insurance, maintenance, and taxes to be paid by the lessor, including any profit thereon, equals or exceeds 90 percent of the excess of the fair value of the leased property to the lessor at lease inception over any related investment tax credit retained by the lessor and expected to be realized by the lessor. 

If at its inception, a lease meets any of the four lease criteria above, the lease is classified by the Company as a capital lease; and if none of the four criteria are met, the lease is classified by the Company as an operating lease. 

Operating lease payments are recognized as an expense in the income statement on a straight-line basis over the lease term, whereby an equal amount of rent expense is attributed to each period during the term of the lease, regardless of when actual payments are made. This generally results in rent expense in excess of cash payments during the early years of a lease and rent expense less than cash payments in the later years. The difference between rent expense recognized and actual rental payments is recorded as deferred rent and included in liabilities. 

Distinguishing Liabilities from Equity 

The Company relies on the guidance provided by ASC Topic 480, Distinguishing Liabilities from Equity, to classify certain redeemable and/or convertible instruments. The Company first determines whether a financial instrument should be classified as a liability. The Company will determine the liability classification if the financial instrument is mandatorily redeemable, or if the financial instrument, other than outstanding shares, embodies a conditional obligation that the Company must or may settle by issuing a variable number of its equity shares. 

Once the Company determines that a financial instrument should not be classified as a liability, the Company determines whether the financial instrument should be presented between the liability section and the equity section of the balance sheet (“temporary equity”). The Company will determine temporary equity classification if the redemption of the financial instrument is outside the control of the Company (i.e. at the option of the holder). Otherwise, the Company accounts for the financial instrument as permanent equity. 

Initial Measurement 

The Company records its financial instruments classified as liability, temporary equity or permanent equity at issuance at the fair value, or cash received. 

Subsequent Measurement – Financial Instruments Classified as Liabilities 

The Company records the fair value of its financial instruments classified as liabilities at each subsequent measurement date. The changes in fair value of its financial instruments classified as liabilities are recorded as other income (expenses). 

Fair Value of Financial Instruments 

ASC Topic 820, Fair Value Measurements and Disclosures (“ASC Topic 820”) provides a framework for measuring fair value in accordance with generally accepted accounting principles. 

ASC Topic 820 defines fair value as 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. ASC Topic 820 establishes a fair value hierarchy that distinguishes between (1) market participant assumptions developed based on market data obtained from independent sources (observable inputs) and (2) an entity’s own assumptions about market participant assumptions developed based on the best information available in the circumstances (unobservable inputs).

The fair value hierarchy consists of three broad levels, which gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1) and the lowest priority to unobservable inputs (Level 3). The three levels of the fair value hierarchy under ASC Topic 820 are described as follows: 

● Level 1 – Unadjusted quoted prices in active markets for identical assets or liabilities that are accessible at the measurement date.

● Level 2 – Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly. Level 2 inputs 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; and inputs that are derived principally from or corroborated by observable market data by correlation or other means.

● Level 3 – Inputs that are unobservable for the asset or liability.

Measured on a Recurring Basis 

The following table presents information about our liabilities measured at fair value on a recurring basis, aggregated by the level in the fair value hierarchy within which those measurements fell:

	Amount at		Fair Value Measurement Using
	Fair Value		Level 1		Level 2		Level 3
November 30, 2018
Liabilities
Derivative liability – conversion features pursuant to convertible notes payable	$	6,152,561	$	—	$	—	$	6,152,561
February 28, 2018
Liabilities
Derivative liability – conversion features pursuant to convertible notes payable	$	31,113,844	$	—	$	—	$	31,113,844

See Note 13 for specific inputs used in determining fair value. 

The carrying amounts of the Company’s financial assets and liabilities, such as cash, accounts receivable, prepaid expenses and advances, accounts payable and accrued expenses, approximate their fair values because of the short maturity of these instruments. 

Earnings (Loss) per Share 

Basic earnings (loss) per share (“EPS”) is computed by dividing net income (loss) available to common shareholders (numerator) by the weighted average number of shares outstanding (denominator) during the period. Diluted EPS give effect to all dilutive potential common shares outstanding during the period using the treasury stock method and convertible preferred stock using the if-converted method. In computing diluted EPS, the average stock price for the period is used to determine the number of shares assumed to be purchased from the exercise of stock options and/or warrants. Diluted EPS excluded all dilutive potential shares if their effect is anti-dilutive. 

Basic loss per common share is computed based on the weighted average number of shares outstanding during the period. Diluted loss per share is computed in a manner similar to the basic loss per share, except the weighted-average number of shares outstanding is increased to include all common shares, including those with the potential to be issued by virtue of convertible debt and other such convertible instruments. Diluted loss per share contemplates a complete conversion to common shares of all convertible instruments only if they are dilutive in nature with regards to earnings per share.

Recently Adopted Accounting Pronouncements 

See discussion of the adoption of ASU 2014-09, “Revenue from Contracts with Customers (Topic 606)”, above. 

In August 2016, the Financial Accounting Standards Board (“FASB”) Accounting Standards Update (“ASU”) 2016-15, “Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments” (“ASU 2016-15”). ASU 2016-15 will make eight targeted changes to how cash receipts and cash payments are presented and classified in the statement of cash flows. ASU 2016-15 is effective for fiscal years beginning after December 15, 2017. The Company adopted this standard on March 1, 2018, on a retrospective basis.  There was no impact of the standard on the Company’s consolidated financial statements. 

In November 2016, the FASB issued ASU 2016-18, “Statement of Cash Flows (Topic 230)”, requiring that the statement of cash flows explain the change in the total cash, cash equivalents, and amounts generally described as restricted cash or restricted cash equivalents. This guidance is effective for fiscal years, and interim reporting periods therein, beginning after December 15, 2017, with early adoption permitted. The Company adopted this standard on March 1, 2018, on a retrospective basis.  There was no impact of the standard on the Company’s consolidated financial statements. 

In May 2017, the FASB issued ASU 2017-09, Modification Accounting for Share-Based Payment Arrangements. The standard amends the scope of modification accounting for share-based payment arrangements and provides guidance on the types of changes to the terms or conditions of share-based payment awards to which an entity would be required to apply modification accounting under ASC 718. The new standard is effective for fiscal years beginning after December 15, 2017. There was no impact on the financial statements of adopting this new standard on March 1, 2018. 

Recently Issued Accounting Pronouncements 

In February 2016, the FASB issued ASU No. 2016-02, Leases (Topic 842), which is effective for public entities for annual reporting periods beginning after December 15, 2018. Under ASU 2016-02, lessees will be required to recognize the following for all leases (with the exception of short-term leases) at the commencement date: 1) a lease liability, which is a lessee’s obligation to make lease payments arising from a lease, measured on a discounted basis, and 2) a right-of-use asset, which is an asset that represents the lessee’s right to use, or control the use of, a specified asset for the lease term. The Company is currently evaluating the effects of ASU 2016-02 on its financial statements for both lessees and lessors. 

In July 2017, the FASB issued ASU 2017-11, Earnings Per Share (Topic 260), Distinguishing Liabilities from Equity (Topic 480) and Derivatives and Hedging (Topic 815): I. Accounting for Certain Financial Instruments with Down Round Features; II. Replacement of the Indefinite Deferral for Mandatorily Redeemable Financial Instruments of Certain Nonpublic Entities and Certain Mandatorily Redeemable Noncontrolling Interests with a Scope Exception. Part I of this update addresses the complexity of accounting for certain financial instruments with down round features. Down round features are features of certain equity-linked instruments (or embedded features) that result in the strike price being reduced on the basis of the pricing of future equity offerings. Current accounting guidance creates cost and complexity for entities that issue financial instruments (such as warrants and convertible instruments) with down round features that require fair value measurement of the entire instrument or conversion option. Part II of this update addresses the difficulty of navigating Topic 480, Distinguishing Liabilities from Equity, because of the existence of extensive pending content in the FASB Accounting Standards Codification. This pending content is the result of the indefinite deferral of accounting requirements about mandatorily redeemable financial instruments of certain nonpublic entities and certain mandatorily redeemable noncontrolling interests. The amendments in Part II of this update do not have an accounting effect. This ASU is effective for fiscal years, and interim periods within those years, beginning after December 15, 2018. The Company is currently assessing the potential impact of adopting ASU 2017-11 on its consolidated financial statements and related disclosures. 

In September 2016, the FASB issued ASU 2016-13, Financial Instruments-Credit Losses. ASU 2016-13 was issued to provide more decision-useful information about the expected credit losses on financial instruments and changes the loss impairment methodology. ASU 2016-13 is effective for reporting periods beginning after December 15, 2019 using a modified retrospective adoption method. A prospective transition approach is required for debt securities for which an other-than-temporary impairment had been recognized before the effective date. The Company is currently assessing the impact this accounting standard will have on its financial statements and related disclosures.

Subsequent Events 

The Company has evaluated all transactions through the date the consolidated financial statements were issued for subsequent event disclosure.

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REVENUE FROM CONTRACTS WITH CUSTOMERS

9 Months Ended

Nov. 30, 2018

Revenue from Contract with Customer [Abstract]

REVENUE FROM CONTRACTS WITH CUSTOMERS

4. REVENUE FROM CONTRACTS WITH CUSTOMERS 

Revenue is earned primarily from two sources: 1) direct sales of goods or services and 2) short-term rentals. Direct sales of goods or services are accounted for under Topic 606, and short-term rentals are accounted for under Topic 840 (which addresses lease accounting and will be updated after the adoption of Topic 842 on March 1, 2019) as operating leases. 

As disclosed in the revenue recognition section of Note 3 – Accounting Polices, the Company adopted Topic 606 in accordance with the effective date on March 1, 2018. Note 3 includes disclosures regarding the Company’s method of adoption and the impact on the Company’s financial statements. Revenue is recognized on direct sales of goods or services when it transfers promised goods or services to customers in an amount that reflects the consideration the entity expects to be entitled to in exchange for those goods or services. 

Upon adoption of Topic 842, also referred to above in Note 3, the Company plans to account for revenue earned from rental activities where an identified asset is transferred to the customer and the customer has the ability to control that asset, will be accounted for under this topic. The Company is currently evaluating the effects of Topic 842 on its financial statements. 

The Company recognizes revenue from its device rental activities when persuasive evidence of a contract exists, the performance obligations have been satisfied, the transaction price is fixed or determinable and collection is reasonably assured. Performance obligations associated with device rental transactions are satisfied over the rental period. Rental periods are short-term in nature. Therefore, the Company has elected to apply the practical expedient which eliminates the requirement to disclose information about remaining performance obligations. Payments are due from customers at the completion of the rental, except for customers with negotiated payment terms, generally net 30 days or less, which are invoiced and remain as accounts receivable until collected. 

The following table presents revenues from contracts with customers disaggregated by product/service:

	Three Months Ended November 30, 2018		Nine Months Ended November 30, 2018
Device rental activities	$	38,864	$	65,295
Direct sales of goods and services		—		410
	$	38,864	$	65,705

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PREPAID EXPENSES AND DEPOSITS

9 Months Ended

Nov. 30, 2018

Prepaid Expenses And Deposits

PREPAID EXPENSES AND DEPOSITS

5. PREPAID EXPENSES AND DEPOSITS 

Prepaid expenses and deposits on device parts expected to be received within one year were comprised of the following:  

	November 30, 2018		February 28, 2018
Prepaid insurance	$	21,078	$	22,076
Prepaid travel		—		10,488
Prepaid trade show expenses		—		50,539
	$	21,078	$	83,103

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REVENUE EARNING DEVICES

9 Months Ended

Nov. 30, 2018

Revenue Earning Devices

REVENUE EARNING DEVICES

6. REVENUE EARNING DEVICES 

Revenue earning devices consisted of the following:

	November 30, 2018			February 28, 2018
Revenue earning devices	$	229,958		$	—
Less: Accumulated depreciation		(28,434	)		—
	$	201,524		$	—

During the nine months ended November 30, 2018, the Company made total additions to revenue earning devices of $229,958. 

During the nine months ended November 30, 2017, the Company made total additions to revenue earning robots of $38,653.  Due to several revenue earning robots becoming non-operational during the nine months ended November 30, 2017, the Company wrote down revenue earning robots with a net book value of $82,855 to $0 as loss on impairment of fixed assets. 

Depreciation expense was $13,646 and $28,434 for the three and nine months ended November 30, 2018, respectively, and $21,350 and $35,056 for the three and nine months ended November 30, 2017 respectively.

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FIXED ASSETS

9 Months Ended

Nov. 30, 2018

Property, Plant and Equipment [Abstract]

FIXED ASSETS

7. FIXED ASSETS 

Fixed assets consisted of the following:

	November 30, 2018			February 28, 2018
Automobile	$	136,318		$	136,318
Computer equipment		20,262			17,361
Office equipment		5,680			11,829
Leasehold improvements		29,329			29,329
		191,589			194,837
Less: Accumulated depreciation		(79,870	)		(36,632	)
	$	111,719		$	158,205

During the nine months ended November 30, 2018, the Company made additions to fixed assets of $2,900 and wrote -off fixed assets having a net book value of $4,739 and recorded a corresponding loss on impairment of fixed assets. 

During the nine months ended November 30, 2017, the Company acquired total fixed assets of $206,449.  Due to several demo robots becoming non-operational during the nine months ended November 30, 2017, the Company wrote down fixed assets with a net book value of $42,409 to $0 as loss on impairment of fixed assets. 

Depreciation expense was $14,748 and $44,646 for the three and nine months ended November 30, 2018, respectively, and $17,695 and $37,683 for the three and nine months ended November 30, 2017, respectively.

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INTANGIBLE ASSET

9 Months Ended

Nov. 30, 2018

Goodwill and Intangible Assets Disclosure [Abstract]

INTANGIBLE ASSET

8. INTANGIBLE ASSETS 

Intangible assets consisted of the following: 

	November 30, 2018			February 28, 2018
Customer lists and relationships	$	61,901		$	61,901
Less accumulated amortization		(15,475	)		(5,653	)
	$	46,426		$	56,248

On October 2, 2017, the Company acquired goods and other intangibles through an asset purchase agreement with WeSecure Robotics, Inc. (“WeSecure”) in exchange for $125,000 payable in 5 monthly $25,000 installments commencing in October 2017 and ending February 2018. The intangible asset primarily consisted of customer relationships and lists acquired as a part of the asset purchase agreement. The Company is treating this transaction as a business combination under ASU 2017-01 – Business Combinations: Clarifying the Definition of a Business. 

Under the asset purchase agreement, the two principals of WeSecure were also hired on an at will basis: one as a sales director for a salary of $8,000 per month and the other as a consultant at $1,000 per month. The salary has been committed to until September 1, 2019, regardless of employment within the Company, In addition, the two principals will receive collectively a commission of $500/month for each SMP robot rented by an identified customer for one year, as long as the customer stays with the Company for two years and an additional year of commission if the two principals remain employed with the Company through September 1, 2020. They will also receive a commission of 5% of net revenues on sales to identified customers for non-SMP robots for 2 years.  In addition, the Company agreed to issue 4,500 options to the two principals to purchase shares its common stock at an exercise price of $5.00 per share that vest on October 2, 2021. 

The purchase price was allocated to the following assets as a part of this transaction: 

Assets Acquired:
Cash	$	17,000
Robots, parts, and equipment		46,099
Intangible assets		61,901
Total assets acquired	$	125,000

Amortization expense was $3,095 and $9,822 for the three and nine months ended November 30, 2018, respectively, and $2,050 for both the three and nine months ended November 30, 2017. 

At both November 30, 2018 and February 28, 2018, the balance due on acquisition to WeSecure was $25,000. The acquisition was to be fully paid by February 28, 2018 per the agreement, however no notices have been sent.

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NOTE RECEIVABLE

9 Months Ended

Nov. 30, 2018

Note Receivable

NOTE RECEIVABLE

9. NOTE RECEIVABLE 

On March 13, 2017, the Company loaned $40,000 to a third party vendor. The note bore interest at 18% per annum and was payable on April 13, 2017. The note was not repaid by the due date. The note was subsequently amended to bear interest of 2% per month plus a $10,000 fee. It was payable on December 31, 2017 and is secured in senior rank on all assets of the borrower. The Company evaluated the note receivable to determine whether its lending activities create a variable interest entity that would require consolidation and determined that it does not create a variable interest entity. Based on the current information available, the Company recorded a full allowance for this note of $40,000, during March 2018 with a corresponding adjustment to bad debt expense.

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CONVERTIBLE NOTES PAYABLE

9 Months Ended

Nov. 30, 2018

Debt Disclosure [Abstract]

CONVERTIBLE NOTES PAYABLE

10. CONVERTIBLE NOTES PAYABLE 

Convertible notes payable consisted of the following:

				Balance	Balance
		Interest	Conversion	November 31,	February 28,
Issued	Maturity	Rate	Rate per Share	2018	2018
February 28, 2011	February 26, 2013 *	7%	$0.015	$32,600	$32,600
January 31, 2013	February 28, 2017 *	10%	$0.010	119,091	119,091
May 31, 2013	November 30, 2016 *	10%	$0.010	261,595	261,595
August 31, 2014	November 30, 2016 *	10%	$0.002	355,652	355,652
November 30, 2014	November 30, 2016 *	10%	$0.002	103,950	103,950
February 28, 2015	February 28, 2017 *	10%	$0.001	63,357	63,357
May 31, 2015	August 31, 2017*	10%	$1.000	65,383	65,383
August 31, 2015	August 31, 2017*	10%	$0.300	91,629	91,629
November 30, 2015	November 30, 2018	10%	$0.300	269,791	269,791
February 29, 2016	February 28, 2019	10%	60% discount(2)	95,245	95,245
May 31, 2016	May 31, 2019	10%	$0.003	35,100	35,100
July 18, 2016	July 18, 2017*	10%	$0.003	3,500	3,500
December 31, 2016	December 31, 2020	8%	35% discount(2)	65,000	65,000
January 15, 2017	January 15, 2021	8%	35% discount(2)	50,000	50,000
January 15, 2017	January 15, 2021	8%	35% discount(2)	100,000	100,000
January 16, 2017	January 16, 2021	8%	35% discount(2)	150,000	150,000
March 8, 2017	March 8, 2020	10%	40% discount (2)	100,000	100,000
March 9, 2017	March 9, 2021	8%	35% discount(2)	50,000	50,000
March 21, 2017	March 21, 2018	8%	40% discount(2)	—	30,000
April 4, 2017	December 4, 2017	10%	40% discount(2)	—	12,066
April 19, 2017	April 19, 2018*	15%	50% discount(2)	96,250	96,250
April 20, 2017	January 30, 2018	8%	40% discount (1)	—	28,000
April 26, 2017	April 26, 2018*	0%	$0.001	68	67
May 1, 2017	May 1, 2021	8%	35% discount(2)	50,000	50,000
May 4, 2017	May 4, 2018*	8%	40% discount(2)	131,450	150,000
May 15, 2017	May 15, 2018*	0%	$0.001	1,280	1,280
May 17, 2017	May 17, 2020	10%	40% discount (1)	85,000	85,000
June 7, 2017	June 7, 2018*	8%	40% discount(2)	191,750	200,000
June 16, 2017	June 16, 2018*	0%	$0.001	750	750
July 6, 2017	July 6, 2018*	8%	40% discount(2)	200,000	200,000
August 8, 2017	August 8, 2018*	8%	40% discount(2)	125,000	125,000
July 28, 2017	July 28, 2018	15%	50% discount(2)	—	116,875
August 29, 2017	August 29, 2018*	15%	50% discount(2)	147,500	247,500
September 1, 2017	September 1, 2018*	0%	lower of 50% discount/$0.005(2)	62,000	187,000
September 12, 2017	September 12, 2018	8%	40% discount(2)	—	128,000
September 25, 2017	September 25, 2018	15%	50% discount(2)	—	398,750
October 4, 2017	May 4, 2018*	8%	40% discount(2)	150,000	150,000
October 16, 2017	October 16, 2018*	15%	50% discount(2)	319,366	345,000
November 22, 2017	November 22 ,2018*	15%	50% discount(2)	500,250	500,250
December 28, 2017	December 28 ,2017*	10%	40% discount(2)	28,150	60,500
December 29, 2017	December 29 ,2018	15%	50% discount(2)	330,000	330,000
January 9, 2018	January 9,2019	8%	40% discount(2)	82,500	82,500
January 30, 2018	January 30, 2019	15%	50% discount(2)	300,000	300,000
February 21, 2018	February 21,2019	15%	50% discount(2)	300,000	300,000
March 14, 2018	March 14, 2019	10%	40% discount(2)	50,000	—
March 16, 2018	March 16, 2019	15%	50% discount(2)	—	—
June 7, 2017	June 9 ,2019	8%	40% discount(2)	200,000	—
April 9, 2018	April 9, 2019	15%	50% discount(2)	55,000	—
March 21, 2017	March 21, 2018*	8%	40% discount(2)	2,870	—
March 21, 2017	March 21, 2018*	8%	40% discount(2)	40,000	—
April 17, 2018	April 17, 2019	8%	45% discount(2)	—	—
April 20, 2018	April 20, 2019	8%	40% discount(2)	49,904	—
May 2, 2018	December 2, 2018	10%	40% discount(2)	77,000	—
May 4, 2018	May 4, 2019	12%	50% discount(2)	89,545	—
May 14, 2018	December 14, 2018	10%	50% discount(2)	33,542	—
May 23, 2018	May 23, 2019	10%	50% discount(2)	110,000	—
June 6, 2018	June 6,2019	15%	50% discount(2)	296,279	—
June 19, 2018	March 19, 2019	15%	50% discount(2)	96,407	—
July 6, 2017	June 9, 2019	8%	40% discount(2)	95,000	—
August 1, 2018	August 1, 2019	15%	50% discount(2)	32,500	—
August 23, 2018	August 23, 2019	8%	45% discount(2)	86,634	—
September 13, 2018	June 30, 2019	12%	45% discount(2)	53,000	—
September 17, 2018	March 17, 2019	10%	50% discount(2)	4,945	—
September 20, 2018	September 20, 2019	15%	50% discount(2)	39,350	—
September 24, 2018	June 24, 2019	8%	40% discount(2)	44,000	—
August 8, 2017	June 9, 2019	8%	40% discount(2)	125,000	—
November 1, 2018	August 15, 2019	12%	45% discount(2)	53,000	—
November 26, 2018	May 26, 2019	10%	50% discount(2)	53,984	—
				6,801,167	6,136,681
Less: current portion of convertible notes payable				(6,236,167)	(5,536,582)
Less: discount on noncurrent convertible notes payable				(345,439)	(505,039)
Noncurrent convertible notes payable, net of discount				$219,561	$95,060
Current portion of convertible notes payable				$6,236,167	$5,536,582
Less: discount on current portion of convertible notes payable				(1,729,420)	(3,418,637)
Current portion of convertible notes payable, net of discount				$4,506,747	$2,117,946

 __________

*	The indicated notes were in default as of November 30, 2018.
(1)	The note is convertible beginning six months after the date of issuance.
(2)	The notes are convertible at a discount (as indicated) to the average market price and are accounted for and evaluated under ASC 480 as discussed in Note 3.
(3)	The conversion price is not subject to adjustment from forward or reverse stock splits.

During the three months ended November 30, 2018 and 2017, the Company incurred original issue discounts of $16,250 and $229,500, respectively, and debt discounts from derivative liabilities of $385,891 and $1,468,475, respectively, related to new convertible notes payable. These amounts are included in discounts on convertible notes payable and are being amortized to interest expense over the life of the convertible notes payable. During the three months ended November 30, 2018 and 2017, the Company recognized interest expense related to the amortization of debt discount of $1,296,997 and $691,607, respectively. 

During the nine months ended November 30, 2018 and 2017, the Company incurred original issue discounts of $79,103 and $229,500, respectively, and debt discounts from derivative liabilities of $1,309,900 and $2,043,475, respectively, related to new convertible notes payable. These amounts are included in discounts on convertible notes payable and are being amortized to interest expense over the life of the convertible notes payable. During the nine months ended November 30, 2018 and 2017, the Company recognized interest expense related to the amortization of debt discount of $3,649,219 and $691,607, respectively. The Company recorded penalty interest of $221,055 during the nine months ended November 30, 2018 that is payable upon maturity if not already converted or settled prior to maturity. 

All the notes above are unsecured. As of November 30, 2018, the Company had total accrued interest payable of $1,385,874, of which $1,300,530 is classified as current and $85,344 is classified as noncurrent. 

See description below for description of the convertible notes issued during the nine months ended November 30, 2018. 

Convertible notes issued

The Company determined that the embedded conversion features in the convertibles notes described below should be accounted for as derivative liabilities as a result of their variable conversion rates. 

On January 5, 2018, the Company issued a convertible promissory note to an investor with an aggregate principal amount of $250,000, due on January 5, 2019 for cash proceeds of $225,000 payable in tranches, with an original issue discount of $25,000. Each tranche matures one year after disbursement. The promissory note is convertible into common shares of the Company and a conversion price equal to 60% of the lowest trading price of the Company’s common stock for the last 25 trading days prior to conversion, and has a 10% per annum interest rate commencing on January 5, 2018. On March 14, 2018, this note was amended to include the issuance of warrants to purchase 333,333 shares of the Company’s common stock with an exercise price of $0.15 with a 3-year maturity, and to change the date of the note to March 14, 2018, coinciding with the payment of the first tranche of $50,000 including cash proceeds of $43,000, fees of $2,000 and an original issue discount of $5,000. 

On March 1, 2018, the Company issued a convertible redeemable note to an investor with an aggregate principal amount of $95,000, due on March 1, 2019 for cash proceeds of $95,000. The promissory note is convertible into units of the Company comprised of one share of common stock and one warrant to purchase a share of common stock with a three-year maturity and a conversion price equal to 50% of the lowest bid price of the Company’s common stock for the last 40 trading days prior to conversion, and has a 15% per annum interest rate. 

In March 2018 and April 2018, an investor paid the Company $200,000 in exchange for a June 7, 2017 back-end note for $200,000, whose maturity was extended to June 9, 2019. The note is convertible into common shares of the Company and a conversion price equal to 60% of the lowest trading price of the Company’s common stock for the last 20 trading days prior to conversion, and has an 8% per annum interest rate. 

On April 9, 2018, the Company issued a convertible redeemable note to an investor with an aggregate principal amount of $55,000, due on April 9, 2019 for cash proceeds of $55,000. The promissory note is convertible into units of the Company comprised of one share of common stock and one warrant to purchase a share of common stock with a three-year maturity and a conversion price equal to 50% of the lowest bid price of the Company’s common stock for the last 40 trading days prior to conversion, and has a 15% per annum interest rate. 

In April 2018, the Company received $76,000 of proceeds from an investor for two back-end notes with a total principal amount of $80,000, including original issue discounts of $4,000 and a one-year maturity. The back-end notes are convertible into common shares of the Company at a conversion price equal to 60% of the lowest trading price of the Company’s common stock for the last 20 trading days prior to conversion, and have an 8% per annum interest rate. 

On May 2, 2018, the Company received $70,000 of proceeds from an investor for a promissory note with a principal amount of $77,000, including an original issue discounts of $7,000 and an eight-month maturity. The promissory note is convertible into common shares of the Company at a conversion price equal to 60% of the lowest trading price of the Company’s common stock for the last 20 trading days prior to conversion, and has a 10% per annum interest rate. 

On May 4, 2018, the Company received $71,500 of proceeds from an investor for a promissory note with a principal amount of $82,500, including an original issue discounts of $11,000 and a one-year maturity. The promissory note is convertible into common shares of the Company at a conversion price equal to 50% of the lowest trading price of the Company’s common stock for the last 20 trading days prior to conversion, and has a 12% per annum interest rate. 

On May 23, 2018, the Company received $90,108 of proceeds from an investor for a promissory note with a principal amount of $110,000, including an original issue discounts of $19,892 and an eight-month maturity. The promissory note is convertible into common shares of the Company at a conversion price equal to 50% of the lowest trading price of the Company’s common stock for the last 40 trading days prior to conversion, and has a 10% per annum interest rate. 

In July and August 2018, the Company received $85,000 of proceeds from an investor for a back-end note date July 6, 2017 principal amount of $95,000, including an original issue discounts of $10,000 and a twelve-month maturity. The promissory note is convertible into common shares of the Company at a conversion price equal to 60% of the lowest trading price of the Company’s common stock for the last 20 trading days prior to conversion, and has an 8% per annum interest rate. 

In July and August 2018, the Company received $32,500 of proceeds from an investor for a promissory note with a principal amount of $32,500, and a one-year maturity. The promissory note is convertible into common shares of the Company at a conversion price equal to 50% of the lowest trading price of the Company’s common stock for the last 20 trading days prior to conversion, and has a 15% per annum interest rate commencing on August 1, 2018. 

On September 13, 2018, the Company received $50,000 of proceeds from an investor for a promissory note with a principal amount of $53,000, including an original issue discounts of $3,000 and a nine-month maturity. The promissory note is convertible into common shares of the Company at a conversion price equal to 45% of the lowest trading price of the Company’s common stock for the last 20 trading days prior to conversion, and has a 12% per annum interest rate. 

On September 20, 2018, the Company received $39,350 of proceeds from an investor for a promissory note with a principal amount of $39,350 and a one-year maturity. The promissory note is convertible into common shares of the Company at a conversion price equal to 50% of the lowest trading price of the Company’s common stock for the last 20 trading days prior to conversion, and has a 15% per annum interest rate. 

On September 24, 2018, the Company received $40,000 of proceeds from an investor for a promissory note with a principal amount of $44,000, including an original issue discounts of $4,000 and a nine-month maturity. The promissory note is convertible into common shares of the Company at a conversion price equal to 40% of the lowest trading price of the Company’s common stock for the last 20 trading days prior to conversion, and has a 8% per annum interest rate. 

On November 1, 2018, the Company received $50,000 of proceeds from an investor for a promissory note with a principal amount of $53,000, including an original issue discounts of $3,000 maturing August 15, 2019. The promissory note is convertible into common shares of the Company at a conversion price equal to 45% of the lowest trading price of the Company’s common stock for the last 20 trading days prior to conversion, and has a 12% per annum interest rate. 

On November 30, 2018, the Company received $118,750 of proceeds from an investor for a back-end promissory note dated August 8, 2017 with a principal amount of $125,000, including an original issue discounts of $6,250 maturing June 9, 2019. The promissory note is convertible into common shares of the Company at a conversion price equal to 40% of the lowest trading price of the Company’s common stock for the last 20 trading days prior to conversion, and has a 8% per annum interest rate.

During the nine months ended November 30, 2018, the Company also had the following convertible note activity:

● A debt holder transferred debt of $344,040, including accrued interest, to third parties who exchanged it for new convertible notes totaling $344,040, $100,000 with a one-year maturity, maturing on April 17, 2019, bearing interest at 8% per annum and are convertible into common shares of the Company at a conversion price equal to 50% of the lowest bid price of the Company’s common stock for the last 40 trading days prior to conversion; $144,404, with a one-year maturity, maturing on April 20, 2019, bearing interest at 8% per annum, and are convertible into common shares of the Company at a conversion price equal to 60% of the lowest bid price of the Company’s common stock for the last 30 trading days prior to conversion; and $100,000 with an eight-month maturity, maturing on December 14, 2018, bearing interest at 10% per annum, and are convertible into common shares of the Company at a conversion price equal to 55% of the lowest bid price of the Company’s common stock for the last 30 trading days prior to conversion. A gain on settlement of debt of $268,145 was recorded that includes the amount of associated derivative liability that was written-off.

● A debt holder transferred debt of $299,200, including accrued interest, to third parties who exchanged it for a replacement convertible note totaling $299,200, a one-year maturity, maturing on September 25, 2018, and bearing interest at 15% per annum. The replacement convertible note is convertible into units of the Company comprised of one share of common stock and one warrant to purchase a share of common stock with a three-year maturity and a conversion price equal to 50% of the lowest bid price of the Company’s common stock for the last 40 trading days prior to conversion. A loss on settlement of debt of $484,484 was recorded that includes the amount of associated derivative liability that was written-off.

● A debt holder transferred debt of $132,149, including accrued interest, to third parties who exchanged it for a replacement convertible note totaling $132,149, with an eight-month maturity, maturing on March 19, 2019, bearing interest at 15% per annum, and are convertible into common shares of the Company at a conversion price equal to 50% of the lowest bid price of the Company’s common stock for the last 40 trading days prior to conversion. A gain on settlement of debt of $71,100 was recorded that includes the amount of associated derivative liability that was written-off.

● The Company exchanged a replacement note issued on April 17, 2018 with a principal of $100,000 and a one-year maturity, maturing on April 17, 2019, and bearing interest at 8% per annum for another replacement note issued on August 23, 2018 with a principal of $100,000 and a one-year maturity, maturing on August 23, 2019, and bearing interest at 8% per annum, and are convertible into common shares of the Company at a conversion price equal to 55% of the lowest bid price of the Company’s common stock for the last 30 trading days prior to conversion.  A gain on settlement of debt of $90,629 was recorded that includes the amount of associated derivative liability that was written-off.

● A debt holder transferred debt of $103,984, including accrued interest, to third parties who exchanged it for new convertible notes totaling $344,040: $50,000 with a six-month maturity, maturing on March 17, 2019, bearing interest at 10% per annum, and are convertible into common shares of the Company at a conversion price equal to 50% of the lowest bid price of the Company’s common stock for the last 20 trading days prior to conversion; $53,984, with a six-month maturity, maturing on May 26, 2019, bearing interest at 10% per annum, and are convertible into common shares of the Company at a conversion price equal to 50% of the lowest bid price of the Company’s common stock for the last 20 trading days prior to conversion. A gain on settlement of debt of $121,305 was recorded that includes the amount of associated derivative liability that was written-off.

● The Company settled a September 1, 2017 note for repayment $125,000, and a gain of $64,441 was recorded due to the associated derivative liability that was written-off.

● During the nine months ended November 30, 2018, holders of certain convertible notes payable elected to convert a total of $690,193 of principal and $24,715 accrued interest, and $5,000 of fees into 15,001,414 shares of common stock and warrants to purchase 1,288,765 shares of common stock (see Note 15 for detail of warrants issued). No gain or loss was recognized on conversions as they occurred within the terms of the agreement that provided for conversion.

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RELATED PARTY TRANSACTIONS

9 Months Ended

Nov. 30, 2018

Related Party Transactions [Abstract]

RELATED PARTY TRANSACTIONS

11. RELATED PARTY TRANSACTIONS 

For the nine months ended November 30, 2018, the Company received advances of $401,473 from its loan payable with a related party. The loan payable is non-interest bearing, unsecured and payable upon demand. At November 30, 2018, the balance due to this related party was $502,106, and $316,142 at February 28, 2018. 

During the three and nine months ended November 30, 2018, the Company paid $288,143 and $484,251 in consulting fees for research and development to a company owned by a principal shareholder. At November 30, 2018, the balance due to this related party was $215,509, and $0 at February 28, 2018.

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OTHER DEBT - VEHICLE LOAN

9 Months Ended

Nov. 30, 2018

Other Debt - Vehicle Loan

OTHER DEBT - VEHICLE LOAN

12. OTHER DEBT – VEHICLE LOAN 

In December 2016, RAD entered into a vehicle loan for $47,704 secured by the vehicle. The loan is repayable over 5 years maturing November 9, 2021, and repayable $1,019 per month including interest and principal. In November 2017, RAD entered into another vehicle loan secured by the vehicle for $47,661. The loan is repayable over 5 years, maturing October 24, 2022 and repayable at $923 per month including interest and principal. The principal repayments were $13,657 and $6,591 for the nine months ended November 30, 2018 and 2017, respectively. The balances of the amounts owed on the vehicle loan were $68,505 and $82,162 as of November 30, 2018 and February 28, 2018, respectively, of which $17,830 and $17,830 were classified as current and $50,675 and $64,332 as long-term, respectively.

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LOANS PAYABLE

9 Months Ended

Nov. 30, 2018

Loans Payable [Abstract]

LOANS PAYABLE

13. LOANS PAYABLE 

Loans payable consisted of the following:

						Annual
						Interest
Date	Maturity	Type		Principal		Rate
June 11, 2018	June 11, 2019	Promissory note	(3)	$	48,000	25%	*
June 20, 2018	August 20, 2018	Promissory note			50,000	20%	*
July 30, 2018	December 1, 2018	Promissory note	(2)		12,000	15%	*
August 10, 2018	September 1, 2018	Promissory note			10,000	25%	*
August 16, 2018	August 16, 2019	Promissory note	(1)		25,000	25%	*
August 16, 2018	October 1, 2018	Promissory note			10,000	25%	*
August 23, 2018	October 20, 2018	Promissory note			20,000	20%	*
September 14, 2018	November 14, 2018	Promissory note			50,000	20%	*
October 10, 2018	October 10, 2019	Promissory note	(6)		7,500	20%
October 11, 2018	October 11, 2019	Promissory note	(7)		23,000	20%
October 18, 2018	December 1, 2018	Promissory note	(5)		11,000	0%
November 8, 2018	March 15, 2019	Merchant sales agreement	(4)		18,902	(4)
November 8, 2018	Demand	Demand secured loan	(8)		54,000	25%
				$	339,402

__________

*	Note is in default. No notice has been given by the note holder.
(1)	Repayable in 12 monthly installments of $2,376 commencing on September 16, 2018, and secured by the revenue earning devices of the Company having a net book value of at least $25,000. No repayments have been made by the Company and no notices have been received.
(2)	Including an original issue discount of $3,000.
(3)	Repayable in 12 monthly installments of $4,562 commencing August 11, 2018, and secured by the revenue earning devices of the Company having a net book value of  at least $48,000. No repayments have been made by the Company and no notices have been received.
(4)	Repayable at $166 per day, including fees and interest of $5,850. Balance consists of original proceeds received of $20,850 less repayment of $1,948.
(5)	Including an original issue discount of $900.
(6)	Repayable in 10 monthly installments of $900 commencing January 10, 2019, and secured by the revenue earning devices of the Company having a net book value of  at least $186,000.

(7)	Principal repayable in one year. Interest repayable in 10 monthly installments of $460 commencing January 11, 2019, and secured by the revenue earning devices of the Company having a net book value of at least $186,000.
(8)	Demand loan, with a 5% fee in addition to the 25% per annum interest is due when repaid. If the Company is unable to repay the loan when the demand is made, an additional 10% interest is levied on any unpaid amounts.  Secured by the revenue earning devices of the Company having a net book value of at least $186,000.

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DERIVATIVE LIABILITES

9 Months Ended

Nov. 30, 2018

Derivative Liability [Abstract]

DERIVATIVE LIABILITES

14. DERIVATIVE LIABILITES 

As of November 30, 2018, the Company revalued the fair value of all of the Company’s derivative liabilities associated with the conversion features on the convertible notes payable and determined that it had a total derivative liability of $6,152,561. 

The Company estimated the fair value of the derivative liabilities using the Monte-Carlo model using the following key assumptions during the nine months November 30, 2018:

Strike price	$1.00 - $0.001
Fair value of Company common stock	$0.3375 - $0.0110
Dividend yield	0.00%
Expected volatility	424% - 102%
Risk free interest rate	1.20% - 2.59%
Expected term (years)	0.00 - 3.66

During the three and nine months ended November 30, 2018, the Company released $233,178 and $990,400, respectively, of the Company’s derivative liability to equity due to the conversions of principal and interest on the associated notes. 

The changes in the derivative liabilities (Level 3 financial instruments) measured at fair value on a recurring basis for the nine months ended November 30, 2018 were as follows:

Balance as of February 28, 2018	$	31,113,844
Release of derivative liability on conversion of convertible notes payable		(990,400	)
Debt discount due to derivative liabilities		1,309,900
Derivative liability in excess of face value of debt recorded to interest expense		751,522
Increase in derivative liability due to debt settlement		183,766
Change in fair value of derivative liabilities		(26,216,071	)
Balance as of November 30, 2018	$	6,152,561

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SHAREHOLDERS' EQUITY (DEFICIT)

9 Months Ended

Nov. 30, 2018

Stockholders' Equity Note [Abstract]

SHAREHOLDERS' EQUITY (DEFICIT)

15. SHAREHOLDERS’ EQUITY (DEFICIT) 

Summary of Preferred Stock Activity 

During the nine months ended November 30, 2018, the Company received $174,070 for the sale of 65 Series F preferred shares. As of the reporting date, these shares have not been issued and are included in preferred stock to be issued on the balance sheet. 

Summary of Common Stock Activity 

On August 24, 2018, the Company undertook a 100:1 reverse stock split. The share capital has been retrospectively adjusted accordingly to reflect this reverse stock split, except for the conversion price of certain convertible notes as the conversion price is not subject to adjustment from forward and reverse stock splits (see Note 10). 

During the nine months ended November 30, 2018, the Company issued 15,001,414 shares of its common stock for the conversion of debt and related interest and fees totaling $719,908 including $690,193 for of principal, $24,715 interest, $5,000 in fees in connection with debt converted during the period, as well as the release of the related derivative liability (see Note 14).

Summary of Stock Option Activity 

As part of the asset purchase agreement described in Note 8, the Company issued 4,500 options to purchase shares at an exercise price of $5.00 per share that vest on October 2, 2021. 

The options have a grant date fair value of $27,843, based on the Black-Scholes Option Pricing model with the following assumptions:

Strike price	$0.05
Fair value of Company’s common stock	$0.06
Dividend yield	0.00%
Expected volatility	303.81%
Risk free interest rate	1.94%
Expected term (years)	4.00

The Company will amortize the $27,843 over the four-year term on a straight-line basis as stock-based compensation. For the three and nine-months periods ended November 30, 2018, the Company amortized $1,741 and $5,221, respectively, to stock-based compensation with a corresponding adjustment to additional paid-in capital. At November 30, 2018, the unamortized expense was $19,782 and the intrinsic value was $0.

	Number of Options	Weighted Average Exercise Price	Weighted Average Remaining Years
Outstanding at March 1, 2018	4,500	$   5.00	2.84
Granted	—
Exercised	—
Forfeited and cancelled	—
Outstanding at November 30, 2018	4,500	$   5.00	2.84

During the nine months ended November 30, 2018, the Company issued the following warrants:

● On April 16, 2018, the Company issued warrants to purchase 64,000 shares of the Company’s common stock in connection with its issuance of 64,000 shares of the Company’s common stock to an investor. The warrants have an exercise price of $2.00 per share and a three-year term.

● On June 6, 2018, the Company issued warrants to purchase 6,640 shares of the Company’s common stock in connection with its issuance of 6,640 shares of the Company’s common stock to an investor. The warrants have an exercise price of $0.44 per share and a three-year term.

● On August 24, 2018, the Company issued warrants to purchase 102,000 shares of the Company’s common stock in connection with its issuance of 102,000 shares of the Company’s common stock to an investor. The warrants have an exercise price of $0.15 per share and a three-year term.

● In September and October 2018, the Company issued warrants to purchase 1,116,125 shares of the Company’s common stock in connection with its issuance of 1,116,125 shares of the Company’s common stock to an investor. The warrants have an exercise price ranging from $0.015-$0.035 per share and a three-year term.

The Company also issued 2,500 warrants with an exercise price of $3.00 per share and a 3-year term on June 11, 2018, and 3,333 warrants with an exercise price of $15.00 and a three year term on March 14, 2018 in connection with loan payables (see Note 13).

	Number of Warrants	Weighted Average Exercise Price	Weighted Average Remaining Years
Outstanding at March 1, 2018	—	$       —	—
Issued	1,294,598	0.19	2.79
Exercised	—	—	—
Forfeited and cancelled	—	—	—
Outstanding at November 30, 2018	1,294,598	$    0.19	2,79

The above warrants have an aggregate grant date fair value of $627,751, based on the Black-Scholes Option Pricing model with the following assumptions:

Strike price	$0.02 - $3.00
Fair value of Company’s common stock	$0.05- $7.00
Dividend yield	0.00%
Expected volatility	305.71% - 341.5%
Risk free interest rate	2.52% - 2.94%
Expected term (years)	3.00 - 5.00

For the nine months ended November 30, 2018, the Company recorded a total of $632,972 to stock-based compensation for options and warrants with a corresponding adjustment to additional paid-in capital.

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COMMITMENTS AND CONTINGENCIES

9 Months Ended

Nov. 30, 2018

Commitments and Contingencies Disclosure [Abstract]

COMMITMENTS AND CONTINGENCIES

16. COMMITMENTS AND CONTINGENCIES 

Litigation 

Occasionally, the Company may be involved in claims and legal proceedings arising from the ordinary course of its business. The Company records a provision for a liability when it believes that is both probable that a liability has been incurred, and the amount can be reasonably estimated. If these estimates and assumptions change or prove to be incorrect, it could have a material impact on the Company’s consolidated financial statements. Contingencies are inherently unpredictable, and the assessments of the value can involve a series of complex judgments about future events and can rely heavily on estimates and assumptions. 

In February 2016, the Company received notice that it had been sued in the Clark County District Court of Nevada. The plaintiff alleges that the Company obtained certain trade secrets through a third party also named in the suit. An arbitration was conducted on May 9, 2017, and the Plaintiff filed a Notice of Trial de Novo, seeking a review of the merit dismissal. The outcome of this matter is uncertain and there is no specific timeline available as of the date of this filing. 

Operating Lease 

The Company’s principal facility is located in Orange County, California. The lease agreement includes, escalating lease payments, renewal provisions and other provisions. The lease began in April 2017 and expires in March 2022. Rent expense is recorded over the lease terms on a straight-line basis.  The security deposit of $25,747 was recorded as a long-term asset as of August 31, 2017. 

The Company also leases premises in Northern California. The lease began in August 2017 and expires in August 2020. The security deposit of $5,126 was paid on September 1, 2017. The Company shares premises with a supplier, who is the co-lessee. Through agreement with the supplier, the Company agreed to pay 75% of the lease costs and the supplier agreed to pay 25%.

On February 1, 2018, the Company entered into an additional lease for premises for a robotic control center. The lease runs from February 1, 2018 to January 31, 2021 for $550 per month. 

The Company’s leases are accounted for as operating leases. Rent expense is recorded over the lease terms on a straight-line basis. Rent expense was $30,155 and $89,917 for the three and nine months ended November 30, 2018. Rent expense was $31,834 and $58,056 for the three and nine months ended November 30, 2017. 

At November 30, 2018, the Company’s future minimum payments are as follows:

Twelve Months Ended	Amount
November 30, 2019	$	105,792
November 30, 2020		96,922
November 30, 2021		58,495
November 30, 2022		19,314
	$	280,523

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EARNINGS (LOSS) PER SHARE

9 Months Ended

Nov. 30, 2018

Net income (loss) per share:

EARNINGS (LOSS) PER SHARE

17. EARNINGS (LOSS) PER SHARE 

The net income (loss) per common share amounts were determined as follows:

	For the Three Months Ended						For the Nine Months Ended
	November 30,						November 30,
	2018			2017			2018			2017
Numerator:
Net income (loss) available to common shareholders	$	7,711,118		$	(8,796,921	)	$	17,384,222		$	(11,805,734	)
Effect of common stock equivalents
Add:  interest expense on convertible debt		316,411			—			726,595			—
Less: gain on change of derivative liabilities		(10,223,431	)		—			(26,216,071	)		—
Net income (loss) adjusted for common stock equivalents	$	(2,195,902	)	$	(8,796,921	)	$	(8,105,254	)	$	(11,805,734	)
Denominator:
Weighted average shares – basic		8,949,875			1,186,924			4,028,324			408,206
Dilutive effect of common stock equivalents:
Stock options and warrants		432,324			—			299,404			—
Convertible debt		1,214,611,324			—			1,186,653,028			—
Preferred shares		56,069,447			—			56,069,447			—
Denominator:
Weighted average shares – diluted		1,280,062,970			1,186,9274			1,247,050,203			408,206
Net income (loss) per share – basic	$	0.86		$	(7.41	)	$	4.32		$	(28.92	)
Net income (loss) per share – diluted	$	(0.00	)	$	(7.41	)	$	(0.01	)	$	(28.92	)

The anti-dilutive shares of common stock equivalents for the three and nine months ended November 30, 2018 and 2017 were as follows:

	For the Three Months Ended				For the Nine Months Ended
	November 30,				November 30,
	2018		2017		2018		2017
Stock options and warrants		71,833		—		71,833		—
Convertible debt		—		230,167		—		230,167
Preferred stock		—		4,312,650		—		4,312,650
Total		71,833		4,542,817		71,833		4,542,817

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SUBSEQUENT EVENTS

9 Months Ended

Nov. 30, 2018

Subsequent Events [Abstract]

SUBSEQUENT EVENTS

18. SUBSEQUENT EVENTS

Subsequent to November 30, 2018, convertible note holders converted $202,621 of principal, $11,122 interest and $3,500 in fees into 184,181,276 shares of the Company’s common stock. 

In addition, an investor canceled 171,500 shares relating to an October 2018 conversion. The Company reinstated the $2,658 of principal relating to this transaction. 

Subsequent to November 30, 2018, the Company issued warrants to purchase 19,141,711 shares of the Company’s common stock in connection with its issuance of 19,141,711 shares of the Company’s common stock to an investor as a part of a debt conversion. 

The above warrants have an aggregate grant date fair value of $111,678, based on the Black-Scholes Option Pricing model with the following assumptions: 

Strike price	$0.001 - $0.0031
Fair value of Company’s common stock	$0.004- $0.01
Dividend yield	0.00%
Expected volatility	334.0% - 335.5%
Risk free interest rate	2.46% - 2.78%
Expected term (years)	3.00

On December 7, 2018, the Company received the balance of $95,000 of proceeds from an investor for a $200,000 back-end note dated July 6, 2017 with an original principal amount of $105,000, including an original issue discount of $10,000, and maturing June 9, 2019. The note’s original maturity was July 6, 2018, but this maturity was extended on December 19, 2018.  The other installments, totaling $95,000 (including an original issue discount of $10,000), on this note were received July and August 2018. The back-end note is convertible into common shares of the Company at a conversion price equal to 60% of the lowest trading price of the Company’s common stock for the last 20 trading days prior to conversion, and has an 8% per annum interest rate. 

On February 1, 2019 the Company entered into an agreement with an investor whereby the investor would pay up to $900,000 (including a $92,000 payment made in January 2019) in exchange for a perpetual 9% royalty on the Company’s reported quarterly revenue. These royalty payments are to be made 90 days after the fiscal quarter. If the royalty payments would deplete RAD’s available cash by more than 20%, the payment may be deferred. The investor has agreed to pay the remaining $808,000 over an eleven-month period in minimum $60,000 monthly installments, commencing February 1, 2019. If the total investment turns out to be less than $900,000, this would not constitute a breach of the agreement, rather the royalty rate would be adjusted on a pro-rata basis.

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ACCOUNTING POLICIES (Policies)

9 Months Ended

Nov. 30, 2018

Accounting Policies [Abstract]

Basis of Presentation and Consolidation

Basis of Presentation and Consolidation 

The accompanying unaudited consolidated financial statements have been prepared in accordance with generally accepted accounting principles in the United States (“GAAP”) and in conformity with the instructions on Form 10-Q and Rule 8-03 of Regulation S-X and the related rules and regulations of the Securities and Exchange Commission (“SEC”) and should be read in conjunction with the audited financial statements and notes thereto in the Company’s latest Annual Report filed with the SEC on Form 10-K. The unaudited consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries, Robotic Assistance Devices, Inc., On the Move Experience, LLC and OMV Transports, LLC. All significant intercompany accounts and transactions have been eliminated in consolidation. The unaudited consolidated financial statements reflect all adjustments, consisting of normal recurring accruals, which are, in the opinion of management, necessary for a fair presentation of such statements. The results of operations for the three and nine months ended November 30, 2018 are not necessarily indicative of the results that may be expected for the entire year.

Cash

Cash 

The Company considers all highly liquid investments with an original maturity of three months or less to be cash equivalents. Cash and cash equivalents consist of cash on deposit with banks and money market instruments. The Company places its cash and cash equivalents with high-quality, U.S. financial institutions and, to date has not experienced losses on any of its balances.

Accounts Receivable

Accounts Receivable 

Accounts receivable are comprised of balances due from customers, net of estimated allowances for uncollectible accounts. In determining collectability, historical trends are evaluated, and specific customer issues are reviewed on a periodic basis to arrive at appropriate allowances.

Device Parts Inventory

Device Parts Inventory 

Device parts inventory is stated at the lower of cost or market using the weighted average cost method. The Company records a valuation reserve for obsolete and slow-moving inventory, relying principally on specific identification of such inventory. The Company uses these device parts in the assembly of revenue earning devices (and demo devices) as well as research and development. Depending on use, the Company will transfer the parts to the corresponding asset or expense if used in research and development.  A charge to income is taken when factors that would result in a need for an increase in the valuation, such as excess or obsolete inventory, are noted.

Revenue Earning Devices

Revenue Earning Devices 

Revenue earning devices are stated at cost. Depreciation is provided on a straight-line basis over the estimated useful life of 48 months. The Company continually evaluates revenue earning devices to determine whether events or changes in circumstances have occurred that may warrant revision of the estimated useful life or whether the devices should be evaluated for possible impairment. The Company uses a combination of the undiscounted cash flows and market approaches in assessing whether an asset has been impaired. The Company measures impairment losses based upon the amount by which the carrying amount of the asset exceeds the fair value.

Fixed Assets

Fixed Assets 

Fixed assets are stated at cost. Depreciation is provided on the straight-line method based on the estimated useful lives of the respective assets which range from three to five years. Major repairs or improvements are capitalized. Minor replacements and maintenance and repairs which do not improve or extend asset lives are expensed currently. 

Demo Devices	4 years
Vehicles	3 years
Computer equipment	3 years
Office equipment	4 years
Leasehold improvements	5 years, the life of the lease

The Company periodically evaluates the fair value of fixed assets whenever events or changes in circumstances indicate that its carrying amounts may not be recoverable. Upon retirement or other disposition of fixed assets, the cost and related accumulated depreciation are removed from the accounts and the resulting gain or loss, if any, is recognized in income.

Intangible Assets

Intangible Assets 

The Company’s intangible assets are stated at cost and amortized on a straight-line basis over their five year expected useful life. The Company periodically determines if there is any impairment in value every year.

Research and Development

Research and Development 

Research and development costs are expensed in the period they are incurred in accordance with ASC 730, Research and Development unless they meet specific criteria related to technical, market and financial feasibility, as determined by Management, including but not limited to the establishment of a clearly defined future market for the product, and the availability of adequate resources to complete the project. If all criteria are met, the costs are deferred and amortized over the expected useful life or written off if a product is abandoned. At November 30, 2018 and February 28, 2018, the Company had no deferred development costs.

Contingencies

Contingencies 

Occasionally, the Company may be involved in claims and legal proceedings arising from the ordinary course of its business. The Company records a provision for a liability when it believes that it is both probable that a liability has been incurred, and the amount can be reasonably estimated. If these estimates and assumptions change or prove to be incorrect, it could have a material impact on the Company’s consolidated financial statements. Contingencies are inherently unpredictable, and the assessments of the value can involve a series of complex judgments about future events and can rely heavily on estimates and assumptions.

Revenue Recognition

Revenue Recognition  

ASU 2014-09, “Revenue from Contracts with Customers (Topic 606)”, supersedes the revenue recognition requirements and industry specific guidance under Revenue Recognition (Topic 605). Topic 606 requires an entity to recognize revenue when it transfers promised goods or services to customers in an amount that reflects the consideration the entity expects to be entitled to in exchange for those goods or services. Topic 606 defines a five-step process that must be evaluated and, in doing so, it is possible more judgment and estimates may be required within the revenue recognition process than required under existing accounting principles generally accepted in the United States of America (“U.S. GAAP”) including identifying performance obligations in the contract, estimating the amount of variable consideration to include in the transaction price and allocating the transaction price to each separate performance obligation. The Company adopted Topic 606 on March 1, 2018, using the modified retrospective method. Under the modified retrospective method, prior period financial positions and results will not be adjusted. There was no cumulative effect adjustment recognized as a result of this adoption. While the Company does not expect fiscal year 2019 net earnings to be materially impacted by revenue recognition timing changes, Topic 606 requires certain changes to the presentation of revenues and related expenses beginning March 1, 2018. Refer to Note 4 – Revenue from Contracts with Customers for additional information.

Income Taxes

Income Taxes 

On July 25, 2017, Robotic Assistance Devices LLC converted to a C Corporation, Robotic Assistance Devices, Inc., through the issuance of 10,000 common shares to its sole shareholder. Prior to the conversion on July 25, 2017, income taxes are not provided in the financial statements as presented as RAD was an LLC and the income or loss flowed through to the shareholder for the two months ended February 28, 2017. Thereafter, income taxes are accounted for under the asset and liability method from that date forward. Deferred income tax assets and liabilities are determined based on differences between financial reporting and tax bases of assets and liabilities, and net operating loss and other tax credit carry-forwards. These items are measured using the enacted tax rates and laws that will be in effect when the differences are expected to reverse. The Company will record a valuation allowance to reduce the deferred income tax assets to the amount that is more likely than not to be realized.

Leases

Leases 

Lease agreements are evaluated to determine if they are capital leases meeting any of the following criteria at inception: (a) transfer of ownership; (b) bargain purchase option; (c) the lease term is equal to 75 percent or more of the estimated economic life of the leased property; or (d) the present value at the beginning of the lease term of the minimum lease payments, excluding that portion of the payments representing executory costs such as insurance, maintenance, and taxes to be paid by the lessor, including any profit thereon, equals or exceeds 90 percent of the excess of the fair value of the leased property to the lessor at lease inception over any related investment tax credit retained by the lessor and expected to be realized by the lessor. 

If at its inception, a lease meets any of the four lease criteria above, the lease is classified by the Company as a capital lease; and if none of the four criteria are met, the lease is classified by the Company as an operating lease. 

Operating lease payments are recognized as an expense in the income statement on a straight-line basis over the lease term, whereby an equal amount of rent expense is attributed to each period during the term of the lease, regardless of when actual payments are made. This generally results in rent expense in excess of cash payments during the early years of a lease and rent expense less than cash payments in the later years. The difference between rent expense recognized and actual rental payments is recorded as deferred rent and included in liabilities.

Distinguishing Liabilities from Equity

Distinguishing Liabilities from Equity 

The Company relies on the guidance provided by ASC Topic 480, Distinguishing Liabilities from Equity, to classify certain redeemable and/or convertible instruments. The Company first determines whether a financial instrument should be classified as a liability. The Company will determine the liability classification if the financial instrument is mandatorily redeemable, or if the financial instrument, other than outstanding shares, embodies a conditional obligation that the Company must or may settle by issuing a variable number of its equity shares. 

Once the Company determines that a financial instrument should not be classified as a liability, the Company determines whether the financial instrument should be presented between the liability section and the equity section of the balance sheet (“temporary equity”). The Company will determine temporary equity classification if the redemption of the financial instrument is outside the control of the Company (i.e. at the option of the holder). Otherwise, the Company accounts for the financial instrument as permanent equity. 

Initial Measurement 

The Company records its financial instruments classified as liability, temporary equity or permanent equity at issuance at the fair value, or cash received. 

Subsequent Measurement – Financial Instruments Classified as Liabilities 

The Company records the fair value of its financial instruments classified as liabilities at each subsequent measurement date. The changes in fair value of its financial instruments classified as liabilities are recorded as other income (expenses).

Fair Value of Financial Instruments

Fair Value of Financial Instruments 

ASC Topic 820, Fair Value Measurements and Disclosures (“ASC Topic 820”) provides a framework for measuring fair value in accordance with generally accepted accounting principles. 

ASC Topic 820 defines fair value as 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. ASC Topic 820 establishes a fair value hierarchy that distinguishes between (1) market participant assumptions developed based on market data obtained from independent sources (observable inputs) and (2) an entity’s own assumptions about market participant assumptions developed based on the best information available in the circumstances (unobservable inputs).

The fair value hierarchy consists of three broad levels, which gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1) and the lowest priority to unobservable inputs (Level 3). The three levels of the fair value hierarchy under ASC Topic 820 are described as follows: 

● Level 1 – Unadjusted quoted prices in active markets for identical assets or liabilities that are accessible at the measurement date.

● Level 2 – Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly. Level 2 inputs 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; and inputs that are derived principally from or corroborated by observable market data by correlation or other means.

● Level 3 – Inputs that are unobservable for the asset or liability.

Measured on a Recurring Basis 

The following table presents information about our liabilities measured at fair value on a recurring basis, aggregated by the level in the fair value hierarchy within which those measurements fell:

	Amount at		Fair Value Measurement Using
	Fair Value		Level 1		Level 2		Level 3
November 30, 2018
Liabilities
Derivative liability – conversion features pursuant to convertible notes payable	$	6,152,561	$	—	$	—	$	6,152,561
February 28, 2018
Liabilities
Derivative liability – conversion features pursuant to convertible notes payable	$	31,113,844	$	—	$	—	$	31,113,844

See Note 13 for specific inputs used in determining fair value. 

The carrying amounts of the Company’s financial assets and liabilities, such as cash, accounts receivable, prepaid expenses and advances, accounts payable and accrued expenses, approximate their fair values because of the short maturity of these instruments.

Earnings (Loss) per Share

Earnings (Loss) per Share 

Basic earnings (loss) per share (“EPS”) is computed by dividing net income (loss) available to common shareholders (numerator) by the weighted average number of shares outstanding (denominator) during the period. Diluted EPS give effect to all dilutive potential common shares outstanding during the period using the treasury stock method and convertible preferred stock using the if-converted method. In computing diluted EPS, the average stock price for the period is used to determine the number of shares assumed to be purchased from the exercise of stock options and/or warrants. Diluted EPS excluded all dilutive potential shares if their effect is anti-dilutive. 

Basic loss per common share is computed based on the weighted average number of shares outstanding during the period. Diluted loss per share is computed in a manner similar to the basic loss per share, except the weighted-average number of shares outstanding is increased to include all common shares, including those with the potential to be issued by virtue of convertible debt and other such convertible instruments. Diluted loss per share contemplates a complete conversion to common shares of all convertible instruments only if they are dilutive in nature with regards to earnings per share.

Recently Adopted Accounting Pronouncements

Recently Adopted Accounting Pronouncements 

See discussion of the adoption of ASU 2014-09, “Revenue from Contracts with Customers (Topic 606)”, above. 

In August 2016, the Financial Accounting Standards Board (“FASB”) Accounting Standards Update (“ASU”) 2016-15, “Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments” (“ASU 2016-15”). ASU 2016-15 will make eight targeted changes to how cash receipts and cash payments are presented and classified in the statement of cash flows. ASU 2016-15 is effective for fiscal years beginning after December 15, 2017. The Company adopted this standard on March 1, 2018, on a retrospective basis.  There was no impact of the standard on the Company’s consolidated financial statements. 

In November 2016, the FASB issued ASU 2016-18, “Statement of Cash Flows (Topic 230)”, requiring that the statement of cash flows explain the change in the total cash, cash equivalents, and amounts generally described as restricted cash or restricted cash equivalents. This guidance is effective for fiscal years, and interim reporting periods therein, beginning after December 15, 2017, with early adoption permitted. The Company adopted this standard on March 1, 2018, on a retrospective basis.  There was no impact of the standard on the Company’s consolidated financial statements. 

In May 2017, the FASB issued ASU 2017-09, Modification Accounting for Share-Based Payment Arrangements. The standard amends the scope of modification accounting for share-based payment arrangements and provides guidance on the types of changes to the terms or conditions of share-based payment awards to which an entity would be required to apply modification accounting under ASC 718. The new standard is effective for fiscal years beginning after December 15, 2017. There was no impact on the financial statements of adopting this new standard on March 1, 2018.

Recently Issued Accounting Pronouncements

Recently Issued Accounting Pronouncements 

In February 2016, the FASB issued ASU No. 2016-02, Leases (Topic 842), which is effective for public entities for annual reporting periods beginning after December 15, 2018. Under ASU 2016-02, lessees will be required to recognize the following for all leases (with the exception of short-term leases) at the commencement date: 1) a lease liability, which is a lessee’s obligation to make lease payments arising from a lease, measured on a discounted basis, and 2) a right-of-use asset, which is an asset that represents the lessee’s right to use, or control the use of, a specified asset for the lease term. The Company is currently evaluating the effects of ASU 2016-02 on its financial statements for both lessees and lessors. 

In July 2017, the FASB issued ASU 2017-11, Earnings Per Share (Topic 260), Distinguishing Liabilities from Equity (Topic 480) and Derivatives and Hedging (Topic 815): I. Accounting for Certain Financial Instruments with Down Round Features; II. Replacement of the Indefinite Deferral for Mandatorily Redeemable Financial Instruments of Certain Nonpublic Entities and Certain Mandatorily Redeemable Noncontrolling Interests with a Scope Exception. Part I of this update addresses the complexity of accounting for certain financial instruments with down round features. Down round features are features of certain equity-linked instruments (or embedded features) that result in the strike price being reduced on the basis of the pricing of future equity offerings. Current accounting guidance creates cost and complexity for entities that issue financial instruments (such as warrants and convertible instruments) with down round features that require fair value measurement of the entire instrument or conversion option. Part II of this update addresses the difficulty of navigating Topic 480, Distinguishing Liabilities from Equity, because of the existence of extensive pending content in the FASB Accounting Standards Codification. This pending content is the result of the indefinite deferral of accounting requirements about mandatorily redeemable financial instruments of certain nonpublic entities and certain mandatorily redeemable noncontrolling interests. The amendments in Part II of this update do not have an accounting effect. This ASU is effective for fiscal years, and interim periods within those years, beginning after December 15, 2018. The Company is currently assessing the potential impact of adopting ASU 2017-11 on its consolidated financial statements and related disclosures. 

In September 2016, the FASB issued ASU 2016-13, Financial Instruments-Credit Losses. ASU 2016-13 was issued to provide more decision-useful information about the expected credit losses on financial instruments and changes the loss impairment methodology. ASU 2016-13 is effective for reporting periods beginning after December 15, 2019 using a modified retrospective adoption method. A prospective transition approach is required for debt securities for which an other-than-temporary impairment had been recognized before the effective date. The Company is currently assessing the impact this accounting standard will have on its financial statements and related disclosures.

Subsequent Events

Subsequent Events 

The Company has evaluated all transactions through the date the consolidated financial statements were issued for subsequent event disclosure.

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ACCOUNTING POLICIES (Tables)

9 Months Ended

Nov. 30, 2018

Accounting Policies [Abstract]

Schedule of fixed assets lives

Minor replacements and maintenance and repairs which do not improve or extend asset lives are expensed currently. 

Demo Devices	4 years
Vehicles	3 years
Computer equipment	3 years
Office equipment	4 years
Leasehold improvements	5 years, the life of the lease

Schedule of measured on a recurring basis

The following table presents information about our liabilities measured at fair value on a recurring basis, aggregated by the level in the fair value hierarchy within which those measurements fell:

	Amount at		Fair Value Measurement Using
	Fair Value		Level 1		Level 2		Level 3
November 30, 2018
Liabilities
Derivative liability – conversion features pursuant to convertible notes payable	$	6,152,561	$	—	$	—	$	6,152,561
February 28, 2018
Liabilities
Derivative liability – conversion features pursuant to convertible notes payable	$	31,113,844	$	—	$	—	$	31,113,844

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REVENUE FROM CONTRACTS WITH CUSTOMERS (Tables)

9 Months Ended

Nov. 30, 2018

Revenue from Contract with Customer [Abstract]

Schedule of revenue from contracts with customers

The following table presents revenues from contracts with customers disaggregated by product/service:

	Three Months Ended November 30, 2018		Nine Months Ended November 30, 2018
Device rental activities	$	38,864	$	65,295
Direct sales of goods and services		—		410
	$	38,864	$	65,705

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PREPAID EXPENSES AND DEPOSITS (Tables)

9 Months Ended

Nov. 30, 2018

Prepaid Expenses And Deposits

Schedule of prepaid expenses and deposits

Prepaid expenses and deposits on device parts expected to be received within one year were comprised of the following:

	November 30, 2018		February 28, 2018
Prepaid insurance	$	21,078	$	22,076
Prepaid travel		—		10,488
Prepaid trade show expenses		—		50,539
	$	21,078	$	83,103

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REVENUE EARNING DEVICES (Tables)

9 Months Ended

Nov. 30, 2018

Revenue Earning Devices

Schedule of revenue earning devices

Revenue earning devices consisted of the following:

	November 30, 2018			February 28, 2018
Revenue earning devices	$	229,958		$	—
Less: Accumulated depreciation		(28,434	)		—
	$	201,524		$	—

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FIXED ASSETS (Tables)

9 Months Ended

Nov. 30, 2018

Property, Plant and Equipment [Abstract]

Schedule of fixed assets

Fixed assets consisted of the following:

	November 30, 2018			February 28, 2018
Automobile	$	136,318		$	136,318
Computer equipment		20,262			17,361
Office equipment		5,680			11,829
Leasehold improvements		29,329			29,329
		191,589			194,837
Less: Accumulated depreciation		(79,870	)		(36,632	)
	$	111,719		$	158,205

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INTANGIBLE ASSET (Tables)

9 Months Ended

Nov. 30, 2018

Goodwill and Intangible Assets Disclosure [Abstract]

Schedule of intangible assets

Intangible assets consisted of the following:

	November 30, 2018			February 28, 2018
Customer lists and relationships	$	61,901		$	61,901
Less accumulated amortization		(15,475	)		(5,653	)
	$	46,426		$	56,248

Schedule of assets and liabilities

The purchase price was allocated to the following assets as a part of this transaction:

Assets Acquired:
Cash	$	17,000
Robots, parts, and equipment		46,099
Intangible assets		61,901
Total assets acquired	$	125,000

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CONVERTIBLE NOTES PAYABLE (Tables)

9 Months Ended

Nov. 30, 2018

Debt Disclosure [Abstract]

Schedule of convertible notes payable

Convertible notes payable consisted of the following:

				Balance	Balance
		Interest	Conversion	November 31,	February 28,
Issued	Maturity	Rate	Rate per Share	2018	2018
February 28, 2011	February 26, 2013 *	7%	$0.015	$32,600	$32,600
January 31, 2013	February 28, 2017 *	10%	$0.010	119,091	119,091
May 31, 2013	November 30, 2016 *	10%	$0.010	261,595	261,595
August 31, 2014	November 30, 2016 *	10%	$0.002	355,652	355,652
November 30, 2014	November 30, 2016 *	10%	$0.002	103,950	103,950
February 28, 2015	February 28, 2017 *	10%	$0.001	63,357	63,357
May 31, 2015	August 31, 2017*	10%	$1.000	65,383	65,383
August 31, 2015	August 31, 2017*	10%	$0.300	91,629	91,629
November 30, 2015	November 30, 2018	10%	$0.300	269,791	269,791
February 29, 2016	February 28, 2019	10%	60% discount(2)	95,245	95,245
May 31, 2016	May 31, 2019	10%	$0.003	35,100	35,100
July 18, 2016	July 18, 2017*	10%	$0.003	3,500	3,500
December 31, 2016	December 31, 2020	8%	35% discount(2)	65,000	65,000
January 15, 2017	January 15, 2021	8%	35% discount(2)	50,000	50,000
January 15, 2017	January 15, 2021	8%	35% discount(2)	100,000	100,000
January 16, 2017	January 16, 2021	8%	35% discount(2)	150,000	150,000
March 8, 2017	March 8, 2020	10%	40% discount (2)	100,000	100,000
March 9, 2017	March 9, 2021	8%	35% discount(2)	50,000	50,000
March 21, 2017	March 21, 2018	8%	40% discount(2)	—	30,000
April 4, 2017	December 4, 2017	10%	40% discount(2)	—	12,066
April 19, 2017	April 19, 2018*	15%	50% discount(2)	96,250	96,250
April 20, 2017	January 30, 2018	8%	40% discount (1)	—	28,000
April 26, 2017	April 26, 2018*	0%	$0.001	68	67
May 1, 2017	May 1, 2021	8%	35% discount(2)	50,000	50,000
May 4, 2017	May 4, 2018*	8%	40% discount(2)	131,450	150,000
May 15, 2017	May 15, 2018*	0%	$0.001	1,280	1,280
May 17, 2017	May 17, 2020	10%	40% discount (1)	85,000	85,000
June 7, 2017	June 7, 2018*	8%	40% discount(2)	191,750	200,000
June 16, 2017	June 16, 2018*	0%	$0.001	750	750
July 6, 2017	July 6, 2018*	8%	40% discount(2)	200,000	200,000
August 8, 2017	August 8, 2018*	8%	40% discount(2)	125,000	125,000
July 28, 2017	July 28, 2018	15%	50% discount(2)	—	116,875
August 29, 2017	August 29, 2018*	15%	50% discount(2)	147,500	247,500
September 1, 2017	September 1, 2018*	0%	lower of 50% discount/$0.005(2)	62,000	187,000
September 12, 2017	September 12, 2018	8%	40% discount(2)	—	128,000
September 25, 2017	September 25, 2018	15%	50% discount(2)	—	398,750
October 4, 2017	May 4, 2018*	8%	40% discount(2)	150,000	150,000
October 16, 2017	October 16, 2018*	15%	50% discount(2)	319,366	345,000
November 22, 2017	November 22 ,2018*	15%	50% discount(2)	500,250	500,250
December 28, 2017	December 28 ,2017*	10%	40% discount(2)	28,150	60,500
December 29, 2017	December 29 ,2018	15%	50% discount(2)	330,000	330,000
January 9, 2018	January 9,2019	8%	40% discount(2)	82,500	82,500
January 30, 2018	January 30, 2019	15%	50% discount(2)	300,000	300,000
February 21, 2018	February 21,2019	15%	50% discount(2)	300,000	300,000
March 14, 2018	March 14, 2019	10%	40% discount(2)	50,000	—
March 16, 2018	March 16, 2019	15%	50% discount(2)	—	—
June 7, 2017	June 9 ,2019	8%	40% discount(2)	200,000	—
April 9, 2018	April 9, 2019	15%	50% discount(2)	55,000	—
March 21, 2017	March 21, 2018*	8%	40% discount(2)	2,870	—
March 21, 2017	March 21, 2018*	8%	40% discount(2)	40,000	—
April 17, 2018	April 17, 2019	8%	45% discount(2)	—	—
April 20, 2018	April 20, 2019	8%	40% discount(2)	49,904	—
May 2, 2018	December 2, 2018	10%	40% discount(2)	77,000	—
May 4, 2018	May 4, 2019	12%	50% discount(2)	89,545	—
May 14, 2018	December 14, 2018	10%	50% discount(2)	33,542	—
May 23, 2018	May 23, 2019	10%	50% discount(2)	110,000	—
June 6, 2018	June 6,2019	15%	50% discount(2)	296,279	—
June 19, 2018	March 19, 2019	15%	50% discount(2)	96,407	—
July 6, 2017	June 9, 2019	8%	40% discount(2)	95,000	—
August 1, 2018	August 1, 2019	15%	50% discount(2)	32,500	—
August 23, 2018	August 23, 2019	8%	45% discount(2)	86,634	—
September 13, 2018	June 30, 2019	12%	45% discount(2)	53,000	—
September 17, 2018	March 17, 2019	10%	50% discount(2)	4,945	—
September 20, 2018	September 20, 2019	15%	50% discount(2)	39,350	—
September 24, 2018	June 24, 2019	8%	40% discount(2)	44,000	—
August 8, 2017	June 9, 2019	8%	40% discount(2)	125,000	—
November 1, 2018	August 15, 2019	12%	45% discount(2)	53,000	—
November 26, 2018	May 26, 2019	10%	50% discount(2)	53,984	—
				6,801,167	6,136,681
Less: current portion of convertible notes payable				(6,236,167)	(5,536,582)
Less: discount on noncurrent convertible notes payable				(345,439)	(505,039)
Noncurrent convertible notes payable, net of discount				$219,561	$95,060
Current portion of convertible notes payable				$6,236,167	$5,536,582
Less: discount on current portion of convertible notes payable				(1,729,420)	(3,418,637)
Current portion of convertible notes payable, net of discount				$4,506,747	$2,117,946

 __________

*	The indicated notes were in default as of November 30, 2018.
(1)	The note is convertible beginning six months after the date of issuance.
(2)	The notes are convertible at a discount (as indicated) to the average market price and are accounted for and evaluated under ASC 480 as discussed in Note 3.
(3)	The conversion price is not subject to adjustment from forward or reverse stock splits.

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LOANS PAYABLE (Tables)

9 Months Ended

Nov. 30, 2018

Loans Payable [Abstract]

Schedule of Loans payable

Loans payable consisted of the following:

						Annual
						Interest
Date	Maturity	Type		Principal		Rate
June 11, 2018	June 11, 2019	Promissory note	(3)	$	48,000	25%	*
June 20, 2018	August 20, 2018	Promissory note			50,000	20%	*
July 30, 2018	December 1, 2018	Promissory note	(2)		12,000	15%	*
August 10, 2018	September 1, 2018	Promissory note			10,000	25%	*
August 16, 2018	August 16, 2019	Promissory note	(1)		25,000	25%	*
August 16, 2018	October 1, 2018	Promissory note			10,000	25%	*
August 23, 2018	October 20, 2018	Promissory note			20,000	20%	*
September 14, 2018	November 14, 2018	Promissory note			50,000	20%	*
October 10, 2018	October 10, 2019	Promissory note	(6)		7,500	20%
October 11, 2018	October 11, 2019	Promissory note	(7)		23,000	20%
October 18, 2018	December 1, 2018	Promissory note	(5)		11,000	0%
November 8, 2018	March 15, 2019	Merchant sales agreement	(4)		18,902	(4)
November 8, 2018	Demand	Demand secured loan	(8)		54,000	25%
				$	339,402

__________

*	Note is in default. No notice has been given by the note holder.
(1)	Repayable in 12 monthly installments of $2,376 commencing on September 16, 2018, and secured by the revenue earning devices of the Company having a net book value of at least $25,000. No repayments have been made by the Company and no notices have been received.
(2)	Including an original issue discount of $3,000.
(3)	Repayable in 12 monthly installments of $4,562 commencing August 11, 2018, and secured by the revenue earning devices of the Company having a net book value of  at least $48,000. No repayments have been made by the Company and no notices have been received.
(4)	Repayable at $166 per day, including fees and interest of $5,850. Balance consists of original proceeds received of $20,850 less repayment of $1,948.
(5)	Including an original issue discount of $900.
(6)	Repayable in 10 monthly installments of $900 commencing January 10, 2019, and secured by the revenue earning devices of the Company having a net book value of  at least $186,000.

(7)	Principal repayable in one year. Interest repayable in 10 monthly installments of $460 commencing January 11, 2019, and secured by the revenue earning devices of the Company having a net book value of at least $186,000.
(8)	Demand loan, with a 5% fee in addition to the 25% per annum interest is due when repaid. If the Company is unable to repay the loan when the demand is made, an additional 10% interest is levied on any unpaid amounts.  Secured by the revenue earning devices of the Company having a net book value of at least $186,000.

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DERIVATIVE LIABILITES (Tables)

9 Months Ended

Nov. 30, 2018

Derivative Liability [Abstract]

Schedule of derivative liabilities using the Monte-Carlo

The Company estimated the fair value of the derivative liabilities using the Monte-Carlo model using the following key assumptions during the nine months November 30, 2018:

Strike price	$1.00 - $0.001
Fair value of Company common stock	$0.3375 - $0.0110
Dividend yield	0.00%
Expected volatility	424% - 102%
Risk free interest rate	1.20% - 2.59%
Expected term (years)	0.00 - 3.66

Schedule of Level 3 financial instruments

The changes in the derivative liabilities (Level 3 financial instruments) measured at fair value on a recurring basis for the nine months ended November 30, 2018 were as follows:

Balance as of February 28, 2018	$	31,113,844
Release of derivative liability on conversion of convertible notes payable		(990,400	)
Debt discount due to derivative liabilities		1,309,900
Derivative liability in excess of face value of debt recorded to interest expense		751,522
Increase in derivative liability due to debt settlement		183,766
Change in fair value of derivative liabilities		(26,216,071	)
Balance as of November 30, 2018	$	6,152,561

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SHAREHOLDERS' EQUITY (DEFICIT) (Tables)

9 Months Ended

Nov. 30, 2018

Stockholders' Equity Note [Abstract]

Schedule of black-scholes option pricing model

The options have a grant date fair value of $27,843, based on the Black-Scholes Option Pricing model with the following assumptions:  

Strike price	$0.05
Fair value of Company’s common stock	$0.06
Dividend yield	0.00%
Expected volatility	303.81%
Risk free interest rate	1.94%
Expected term (years)	4.00

The above warrants have an aggregate grant date fair value of $627,751, based on the Black-Scholes Option Pricing model with the following assumptions:  

Strike price	$0.02 - $3.00
Fair value of Company’s common stock	$0.05- $7.00
Dividend yield	0.00%
Expected volatility	305.71% - 341.5%
Risk free interest rate	2.52% - 2.94%
Expected term (years)	3.00 - 5.00

Schedule of black-scholes warrants pricing model

The Company also issued 2,500 warrants with an exercise price of $3.00 per share and a 3-year term on June 11, 2018, and 3,333 warrants with an exercise price of $15.00 and a three year term on March 14, 2018 in connection with loan payables (see Note 13).

	Number of Warrants	Weighted Average Exercise Price	Weighted Average Remaining Years
Outstanding at March 1, 2018	—	$       —	—
Issued	1,294,598	0.19	2.79
Exercised	—	—	—
Forfeited and cancelled	—	—	—
Outstanding at November 30, 2018	1,294,598	$    0.19	2,79

Schedule of stock-based compensation with a corresponding adjustment to additional paid-in capital

For the three and nine-months periods ended November 30, 2018, the Company amortized $1,741 and $5,221, respectively, to stock-based compensation with a corresponding adjustment to additional paid-in capital. At November 30, 2018, the unamortized expense was $19,782 and the intrinsic value was $0.

	Number of Options	Weighted Average Exercise Price	Weighted Average Remaining Years
Outstanding at March 1, 2018	4,500	$   5.00	2.84
Granted	—
Exercised	—
Forfeited and cancelled	—
Outstanding at November 30, 2018	4,500	$   5.00	2.84

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COMMITMENTS & CONTINGENCIES (Tables)

9 Months Ended

Nov. 30, 2018

Commitments and Contingencies Disclosure [Abstract]

Schedule of RAD's future minimum payments

At November 30, 2018, the Company’s future minimum payments are as follows: 

Twelve Months Ended	Amount
November 30, 2019	$	105,792
November 30, 2020		96,922
November 30, 2021		58,495
November 30, 2022		19,314
	$	280,523

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EARNINGS (LOSS) PER SHARE (Tables)

9 Months Ended

Nov. 30, 2018

Net income (loss) per share:

Schedule of earnings (loss) per Share

The net income (loss) per common share amounts were determined as follows:

	For the Three Months Ended						For the Nine Months Ended
	November 30,						November 30,
	2018			2017			2018			2017
Numerator:
Net income (loss) available to common shareholders	$	7,711,118		$	(8,796,921	)	$	17,384,222		$	(11,805,734	)
Effect of common stock equivalents
Add:  interest expense on convertible debt		316,411			—			726,595			—
Less: gain on change of derivative liabilities		(10,223,431	)		—			(26,216,071	)		—
Net income (loss) adjusted for common stock equivalents	$	(2,195,902	)	$	(8,796,921	)	$	(8,105,254	)	$	(11,805,734	)
Denominator:
Weighted average shares – basic		8,949,875			1,186,924			4,028,324			408,206
Dilutive effect of common stock equivalents:
Stock options and warrants		432,324			—			299,404			—
Convertible debt		1,214,611,324			—			1,186,653,028			—
Preferred shares		56,069,447			—			56,069,447			—
Denominator:
Weighted average shares – diluted		1,280,062,970			1,186,9274			1,247,050,203			408,206
Net income (loss) per share – basic	$	0.86		$	(7.41	)	$	4.32		$	(28.92	)
Net income (loss) per share – diluted	$	(0.00	)	$	(7.41	)	$	(0.01	)	$	(28.92	)

Schedule of anti-dilutive shares of common stock

The anti-dilutive shares of common stock equivalents for the three and nine months ended November 30, 2018 and 2017 were as follows:

	For the Three Months Ended				For the Nine Months Ended
	November 30,				November 30,
	2018		2017		2018		2017
Stock options and warrants		71,833		—		71,833		—
Convertible debt		—		230,167		—		230,167
Preferred stock		—		4,312,650		—		4,312,650
Total		71,833		4,542,817		71,833		4,542,817

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SUBSEQUENT EVENTS (Tables)

9 Months Ended

Nov. 30, 2018

Subsequent Events [Abstract]

Schedule of based on the Black-Scholes Option Pricing model

The above warrants have an aggregate grant date fair value of $111,678, based on the Black-Scholes Option Pricing model with the following assumptions:

Strike price	$0.001 - $0.0031
Fair value of Company’s common stock	$0.004- $0.01
Dividend yield	0.00%
Expected volatility	334.0% - 335.5%
Risk free interest rate	2.46% - 2.78%
Expected term (years)	3.00

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GENERAL INFORMATION (Details Narrative) - shares	Aug. 28, 2017	Nov. 30, 2018	Feb. 28, 2018	Jul. 25, 2017
Common stock, issued		16,252,014	1,250,046
Robotic Assistance Devices, LLC ("RAD") [Member]
Common stock, issued				10,000
Robotic Assistance Devices, LLC ("RAD") [Member] | Series F Convertible Preferred Stock [Member]
Number of shares isuued under acquisition	2,450
Robotic Assistance Devices, LLC ("RAD") [Member] | Series E Preferred Stock [Member]
Number of shares isuued under acquisition	3,350,000

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GOING CONCERN (Details Narrative) - USD ($)	9 Months Ended
	Nov. 30, 2018	Nov. 30, 2017	Feb. 28, 2018
Going Concern
Cash flow from operating activities	$ (1,678,281)	$ (2,231,778)
Accumulated deficit	(18,119,807)		$ (35,504,029)
Working capital	$ 14,397,962

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ACCOUNTING POLICIES (Details) - Robotic Assistance Devices, LLC ("RAD") [Member]	9 Months Ended
	Nov. 30, 2018
Minimum [Member]
Estimated useful lives	3 years
Maximum [Member]
Estimated useful lives	5 years
Vehicles [Member]
Estimated useful lives	3 years
Computer Equipment [Member]
Estimated useful lives	3 years
Office Equipment [Member]
Estimated useful lives	4 years
Leasehold Improvements [Member]
Estimated useful lives	5 years
Demo Devices [Member]
Estimated useful lives	4 years

XML

ACCOUNTING POLICIES (Details 1) - Fair Value, Measurements, Recurring [Member] - USD ($)	Nov. 30, 2018	Feb. 28, 2018
Liabilities
Derivative liability - conversion features pursuant to convertible notes payable	$ 6,152,561	$ 31,113,844
Level 1 [Member]
Liabilities
Derivative liability - conversion features pursuant to convertible notes payable
Level 2 [Member]
Liabilities
Derivative liability - conversion features pursuant to convertible notes payable
Level 3 [Member]
Liabilities
Derivative liability - conversion features pursuant to convertible notes payable	$ 6,152,561	$ 31,113,844

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ACCOUNTING POLICIES (Details Narrative) - shares		9 Months Ended
	Jul. 25, 2017	Nov. 30, 2018
Intangible assets useful life		5 years
Robotic Assistance Devices, LLC ("RAD") [Member]
Issuance of authorized common shares to sole shareholder	10,000
Robotic Assistance Devices, LLC ("RAD") [Member] | Maximum [Member]
Estimated useful lives		5 years
Robotic Assistance Devices, LLC ("RAD") [Member] | Minimum [Member]
Estimated useful lives		3 years

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REVENUE FROM CONTRACTS WITH CUSTOMERS (Details) - USD ($)	3 Months Ended	9 Months Ended
	Nov. 30, 2018	Nov. 30, 2018
Revenue from Contract with Customer [Abstract]
Device rental activities	$ 38,864	$ 65,295
Direct sales of goods and services		410
Total revenue from contracts with customers	$ 38,864	$ 65,705

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PREPAID EXPENSES AND DEPOSITS (Details) - USD ($)	Nov. 30, 2018	Feb. 28, 2018
Prepaid Expenses And Deposits
Prepaid insurance	$ 21,078	$ 22,076
Prepaid travel		10,488
Prepaid trade show expenses		50,539
Total Prepaid expenses and deposits	$ 21,078	$ 83,103

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REVENUE EARNING DEVICES (Details) - Robotic Assistance Devices, LLC ("RAD") [Member] - USD ($)	Nov. 30, 2018	Feb. 28, 2018
Revenue earning devices	$ 229,958
Less: Accumulated depreciation	(28,434)
Total revenue earning devices	$ 201,524

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REVENUE EARNING DEVICES (Details Narrative) - USD ($)	3 Months Ended		9 Months Ended
	Nov. 30, 2018	Nov. 30, 2017	Nov. 30, 2018	Nov. 30, 2017
Depreciation expense	$ 31,489	$ 41,095	$ 82,902	$ 74,789
Revenue earning	38,864	63,632	65,705	98,632
Loss on impairment of fixed assets		(32,322)	(4,739)	(125,264)
Robotic Assistance Devices, LLC ("RAD") [Member]
Depreciation expense	$ 13,646	$ 21,350	$ 28,434	35,056
Revenue earning				38,653
Robotic Assistance Devices, LLC ("RAD") [Member] | Minimum [Member]
Loss on impairment of fixed assets				0
Robotic Assistance Devices, LLC ("RAD") [Member] | Maximum [Member]
Loss on impairment of fixed assets				$ 82,855

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FIXED ASSETS (Details) - USD ($)	Nov. 30, 2018	Feb. 28, 2018
Less: Accumulated depreciation	$ (79,870)	$ (36,632)
Fixed assets, net of accumulated depreciation	111,719	158,205
Robotic Assistance Devices, LLC ("RAD") [Member]
Gross	191,589	194,837
Less: Accumulated depreciation	(79,870)	(36,632)
Fixed assets, net of accumulated depreciation	111,719	158,205
Robotic Assistance Devices, LLC ("RAD") [Member] | Automobile [Member]
Gross	136,318	136,318
Robotic Assistance Devices, LLC ("RAD") [Member] | Computer Equipment [Member]
Gross	20,262	17,361
Robotic Assistance Devices, LLC ("RAD") [Member] | Office Equipment [Member]
Gross	5,680	11,829
Robotic Assistance Devices, LLC ("RAD") [Member] | Leasehold Improvements [Member]
Gross	$ 29,329	$ 29,329

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FIXED ASSETS (Details Narrative) - USD ($)	3 Months Ended		9 Months Ended
	Nov. 30, 2018	Nov. 30, 2017	Nov. 30, 2018	Nov. 30, 2017
Loss on impairment of fixed assets			$ (4,739)	$ (125,264)
Robotic Assistance Devices, LLC ("RAD") [Member]
Fixed assets acquired				206,449
Depreciation expense	$ 14,748	$ 17,695	44,646	37,683
Loss on impairment of fixed assets			$ 4,739	42,409
Impairment of fixed assets				$ 0
Additions to fixed assets	$ 2,900

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INTANGIBLE ASSETS (Details) - USD ($)	Nov. 30, 2018	Feb. 28, 2018
Goodwill and Intangible Assets Disclosure [Abstract]
Customer lists and relationships	$ 61,901	$ 61,901
Less accumulated amortization	(15,475)	(5,653)
Intangible assets, net	$ 46,426	$ 56,248

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INTANGIBLE ASSETS (Details 1) - WeSecure [Member]	Nov. 30, 2018 USD ($)
Assets Acquired:
Cash	$ 17,000
Robots, parts, and equipment	46,099
Intangible assets	61,901
Total assets acquired	$ 125,000

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INTANGIBLE ASSETS (Details Narrative)		3 Months Ended		9 Months Ended		12 Months Ended
	Oct. 02, 2017 USD ($) Number $ / shares shares	Nov. 30, 2018 USD ($)	Nov. 30, 2017 USD ($)	Nov. 30, 2018 USD ($) shares	Nov. 30, 2017 USD ($)	Feb. 28, 2018 USD ($)	Aug. 01, 2018 USD ($)	Jul. 02, 2018 USD ($)
Principal face amount		$ 175,000		$ 175,000			$ 95,000	$ 95,000
Professional fees, per month		288,143		$ 484,251
Number of options issued | shares
Amortization expense		$ 3,095	$ 2,050	$ 9,822	$ 2,050
WeSecure [Member]
Payment of acquire intangible assets				$ 25,000		$ 25,000
WeSecure Robotics, Inc [Member] | Director [Member]
Salary, per month	$ 8,000
Commission paid, per month	$ 500
WeSecure Robotics, Inc [Member] | Director & Consultant [Member]
Number of options issued | shares	4,500
Options exericse price (in dollars per share) | $ / shares	$ 5.00
Vesting date	Oct. 02, 2021
WeSecure Robotics, Inc [Member] | Consultant [Member]
Professional fees, per month	$ 1,000
Commission paid, per month	500
WeSecure Robotics, Inc [Member] | Promissory Note [Member] | Asset Purchase Agreement [Member]
Principal face amount	$ 125,000
Number of installments | Number	5
Face amount individual value of installment	$ 25,000

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NOTE RECEIVABLE (Details Narrative) - USD ($)		9 Months Ended
	Mar. 13, 2017	Nov. 30, 2018
Adjustment to bad debt expense		$ 40,000
Notes Receivable [Member]
Promissory note fee amount	$ 10,000
Third Party [Member] | Notes Receivable [Member]
Advances receivable	$ 40,000
Maturity date	Dec. 31, 2017
Description of note receivable interest	The note was subsequently amended to bear interest of 2% per month plus a $10,000 fee.
Description of note receivable collateral	It is payable on December 31, 2017 and is secured in senior rank on all assets of the borrower.

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CONVERTIBLE NOTES PAYABLE (Details)		9 Months Ended
		Nov. 30, 2018 USD ($) $ / shares	Aug. 01, 2018 USD ($)	Jul. 02, 2018 USD ($)	Feb. 28, 2018 USD ($)	May 31, 2017 USD ($)
Total convertible notes payable		$ 6,801,167				$ 6,136,681
Less: current portion of convertible notes payable		(6,236,167)				(5,536,582)
Less: discount on noncurrent convertible notes payable		(345,439)				(505,039)
Noncurrent convertible notes payable, net of discount		219,561			$ 95,060	95,060
Current portion of convertible notes payable		6,236,167				5,536,582
Less: discount on current portion of convertible notes payable		(1,729,420)	$ (10,000)	$ (10,000)		(3,418,637)
Current portion of convertible notes payable, net of discount		$ 4,506,747			2,117,946	$ 2,117,946
7% Convertible Note Due February 26, 2013 [Member]
Issuance date		Feb. 28, 2011
Conversion rate per share | $ / shares		$ 0.015
Total convertible notes payable		$ 32,600			32,600
10% Convertible Note Due February 28, 2017 [Member]
Issuance date		Jan. 31, 2013
Conversion rate per share | $ / shares		$ 0.010
Total convertible notes payable		$ 119,091			119,091
10% Convertible Note Due November 30, 2016 [Member]
Issuance date		May 31, 2013
Conversion rate per share | $ / shares		$ 0.010
Total convertible notes payable		$ 261,595			261,595
10% Convertible Note Due November 30, 2016 [Member]
Issuance date		Aug. 31, 2014
Conversion rate per share | $ / shares		$ 0.002
Total convertible notes payable		$ 355,652			355,652
10% Convertible Note Due November 30, 2016 [Member]
Issuance date		Nov. 30, 2014
Conversion rate per share | $ / shares		$ 0.002
Total convertible notes payable		$ 103,950			103,950
10% Convertible Note Due February 28, 2017 [Member]
Issuance date		Feb. 28, 2015
Conversion rate per share | $ / shares		$ 0.001
Total convertible notes payable		$ 63,357			63,357
10% Convertible Note Due August 31, 2017 [Member]
Issuance date		May 31, 2015
Conversion rate per share | $ / shares		$ 1.000
Total convertible notes payable		$ 65,383			65,383
10% Convertible Note Due August 31, 2017 [Member]
Issuance date		Aug. 31, 2015
Conversion rate per share | $ / shares		$ 0.300
Total convertible notes payable		$ 91,629			91,629
10% Convertible Note Due November 30, 2018 [Member]
Issuance date		Nov. 30, 2015
Conversion rate per share | $ / shares		$ 0.300
Total convertible notes payable		$ 269,791			269,791
10% Convertible Note Due February 28, 2019 [Member]
Issuance date		Feb. 29, 2016
Percentage of conversion rate discount	[1]	0.60
Total convertible notes payable		$ 95,245			95,245
10% Convertible Note Due May 31, 2019 [Member]
Issuance date		May 31, 2016
Conversion rate per share | $ / shares		$ 0.003
Total convertible notes payable		$ 35,100			35,100
10% Convertible Note Due July 18, 2017 [Member]
Issuance date		Jul. 18, 2016
Conversion rate per share | $ / shares		$ 0.003
Total convertible notes payable		$ 3,500			3,500
8% Convertible Note Due December 31, 2020 [Member]
Issuance date		Dec. 31, 2016
Percentage of conversion rate discount	[1]	0.35
Total convertible notes payable		$ 65,000			65,000
8% Convertible Note Due January 15, 2021 [Member]
Issuance date		Jan. 15, 2017
Percentage of conversion rate discount	[1]	0.35
Total convertible notes payable		$ 50,000			50,000
8% Convertible Note Due January 15, 2021 [Member]
Issuance date		Jan. 15, 2017
Percentage of conversion rate discount	[1]	0.35
Total convertible notes payable		$ 100,000			100,000
8% Convertible Note Due January 16, 2021 [Member]
Issuance date		Jan. 16, 2017
Percentage of conversion rate discount	[1]	0.35
Total convertible notes payable		$ 150,000			150,000
10% Convertible Note Due March 8, 2020 [Member]
Issuance date		Mar. 08, 2017
Percentage of conversion rate discount	[1]	0.40
Total convertible notes payable		$ 100,000			100,000
8% Convertible Note Due March 9, 2021 [Member]
Issuance date		Mar. 09, 2017
Percentage of conversion rate discount	[1]	0.35
Total convertible notes payable		$ 50,000			50,000
22% Convertible Note Due March 21, 2018 [Member]
Issuance date		Mar. 21, 2017
Percentage of conversion rate discount	[1]	0.40
Total convertible notes payable					30,000
10% Convertible Note Due December 4, 2017 [Member]
Issuance date		Apr. 04, 2017
Percentage of conversion rate discount	[1]	0.40
Total convertible notes payable					12,066
15% Convertible Note Due April 19, 2018 [Member]
Issuance date		Apr. 19, 2017
Percentage of conversion rate discount	[1]	0.50
Total convertible notes payable		$ 96,250			96,250
8% Convertible Note Due January 30, 2018 [Member]
Issuance date		Apr. 20, 2017
Percentage of conversion rate discount	[2]	0.40
Total convertible notes payable					28,000
0% Convertible Note Due April 26, 2018 [Member]
Issuance date		Apr. 26, 2017
Conversion rate per share | $ / shares		$ 0.001
Total convertible notes payable		$ 68			67
8% Convertible Note Due May 1, 2021 [Member]
Issuance date		May 01, 2017
Percentage of conversion rate discount	[1]	0.35
Total convertible notes payable		$ 50,000			50,000
8% Convertible Note Due May 4, 2018 [Member]
Issuance date		May 04, 2017
Percentage of conversion rate discount	[1]	0.40
Total convertible notes payable		$ 131,450			150,000
0% Convertible Note Due May 15, 2018 [Member]
Issuance date		May 15, 2017
Conversion rate per share | $ / shares		$ 0.001
Total convertible notes payable		$ 1,280			1,280
10% Convertible Note Due May 17, 2020 [Member]
Issuance date		May 17, 2017
Percentage of conversion rate discount	[2]	0.40
Total convertible notes payable		$ 85,000			85,000
8% Convertible Note Due June 7, 2018 [Member]
Issuance date		Jun. 07, 2017
Percentage of conversion rate discount	[1]	0.40
Total convertible notes payable		$ 191,750			200,000
0% Convertible Note Due June 16, 2018 [Member]
Issuance date		Jun. 16, 2017
Conversion rate per share | $ / shares		$ 0.001
Total convertible notes payable		$ 750			750
8% Convertible Note Due July 6, 2018 [Member]
Issuance date		Jul. 06, 2017
Percentage of conversion rate discount	[1]	0.40
Total convertible notes payable		$ 200,000			200,000
8% Convertible Note Due August 8, 2018 [Member]
Issuance date		Aug. 08, 2017
Percentage of conversion rate discount	[1]	0.40
Total convertible notes payable		$ 125,000			125,000
15% Convertible Note Due July 28, 2018 [Member]
Issuance date		Jul. 28, 2017
Percentage of conversion rate discount	[1]	0.50
Total convertible notes payable					116,875
15% Convertible Note Due August 29, 2018 [Member]
Issuance date		Aug. 29, 2017
Percentage of conversion rate discount	[1]	0.50
Total convertible notes payable		$ 147,500			247,500
0% Convertible Note Due September 1, 2018 [Member]
Issuance date		Sep. 01, 2017
Percentage of conversion rate discount	[1]	0.50
Conversion rate per share | $ / shares		$ 0.005
Total convertible notes payable		$ 62,000			187,000
8% Convertible Note Due September 12, 2018 [Member]
Issuance date		Sep. 12, 2017
Percentage of conversion rate discount	[1]	0.40
Total convertible notes payable					128,000
15% Convertible Note Due September 25, 2018 [Member]
Issuance date		Sep. 25, 2017
Percentage of conversion rate discount	[1]	0.50
Total convertible notes payable					398,750
8% Convertible Note Due May 4, 2018 [Member]
Issuance date		Oct. 04, 2017
Percentage of conversion rate discount	[1]	0.40
Total convertible notes payable		$ 150,000			150,000
15% Convertible Note Due October 16, 2018 [Member]
Issuance date		Oct. 16, 2017
Percentage of conversion rate discount	[1]	0.50
Total convertible notes payable		$ 319,366			345,000
15% Convertible Note Due November 22, 2018 [Member]
Issuance date		Nov. 22, 2017
Percentage of conversion rate discount	[1]	0.50
Total convertible notes payable		$ 500,250			500,250
10% Convertible Note Due December 28, 2017 [Member]
Issuance date		Dec. 28, 2017
Percentage of conversion rate discount	[1]	0.40
Total convertible notes payable		$ 28,150			60,500
15% Convertible Note Due December 29, 2018 [Member]
Issuance date		Dec. 29, 2017
Percentage of conversion rate discount	[1]	0.50
Total convertible notes payable		$ 330,000			330,000
8% Convertible Note Due January 9, 2019 [Member]
Issuance date		Jan. 09, 2018
Percentage of conversion rate discount	[1]	0.40
Total convertible notes payable		$ 82,500			82,500
15% Convertible Note Due January 30, 2019 [Member]
Issuance date		Jan. 30, 2018
Percentage of conversion rate discount	[1]	0.50
Total convertible notes payable		$ 300,000			300,000
15% Convertible Note Due February 21, 2019 [Member]
Issuance date		Feb. 21, 2018
Percentage of conversion rate discount	[1]	0.50
Total convertible notes payable		$ 300,000			300,000
10% Convertible Note Due March 14, 2019 [Member]
Issuance date		Mar. 14, 2018
Percentage of conversion rate discount	[1]	0.40
Total convertible notes payable		$ 50,000
15% Convertible Note Due March 16, 2019 [Member]
Issuance date		Mar. 16, 2018
Percentage of conversion rate discount	[1]	0.50
Total convertible notes payable
8% Convertible Note Due June 9, 2019 [Member]
Issuance date		Jun. 07, 2017
Percentage of conversion rate discount	[1]	0.40
Total convertible notes payable		$ 200,000
15% Convertible Note Due April 9, 2019 [Member]
Issuance date		Apr. 09, 2018
Percentage of conversion rate discount	[1]	0.50
Total convertible notes payable		$ 55,000
8% Convertible Note Due March 21, 2018 [Member]
Issuance date		Mar. 21, 2017
Percentage of conversion rate discount	[1]	0.40
Total convertible notes payable		$ 2,870
8% Convertible Note Due March 21, 2018 [Member]
Issuance date		Mar. 21, 2017
Percentage of conversion rate discount	[1]	0.40
Total convertible notes payable		$ 40,000
8% Convertible Note Due April 17, 2019 [Member]
Issuance date		Apr. 17, 2018
Percentage of conversion rate discount	[1]	0.45
Total convertible notes payable
8% Convertible Note Due April 20, 2019 [Member]
Issuance date		Apr. 20, 2018
Percentage of conversion rate discount	[1]	0.40
Total convertible notes payable		$ 49,904
10% Convertible Note Due December 2, 2018 [Member]
Issuance date		May 02, 2018
Percentage of conversion rate discount	[1]	0.40
Total convertible notes payable		$ 77,000
12% Convertible Note Due May 4, 2019 [Member]
Issuance date		May 04, 2018
Percentage of conversion rate discount	[1]	0.50
Total convertible notes payable		$ 89,545
10% Convertible Note Due December 14, 2018 [Member]
Issuance date		May 14, 2018
Percentage of conversion rate discount	[1]	0.50
Total convertible notes payable		$ 33,542
10% Convertible Note Due May 23, 2019 [Member]
Issuance date		May 23, 2018
Percentage of conversion rate discount	[1]	0.50
Total convertible notes payable		$ 110,000
15% Convertible Note Due June 6, 2019 [Member]
Issuance date		Jun. 06, 2018
Percentage of conversion rate discount	[1]	0.50
Total convertible notes payable		$ 296,279
15% Convertible Note Due March 19, 2019 [Member]
Issuance date		Jun. 19, 2018
Percentage of conversion rate discount	[1]	0.50
Total convertible notes payable		$ 96,407
8% Convertible Note Due June 9, 2018 [Member]
Issuance date		Jul. 06, 2017
Percentage of conversion rate discount	[1]	0.40
Total convertible notes payable		$ 95,000
15% Convertible Note Due August 1, 2019 [Member]
Issuance date		Aug. 01, 2018
Percentage of conversion rate discount	[1]	0.50
Total convertible notes payable		$ 32,500
8% Convertible Note Due August 23, 2019 [Member]
Issuance date		Aug. 23, 2018
Percentage of conversion rate discount	[1]	0.45
Total convertible notes payable		$ 86,634
12% Convertible Note Due June 30, 2019 [Member]
Issuance date		Sep. 13, 2018
Percentage of conversion rate discount	[1]	0.45
Total convertible notes payable		$ 53,000
10% Convertible Note Due March 17, 2019 [Member]
Issuance date		Sep. 17, 2018
Percentage of conversion rate discount	[1]	0.50
Total convertible notes payable		$ 4,945
15% Convertible Note Due September 20, 2019 [Member]
Issuance date		Sep. 20, 2018
Percentage of conversion rate discount	[1]	0.50
Total convertible notes payable		$ 39,350
8% Convertible Note Due June 24, 2019 [Member]
Issuance date		Sep. 24, 2018
Percentage of conversion rate discount	[1]	0.40
Total convertible notes payable		$ 44,000
8% Convertible Note Due June 9, 2019 [Member]
Issuance date		Aug. 08, 2017
Percentage of conversion rate discount	[1]	0.40
Total convertible notes payable		$ 125,000
12% Convertible Note Due August 15, 2019 [Member]
Issuance date		Nov. 01, 2018
Percentage of conversion rate discount	[1]	0.45
Total convertible notes payable		$ 53,000
10% Convertible Note Due May 26, 2019 [Member]
Issuance date		Nov. 26, 2018
Percentage of conversion rate discount	[1]	0.50
Total convertible notes payable		$ 53,984

[1] The notes are convertible at a discount (as indicated) to the average market price and are accounted for and evaluated under ASC 480 as discussed in Note 3.

[2] The note is convertible beginning six months after the date of issuance.

XML

CONVERTIBLE NOTES PAYABLE (Details Narrative) - USD ($)																				1 Months Ended		2 Months Ended	3 Months Ended		9 Months Ended
	Nov. 30, 2018	Nov. 01, 2018	Oct. 31, 2018	Sep. 30, 2018	Sep. 24, 2018	Sep. 20, 2018	Sep. 13, 2018	Aug. 24, 2018	Jul. 02, 2018	Jun. 11, 2018	Jun. 06, 2018	May 23, 2018	May 04, 2018	May 02, 2018	Apr. 16, 2018	Apr. 09, 2018	Mar. 14, 2018	Mar. 02, 2018	Jan. 05, 2018	Apr. 30, 2018	Mar. 31, 2018	Aug. 31, 2018	Nov. 30, 2018	Nov. 30, 2017	Nov. 30, 2018	Nov. 30, 2017	Aug. 30, 2018	Aug. 01, 2018	Feb. 28, 2018
Principal face amount	$ 175,000								$ 95,000														$ 175,000		$ 175,000			$ 95,000
Warrant exercise price (in dollars per share)	$ 0.19																						$ 0.19		$ 0.19
Repayment of notes																									$ 125,000	$ 50,000
Description of debt conversion									The back-end note is convertible into common shares of the Company at a conversion price equal to 60% of the lowest trading price of the Company’s common stock for the last 20 trading days prior to conversion
Debt discount recognized from derivative liabilities																									1,309,900	2,033,475
Amortization of discount on convertible note payable																									3,649,219	691,607
Current accrued interest payable	$ 1,300,530																						$ 1,300,530		1,300,530
Noncurrent accrued interest payable	85,344																						85,344		85,344
Accrued interest payable	1,385,874																						1,385,874		$ 1,385,874
8% Convertible Note Due on April 17, 2019 [Member]
Note maturity term																									1 year
Note maturity date																									Aug. 23, 2019
Description of debt conversion																									Convertible into common shares of the Company at a conversion price equal to 55% of the lowest bid price of the Company’s common stock for the last 30 trading days prior to conversion.
8% Convertible Note Due on August 23, 2019 [Member]
Principal face amount	100,000																						100,000		$ 100,000
Note maturity term																									1 year
Gain on settlement of debt																									$ 90,629
15% Convertible Note Due on March 19, 2019 [Member]
Note maturity term																									8 months
Gain on settlement of debt																									$ 71,100
15% Convertible Note Due on March 19, 2019 [Member]
Principal face amount	132,149																						132,149		$ 132,149
Note maturity date																									Mar. 19, 2019
Description of debt conversion																									Convertible into common shares of the Company at a conversion price equal to 50% of the lowest bid price of the Company’s common stock for the last 40 trading days prior to conversion.
15% Convertible Note Due on September 25, 2018 [Member]
Note maturity term																									1 year
Gain on settlement of debt																									$ 484,484
Warrant [Member]
Warrant exercise price (in dollars per share)								$ 0.15		$ 3.00	$ 0.44				$ 0.02		$ 15.00
Note maturity term			3 years	3 years				3 years		3 years	3 years				3 years		3 years
Promissory Note [Member] | Lender [Member]
Principal face amount							$ 53,000					$ 110,000	$ 82,500	$ 77,000					$ 250,000	$ 200,000	$ 200,000						$ 95,000
Issuance date												May 23, 2018	May 04, 2018	May 02, 2018
Proceeds from note												$ 90,108	$ 71,500	$ 70,000					225,000			$ 85,000
Original issue discounts												$ 11,000	$ 19,892	$ 7,000					$ 25,000			$ 10,000
Note maturity term												8 months	1 year	1 year 6 months					1 year			12 months
Description of debt conversion												A conversion price equal to 50% of the lowest bid price of the Company’s common stock for the last 40 trading days prior to conversion.	A conversion price equal to 50% of the lowest trading price of the Company’s common stock for the last 20 trading days prior to conversion.	A conversion price equal to 60% of the lowest trading price of the Company’s common stock for the last 20 trading days prior to conversion					The promissory note is convertible into common shares of the Company and a conversion price equal to 60% of the lowest trading price of the Company’s common stock for the last 25 trading days prior to conversion, and has a 10% per annum interest rate commencing on January 5, 2018.	A conversion price equal to 60% of the lowest trading price of the Company’s common stock for the last 20 trading days prior to conversion	A conversion price equal to 60% of the lowest trading price of the Company’s common stock for the last 20 trading days prior to conversion	The promissory note is convertible into common shares of the Company at a conversion price equal to 60% of the lowest trading price of the Company’s common stock for the last 20 trading days prior to conversion.
Debt interest rate							12.00%					10.00%	12.00%	10.00%					10.00%	8.00%	8.00%						8.00%
Promissory Note [Member] | Lender [Member] | Warrant [Member]
Issuance date																	Mar. 14, 2018
Number of shares issued																	333,333
Warrant exercise price (in dollars per share)																	$ 0.15
Warrant maturity																	3 years
Repayment of notes																	$ 50,000
Proceeds from note																	43,000
Notes fees																	2,000
Original issue discounts																	$ 5,000
15% Convertible Note [Member] | Lender [Member]
Principal face amount																		$ 95,000
Issuance date																		Mar. 01, 2018
Proceeds from note																		$ 95,000
Note maturity term																		3 years
Description of debt conversion																		A conversion price equal to 50% of the lowest bid price of the Company’s common stock for the last 40 trading days prior to conversion, and has a 15% per annum interest rate.
Debt interest rate																		15.00%
15% Convertible Note [Member] | Lender [Member]
Principal face amount																$ 55,000
Issuance date																Apr. 09, 2018
Proceeds from note																$ 55,000
Note maturity term																3 years
Description of debt conversion																A conversion price equal to 50% of the lowest bid price of the Company’s common stock for the last 40 trading days prior to conversion, and has a 15% per annum interest rate.
Debt interest rate																15.00%
Promissory Note [Member] | Lender [Member]
Principal face amount	$ 125,000	$ 53,000			$ 44,000	$ 39,350														$ 80,000			$ 125,000		$ 125,000		$ 32,500
Issuance date	Aug. 08, 2017
Proceeds from note	$ 118,750	50,000			40,000	$ 39,350	$ 50,000													76,000		$ 32,500
Original issue discounts	$ 6,250	$ 3,000			$ 4,000		$ 3,000													$ 4,000
Note maturity term					9 months	1 year	9 months													1 year		1 year
Note maturity date	Jun. 09, 2019	Aug. 15, 2019
Description of debt conversion	The promissory note is convertible into common shares of the Company at a conversion price equal to 40% of the lowest trading price of the Company’s common stock for the last 20 trading days prior to conversion, and has a 8% per annum interest rate.	The promissory note is convertible into common shares of the Company at a conversion price equal to 45% of the lowest trading price of the Company’s common stock for the last 20 trading days prior to conversion, and has a 12% per annum interest rate.			The promissory note is convertible into common shares of the Company at a conversion price equal to 40% of the lowest trading price of the Company’s common stock for the last 20 trading days prior to conversion, and has a 8% per annum interest rate.	The promissory note is convertible into common shares of the Company at a conversion price equal to 50% of the lowest trading price of the Company’s common stock for the last 20 trading days prior to conversion, and has a 15% per annum interest rate.	The promissory note is convertible into common shares of the Company at a conversion price equal to 45% of the lowest trading price of the Company’s common stock for the last 20 trading days prior to conversion, and has a 12% per annum interest rate.													A conversion price equal to 60% of the lowest trading price of the Company’s common stock for the last 20 trading days prior to conversion		The promissory note is convertible into common shares of the Company at a conversion price equal to 50% of the lowest trading price of the Company’s common stock for the last 20 trading days prior to conversion.
Debt interest rate	8.00%	12.00%			8.00%	15.00%														8.00%			8.00%		8.00%		15.00%
Convertible notes payable [Member]
Principal face amount	$ 690,193																						$ 690,193		$ 690,193
Original issue discounts																							16,250	$ 229,500	79,103	229,500
Debt discount recognized from derivative liabilities																							385,891	1,468,475	1,309,900	2,043,475
Amortization of discount on convertible note payable																							1,296,997	$ 691,607	3,649,219	$ 691,607
Penalty interest																									221,055
Convertible Note [Member]
Principal face amount	344,040																						344,040		$ 344,040
Description of debt conversion																									Convertible into common shares of the Company at a conversion price equal to 50% of the lowest bid price of the Company’s common stock for the last 40 trading days prior to conversion.
Gain on settlement of debt																									$ 268,145
8% Convertible Note Due April 17, 2019 [Member]
Principal face amount	100,000																						100,000		$ 100,000
Note maturity term																									1 year
8% Convertible Note Due April 20, 2019 [Member]
Principal face amount	144,404																						144,404		$ 144,404
Note maturity term																									1 year
Description of debt conversion																									Convertible into common shares of the Company at a conversion price equal to 60% of the lowest bid price of the Company’s common stock for the last 30 trading days prior to conversion.
10% Convertible Note Due December 14, 2018 [Member]
Principal face amount	100,000																						100,000		$ 100,000
Note maturity term																									8 months
Description of debt conversion																									Convertible into common shares of the Company at a conversion price equal to 55% of the lowest bid price of the Company’s common stock for the last 30 trading days prior to conversion.
15% Convertible Note Due on September 25, 2018 [Member]
Principal face amount	299,200																						299,200		$ 299,200
Description of debt conversion																									The replacement convertible note is convertible into units of the Company comprised of one share of common stock and one warrant to purchase a share of common stock with a three-year maturity and a conversion price equal to 50% of the lowest bid price of the Company’s common stock for the last 40 trading days prior to conversion.
Convertible Note [Member]
Principal face amount	103,984																						103,984		$ 103,984
Convertible Note Due on March 17, 2019 [Member]
Principal face amount	$ 50,000																						$ 50,000		$ 50,000
Note maturity date																									Mar. 17, 2019
Description of debt conversion																									Convertible into common shares of the Company at a conversion price equal to 50% of the lowest bid price of the Company’s common stock for the last 20 trading days prior to conversion.
Debt interest rate	10.00%																						10.00%		10.00%
Convertible Note Due on May 26, 2019 [Member]
Principal face amount	$ 53,984																						$ 53,984		$ 53,984
Note maturity term	6 months
Note maturity date	May 26, 2019
Description of debt conversion	Convertible into common shares of the Company at a conversion price equal to 50% of the lowest bid price of the Company’s common stock for the last 20 trading days prior to conversion.
Debt interest rate	10.00%																						10.00%		10.00%
Gain on settlement of debt	$ 121,305
Convertible Note Due on September 1, 2017 [Member]
Repayment of notes	125,000
Gain on settlement of debt	64,441
Convertible Note [Member]
Principal face amount	690,193																						$ 690,193		$ 690,193
Number of shares issued																									15,001,414
Number of shares repurchase (in shares)																									1,288,765
Notes fees	5,000																						5,000		$ 5,000
Accrued interest payable	$ 24,715																						$ 24,715		$ 24,715

XML

RELATED PARTY TRANSACTIONS (Details Narrative) - USD ($)	3 Months Ended	9 Months Ended
	Nov. 30, 2018	Nov. 30, 2018	Nov. 30, 2017	Feb. 28, 2018
Related Party Transactions [Abstract]
Net borrowings on loan payable - related party		$ 401,473	$ 237,948
Loan payable - related party	$ 502,106	502,106		$ 316,142
Consulting fees for research and development	288,143	484,251
research and development - related party	$ 215,509	$ 215,509		$ 0

XML

OTHER DEBT - VEHICLE LOAN (Details Narrative) - USD ($)	1 Months Ended		9 Months Ended
	Nov. 30, 2017	Dec. 31, 2016	Nov. 30, 2018	Nov. 30, 2017	Aug. 01, 2018	Jul. 02, 2018	Feb. 28, 2018
Vehicle loan secured by automobile			$ 175,000		$ 95,000	$ 95,000
Robotic Assistance Devices, LLC ("RAD") [Member] | Vehicle Loan [Member]
Vehicle loan secured by automobile	$ 47,661	$ 47,704		$ 47,661
Term of debt	5 years	5 years
Payment of debt interest and principal	$ 923	$ 1,019
Principal repayment of debt			13,657	$ 6,591
Total vehicle loan			68,505				$ 82,162
Current portion vehicle loan			17,830				17,830
Long-term vehicle loan			$ 50,675				$ 64,332

XML

LOANS PAYABLE (Details) - USD ($)	9 Months Ended
	Nov. 30, 2018	Aug. 01, 2018	Jul. 02, 2018
Principal amount	$ 175,000	$ 95,000	$ 95,000
Total	339,402
25% Promissory Note Due on June 11, 2019 [Member]
Principal amount	$ 48,000
25% Promissory Note Due on June 11, 2019 [Member]
Date of issuance	Jun. 11, 2018
20% Promissory Note Due on August 20, 2018 [Member]
Date of issuance	Jun. 20, 2018
Principal amount	$ 50,000
15% Promissory Note Due on December 1, 2018 [Member]
Date of issuance	Jul. 30, 2018
Principal amount	$ 12,000
25% Promissory Note Due on September 1, 2018 [Member]
Date of issuance	Aug. 10, 2018
Principal amount	$ 10,000
25% Promissory Note Due on August 16, 2019 [Member]
Date of issuance	Aug. 16, 2018
Principal amount	$ 25,000
25% Promissory Note Due on October 1 ,2018 [Member]
Date of issuance	Aug. 16, 2018
Principal amount	$ 10,000
20% Promissory Note Due on October 20,2018 [Member]
Date of issuance	Aug. 23, 2018
Principal amount	$ 20,000
20% Promissory Note Due on November 14, 2018 [Member]
Date of issuance	Sep. 14, 2018
Principal amount	$ 50,000
20% Promissory Note Due on October 10, 2019 [Member]
Date of issuance	Oct. 10, 2018
Principal amount	$ 7,500
20% Promissory Note Due on October 11, 2019 [Member]
Date of issuance	Oct. 11, 2018
Principal amount	$ 23,000
0% Promissory Note Due on December 1, 2018 [Member]
Date of issuance	Oct. 18, 2018
Principal amount	$ 11,000
(4) Merchant Sales Agreement on March 15, 2019 [Member]
Date of issuance	Nov. 08, 2018
Principal amount	$ 18,902
25% Demand Secured Loan on Demand [Member]
Date of issuance	Nov. 08, 2018
Principal amount	$ 54,000

XML

LOANS PAYABLE (Details Narrative) - USD ($)					9 Months Ended
	Jan. 11, 2019	Jan. 10, 2019	Sep. 16, 2018	Aug. 11, 2018	Nov. 30, 2018	Aug. 01, 2018	Jul. 02, 2018	May 31, 2017
Loans Payable [Abstract]
Repayment of debt	$ 460	$ 900	$ 2,376	$ 4,562	$ 166
Net book value	$ 186,000	$ 186,000	$ 25,000	$ 48,000	186,000
Debt discount					1,729,420	$ 10,000	$ 10,000	$ 3,418,637
Payment term	P10M	P10M	P12M	P12M
Fees and interest					$ 5,850
Demand loan					5.00%
Fee in addition interest					25.00%

XML

DERIVATIVE LIABILITES (Details)	9 Months Ended
	Nov. 30, 2018 Number $ / shares
Strike price | $ / shares	$ 0.05
Dividend Yield [Member]
Fair value measurement	0.00
Minimum [Member]
Strike price | $ / shares	$ 0.001
Minimum [Member] | Fair Value Of Company Common Stock[Member]
Fair value measurement	0.001
Minimum [Member] | Expected Volatility [Member]
Fair value measurement	424
Minimum [Member] | Risk Free Interest Rate [Member]
Fair value measurement	1.20
Minimum [Member] | Expected Term [Member]
Expected term (years)	0 years
Maximum [Member]
Strike price | $ / shares	$ 1.00
Maximum [Member] | Fair Value Of Company Common Stock[Member]
Fair value measurement	0.0110
Maximum [Member] | Expected Volatility [Member]
Fair value measurement	102
Maximum [Member] | Risk Free Interest Rate [Member]
Fair value measurement	2.59
Maximum [Member] | Expected Term [Member]
Expected term (years)	3 years 7 months 28 days

XML

DERIVATIVE LIABILITES (Details 1) - USD ($)	9 Months Ended
	Nov. 30, 2018	Nov. 30, 2017
Balance as of February 28, 2018	$ 31,113,844
Derivative liability in excess of face value of debt recorded to interest expense	751,522	$ 6,524,664
Increase in derivative liability due to debt settlement	1,309,900	$ 2,033,475
Balance as of November 30, 2018	6,152,561
Fair Value, Measurements, Recurring [Member] | Level 3 [Member]
Balance as of February 28, 2018	31,113,844
Release of derivative liability on conversion of convertible notes payable	(990,400)
Debt discount due to derivative liabilities	1,309,900
Derivative liability in excess of face value of debt recorded to interest expense	751,522
Increase in derivative liability due to debt settlement	183,766
Change in fair value of derivative liabilities	(26,216,071)
Balance as of November 30, 2018	$ 6,152,561

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DERIVATIVE LIABILITES (Details Narrative) - USD ($)	3 Months Ended	9 Months Ended
	Nov. 30, 2018	Nov. 30, 2018	Feb. 28, 2018
Derivative Liability [Abstract]
Derivative liabilities	$ 6,152,561	$ 6,152,561	$ 31,113,844
Due to equity conversions derivative liability	$ 233,178	$ 990,400

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SHAREHOLDERS' EQUITY (DEFICIT) (Details)	9 Months Ended
	Nov. 30, 2018 $ / shares
Stockholders' Equity Note [Abstract]
Strike price	$ 0.05
Fair value of Company's common stock	$ 0.06
Dividend yield	0.00%
Expected volatility	303.81%
Risk free interest rate	1.94%
Expected term (years)	4 years

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SHAREHOLDERS' EQUITY (DEFICIT) (Details 1)	9 Months Ended
	Nov. 30, 2018 $ / shares shares
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding [Roll Forward]
Outstanding at beginning	4,500
Granted
Exercised
Forfeited and cancelled
Outstanding at ending	4,500
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Weighted Average Exercise Price [Roll Forward]
Outstanding at beginning | $ / shares	$ 5.00
Outstanding at ending | $ / shares	$ 5.00
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Weighted Average Remaining Contractual Life [Roll Forward]
Outstanding at beginning	2 years 10 months 2 days
Outstanding at ending	2 years 10 months 2 days

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SHAREHOLDERS' EQUITY (DEFICIT) (Details 2)	9 Months Ended
	Nov. 30, 2018 $ / shares shares
Number of Warrants, Outstanding [Roll Forward]
Outstanding at beginning | shares
Issued | shares	1,294,598
Exercised | shares
Forfeited and cancelled | shares
Outstanding at ending | shares	1,294,598
Warrants, Outstanding, Weighted Average Exercise Price [Roll Forward]
Outstanding at beginning | $ / shares
Issued | $ / shares	0.19
Exercised | $ / shares
Forfeited and cancelled | $ / shares
Outstanding at ending | $ / shares	$ 0.19
Warrants, Options, Outstanding, Weighted Average Remaining Contractual Life [Roll Forward]
Outstanding at beginning
Issued	2 years 9 months 14 days
Forfeited and cancelled
Outstanding at ending	2 years 9 months 14 days

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SHAREHOLDERS' EQUITY (DEFICIT) (Details 3)	9 Months Ended
	Nov. 30, 2018 $ / shares
Strike price	$ 0.05
Fair value of Company's common stock	$ 0.06
Dividend yield	0.00%
Expected volatility	303.81%
Risk free interest rate	1.94%
Expected term (years)	4 years
Minimum [Member]
Strike price	$ 0.001
Maximum [Member]
Strike price	$ 1.00
Warrant [Member]
Dividend yield	0.00%
Warrant [Member] | Minimum [Member]
Strike price	$ 0.02
Fair value of Company's common stock	$ 0.05
Expected volatility	305.71%
Risk free interest rate	2.52%
Expected term (years)	3 years
Warrant [Member] | Maximum [Member]
Strike price	$ 3.00
Fair value of Company's common stock	$ 7.00
Expected volatility	341.50%
Risk free interest rate	2.94%
Expected term (years)	5 years

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SHAREHOLDERS' EQUITY (DEFICIT) (Details Narrative) - USD ($)									3 Months Ended	9 Months Ended
	Oct. 31, 2018	Sep. 30, 2018	Aug. 24, 2018	Jun. 11, 2018	Jun. 06, 2018	Apr. 16, 2018	Mar. 14, 2018	Oct. 02, 2017	Nov. 30, 2018	Nov. 30, 2018	Nov. 30, 2017	Aug. 01, 2018	Jul. 02, 2018	Feb. 28, 2018
Number of common stock shares issued (in shares)										6,640
Debt conversion amount converted										$ 719,908
Interest paid										$ 4,687	$ 22,320
Warrants exercise price (in dollars per share)									$ 0.19	$ 0.19
Stock-based compensation adjustment to additional paid in capital									$ 1,741	$ 5,221
Principal face amount									175,000	$ 175,000		$ 95,000	$ 95,000
Number of options issued
Intrinsic value									0	$ 0
Fair value of stock options										27,843
Unamortized expense										19,782
Amortized expense										$ 27,843
Amortized period										4 years
Reverse stock split ratio			100:1
Convertible notes payable [Member]
Number of common stock shares issued (in shares)										15,001,414
Debt conversion amount converted										$ 5,000
Fees converted									719,908	719,908
Interest paid										24,715
Principal face amount									$ 690,193	690,193
Series F Convertible Preferred Stock [Member]
Value of shares issued										174,070
WeSecure Robotics, Inc [Member] | Director & Consultant [Member]
Number of options issued								4,500
Options exericse price (in dollars per share)								$ 5.00
Vesting date								Oct. 02, 2021
Warrant [Member]
Number of common stock shares issued (in shares)	1,116,125	1,116,125	102,000	2,500	6,640	64,000	3,333
Warrants exercise price (in dollars per share)			$ 0.15	$ 3.00	$ 0.44	$ 0.02	$ 15.00
Warrants Term	3 years	3 years	3 years	3 years	3 years	3 years	3 years
Stock-based compensation adjustment to additional paid in capital						$ 627,751				$ 632,972
Warrant [Member] | Minimum [Member]
Warrants exercise price (in dollars per share)		$ 0.015
Warrant [Member] | Maximum [Member]
Warrants exercise price (in dollars per share)		$ 0.035

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COMMITMENTS AND CONTINGENCIES (Details)	Nov. 30, 2018 USD ($)
Commitments and Contingencies Disclosure [Abstract]
November 30, 2019	$ 105,792
November 30, 2020	96,922
November 30, 2021	58,495
November 30, 2022	19,314
Total	$ 280,523

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COMMITMENTS AND CONTINGENCIES (Details Narrative) - USD ($)		3 Months Ended		9 Months Ended
	Feb. 01, 2018	Nov. 30, 2018	Nov. 30, 2017	Nov. 30, 2018	Nov. 30, 2017	Feb. 28, 2018
Security deposit		$ 30,216		$ 30,216		$ 30,141
Rent expense		30,155	$ 31,834	89,917	$ 58,056
Robotic Control Center [Member]
Rent lease	$ 550
Rent lease terms	Jan. 31, 2021
Orange County, CALIFORNIA [Member]
Security deposit		25,747		$ 25,747
Rent lease expire				2022-03
Northern CALIFORNIA [Member]
Security deposit		$ 5,126		$ 5,126
Rent lease expire				2020-08
Percentager of lease cost paid by company				75.00%
Percentager of lease cost paid by supplier				25.00%

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EARNINGS (LOSS) PER SHARE (Details) - USD ($)	3 Months Ended		9 Months Ended
	Nov. 30, 2018	Nov. 30, 2017	Nov. 30, 2018	Nov. 30, 2017
Numerator:
Net income (loss) available to common shareholders	$ 7,711,118	$ (8,796,921)	$ 17,384,222	$ (11,805,734)
Effect of common stock equivalents
Add: interest expense on convertible debt	316,411		726,595
Less: gain on change of derivative liabilities	(10,223,431)		(26,216,071)
Net income (loss) adjusted for common stock equivalents	$ (2,195,902)	$ (8,796,921)	$ (8,105,254)	$ (11,805,734)
Denominator:
Weighted average shares - basic (in shares)	8,949,875	1,186,924	4,028,324	408,206
Dilutive effect of common stock equivalents:
Stock options and warrants (in shares)	432,324		299,404
Convertible debt (in shares)	1,214,611,324		1,186,653,028
Preferred shares (in shares)	56,069,447		56,069,447
Denominator:
Weighted average shares - diluted (in shares)	1,280,062,970	1,186,924	1,247,050,203	408,206
Net income (loss) per share - basic (in dollars per share)	$ 0.86	$ (7.41)	$ 4.32	$ (28.92)
Net income per share - diluted (in dollars per share)	$ 0.00	$ (7.41)	$ (0.01)	$ (28.92)

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EARNINGS (LOSS) PER SHARE (Details 1) - shares	3 Months Ended		9 Months Ended
	Nov. 30, 2018	Nov. 30, 2017	Nov. 30, 2018	Nov. 30, 2017
Total	71,833	4,542,817	71,833	4,542,817
Stock Options And Warrants [Member]
Total	71,833		71,833
Convertible Debt [Member]
Total		230,167		230,167
Preferred stock [Member]
Total		4,312,650		4,312,650

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SUBSEQUENT EVENTS (Details) - $ / shares		9 Months Ended
	Dec. 02, 2018	Nov. 30, 2018
Strike price		$ 0.05
Fair value of Company's common stock		$ 0.06
Dividend yield		0.00%
Expected volatility		303.81%
Risk free interest rate		1.94%
Expected term (years)		4 years
Warrant [Member]
Dividend yield		0.00%
Minimum [Member]
Strike price		$ 0.001
Minimum [Member] | Warrant [Member]
Strike price		0.02
Fair value of Company's common stock		$ 0.05
Expected volatility		305.71%
Risk free interest rate		2.52%
Expected term (years)		3 years
Maximum [Member]
Strike price		$ 1.00
Maximum [Member] | Warrant [Member]
Strike price		3.00
Fair value of Company's common stock		$ 7.00
Expected volatility		341.50%
Risk free interest rate		2.94%
Expected term (years)		5 years
Subsequent Event [Member] | Warrant [Member]
Dividend yield	0.00%
Expected term (years)	3 years
Subsequent Event [Member] | Minimum [Member] | Warrant [Member]
Strike price	$ 0.001
Fair value of Company's common stock	$ 0.004
Expected volatility	334.00%
Risk free interest rate	2.46%
Subsequent Event [Member] | Maximum [Member] | Warrant [Member]
Strike price	$ 0.0031
Fair value of Company's common stock	$ 0.01
Expected volatility	335.50%
Risk free interest rate	2.78%

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SUBSEQUENT EVENTS (Details Narrative) - USD ($)											9 Months Ended
	Feb. 01, 2019	Dec. 02, 2018	Oct. 31, 2018	Sep. 30, 2018	Aug. 24, 2018	Jul. 02, 2018	Jun. 11, 2018	Jun. 06, 2018	Apr. 16, 2018	Mar. 14, 2018	Nov. 30, 2018	Jan. 31, 2019	Aug. 01, 2018	Feb. 28, 2018	May 31, 2017
Principal amount						$ 95,000					$ 175,000		$ 95,000
Shares converted											6,640
Warrant exercise price (in dollars per share)											$ 0.19
Debt discount						$ 10,000					$ 1,729,420		$ 10,000		$ 3,418,637
Description of debt conversion						The back-end note is convertible into common shares of the Company at a conversion price equal to 60% of the lowest trading price of the Company’s common stock for the last 20 trading days prior to conversion
Interest rate						8.00%
Warrant [Member]
Shares converted			1,116,125	1,116,125	102,000		2,500	6,640	64,000	3,333
Warrant exercise price (in dollars per share)					$ 0.15		$ 3.00	$ 0.44	$ 0.02	$ 15.00
Convertible Note [Member]
Principal amount											$ 344,040
Description of debt conversion											Convertible into common shares of the Company at a conversion price equal to 50% of the lowest bid price of the Company’s common stock for the last 40 trading days prior to conversion.
Subsequent Event [Member] | Convertible Note [Member]
Principal amount		$ 202,621
Fees converted		$ 3,500
Shares converted		184,181,276
Number of shares cancelled		171,500
Debt instrument interest		$ 11,122
Subsequent Event [Member] | 25% Promissory Note [Member] | Warrant [Member]
Shares converted		19,141,711
Fair value of warrants		$ 111,678
Subsequent Event [Member] | Investor [Member]
Principal amount		105,000										$ 92,000
Proceeds from note		$ 95,000
Debt issuance date		Jul. 06, 2017
Debt maturity terms		Jun. 09, 2019
Debt discount		$ 10,000
Debt amount		200,000
Maximum amount of debt	$ 900,000
Percentage of royalty	9.00%
Description of royalty payment terms	These royalty payments are to be made 90 days after the fiscal quarter. If the royalty payments would deplete RAD’s available cash by more than 20%, the payment may be deferred. The investor has agreed to pay the remaining $808,000 over an eleven-month period in minimum $60,000 monthly installments, commencing February 1, 2019. If the total investment turns out to be less than $900,000, this would not constitute a breach of the agreement, rather the royalty rate would be adjusted on a pro-rata basis.
Subsequent Event [Member] | Investor [Member] | Convertible Note [Member]
Principal amount		$ 2,658