Forward Looking Statements
Some of the information in this section contains forward-looking statements that
involve substantial risks and uncertainties. You can identify these statements
by forward-looking words such as "may," "will," "expect," "anticipate,"
"believe," "estimate" and "continue," or similar words.
We believe it is important to communicate our expectations. However, there may
be events in the future that we are not able to accurately predict or over which
we have no control. Our actual results and the timing of certain events could
differ materially from those anticipated in these forward-looking statements as
a result of certain factors, including those set forth elsewhere in this
Quarterly Report on Form 10-Q.
Unless stated otherwise, the words "we," "us," "our," "the Company" or
"Innovative MedTech" in this Quarterly Report on Form 10-Q collectively refers
to Innovative MedTech, Inc., a Delaware corporation (the "Parent Company"), and
subsidiaries.
Overview
Innovative MedTech, Inc. (the "Company"), a Delaware corporation, is a provider
of health and wellness services. On March 25, 2021, the Company acquired
SarahCare for a total of $3,718,833; $2,000,110 was paid in cash and the Company
assumed approximately $393,885 in debt due to sellers, and the remaining is
payable through a royalty fee liability due in the amount of $1,500,000. With 26
centers (2 corporate and 24 franchise locations) located in 13 states, SarahCare
offers seniors daytime care and activities focusing on meeting their physical
and medical needs on a daily basis, and ranging from nursing care to salon
services and providing meals, to offering engaging and enriching activities to
allow them to continue to lead active and engaged lives. We are now focusing all
of our efforts on our senior care operations.
As of December 31, 2021, the Company had current assets of $329,933. The Company
has a limited amount of liquid cash and no other liquid assets on hand as of
December 31, 2021, and this is not sufficient to fund operations for the next 12
months. Accordingly, we will be required to raise additional funds to meet our
short and long-term planned goals. There can be no assurance that such funds, if
available at all, can be obtained on terms reasonable to us. In this regard, we
have obtained and will continue to attempt to obtain (short and long term) loans
for inventory purchases, new product development, expansion, advertising and
marketing. We cannot assure you that we will be successful in obtaining the
aforementioned financings (either debt or equity) on terms acceptable to us, or
otherwise.
Our unaudited consolidated financial statements contained in this Quarterly
Report on Form 10-Q have been prepared on a going concern basis, which assumes
that we will be able to realize our assets and discharge our obligations in the
normal course of business.
Results of Operations for the Three Months Ended December 31, 2021, and December
31, 2020
For the quarter ended December 31, 2021, we recorded gross revenues of $330,708,
versus $0 for the quarter ended December 31, 2020, as a result of the Company's
acquisition of SarahCare in 2021.
For the quarter ended December 31, 2021, operating expenses increased to
$476,579 from $76,654, a $399,925 increase, or 521.73%, over the quarter ended
December 31, 2020. The increase is due to an increase in operating expenses for
SarahCare's operational expenses in 2021.
For the quarter ended December 31, 2021, interest expense on our convertible
notes payable decreased to $32,534 from $89,428, a decrease of 63.62% over the
quarter ended December 31, 2020. This decrease is primarily due to a decrease in
interest expense, because of the conversions of a majority of the outstanding
convertible notes to common stock, an increase in the fair value of derivatives
and an increase in other income.
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For the quarter ended December 31, 2021, we realized a net loss of $198,856 as
compared to a net loss of $159,940 for the quarter ended December 31, 2020. The
increase in our net loss of $38,916 was primarily due to the increase in general
and administrative, salary and wages, and consulting expenses.
Results of Operations for the Six Months Ended December 31, 2021, and December
31, 2020
For the six months ended December 31, 2021, we recorded gross revenues of
$647,274, versus $0 for the six months ended December 31, 2020, as a result of
the Company's acquisition of SarahCare in 2021.
For the six months ended December 31, 2021, operating expenses increased to
$1,091,302 from $109,924, a $981,378 increase, or 892.78%, over the six months
ended December 31, 2020. The increase is due to an increase in expenses due to
the Company's acquisition of SarahCare and SarahCare's operational expenses in
2021 as compared to 2020.
For the six months ended December 31, 2021, interest expense on our convertible
notes payable decreased to $49,875 from $147,933, a decrease of 66.29% over the
six months ended December 31, 2020. This decrease is primarily due to a decrease
in interest expense and fair value of derivatives, because of the conversions of
a majority of the outstanding convertible notes to common stock, and due to an
increase in other income.
For the six months ended December 31, 2021, we realized a net loss of $458,174
as compared to a net loss of $390,402 for the six months ended December 31,
2020. The increase in our net loss of $67,772 was primarily due to the increase
in general and administrative expenses associated with our acquisition and the
operations of SarahCare in 2021 partially offset by decreases in interest
expenses and derivative liability.
Liquidity and Capital Resources
Based upon our current financial condition, we do not have sufficient cash to
operate our business at the current level for the next twelve months. We intend
to fund operations through debt and/or equity financing arrangements, which may
be insufficient to fund expenditures or other cash requirements. We plan to seek
additional financing in a private equity offering to secure funding for
operations. There can be no assurance that we will be successful in raising
additional funding. If we are not able to secure additional funding, the
implementation of our business plan will be impaired. There can be no assurance
that such additional financing will be available to us on acceptable terms or at
all.
Off Balance Sheet Arrangements
We currently have no off-balance sheet arrangements that have or are reasonably
likely to have a current or future material effect on our financial condition,
changes in financial condition, revenues or expenses, results of operations,
liquidity, capital expenditures or capital resources.
Critical Accounting Policies
The preparation of financial statements in conformity with accounting principles
generally accepted in the United States of America requires us to make a number
of estimates and assumptions that affect the reported amounts of assets and
liabilities and disclosure of contingent assets and liabilities at the date of
the financial statements. Such estimates and assumptions affect the reported
amounts of revenues and expenses during the reporting period. We base our
estimates on historical experiences and on various other assumptions that we
believe to be reasonable under the circumstances. Actual results may differ
materially from these estimates under different assumptions and conditions. We
continue to monitor significant estimates made during the preparation of our
financial statements. On an ongoing basis, we evaluate estimates and assumptions
based upon historical experience and various other factors and circumstances. We
believe our estimates and assumptions are reasonable in the circumstances;
however, actual results may differ from these estimates under different future
conditions.
Inflation
We do not believe that inflation had a significant impact on our results of
operations for the periods presented.
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