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, less legal fees of approximately $175,000. 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 and development of a digital healthcare debit card and wallet, which will have a loyalty program and offer discounts and savings.

As of March 31, 2022, the Company had current assets of $507,825. The Company has a limited amount of liquid cash and no other liquid assets on hand as of March 31, 2022, 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 March 31, 2022 and 2021

For the quarter ended March 31, 2022, we recorded gross revenues of $291,787, versus $71,201 for the quarter ended March 31, 2021. This increase is due to an increase in participants returning to our centers.

For the quarter ended March 31, 2022, operating expenses increased to $485,961 from $477,491, a $8,470 increase, or 1.77%, over the quarter ended March 31, 2021. The increase is due to an increase in operating expenses for SarahCare's operational expenses in 2022.

For the quarter ended March 31, 2022, interest expense on our convertible notes payable increased to $28,580 from $15,390, an increase of 85.71% over the quarter ended March 31, 2021. This increase is primarily due to an increase in the amount of convertible notes taken in by the Company.






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For the quarter ended March 31, 2022, we realized a net income of $78,457 as compared to a net loss of $2,167,481 for the quarter ended March 31, 2021. The decrease in our net loss of $2,245,938 was primarily due to the loss on extinguishment of debt and gain on forgiveness of PP loan.

Results of Operations for the Nine months ended March 31, 2022 and 2021

For the nine months ended March 31, 2022, we recorded gross revenues of $939,061, versus $71,201 for the nine months ended March 31, 2021. This increase is due to an increase in participants returning to our centers

For the nine months ended March 31, 2022, operating expenses increased to $1,577,263 from $587,415, a $993,141 increase, or 168.51%, over the nine months ended March 31, 2021. The increase is due to an increase in expenses due to SarahCare's operational expenses in 2022.

For the nine months ended March 31, 2022, interest expense on our convertible notes payable decreased to $78,455 from $162,793, a decrease of 51.81% over the nine months ended March 31, 2021. 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 nine months ended March 31, 2022, we realized a net loss of $379,717 as compared to a net loss of $2,557,353 for the nine months ended March 31, 2021. The decrease in our net loss of $2,177,636 was primarily due to the loss on extinguishment of debt, a gain on forgiveness of PP loan, and a decrease in interest expense and fair value of derivatives.

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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