SIGNATURES

34

PART I - FINANCIAL INFORMATION

Item 1.  Financial Statements

See accompanying notes to unaudited consolidated financial statements.statements

See accompanying notes to unaudited consolidated financial statements

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See accompanying notes to unaudited consolidated financial statements

FRESH HARVEST PRODUCTS,

INNOVATIVE MEDTECH, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

July 31, 2012FOR THE PERIOD ENDING SEPTEMBER 30, 2022

NOTE 1.

GENERAL ORGANIZATION AND BUSINESS

Fresh Harvest Products,Innovative MedTech, Inc. (the “Company”), a New JerseyDelaware corporation, (the “Parent Company”),is a provider of health and wellness services, primarily through its subsidiaries (collectively referredwholly owned subsidiary SarahCare, an adult day care franchisor with 26 centers (2 corporate and 24 franchise locations) located in 13 states. SarahCare offers seniors daytime care and activities focusing on meeting their physical and medical needs on a daily basis, and ranging from nursing care to salon services and providing meals, to offering engaging and enriching activities to allow them to continue to lead active and engaged lives.

The Company has also been working on launching an RX Vitality wallet digital offering and mobile app. Once implemented and live, the Company’s digital healthcare wallet will be accessible by customers via mobile wallet on both the Apple iOS and Android App Stores. The Company intends to have a physical healthcare card as the “Company”), are engaged in the proprietary development, sales and marketing of organic and natural food products.  well.

On December 16, 2005,April 1, 2022, the ParentCompany partnered with TruCash Group of Companies Inc. (“TruCash”), a leading global payments provider, to launch an all-in-one Super Healthcare App, called RX Vitality Wallet, that will be designed to cater to consumers, patients, hospitals, Seniors, and governments, with a solid platform of benefits and online banking. The RX Vitality digital healthcare wallet is being designed to offer 20%-75% pharmaceutical discounts at 65,000 pharmacies across the United States, including Walgreens and CVS. In addition, the Company plans to offer health and wellness discounts at 500+ online merchants, as well as earning points on its loyalty program. The Company intends to generate revenue from its digital wallet and mobile app in multiple ways, including but not limited to monthly recurring fees, transfer fees, and the inter-exchange rate. On June 15, 2022, the Company’s RX Vitality digital healthcare wallet became available for download at the Apple iOS App store for Apple iPhone users. The Company’s app has also been approved and is available on the Google Play Store.

On April 5, 2022, the Company engaged mPulse Mobile, a leader in conversational AI and digital engagement solutions for the healthcare industry, to drive engagement with the Company’s digital app and wallet.

On April 28, 2022, the Company entered into an Agreement and Plan of Acquisition and Merger (the “Merger Agreement”a share exchange agreement to acquire RX Vitality, Inc. (“RX Vitality”) with Fresh Harvest Products, Inc., a New York corporation (“New York FHP”), Michael Friedman, Marcia Robertsmedia and Illuminate, Inc.  The Merger Agreement contemplatesfinance advisory company.

On May 13, 2022, the merger of the Parent Company and New York FHP (the “Merger”).  Although the Parent Company has operated as if the Merger was consummated in December 2005, it has come to the Parent Company’s attention that certain required filings were not made in the State of New Jersey and the State of New York to properly consummate the Merger.   As a result, as of the date of this Quarterly Report on Form 10-Q, the Parent Company and New York FHP had not completed the Merger.  In order to complete the Merger, the Parent Company and New York FHP plan to take the following steps:

1. Pay all taxes owed by New York FHP to the State of New York.  As of October 31, 2011, New York FHP owed New York State payroll related taxes in the amount of approximately $30,145 plus applicable interest and penalties.

2. File an application on behalf of the Parent Company for authority to do business in the State of New York with the Secretary of State of the State of New York, which application requires the consent of the New York State Tax Commission, and pay any applicable late filing penalties.  

3. File a final franchise tax return with the State of New York with respect to New York FHP.

4. File a Certificate of Merger with the Secretary of State of the State of New Jersey.

5. File a Certificate of Merger with the Secretary of State of the State of New York.

The Parent Company intends to take the steps required to complete the Merger, however, the Parent Company cannot forecast when it will pay the amounts owed to the State of New York, make the indicated filings or otherwise complete the Merger.  In addition, there is a risk that the State of New York and the State of New Jersey may require the Parent Company and New York FHP to take additional actions that the Company is not presently contemplating.  If the Parent Company and New York FHP are unable to complete the above described steps and to consummate the Merger, then there is a risk that the Parent Company’s acquisition of New York FHP could be challenged which could seriously harm the Parent Company’s business, financial condition, results of operations and cash flows.  If the Parent Company and New York FHP are unable to consummate the Merger, the value of the Parent Company’s shares held by the Parent Company’s shareholders could significantly decline.

The Company sells its products to consumers through local, regional and national supermarkets, retailers, distributors, brokers and wholesalers.  In August 2009, the Parent Company formed a wholly-owned subsidiary, Wings of Nature, LLC.  On March 2, 2010, the Parent Company entered into the Asset Purchase Agreement (the “Asset Purchase Agreement”)a partnership with Take and Bake, Inc., doing business as A.C. LaRocco Pizza Company. In April 2010, the Parent Company formed a wholly-owned subsidiary, New A.C. LaRocco, for the purpose of implementing its new pizza business.  On May 4, 2011, the Parent Company, New York FHP, New A.C. LaRocco, the Seller, Clarence Scott and Karen Leffler entered into a Settlement Agreement and Release (the “Settlement Agreement”VSUSA Corp. (“VSUSA”), a non-for-profit organization that empowers Veterans and Seniors by offering services designed to build successful life transitions with access to workforce and independent housing; health services; and social service programs in communities across the United States. The partnership will permit the Company to use the VSUSA logo on the back of its Vitality Debit Card. For this, the Company will give up to 1% of its revenue generated from its Vitality Debit Card to VSUSA. The Company’s Chairman is a principal and co-Founder of VSUSA.

NOTE 2. LIQUIDITY, CAPITAL RESOURCES AND GOING CONCERN

The accompanying consolidated financial statements have been prepared on a going-concern basis, which was effective on May 11, 2011.  contemplates the continuation of operations, realization of assets and liquidation of liabilities in the ordinary course of business.

Going ConcernFor the quarters ended September 30, 2022 and 2021, the Company reported a net loss of $1,000,490 and $259,318 respectively.

As of September 30, 2022, the Company maintained total assets of $4,586,989, total liabilities including long-term debt of $6,997,918 along with an accumulated deficit of $33,974,856.

The Company continues to have limited capital resources and has experienced net losses and negative cash flows from operations and expects these conditions to continue for the foreseeable future. As of July 31, 2012,September 30, 2022, the Company has limitedhad $129,617 cash available for operations and hashad an accumulated deficit of $8,217,299.$33,974,856. Management believes that cash on hand as of July 31, 2012September 30, 2022 is not sufficient to fund operations for the next year.through November 2023. The Company will be required to raise additional funds to meet its short and long-term planned goals. There can be no assurance that such funds, if available at all, can be obtained on terms reasonable to the Company. 

IfThe Company believes that additional capital will be required to fund operations through November 15, 2023 and beyond, as it attempts to generate increasing revenue, and develop new products. The Company intends to attempt to raise capital through additional equity offerings and debt obligations. There can be no assurance that the Company will be successful in obtaining financing is not availableat the level needed or not available on terms acceptable to us, our ability to fund our operations or otherwise respond to competitive pressures may be significantly impaired. We could also be forced to curtail our business operations, reduce our investments, decrease or eliminate capital expenditures and delay the execution of our business plan, including, without limitation, all aspects of our operations, which would have a material adverse affect on our business.  The items discussedCompany. These conditions raise substantial doubt about ourthe Company’s ability to continue as a going concern. We cannot assure you that we can achieve or sustain profitability in the future. Our operations are subject to the risks and competition inherent in the establishment of a business enterprise.  Revenues and profits, if any, will depend upon various factors, including whether our products achieve market acceptance and whether we obtain additional

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FRESH HARVEST PRODUCTS, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

July 31, 2012

financing. We may not achieve our business objectives and the failure to achieve such goals would have a materially adverse impact on us.

The accompanying consolidated financial statements have been prepared assumingdo not include any adjustments that might result from the Company will continue as a going concern, which contemplates the realizationoutcome of assets and the liquidation of liabilities in the normal course of business. However, the Company has limited revenue and without realization of additional capital, it would be highly unlikely for the Company to continue as a going concern.

Special Meeting and Shareholder Meetingthis uncertainty.

The Parent Company held a special meeting of shareholders on September 2, 2011.  At this meeting, the holders of the Parent Company’s common stock and Series A Preferred Stock voted, as a single class, to approve an increase in the number of authorized shares of the Parent Company’s common stock from 200,000,000 to 2,000,000,000 shares and to authorize the filing of an amendment to the Parent Company’s Certificate of Incorporation with respect to such change.  On September 6, 2011, the Parent Company filed the amendment with the Secretary of State of the State of New Jersey

Settlement Agreements

On December 2, 2011, the Parent Company, New York FHP, and a certain creditor of the Company entered into a Settlement Agreement and Release (the “Second Settlement Agreement”), which was effective on December 9, 2011.  

The terms of the Second Settlement Agreement include, among others:

(i)

The Parent Company shall issue 2,500,000 shares of common stock to the Settler, which shares have been issued;

(ii)

Prior to the effective date of the Second Settlement Agreement, Fresh Harvest would pay to Settler an aggregate $5,000, which amount as been paid;

(iii)

each of the Settler, the Company acknowledged and agreed that upon receipt of the share and payment by the Parent Company all amounts owed by Fresh Harvest to the Settler in connection with the Settler’s employment agreement or any other dispute with Fresh Harvest or otherwise shall be deemed satisfied and paid in full.

The Second Settlement Agreement also provides for a mutual release of claims by the parties.

On May 4, 2011, the Parent Company, New York FHP, New A.C. LaRocco, the Seller, Clarence Scott and Karen Leffler entered into a Settlement Agreement and Release (the “Settlement Agreement”), which was effective on May 11, 2011.  

The terms of the Settlement Agreement include, among others:

(i)

The Parent Company shall issue an additional 150,000 shares of Series A Convertible Preferred Stock to the Seller (the “Share Payment”), which shares have been issued;

(ii)

during the 90 day period following the effective date of the Settlement Agreement, Fresh Harvest would pay to the Seller an aggregate of $23,000, which amount has been paid;

(iii)

neither Mr. Scott nor Ms. Leffler would be restricted from accepting employment with, consulting with or investing in any business in competition with Fresh Harvest or its subsidiaries;

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FRESH HARVEST PRODUCTS, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

July 31, 2012

(iv)

each of the Seller, Mr. Scott and Ms. Leffler acknowledged and agreed that upon receipt of the Share Payment by the Parent Company and compliance by New A.C. LaRocco with the provisions of Section 2(b) of the Settlement Agreement (i.e., payment of $23,000 to the Seller), all amounts owed by Fresh Harvest and/or New A.C. LaRocco to the Seller, Mr. Scott and Ms. Leffler in connection with the Asset Acquisition, pursuant to the Transaction Documents (including the employment agreements between Fresh Harvest and each of Mr. Scott and Ms. Leffler) or otherwise shall be deemed satisfied and paid in full;

(v)

each of the Seller, Mr. Scott and Ms. Leffler acknowledged and agreed that on March 2, 2010, the Parent Company acquired allright, title and interest in (collectively, the “Acquired Assets”) allof the property and assets, real, personal or mixed, tangible and intangible, of every kind and description of the Seller, except for: (1) receivables due to the Seller on March 2, 2010, (2) cash and cash equivalent items on hand at the close of business on March 2, 2010, (3) accounts receivable earned from the operation of the Seller’s business during the period beginning sixty (60) days prior to March 2, 2010 and ending on March 2, 2010, (4) accounts receivable as to litigation commenced prior to March 2, 2010 against a debtor for purposes of collection, (5) all judgments in favor of the Seller in connection with the collection of accounts receivable as of March 2, 2010 and (6) all  checkbooks,  stubs,  books of account, ledgers  and journals related to the prior operation of the Seller’s business prior to March 2, 2010;

(vi)

each of the Seller, Mr. Scott and Ms. Leffler further acknowledged and agreed that the only liability assumed by Fresh Harvest from the Seller pursuant to the Transaction Documents was the assumption of that certain Secured Promissory Note dated July 6, 2007 in the original principal amount of $218,356.94 (and with a principal balance of $129,384.59 on March 2, 2010) owed by the Seller to a specified creditor;

(vii)

New A.C. LaRocco agreed to transfer to the Seller certain specified assets and any rights and obligations of New A.C. LaRocco and/or Fresh Harvest with respect to the facility located in Spokane, Washington; and,

(viii)

subject to certain conditions, the domain name healthypizzarevolution.com, will be the property of Mr. Scott.

The Settlement Agreement also provides for a mutual release of claims by the parties.

Explanation:

 (1)

Assets located in the Spokane, Washington office that were released in the Settlement Agreement dated May 4, 2011.

(2)

Balance of the Note Payable owed to Take and Bake, Inc. that was released in the Settlement Agreement dated May 4, 2011.

(3)

150,000 shares of convertible preferred stock (15,000,000 shares of common stock) at a per common share price of $.012; per share price of the common stock was determined to be the closing price of the shares on the date of issuance.

NOTE 2.

3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Basis of Presentation

The accompanying consolidated financial statements have been prepared in accordance with generally accepted accounting principles (“GAAP”) and pursuant to the rules and regulations of the Securities and Exchange Commission (the “SEC”) and reflect all adjustments, consisting of normal recurring adjustments, which management believes are necessary to fairly present the financial position, results of operations and cash flows of the Company as of and for the yearsthree months ended October 31, 2011September 30, 2022 and 2010.2021.

Reclassifications

Principles of Consolidation

TheseThe Company has two wholly-owned operating subsidiaries; Sarah Adult Day Services, Inc., and Sarah Day Care Centers, Inc., along with non-operating subsidiaries consisting of RX Vitality, Inc. and the 10 newly formed limited liability companies formed for the additional SarahCare location leases. The consolidated financial statements, which include reclassification adjustments as of October 31, 2011 to “accounts payable and accrued expenses” and “accrued expenses, related party, current” for comparison purposes, as well as breaking out depreciation expense in the statement of operations. These amounts have been reclassified on the balance sheet and statement of operationsaccounts of the Company accordingly.  These reclassifications did notand its two wholly-owned subsidiaries, are prepared in conformity with GAAP pursuant to the rules and regulations of the SEC. All significant intercompany balances and transactions have any effect onbeen eliminated. The consolidated financial statements have been prepared using the reported net income (loss) for the quarters ended July 31, 2012accrual basis of accounting in accordance with GAAP and July 31, 2011 or for thepresented in US dollars. The fiscal year ended October 31, 2011.end is June 30.

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FRESH HARVEST PRODUCTS, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

July 31, 2012

Use of Estimates

The preparation of financial statements in conformity with accounting principles generally accepted in the United States of AmericaGAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements and the reported revenues and expenses during the reporting periods. Because of the use of estimates inherent in the financial reporting process, actual results may differ significantly from those estimates.

Cash and Cash Equivalents

The Company maintains cash balances in a non-interest bearingnon-interest-bearing account that currently does not exceed federally insured limits.$250,000 at September 30, 2022. For the purpose of the consolidated financial statements, of cash flows, all highly liquid investments with a maturity of three months or less are considered to be cash equivalents. There were no cash equivalents as of July 31, 2012.September 30 and June 30, 2022.

As of July 31, 2012, the bank account located in Spokane, Washington that the Parent Company was using (and no longer uses) for the operations of the New A.C. LaRocco is in the name of Take and Bake, Inc. dba AC LaRocco Pizza.  

As of July 31, 2012 and October 31, 2011, the Company had zero cash balances.

Net Income (Loss)Earnings Per Share Calculation

Basic net lossearnings per common share ("EPS"(“EPS”) is computed by dividing income available to common stockholders by the weighted-average number of common shares outstanding for the period. Diluted earnings per share is computed by dividing net income by the weighted average shares outstanding, assuming all dilutive potential common shares were issued.

The weighted-average numberIntangible Assets

Certain intangible assets arose from the acquisition of common shares outstanding for computing basic EPS for the three months ended July 31, 2012Sarah Adult Day Services, Inc., and 2011 were 1,068,943,779Sarah Day Care Centers, Inc. on March 25, 2021 and 200,000,000 respectively. The weighted-average number of common shares outstanding for computing basic EPS for the nine months ended July 31, 2012 were 724,521,655 and 200,000,000, respectively.

Revenue Recognition and Sales Incentives

Sales are recognized when the earnings process is complete, which occurs when products are shipped in accordance with terms of agreements, title and risk of loss transfer to customers, collection is probable and pricing is fixed or determinable. Sales are reported net of sales incentives, which include trade discounts and promotions and certain coupon costs. Shipping and handling costs billed to customers are included in reported sales. Allowances for cash discounts are recorded in the period in which the related sale is recognized.

Concentrations of Credit Risk

Financial instruments which potentially subject the Company to concentrations of credit risk consist of accounts receivable.

For the quarter ended July 31, 2012, the Company earned revenue from three customersfollowing, which represented approximately 83.71% of total revenue and at July 31, 2012, three customers had accounts receivable balances representing 78.14% of the gross accounts receivable balance.

Accounts Receivable

The Company performs ongoing credit evaluations on existing and new customers daily. When it is determined that an amount included in accounts receivable is uncollectible it is written off as uncollectible.

As of July 31, 2012 and October 31, 2011, the allowance for doubtful accounts was $0 and $76,109, respectively.  

Inventory

Inventory is valued at the lower of actual costhave been or market, utilizing the first-in, first-out method.  The Company provides write-downs for finished goods expected to become non-saleable due to age and specifically identifies and provides for slow moving products and packaging.

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FRESH HARVEST PRODUCTS, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

July 31, 2012

As of July 31, 2012 and October 31, 2011, the Company’s obsolete inventory was $12,629 and $40,676, respectively.

Property and Equipment

Property and equipment is carried at cost and depreciated orare being amortized on a straight-line basis over theirthe following estimated useful life.lives, unless they have an indefinite life:

An intangible asset with an indefinite useful life is not amortized but assessed for impairment annually, or more frequently, when events or changes in circumstances occur indicating that it is more likely than not that the indefinite-lived asset is impaired. Impairment exists when the carrying amount exceeds its fair value. In testing for impairment, the Company has the option to first perform a qualitative assessment to determine whether it is more likely than not that an impairment exists. If it is determined that it is not more likely than not that an impairment exists, a quantitative impairment test is not necessary. If the Company concludes otherwise, it is required to perform a quantitative impairment test. To the extent an impairment loss is recognized, the loss establishes the new cost basis of the asset. Subsequent reversal of impairment losses is not permitted. For the quarters ended September 30, 2022 and 2021, there were no impairment losses.

Revenue Recognition

Revenue is recognized when a customer obtains services. The amount of revenue that is recorded reflects the consideration that the Company expects to receive in exchange for those goods. The Company believesapplies the asset lives assignedfollowing five-step model in order to its property and equipment is within the ranges/guidelines generally used in food manufacturing and distribution businesses.  Depreciation is provided for on a straight-line basis over the useful lifedetermine this amount: (i) identification of the assetspromised goods in the contract; (ii) determination of five years. Ordinary repairswhether the promised goods are performance obligations, including whether they are distinct in the context of the contract; (iii) measurement of the transaction price, including the constraint on variable consideration; (iv) allocation of the transaction price to the performance obligations; and maintenance are expensed as incurred.  (v) recognition of revenue when (or as) the Company satisfies each performance obligation.

For the three months ended July 31, 2012 and 2011, depreciation expense was  $113 and $12,176, respectively. For the nine months ended July 31, 2012 and 2011, depreciation expense was $2,544 and $3,018, respectively.

Dividends

The Company only applies the five-step model to contracts when it is probable that the entity will collect the consideration it is entitled to in exchange for the services it provides to the customer. Once a contract is determined to be within the scope of Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 606 at contract inception, the Company reviews the contract to determine which performance obligations the Company must deliver and which of these performance obligations are distinct.

Patient Fees

Participant fee revenue is reported at the amount that reflects the consideration the Company expects to receive in exchange for the services provided. These amounts are due from participants or third-party payors and include variable consideration for retroactive adjustments from estimated reimbursements, if any, under reimbursement programs. Performance obligations are determined based on the nature of the services provided. Resident fee revenue is recognized as performance obligations are satisfied.

Under the Company’s day care agreements, which are generally for a contractual term of 30 days to one year, the Company provides services to participants for a stated daily or monthly fee. The Company has elected the lessor practical expedient within ASC 842, Leases (“ASC 842”) and recognizes, measures, presents, and discloses the revenue for services under the Company’s senior living residency agreements based upon the predominant component, either the lease or nonlease component, of the contracts. The Company has determined that the services included under the Company’s independent living, assisted living, and memory care residency agreements have the same timing and pattern of transfer and are performance obligations that are satisfied over time. The Company recognizes revenue under ASC 606, Revenue Recognition from Contracts with Customers (“ASC 606”) for its participants agreements for which it has estimated that the nonlease components of such agreements are the predominant component of the contract.

The Company enters into contracts to provide home assisted health, and certain outpatient services. Each service provided under the contract is capable of being distinct, and thus, the services are considered individual and separate performance obligations. The performance obligations are satisfied as services are provided and revenue is recognized as services are provided.

The Company receives payment for services under various third-party payor programs which include Medicaid, Veterans Affairs and other third-party payors. Estimates for settlements with third-party payors for retroactive adjustments from estimated reimbursements due to audits, reviews, or investigations are included in the determination of the estimated transaction price for providing services. The Company estimates the transaction price based on the terms of the contract with the payor, correspondence with the payor, and historical payment trends. Changes to these estimates for retroactive adjustments are recognized in the period the change or adjustment becomes known or when final settlements are determined.

Billings for services under third-party payor programs are recorded net of estimated retroactive adjustments, if any. Retroactive adjustments are accrued on an estimated basis in the period the related services are rendered and adjusted in future periods or as final settlements are determined. Contractual or cost related adjustments from Medicaid or Veterans Affairs are accrued when assessed (without regard to when the assessment is paid or withheld). Subsequent adjustments to these accrued amounts are recorded in net revenues when known.

Franchise Fees

The Company franchises a number of its locations under franchise contracts which provide periodic franchise fee payments to the Company and reimbursement for costs and expense related to such franchises. The Company’s franchisees pay a variety of royalties and fees, including an agreed upon percentage of gross revenues (as defined in the franchise agreement). The Company estimates the amount of franchise fee revenue expected to be earned, if any, during the annual contract period and revenue is recognized as services are provided. The Company’s estimate of the transaction price for the franchise services also includes the amount of reimbursement due from the franchises for services provided and related costs incurred.

SarahCare, as the franchisor, supplies the franchisee’s with initial assistance and approval with the following: (1) Providing the site selection criteria for the SARAH Business and, upon a potential franchisee’s request, provide input regarding possible sites. The Company does not yet adoptedown and lease any policy regardingsite to franchisees. After the franchise selects and the Company approves a site, the Company will designate the geographic area within which they may establish the SARAH Business; (2) Approve the signage; (3) Identify the standards and specifications for products, services, and materials that comply with the System, and, if the Company requires, the approved suppliers of these items. The Company will furnish a potential Franchisee with the listing of the package of initial franchise items as detailed in the Operations Manual. Neither the Company or its affiliate provide, deliver, or install any of these items; (4) Provide an Initial Training Program; and (5) Provide an Operations Training Program.

Once the Franchisee’s SarahCare business is operational, the Company will: (1) Issue and modify System standards for SARAH Businesses; (2) Provide access to a copy of the Company’s Operations Manual as they make available through our intranet. The Operations Manual contains mandatory and suggested specifications, standards and operating procedure; (3) Provide additional or special guidance and assistance and training as the Company deem appropriate and for which a potential Franchisee are financially responsible; (4) Inspect and observe the operation of the SARAH Business to help a potential Franchisee comply with the Franchise Agreement and all System standards; (5) Let the Franchisee use the confidential information; and, (6) Let the Franchisee use the Marks (trademarks, trade names, service marks, and logos).

Digital Healthcare Wallet & Card

Revenue will be recognized when fees are collected from cardholders at the time the fees are assessed and debited from their account balances. The Company anticipates the card revenues to consist of monthly maintenance fees, new card fees, ATM fees, and other card revenues. The fees will be earned by providing account services to each cardholder over the contract term. Agreements with cardholders are considered daily services contracts.

The Company intends to earn interchange revenue from fees remitted by the merchant’s bank, which are based on rates established by the payment of dividends. No dividends have been paid during 2011networks, such as Visa, when account holders make purchase transactions using the card products and 2012.

services. The Company intends to recognize revenues at the point in time the transactions occurs.

Income Taxes

The provision for income taxes is the total of the current taxes payable and the net of the change in the deferred income taxes. Provision is made for the deferred income taxes where differences exist between the period in which transactions affect current taxable income and the period in which they enter into the determination of net income in the financial statements.

Leases

The Company accounts for leases in accordance with Accounting Standards Update (ASU) 2016-02, “Leases” (Topic 842). Based on this standard, the Company determines if an agreement is a lease at inception. Leases are included – right to use, current portion of lease liability, and operating lease liability, less current portion in the Company’s consolidated balance sheets. Finance leases are included in property and equipment, net current portion of long-term debt, net and long-term debt, less current portion and debt issuance costs in the Company’s consolidated balance sheets.

Fair Valuevalue of Financial Instrumentsfinancial instruments

The Company’s financial instruments includinginclude cash accounts receivable, and cash equivalents, accounts payable, are reflected in the accompanying consolidated financial statements ataccrued expenses, and debt. The carrying value whichof these financial instruments is considered to be representative of their fair value due to the short maturity of these instruments. The carrying amount of the debt approximates fair value, because the interest rates on these instruments approximate the interest rate on debt with similar terms available to the Company. The Company’s derivative liabilities were adjusted to fair market value at the end of each reporting period, using Level 3 inputs.

Fair value is defined as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability, in an orderly transaction between market participants on the measurement date. Valuation techniques used to measure fair value must maximize the use of observable inputs and minimize the use of unobservable inputs. The fair value hierarchy is based on three levels of inputs, of which the first two are considered observable and the last unobservable, as follows:

Level 1 – Quoted prices in active markets for identical assets or liabilities.

Level 2 – Inputs other than Level 1 that are observable, either directly or indirectly, such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the short-termassets or liabilities.

Level 3 – Unobservable inputs that are supported by little or no market activity and that are significant to the measurement of the fair value of the assets or liabilities.

The carrying amounts of the Company’s financial assets and liabilities, such as cash, accounts payable, accrued expenses and interest, certain notes payable and notes payable – due to related parties, approximate their fair values because of the short maturity of these instruments.

The Company accounts for its derivative liabilities, at fair value, on a recurring basis under Level 3 (See Note 12).

Impairment

Embedded Conversion Features

The Company evaluates embedded conversion features within convertible debt under ASC 815 “Derivatives and Hedging” to determine whether the embedded conversion feature(s) should be bifurcated from the host instrument and accounted for as a derivative at fair value with changes recorded in earnings. If the conversion feature does not require derivative treatment under ASC 815, the instrument is evaluated under ASC 470-20 “Debt with Conversion and Other Options” for consideration of Long-Lived Assetsany beneficial feature.

Long-lived assets such as property and equipment are reviewed for impairment whenever events or changes in circumstances indicateDerivative Financial Instruments

When the Company issues debt that contains a conversion feature, it first evaluates whether the carrying amount of an asset may not be recoverable. Recoverability of assetsconversion feature meets the requirements to be held and used is measured bytreated as a comparisonderivative: a) one or more underlying, typically the price of the carryingCompany’s stock; b) one or more notional amounts or payment provisions or both, generally the number of shares upon conversion; c) no initial net investment, which typically excludes the amount borrowed; and d) net settlement provisions, which in the case of an asset toconvertible debt generally means the estimated undiscounted future cash flows expectedstock received upon conversion can be readily sold for cash. There are certain scope exceptions from derivative treatment, but these typically exclude conversion features that provide for a variable number of shares.

If the conversion features within convertible debt meet the requirements to be generated bytreated as a derivative, the asset.Company estimates the fair value of the derivative liability using the Monte Carlo Simulation Model upon the date of issuance. If the carryingfair value of the derivative liability is higher than the face value of the convertible debt, the excess is immediately recognized as interest expense. Otherwise, the fair value of the derivative liability is recorded as a liability with an offsetting amount of an asset exceeds its estimated future cash flows, an impairment charge is recognized by the amount byrecorded as a debt discount, which offsets the carrying amount of the asset exceedsdebt. The derivative liability is revalued at the end of each reporting period and any change in fair value is recorded as a change in fair value in the consolidated statements of operations. The debt discount is amortized through interest expense over the life of the asset.

Assets todebt. Derivative instrument liabilities and the host debt agreement are classified on the consolidated balance sheets as current or non-current based on whether settlement of the derivative instrument could be disposedrequired within twelve months of would be separately presented in the balance sheet and reporteddate.

The accounting treatment of derivative financial instruments requires that the Company record the embedded conversion option at the lowertheir fair values as of the carrying amount orinception date of the agreement and at fair value less costs to sell,as of each subsequent balance sheet date. Any change in fair value is recorded as non-operating, non-cash income or expense for each reporting period at each balance sheet date. The Company reassesses the classification of its derivative instruments at each balance sheet date. If the classification changes as a result of events during the period, the contract is reclassified as of the date of the event that caused the reclassification. As a result of entering into warrant agreements, for which such instruments contained a variable conversion feature with no floor, the Company has adopted a sequencing policy in accordance with ASC 815-40-35-12 “Derivatives and are no longer depreciated. The assetsHedging” (provides comprehensive guidance on derivative and liabilities of a disposal grouphedging transactions) whereby all future instruments may be classified as held for sale would be presented separately ina derivative liability with the appropriate assetexception of instruments related to share-based compensation issued to employees or directors.

Debt Issue Costs and liability sections of the balance sheet.

For the three months ended July 31, 2012 and 2011, the Company recognized a loss on the disposal of assets of $0 and $1,226 respectively. For the nine months ended July 31, 2012 and 2011, the Company recognized a loss on the disposal of assets of $0 and $24,760 respectively.

Share-based compensation

Debt Discount

The Company accounts for common stock issued to employees, directors, and consultantsmay record debt issue costs and/or debt discounts in accordanceconnection with raising funds through the provisionsissuance of Stock Compensation. The compensation cost relating to share-based payment transactions willdebt. These costs may be recognizedpaid in the consolidated financial statements.  The cost associatedform of cash, or equity (such as warrants). These costs are amortized to interest expense over the life of the debt. If a conversion of the underlying debt occurs, a proportionate share of the unamortized amounts is immediately expensed.

Reclassification of Presentation

Certain prior year amounts have been reclassified to conform with common stock issued to employees, directors and consultants will recognized, at fair value,current year presentation. These reclassifications had no effect on the date issued.  Awards granted to non-employee consultants will be subsequently re-measured to current fair value until performance is completed or a performance commitment exists.reported results of operations.

For the three months ended July 31, 2012 and 2011, the Company recognized $0 and $0 in stock issued for services.  For the nine months ended July 31, 2012 and 2011, the Company recognized $378,714 and $301,091 in stock issued for services.

11

FRESH HARVEST PRODUCTS, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

July 31, 2012

Recently Issued Accounting for Uncertain Tax PositionsPronouncements

The Parent Company anddoes not expect any of the recently issued accounting pronouncements to have a material impact on its financial condition or its subsidiaries file income tax returns in the U.S. federal jurisdiction and various state, and local jurisdictions. The Company is no longer subject to U.S. federal income tax examination by tax authoritiesresults of operations for the years prior to October 31, 2005.  With respect to state and local jurisdictions, with limited exception, the Parent Company andperiod ended as of September 30, 2022 or its subsidiaries are no longer subject to income tax audits prior October 31, 2005.  In the normal course of business, the Company is subject to examination by various taxing authorities. Although the outcome of tax audits is always uncertain, the Company believes that adequate amounts of tax, interest and penalties have been provided for any adjustments that may result from these open tax years. Management has evaluated tax positions in accordance with FASB ASC 740, Income Taxes, and has not identified any other tax positions that require disclosure.

on a going forward basis.

Subsequent Events

In accordance with ASC 855,Subsequent Events, the Company evaluated subsequent events through September 20, 2012, the date of this filing;report; the date the consolidated financial statements were available for issue.  As

NOTE 4. BUSINESS ACQUISITION

SarahCare

On March 25, 2021 the Company acquired SarahCare, an adult day care center franchisor and provider. The combined purchase price was $3,718,833. The purchase price was paid as follows: (i) $2,000,110 was paid in cash, (ii) the Company assumed $393,885 in debt due to sellers, and (iii) the remaining is payable through a royalty fee liability due in the amount of $1,500,000. The Royalty fee liability has a term 3 years and is to be repaid from any new subsidiary franchisee fees.

The Company completed its accounting for the acquisition on March 25, 2022. The purchase price allocation is as follows:

On June 30, 2022, the Company performed a test to determine if goodwill or the indefinite lived intangibles should be impaired. The Company determined that the fair value of the datereporting units was greater than its carrying value. As such, no impairment was recorded for the year ended June 30, 2022.

NOTE 5. NOTES RECEIVABLE

The Company’s wholly-owned subsidiary Sarah Adult Day Services, Inc., has notes receivables from two franchises, which were previously converted from trade receivables. They are as follows:

Principal to be collected during the next year is as follows:

NOTE 6. PROPERTY AND EQUIPMENT

Property and equipment consisted of filing of these financial statements, the following subsequent events that were required to beat September 30, 2022 and June 30, 2022:

Depreciation expense was $6,411 and $13,710 for the three months ended September 30, 2022 and 2021.

NOTE 7. INTANGIBLE ASSETS

The Company recorded or disclosedamortization expense in the accompanying financial statementsamount of $5,318 and $0 for the quarterthree months ended July 31, 2012.September 30, 2022 and 2021.

On September 11, 2012, Dominick Cingari, a Director of the Company since December 16, 2005, submitted an email of resignation, and stated that a letter of resignation was forthcoming, and which letter has not yet been received by the Company.Mr. Cingari is owed compensation of $14,000 as of July 31, 2012.  This amount has a conversion option into common shares at the option and by a majority vote of the Company’s Board of Directors.NOTE 8. NOTES PAYABLE

NOTE 3.  ACCOUNTS PAYABLE

As of July 31, 2012September 30, 2022 and October 31, 2011,June 30, 2022, the accountsCompany had $172,360 and $180,626, respectively, in outstanding notes payable, was as follows:

________

12* As of September 30, 2022, these notes are in default.

FRESH HARVEST PRODUCTS, INC. AND SUBSIDIARIES________

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS* As of September 30, 2022, these notes are in default.

July 31, 2012

NOTE 4.  9. NOTES PAYABLE, - RELATED PARTIES

As of July 31, 2012September 30 and October 31, 2011,June 30, 2022, the Company had $732,562 and $732,562, respectively, in outstanding notes payable, – related partiesparties. As of September 30 and June 30, 2022, the Company had $59,963 and $47,763, respectively, in accrued interest related to these notes. All of these notes were as follows:assumed in connection with the acquisition on March 25, 2021.

* As of September 30, 2022, these notes are in default.

NOTE 5.  10. CONVERTIBLE NOTES PAYABLE, IN DEFAULT

As of July 31, 2012September 30 and October 31, 2011,June 30, 2022, the convertible notes payable were as follows: