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

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 ("VRVR" or "the Company" or "we")

VRVR 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, VRVR offers expertise in development solutions, publishing and marketing video game products and is actively involved in the early stages of VR/AR game development. VRVR 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, console and mobile market, it will continue to explore addition opportunities in the gaming space as they present themselves. In addition, the VRVR 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, 2021 and 2020.

Revenue decreased 24% from $256,396 for the year ended September 30, 2020 to $194,350 for the year ended September 30, 2021. 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 2020 but not in 2021. For the year ended September 30, 2020, we recorded $23,035 in R&D expense versus $-0- for the year ended September 30, 2021. In 2020 we recorded the final payment for Catch & Release.

General and Administrative expense for the years ended September 30, 2021 and 2020 was $265,027 and $274,094, respectively. This represents a 3.3% decrease over the years. Most of the expense recorded for both years consisted of contract services for management and operations.

For the years ended September 30, 2021 and 2020, we recorded a loss of $119,021 and $9,823, respectively. The increase of $109,198 was mainly associated with the decrease in revenue and operating expenses in 2021 offset by a gain on extinguishment of debt of $77,118 in 2020.

Liquidity and Capital Resources

For the year ended September 30, 2021, we had cash and cash equivalents of $251,064, compared to $36,244 for the year ended September 30, 2020. Working capital was $293,754 as of September 30, 2021 compared to $205,941 at September 30, 2020. The increase in working capital was $87,813. The increase in the working capital was impacted by the increases in additional current debt of $52,375 and associated interest of $1,170. Other changes were related to the normal operations of the Company that primarily included increases in convertible note receivable interest of $1,754 and accounts payable of $29,944, offset by decreases in royalties receivable of $55,266, and $9,994 in accounts payable, related parties.

Cash Flows from Operating Activities:

Net cash provided by operating activities for the year ended September 30, 2021 and 2020 was $4,945 and $24,913, respectively. The decrease over the two years presented of $19,968 was a result of decreases in our gain on extinguishment of debt of $77,118, royalty receivable of $43,232, accounts payable and accrued liabilities of $117,281, interest payable of $1,674, other assets of $2,660 and interest receivable of $168 that was offset by increases in accounts payable, related parties of $59,988, and interest payable, related parties of $795.

Cash Flows from Investing Activities:

Net cash used in investing activities for the year ended September 30, 2021 was $7,500. Net cash provided by investing activities for the year ended September 30, 2020 was $11,195. In 2021 the Company advanced money of $7,500 to an unrelated party. In 2020, the Company sold land for proceeds of $36,195 and advanced money to an unrelated party in the amount of $25,000.

Cash Flows from Financing Activities:

Net cash provided by financing activities for the year ended September 30, 2021 was $217,375. Net cash used in financing activities for the year ended September 30, 2020 was $36,000. The change of $253,375 was a direct result of $217,375 in proceeds from a note payable during 2021, and payments on notes payable and notes payable, related parties in 2020 of $32,000 and $4,000, respectively.

On September 23, 2021, an unrelated third party loaned VRVR $235,000 that consisted of cash received by the Company in the amount of $204,300, $13,075 paid to other contract services, and an original issue discount of $17,625. This discount will be amortized over the life of the note commencing October 1, 2021. The note carries a 12.5% annual interest rate and matures on March 23, 2022.

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