Artificial Intelligence Technology Solutions Inc. (AITX) filed a Form 8-K on October 26, 2026, detailing four internal operating milestones intended to measure the company's progress toward financial breakeven. The company, led by CEO/CTO Steve Reinharz, emphasized that these are internal management measures and not projections or guarantees under generally accepted accounting principles (GAAP).
The four milestones are tiered, with each subsequent test being stricter than the last. The first milestone, Monthly Operating Cash Breakeven, is targeted for January 2027. This measure requires that monthly revenue, as recognized, exceeds operating cash paid to operate the company, excluding debt service and inventory purchases. The second milestone, Monthly Accrual Operating Breakeven, is targeted for March or April 2027. This requires monthly revenue to exceed operating expenses as incurred, excluding depreciation, deferrals, debt service, and inventory purchases.
The third milestone, Operating Breakeven After Cash Debt Service, is not yet set. It requires achieving Milestone 2 while also paying debt service in cash. The fourth and most stringent measure, Full Accrual-Basis Breakeven, is also not yet set. This requires monthly revenue to exceed all expenses as incurred, including debt service and inventory purchases.
Management stated that reaching the first milestone would represent a significant step toward self-sustainability. The company’s projection for Milestone 1 assumes revenue growth of approximately 2.7% per month, consistent with its fiscal second quarter ended August 31, 2026. During that quarter, the company reported revenue of $1,985,604, an 8% sequential increase. The company also expanded its cost-reduction program, aiming for more than $350,000 in monthly cash spend reductions from February 2027, measured against its August 2026 run-rate. This program includes a reduction in force of approximately 24 positions and reductions in marketing, promotion, cloud, and other operating costs.
Regarding gross margin, the company reported a second-quarter margin of 67% excluding a one-time non-cash inventory write-down of $270,987. Management aims to return gross margin to the 75% to 85% range, a level achieved in the fiscal fourth quarter of 2026. The company also noted that certain monthly-repayment loans, including merchant cash advances, are scheduled to be fully repaid beginning in April 2027, which would reduce monthly cash debt service.
