Defense Technologies Narrows Loss 52% Amidst Zero Revenue, Mounting Debt

TL;DR

**DTII is a cash-burning shell with no revenue, avoid at all costs; the 'reduced loss' is lipstick on a pig.**

AI Summary

DEFENSE TECHNOLOGIES INTERNATIONAL CORP. (DTII) reported a net loss of $222,164 for the three months ended July 31, 2025, a significant improvement from the $461,239 net loss in the same period last year, representing a 51.8% reduction. Despite this, the company generated no revenue and continues to operate with an accumulated deficit of $18,271,717 and a working capital deficit of $2,229,558 as of July 31, 2025. Total liabilities increased to $2,309,579 from $2,084,218 at April 30, 2025, driven by increases in accounts payable, accrued interest, and related party payables. Cash on hand slightly increased to $2,422 from $1,493, primarily due to financing activities, including proceeds from notes payable. The company's expenses totaled $187,230, up from $163,517 year-over-year, with consulting expenses decreasing to $100,250 from $117,500, but general and administrative expenses rising to $86,980 from $46,017. DTII continues to rely on debt and equity issuances, along with related party support, to fund its operations, raising substantial doubt about its ability to continue as a going concern.

Why It Matters

This filing reveals a company struggling with fundamental business viability, posing significant risks for investors. Despite a reduced net loss, the complete absence of revenue and a growing working capital deficit of $2,229,558 indicate a critical lack of sustainable operations. The reliance on related party funding and debt issuances, rather than product sales, suggests a precarious financial position that could lead to further dilution for existing shareholders or even bankruptcy. Competitors in the defense and security technology sector, particularly those with established revenue streams, face little threat from DTII's current market presence.

Risk Assessment

Risk Level: high — The company has no revenues and an accumulated deficit of $18,271,717 as of July 31, 2025, indicating a severe lack of sustainable operations. Furthermore, its working capital deficit increased to $2,229,558, and total liabilities grew to $2,309,579, demonstrating a deteriorating financial position and significant going concern risk.

Analyst Insight

Investors should avoid DTII stock due to its lack of revenue, substantial accumulated deficit, and reliance on debt and related party funding. The company's 'going concern' warning signals extreme financial instability, making it a highly speculative and risky investment.

Financial Highlights

debt To Equity

N/A

revenue

$0

operating Margin

N/A

total Assets

$10,021

total Debt

$2,309,579

net Income

$-222,164

eps

$0.00

gross Margin

N/A

cash Position

$2,422

revenue Growth

0.0%

Revenue Breakdown

Key Numbers

• $222,164 — Net Loss (For the three months ended July 31, 2025, a 51.8% improvement from $461,239 in 2024)
• $0 — Revenue (No revenue generated for the three months ended July 31, 2025 or 2024)
• $18,271,717 — Accumulated Deficit (As of July 31, 2025, indicating significant historical losses)
• $2,229,558 — Working Capital Deficit (As of July 31, 2025, worsened from $2,075,126 at April 30, 2025)
• $2,309,579 — Total Liabilities (As of July 31, 2025, an increase from $2,084,218 at April 30, 2025)
• $2,422 — Cash (As of July 31, 2025, a slight increase from $1,493 at April 30, 2025)
• $838,708 — Payables – related parties (As of July 31, 2025, increased from $747,208 at April 30, 2025)
• 37,531,767 — Common Stock Shares Outstanding (As of December 5, 2025)
• $0.00 — Net Loss Per Common Share (For the three months ended July 31, 2025, compared to $0.10 in 2024)
• 51.8% — Reduction in Net Loss (From $461,239 in 2024 to $222,164 in 2025)

Key Players & Entities

• DEFENSE TECHNOLOGIES INTERNATIONAL CORP. (company) — Registrant and parent company
• Passive Security Scan, Inc. (company) — Majority-owned subsidiary (76.28%) responsible for sales and marketing
• Controlled Capture Systems, LLC (company) — Licensor of exclusive security technology patents
• EMAC Handels AG (company) — Related party lender providing short-term loans
• Haynie & Company (company) — Former auditors and promissory note holder
• Chief Executive Officer (person) — Identified as the Chief Operating Decision Maker (CODM)
• Delaware (regulator) — State of incorporation
• Securities and Exchange Commission (regulator) — Regulatory body for filing
• Premium Marketing Associates, LLC (company) — Note agreement counterparty for marketing funds
• Edward Fitzgerald Group (company) — Marketing agreement partner for raising funds for PSSI

FAQ

Risk Factors

• Going Concern Uncertainty [high — financial]: The company has an accumulated deficit of $18,271,717 and a working capital deficit of $2,229,558 as of July 31, 2025. Operations are funded through debt and equity issuances, and related party support, raising substantial doubt about its ability to continue as a going concern.
• Increasing Liabilities [medium — financial]: Total liabilities increased to $2,309,579 as of July 31, 2025, from $2,084,218 at April 30, 2025. This increase is driven by higher accounts payable, accrued interest, and related party payables.
• Lack of Revenue Generation [high — operational]: The company reported zero revenue for the three months ended July 31, 2025, and the same period in the prior year. This persistent lack of revenue generation poses a significant operational risk.
• Dependence on Financing [high — financial]: The company relies heavily on debt and equity issuances, as well as related party financing, to fund its operations. This dependence creates vulnerability to market conditions and lender/investor sentiment.
• Rising General and Administrative Expenses [medium — operational]: General and administrative expenses increased to $86,980 for the three months ended July 31, 2025, from $46,017 in the prior year, despite no revenue. This rise in overhead without corresponding revenue growth is a concern.

Industry Context

The defense technology sector is characterized by long development cycles, significant R&D investment, and reliance on government contracts. Companies often face intense competition and stringent regulatory oversight. Recent trends include increased demand for advanced cybersecurity, AI integration, and drone technology, but also budget constraints and geopolitical uncertainties impacting procurement.

Regulatory Implications

Defense contractors are subject to extensive regulations, including export controls (ITAR), cybersecurity standards, and procurement integrity rules. Non-compliance can lead to severe penalties, contract cancellations, and reputational damage. DTII's lack of revenue and financial distress could also attract scrutiny regarding its operational viability and compliance.

What Investors Should Do

1. Monitor future filings for any signs of revenue generation or a clear path to profitability.
2. Assess the terms and sustainability of related party financing and debt issuances.
3. Evaluate the company's strategy for overcoming its significant accumulated deficit and working capital shortfall.
4. Consider the high risk associated with the company's going concern status and dependence on external funding.

Key Dates

• 2025-07-31: End of Q2 Fiscal Year 2025 — Reported a net loss of $222,164 on zero revenue, with a working capital deficit of $2,229,558 and total liabilities of $2,309,579.
• 2025-04-30: End of Q1 Fiscal Year 2025 — Total liabilities were $2,084,218 and working capital deficit was $2,075,126.

Glossary

Accumulated Deficit

The total net losses of a company over its lifetime that have not been offset by net income. (DTII has a significant accumulated deficit of $18,271,717, indicating substantial historical unprofitability.)

Working Capital Deficit

Occurs when a company's current liabilities exceed its current assets, indicating a potential short-term liquidity problem. (DTII has a working capital deficit of $2,229,558, highlighting its immediate liquidity challenges.)

Going Concern

An assumption that a company will continue to operate for the foreseeable future, typically at least 12 months. (The company's financial condition raises substantial doubt about its ability to continue as a going concern.)

Related Party Payables

Amounts owed to individuals or entities that have a close relationship with the company, such as officers, directors, or major shareholders. (An increase in related party payables to $838,708 suggests continued financial support or transactions with insiders.)

Year-Over-Year Comparison

Compared to the prior year's three-month period, DTII has significantly reduced its net loss by 51.8%, from $461,239 to $222,164. However, this improvement occurred despite a substantial increase in general and administrative expenses to $86,980 from $46,017, while revenue remained at zero. Total liabilities have also grown from $2,084,218 to $2,309,579, and the working capital deficit has widened, indicating persistent financial challenges.

Key Financial Figures

• $0.0001 — B preferred and 531 Series D preferred: $0.0001 par value, outstanding. DEFENSE TECHNO
• $12,500 — ed and paid quarterly with a minimum of $12,500 paid each quarter (2) All payment will
• $378,600 — any for 17,500 shares of PSSI valued at $378,600 for 76.28% of PSSI . The balance of PSS

Filing Documents

• dtii_10q.htm (10-Q) — 441KB
• dtii_ex311.htm (EX-31.1) — 10KB
• dtii_ex321.htm (EX-32.1) — 6KB
• 0001477932-25-008822.txt ( ) — 2673KB
• dtii-20250731.xsd (EX-101.SCH) — 32KB
• dtii-20250731_lab.xml (EX-101.LAB) — 197KB
• dtii-20250731_cal.xml (EX-101.CAL) — 32KB
• dtii-20250731_pre.xml (EX-101.PRE) — 164KB
• dtii-20250731_def.xml (EX-101.DEF) — 109KB
• dtii_10q_htm.xml (XML) — 229KB

— FINANCIAL INFORMATION

PART I — FINANCIAL INFORMATION Page Item 1.

Financial Statements

Financial Statements: Condensed Consolidated Balance Sheets as of July 31, 2025 (Unaudited) and April 30, 2025 (Audited) 3 Condensed Consolidated Statements of Operations for the Three-Month Periods Ended July 31, 2025 and 2024 (Unaudited) 4 Condensed Consolidated Statements of Shareholders' Deficit for the Three Months Ended July 31, 2025 and 2024 (Unaudited) 5 Condensed Consolidated Statements of Cash Flows for the Three-Month Periods Ended July 31, 2025 and 2024 (Unaudited) 6 Notes to Condensed Consolidated Financial Statements 7 Item 2.

Management's Discussion and Analysis of Financial Condition and Results of Operations

Management's Discussion and Analysis of Financial Condition and Results of Operations 15 Item 3.

Quantitative and Qualitative Disclosures about Market Risk

Quantitative and Qualitative Disclosures about Market Risk 18 Item 4.

Controls and Procedures

Controls and Procedures 18

— OTHER INFORMATION

PART II — OTHER INFORMATION Item 1.

Legal Proceedings

Legal Proceedings 19 Item 1A.

Risk Factors

Risk Factors 19 Item 2 Unregistered Sales of Equity Securities and Use of Proceeds. 19 Item 3. Defaults upon Senior Securities 19 Item 4. Mine Safety Disclosure 19 Item 5. Other Information 19 Item 6. Exhibits 20

Signatures

Signatures 21 2 Table of Contents

— FINANCIAL INFORMATION

PART I — FINANCIAL INFORMATION

Financial Statements

Item 1. Financial Statements Defense Technologies International Corp. and Subsidiary Condensed Consolidated Balance Sheets July 31, 2025 April 30, 2025 (Unaudited) (Audited) ASSETS Current assets: Cash $ 2,422 $ 1,493 Inventory 7,599 7,599 Total current assets 9,092 Total assets $ 10,021 $ 9,092 Current liabilities: Accounts payable and accrued expense $ 206,213 $ 172,082 Accrued licenses agreement payable 37,500 25,000 Accrued interest and fees payable 227,238 220,521 Convertible notes payable, net of discount 215,391 185,762 Derivative liability 36,974 31,866 Payables – related parties 838,708 747,208 Customer deposits 40,375 40,375 Stock payable 24,000 24,000 Notes payable 511,288 476,312 Note payable- related party 171,892 161,092 Total current liabilities 2,309,579 2,084,218 Total liabilities $ 2,309,579 $ 2,084,218 Commitments and Contingencies - - Stockholders' deficit: Preferred stock, $ 0.0001 par value; 20,000,000 shares authorized, Series A – 2,535,135 and 2,535,135 shares issued and outstanding, respectively 253 253 Series B – 1,200,254 and 1,100,254 shares issued and outstanding, respectively 120 110 Series D – 579 and 600 shares issued and outstanding, respectively - - Common stock, $ 0.0001 par value; 600,000,000 shares authorized, 35,776,558 and 34,147,881 shares issued and outstanding, respectively 3,579 3,416 Additional paid-in capital 16,343,852 16,324,169 Accumulated deficit ( 18,271,717 ) ( 18,042,197 ) Total ( 1,923,913 ) ( 1,714,249 ) Non-controlling interest ( 375,645 ) ( 360,877 ) Total stockholders' deficit ( 2,299,558 ) ( 2,075,126 ) Total liabilities and stockholders' deficit $ 10,021 $ 9,092 See notes to condensed consolidated financial statements 3 Table of Contents Defense Technologies International Corp. and Subsidiary Condensed Consolidated Statements of Operations As of July

View Full Filing

View this 10-Q filing on SEC EDGAR