Cautionary Statement about Forward-Looking Statements

This Form 10-K contains forward-looking statements regarding future events and the Company's future results that are subject to the safe harbors created under the Securities Act of 1933 (the "Securities Act") and the Securities Exchange Act of 1934 (the "Exchange Act"). These statements are based on current expectations, estimates, forecasts, and projections about the industry in which the Company operates and the beliefs and assumptions of the Company's management. Words such as "hopes," "expects," "anticipates," "targets," "goals," "projects," "intends," "plans," "believes," "seeks," "estimates," "continues," "may," variations of such words, and similar expressions are intended to identify such forward-looking statements. In addition, any statements that refer to projections of the Company's future financial performance, and other characterizations of future events or circumstances are forward-looking statements.

The Company is under no duty to update any of these forward-looking statements after the date of this report. You should not place undue reliance on these forward-looking statements.





EXECUTIVE OVERVIEW

Virtual Interactive Technologies Corp. (OTCPINK: VRVR) ("VIT") or ("the Company") is a next generation game and metaverse developer that creates immersion experiences by harnessing the latest technologies, including Blockchain and digital assets. The Company's newly launched brand, Extrosive, is building a metaverse that replaces traditional boring financial experiences with a new paradigm, "global Prosperity space" (gPs). This new asset class dynamically augments global and local realities and builds communities of aligned financial values, virtuous economies, and a trusted network. The result would be a metaverse game for the glamourous world of Wall Street, High-Speed trading involving community building, quantified self, and NFTs - a pure adrenal rush! In addition, the Company continues to build on its successful catalog that includes Carmageddon Max Damage, Carmageddon Crashers, Interplanetary: Enhanced Edition, Catch & Release, and Worbitol. The Company also entered into a joint development partnership with Duane Lee "Dog" Chapman, of the "Dog The Bounty Hunter" fame, to develop and promote multiple games across several platforms. For more information, please visit www.vrvrcorp.com.





Results of Operations

The following discussion involves the results of operations for the years ended September 30, 2022 and 2021.

Revenue decreased 33% from $194,350 for the year ended September 30, 2021 to $130,626 for the year ended September 30, 2022. Revenue was derived from royalty interests in five games, Carmageddon Max Damage, Carmageddon Crashers, Catch & Release, Interplanetary: Enhanced Edition and Worbital. This decrease in revenue is largely due to the fact that these games have been in the marketplace for several years and decreasing revenue over time is part of the natural sales cycle for video games. Over the last year, the Company has entered into several new development agreements, that when completed should substantially increase the Company's revenue.





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Operating expenses for the years ended September 30, 2022 and 2021 totaled $1,265,153 and $265,027, respectively. This represents a 377% increase over the years. Operating expenses were comprised of professional fees of $854,548 and $249,078; marketing and advertising of $335,916 and $4,000; travel, meals, and entertainment of $39,897 and $0; general and administrative of $18,253 and $11,949; and research and development of $16,539 and $0 during the years ended September 30, 2022 and 2021, respectively. The significant increases during the year ended September 30, 2022 over 2021 was due to an overall increase in operations. During fiscal 2022, the Company entered into several marketing and development agreements that are intended to position the Company for a substantial increase in growth going forward.. The Company also incurred $656,093 in stock-based compensation during fiscal 2022 as compared to $0 in fiscal 2021.

Other income (expense) for the years ended September 30, 2022 and 2021 totaled ($535,582) and ($48,344), respectively, resulting in an increase of $487,238. Other income (expense) were comprised of other income of $1,500 and $1,754; bad debt expense of ($7,754) and $0; amortization of debt discount of ($423,061) and $0; interest expense, related party of ($56,343) and ($49,335); interest expense of ($48,928) and ($1,171); and gain (loss) from foreign currency of ($996) and 408 during the years ended September 30, 2022 and 2021, respectively.

For the years ended September 30, 2022 and 2021, we recorded a loss of $1,670,109 and $119,021, respectively. The increase of $1,551,088 was mainly associated with the decrease in revenue in 2022 offset by increases in operating expenses and amortization of debt discount in fiscal 2022.

Liquidity and Capital Resources

As of September 30, 2022, we had cash of $36,378, compared to $251,064 at September 30, 2021. Working capital was $809,447 as of September 30, 2022, compared to $293,754 at September 30, 2021. The increase in working capital of $515,693 was due to an increase in prepaid expenses of $1,956,215 at September 30, 2022 and reclass of related party debt of $741,030 principal and accrued interest of $223,940 from long-term liabilities at September 30, 2021 to current liabilities at September 30, 2022.

Cash Flows from Operating Activities:

Net cash used in operating activities for the year ended September 30, 2022 was $464,436. Net cash provided by operating activities for the year ended September 30, 2021 was $4,945. The change over the two years presented was $469,381.

Cash flows used in operating activities for the year ended September 30, 2022 included a net loss of $1,670,109, offset by stock-based compensation of $656,093, debt discount amortization of $423,061, and bad debt expense of $7,754, along with net change in operating assets and liabilities of $118,765.

Cash flows from operating activities for the year ended September 30, 2021 included a net loss of $119,021, offset by net change in operating assets and liabilities of $123,966.

Cash Flows from Investing Activities:

Net cash used in investing activities for the years ended September 30, 2022 and 2021 was $0 and $7,500, respectively. In 2021 the Company advanced money of $7,500 to an unrelated party.

Cash Flows from Financing Activities:

Net cash provided by financing activities for the years ended September 30, 2022 and 2021 was $249,750 and $217,375, respectively. In fiscal 2022, the Company received proceeds from a note payable of $434,750 and proceeds from the sale of common stock of $50,000. This was offset by payments made to notes payable of $235,000. In fiscal 2021, the Company received proceeds from a note payable of $217,375.

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