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, achieving exploration milestones, global demand for uranium, 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

On September 27, 2019, Virtual Interactive Technologies Corp merged with Advanced Interactive Gaming Inc, and its subsidiary Advanced Interactive Gaming Ltd. (collectively "Advanced Interactive Gaming" or "AIG"), through a reverse merger transaction. Advanced Interactive Gaming was founded in 2016 to provide financing solutions for independent video game developers globally. Advanced Interactive Gaming was deemed to be the accounting acquirer of the transaction and will be the operating entity moving forward under the name of Virtual Interactive Technologies Corp ("VIT" or "the Company" or "we")

VIT finances the development of video game projects to be released on various popular gaming platforms in exchange for a royalty stream on the games. To date the Company financed several gaming titles including Carmageddon Max Damage, Carmageddon Crashers, Interplanetary: Enhanced Edition, Catch & Release and Worbital. Collectively these games are distributed world-wide on various gaming platforms including Sony PlayStation, Xbox, Steam and Oculus among others. In addition to financing solutions, VIT offers expertise in development solutions, publishing and marketing video game products and is actively involved in the early stages of VR/AR game development. VIT continues to reinvest its royalty income into growing its royalty contracts and intellectual property in the video game development industry.

The Company's strategy moving forward is to continue to invest in new game development through partnerships and royalty contracts. Management believes that there is significant opportunity in VR games given the relatively early stage in the product cycle and the growing need for content to support VR hardware sales. While the Company has historically participated mostly in the PC and console market, it will continue to explore addition opportunities in the gaming space as they present themselves. In addition, the VIT may explore strategic alliances and acquisitions in order to expand its business.





Results of Operations

The following discussion involves the results of operations for the years ended September 30, 2019 and September 30, 2018.

Revenue increased 34% from $249,221 for the year ended September 30, 2018 to $334,394 for the year ended September 30, 2019. Revenue was derived from royalty interests in five games, Carmageddon Max Damage, Carmageddon Crashers, Catch & Release, Interplanetary: Enhanced Edition and Worbital.





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The Company continued its research and development in 2019. For the year ended September 30, 2019, we recorded $208,116 in R&D expense versus $605,868 for the year ended September 30, 2019. In 2018, most of the expense was spent on milestone payments for Worbital and Catch & Release. In 2019 we recorded the remaining milestone payments for Worbital and Catch & Release.

In 2016, the Company began amortizing our investment in royalty contacts for Carmageddon Crashers and Max Damage over a three-year period. During the years ended September 30, 2019 and 2018 we amortized $675,000 and $1,333,333, respectively. After evaluating the recoverability of this asset, an impairment charge of $0 and $375,000 was recorded for September 30, 2019 and 2018, respectively.

General and Administrative expense for the years ended September 30, 2019 and 2018 was $334,515 and $322,663, respectively. This represents a 4% increase over the years. Most of the expense recorded for both years consisted of contract services for management and operations.

For the year ended September 30, 2018 we recorded a loss of $2,546,060. For the year ended September 30, 2019, we recorded a loss of $1,023,087, a decrease of 60%. The decrease of $1,522,973 was mainly associated with the impairment and amortization of our long-term asset and research and development associated with that asset during the year ended September 30, 2018.

Liquidity and Capital Resources

For the year ended September 30, 2019, we had cash and cash equivalents of $36,136, compared to $375,855 for the year ended September 30, 2018. Working capital was $153,198 as of September 30, 2019 compared to $196,943 at September 30, 2018. The decrease in working capital was $43,745. The decrease in the working capital was impacted by the reverse merger as we brought on additional current debt of $60,900, associated interest of $8,855 and accounts payable of $10,006. Other changes were related to the normal operations of the Company that primarily included decreases in cash of $339,719 and other assets of $4,460, accounts payable, related party of $40,000, dividends payable of $240,000, notes payable, related party of $24,937, interest payable, related party of $1,188, offset by increases in accounts receivable of $91,414, accounts payable of $31,747 and interest payable of $5,484.





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Cash Flows from Operating Activities:

Net cash used in operating activities for the year ended September 30, 2019 was $329,391 and $804,537 for the year ended September 30, 2018. The decrease over the two years presented of $475,146 was a result of decreases in our net loss of $1,522,972, amortization of royalty contracts of $708,333, impairment of assets of $375,000, accounts payable, related parties of $53,842 that was offset by increases in shares issued for services of $1,200, other assets of $1,458, royalty receivable of $15,351, accounts payable and accrued liabilities of $72,192 and accrued interest, related parties of $29,850.

Cash Flows from Investing Activities:

Net cash provided by investing activities for the year ended September 30, 2019 and September 30, 2018 was $1,812 and $0. As part of the merger transaction between AIG and VIT, the Company recorded an additional $1,812 in cash.

Cash Flows from Financing Activities:

Net cash used in financing activities for the year ended September 30, 2019 was $12,140. Net cash provided by financing activities for the year ended September 30, 2018 was $731,030. The change of $743,170 was a direct result of proceeds from a note payable in 2018 of $741,030. In 2019, the Company used $10,000 in payments on a note payable, redemption of common shares of $22,740, and redemption of preferred stock of $100, offset by proceeds totaling $20,700 received from sales of common stock of our subsidiary.

On September 27, 2019, the Company effected a reverse merger with Virtual Interactive Technologies, Corp (f/k/a Mascota Resources, Corp.) ("VIT") The following are transactions associated with the reverse merger. (Additional information can be found with the 8K/A filed on January 15, 2020.)





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On September 27, 2019, the Company issued 5,175,000 shares of AIG Inc common stock to various investors, at $0.004 per share for proceeds of $20,700.

On September 27, 2019 AIG, Inc executed a share exchange agreement with Virtual Interactive Technologies, Corp (f/k/a Mascota Resources, Corp.) ("VIT"). AIG, Inc. received 6,175,000 shares of VIT for all of its outstanding shares and became a wholly owned subsidiary of VIT.

On September 27, 2019, the VIT issued 595,612 shares of Series B preferred stock in full payment of outstanding loans and accrued interest totaling $2,404,900 to Velocity Capital. The loans were payable by AIG prior to the reverse merger that were paid by the issuance of the Company's preferred stock after the merger.

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