Forward Looking Statements

This Quarterly Report on Form 10-Q contains forward-looking statements. For this purpose, any statements contained in this Report that are not statements of historical fact may be deemed to be forward-looking statements. Forward-looking information includes statements relating to future actions, prospective products, future performance or results of current or anticipated products, sales and marketing efforts, costs and expenses, interest rates, outcome of contingencies, financial condition, results of operations, liquidity, business strategies, cost savings, objectives of management, and other matters. You can identify forward-looking statements by those that are not historical in nature, particularly those that use terminology such as "may," "will," "should," "expects," "anticipates," "contemplates," "estimates," "believes," "plans," "projected," "predicts," "potential," or "continue" and similar expressions or the negative of these similar terms. The Private Securities Litigation Reform Act of 1995 provides a "safe harbor" for forward-looking information to encourage companies to provide prospective information about themselves without fear of litigation so long as that information is identified as forward-looking and is accompanied by meaningful cautionary statements identifying important factors that could cause actual results to differ materially from those projected in the information.

These forward-looking statements are not guarantees of future performance and involve risks, uncertainties and assumptions that we cannot predict. In evaluating these forward-looking statements, you should consider various factors, including the following: (a) those risks and uncertainties related to general economic conditions, (b) whether we are able to manage our planned growth efficiently and operate profitable operations, (c) whether we are able to generate sufficient revenues or obtain financing to sustain and grow our operations, (d) whether we are able to successfully fulfill our primary requirements for cash, which are explained below under "Liquidity and Capital Resources". We assume no obligation to update forward-looking statements, except as otherwise required under the applicable federal securities laws. Unless stated otherwise, terms such as the "Company," "Wearable Health," "we," "us," "our," and similar terms shall refer to Wearable Health Solutions, Inc., a Nevada corporation, and its subsidiaries.





Results of Operations



Results for the Period Ended September 30, 2022, compared to the Period Ended
September 30, 2021



                             September 30,        June 30,
                                 2022               2022
Working Capital                    $                 $
Cash                                255,904           70,505
Current Assets                      335,604          297,409
Current Liabilities               2,430,903        2,431,287
Working Capital (Deficit)        (2,095,299 )     (2,133,878 )




                                               September 30,       September 30,
                                                   2022                2021
Cash Flows                                           $                   $
Cash Flows (used in) Operating Activities            (561,112 )        (1,000,872 )
Cash Flows (used in) Investing Activities              (9,442 )           (50,000 )
Cash Flows provided by Financing Activities           755,953           1,956,237
Net Increase in Cash During Period                    185,399             905,365








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Operating Revenues

The Company had revenues of $216,460 and $302,872 for the periods ended September 30, 2022 and 2021, respectively.





Cost of Revenues

The Company's cost of revenues for the periods ended September 30, 2022 and 2021 was $120,002 and $203,511, respectively.





Gross Profit

The Company's gross profit for the periods ended September 30, 2022 and 2021 was $96,458, and $99,361, respectively.

General and Administrative Expenses

General and administrative expenses consisted primarily of salaries and wages, consulting fees, professional fees, and legal and accounting expenses. For the Period Ended September 30, 2022, general and administrative expenses were $856,483 compared to $4,196,468 for the Period Ended 2021. The primary expenses for 2022 were salaries and wages of $502,856; the primary expenses for 2021 were salaries and wages of $3,529,453.





Other (Income) Expense

The Company had other (income) expense, net for the periods ended September 30, 2022 and 2021 of $(11,258) and $257,627, respectively. Other income, net for the three months ended September 30, 2022 consisted of $19,500 in settlement proceeds, interest income of $1,500 all of which was partially offset by interest expense of $9,742. Other expense, net for the three months ended September 30, 2021 consisted of change in fair value of derivative instrument of $238,155, gain on debt extinguishment of $15,832, and interest expense of $35,304.





Net loss

The net loss for the Period Ended September 30, 2022, was $748,767 compared to $4,354,735 for the Period Ended September 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 September 30, 2022, the Company had total current assets of $335,604. Current assets consisted primarily of cash and inventory. At September 30, 2022 and June 30, 2022, the Company had total current liabilities of $2,430,903 and $2,431,287, respectively. Current liabilities consisted primarily of accounts payable, accrued liabilities and notes payable.

We had negative working capital of $2,095,299 as of September 30, 2022.











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Cash flow from Operating Activities

During the three months ended September 30, 2022, cash used in operating activities was $(561,112) compared to $(1,000,872) for the period ended September 30, 2021. The decrease in the amount of cash used in operating activities was primarily due to the decrease in the net loss resulting from the lower salaries and wages incurred in the three months ended September 30, 2022 as compared to the three months ended September 30, 2021.

Cash flow from Financing Activities

For the three months ended September 30, 2022, cash provided by financing activities was $755,953 compared to $1,956,237 provided during the three months ended September 30, 2021.





Quarterly Developments



None.



Subsequent Developments



None.



Going Concern

The accompanying unaudited interim consolidated condensed financial statements have been prepared in conformity with generally accepted accounting principles which contemplate continuation of the Company on a going-concern basis. The going concern basis assumes that assets are realized, and liabilities are extinguished in the ordinary course of business at amounts disclosed in the consolidated financial statements. The Company has incurred recurring losses from operations and has an accumulated deficit of $40,172,149. The Company's ability to continue as a going concern depends upon its ability to obtain adequate funding to support its operations through continuing investments of debt and/or equity by qualified investors/creditors, internally generated working capital and monetization of intellectual property assets. These factors raise substantial doubt about the Company's ability to continue as a going concern. These consolidated financial statements do not include any adjustments that might be necessary if the Company is unable to continue as a going concern. Management is currently pursuing a business strategy which includes raising the necessary funds to finance the Company's development and marketing efforts.

Critical Accounting Estimates and Policies

The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities of the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Note 1 to the Financial Statements describes the significant accounting policies and methods used in the preparation of the Financial Statements. Estimates are used for, but not limited to, contingencies and taxes. Actual results could differ materially from those estimates. The following critical accounting policies are impacted significantly by judgments, assumptions, and estimates used in the preparation of the Financial Statements.

We are subject to various loss contingencies arising in the ordinary course of business. We consider the likelihood of loss or impairment of an asset or the incurrence of a liability, as well as our ability to reasonably estimate the amount of loss in determining loss contingencies. An estimated loss contingency is accrued when management concludes that it is probable that an asset has been impaired, or a liability has been incurred and the amount of the loss can be reasonably estimated. We regularly evaluate current information available to us to determine whether such accruals should be adjusted.











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We recognize deferred tax assets (future tax benefits) and liabilities for the expected future tax consequences of temporary differences between the book carrying amounts and the tax basis of assets and liabilities. The deferred tax assets and liabilities represent the expected future tax return consequences of those differences, which are expected to be either deductible or taxable when the assets and liabilities are recovered or settled. Future tax benefits have been fully offset by a 100% valuation allowance as management is unable to determine that it is more likely than not that this deferred tax asset will be realized.

Recent Accounting Pronouncements

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.

Off Balance Sheet Arrangements

We have not entered into any 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 and would be considered material to investors.

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