UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
For
the quarterly period ended
OR
For the transition period from ________ to ________
Commission
file number:
(Exact Name of Registrant as Specified in its Charter)
(State or Other Jurisdiction of Incorporation or Organization) |
(I.R.S. Employer Identification No.) |
(Address of Principal Executive Offices)
Registrant’s
telephone number, including area code:
Securities registered pursuant to Section 12(b) of the Act: None
Securities registered pursuant to section 12(g) of the Act:
(Title of class)
Indicate by check mark if the Registrant is a well-known seasoned issuer, as defined by Rule 405 of the Securities Act. Yes ☐ No ☒
Indicate by check mark if the Registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Exchange Act. Yes ☐ No ☒
Indicate
by check mark whether the Registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange
Act of 1934 during the preceding 12 months (or for such shorter period that the Registrant was required to file such reports), and (2)
has been subject to such filing requirements for the past 90 days.
Indicate
by check mark whether the Registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data
File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (ss.232.405 of this chapter) during the preceding 12
months (or for such shorter period that the Registrant was required to submit and post such files). Yes ☐
Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K (§ 229.405 of this chapter) is not contained herein, and will not be contained, to the best of Registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-Q or any amendment to this Form 10-Q. ☐
Indicate by check mark whether the Registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
| Large accelerated filer | ☐ | Accelerated filer | ☐ |
| ☐ | Smaller reporting company | ||
| (Do not check if a smaller reporting company) | Emerging growth company | ||
If an emerging growth company, indicate by check mark if the Registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 7(a)(2)(B) of the Securities Act. ☐
Indicate
by check mark whether the Registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No
As of March 12, 2025, there were shares of common stock of the Registrant outstanding.
Documents Incorporated by Reference: None.
TABLE OF CONTENTS
| 2 |
Unless the context clearly indicates otherwise, when used in this report “we,” “us,” “our,” “Healthcare Integrated Technologies,” “Company,” or “our Company” refers to Healthcare Integrated Technologies, Inc. and, if applicable, our subsidiaries.
CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS
This Quarterly Report on Form 10-Q (this “Report”) contains “forward-looking statements” within the meaning of the Section 27A of the Securities Act of 1933, as amended (the “Securities Act”), and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). Forward-looking statements discuss matters that are not historical facts. Because they discuss future events or conditions, forward-looking statements may include words such as “anticipate,” “believe,” “estimate,” “intend,” “could,” “should,” “would,” “may,” “seek,” “plan,” “might,” “will,” “expect,” “predict,” “project,” “forecast,” “potential,” “continue,” negatives thereof or similar expressions. These forward-looking statements are found at various places throughout this Report and include information concerning: possible or assumed future results of our operations; business strategies; future cash flows; financing plans; plans and objectives of management; any other statements regarding future operations, future cash needs, business plans and future financial results; and any other statements that are not historical facts.
From time to time, forward-looking statements also are included in our other periodic reports on Form 8-K, in our press releases, in our presentations, on our website and in other materials released to the public. Any or all the forward-looking statements included in this Report and in any other reports or public statements made by us are not guarantees of future performance and may turn out to be inaccurate. These forward-looking statements represent our intentions, plans, expectations, assumptions, and beliefs about future events and are subject to risks, uncertainties, and other factors. Many of those factors are outside of our control and could cause actual results to differ materially from the results expressed or implied by those forward-looking statements. Considering these risks, uncertainties and assumptions, the events described in the forward-looking statements might not occur or might occur to a different extent or at a different time than we have described. You are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date of this Report. All subsequent written and oral forward-looking statements concerning other matters addressed in this Report and attributable to us or any person acting on our behalf are expressly qualified in their entirety by the cautionary statements contained or referred to in this Report.
Except to the extent required by law, we undertake no obligation to update or revise any forward-looking statements, whether resulting from new information, future events, a change in events, conditions, circumstances, or assumptions underlying such statements, or otherwise.
For discussion of factors that we believe could cause our actual results to differ materially from expected and historical results see “ITEM 1A – RISK FACTORS” included in our most recent Annual Report on Form 10-K for the year ended July 31, 2024 as filed with the United States Securities and Exchange Commission on October 29, 2024.
| 3 |
PART I – FINANCIAL INFORMATION
Item 1. FINANCIAL STATEMENTS.
Index to Financial Statements
| F-1 |
HEALTHCARE INTEGRATED TECHNOLOGIES, INC.
INTERIM CONSOLIDATED BALANCE SHEETS
| January 31, 2025 | July 31, 2024 | |||||||
| (Unaudited) | ||||||||
| ASSETS | ||||||||
| CURRENT ASSETS | ||||||||
| Cash and cash equivalents | $ | $ | ||||||
| Restricted Cash | ||||||||
| Accounts receivable, net | ||||||||
| Prepaid expenses | ||||||||
| Total current assets | ||||||||
| OTHER ASSETS: | ||||||||
| Intangibles, net | ||||||||
| Total assets | $ | $ | ||||||
| LIABILITIES AND STOCKHOLDERS’ EQUITY (DEFICIT) | ||||||||
| CURRENT LIABILITIES: | ||||||||
| Accounts payable and accrued expenses | $ | $ | ||||||
| Accounts payable and accrued expenses, related party | ||||||||
| Payroll related liabilities | ||||||||
| Note payable, net related party | ||||||||
| Notes payable | ||||||||
| Total current and total liabilities | ||||||||
| STOCKHOLDERS’ EQUITY (DEFICIT): | ||||||||
| Common stock par value $; shares authorized; and shares issued and outstanding as of January 31, 2025 and July 31, 2024, respectively | ||||||||
| Additional paid-in capital | ||||||||
| Deposits on stock subscriptions | ||||||||
| Accumulated deficit | ( | ) | ( | ) | ||||
| Total stockholders’ equity (deficit) | ( | ) | ||||||
| Total liabilities and stockholders’ equity | $ | $ | ||||||
See accompanying notes to the interim consolidated financial statements.
| F-2 |
HEALTHCARE INTEGRATED TECHNOLOGIES, INC.
INTERIM CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
| For the Three Months Ended | For the Six Months Ended | |||||||||||||||
| January 31, | January 31, | |||||||||||||||
| 2025 | 2024 | 2025 | 2024 | |||||||||||||
| REVENUE, NET | $ | $ | $ | $ | ||||||||||||
| OPERATING EXPENSES: | ||||||||||||||||
| Selling, general and administrative | ||||||||||||||||
| Stock-based compensation | ||||||||||||||||
| Amortization of intangibles | ||||||||||||||||
| Impairment of intangibles | ||||||||||||||||
| Total operating expenses | ||||||||||||||||
| OPERATING LOSS | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| OTHER INCOME (EXPENSE): | ||||||||||||||||
| Interest expense | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| Total other income (expense) | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| NET LOSS | $ | ( | ) | $ | ( | ) | $ | ( | ) | $ | ( | ) | ||||
| NET LOSS PER COMMON SHARE | ||||||||||||||||
| Basic and diluted | $ | ) | $ | ) | $ | ) | $ | ) | ||||||||
| WEIGHTED AVERAGE NUMBER OF COMMON SHARES OUTSTANDING | ||||||||||||||||
| Basic and diluted | ||||||||||||||||
See accompanying notes to the interim consolidated financial statements.
| F-3 |
HEALTHCARE INTEGRATED TECHNOLOGIES, INC.
INTERIM CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ DEFICIT
(Unaudited)
| Six Months Ended January 31, 2025 | ||||||||||||||||||||||||
| Additional | Common | Total | ||||||||||||||||||||||
| Common Stock | Paid-In | Stock | Accumulated | Stockholders’ | ||||||||||||||||||||
| Shares | Amount | Capital | Subscribed | Deficit | Deficit | |||||||||||||||||||
| Balances at July 31, 2024 | $ | $ | $ | $ | ( | ) | $ | ( | ) | |||||||||||||||
| Net loss | ( | ) | ( | ) | ||||||||||||||||||||
| Shares issued for cash | ||||||||||||||||||||||||
| Receipt of cash deposits on stock subscription agreements | - | |||||||||||||||||||||||
| Stock-based compensation | ||||||||||||||||||||||||
| Shares issued for settlement of accrued expenses | ||||||||||||||||||||||||
| Activity for the three months ended October 31, 2024 | ( | ) | ||||||||||||||||||||||
| Net loss | ( | ) | ( | ) | ||||||||||||||||||||
| Shares issued for cash | ( | ) | ||||||||||||||||||||||
| Shares issued for services | ||||||||||||||||||||||||
| Receipt of cash deposits on subscriptions | - | |||||||||||||||||||||||
| Shares issued for settlement | ( | ) | ||||||||||||||||||||||
| Stock-based compensation | ||||||||||||||||||||||||
| Activity for the three months ended January 31, 2025 | ( | ) | ||||||||||||||||||||||
| Balances at January 31, 2025 | $ | $ | $ | ( | ) | $ | ||||||||||||||||||
| Six Months Ended January 31, 2024 | ||||||||||||||||||||
| Additional | Total | |||||||||||||||||||
| Common Stock | Paid-In | Accumulated | Stockholders’ | |||||||||||||||||
| Shares | Amount | Capital | Deficit | Deficit | ||||||||||||||||
| Balances at July 31, 2023 | $ | $ | $ | ( | ) | $ | ( | ) | ||||||||||||
| Net loss | ( | ) | ( | ) | ||||||||||||||||
| Issuance of shares for services | ( | ) | ||||||||||||||||||
| Stock-based compensation | ||||||||||||||||||||
| Activity for the three months ended October 31, 2023 | ( | ) | ( | ) | ||||||||||||||||
| Net loss | ( | ) | ( | ) | ||||||||||||||||
| Issuance of shares for cash | ||||||||||||||||||||
| Issuance of shares for services | ( | ) | ||||||||||||||||||
| Issuance of shares for loan modification | ( | ) | ||||||||||||||||||
| Stock-based compensation | ||||||||||||||||||||
| Activity for the three months ended January 31, 2024 | ( | ) | ( | ) | ||||||||||||||||
| Balances at January 31, 2024 | $ | $ | $ | ( | ) | $ | ( | ) | ||||||||||||
See accompanying notes to the interim consolidated financial statements.
| F-4 |
HEALTHCARE INTEGRATED TECHNOLOGIES, INC.
INTERIM CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
For the Six Months Ended January 31, | ||||||||
| 2025 | 2024 | |||||||
| CASH FLOWS FROM OPERATING ACTIVITIES | ||||||||
| Net loss | $ | ( | ) | $ | ( | ) | ||
| Adjustments to reconcile loss to net cash used in operating activities: | ||||||||
| Amortization expense | ||||||||
| Stock-based compensation | ||||||||
| Shares issued for services | ||||||||
| Impairment of intangibles | ||||||||
| Amortization of debt discount | ||||||||
| Cash received from deferred revenue | ||||||||
| Changes in operating assets and liabilities: | ||||||||
| Accounts receivable, net- | ( | ) | ||||||
| Prepaid expenses and other current assets | ||||||||
| Accounts payable and accrued expenses | ( | ) | ||||||
| Accounts payable and accrued expenses, related party | ( | ) | ||||||
| Payroll related liabilities | ||||||||
| NET CASH PROVIDED (USED) BY OPERATING ACTIVITIES | ( | ) | ||||||
| CASH FLOWS FROM FINANCING ACTIVITIES | ||||||||
| Proceeds from issuance of common stock | ||||||||
| Cash deposits on stock subscription agreements | ||||||||
| Restricted cash | ( | ) | ||||||
| Principle payments on related party note payable | ( | ) | ||||||
| Proceeds from related party loans | ||||||||
| Payments of amounts owed to related parties | ( | ) | ( | ) | ||||
| NET CASH PROVIDED BY FINANCING ACTIVITIES | ||||||||
| Net change in cash and cash equivalents | ||||||||
| Cash and cash equivalents, beginning of period | ||||||||
| Cash and cash equivalents, end of period | $ | $ | ||||||
| SUPPLEMENTAL CASH FLOW INFORMATION | ||||||||
| Cash paid for interest, related party | $ | $ | ||||||
| SIGNIFICANT NON-CASH INVESTING AND FINANCING ACTIVITIES | ||||||||
| Issuance of common stock for payment of accrued expenses | $ | $ | ||||||
See accompanying notes to the interim consolidated financial statements.
| F-5 |
HEALTHCARE INTEGRATED TECHNOLOGIES, INC.
NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS
January 31, 2025
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Healthcare Integrated Technologies, Inc. and its wholly owned subsidiaries Grasshopper Staffing, Inc. and Indeliving Holdings, Inc. (collectively the “Company,” “we,” “our” or “us”) is an AI-ambient technology solutions company with a dedicated team focused on driving safety innovation across multiple industries. We are currently marketing products and solutions that utilize advanced AI monitoring tools to enhance resident safety, reduce the risk of injuries, and improve overall care efficiency.
Basis of Presentation
The accompanying interim consolidated financial statements include those of Healthcare Integrated Technologies, Inc. and its subsidiaries, after elimination of all intercompany accounts and transactions. We have prepared the accompanying interim consolidated financial statements in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) and pursuant to the rules and regulations of the United States Securities and Exchange Commission (the “SEC”). Accordingly, they do not contain all information and footnotes required by U.S. GAAP for annual financial statements. In the opinion of the Company’s management, the accompanying interim consolidated financial statements contain all of the adjustments necessary (consisting only of normal recurring accruals) to fairly present the financial position of the Company as of January 31, 2025 and the results of operations and cash flows for the periods presented. The results of operations for the six months ending January 31, 2025 are not necessarily indicative of the operating results for the full fiscal year or any future period. These interim consolidated financial statements should be read in conjunction with the financial statements and related notes thereto included in the Company’s Annual Report on Form 10-K for the year ended July 31, 2024 filed with the SEC on October 29, 2024.
Consolidation Policy
Our consolidated financial statements are consolidated in accordance with U.S. GAAP and include our accounts and the accounts of our wholly owned subsidiaries. We eliminate all intercompany transactions from our financial results.
Business Combinations
We account for business combinations under the acquisition method of accounting. The acquisition method requires that the acquired assets and liabilities, including contingencies, be recorded at fair value determined on the acquisition date and that changes thereafter be reflected in income (loss). The estimation of fair values of the assets and liabilities assumed involves several estimates and assumptions that could differ materially from the actual amounts recorded. The results of the acquired businesses are included in our results from operations beginning from the day of acquisition.
Allowance for Credit losses
In accordance with ASC 326, Financial Instruments – Credit Losses, we recognize an allowance for credit losses on acquired financial assets with credit deterioration since origination. The allowance of credit losses is measured based on the Current Expected Credit Loss (CECL) model, which requires an estimate of the expected credit losses over the life of the financial asset. This estimate considers historical loss information, current conditions, and reasonable and supportable forecasts. The allowance for credit losses, if any, is recorded as a reduction to the carrying amount of the financial asset, with a corresponding charge to earnings.
| F-6 |
Risk and Uncertainties
Factors that could affect our future operating results and cause actual results to vary materially from management’s expectation include, but are not limited to: our ability to maintain and secure adequate capital to fund our operations and fully develop our product(s); our ability to source strong opportunities with sufficient risk adjusted returns; acceptance of the terms and conditions of our licenses and/or the acceptance of our royalties and fees; the nature and extent of competition from other companies that may reduce market share and create pressure on pricing and investment return expectations; changes in the projects in which we plan to invest which result from factors beyond our control, including, but not limited to, a change in circumstances, capacity and economic impacts; changes in laws, regulations, accounting, taxation, and other requirements affecting our operations and business. Negative developments in these or other risk factors could have a significant adverse effect on our financial position, results of operations and cash flows.
Use of Estimates
The preparation of consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results may differ from those estimates. We base our estimates on experience and various other assumptions that are believed to be reasonable under the circumstances. We evaluate our estimates and assumptions on a regular basis and actual results may differ from those estimates.
Reclassifications
Certain prior period amounts may be reclassified to conform to current period presentation with no changes to previously reported net loss or stockholders’ deficit.
Cash and Cash Equivalents
We consider all highly liquid short-term investments with a maturity of three months or less at the time of purchase to be cash equivalents. The Company minimizes its credit risk associated with cash by periodically evaluating the credit quality of its primary financial institution. The balance at times may exceed federally insured limits. No loss has been experienced and management does not believe we are exposed to any significant credit risk.
Restricted Cash
Restricted cash includes cash received from investors prior to obtaining executed Common Stock Subscription Purchase Agreements (“SPAs”). The investors agreed to purchase shares of our common stock at a purchase price of $ per share. The executed SPAs were received subsequent to January 31, 2025. The proceeds received were recorded as Deposits on stock subscription agreements in the interim consolidated balance sheets.
Accounts Receivable
Accounts receivable are stated at the amount management expects to collect from outstanding customer balances. Credit is extended to customers based on an evaluation of their financial condition and other factors. Interest is not accrued on overdue accounts receivable. The Company does not require collateral.
Management periodically assesses the Company’s accounts receivable and, if necessary, establishes an allowance for estimated uncollectible amounts. The Company provides an allowance for credit losses based upon a review of the outstanding accounts receivable, historical collection information and existing economic conditions. Accounts determined to be uncollectible are charged to operations when that determination is made.
Concentration of Credit Risk
Financial
instruments that potentially expose the Company to credit risk consist of demand deposits with a financial institution. The Company is
exposed to credit risk on its cash and cash equivalents in the event of default by the financial institution to the extent account balances
exceed the amount insured by the FDIC, which is $
| F-7 |
Fair Value of Financial Instruments
Fair value is defined as the price that would be received to sell an asset, or paid to transfer a liability, in an orderly transaction between market participants. A fair value hierarchy has been established for valuation inputs that gives the highest priority to quoted prices in active markets for identical assets or liabilities and the lowest priority to unobservable inputs. The fair value hierarchy is as follows:
Level 1 Inputs – Unadjusted quoted prices in active markets for identical assets or liabilities that the reporting entity can access at the measurement date.
Level 2 Inputs – Inputs other than quoted prices included in Level 1 that are observable for the asset or liability, either directly or indirectly. These might include quoted prices for similar assets or liabilities in active markets, quoted prices for identical or similar assets or liabilities in markets that are not active, inputs other than quoted prices that are observable for the asset or liability (such as interest rates, volatilities, prepayment speeds, credit risks, etc.) or inputs that are derived principally from or corroborated by market data by correlation or other means.
Level 3 Inputs – Unobservable inputs for determining the fair values of assets or liabilities that reflect an entity’s own assumptions about the assumptions that market participants would use in pricing the assets or liabilities.
Financial instruments consist of cash and cash equivalents, accounts receivable, accounts payable and borrowings. The fair value of current financial assets and current financial liabilities approximates their carrying value because of the short-term maturity of these financial instruments.
Property and Equipment
Property
and equipment are stated at cost, net of accumulated depreciation. Expenditures for major additions and improvements are capitalized
while minor replacements and maintenance and repairs, which do not improve or extend the life of such assets, are charged to operations
as incurred. Disposals are removed at cost less accumulated depreciation, and any resulting gain or loss is reflected in the interim
consolidated statements of operations. Depreciation is calculated using the straight-line method which depreciates the assets over the
estimated useful lives of the depreciable assets ranging from to
Intangible Assets
Intangible
assets consist of patents, our website and the costs of software developed for internal use. Certain payroll and stock-based compensation
costs incurred are allocated to the intangible assets. We determine the amount of costs to be capitalized based on the time spent by
employees or outside contractors on the projects. Intangible assets are amortized on a straight-line basis over their expected useful
lives, which approximate
Intangibles,
net was $
Derivative Liability
Options, warrants, convertible notes, or other contracts, if any, are evaluated to determine if those contracts, or embedded components of those contracts, qualify as derivatives to be separately accounted for in accordance with Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Topic 815, “Derivatives and Hedging,” (paragraph 815-10-05-4 and Section 815-40-25). The result of this accounting treatment is that the fair value of the embedded derivative is marked-to-market each balance sheet date and recorded as either an asset or a liability. The change in fair value is recorded in the consolidated statements of operations as other income or expense. Upon conversion, exercise or cancellation of a derivative instrument, the instrument is marked to fair value at the date of conversion, exercise, or cancellation and then the related fair value is reclassified to equity.
| F-8 |
In circumstances where the embedded conversion option in a convertible instrument is required to be bifurcated, and there are also other embedded derivative instruments in the convertible instrument that are required to be bifurcated, the bifurcated derivative instruments are accounted for as a single, compound derivative instrument.
The classification of derivative instruments, including whether such instruments should be recorded as liabilities or as equity, is re-assessed at the end of each reporting period. Equity instruments that are initially classified as equity that become subject to reclassification are reclassified to liability at the fair value of the instrument on the reclassification date. Derivative instrument liabilities will be classified in the balance sheet as current or non-current based on whether net-cash settlement of the derivative instrument is expected within 12 months of the balance sheet date.
The Company adopted Section 815-40-15 of the FASB ASC (“Section 815-40-15”) to determine whether an instrument (or an embedded feature) is indexed to the Company’s own stock. Section 815-40-15 provides that an entity should use a two-step approach to evaluate whether an equity-linked financial instrument (or embedded feature) is indexed to its own stock, including evaluating the instrument’s contingent exercise and settlement provisions.
We utilize a binomial option pricing model to compute the fair value of the derivative liability and to mark to market the fair value of the derivative liability at each balance sheet date. We record the change in the fair value of the derivative liability as other income or expense in the consolidated statements of operations.
We
had
Related Parties
The Company follows subtopic ASC 850-10 for the identification of related parties and disclosure of related party transactions. Pursuant to Section 850-10-20, the related parties include: (a) affiliates of the Company (“Affiliate” means, with respect to any specified person, any other person that, directly or indirectly through one or more intermediaries, controls, is controlled by or is under common control with such person, as such terms are used in and construed under Rule 405 under the Securities Act); (b) entities for which investments in their equity securities would be required, absent the election of the fair value option under the Fair Value Option Subsection of Section 825-10-15, to be accounted for by the equity method by the investing entity; (c) trusts for the benefit of employees, such as pension and profit-sharing trusts that are managed by or under the trusteeship of management; (d) principal owners of the Company; (e) management of the Company; (f) other parties with which the Company may deal if one party controls or can significantly influence the management or operating policies of the other to an extent that one of the transacting parties might be prevented from fully pursuing its own separate interests; and (g) other parties that can significantly influence the management or operating policies of the transacting parties or that have an ownership interest in one of the transacting parties and can significantly influence the other to an extent that one or more of the transacting parties might be prevented from fully pursuing its own separate interests.
Segment Information
The Company has identified its Chief Executive Officer as the chief operating decision maker (“CODM”) who uses consolidated financial information to make operating decisions, assess financial performance, and allocate resources. The Company’s operations constitute a single operating segment and therefore, a single reportable segment, because the CODM manages the business activities using information of the Company as a whole. Net loss is used to monitor budget versus actual results.
Revenue Recognition
The Company’s revenue recognition policy is to recognize revenue in accordance with ASC 606, “Revenue from Contracts with Customers.” The Company follows the five-step model provided by ASC Topic 606 in order to recognize revenue in the following manner: 1) Identify the contract; 2) Identify the performance obligations of the contract; 3) Determine the transaction price of the contract; 4) Allocate the transaction price to the performance obligations; and 5) Recognize revenue. An entity recognizes revenue for the transfer of promised goods or services to customers in an amount that reflects the consideration for which the entity expects to be entitled in exchange for those goods or services.
| F-9 |
Often contracts contain more than one performance obligation. Performance obligations are the unit of accounting for revenue recognition and generally represent the distinct goods or services that are promised to the customer. Revenue is recognized net of any taxes collected and subsequently remitted to governmental authorities. If we determine that we have not satisfied a performance obligation, we defer recognition of the revenue until the performance obligation is satisfied. The agreements are generally non-cancellable or contain significant penalties for early cancellation, although customers typically have the right to terminate their contracts for cause if we fail to perform material obligations. However, if non-standard acceptance periods, non-standard performance criteria, or cancellation or right of refund terms are required, revenue is recognized upon the satisfaction of such criteria.
Advertising and Marketing
Advertising
and marketing costs are expensed as incurred in accordance with ASC 720-35, “Advertising Costs.” We incurred advertising
and marketing costs of $
The Company accounts for stock-based compensation in accordance with ASC Topic 718, “Compensation – Stock Compensation” (“ASC 718”) which establishes financial accounting and reporting standards for stock-based employee compensation. It defines a fair value-based method of accounting for an employee stock option or similar equity instrument. The Company accounts for compensation cost for stock option plans, if any, in accordance with ASC 718.
Stock-based payments, excluding restricted stock, are valued using a Black-Scholes option pricing model. Grants of stock-based payment awards issued to non-employees for services rendered have been recorded at the fair value of the stock-based payment, which is the more readily determinable value. The grants are amortized on a straight-line basis over the requisite service periods, which is generally the vesting period. If an award is granted, but vesting does not occur, any previously recognized compensation cost is reversed in the period related to the termination of service. Stock-based compensation expense is included in cost of goods sold or selling, general and administrative expenses, depending on the nature of the services provided, in the interim consolidated statements of operations. Stock-based payments issued to placement agents are classified as a direct cost of a stock offering and are recorded as a reduction in additional paid-in capital.
The Company recognizes all forms of stock-based payments, including stock option grants, warrants and restricted stock grants, at their fair value on the grant date, which are based on the estimated number of awards that are expected to vest. See Note 9 - Stock-Based Compensation.
Income Taxes
We use the asset and liability method of accounting for income taxes in accordance with Topic 740, “Income Taxes”. Under this method, income tax expense is recognized for the amount of: (1) taxes payable or refundable for the current year and (2) deferred tax consequences of temporary differences resulting from matters that have been recognized in an entity’s financial statements or tax returns. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in the results of operations in the period that includes the enactment date. A valuation allowance is provided to reduce the deferred tax assets reported if based on the weight of the available positive and negative evidence, it is more likely than not some portion or all of the deferred tax assets will not be realized.
ASC Topic 740-10-30 clarifies the accounting for uncertainty in income taxes recognized in an enterprise’s financial statements and prescribes a recognition threshold and measurement attribute for the financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. ASC Topic 740-10-40 provides guidance on de-recognition, classification, interest and penalties, accounting in interim periods, disclosure, and transition. We have no material uncertain tax positions for any of the reporting periods presented.
| F-10 |
We determine basic loss per share and diluted loss per share in accordance with the provisions of ASC 260, “Earnings Per Share.” Basic loss per share excludes dilution and is computed by dividing earnings available to common stockholders by the weighted-average number of common shares outstanding for the period. The calculation of diluted income loss per share is similar to that of basic earnings per share, except the denominator is increased, if the earnings are positive, to include the number of additional common shares that would have been outstanding if all potentially dilutive common shares had been exercised.
Recent Accounting Pronouncements
In November 2024, the FASB issued ASU 2024-03, Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses, which improves financial reporting by requiring public entities to disclose additional information about specific expense categories in the notes of the financial statements at interim and annual reporting period. ASU 2024-03 is effective for all public entities for annual reporting periods beginning after December 15, 2026, and interim reporting periods beginning after December 15, 2027. The Company is currently evaluating the effect of adopting this ASU.
NOTE 2 - INTANGIBLES, NET
Intangibles, net consisted of the following at January 31, 2025 and July 31, 2024:
| As of January 31, 2025 | ||||||||||||||||
| Accumulated | Reserve for | |||||||||||||||
| Cost | Amortization | Impairment | Net | |||||||||||||
| Software | $ | $ | ( | ) | $ | $ | ||||||||||
| Patents | ( | ) | ( | ) | ||||||||||||
| Website | ( | ) | ||||||||||||||
| Total intangibles | $ | $ | ( | ) | $ | ( | ) | $ | ||||||||
| As of July 31, 2024 | ||||||||||||||||
| Accumulated | Reserve for | |||||||||||||||
| Cost | Amortization | Impairment | Net | |||||||||||||
| Software | $ | $ | ( | ) | $ | $ | ||||||||||
| Patents | ( | ) | ( | ) | ||||||||||||
| Website | ( | ) | ||||||||||||||
| Total intangibles | $ | $ | ( | ) | $ | ( | ) | $ | ||||||||
| F-11 |
Amortization
expense for the six months ended January 31, 2025 and 2024 was $
Intangibles
are amortized over their estimated useful lives of two (
| 2025 | $ | |||
| 2026 | ||||
| 2027 | ||||
| 2028 | ||||
| 2029 | ||||
| Thereafter | ||||
| Total expected amortization expense | $ |
NOTE 3 - ACCOUNTS PAYABLE AND ACCRUED EXPENSES
Accounts payable and accrued expenses consisted of the following at January 31, 2025 and July 31, 2024:
| January 31, 2025 | July 31, 2024 | |||||||
| Accounts payable | $ | $ | ||||||
| Accrued expenses | ||||||||
| Accrued interest expense | ||||||||
| Accounts payable and accrued expenses | ||||||||
| Accounts payable, related party | ||||||||
| Accrued expenses, related party | ||||||||
| Accrued interest expense, related party | ||||||||
| Accounts payable and accrued expenses, related party | ||||||||
| Total accounts payable and accrued expenses | $ | $ | ||||||
NOTE 4 - PAYROLL RELATED LIABILITIES
Payroll related liabilities consisted of the following at January 31, 2025 and July 31, 2024:
| January 31, 2025 | July 31, 2024 | |||||||
| Accrued officers’ payroll | $ | $ | ||||||
| Payroll taxes payable | ||||||||
| Total payroll related liabilities | $ | $ | ||||||
NOTE 5 - NOTE PAYABLE, RELATED PARTY
On
June 12, 2023, we issued a Promissory Note to Platinum Equity Advisors, LLC, a related party (the “Platinum Note 1”), in
the principal amount of $
| F-12 |
On
December 12, 2023 we issued a new promissory note to Platinum Equity Advisors, LLC in the principal amount of $
On
June 12, 2024, we issued a Promissory Note to Platinum Equity Advisors, LLC, a related party (the “Platinum Note 3”), in
the principal amount of $
On
December 31, 2024, we issued a new promissory note to Platinum Equity Advisors, LLC in the principal amount of $
Platinum
Equity Advisors, LLC is a related party and is our largest shareholder and is owed
At
January 31, 2025, the principal balance of the Platinum Note 4 was $
NOTE 6 - NOTES PAYABLE
We had the following debt obligations reflected at their respective carrying values on our interim consolidated balance sheets as of January 31,2025 and July 31, 2024:
| January 31, 2025 | July 31, 2024 | |||||||
| $ | $ | |||||||
| Note payable to Acorn Management Partners, LLC | ||||||||
| Notes payable | $ | $ | ||||||
5% Convertible Promissory Notes
On
various dates during the month of March 2018, we issued a series of
| F-13 |
| ● | At the option of the holder, the outstanding principal amount of the note, and any accrued but unpaid interest due, may be converted into the Company’s common stock at any time prior to the maturity date of the note. | |
| ● |
At
January 31, 2025,
Note Payable to Acorn Management Partners, LLC
On
August 11, 2020 we agreed to repurchase shares of our common stock from Acorn Management Partners, LLC (“AMP”).
As consideration for the share repurchase, we issued a $
NOTE 7 - COMMON STOCK
At January 31, 2025 and July 31, 2024, we had and shares of common stock outstanding, respectively. We issued unregistered shares of our common stock, of which shares were issued for cash, shares for a loan modification fee, shares were issued for the payment of accrued expenses, shares were issued for services and were issued for compensation during the six months ended January 31, 2025.The Company received stock subscription agreements for shares at $ per share, however, the Company had not received a cash payment of $ with the agreements at January 31, 2025. During the fiscal year ended July 31, 2024, we issued unregistered shares of our common stock, of which shares were issued for cash, shares were issued for the payment of accrued expenses, were issued for compensation, shares were issued for services, and shares were issued for a loan modification fee.
On August 25, 2024, we issued unregistered shares of our common stock to a member of our Board of Directors as compensation for serving on the Board and for providing certain other business advisory services. The shares were issued upon the vesting of shares from a restricted stock award dated August 25, 2024 at an estimated grant date fair value of $ per share on such date.
On September 1, 2024, we issued unregistered shares of our common stock to a consultant pursuant to the terms of a consulting agreement. The shares were issued upon the vesting of shares from a restricted stock award dated September 1, 2024, at an estimated grant date fair value of $ per share on such date.
| F-14 |
On
September 20, 2024, we completed a private placement of unregistered shares of our common stock at a price of $ per share
resulting in net proceeds to the Company of $
On
September 26, 2024, we completed a private placement of unregistered shares of our common stock at a price of $ per share
resulting in net proceeds to the Company of $
On
October 8, 2024, we completed multiple private placements of unregistered shares of our common stock at a price of $ per
share resulting in net proceeds to the Company of $
On
October 10, 2024, we completed multiple private placements of unregistered shares of our common stock at a price of $ per
share resulting in net proceeds to the Company of $
On
October 18, 2024, we completed a private placement of unregistered shares of our common stock at a price of $ per share
resulting in net proceeds to the Company of $
On October 19, 2024, we issued shares of common stock to a consultant pursuant to the terms of a consulting agreement entered on October 19, 2022. The shares were issued to the consultant at an estimated value of $ per share.
On October 19, 2024, we issued shares of common stock to consultants pursuant to the terms of their consulting agreements entered on October 19, 2022. The shares were issued to the consultants at an estimated value of $ per share.
On
October 21, 2024, we completed multiple private placements of unregistered shares of our common stock at a price of $ per
share resulting in net proceeds to the Company of $
On
October 22, 2024, we completed multiple private placements of unregistered shares of our common stock at a price of $ per
share resulting in net proceeds to the Company of $
On
October 24, 2024, we completed multiple private placements of unregistered shares of our common stock at a price of $ per
share resulting in net proceeds to the Company of $
On
October 25, 2024, we completed multiple private placements of unregistered shares of our common stock at a price of $ per
share resulting in net proceeds to the Company of $
On October 25, 2024, we issued unregistered shares of our common stock for settlement of accounts payables. The shares were issued at an agreed upon value of $ per share.
On
October 29, 2024, we completed a private placement of unregistered shares of our common stock at a price of $ per share
resulting in net proceeds to the Company of $
On October 29, 2024, we issued unregistered shares of our common stock to the Chief Strategy Officer. The shares were issued to the officer at an estimated grant date fair value of $ per share.
| F-15 |
On
October 31, 2024, we completed a private placement of unregistered shares of our common stock at a price of $ per share
resulting in net proceeds to the Company of $
On
November 1, 2024, we completed a private placement of unregistered shares of our common stock at a price of $ per share
resulting in net proceeds to the Company of $
On
November 5, 2024, we completed a private placement of unregistered shares of our common stock at a price of $ per share
resulting in net proceeds to the Company of $
On
November 6, 2024, we completed a private placement of unregistered shares of our common stock at a price of $ per share resulting
in net proceeds to the Company of $
On
November 11, 2024, we completed a private placement of unregistered shares of our common stock at a price of $ per share
resulting in net proceeds to the Company of $
On November 13, 2024, we issued shares of common stock to a previous lender pursuant to a make whole provision included as part of a loan modification fee. The shares were issued at an estimated value of $ per share.
On November 19, 2024, we issued unregistered shares of our common stock for settlement of accounts payables. The shares were issued at an agreed upon value of $ per share.
On December 1, 2024,, we issued shares of common stock to a consultant pursuant to the terms of their consulting agreement.. The shares were issued to the consultants at an estimated value of $ per share.
On December 1, 2024, we issued unregistered shares of our common stock to the Chief Financial Officer. The shares were issued to the officer at an estimated grant date fair value of $ per share.
On December 5, 2024,, we issued shares of common stock to a consultant pursuant to the terms of their consulting agreement.. The shares were issued to the consultants at an estimated value of $ per share.
On December 20, 2024, we issued unregistered shares of our common stock to a member of our Board of Directors as compensation for serving on the Board at their resignation. The shares were issued as part of a settlement agreement at an estimated grant date fair value of $ per share.
On January 1, 2025, we issued shares of common stock to consultants pursuant to the terms of their consulting agreement The shares were issued to the consultants at an estimated value of $ per share.
On January 2, 2025, we issued shares of common stock to consultants pursuant to the terms of their consulting agreement. The shares were issued to the consultants at an estimated value of $ per share.
On
January 6, 2025, we completed a private placement of unregistered shares of our common stock at a price of $ per share resulting
in net proceeds to the Company of $
On
January 15, 2025, we completed a private placement of unregistered shares of our common stock at a price of $ per share
resulting in net proceeds to the Company of $
| F-16 |
On January 20, 2025, we issued shares of common stock to consultants pursuant to the terms of their consulting agreement. The shares were issued to the consultants at an estimated value of $ per share.
On
January 24, 2025, we completed a private placement of unregistered shares of our common stock at a price of $ per share
resulting in net proceeds to the Company of $
On
January 26, 2025, we completed multiple private placements of unregistered shares of our common stock at a price of $
per share resulting in net proceeds to the Company of $
On
January 27, 2025, we completed multiple private placements of unregistered shares of our common stock at a price of $
per share resulting in net proceeds to the Company of $
On
January 28, 2025, we completed multiple private placements of unregistered shares of our common stock at a price of $
per share resulting in net proceeds to the Company of $
On
January 29, 2025, we completed multiple private placements of unregistered shares of our common stock at a price of $
per share resulting in net proceeds to the Company of $
On
January 30, 2025, we completed multiple private placements of unregistered shares of our common stock at a price of $
per share resulting in net proceeds to the Company of $
On
January 31, 2025, we completed multiple private placements of unregistered shares of our common stock at a price of $
per share resulting in net proceeds to the Company of $
Our stock-based compensation programs are long-term retention awards that are intended to attract, retain, and provide incentives for employees, officers and directors, and to align stockholder and employee interest. We utilize grants of both stock options and warrants and restricted stock to achieve those goals.
Summary of Stock Options and Warrants
Our stock-based compensation programs are long-term retention awards that are intended to attract, retain, and provide incentives for employees, officers and directors, and to align stockholder and employee interest. We utilize grants of both stock options and warrants and restricted stock to achieve those goals.
Summary of Stock Options and Warrants
During the six months ended January 31, 2025, we recorded compensation expense related to stock options and warrants. During the six months ended January 31, 2024, we recorded $ of compensation expense related to stock options and warrants. We granted no stock options or warrants during the six months ending January 31, 2025 or 2024.
| F-17 |
| January 31, 2025 | July 31, 2024 | |||||||||||||||
| Number of Options and Warrants | Weighted Average Exercise Price | Number of Options and Warrants | Weighted Average Exercise Price | |||||||||||||
| Balance at beginning of year | $ | $ | ||||||||||||||
| Granted | ||||||||||||||||
| Expired / Cancelled | ( | ) | ||||||||||||||
| Balance at end of period | $ | $ | ||||||||||||||
| Options and warrants exercisable | $ | $ | ||||||||||||||
Summary of Restricted Stock Grants
During the six months ended January 31, 2025 and 2024, we recorded compensation expense related to restricted stock grants of $ and $, respectively. The grant date fair value of restricted stock awards during the six months ended January 31, 2025 and 2024 was $ and $, respectively. Additionally, the Company estimated a 25% discount to market to reflect the legal restrictions preventing the securities from being sold on the OTC market until they are registered or deemed exempt from registration
| January 31, 2025 | July 31, 2024 | |||||||
| Balance at beginning of period | ||||||||
| Granted | ||||||||
| Expired / Cancelled | ( | ) | ||||||
| Released | ( | ) | ( | ) | ||||
| Balance at end of period | ||||||||
NOTE 9 - RELATED PARTY TRANSACTIONS
To
continue operations and meet operating cash requirements, we have periodically relied on short term loans from related parties, primarily
shareholders, until such time as our cash flow from operations meets our cash requirements, or we are able to obtain adequate financing
through sales of our equity securities and/or traditional debt financing. There is no formal written commitment for continued support
by shareholders or others. Amounts loaned primarily relate to amounts paid to vendors. The loans are considered temporary in nature and
have not been formalized by any written agreement. As of January 31, 2025 and July 31, 2024, related parties were owed $
For
compensation after August 1, 2023, we entered into a Non-Employee Chief Executive Officer Engagement Agreement (the “Contract CEO
Agreement”) with Platinum Equity Advisors, LLC (“Platinum Equity”), a related party, to provide the services of our
CEO and Chairman of the Board of Directors. Platinum Equity Advisors, LLC is a related party, is our largest shareholder, and is owned
| F-18 |
On
December 31, 2024, we issued a Promissory Note to Platinum Equity Advisors, LLC in the principal amount of $
During
the six months ended January 31, 2025, the Company recognized $
NOTE 10 - COMMITMENTS AND CONTINGENCIES
Litigation
On
September 18, 2023, Apex Funding Source, LLC (the “Lender”) filed a lawsuit in the Supreme Court of the State of New York,
County of New York, naming Grasshopper Staffing, Inc. and Indeliving Holdings, Inc., both of which are wholly owned subsidiaries of the
Company, as defendants in the suit. The action against our wholly owned subsidiaries is due to an alleged guarantee of a loan the Lender
made to BERI, an entity related to the Company through common management control. The lawsuit is an action for BERI’s breach of
a loan agreement and failure to pay $
On
April 18, 2024, the Lender filed a motion seeking partial summary judgment on its First Cause of Action against BERI and its Second Cause
of Action against Scott M. Boruff in the amount of $
In the event the Lender attempts to enforce the alleged guarantees against our subsidiaries, we believe we have valid defenses against such an action. In addition, both subsidiaries previously discontinued their operations and currently have no assets. In the judgement of the Company’s management, if the pending actions were adversely determined they would not have a material adverse effect on the Company.
Employment and Consulting Agreements
On
January 31, 2024,
| F-19 |
On
January 31, 2024,
On
January 31, 2024,
On
January 1, 2025,
Effective
as of October 1, 2024, Timothy R. Brady was appointed by the Board of Directors (the “Board”) of Healthcare Integrated Technologies
Inc. (the “Company”) to the position of Chief Financial Officer. Mr. Brady initially served as our Chief Financial Officer
on a fractional basis and commenced service as Chief Financial Officer on a full-time basis as of December 1, 2024.
NOTE 11 - SUBSEQUENT EVENTS
| ● | On March 6, 2025, we received our first order and deposit from Brentwood Academy in Nashville, Tennessee, for our SafeSchool™ product and service with an expected install date of August 2025.
On March 11, 2025, we appointed Ken Greenwood, as our Chief Product Architect. Mr. Greenwood was previously our Chief Technology Officer (CTO). Mr. Greenwood’s responsibilities as Chief Product Architect will be to act as our strategic leader, responsible for defining and driving the overarching vision, strategy, architecture and technical direction of the Company’s products from ideation to delivery, aligning product innovation with business objectives, market trends, and customer needs, ensuring the delivery of scalable, robust, and forward-thinking solutions. Mr. Greenwood’s change in title and responsibilities was due to the growth of the Company and the resulting need to realign Mr. Greenwood’s role. |
| F-20 |
Item 2. MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.
THE FOLLOWING DISCUSSION OF OUR PLAN OF OPERATION AND RESULTS OF OPERATIONS SHOULD BE READ IN CONJUNCTION WITH THE FINANCIAL STATEMENTS AND RELATED NOTES TO THE FINANCIAL STATEMENTS INCLUDED ELSEWHERE IN THIS REPORT. THIS DISCUSSION CONTAINS FORWARD-LOOKING STATEMENTS THAT RELATE TO FUTURE EVENTS OR OUR FUTURE FINANCIAL PERFORMANCE. THESE STATEMENTS INVOLVE KNOWN AND UNKNOWN RISKS, UNCERTAINTIES AND OTHER FACTORS THAT MAY CAUSE OUR ACTUAL RESULTS, LEVELS OF ACTIVITY, PERFORMANCE OR ACHIEVEMENTS TO BE MATERIALLY DIFFERENT FROM ANY FUTURE RESULTS, LEVELS OF ACTIVITY, PERFORMANCE OR ACHIEVEMENTS EXPRESSED OR IMPLIED BY THESE FORWARD-LOOKING STATEMENTS. THESE RISKS AND OTHER FACTORS INCLUDE, AMONG OTHERS, THOSE LISTED UNDER “FORWARD-LOOKING STATEMENTS” AND “RISK FACTORS” AND THOSE INCLUDED ELSEWHERE IN THIS REPORT.
Overview
Healthcare Integrated Technologies, Inc. is focused on ambient AI technology solutions, dedicated to enhancing safety and security across various sectors, including healthcare, education, transportation, manufacturing, incarceration, and commercial industries. The company’s mission is to help save lives worldwide by developing advanced AI technologies designed to enhance situational awareness and mitigate risks in critical environments. We are currently marketing five products and solutions, including our initial product, SafeSpace® Fall Monitoring, which utilizes advanced AI monitoring tools to enhance resident safety in senior living, reduce the risk of injuries, and improve overall care efficiency. Additionally, we have expanded our services and offerings beyond senior living facilities, into schools and transportation where we’ve recently launched five more innovative solutions:
| ● | SafeFace™ Access Control - An advanced solution that leverages facial recognition to automatically and instantly unlock doors for registered staff and visitors, integrating seamlessly with your existing maglock system for a completely keyless and no badge entry. | |
| ● | SafeFace™ Time Compliance - Independently verifies the accuracy of your employee time records, reducing overbilling and payroll costs while improving productivity and ensuring PPD compliance. Using facial recognition technology and video cameras at the entrance, each employee’s clock-in and out times are automatically captured for integration with your payroll and invoicing workflows. | |
| ● | SafeGuard™ Wander Protection - Strategically-placed facial recognition cameras that trigger alerts when an at-risk resident is seen outside your secured unit, reducing immediate jeopardy situations and litigation. | |
| ● | SafeTrace™ Rapid Investigations – An innovative investigation solution—simply select a face to instantly retrieve video clips of that individual across your facilities, anytime. Local data storage ensures security and cost efficiency, saving countless hours in investigations. | |
| ● | SafeSchool™ - Solving one of the biggest problems in the USA. SafeSchool multimodel ambient AI solution helps protect your children while at school and provide guardian’s peace of mind. The SafeSchool product offers proactive protection that cameras on their own cannot provide. Our software proactively alerts when weapons are detected or persons of concern (i.e. predators or non-custodial parents) are sited, offering immediate situational awareness to deter a tragedy. |
Strategy
HITC emphasizes world-class executive experience, operational leaders and business development team members who know how to achieve significant results in an expedited fashion. This team has a systematic growth focus maximizing our patented ambient AI innovative technology to help save lives. We have added new technology team members who are IT executives, architects and engineers, who are leveraging AI to maximize global market penetration. The primary objective is to capture substantial market share in existing and emerging verticals, including senior living, schools, transportation, with plans to expand into commercial buildings and prisons, and beyond. A key new strength lies in HITC’s dedicated professional salesforce, passionate about saving lives and harnessing the power of ambient AI technology to help save lives.
Financial and Operating Results
As of the date of this filing, the Company has approximately $9,000,000 in cash and cash equivalents from recent private placements. Management believes this adequately supports the Company’s five-year strategic plan enabling strategic initiatives, such as acquisitions, investments in advanced AI technology, and the expansion of its technology development team. HITC remains committed to driving innovation in healthcare technology, with a focus on solutions that enhance safety, efficiency, and patient outcomes across various care settings.
| 4 |
Highlighted achievements for the six months ending January 31, 2025 include:
| ● | On August 23, 2024, we appointed Micheal “Coach” Burt to our Board of Directors. | |
| ● | On October 1, 2024, we appointed Timothy R. Brady as Fractional Chief Financial Officer and on December 1, 2024, appointed him to full-time Chief Financial Officer. | |
| ● | On November 5, 2024, we announced the appointment of Caleb Dixon as Chief Customer Officer to focus on enhancing customer engagement and satisfaction. | |
| ● | On December 9, 2024, we announced the appointment of Theo Davies as Vice President of Sales Enablement & International Expansion | |
| ● | On December 18, 2024, we announced the engagement of Katie Piperata as a Senior Living Consultant for the Company’s Healthcare division. | |
| ● | On December 30, 2024, we announced the promotion of Dustin Hillis to President and Chief Strategy Officer. | |
| ● | On January 7, 2025, we announced that Justin Freishtat joined in a capital advisory role with Investor Relations. | |
| ● | We received $6,998,900 in net proceeds from the sale of our common stock at an average price of $0.114 per share during the six months ending January 31, 2025. |
Results of Operations
Three Months Ending January 31, 2025 Compared to the Three Months Ending January 31, 2024
Revenues
Our business did not produce revenue during the three-month period ending January 31, 2025. We recognized $21,769 of revenue for professional fees from our contract for the three-month period ending January 31, 2024.
Operating Expenses
The table below presents a comparison of our operating expenses for the three months ending January 31, 2025 and 2024:
For the Three Months Ending January 31, | ||||||||||||||||
| 2025 | 2024 | $ Variance | %Variance | |||||||||||||
| Officers’ salaries | $ | 140,687 | $ | 86,860 | $ | 53,827 | 62 | % | ||||||||
| Contract labor | 30,942 | - | 30,942 | - | ||||||||||||
| Professional fees | 48,291 | 11,891 | 36,400 | 306 | % | |||||||||||
| Software development | 38,885 | 4,381 | 34,504 | 788 | % | |||||||||||
| Travel and entertainment | 60,388 | 212 | 60,176 | 28,385 | % | |||||||||||
| Advertising and marketing | 72,572 | - | 72,572 | - | ||||||||||||
| Rent expense | 15,458 | - | 15,458 | - | ||||||||||||
| Office expense | 46,002 | 793 | 45,209 | 5,701 | % | |||||||||||
| Other | 17,002 | - | 17,002 | - | ||||||||||||
| Total selling, general & administrative | 470,227 | 104,137 | 366,090 | 352 | % | |||||||||||
| Stock-based compensation | 624,365 | 3,893 | 620,472 | 15,938 | % | |||||||||||
| Amortization | 123,597 | 55,697 | 67,900 | 122 | % | |||||||||||
| Impairment of intangibles | 30,547 | - | 30,547 | - | ||||||||||||
| Total Operating Expenses | $ | 1,248,736 | $ | 163,727 | $ | 1,085,009 | 663 | % | ||||||||
| 5 |
Officers’ Salaries - Officers’ salaries increased $53,827, or 62%, over the prior period primarily due to the addition of the President & Chief Strategy Officer and increased pay for the Chief Financial Officer and Chief Executive Officer compared to the previous period, the Company’s officers accepted voluntary pay reductions in the prior comparable period.
Contract labor – Contract labor increased $30,942 over the prior period and is attributable to the addition of new finance and accounting personnel.
Professional Fees - Professional fees increased $36,400, or 306% over the same period in the prior year primarily due to increased accounting and legal fees and the addition of a grant writing consultant.
Software Development – Software development expenses increased $34,504, or 788% over the same period in the prior year due to an increase in the use of independent contractors for specific development projects.
Travel and entertainment – Travel and entertainment expense increased $60,176 over the same period in the prior year. The increase is primarily due to increased business travel by the senior management team.
Advertising and Marketing - Advertising and marketing costs increased $72,572 over the same period in the prior year due to no advertising and marketing expenses during the three months ending January 31, 2025.
Office expense - Office expense increased $45,209 primarily due to increases in office activities over the same period in the prior year.
Rent expense – Rent expense increased $15,458 over the same period in the prior year due to no rent expense in the prior year.
Other - Other expenses increased $17,002 over the same period in the prior year due to no advertising and marketing expenses during the three months ending January 31, 2024.
Stock-based Compensation - Stock-based compensation expense increased $620,472 from the same period in the prior year. The increase results from the amortization of the grant date fair value of new restricted stock awards.
Amortization - Amortization expense increased $67,900, or 122% over the same period in the prior year due to a reduction in the estimated useful life from three years to two years of software development costs.
Impairment of intangibles – Impairment of intangibles increased $30,547 over the same period in the prior year. The impairment expense relates to the abandonment of certain patent applications and the establishment of an impairment reserve on active patent applications.
Other Income (Expense)
The table below presents a comparison of our other income (expense) for the three months ending January 31, 2025 and 2024:
For the Three Months Ending January 31, | ||||||||||||||||
| 2025 | 2024 | $ Variance | %Variance | |||||||||||||
| Interest expense | $ | 17,700 | $ | 13,205 | $ | 4,495 | 34 | % | ||||||||
| Total | $ | 17,700 | $ | 13,205 | $ | 4,495 | 34 | % | ||||||||
Interest Expense - Interest expense increased $4,495, or 34%, over the same period in the prior year due to an increase in the average outstanding debt balance during the same period in the prior year.
| 6 |
Six Months Ending January 31, 2025 Compared to the Six Months Ending January 31, 2024
Revenues
Our business did not produce revenue during the six-month period ending January 31, 2025. We recognized $21,769 of revenue for professional fees from our contract for the six-month period ending January 31, 2024.
Operating Expenses
The table below presents a comparison of our operating expenses for the six months ending January 31, 2025 and 2024:
For the Six Months Ending January 31, | ||||||||||||||||
| 2025 | 2024 | $ Variance | %Variance | |||||||||||||
| Officers’ salaries | $ | 277,918 | $ | 173,721 | $ | 104,197 | 60 | % | ||||||||
| Contract labor | 66,953 | - | 66,953 | - | ||||||||||||
| Professional fees | 120,713 | 54,500 | 66,213 | 121 | % | |||||||||||
| Software development | 72,591 | 8,281 | 64,310 | 777 | % | |||||||||||
| Travel and entertainment | 85,143 | 1,052 | 84,091 | 7,993 | % | |||||||||||
| Advertising and marketing | 90,257 | 2,668 | 87,589 | 3,283 | % | |||||||||||
| Rent expense | 25,577 | - | 25,577 | - | ||||||||||||
| Office expense | 57,620 | 1,912 | 55,708 | 2,914 | % | |||||||||||
| Other | 17,242 | 20 | 17,222 | 86,110 | % | |||||||||||
| Total selling, general & administrative | 814,014 | 242,154 | 571,860 | 236 | % | |||||||||||
| Stock-based compensation | 880,747 | 25,835 | 854,912 | 3,309 | % | |||||||||||
| Amortization | 177,951 | 111,394 | 66,557 | 60 | % | |||||||||||
| Impairment of intangibles | 46,225 | - | 46,225 | - | ||||||||||||
| Total Operating Expenses | $ | 1,918,937 | $ | 379,383 | $ | 1,539,554 | 406 | % | ||||||||
Officers’ Salaries - Officers’ salaries increased $104,197, or 60%, over the prior period primarily due to the addition of the President & Chief Strategy Officer and increased pay for the Chief Financial Officer and Chief Executive Officer compared to the previous period, the Company’s officers accepted voluntary pay reductions in the prior comparable period.
Contract labor – Contract labor increased $66,953 over the prior period and is attributable to the addition of new finance and accounting personnel.
Professional Fees - Professional fees increased $66,213, or 121%. over the same period in the prior year primarily due to increased accounting and legal fees and the addition of a grant writing consultant.
Software Development – Software development expenses increased $64,310, or 777% over the same period in the prior year due to an increase in the use of independent contractors for specific development projects.
Travel and entertainment – Travel and entertainment expense increased $84,091 over the same period in the prior year. The increase is primarily due to increased business travel by the senior management team.
Advertising and Marketing - Advertising and marketing costs increased $87,589 over the same period in the prior year due to minimal expenses during the six months ending January 31, 2025.
Rent expense – Rent expense increased $25,577 over the same period in the prior year due to no rent expense in the prior year.
Office expense - Office expense increased $55,708 primarily due to increases in office activities over the same period in the prior year.
Other - Other expenses increased $17,222 over the same period in the prior year due to minimal activity during the prior year.
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Stock-based Compensation - Stock-based compensation expense increased $854,912 from the same period in the prior year. The increase results from the amortization of the grant date fair value of new restricted stock awards.
Amortization - Amortization expense increased $66,557, or 60% over the same period in the prior year due to a reduction in the estimated useful life from three years to two years of software development costs.
Impairment of intangibles – Impairment of intangibles increased $46,225 over the same period in the prior year. The impairment expense relates to the abandonment of certain patent applications and the establishment of an impairment reserve on active patent applications.
Other Income (Expense)
The table below presents a comparison of our other income (expense) for the six months ended January 31, 2025 and 2024:
For the Six Months Ended January 31, | ||||||||||||||||
| 2025 | 2024 | $ Variance | %Variance | |||||||||||||
| Interest expense | $ | 31,637 | $ | 26,049 | $ | 5,588 | 21 | % | ||||||||
| Total | $ | 31,637 | $ | 26,049 | $ | 5,588 | 21 | % | ||||||||
Interest Expense - Interest expense increased $5,588, or 21%, over the same period in the prior year due to a decrease in the average outstanding debt balance during this same period in the prior period.
Liquidity and Capital Resources
Working Capital
The following table summarizes our working capital for the interim period ended January 31, 2025 and fiscal year ended July 31, 2024:
| January 31, 2025 | July 31, 2024 | |||||||
| Current assets | $ | 6,995,238 | $ | 222,584 | ||||
| Current liabilities | (849,403 | ) | (1,022,522 | ) | ||||
| Working capital deficiency | $ | 6,145,835 | $ | (799,938 | ) | |||
Current assets for the interim period ending January 31, 2025 increased $6,772,654 as compared to the fiscal year ended July 31, 2024. The increase is primarily due to the receipt of $6,998,900 in net proceeds from the sale of our common stock at an average price of $0.114 per share during the six months ending January 31, 2025.
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Current liabilities for the interim period ending January 31, 2025 decreased $173,119 as compared to the fiscal year ended July 31, 2024. The decrease is primarily due to decreases in accounts payable and accrued expenses and a reduction in the Notes payable, related party.
Net Cash Used by Operating Activities
We currently do not have a revenue source and will continue to have negative cash flow from operations for the near future. The factors in determining operating cash flows are largely the same as those that affect net earnings, except for non-cash expenses such as depreciation and amortization, stock-based compensation, and impairment of intangibles, which affect earnings but do not affect operating cash flow. Net cash used by operating activities was $873,002 for the six months ended January 31, 2025 as compared to net cash provided by operating activities of $187,571 for the six months ended January 31, 2024. The increase in cash used by operating activities is primarily attributable to an increase in operating costs and the payment of accounts payable and accrued expenses, including related party items.
Net Cash Provided by Financing Activities
Net cash provided by financing activities was $6,903,656 for the six months ending January 31, 2025, which represents a $6,775,859 increase over the same period in the prior year. The increase is primarily due to the receipt of $6,998,900 in net proceeds from the sale of our common stock at an average price of $0.114 per share during the six months ending January 31, 2025.
Critical Accounting Policies and Estimates
Our interim consolidated financial statements and related public financial information are based on the application of U.S. GAAP. U.S. GAAP requires the use of estimates; assumptions, judgments and subjective interpretations of accounting principles that have an impact on the assets, liabilities, revenues and expense amounts reported. These estimates can also affect supplemental information contained in our external disclosures including information regarding contingencies, risk and financial condition. We believe our use of estimates and underlying accounting assumptions adhere to U.S. GAAP and are consistently and conservatively applied. We base our estimates on historical experience and on various other assumptions that we believe to be reasonable under the circumstances. Actual results may differ materially from these estimates under different assumptions or conditions. We continue to monitor significant estimates made during the preparation of our financial statements.
Our significant accounting policies are summarized in Note 1 of our interim consolidated financial statements.
There have been no material changes to our critical accounting policies and estimates from the information provided in Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” included in our July 31, 2024 Annual Report.
We believe the following critical policies impact our more significant judgments and estimates used in preparation of our interim consolidated financial statements.
Business Combinations
We account for business combinations under the acquisition method of accounting. The acquisition method requires that the acquired assets and liabilities, including contingencies, be recorded at fair value determined on the acquisition date and that changes thereafter be reflected in income (loss). The estimation of fair values of the assets and liabilities assumed involves several estimates and assumptions that could differ materially from the actual amounts recorded. The results of the acquired businesses are included in our results from operations beginning from the day of acquisition.
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Risk and Uncertainties
Factors that could affect our future operating results and cause actual results to vary materially from management’s expectation include, but are not limited to: our ability to maintain and secure adequate capital to fund our operations and fully develop our product(s); our ability to source strong opportunities with sufficient risk adjusted returns; acceptance of the terms and conditions of our licenses and/or the acceptance of our royalties and fees; the nature and extent of competition from other companies that may reduce market share and create pressure on pricing and investment return expectations; changes in the projects in which we plan to invest which result from factors beyond our control, including, but not limited to, a change in circumstances, capacity and economic impacts; changes in laws, regulations, accounting, taxation, and other requirements affecting our operations and business. Negative developments in these or other risk factors could have a significant adverse effect on our financial position, results of operations and cash flows.
Use of Estimates
The preparation of consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. We base our estimates on experience and various other assumptions that are believed to be reasonable under the circumstances. We evaluate our estimates and assumptions on a regular basis and actual results may differ from those estimates.
Fair Value of Financial Instruments
Fair value is defined as the price that would be received to sell an asset, or paid to transfer a liability, in an orderly transaction between market participants. A fair value hierarchy has been established for valuation inputs that gives the highest priority to quoted prices in active markets for identical assets or liabilities and the lowest priority to unobservable inputs. The fair value hierarchy is as follows:
Level 1 Inputs - Unadjusted quoted prices in active markets for identical assets or liabilities that the reporting entity can access at the measurement date.
Level 2 Inputs - Inputs other than quoted prices included in Level 1 that are observable for the asset or liability, either directly or indirectly. These might include quoted prices for similar assets or liabilities in active markets, quoted prices for identical or similar assets or liabilities in markets that are not active, inputs other than quoted prices that are observable for the asset or liability (such as interest rates, volatilities, prepayment speeds, credit risks, etc.) or inputs that are derived principally from or corroborated by market data by correlation or other means.
Level 3 Inputs - Unobservable inputs for determining the fair values of assets or liabilities that reflect an entity’s own assumptions about the assumptions that market participants would use in pricing the assets or liabilities.
Financial instruments consist of cash and cash equivalents, accounts receivable, accounts payable and borrowings. The fair value of current financial assets and current financial liabilities approximates their carrying value because of the short-term maturity of these financial instruments.
Intangible Assets
Intangible assets consist of patents, our website and the costs of software developed for internal use. Certain payroll and stock-based compensation costs incurred are allocated to the intangible assets. We determine the amount of costs to be capitalized based on the time spent by employees or outside contractors on the projects. Intangible assets are amortized over their expected useful life on a straight-line basis. We evaluate the useful lives of these assets on an annual basis and test for impairment whenever events or changes in circumstances occur that could impact the recoverability of these assets. If the estimate of an intangible asset’s remaining life is changed, the remaining carrying value of the intangible asset is amortized prospectively over the revised remaining useful life.
Impairment of Long-Lived Assets
Long-lived assets such as property, equipment and identifiable intangibles are reviewed for impairment at least annually or whenever facts and circumstances indicate that the carrying value may not be recoverable. When required, impairment losses on assets to be held and used are recognized based on the fair value of the asset. The fair value is determined based on estimates of future cash flows, market value of similar assets, if available, or independent appraisals, if required. If the carrying amount of the long-lived asset is not recoverable, an impairment loss is recognized for the difference between the carrying amount and fair value of the asset.
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Derivative Liability
Options, warrants, convertible notes, or other contracts, if any, are evaluated to determine if those contracts, or embedded components of those contracts, qualify as derivatives to be separately accounted for in accordance with Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Topic 815, “Derivatives and Hedging,” (paragraph 815-10-05-4 and Section 815-40-25). The result of this accounting treatment is that the fair value of the embedded derivative is marked-to-market each balance sheet date and recorded as either an asset or a liability. The change in fair value is recorded in the consolidated statements of operations as other income or expense. Upon conversion, exercise or cancellation of a derivative instrument, the instrument is marked to fair value at the date of conversion, exercise, or cancellation and then the related fair value is reclassified to equity.
In circumstances where the embedded conversion option in a convertible instrument is required to be bifurcated, and there are also other embedded derivative instruments in the convertible instrument that are required to be bifurcated, the bifurcated derivative instruments are accounted for as a single, compound derivative instrument.
The classification of derivative instruments, including whether such instruments should be recorded as liabilities or as equity, is re-assessed at the end of each reporting period. Equity instruments that are initially classified as equity that become subject to reclassification are reclassified to liability at the fair value of the instrument on the reclassification date. Derivative instrument liabilities will be classified in the balance sheet as current or non-current based on whether or not net-cash settlement of the derivative instrument is expected within 12 months of the balance sheet date.
The Company adopted Section 815-40-15 of the FASB ASC (“Section 815-40-15”) to determine whether an instrument (or an embedded feature) is indexed to the Company’s own stock. Section 815-40-15 provides that an entity should use a two- step approach to evaluate whether an equity-linked financial instrument (or embedded feature) is indexed to its own stock, including evaluating the instrument’s contingent exercise and settlement provisions.
We utilize a binomial option pricing model to compute the fair value of the derivative liability and to mark to market the fair value of the derivative at each balance sheet date. We record the change in the fair value of the derivative as other income or expense in the consolidated statements of operations.
Revenue Recognition
Revenue is recognized under ASC 606, “Revenue from Contracts with Customers” using the modified retrospective method. Under this method, the Company follows the five-step model provided by ASC Topic 606 in order to recognize revenue in the following manner: 1) Identify the contract; 2) Identify the performance obligations of the contract; 3) Determine the transaction price of the contract; 4) Allocate the transaction price to the performance obligations; and 5) Recognize revenue. An entity recognizes revenue for the transfer of promised goods or services to customers in an amount that reflects the consideration for which the entity expects to be entitled in exchange for those goods or services. The Company’s revenue recognition policies remained unchanged as a result of the adoption of ASC 606, and there were no significant changes in business processes or systems.
Stock-Based Compensation
The Company accounts for stock-based compensation in accordance with ASC Topic 718, “Compensation – Stock Compensation” (“ASC 718”) which establishes financial accounting and reporting standards for stock-based employee compensation. It defines a fair value-based method of accounting for an employee stock option or similar equity instrument. The Company accounts for compensation cost for stock option plans, if any, in accordance with ASC 718.
Stock-based payments, excluding restricted stock, are valued using a Black-Scholes option pricing model. Grants of stock-based payment awards issued to non-employees for services rendered have been recorded at the fair value of the stock-based payment, which is the more readily determinable value. The grants are amortized on a straight-line basis over the requisite service periods, which is generally the vesting period. If an award is granted, but vesting does not occur, any previously recognized compensation cost is reversed in the period related to the termination of service. Stock-based compensation expenses are included in cost of goods sold or selling, general and administrative expenses, depending on the nature of the services provided, in the consolidated statements of operations. Stock-based payments issued to placement agents are classified as a direct cost of a stock offering and are recorded as a reduction in additional paid in capital.
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The Company recognizes all forms of stock-based payments, including stock option grants, warrants and restricted stock grants, at their fair value on the grant date, which are based on the estimated number of awards that are ultimately expected to vest.
Capital Resources
We had no material commitments for capital expenditures as of January 31, 2025.
Off-Balance Sheet Arrangements
The Company has no off-balance sheet arrangements as of January 31, 2025.
Item 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.
We do not hold any market risk sensitive instruments. We consider our interest rate risk exposure to be minimal as a result of fixing interest rates on 100% of our debt. At January 31, 2025, there was no floating rate debt that would expose us to market fluctuations in interest rates.
Item 4. CONTROLS AND PROCEDURES.
Disclosure Controls and Procedures
Under the supervision and with the participation of our management, including our Chief Executive Officer and our Chief Financial Officer, we conducted an evaluation of the effectiveness of the design and operation of our disclosure controls and procedures, as defined in Rules 13a-15(e) under the Securities Exchange Act of 1934, as amended, at the end of the period covered by this report (the “Evaluation Date”). In conducting its evaluation, management considered the material weaknesses described below in Management’s Report on Internal Control over Financial Reporting.
Based on that evaluation, our Chief Executive Officer and Chief Financial Officer have concluded that as of the Evaluation Date we did not maintain disclosure controls and procedures that were effective in providing reasonable assurances that information required to be disclosed in our reports filed under the Securities Exchange act of 1934 was recorded, processed, summarized and reported within the time periods prescribed by SEC rules and regulations, and that such information was accumulated and communicated to our management to allow timely decisions regarding required disclosure.
Our management, including the Chief Executive Officer and Chief Financial Officer, does not expect that our disclosure controls and procedures will prevent all errors and all fraud. A control system, no matter how well designed and operated, can provide only reasonable, not absolute, assurance that the control system’s objectives will be met. Further, the design of a control system must reflect the fact that there are resource constraints, and the benefits of controls must be considered relative to their costs. Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, have been detected. These inherent limitations include the realities that judgments in decision-making can be faulty, and that breakdowns can occur because of simple error or mistake. The design of any system of controls is based in part upon certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions.
Changes in Internal Control over Financial Reporting
There were no changes in our internal control over financial reporting, as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act, during our most recently completed fiscal quarter that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
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PART II - OTHER INFORMATION
Item 1. LEGAL PROCEEDINGS.
None.
Item 1A. RISK FACTORS.
Not required for smaller reporting companies.
Item 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
On January 6, 2025, we issued 909,090 shares of our unregistered common stock at a price of $0.11 per share to an accredited investor resulting in net proceeds to the Company of $100,000. We incurred no cost related to the private transaction. The net proceeds are expected to be used for working capital. The issuance of the shares was exempt from registration under the Securities Act of 1933 in reliance on an exemption provided by Section 4(a)2 of that act.
On January 15, 2025, we issued 793,650 shares of our unregistered common stock at a price of $0.126 per share to an accredited investor resulting in net proceeds to the Company of $100,000. We incurred no cost related to the private transaction. The net proceeds are expected to be used for working capital. The issuance of the shares was exempt from registration under the Securities Act of 1933 in reliance on an exemption provided by Section 4(a)2 of that act.
On January 24, 2025, we issued 793,650 shares of our unregistered common stock at a price of $0.126 per share to an accredited investor resulting in net proceeds to the Company of $226,000. We incurred no cost related to the private transaction. The net proceeds are expected to be used for working capital. The issuance of the shares was exempt from registration under the Securities Act of 1933 in reliance on an exemption provided by Section 4(a)2 of that act.
On January 26, 2025, we completed multiple private placements of 4,799,566 unregistered shares of our common stock at a price of $0.123 per share resulting in net proceeds to the Company of $590,200. We incurred no cost related to the private placements. On January 24, 2025, we issued 793,650 shares of our unregistered common stock at a price of $0.126 per share to an accredited investor resulting in net proceeds to the Company of $226,000. We incurred no cost related to the private transaction. The net proceeds are expected to be used for working capital. The issuance of the shares was exempt from registration under the Securities Act of 1933 in reliance on an exemption provided by Section 4(a)2 of that act.
On January 27, 2025, we issued 2,587,300 shares of our unregistered common stock at a price of $0.126 per share to an accredited investor resulting in net proceeds to the Company of $326,000. We incurred no cost related to the private transaction. The net proceeds are expected to be used for working capital. The issuance of the shares was exempt from registration under the Securities Act of 1933 in reliance on an exemption provided by Section 4(a)2 of that act.
On January 24, 2025, we issued 6,793,650 shares of our unregistered common stock at a price of $0.126 per share to an accredited investor resulting in net proceeds to the Company of $856,000. We incurred no cost related to the private transaction. The net proceeds are expected to be used for working capital. The issuance of the shares was exempt from registration under the Securities Act of 1933 in reliance on an exemption provided by Section 4(a)2 of that act.
On January 29, 2025, we issued 9,813,056 shares of our unregistered common stock at a price of $0.125 per share to an accredited investor resulting in net proceeds to the Company of $1,221,900. We incurred no cost related to the private transaction. The net proceeds are expected to be used for working capital. The issuance of the shares was exempt from registration under the Securities Act of 1933 in reliance on an exemption provided by Section 4(a)2 of that act.
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On January 30, 2025, we issued 4,380,951 shares of our unregistered common stock at a price of $0.126 per share to an accredited investor resulting in net proceeds to the Company of $500,800. We incurred no cost related to the private transaction. The net proceeds are expected to be used for working capital. The issuance of the shares was exempt from registration under the Securities Act of 1933 in reliance on an exemption provided by Section 4(a)2 of that act.
On January 31, 2025, we issued 3,974,600 shares of our unregistered common stock at a price of $0.126 per share to an accredited investor resulting in net proceeds to the Company of $590,200. We incurred no cost related to the private transaction. The net proceeds are expected to be used for working capital. The issuance of the shares was exempt from registration under the Securities Act of 1933 in reliance on an exemption provided by Section 4(a)2 of that act.
On February 3, 2025, we issued 1,909,090 shares of our unregistered common stock at a price of $0.118 per share to an accredited investor resulting in net proceeds to the Company of $226,000. We incurred no cost related to the private transaction. The net proceeds are expected to be used for working capital. The issuance of the shares was exempt from registration under the Securities Act of 1933 in reliance on an exemption provided by Section 4(a)2 of that act.
On February 4, 2025, we issued 793,650 shares of our unregistered common stock at a price of $0.126 per share to an accredited investor resulting in net proceeds to the Company of $100,000. We incurred no cost related to the private transaction. The net proceeds are expected to be used for working capital. The issuance of the shares was exempt from registration under the Securities Act of 1933 in reliance on an exemption provided by Section 4(a)2 of that act.
On February 5, 2025, we issued 3,000,000 shares of our unregistered common stock at a price of $0.126 per share to an accredited investor resulting in net proceeds to the Company of $378,000. We incurred no cost related to the private transaction. The net proceeds are expected to be used for working capital. The issuance of the shares was exempt from registration under the Securities Act of 1933 in reliance on an exemption provided by Section 4(a)2 of that act.
On February 6, 2025, we issued 5,295,090 shares of our unregistered common stock at a price of $0.12 per share to an accredited investor resulting in net proceeds to the Company of $636,800. We incurred no cost related to the private transaction. The net proceeds are expected to be used for working capital. The issuance of the shares was exempt from registration under the Securities Act of 1933 in reliance on an exemption provided by Section 4(a)2 of that act.
On February 7, 2025, we issued 2,586,000 shares of our unregistered common stock at a price of $0.126 per share to an accredited investor resulting in net proceeds to the Company of $326,000. We incurred no cost related to the private transaction. The net proceeds are expected to be used for working capital. The issuance of the shares was exempt from registration under the Securities Act of 1933 in reliance on an exemption provided by Section 4(a)2 of that act.
On February 8, 2025, we issued 909,091 shares of our unregistered common stock at a price of $0.11 per share to an accredited investor resulting in net proceeds to the Company of $100,000. We incurred no cost related to the private transaction. The net proceeds are expected to be used for working capital. The issuance of the shares was exempt from registration under the Securities Act of 1933 in reliance on an exemption provided by Section 4(a)2 of that act
On February 10, 2025, we issued 1,000,000 shares of our unregistered common stock at a price of $0.126 per share to an accredited investor resulting in net proceeds to the Company of $126,000. We incurred no cost related to the private transaction. The net proceeds are expected to be used for working capital. The issuance of the shares was exempt from registration under the Securities Act of 1933 in reliance on an exemption provided by Section 4(a)2 of that act.
On February 14, 2025, we issued 3,156,635 shares of our unregistered common stock at a price of $0.114 per share to an accredited investor resulting in net proceeds to the Company of $360,000. We incurred no cost related to the private transaction. The net proceeds are expected to be used for working capital. The issuance of the shares was exempt from registration under the Securities Act of 1933 in reliance on an exemption provided by Section 4(a)2 of that act.
On February 18, 2025, we issued 2,000,000 shares of our unregistered common stock at a price of $0.11 per share to an accredited investor resulting in net proceeds to the Company of $200,000. We incurred no cost related to the private transaction. The net proceeds are expected to be used for working capital. The issuance of the shares was exempt from registration under the Securities Act of 1933 in reliance on an exemption provided by Section 4(a)2 of that act.
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On February 19, 2025, we issued 500,000 shares of our unregistered common stock at a price of $0.126 per share to an accredited investor resulting in net proceeds to the Company of $63,000. We incurred no cost related to the private transaction. The net proceeds are expected to be used for working capital. The issuance of the shares was exempt from registration under the Securities Act of 1933 in reliance on an exemption provided by Section 4(a)2 of that act.
On February 20, 2025, we issued 793,651 shares of our unregistered common stock at a price of $0.126 per share to an accredited investor resulting in net proceeds to the Company of $100,000. We incurred no cost related to the private transaction. The net proceeds are expected to be used for working capital. The issuance of the shares was exempt from registration under the Securities Act of 1933 in reliance on an exemption provided by Section 4(a)2 of that act.
On February 21, 2025, we issued 793,650 shares of our unregistered common stock at a price of $0.126 per share to an accredited investor resulting in net proceeds to the Company of $100,000. We incurred no cost related to the private transaction. The net proceeds are expected to be used for working capital. The issuance of the shares was exempt from registration under the Securities Act of 1933 in reliance on an exemption provided by Section 4(a)2 of that act.
On February 26, 2025, we issued 1,590,909 shares of our unregistered common stock at a price of $0.11 per share to an accredited investor resulting in net proceeds to the Company of $175,000. We incurred no cost related to the private transaction. The net proceeds are expected to be used for working capital. The issuance of the shares was exempt from registration under the Securities Act of 1933 in reliance on an exemption provided by Section 4(a)2 of that act.
On February 27, 2025, we issued 1,000,000 shares of our unregistered common stock at a price of $0.126 per share to an accredited investor resulting in net proceeds to the Company of $126,000. We incurred no cost related to the private transaction. The net proceeds are expected to be used for working capital. The issuance of the shares was exempt from registration under the Securities Act of 1933 in reliance on an exemption provided by Section 4(a)2 of that act.
On March 4, 2025, we issued 1,136,364 shares of our unregistered common stock at a price of $0.11 per share to an accredited investor resulting in net proceeds to the Company of $125,000. We incurred no cost related to the private transaction. The net proceeds are expected to be used for working capital. The issuance of the shares was exempt from registration under the Securities Act of 1933 in reliance on an exemption provided by Section 4(a)2 of that act.
Item 3. DEFAULTS UPON SENIOR SECURITIES.
On various dates during the month of March 2018 we issued a series of 5% Convertible Promissory Notes (collectively, the “5% Notes”) totaling $750,000 in face amount. The 5% Notes bear interest at the rate of five percent (5%) per annum, compounded annually, and initially matured one-year from the date of issuance. As of March 17, 2024, 5% Notes with face amounts totaling $575,000 have been converted into common stock of the Company. 5% Notes with face amounts totaling $175,000 have matured and are currently in default for non-payment of principal and related accrued interest of $71,145 as of the filing date of this interim report.
On August 11, 2020 we agreed to repurchase 1,000,000 shares of our common stock from Acorn Management Partners, LLC (“AMP”). As consideration for the share repurchase, we issued a $50,000 promissory note bearing interest a 6.0% per annum and due one-year from the date of issuance (the “AMP Note”). The AMP Note was subsequently amended to extend the maturity date to March 31, 2024. In the event of default, we are required to deliver 1,000,000 shares of our common stock back to AMP in full satisfaction of the obligation. The AMP Note is currently in default for non-payment of the principal amount of $50,000 and related accrued interest of $13,512 as of the filing date of this report.
Item 4. MINE SAFETY DISCLOSURES
Not applicable.
Item 5. OTHER INFORMATION
None.
Item 6. EXHIBITS
*Filed Herewithin
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has caused this Report to be signed on its behalf by the undersigned, thereunto duly authorized.
| Healthcare Integrated Technologies, Inc. | ||
| Date: March 14, 2025 | ||
| By: | /s/ Scott M. Boruff | |
| Scott M. Boruff | ||
| President, Chief Executive Officer | ||
| (Principal Executive Officer) | ||
| Healthcare Integrated Technologies, Inc. | ||
| Date: March 14, 2025 | ||
| By: | /s/ Timothy R. Brady | |
| Timothy R. Brady | ||
| Chief Financial Officer | ||
| (Principal Financial Officer) | ||
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