The following discussion and analysis of the results of operations and financial condition of the Company for the years ended September 30, 2021 and 2020, should be read in conjunction with the other sections of this Annual Report, including "Description of Business" and the Financial Statements and notes thereto of the Company included in this Annual Report. The various sections of this discussion contain forward-looking statements, all of which are based on our current expectations and could be affected by the uncertainties and risk factors described throughout this Annual Report as well as other matters over which we have no control. See "Cautionary Note Regarding Forward-Looking Statements." Our actual results may differ materially. The Company does not undertake any obligation to update forward-looking statements to reflect events or circumstances occurring after the date of this Annual Report.

Organizational History of the Company and Overview

Healthcare Solutions Management Group, Inc., a Delaware corporation, and successor in interest to Verity Delaware Inc., a Delaware corporation which was previously a Nevada corporation named Verity Corp. was incorporated on April 11, 2006 in the state of Nevada under the name Infrared Systems, International.

On December 31, 2012, AquaLiv Technologies, Inc. ("ALTI") and Verity Farms II, Inc. ("Verity Farms"), a South Dakota corporation, entered into a Share Exchange Agreement. Pursuant to the Share Exchange Agreement, ALTI acquired 100% of the authorized and issued shares of Verity Farms in exchange (the "Exchange") for 4,850,000 shares of Series B Convertible Preferred Stock, par value $0.001 of ALTI, representing approximately 86% of the outstanding shares of ALTI, on a fully diluted basis, assuming conversion into common stock. As a result of the Exchange and the other transactions contemplated thereunder, Verity Farms became a wholly owned subsidiary of ALTI and ALTI acquired Verity Farms' business operations. ALTI was formed under the laws of the State of Nevada on April 11, 2006 originally under the name of Infrared Systems International "ISI" as a wholly owned subsidiary of China Sxan Biotech, Inc. ("CSBI") (then known as Advance Technologies, Inc.) to pursue a narrowly defined business objective called infrared security systems.

On April 1, 2013, the Company changed its name from AquaLiv Technologies Inc. to Verity Corp. and our stock symbol changed to VRTY. The Company was the parent of Verity Farms and Aistiva Corporation ("Aistiva") (f/k/a AquaLiv, Inc.). Verity Farms was dedicated to providing consumers with safe, high-quality, and nutritious food sources through sustainable crop and livestock production. Aistiva previously released products in the industries of water treatment, skincare, and agriculture. Verity Farms was administratively dissolved in the State of South Dakota on May 4, 2018. Aistiva was administratively dissolved on April 9, 2015, in the State of Washington.

In February 2016, all of the Company's officers and directors resigned, and the Company stopped substantially all operating activities. At such time, the Company became a "shell company," as such term is defined in Rule 12b-2 under the Exchange Act.

On November 5, 2020, we changed our Fiscal Year End from June 30 to September 30. As a result of this change, we filed a Transition Report on Form 10-K with the SEC for the three-month transition period from June 30, 2020 to September 30, 2020 on January 20, 2021.

As a result of the consummation of the Merger, as such term is defined below, on April 15, 2021, Healthcare Solutions Holdings, Inc., a Delaware corporation ("HSH"), became our wholly owned subsidiary and the business of HSH became the business of the Company going forward. Accordingly, the Company ceased to be a shell company as of April 15, 2021.

Merger with Healthcare Solutions Holdings, Inc.

On June 14, 2019, the Company entered into a Merger Agreement (the "Merger Agreement") by and between the Company, Verity Merger Corp., a wholly-owned subsidiary of the Company and a Delaware corporation (the "Merger Sub"), and Healthcare Solutions Holdings, Inc., a Delaware corporation ("HSH"). Pursuant to the terms of the Merger Agreement, the parties agreed that Merger Sub would merge with and into HSH, with HSH being the surviving entity and becoming a wholly-owned subsidiary of the Company (the "Merger"). The Merger closed on April 15, 2021 (the "Closing"), at which time Merger Sub merged with and into HSH with HSH being the surviving entity, and HSH became our wholly owned subsidiary. As a result of the consummation of the Merger, HSH became our wholly owned subsidiary and the business of HSH became the business of the Company going forward.

At the Closing of the Merger, Robert Stevens (the "Receiver") appointed new officers and directors of the Company. As consideration for the services of the Receiver and his team, for acting as the court-appointed receiver for the Company and its predecessor and affiliated entities, and pursuant the Merger Agreement, as amended, in August of 2020, the Receiver and certain entities, as directed by the Receiver, were issued an aggregate total of 114,599,754 shares of the Company's common stock. At Closing, the aggregate Merger consideration paid to the holders of the HSH common was 1,145,997,555 shares of the Company's common stock constituting 90% of the issued and outstanding shares of Company common stock immediately following the Closing.






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As a result of the consummation of the Merger, on April 15, 2021, HSH became our wholly owned subsidiary and the business of HSH became the business of the Company going forward. Accordingly, at the Closing, the Company ceased to be a shell company as of April 15, 2021.





Prior Receivership

The Company was previously in receivership. On May 16, 2016, pursuant to Case Number A16-733815-B, Nevada's 8th Judicial District, Business Court, appointed Robert Stevens as receiver (the "Receiver") for the Company. Creditors of the Company were required to provide claims in writing under oath on or before November 3, 2016, or they would be barred under Nevada Revised Statute §78.675. Since May 16, 2016, through the date of the Merger, the Company was operating under the direction of the Receiver. On March 5, 2018, the District Court in Clark County, Nevada approved a plan of reorganization for the Company and the discharge of the Receiver upon completion of his duties under the court order. Upon the Closing of the Merger, the reorganization of the Company described in the court order was completed and, as a result and pursuant to the court order dated March 5, 2018, the Receiver was automatically discharged and the receivership was automatically terminated such that no further action was needed by the Receiver or the Company in connection with the receivership, and such that Company was no longer in receivership.

Change of Domicile and Plan of Conversion

On March 15, 2019, Healthcare Solutions Management Group, Inc. was incorporated in the State of Delaware. Verity Delaware, Inc. was incorporated in the State of Delaware on March 11, 2019. Verity Merger Corp. was incorporated in the State of Delaware on March 15, 2019. On March 11, 2019, pursuant to an Agreement and Plan of Conversion, the Company, then a Nevada corporation named Verity Corp., converted into, and became Verity Delaware, Inc., a Delaware corporation in Delaware and on May 30, 2019, the conversion was completed in Nevada. As a result of the foregoing, Verity Corp. a Nevada corporation converted into and became Verity Delaware, Inc., a Delaware corporation. On May 8, 2019, pursuant to a Plan of Merger, Verity Delaware, Inc. was merged with and into Verity Merger Corp., with Verity Merger Corp. surviving, and with Healthcare Solutions Management Group, Inc. becoming a successor in interest to Verity Delaware Inc. and the parent company of Verity Merger Corp.





Change in Fiscal Year End

On November 5, 2020, the Company's court appointed receiver, acting under judicial order on behalf of the Board of Directors of the Company, in accordance with the Company's Bylaws, acted by written consent to change the Company's Fiscal Year End from June 30 to September 30. As a result of this change, we filed a Transition Report on Form 10-K for the three-month transition period from June 30, 2020 to September 30, 2020 on January 20, 2021.





Impact of COVID-19

On March 11, 2020, the World Health Organization declared the COVID-19 outbreak to be a global pandemic which continued to spread throughout the U.S. and the globe. In addition to the devastating effects on human life, the pandemic is continuing to have a negative ripple effect on the global economy, leading to disruptions and volatility in the global financial markets. There are no comparable events that provide guidance as to the effect the COVID-19 pandemic may have, and, as a result, the ultimate effect of the pandemic is highly uncertain and subject to change. COVID-19 has already hindered or slowed many of HSH's businesses, including but not limited to our growth and growth strategies, developments in the marketplace for products, therapies and services, financial results, research and development strategy, regulatory approvals, and competitive strengths. The direct or indirect impact of COVID-19 on our business, results of operations and/or financial condition, continues today, but HSH has thus far weathered the pandemic storm and continues to seek to improve our level of service and patient care. The extent of the ultimate impact of the pandemic on the Company's operational and financial performance will depend on various developments, including the duration and continued spread of the outbreak, which cannot be reasonably predicted at this time. Accordingly, while management reasonably expects the COVID-19 outbreak to negatively impact the Company, the related consequences and duration are highly uncertain and cannot be predicted at this time.






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Results of Operations

Comparison of Results of Operations for the Years Ended September 30, 2021 and 2020





Revenue and cost of sales

For the year ended September 30, 2021, we recorded $9,248,784 in revenue compared to $3,524,334 for the year ended September 30, 2020. The increase is attributable to the establishment and opening of new locations. Included in revenue was $682,500 in related party revenue. The related party revenue was generated from the sale of medical services such as laboratory, durable medical equipment, and pharmacy services through preestablish sales channels that were accessed through the founders of the company.

Cost of sales for the year ended September 30, 2021 was $2,464,189 compared to $2,595,860 in the year ended September 30, 2020. The increase is attributable to the establishment of a new location. Included in cost of sales in September 30, 2022 and 2021 is $2,297,455 and $2,595,860, respectively in cost of goods sold, related parties. The Company is entering into a significant business growth stage and to be prepared for this expansion requires the development of significant infrastructure which was provided through certain founders and corporate officers.





Operating Expenses

Operating expenses for the year ended September 30, 2021 were $9,438,982 compared to $3,952,621 for the year ended September 30, 2020, an increase of $5,486,361. The increase in operating expenses in the 2021 period compared to 2020 is attributable to an increase of approximately $1,843,000 in administrative expenses and increase of approximately $4,013,000 in contractors expenses related party, offset by a decrease of approximately $370,000 of contractor expenses. The increase of $4,013,000 in contractors expenses related party is attributable to an increase in our labor costs in anticipation of generated higher revenues and the opening of additional location. The key components of general and administrative expenses are the transition expenses of the Company from the planning and development stage to transitioning into the operation of our medical facilities.

Liquidity and Capital Resources

As of September 30, 2021, we had $659,194 in cash and cash equivalents compared to $841,349 as of September 30, 2020.

Net cash used in operating activities for year ended September 30, 2021 was $3,575,737 compared to net cash used in operating activities of $3,132,491 for the year ended September 30, 2020. The increase in cash used in operating activities of $443,246 is primarily attributable to an increase in accounts receivable balances offset to a lesser extent by other balance sheet changes.

Net cash used in investing activities was $1,323,696 for the year ended September 30, 2021 compared to $554,335 used in investing activities for the year ended September 30, 2020. The increase in 2021 is primarily attributable to an increase in equipment purchases

Net cash provided by financing activities for the year ended September 30, 2021 was $4,717,278 compared to $4,119,278 for the year ended September 30, 2020. The increase in 2021 is primarily attributable to an increase in notes payable related parties of approximately $807,000.

We will have significant ongoing needs for working capital to fund operations and to continue to expand our operations. To that end, we would be required to raise additional funds through equity or debt financing. However, there can be no assurance that we will be successful in securing additional capital on favorable terms, if at all. Currently all of our financing is being provided by interest free demand notes payable from related parties. There are no assurance that these related parties will continue to finance the Company. Our inability to raise capital could require us to significantly curtail or terminate our operations altogether.

The financial statements do not include any adjustments that might be necessary if the Company is unable to continue as a going concern.






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Critical Accounting Policies and Estimates

Our management's discussion and analysis of our financial condition and results of operations is based on our consolidated financial statements, which have been prepared in accordance with U.S. generally accepted accounting principles, or "GAAP." The preparation of these financial statements requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenue and expenses during the reported period. In accordance with GAAP, we base our estimates on historical experience and on various other assumptions that we believe are reasonable under the circumstances. Actual results may differ from these estimates under different assumptions or conditions.

Our significant accounting policies are fully described in Note 2 to our consolidated financial statements appearing elsewhere in this Annual Report, and we believe those accounting policies are critical to the process of making significant judgments and estimates in the preparation of our consolidated financial statements.

Off-Balance Sheet Arrangements

None.

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