This Annual Report on Form 10-K contains forward-looking statements within the
meaning of Section 27A of the Securities Act of 1933, as amended (the
"Securities Act") and Section 21E of the Securities Exchange Act of 1934, as
amended (the "Exchange Act"). These forward-looking statements are not
historical facts but rather are based on current expectations, estimates and
projections. We may use words such as "anticipate," "expect," "intend," "plan,"
"believe," "foresee," "estimate" and variations of these words and similar
expressions to identify forward-looking statements. These statements are not
guarantees of future performance and are subject to certain risks,
uncertainties, and other factors, some of which are beyond our control, are
difficult to predict and could cause actual results to differ materially from
those expressed or forecasted. You should read this report completely and with
the understanding that actual future results may be materially different from
what we expect. The forward-looking statements included in this report are made
as of the date of this report and should be evaluated with consideration of any
changes occurring after the date of this Report. We will not update
forward-looking statements even though our situation may change in the future
and we assume no obligation to update any forward-looking statements, whether as
a result of new information, future events or otherwise.
Results for the year ended June 30, 2022, compared to the year ended June 30,
2021
June 30, 2022 June 30, 2021
Working Capital $ $
Cash 70,505 847,430
Current Assets 297,409 907,806
Current Liabilities 2,431,287 4,258,106
Working Capital (Deficit) (2,133,878 ) (3,350,300 )
June 30, 2022 June 30, 2021
Cash Flows $ $
Cash Flows used in Operating Activities (3,107,177 ) (1,173,370 )
Cash Flows provided by Financing Activities 2,380,252 2,020,800
Net (Decrease) increase in Cash During Period (776,925 ) 847,430
Operating Revenues
The Company had revenues of $1,045,890 and $1,394,149 for the years ended June
30, 2022 and 2021, respectively.
Cost of Revenues
The Company's cost of revenues for the years ended June 30, 2022 and 2021 was
$568,409 and $869,450, respectively.
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Gross Profit
The Company's gross profit for the years ended June 30, 2022 and 2021 was
$477,481, and $524,699, respectively.
General and Administrative Expenses
General and administrative expenses consisted primarily of consulting fees,
professional fees, and legal and accounting expenses. For the year ended June
30, 2022, general and administrative expenses were $13,522,061 compared to
$3,686,379 for the year ended 2021. The primary expenses for 2022 were salaries
and wages totaling $11,375,405; the primary expenses for 2021 were salaries and
wages and professional services totaling $2,452,018.
Other Income (Expense)
The Company had other income (expense) for the years ended June 30, 2022 and
2021 of $(4,575) and $(151,326), respectively. Other income (expense) consisted
primarily of a loss in fair value of derivative instrument of $213,053 and
$11,003, gain on settlement of accounts payable of $156,616 and $-0-, and
interest expense of $80,283 and $221,323, respectively.
Net loss
The net loss for the year ended June 30, 2022, was $13,049,155 compared to
$3,316,006 for the year ended June 30, 2021.
Liquidity and Capital Resources
The ability of the Company to continue as a going concern is dependent on the
Company's ability to raise additional capital and implement its business plan.
Since its inception, the Company has been funded by related parties through
capital investment and borrowing of funds.
At June 30, 2022, the Company had total current assets of $297,409 compared to
$907,806 at June 30, 2021. Current assets consisted primarily of cash and
prepaid inventory in 2022, and in 2021. At June 30, 2022, the Company had total
current liabilities of $2,431,287 compared to $4,258,106 at June 30, 2021.
Current liabilities consisted primarily of accounts payable, accrued
liabilities, notes payable, and convertible notes payable with derivative
liabilities. The decrease in our current liabilities was primarily attributed to
the decrease in accounts payable and notes payable.
We had negative working capital of $2,133,878 as of June 30, 2022.
Cash flow from Operating Activities
During the year ended June 30, 2022, cash used in operating activities was
$(3,107,177) compared to $(1,173,370) for the year ended June 30, 2021. The
increase in the amounts of cash used in operating activities was primarily due
to increased operating expenses and the paydown of accounts payable in 2022 as
compared to 2021.
Cash flow from Financing Activities
For the year ended June 30, 2022, cash provided by financing activity was
$2,380,252 compared to $2,020,800 provided during the year ended June 30, 2021.
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Going Concern
We have not attained profitable operations and are dependent upon obtaining
financing to pursue any extensive business activities. For these reasons, we
have included in our audited financial statements that there is substantial
doubt that we will be able to continue as a going concern without further
financing.
The Company is a going concern, which contemplates continuity of operations,
realization of assets, and liquidation of liabilities in the normal course of
business.
As reflected in the accompanying financial statements, the Company had a
Shareholders' Deficit at June 30, 2022, of $2,092,227 as its liabilities
exceeded its assets. These factors among others raise substantial doubt about
the Company's ability to continue as a going concern.
Wearable Health Solutions provides mobile health (mHealth) products and services
to approximately 200 dealers and distributors throughout the globe (mostly
Canada, United States and New Zealand). As a provider of personal emergency
response devices in the rapidly growing medical alarm device and eHealth sector,
we provide innovative wearable healthcare products, tracking services, and
turn-key solutions that enable our users to be proactive with their health, as
well as safe and protected. According to the QYResearch report on Global PERS
devices, MediPendant was the 17th largest global PERS company based on revenues
in 2022 ("QYResearch Global PERs Devices Market Report, History and Forecast
2016-2027"). Our products and services are always state-of-the-art and cost
effective. Through our culture, our drive, and the expertise of each individual
employee, we are uniquely positioned to build shareholder value by setting the
highest standards in service, reliability, and safety in our rapidly growing
industry.
The financial statements do not include any adjustments that might be necessary
if the Company is unable to continue as a going concern.
The Company has not yet established an ongoing source of revenues sufficient to
cover its operating costs for the next fiscal year and allow it to continue as a
going concern. The ability of the Company to continue as a going concern is
dependent on the Company obtaining adequate capital to fund operating losses
until it becomes profitable. As of June 30, 2022, the Company has a net loss of
$13,049,155, and if the Company is unable to obtain adequate capital, it could
be forced to cease operations.
During the year ended June 30, 2022, Company has net cash used in operating
activities of $3,107,177 as well as stock compensation non-cash expenses of
$10,044,522 and a net loss of $13,049,155. The Company raised $2,380,252 from
financing activities in the year ended June 30, 2022, which resulted in a
negative working capital of $2,133,878 as of June 30, 2022. If the Company is
unable to raise additional adequate capital, it could be forced to cease
operations.
Future Financings
We will continue to rely on equity sales of the Company's common shares in order
to continue to fund business operations. Issuances of additional shares will
result in dilution to existing shareholders. There is no assurance that the
Company will achieve any additional sales of the equity securities or arrange
for debt or other financing to fund our business plan of selling the iHelp MAX®.
Since inception, we have financed our cash flow requirements through issuance of
common stock and loans from third parties. As we expand our activities, we may,
and most likely will, continue to experience net negative cash flows from
operations, pending receipt of revenues. Additionally, we anticipate obtaining
additional financing to fund operations through common stock offerings, to the
extent available, or to obtain additional financing to the extent necessary to
augment our working capital. In the future we will need to generate sufficient
revenues from sales in order to eliminate or reduce the need to sell additional
stock or obtain additional loans. There can be no assurance we will be
successful in raising the necessary funds to execute our business plan.
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We anticipate that we will incur operating losses in the next twelve months. Our
minimal operating history makes predictions of future operating results
difficult to ascertain. Our prospects must be considered in light of the risks,
expenses and difficulties frequently encountered by companies in their early
stage of development, particularly companies in new and rapidly evolving
markets. Such risks for us include, but are not limited to, an evolving and
unpredictable business model and the management of growth.
To address these risks, we must, among other things, obtain a customer base,
implement and successfully execute our business and marketing strategy,
continually develop and upgrade our products, business model and website,
respond to competitive developments, and attract, retain and motivate qualified
personnel. There can be no assurance that we will be successful in addressing
such risks, and the failure to do so can have a material adverse effect on our
business prospects, financial condition and results of operations.
Off-Balance Sheet Arrangements
We have no significant off-balance sheet arrangements that have or are
reasonably likely to have a current or future effect on our financial condition,
changes in financial condition, revenues or expenses, results of operations,
liquidity, capital expenditures or capital resources that are material to
stockholders.
Recently Issued Accounting Pronouncements
In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842), which
supersedes the current accounting for leases and while retaining two distinct
types of leases, finance and operating, (1) requires lessees to record a right
of use asset and a related liability for the rights and obligations associated
with a lease, regardless of lease classification, and recognize lease expense in
a manner similar to current accounting, (2) eliminates most real estate specific
lease provisions, and (3) aligns many of the underlying lessor model principles
with those in the new revenue standard. Leases with a term of 12 months or less
will be accounted for similar to existing guidance for operating leases today.
For public companies, the new standard is effective for annual and interim
periods in fiscal years beginning after December 15, 2018. For all other
entities, including emerging growth companies, this standard is effective for
annual reporting periods beginning after December 15, 2019, and interim periods
within fiscal years beginning after December 2020. Earlier application is
permitted. The Company evaluated the impact on the financial statements and
implemented the provisions of ASU 2016-02 for the annual financial statements
for the year ended June 30, 2019.
In December 2019, the FASB issued ASU No. 2019-12, Simplifying the Accounting
for Income Taxes, as part of its initiative to reduce complexity in accounting
standards. The amendments in the ASU are effective for fiscal years beginning
after December 15, 2020, including interim periods therein. Early adoption of
the standard is permitted, including adoption in interim or annual periods for
which financial statements have not yet been issued. The Company is currently
evaluating the effect, if any, that the ASU will have on its consolidated
financial statements.
In August 2020, the FASB issued ASU No. 2020-06, Accounting for Convertible
Instruments and Contracts in an Entity's Own Equity (ASU 2020-06), which
simplifies the accounting for certain financial instruments with characteristics
of liabilities and equity, including convertible instruments and contracts in an
entity's own equity. Among other changes, ASU 2020-06 removes from U.S. GAAP the
liability and equity separation model for convertible instruments with a cash
conversion feature, and as a result, after adoption, entities will no longer
separately present in equity an embedded conversion feature for such debt.
Similarly, the embedded conversion feature will no longer be amortized into
income as interest expense over the life of the instrument. Instead, entities
will account for a convertible debt instrument wholly as debt unless (1) a
convertible instrument contains features that require bifurcation as a
derivative under ASC Topic 815, Derivatives and Hedging, or (2) a convertible
debt instrument was issued at a substantial premium. Among other potential
impacts, this change is expected to reduce reported interest expense, increase
reported net income, and result in a reclassification of certain conversion
feature balance sheet amounts from shareholders' equity to liabilities as it
relates to the Company's convertible senior notes. Additionally, ASU 2020-06
requires the application of the if-converted method to calculate the impact of
convertible instruments on diluted earnings per share (EPS), which is consistent
with the Company's accounting treatment under the current standard. ASU 2020-06
is effective for fiscal years beginning after December 15, 2021, with early
adoption permitted for fiscal years beginning after December 15, 2020, and can
be adopted on either a fully retrospective or modified retrospective basis. The
Company is currently evaluating the timing, method of adoption and overall
impact of this standard on its consolidated financial statements.
The Company reviewed all recent accounting pronouncements issued by the FASB
(including its Emerging Issues Task Force), the AICPA and the SEC, and they did
not or are not believed by management to have a material impact on the Company's
present or future financial statements.
The Company has implemented all new accounting pronouncements that are in
effect. These pronouncements did not have any material impact on the financial
statements unless otherwise disclosed, and the Company does not believe that
there are any other new accounting pronouncements that have been issued that
might have a material impact on its financial position or results of operations.
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