Results of Operations

On November 16, 2020 Healthtech Solutions acquired all of the capital stock of Medi-Scan, Inc. in exchange for Series A Preferred Stock representing, at that time, 97% of the equity in Healthtech Solutions. Because the transaction is classified as a reverse merger under GAAP, the financial results presented in this Report for the six months ended June 30, 2020 are the financial results of Medi-Scan for that quarter.

On May 7, 2021 Healthtech Solutions acquired all of the capital stock of Healthtech Oncology, which owned 99% of the capital stock of Varian Biopharmaceuticals, Inc. In exchange for ownership of Varian, Healthtech Solutions issued Series C Preferred Stock representing a 5% equity position in Healthtech Solutions and a contingent right to exchange the Series C shares for control of Healthtech Oncology. Because the transaction is classified as an acquisition under GAAP, the financial results presented in this Report for the three and six months ended June 30, 2021 include the results of Varian's operations for the period from May 7, 2021 through June 30, 2021.

The aforesaid two acquisitions, joined by a third, ground-up subsidiary named RevHeart, form the platform on which we intend to pursue an incubator model of operations, focused on medical technology, both therapeutic and device-oriented. Our business model begins with the identification of target subsidiary companies through our broad network of relationships in academia and industry. Upon bringing a company and/or its technology into a Healthtech subsidiary, we will provide funding and operational support to achieve value enhancing milestones and accelerate the organization's mission. We will roll up our sleeves and provide operational and leadership support to our portfolio companies, increasing their chances of success and decreasing their capital requirements. Upon achieving the targeted value inflection, we will work closely with our subsidiaries to prepare for their independent launch and spin-out. Through this approach, Healthtech shareholders may gain exposure to early-stage life science technologies that are approaching the steepest portion of their value creation curve through an investment structure that is devoid of the "carry" typically imposed by a traditional private equity/venture capital fund.

Our cash resources at this time are early stage, as we have relied to date on contributions by management and modest private offerings to their friends and family. The $5,068,957 net loss that we incurred in the first half of 2021, therefore, entailed a use for operating activities of only $699,217 in cash.

Since our only business activities during the six months ended June 30, 2021 and 2020 were research and development activities, our expenses during those periods were primarily salaries and consulting and service fees, including fees relating to our development of potential acquisition targets and our efforts at securing the financial resources necessary to fund those acquisitions. During the three and six months ended June 30, 2021, we incurred $1,505,586 and $1,768,078 in operating expenses, including, during the three month period, $137,478 in operating expenses of Varian for the period after its acquisition by Healthtech Solutions. The greater portion of our operating expenses were related to the market value of common stock that we granted to attract management, research and development expertise, and other individuals qualified to aid our projects. Of the $1,768,078 in operating expenses incurred during the six months ended June 30, 2021, stock compensation represented $1,029,028 of the expense.






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During the three and six months ended June 30, 2020, our operating expenses of $109,153 and $184,710, respectively, primarily reflected payments by Medi-Scan for management services along with payments for the research and development activities related to Medi-Scan's scanning technology.

The cash portion of our operating expenses during the three and six months ended June 30, 2021 was primarily attributable to administrative costs: office expenses plus legal and accounting fees, and fees for public relations services. Legal fees, in particular, were high during the first six months quarter of 2021, as we initiated negotiations of a number of prospective acquisitions, changed the corporate name, and entered into negotiations with a number of potential sources of finance. As we continue to implement our incubator model, the administrative costs of our operations should continue to grow; if we plot carefully, however, the ratio of cash used for administration to cash used in research and development activities will reduce.

As a result of the aforesaid expenses, in the three and six month periods ended June 30, 2021 and 2020, we recorded losses from operations identical to our total operating expenses. During 2021, however, the greater portion of our net loss reflected "other expenses" related to the convertible debentures that we sold during 2020 and the first two months of 2021. During the three months ended June 30, 2021, we incurred items of Other Expense that added $3,269,494 to our net loss, specifically:





·     $328,544 in interest expense due to accretion of the debenture discount;
and

· a loss of $2,940,950 due to an increase in the fair value of derivative liabilities, relating to the 7% Convertible Debentures.

We accounted for our convertible debt in accordance with ASC 815, Derivatives and Hedging as the conversion feature embedded in the convertible debentures could have resulted in the debenture principal and related accrued interest being converted to a variable number of our common shares. The conversion feature on these debentures was variable and based on trailing market prices. It therefore contains an embedded derivative. The fair value of the conversion feature was calculated when the debentures were issued, and we recorded a debenture discount and derivative liability for the calculated value. We recognized interest expense for accretion of the debenture discount over the term of the note. The conversion liability was valued at the end of each reporting period and would result in a gain or loss for the change in fair value. Due to the volatile nature of our stock, the change in the derivative liability and the resulting gain or loss could often be material to our results. This was among the reasons why, in May 2021, we negotiated a cancellation of the 7% Convertible Debentures in exchange for common stock.

After taking into account our Other Expenses, our net loss was $4,773,870 and $5,067,747 during the three and six months ended June 30, 2021. During the three and six months ended June 30, 2020, our net loss was $109,153 and $184,710, respectively.






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We will continue to incur losses for the immediate future. The process of making valuable acquisitions is expensive, and our acquisitions will generally not result in revenue until after a period of incubation, which may be lengthy. Success in implementing our business plan, therefore, will require infusions of capital. We are in ongoing discussions with investors, but have received no commitments at this time.

Liquidity and Capital Resources

At December 31, 2020 Healthtech Solutions had working capital totaling $55,035, primarily consisting of cash. At the end of June 2021, despite incurring a $5 million net loss in the intervening six months, we had working capital totaling $81,830, primarily as a result of capital contributed by friends and family. As noted above, however, the cash requirements of our business plan are intense. To attract exciting additions to our portfolio, we must be able to offer each the several million dollars of financing that is necessary to bring a medical technology to a stage where its sponsor can function independently. Since our ambition is to sustain a portfolio of such enterprises, our near term capital requirements (near term being the two to three years before we can anticipate initial returns on our investments) will be tens of millions of dollars.

To be successful in identifying promising technologies, attracting their sponsors into our company, and sourcing the funds needed for their growth, we require a skilled management team. For this reason, as the quarter closed, we added three members to our Board of Directors, each carrying valuable experience in the business of medical technology and the business of business in general. We also added two executives to our C-Suite, a new CEO and a new COO. This expansion should enable us to compete effectively in pursuing promising technologies. However the expansion also gives us several new mouths to feed, as well as sourcing projects to fund. We are, therefore, focused in the coming quarter on securing investors

Note 3 to our consolidated financial statements discloses that the financial condition of Healthtech Solutions - i.e. our modest cash resources and the absence of revenue - raises substantial doubt as to the Company's ability to continue as a going concern. Management intends to pursue one or more offerings of securities in order to obtain the funds that will be necessary for successful implementation of our business plan. At present, however, no commitments for future funding have been received.

Application of Critical Accounting Policies

In preparing our financial statements we are required to formulate working policies regarding valuation of our assets and liabilities and to develop estimates of those values. In our preparation of the financial statements for the three and six months ended June 30, 2021, there was one estimates made which was (a) subject to a high degree of uncertainty and (b) material to our results. This was:

· Our determination of the fair value of the Class C Preferred Stock that we issued in order to acquire ownership of Varian. Based upon the speculative nature of the assets acquired, we determined that the fair value of the Series C Preferred Stock was equal to the amount of cash acquired in the transaction ($1,658) plus the amount of debt in excess of that cash that was assumed ($665,673).








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Off-Balance Sheet Arrangements

We do not have any off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition or results of operations.

Impact of Accounting Pronouncements

There were no recent accounting pronouncements that have or will have a material effect on the Corporation's financial position or results of operations.

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