Significant Number of Warrants Are Off the Books Among Other Improvements
Detroit, Michigan, Oct. 24, 2022 (GLOBE NEWSWIRE) -- Artificial Intelligence Technology Solutions, Inc., (OTCPK:AITX) (the "Company", a global leader in AI-driven security and productivity solutions for enterprise clients, filed its quarterly report on Form 10-Q for the 3 and 6 months ended August 31, 2022 with the Securities and Exchange Commission for its Q2 of fiscal year 2023. AITX is a fully reporting company with the SEC, filing annual and quarterly reports with audited and unaudited financial statements, respectively.
"The second quarter was an important quarter, delivering continued revenue growth, stability, and maturity," said Steve Reinharz, CEO of AITX. "Not only did subscription revenue increase year over year, but the Company solidified across all platforms and departments."
Key Takeaways from the Q2 FY 202310-QFiling
Subscription Revenue Increases 85% Over Prior Year
Total subscription revenue of $228,145 for the three months year ended August 31, 2022 increased over the prior year's quarter ended August 31, 2022 by $123,375 or 85%. The majority of the Company's revenue is derived from subscription-based contracts.
Increase in Gross Profit Percentage
Gross profit percentage stabilized at 87% margin in Q2 after stabilizing from the inventory adjustments in Q1 and resulted in an unusually low 23% gross profit percentage.
Proceeds on Common Share Issuances
The Company through October 21, 2022, received approximated $4M in share proceeds net of issuance costs. The Company expects to raise an additional $4M to $6M through the issuance of additional shares over the fiscal year, which it plans to use for its growth and debt reduction.
Reduction in Warrants
The Company eliminated 955 million warrants to purchase common stock at an average price of $0.008, in exchange for $3M in debt maturing in 2 years at an interest rate of 15%. The execution of such warrants would have diluted the value of the Company's stock, so reducing the number of outstanding warrants and thereby increasing the value of the common stock to both current and future shareholders.
Solutions Development
AITX and its subsidiaries announced and/or launched several new solutions during the second quarter of the fiscal year. These solutions leverage the RAD platform to provide unique 'security-in-a-box' solutions that can be deployed in minutes and provide innovative solutions such as firearm detection and much more. Added to RAD's award-winning line up during the quarter were RIO, ROSA-P, TOM, ROSS, plus enhancements to RAD's software suite.
Continued Expansion of Sales Funnel and Opportunities
RAD's sales funnel continued to substantially grow through its established dealer channel and direct end-users opportunities. The RAD dealer network expanded to 46, adding six new dealers in the fiscal quarter. Sales opportunities were added through RAD's participation at several nationwide and regional industry conferences, multiple dealer meetings, end-user meetings and demonstrations at the REX facility. On July 18, 2022, RAD hosted a livestreamed demonstration and press event showcasing RAD's firearm detection technology.
"One of the breakthrough moments of the quarter was the announcement of our AI-based firearm detection," Reinharz added. "We have received tremendous response and media attention to this innovative technology and its related 'Bailey's Gift' campaign. It's apparent that the marketplace is eager for an affordable and easy to deploy tech solution that can help save lives. We are very proud of this development and expect great results as it rolls out."
AITX through its subsidiary, Robotic Assistance Devices, Inc. (RAD), is redefining the $25 billion (US) security and guarding services industry through its broad lineup of innovative, AI-driven Solutions-as-a-Service business model. RAD solutions are specifically designed to provide a cost savings to businesses of between 35%-80% when compared to the industry's existing and costly manned security guarding and monitoring model. RAD delivers this tremendous costs savings via a suite of stationary and mobile robotic solutions that complement, and at times, directly replace the need for human personnel in environments better suited for machines. All RAD technologies, AI-based analytics and software platforms are developed in-house.
RAD has a sales pipeline of over 35 Fortune 500 companies and numerous other client opportunities. RAD expects to continue to attract new business as it converts its existing sales opportunities into deployed clients generating a recurring revenue stream. Each Fortune 500 client has the potential of making numerous reorders over time.
RAD's parent company AITX has filed for up listing to the OTCQB. Future announcements will be made regarding the status of the OTCQB application.
