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.

On April 1, 2022, the Company partnered with TruCash Group of Companies Inc. ("TruCash"), a leading global payments provider, to launch an all-in-one Super Healthcare App, called RX Vitality Wallet, that was being designed to cater to consumers, patients, hospitals, Seniors, and governments, with a solid platform of benefits and online banking. The RX Vitality digital healthcare wallet was being designed to offer 20%-75% pharmaceutical discounts at 65,000 pharmacies across the United States, including Walgreens and CVS. In addition, we plan to offer health and wellness discounts at 500+ online merchants, as well as earning points on our Loyalty Program. The Company intends to generate revenue from its digital wallet and mobile app in multiple ways, including but not limited to monthly recurring fees, transfer fees, and the inter-exchange rate. On June 15, 2022, the Company's RX Vitality digital healthcare wallet became available for download at the Apple iOS App store for Apple iPhone users. The Company's app has also been approved and is available on the Google Play Store. The Company's digital healthcare wallet should be accessible by customers via mobile wallet on both the Apple iOS and Android App Stores. The Company intends to have a physical healthcare card as well.

On April 5, 2022, the Company engaged mPulse Mobile, a leader in conversational AI and digital engagement solutions for the healthcare industry, to drive engagement with the Company's digital app and wallet (currently under development).

On April 28, 2022, the Company entered into a share exchange agreement to acquire RX Vitality, Inc. ("RX Vitality"), a media and finance advisory company.

On May 13, 2022, the Company entered into a partnership with VSUSA Corp. ("VSUSA"), a non-for-profit organization that empowers Veterans and Seniors by offering services designed to build successful life transitions with access to workforce and independent housing; health services; and social service programs in communities across the United States. The partnership permits the Company to use the VSUSA logo on the back of its Vitality Debit Card. For this the Company is obligated to give up to 1% of its revenue generated from its Vitality Debit Card to VSUSA. The Company's Chairman is a principal and co-Founder of VSUSA.

As of December 31, 2022, the Company had current assets of $326,028. The Company has a limited amount of liquid cash and no other liquid assets on hand as of December 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.






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Results of Operations for the Three Months Ended December 31, 2022, and December 31, 2021

For the quarter ended December 31, 2022, we recorded gross revenues of $420,352 versus $330,708 for the quarter ended December 31, 2021, as a result of the Company's ability to keep centers open for longer periods of time, and more participants coming to the center more often.

For the quarter ended December 31, 2022, operating expenses increased to $1,352,754 from $476,579, a $876,175 increase, or 184%, over the quarter ended December 31, 2021. The increase is due to an increase in expenses due to the Company's development of its RX Vitality Wallet and debit card.

For the quarter ended December 31, 2022, interest expense on our convertible notes payable increased to $63,803 from $32,534, an increase of 96% over the quarter ended December 31, 2021. This increase is primarily due to an increase in notes.

For the quarter ended December 31, 2022, we realized a net loss of $977,074 as compared to a net loss of $198,856 for the quarter ended December 31, 2021. The increase in our net loss of $778,218 was primarily due to an increase in licensing expenses due to the development of its RX Vitality Wallet and debit card.

Results of Operations for the Six Months Ended December 31, 2022, and December 31, 2021

For the six months ended December 31, 2022, we recorded gross revenues of $804,502 versus $647,274 for the six months ended December 31, 2021, as a result of the Company's ability to keep centers open for longer periods of time, and more participants coming to the center more often.

For the six months ended December 31, 2022, operating expenses increased to $2,699,912 from $1,091,302, a $1,608,610 increase, or 147%, over the six months ended December 31, 2021. The increase is due to an increase in expenses due to the development of its RX Vitality Wallet and debit card.

For the six months ended December 31, 2022, interest expense on our convertible notes payable increased to $111,472 from $49,875, an increase of 124% over the six months ended December 31, 2021. This increase is primarily due to an increase in notes.

For the six months ended December 31, 2022, we realized a net loss of $1,977,564 as compared to a net loss of $458,174 for the six months ended December 31, 2021. The increase in our net loss of $1,519,390 was primarily due to an increase in licensing expenses due to the development of its RX Vitality Wallet and debit card.

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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