DEFENSE TECHNOLOGIES INTERNATIONAL CORP.

DEFENSE TECHNOLOGIES INTERNATIONAL CORP. Annual Investor Review - 2025

Let’s break down how Defense Tech performed this year – the good, the bad, and the risky.

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1. What They Do

They make passive security scanners (using Earth’s magnetic field) to detect weapons in schools, airports, and public buildings. No radiation – a key selling point vs competitors. Pivoted from gold mining in 2017; now operate through subsidiary PSSI (76% owned).

New in 2024: Signed a testing deal with Homeland Security (May 2024) and passed 500+ lab/field tests. Received a positive 36-page federal report.

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2. Financial Performance: Troubling Trends

Revenue:

• $0 this year (down from $49k last year).
• Sold only 10 scanners total since 2016.

Losses:

• $942k net loss (up 64% from last year’s $575k loss).
• Cumulative losses: $18 million over time.

Why the Losses?

• Operating costs doubled to $1.38M (legal fees, admin bloat).
• Wrote off $378,600 for a failed tech license.
• Total debt exceeds assets by $9.1 million (up 17% YoY).

Inventory Quirk:

• Only $7,599 in parts left (down from supplies for 25 scanners last year).
• Values old parts at current prices – may hide outdated inventory.

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3. Cash & Debt: Red Flags

Cash Crisis:

• Out of money as of April 2025 – can’t fund operations without new cash.

Debt Problems:

• Owe $380,770 to suppliers + $11,072 to insiders.
• Took $387k in emergency loans (July 2024-Feb 2025) with 15-20% upfront fees.
• $12,500 loan already in default (missed Feb 2025 payment).

Stock Collapse Risk:

• Issued 10.6 MILLION new shares this year to pay debt/consultants:
  • 850,000 shares given away for $85 total ($0.0001/share).
  • 685,825 shares (worth $34k) used to settle debt.
• Share price dropped 14% ($0.07 → $0.06) in late 2024.

Auditor Warning: “Serious doubt they can stay in business.”

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4. Bright Spots (Few But Notable)

• Tech Validation: Homeland Security testing adds credibility.
• Debt Relief: Converted $773k debt to stock (but diluted shareholders).

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5. Major Risks

• No Sales Pipeline: Two straight years of near-zero revenue.
• Cash Burn: Needs funding immediately to avoid shutdown.
• Beta Test Risk: Texas high school trial ongoing – failure could kill reputation.
• IRS Audit Exposure: Tax filings back to 2016 could be reviewed.
• License Dependency: Tech relies on a 2016 agreement – if lost, business ends.

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6. Future Outlook

Plan: Secure investor cash, mass-produce scanners, and hope for government contracts.
Reality Check:

• No visible sales momentum.
• Surviving on high-fee loans and stock dilution.
• Assets depreciating quickly (scanners lose value in 3 years).

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Key Takeaways for Investors

🚩 Avoid Unless High-Risk Tolerance 🚩

• Strengths: Innovative tech, federal testing approval.
• Weaknesses: No revenue, rising debt, cash crisis, shareholder dilution.
• Critical Risks: Defaulted loans, IRS audits, stock price collapse.

Bottom Line: Defense Tech is a speculative bet. Success hinges on landing a major contract soon. Without it, this stock resembles a sinking ship. Existing investors should watch for dilution; new investors should wait for proof of sales.

Note: The company provided limited details about their sales strategy, which reduces transparency for investors.