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Form 10-Q Healthcare Integrated For: Oct 31

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UNITED
STATES

SECURITIES
AND EXCHANGE COMMISSION

Washington,
D.C. 20549

 

FORM
10-Q

 

[X]
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

 

For
the quarterly period ended October 31, 2020

 

OR

 

[  ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

 

For
the transition period from ________ to ________

 

Commission
file number: 001-36564

 

Icon

Description automatically generated

 

Healthcare
Integrated Technologies, Inc.

(Exact
Name of Registrant as Specified in its Charter)

 

Nevada   85-1173741

(State
or Other Jurisdiction of

Incorporation
or Organization)

 

(I.R.S.
Employer

Identification
No.)

 

1462
Rudder Lane

Knoxville,
TN 37919

(Address
of Principal Executive Offices)

 

Registrant’s
telephone number, including area code: (865) 719-8160

 

Securities
registered pursuant to Section 12(b) of the Act: None

 

Securities
registered pursuant to section 12(g) of the Act:

 

Common
Stock, $0.001 par value

(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 [X]

 

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 [X]

 

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. Yes [  ] No [X]

 

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 [  ]
No [X]

 

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
[  ]
Non-accelerated
filer
[  ] Smaller
reporting company
[X]
(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 [X]

 

As
of December 11, 2020, there were 38,137,235 shares of common stock of the Registrant outstanding.

 

Documents
Incorporated by Reference: None.

 

 

 

TABLE
OF CONTENTS

 

 

 

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 our subsidiary IndeLiving Holdings, Inc. (“Inde” or “IndeLiving”).

 

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 as a result
of 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” below.

 

 

PART
I – FINANCIAL INFORMATION

 

Item
1. FINANCIAL STATEMENTS.

 

Index
to Financial Statements

 

 

 

HEALTHCARE
INTEGRATED TECHNOLOGIES, INC.

INTERIM
CONSOLIDATED BALANCE SHEETS

 

    October 31, 2020     July 31, 2020  
    (Unaudited)        
ASSETS                
                 
CURRENT ASSETS                
Cash and cash equivalents   $ 14,948     $ 78,072  
Prepaid expenses     43,508       46,938  
Total current assets     58,456       125,010  
                 
OTHER ASSETS:                
Property and equipment, net     1,897       2,453  
Intangibles, net     121,170       33,958  
Total assets   $ 181,523     $ 161,421  
                 
LIABILITIES AND STOCKHOLDERS’ DEFICIT                
                 
CURRENT LIABILITIES:                
Accounts payable and accrued expenses   $ 232,198     $ 229,114  
Accounts payable, related party     201,790       271,819  
Payroll related liabilities     993,160       861,019  
Notes payable     50,000        
Convertible notes     550,000       600,000  
Current portion of long-term debt     27,639       20,651  
Total current liabilities     2,054,787       1,982,603  
                 
OTHER LIABILITIES:                
Long-term debt     14,028       21,016  
Total liabilities     2,068,815       2,003,619  
                 
STOCKHOLDERS’ DEFICIT:                
Common stock par value $0.001; 200,000,000 shares authorized; 36,637,235 and 36,474,661 shares issued and outstanding as of October 31, 2020 and July 31, 2020, respectively     36,638       36,475  
Additional paid-in capital     9,896,575       9,564,989  
Accumulated deficit     (11,820,505 )     (11,443,662 )
Total stockholders’ deficit     (1,887,292 )     (1,842,198 )
Total liabilities and stockholders’ deficit   $ 181,523     $ 161,421  

 

See
accompanying notes to the interim consolidated financial statements.

 

 

HEALTHCARE
INTEGRATED TECHNOLOGIES, INC.

INTERIM
CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited)

 

   

For the Three Months Ended

October 31,

 
    2020     2019  
             
OPERATING EXPENSES:                
Selling, general and administrative     318,346       176,264  
Total operating expense     318,346       176,264  
                 
OPERATING LOSS     (318,346 )     (176,264 )
                 
OTHER EXPENSE:                
Interest expense     (8,497 )     (10,645 )
Total other expense     (8,497 )     (10,645 )
                 
NET LOSS   $ (326,843 )   $ (186,909 )
                 
NET LOSS PER COMMON SHARE                
Basic and diluted   $ (0.01 )   $ (0.01 )
                 
WEIGHTED AVERAGE NUMBER OF COMMON SHARES OUTSTANDING                
Basic and diluted     36,313,741       32,487,500  

 

See
accompanying notes to the interim consolidated financial statements.

 

 

HEALTHCARE
INTEGRATED TECHNOLOGIES, INC.

INTERIM
CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ DEFICIT

(Unaudited)

 

    Three-Month Period Ended October 31, 2020  
          Additional           Total  
    Common Stock     Paid-In     Accumulated     Stockholders’  
    Shares     Amount     Capital     Deficit     Deficit  
                               
Balances at July 31, 2020     36,474,611     $ 36,475     $ 9,564,989     $ (11,443,662 )   $      (1,842,198 )
                                         
Net loss                             (326,843 )     (326,843 )
Issuance of common stock     1,050,000       1,050       103,950               105,000  
Purchase and cancellation of shares     (1,000,000 )     (1,000 )     1,000       (50,000 )     (50,000 )
Issuance of shares of common stock upon conversion of debt and related accrued interest     112,624       113       56,199               56,312  
Stock-based compensation                     170,437               170,437  
                                         
Balances at October 31, 2020     36,637,235     $ 36,638     $ 9,896,575     $ (11,820,505 )   $ (1,887,292 )

 

    Three-Month Period Ended October 31, 2019  
          Additional           Total  
    Common Stock     Paid-In     Accumulated     Stockholders’  
    Shares     Amount     Capital     Deficit     Deficit  
                               
Balances at July 31, 2019     32,487,500     $ 32,488     $ 8,582,166     $ (10,385,575 )   $      (1,770,921 )
                                         
Net loss                             (186,909 )     (186,909 )
Stock-based compensation                     75,194               75,194  
                                         
Balances at October 31, 2019     32,487,500     $ 32,488     $ 8,657,360     $ (10,572,484 )   $ (1,882,636 )

 

See
accompanying notes to the interim consolidated financial statements.

 

 

HEALTHCARE
INTEGRATED TECHNOLOGIES, INC.

INTERIM
CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

 

   

For the Three Months Ended

October 31,

 
    2020     2019  
             
CASH FLOWS FROM OPERATING ACTIVITIES                
Net loss   $ (326,843 )   $ (186,909 )
Adjustments to reconcile loss to net cash used in operating activities:                
Depreciation and amortization     1,739       1,829  
Stock-based compensation     150,779       75,194  
Changes in operating assets and liabilities:                
Prepaid expenses and other current assets     3,430        
Accounts payable and accrued expenses     9,396       9,867  
Accounts payable, related party           5,050  
Payroll related liabilities     66,434       85,322  
NET CASH USED BY OPERATING ACTIVITIES     (95,065 )     (9,646 )
                 
CASH FLOW FROM INVESTING ACTIVITIES                
Cash paid for development of intangible assets     (3,030 )      
NET CASH USED BY INVESTING ACTIVITIES     (3,030 )      
                 
CASH FLOWS FROM FINANCING ACTIVITIES                
Proceeds from sale of common stock     105,000        
Proceeds from related party advances           9,307  
Payments of amounts owed to related parties     (70,029 )      
NET CASH PROVIDED BY FINANCING ACTIVITIES     34,971     9,307  
                 
Net change in cash and cash equivalents     (63,124 )     (339 )
                 
Cash and cash equivalents, beginning of period     78,072       725  
                 
Cash and cash equivalents, end of period   $ 14,948     $ 386  
                 
SUPPLEMENTAL CASH FLOW INFORMATION                
Cash paid for interest   $     $ 8,262  
                 
SIGNIFICANT NON-CASH INVESTING AND FINANCING ACTIVITIES                
Capital expenditures included in payroll related liabilities   $ 65,707     $  
Capital expenditures from non-cash compensation   $ 19,658     $  
Issuance of common stock for payment of accrued interest included in accounts payable and accrued expenses   $ 6,312     $  
Issuance of common stock for conversion of convertible debt   $ 50,000     $  
Issuance of debt for purchase and cancellation of shares   $ 50,000     $  

 

See
accompanying notes to the interim consolidated financial statements.

 

 

HEALTHCARE
INTEGRATED TECHNOLOGIES, INC.

NOTES
TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS

October
31, 2020

 

NOTE
1 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

 

Healthcare
Integrated Technologies, Inc. and its subsidiaries (collectively the “Company,” “we,” “our”
or “us”) is a healthcare technology company based in Knoxville, Tennessee. We are creating a diversified spectrum
of healthcare technology solutions to integrate and automate the continuing care, home care and professional healthcare spaces.

 

Our
initial product, SafeSpace, is an ambient fall detection solution designed for continuing care communities and at home use. SafeSpace
includes wall mounted devices utilizing radar technology and state of the art software to effectively monitor a person remotely.
In continuing care communities, SafeSpace detects resident falls and generates alerts to a centralized, intelligent dashboard
without the use of wearable devices or any action by the resident. In the home, SafeSpace detects falls and sends alerts directly
to designated individuals.

 

In
addition to SafeSpace, we are creating a home concierge healthcare service application to provide a virtual assisted living experience
for seniors, recently released postoperative patients and others. The concierge application will enable the consumer to obtain
home healthcare services and health and safety monitoring equipment to improve quality of life. We are also working to develop
a fully integrated solution for the professional healthcare community that integrates electronic health records, remote patient
monitoring, telehealth, and other items where integration is beneficial.

 

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. Accordingly, they do not contain
all information and footnotes required by accounting principles generally accepted in the United States of America for annual
financial statements. In the opinion of the Company’s management, the accompanying unaudited interim consolidated financial
statements contain all of the adjustments necessary (consisting only of normal recurring accruals) to present the financial position
of the Company as of October 31, 2020 and the results of operations and cash flows for the periods presented. The results of operations
for the three months ended October 31, 2020 are not necessarily indicative of the operating results for the full fiscal year or
any future period. These unaudited 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, 2020
filed with the SEC on October 16, 2020.

 

Reclassifications

 

Certain
prior period amounts have been reclassified to conform to current period presentation. On the interim consolidated statements
of operations for the three months ended October 31, 2019, we reclassified $1,095 in loss from discontinued operations to selling,
general and administrative expense and interest expense.

 

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 fully develop our product(s) and operations;
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.

 

 

On
January 30, 2020, the World Health Organization (“WHO”) announced a global health emergency because of a new strain
of coronavirus originating in Wuhan, China (the “COVID-19 outbreak”) and the risks to the international community
as the virus spreads globally beyond its point of origin. In March 2020, the WHO classified the COVID-19 outbreak as a pandemic,
based on the rapid increase in exposure globally. The full impact of the COVID-19 outbreak continues to evolve as of the date
of this report. As such, it is uncertain as to the full magnitude that the pandemic will have on the Company’s future financial
condition, liquidity, and results of operations. Management is actively monitoring the impact of the global situation on its financial
condition, liquidity, operations, suppliers, industry, and workforce. Given the daily evolution of the COVID-19 outbreak and the
global responses to curb its spread, the Company is not able to estimate the effects of the COVID-19 outbreak on its results of
operations, financial condition, or liquidity for fiscal year 2021.

 

Use
of Estimates

 

The
preparation of interim 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 interim 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.

 

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 $250,000.

 

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.

 

Accounts
Receivable

 

Accounts
receivable are stated at their historical carrying amount net of write-offs and allowance for uncollectible accounts. We routinely
assess the recoverability of all customer and other receivables to determine their collectability and record a reserve when, based
on the judgement of management, it is probably that a receivable will not be collected and the amount of the reserve may be reasonably
estimated. When collection is no longer pursued, we charge uncollectable accounts receivable against the reserve.

 

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 consolidated
statement 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 five to seven years.

 

  

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. The Company did not recognize any impairment losses for any periods presented.

 

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. We did
not recognize any impairment losses during any of the periods presented.

 

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.

 

Revenue
Recognition

 

Revenue
is recognized under Accounting Standards Codification (“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 substantially unchanged as a result of the adoption of ASC 606, and there were no significant
changes in business processes or systems.

 

 

Advertising

 

Advertising
costs are expensed as incurred in accordance with ASC 720-35, “Advertising Costs.” We incurred advertising
costs of $1,975 and $5,300 for the three months ended October 31, 2020 and 2019, respectively, which are included in selling,
general and administrative expenses on the interim consolidated financial statements.

 

Net
Loss Per Common Share

 

We
determine basic income (loss) per share and diluted income (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.

 

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.

 

Share-based
payments, excluding restricted stock, are valued using a Black-Scholes option pricing model. Grants of share-based payment awards
issued to non-employees for services rendered have been recorded at the fair value of the share-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.
Share-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 share-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. See
Note 11.

 

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.

 

Income
Taxes

 

We
use the asset and liability method of accounting for income taxes in accordance with Accounting Standards Codification (“ASC”)
Topic 740, “Income Taxes”. Under this method, income tax expense is recognized for the amount of: (i) taxes
payable or refundable for the current year and (ii) 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.

 

In
response to the COVID-19 pandemic, the Coronavirus Aid, Relief and Economic Security Act (“CARES Act”) was
signed into law in March 2020. The CARES Act lifts certain deduction limitations originally imposed by the Tax Cuts and Jobs Act
of 2017 (“2017 Tax Act”). Corporate taxpayers may carryback net operating losses (NOLs) originating between
2018 and 2020 for up to five years, which was not previously allowed under the 2017 Tax Act. The CARES Act also eliminates the
80{14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3} of taxable income limitations by allowing corporate entities to fully utilize NOL carryforwards to offset taxable income in
2018, 2019 or 2020. Taxpayers may generally deduct interest up to the sum of 50{14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3} of adjusted taxable income plus business interest
income (30{14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3} limit under the 2017 Tax Act) for 2019 and 2020. The CARES Act allows taxpayers with alternative minimum tax credits
to claim a refund in 2020 for the entire amount of the credits instead of recovering the credits through refunds over a period
of years, as originally enacted by the 2017 Tax Act.

 

In
addition, the CARES Act raises the corporate charitable deduction limit to 25{14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3} of taxable income and makes qualified improvement
property generally eligible for 15-year cost-recovery and 100{14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3} bonus depreciation. The enactment of the CARES Act did not result
in any material adjustments to our income tax provision for the reporting periods presented.

 

Recently
Adopted Accounting Pronouncements

 

In
August 2018, the FASB issued ASU 2018-13, “Fair Value Measurement (Topic 820): Disclosure Framework—Changes to
the Disclosure Requirements for Fair Value Measurement”.
This update is to improve the effectiveness of disclosures
in the notes to the financial statements by facilitating clear communication of the information required by U.S. GAAP that is
most important to users of each entity’s financial statements. The amendments in this update apply to all entities that
are required, under existing U.S. GAAP, to make disclosures about recurring or nonrecurring fair value measurements. The amendments
in this update are effective for all entities for fiscal years beginning after December 15, 2019, and interim periods within those
fiscal years. The Company adopted this guidance and the adoption of this update did not have a material impact on the Company’s
consolidated financial statements.

 

In
March 2020, the FASB issued ASU No. 2020-04, “Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference
Rate Reform on Financial Reporting
.” ASU 2020-04 provides optional expedients and exceptions to account for contracts,
hedging relationships and other transactions that reference LIBOR or another reference rate if certain criteria are met. The amendments
of ASU No. 2020-04 are effective immediately, as of March 12, 2020, and may be applied prospectively to contract modifications
made and hedging relationships entered into on or before December 31, 2022. The Company adopted this guidance and the adoption
of this update did not have a material impact on the Company’s consolidated financial statements.

 

Recent
Accounting Pronouncements

 

In
December 2019, the FASB issued authoritative guidance intended to simplify the accounting for income taxes (ASU 2019-12, “Income
Taxes
(Topic 740): Simplifying the Accounting for Income Taxes”). This guidance eliminates certain exceptions
to the general approach to the income tax accounting model and adds new guidance to reduce the complexity in accounting
for income taxes. This guidance is effective for annual periods after December 15, 2020, including interim periods within those
annual periods. The Company is currently evaluating the potential impact of this guidance on its consolidated financial statements.

 

 

In
August 2020, the FASB issued ASU 2020-06 Debt – Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives
and Hedging – Contracts in Entity’s Own Equity
(Subtopic 815-40): Accounting for Convertible Instruments and Contracts
in an Entity’s Own Equity
. The amendments in Update No. 2020-06 simplify the complexity associated with applying U.S.
GAAP for certain financial instruments with characteristics of liabilities and equity. More specifically, the amendments focus
on the guidance for convertible instruments and derivative scope exception for contracts in an entity’s own equity. Update
No. 2020-06 is effective for fiscal years beginning after December 15, 2021, including interim periods within those fiscal years.
Early adoption is permitted, but no earlier than fiscal years beginning after December 15, 2020, including interim periods within
those fiscal years. The Company is currently in the process of determining the effect that the adoption will have on its financial
position and results of operations.

 

Management
has evaluated all recent accounting pronouncements as issued by the FASB in the form of Accounting Standards Updates (“ASU”)
through the date these financial statements were available to be issued and found no recent accounting pronouncements issued,
but not yet effective accounting pronouncements, when adopted, will have a material impact on the interim consolidated financial
statements of the Company.

 

NOTE
2 – GOING CONCERN

 

The
accompanying interim consolidated financial statements have been prepared in conformity with U.S. GAAP, which contemplates continuation
of the Company as a going concern. The Company had a net loss of $326,843 for its most recent period ended October 31, 2020. As
of October 31, 2020, the Company has minimal cash and a significant working capital deficit. We have a history of losses,
an accumulated deficit, have negative working capital and have not generated cash from our operations to support a meaningful
and ongoing business plan. It is management’s opinion that these conditions raise substantial doubt about the Company’s
ability to continue as a going concern.

 

In
view of these matters, our ability to continue as a going concern is dependent upon the development, marketing and sales of a
viable product to achieve a level of profitability. We intend on financing our future development activities and our working capital
needs largely from the sale of private and public equity securities with additional funding from other traditional financing sources,
including term notes, until such time that funds provided by operations are sufficient to fund working capital requirements. Although
the Company believes in the viability of management’s strategy to generate sufficient revenue, control costs and the ability
to raise additional funds if necessary, there can be no assurances to that effect. Therefore, the accompanying interim consolidated
financial statements have been prepared assuming that the Company will continue as a going concern. The interim consolidated financial
statements do not include any adjustments relating to the recoverability and classification of recorded assets, or the amounts
and classifications of liabilities that might be necessary should we be unable to continue as a going concern.

 

NOTE
3 – PROPERTY AND EQUIPMENT

 

Property
and equipment, net consisted of the following at October 31, 2020 and July 31, 2020:

 

    October 31, 2020     July 31, 2020  
Equipment   $ 8,923     $ 8,923  
Less: accumulated depreciation     (7,026 )     (6,470 )
Total property and equipment, net   $ 1,897     $ 2,453  

 

Depreciation
expense for the three months ended October 31, 2020 and 2019 was $556 and $4,769, respectively.

 

NOTE
4 – INTANGIBLES

 

Intangibles, net consisted of the following
at October 31, 2020 and July 31, 2020:

 

    October 31, 2020     July 31, 2020  
Intangible assets under development     63,629       33,958  
Capitalized costs of patents     49,939        
Capitalized costs of website     8,785        
Less: accumulated amortization     (1,183 )      
Total intangibles, net   $ 121,170     $ 33,958  

 

Amortization
expense for the three months ended October 31, 2020 was $1,183. We incurred no amortization expense for the fiscal year ended
July 31, 2020.

 

 

NOTE
5 – ACCOUNTS PAYABLE AND ACCRUED EXPENSES

 

Accounts
payable and accrued expenses consisted of the following at October 31, 2020 and July 31, 2020:

 

    October 31, 2020     July 31, 2020  
Accounts payable   $ 156,110     $ 155,211  
Accrued interest expense     76,088       73,903  
Accounts payable and accrued expenses     232,198       229,114  
Accounts payable, related party     201,790       271,819  
Total accounts payable and accrued expenses   $ 433,988     $ 500,933  

 

NOTE
6 – PAYROLL RELATED LIABILITIES

 

Payroll
related liabilities consisted of the following at October 31, 2020 and July 31, 2020:

 

    October 31, 2020     July 31, 2020  
Accrued officers’ payroll   $ 986,692     $ 858,154  
Payroll taxes payable     6,468       2,865  
Total payroll related liabilities   $ 993,160     $ 861,019  

 

NOTE
7 – DEBT

 

We
had the following debt obligations reflected at their respective carrying values on our consolidated balance sheets as of October
31, 2020 and July 31, 2020:

 

    October 31, 2020     July 31, 2020  
5{14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3} Convertible promissory notes   $ 550,000     $ 600,000  
Paycheck Protection Program loan     41,667       41,667  
Note payable to Acorn Management Partners, LLC     50,000        
Total debt obligations     641,667       641,667  
Less current portion     (627,639 )     (620,651 )
Long-term debt   $ 14,028     $ 21,016  

 

5{14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3}
Convertible Promissory Notes

 

On
various dates during the month of March 2018 we issued a series of 5{14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3} Convertible Promissory Notes (collectively, the “5{14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3}
Notes”) totaling $750,000 in net proceeds. We incurred no costs related to the issuance of the 5{14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3} Notes. The 5{14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3} Notes bear
interest at the rate of five percent (5{14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3}) per annum, compounded annually and matured one-year from the date of issuance. At October
31, 2020 and July 31, 2020, accrued but unpaid interest on the 5{14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3} Notes was $75,419 and $73,903, respectively, which is included
in “accounts payable and accrued expenses” on our consolidated balance sheets.

 

The
5{14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3} Notes are convertible into common shares of the Company at a fixed ratio of two shares of common stock per dollar amount of
the face value of the note. The principal terms under which the 5{14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3} Notes may be converted into common stock of the Company are
as follows:

 

  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.

 

 

  The
outstanding principal amount of the note, and any accrued but unpaid interest due, will automatically be converted into the
Company’s common stock if at any time prior to the maturity date of the note, the Company concludes a sale of equity
securities in a private offering resulting in gross proceeds to the Company of at least $1,000,000.

 

5{14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3}
Notes with a face amount of $50,000 and accrued interest expense of $6,312 were converted, at the option of the holder, into 112,624
shares of our common stock during the three months ended October 31, 2020. On October 31, 2020, 5{14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3} Notes with a face amount of
$225,000 and related accrued interest expense of $30,853, which matured on various dates during March 2019, are currently in default
and are not convertible under the conversion terms. 5{14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3} Notes with a face amount of $325,000 and related accrued interest expense
of $44,566 mature on March 31, 2021 and are convertible under the conversion terms. Management continues to negotiate amendments
to the remaining notes in default to extend the maturity dates of such notes and to encourage note conversions.

 

Paycheck
Protection Program Loan

 

On
March 27, 2020 the Coronavirus Aid, Relief, and Economic Security Act (the “CARES Act”) was enacted and included a
provision for the Small Business Administration (“SBA”) to implement its Paycheck Protection Program (“PPP”).
The PPP provides small businesses with funds to pay up to eight (8) weeks of payroll costs, including benefits. Funds received
under the PPP may also be used to pay interest on mortgages, rent, and utilities. Subject to certain criteria being met, all or
a portion of the loan may be forgiven. The loans bear interest at an annual rate of one percent (1{14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3}), are due two (2) years from
the date of issuance, and all payments are deferred for the first six (6) months of the loan. Any unforgiven balance of loan principal
and accrued interest at the end of the six (6) month loan deferral period is amortized in equal monthly instalments over
the remaining 18-months of the loan term. On April 30, 2020, we closed a $41,667 SBA guaranteed PPP loan with Mountain Commerce
Bank. We used the loan proceeds as permitted and will apply for forgiveness for the entire loan amount. As of October 31, 2020,
the SBA had issued its final rules for forgiveness of the loan balance and we will soon be submitting our application for
forgiveness.

 

Note
Payable to Acorn Management Partners, LLC

 

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{14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3} per annum and due one-year
from the date of issuance (the “Note”). In the event we default under the terms of the Note, we are required to deliver
1,000,000 shares of our common stock back to AMP in full satisfaction of the obligation. The purchased shares were delivered by
AMP directly to the transfer agent on September 8, 2020 and immediately cancelled. At October 31, 2020, accrued but unpaid interest
on the Note was $669, which is included in “accounts payable and accrued expenses” on our interim consolidated
balance sheets.

 

NOTE
8 – INCOME TAXES

 

A
reconciliation of the provision for income taxes as reported, and the amount computed by multiplying net loss by the federal statutory
rate of 21{14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3} as of October 31, 2020 and July 31, 2020 are as follows:

 

    October 31, 2020     July 31, 2020  
Federal income tax benefit computed at the statutory rate   $ (68,637 )   $ (222,198 )
Increase (decrease) resulting from:                
State income taxes, net of federal benefit           (1,088 )
Stock-based compensation     35,792       89,933  
Valuation allowance     32,743       133,113  
Other     102       240  
Income tax benefit, as reported   $     $  

 

The
components of the net deferred tax asset as of October 31, 2020 and July 31, 2020 are as follows:

 

    October 31, 2020     July 31, 2020  
Deferred tax assets:                
Net operating loss carryovers   $ 570,507     $ 537,764  
Valuation allowance     (570,507 )     (537,764 )
Net deferred tax asset, as reported   $     $  

 

 

In
assessing the realizable value of deferred tax assets, management considers whether it is more likely than not that some portion
or all the deferred tax assets will not be realized. The ultimate realization of deferred tax assets is dependent upon generation
of future taxable income during the periods in which these temporary differences become tax deductible. Based on management’s
assessment of objective and subjective evidence, we have concluded at this time it is more likely than not that all of our deferred
tax asset will not be realized and we have provided a valuation allowance for the entire amount of the deferred tax asset. At
October 31, 2020, we have approximately $2.62 million in federal and state net operating loss carryovers that begin expiring in
fiscal 2037.

 

We
conduct business solely in the United States and file income tax returns in the United States federal jurisdiction as well as
in the states of Tennessee and Colorado. The taxable years ended July 31, 2020, 2019 and 2018 remain open to examination by the
taxing jurisdictions to which we are subject.

 

The
Company evaluated the provisions of ASC 740 related to the accounting for uncertainty in income taxes recognized in an enterprise’s
financial statements. ASC 740 prescribes a comprehensive model for how a company should recognize, present, and disclose uncertain
positions that the Company has taken or expects to take in its tax return. For those benefits to be recognized, a tax position
must be more-likely-than-not to be sustained upon examination by taxing authorities. Differences between tax positions taken or
expected to be taken in a tax return and the net benefit recognized and measured pursuant to the interpretation are referred to
as “unrecognized benefits.” A liability is recognized (or amount of net operating loss carry forward or amount of
tax refundable is reduced) for unrecognized tax benefit because it represents an enterprise’s potential future obligation
to the taxing authority for a tax position that was not recognized as a result of applying the provisions of ASC 740.

 

If
applicable, interest costs related to the unrecognized tax benefits are required to be calculated and would be classified as “Other
expenses – Interest expense” in the consolidated statements of operations. Penalties would be recognized as a component
of “General and administrative.”

 

No
material interest or penalties on unpaid tax were recorded during the three months ended October 31, 2020 and 2019. As of October
31, 2020 and July 31, 2020, no liability for unrecognized tax benefits was required to be reported. The Company does not expect
any significant changes in its unrecognized tax benefits in the next year.

 

NOTE
9 – RELATED PARTY TRANSACTIONS

 

To
continue operations and meet operating cash requirements, we have periodically relied on advances 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. Amounts advanced primarily relate to amounts paid to vendors. The advances are considered temporary in
nature and have not been formalized by any written agreement. As of October 31, 2020 and July 31, 2020, related parties have advanced
the Company $201,790 and $271,819, respectively. The advances are payable on demand and carry no interest.

 

The
amounts and terms of the related party transactions may not necessarily be indicative of the amounts and terms that would have
been incurred had comparable transactions been entered into with independent third parties.

 

NOTE
10 – COMMON STOCK

 

At
October 31, 2020 and July 31, 2020, we had 36,637,235 and 36,474,611 shares of common stock outstanding, respectively. We issued
1,162,624 shares of common stock during the three months ended October 31, 2020, of which 1,050,000 shares were issued for cash
and 112,624 shares were issued upon conversion of debt and related accrued interest. In addition, we purchased and immediately
cancelled 1,000,000 shares of our common stock. During the year ended July 31, 2020 we issued 3,987,111 shares of common
stock, of which 2,950,000 shares were issued for cash, 500,000 shares were issued for services, 337,111 shares were issued upon
conversion of debt and related accrued interest, and 200,000 shares were issued for the vesting of an employee stock grant.

 

 

On
August 11, 2020, we agreed to repurchase 1,000,000 shares of our common stock from Acorn Management Partners, LLC (“AMP”).
The purchased shares were delivered by AMP directly to the transfer agent on September 8, 2020 and immediately cancelled. See
Note 7.

 

On
August 15, 2020, we issued 112,624 shares of common stock to the holder of a $50,000 5{14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3} Convertible Promissory Note (the “Note”)
in exchange for the Note plus accrued interest of $6,312 through the conversion date. Under the terms of the Note, the shares
were issued at a conversion price of $0.50 per share.

 

On
October 13, 2020, we completed two (2) private placement transactions totaling 1,050,000 shares of our common stock, each at a
price of $0.10 per share, resulting in net proceeds to the Company of $105,000. We incurred no cost related to the private placements.

 

NOTE
11 – STOCK-BASED COMPENSATION

 

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 three months ended October 31, 2020, we recorded $134,737 of compensation expense, net of capitalized expense of $19,658,
related to stock options and warrants. During the three months ended October 31, 2019, we recorded $75,194 of compensation expense
related to stock options and warrants. The grant date fair value of stock options and warrants issued during the three months
ended October 31, 2020 and 2019 was $241,433 and $72,071, respectively. We estimated the grant date fair value of stock options
and warrants using the Black-Scholes pricing model with the following weighted average range of assumptions for the periods presented:

 

    October 31, 2020     October 31, 2019  
Expected volatility     271.61 {14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3}     255.85 {14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3}
Expected term (in years)     3.25       3.25  
Risk-free interest rate     0.20 {14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3}     1.38 {14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3}
Dividend yield     None        None  

 

Expected
Volatility

 

Due
to the fact we do not consider historical volatility is the best indicator of future volatility, we use implied volatility of
our options to estimate future volatility.

 

Expected
Term

 

Where
possible, we use the simplified method to estimate the expected term of employee stock options. Where we are unable to use the
simplified method due to the terms of a stock option, we may use a modified simplified method to estimate the expected term. We
do not have adequate historical exercise data to provide a reasonable basis for estimating the expected term for the current share
options granted. The simplified method assumes that employees will exercise share options evenly between the period when the share
options are vested and ending on the date when the options would expire.

 

Risk-Free
Interest Rate

 

The
risk-free rate for the expected term of the option is based on the U.S. Treasury yield curve at the date of grant.

 

Dividend
Yield

 

We
have not estimated any dividend yield as we currently do not pay a dividend and do not anticipate paying a dividend over the expected
term.

 

 

The
following table summarizes our options and warrant activity for the three months ended October 31, 2020 and fiscal year ended
July 31, 2020:

 

    October 31, 2020     July 31, 2020  
    Number of     Weighted     Number of     Weighted  
    Options and     Average     Options and     Average  
    Warrants     Exercise Price     Warrants     Exercise Price  
Balance at beginning of year     6,350,000     $ 1.34       2,500,000     $ 3.00  
Granted     1,000,000       0.40       3,850,000       0.25  
Exercised                        
Balance at end of period     7,350,000     $ 1.21       6,350,000     $ 1.34  
Options and warrants exercisable     2,450,000     $ 1.60       2,150,000     $ 1.85  

 

Summary
of Restricted Stock Grants

 

During
the three months ended October 31, 2020 and 2019, we recorded compensation expense of $16,042 and $-0-, respectively, related
to restricted stock grants. There were no restricted stock grants during the three months ended October 31, 2020 and 2019.

 

The
following table summarizes our restricted stock activity for the three months ended October 31, 2020 and fiscal year ended July
31, 2020:

 

    October 31, 2020     July 31, 2019  
Balance at beginning of year     300,000        
Granted           500,000  
Released           (200,000 )
Forfeited            
Balance at end of period     300,000       300,000  

 

NOTE
12 – COMMITMENTS AND CONTINGENCIES

 

On
March 13, 2018, in connection with the appointment of Scott M. Boruff as Chief Executive Officer of the Company, the Company and
Mr. Boruff entered into an employment agreement (the “Boruff Employment Agreement”) with an initial term of three
(3) years. As compensation for his services, the Company shall pay Mr. Boruff an annual base salary of $300,000. In the event
Mr. Boruff’s employment with the Company is terminated without cause, Mr. Boruff shall be entitled to a severance payment
equal to his base salary for one (1) full year. If Mr. Boruff is terminated without cause within two (2) years of a change in
control upon request of the acquiror, Mr. Boruff shall be entitled to a severance payment in an amount equal to 2.99 times the
annualized base salary he is then earning. In addition, Mr. Boruff is eligible for equity awards as approved by the Board of Directors
as defined in the agreement.

 

On
October 8, 2019, in connection with the appointment of Charles B. Lobetti, III as Chief Financial Officer of the Company, the
Company and Mr. Lobetti entered into an employment agreement (the “Lobetti Employment Agreement”) ”) with
an initial term of three (3) years. Pursuant to a modification of the Lobetti Employment Agreement effective May 1, 2020, the
Company shall pay Mr. Lobetti an annual base salary of $104,000 per year as compensation for his services. In the event Mr.
Lobetti’s employment with the Company is terminated without cause, Mr. Lobetti shall be entitled to a severance payment
equal to his base salary for one (1) full year. If Mr. Lobetti is terminated without cause within two (2) years of a change
in control upon request of the acquiror, Mr. Lobetti shall be entitled to a severance payment in an amount equal to 2.99
times the annualized base salary he is then earning. In addition, Mr. Lobetti is eligible for equity awards as approved by
the Board of Directors as defined in the agreement.

 

 

On
June 15, 2020, in connection with the appointment of Kenneth M. Greenwood as Chief Technology Officer of the Company, the
Company and Mr. Greenwood entered into an employment agreement (the “Greenwood Employment Agreement”) with an
initial term of three (3) years. As compensation for his services, the Company shall pay Mr. Greenwood an annual base salary
of $257,000. The base salary shall be accrued until the Company obtains funding of $1,000,000 in excess of funding used for
inventory purchases, or has $1,000,000 in revenue, whichever occurs first. In the event Mr. Greenwood’s employment with
the Company is terminated without cause, Mr. Greenwood shall be entitled to a severance payment equal to his base salary for
one (1) full year. If Mr. Greenwood is terminated without cause within two (2) years of a change in control upon request of
the acquiror, Mr. Greenwood shall be entitled to a severance payment in an amount equal to 2.99 times the annualized base
salary he is then earning. In addition, Mr. Greenwood is eligible for equity awards as approved by the Board of Directors as
defined in the agreement.

 

On
September 1, 2020, in connection with the appointment of Susan A. Reyes, M.D. as Chief Medical Officer of the Company, the
Company and Dr. Reyes entered into an employment agreement (the “Reyes Employment Agreement”) with an initial
term of three (3) years. As compensation for her services, the Company shall pay Dr. Reyes an annual base salary of $52,000.
The base salary shall be accrued until the Company obtains funding of at least $1,000,000, or has reported $10,000,000 in
revenue, whichever occurs first. In the event Dr. Reyes’ employment with the Company is terminated without cause, Dr.
Reyes shall be entitled to a severance payment equal to her base salary for one (1) full year. If Dr. Reyes is terminated
without cause within two (2) years of a change in control upon request of the acquiror, Dr. Reyes shall be entitled to a
severance payment in an amount equal to 2.99 times the annualized base salary she is then earning. In addition, Dr. Reyes is
eligible for equity awards as approved by the Board of Directors as defined in the agreement.

 

NOTE
13 – SUBSEQUENT EVENTS

 

On December 2, 2020, we completed a private
placement of 1,500,000 shares of our common stock at a price of $0.10 per share resulting in net proceeds to the Company
of $150,000. We incurred no cost related to the private placement.

 

 

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.

 

This
following discussion summarizes the significant factors affecting the interim consolidated financial statements, financial condition,
liquidity, and cash flows of Healthcare Integrated Technologies, Inc, for the three months ended October 31, 2020 and 2019. The
discussion and analysis should be read in conjunction with the consolidated financial statements and notes included in our most
recent Annual Report on Form 10-K for the year ended July 31, 2020 filed with the SEC on October 16, 2020.

 

Executive
Overview

 

We
are a healthcare technology company based in Knoxville, Tennessee. Our business is creating a diversified spectrum of healthcare
technology solutions to integrate and automate the continuing care, home care and professional healthcare spaces.

 

Our
initial product, SafeSpace, is an ambient fall detection solution designed for continuing care communities and at home use. SafeSpace
includes wall mounted devices utilizing radar technology and state of the art software to effectively monitor a person remotely.
In continuing care communities, SafeSpace detects resident falls and generates alerts to a centralized, intelligent dashboard
without the use of wearable devices or any action by the resident. In the home, SafeSpace detects falls and sends alerts directly
to designated individuals.

 

In
addition to SafeSpace, we are creating a home concierge healthcare service application to provide a virtual assisted living experience
for seniors, recently released postoperative patients and others. The concierge application will enable the consumer to obtain
home healthcare services and health and safety monitoring equipment to improve quality of life. We are also working to develop
a fully integrated solution for the professional healthcare community that integrates electronic health records, remote patient
monitoring, telehealth, and other items where integration is beneficial.

 

Strategy

 

Our
mission is to grow a profitable healthcare technology company by focusing on our core product, continuing the development of our
proprietary software and developing new uses and product lines for our technology. Our management team is focused on maintaining
the financial flexibility and assembling the right complement of personnel and outside consultants required to successfully execute
our mission.

 

Financial
and Operating Results

 

Highlights
for three months ended October 31, 2020 include:

 

  On
August 11, 2020 we agreed to repurchase 1,000,000 shares of our common stock from Acorn Management Partners, LLC (“AMP”).
The purchased shares were delivered by AMP directly to the transfer agent on September 8, 2020 and immediately cancelled.

 

 

  On
August 15, 2020, we issued 112,624 shares of common stock to the holder of a $50,000 5{14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3} Convertible Promissory Note (the “Note”)
in exchange for the Note plus accrued interest of $6,312 through the conversion date. Under the terms of the Note, the shares
were issued at a conversion price of $0.50 per share.
     
  On
September 1, 2020, Susan A. Reyes, M.D. was appointed Chief Medical Officer and entered into a three-year employment agreement
with the Company. The employment agreement provides for a base salary of $52,000 per annum (on a part-time basis) and 1,000,000
options to purchase the Company’s common stock at an exercise price of $0.40 per share, with 25{14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3} immediately vested
and exercisable on the grant date and the remaining options vesting equally over a period of three (3) years from the grant
date. The value of the options on the grant date was estimated using the Black-Scholes pricing model and is being recognized
as an expense over the vesting term.
     
  On
October 13, 2020, we completed two (2) private placement transactions totaling 1,050,000 shares of our common stock, each
at a price of $0.10 per share, resulting in net proceeds to the Company of $105,000. We incurred no cost related to the private
placements.

 

Results
of Operations

 

Three
Months Ended October 31, 2020 Compared to the Three Months Ended October 31, 2019

 

Revenues

 

Our
healthcare technology business is not currently producing revenue as we continue to develop, refine and test our products both
internally and in independent senior living facilities through our Pilot Program.

 

Selling,
General and Administrative Expenses

 

The
table below presents a comparison of our selling, general and administrative expenses for the three months ended October 31, 2020
and 2019:

 

   

For the Three Months Ended

October 31,

       
    2020     2019     $ Variance     {14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3}Variance  
                         
Officer’s salaries   $ 121,608     $ 86,187     $ 35,421       41 {14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3}
Stock-based compensation     150,779       75,194       75,585       101 {14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3}
Advertising and marketing     1,975       5,300       (3,325 )     (63 ){14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3}
Professional fees     40,505       7,365       33,140       450 {14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3}
Other     3,479       2,218       1,261       (6 ){14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3}
Total   $ 318,346     $ 176,264     $ 142,082       81 {14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3}

 

Officer’s
Salaries –
Officer’s salaries, net of capitalized amounts, increased $35,421 over 2019, or 41{14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3}. The increase is
attributable to the uncapitalized portion of our new CTO’s salary for the entire period, two months of salary for our new
CMO, and our CFO’s salary for the full period at an increased rate. In 2019, Officer’s salaries only included the
salaries for our CEO and our CFO’s salary, at the starting rate, for less than one month.

 

Stock-Based
Compensation –
Stock-based compensation expense increased $75,585, or 101{14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3}, over the same period in the prior year.
The increase results from amortization of the grant date fair value of additional employee stock options granted to our CTO
and CMO, as well as a restricted stock grant to our CFO.

 

Advertising
and Marketing –
Advertising and marketing costs decreased $3,325 over 2019. We incurred minimal advertising and marketing
costs in both periods.

 

 

Professional
Fees –
Professional fees increased $33,140 from over 2019. The increase was primarily related to the increased accounting,
legal and filing fees associated with the filing of our July 31, 2020 Form 10-K. Our Comprehensive Form 10-K, filed in March 2020,
included the July 31, 2019 Form 10-K and the expense of filing this report was incurred after the three months ended October
31, 2019.

 

Interest
Expense

 

Interest
expense decreased $2,148 over the same period in the prior year. The decrease is primarily due to a $200,000 reduction in outstanding
5{14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3} convertible notes for most of 2020. The decrease was partially offset by increases in interest expense related to the
compounding effect of the accrued interest on the outstanding 5{14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3} convertible notes and the issuance of a new note
payable in August 2020.

 

Liquidity
and Capital Resources

 

Working
Capital

 

The
following table summarizes our working capital for the interim period ended October 31, 2020 and fiscal year ended July 31, 2020:

 

    October 30, 2020     July 31, 2020  
Current assets   $ 58,456     $ 125,010  
Current liabilities     (2,052,611 )     (1,982,603 )
Working capital deficiency   $ (1,994,155 )   $ (1,857,593 )

 

Current
assets for the period ended October 31, 2020 decreased as compared to the year ended July 31, 2020 due to a decrease in cash and
cash equivalents and the amortization of prepaid expenses.

 

Current
liabilities for the period ended October 31, 2020 increased as compared to the year ended July 31, 2020 primarily due to the continued
accrual of unpaid officer’s compensation partially offset by the payment of certain amounts owed to related parties.

 

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 stock-based compensation, which affect earnings but do not affect cash flow. Net cash used by operating activities
was $95,065 for the three months ended October 31, 2020 as compared to $9,646 for the three months ended October 31, 2019. The
$85,419 increase in cash used during 2020 is attributable to the partial payment of accrued officer’s compensation and the
payment of certain amounts owed to related parties in 2020 as compared to 2019.

 

Net
Cash Used by Investing Activities

 

Net
cash used by investing activities was $3,030 for the three months ended October 31, 2020. The amount is comprised solely of cash
paid for the expense of filing our patent applications. We had no cash flows from investing activities during the same period
of 2019.

 

Net
Cash Provided by Financing Activities

 

Net
cash provided by financing activities was $34,971 for the three months ended October 31, 2020, which represented a $25,664 increase
over the same period of 2019. During 2020, we raised $105,000 from the sale of common stock in two (2) private transactions. The
amount was partially offset by $70,029 in payments made for amounts owed to related parties. In fiscal year 2019, we raised $9,307
in cash exclusively from short-term loans from related parties.

 

At
this time, we cannot provide investors with any assurance that we will be able to obtain sufficient funding from debt financing
and/or the sale of our equity securities to meet our obligations over the next twelve months. We are likely to continue using
short-term loans from management to meet our short-term funding needs. We have no material commitments for capital expenditures
as of October 31, 2020.

 

 

Going
Concern Qualification

 

We
have a history of losses, an accumulated deficit, a negative working capital and have not generated cash from operations to support
a meaningful and ongoing business plan. Our Independent Registered Public Accounting Firm has included a “Going Concern
Qualification” in their report for the years ended July 31, 2020, 2019, 2018, 2017 and 2016. The foregoing raises substantial
doubt about the Company’s ability to continue as a going concern. We intend on financing our future activities and working
capital needs largely from the sale of private and/or public equity securities with additional funding from other traditional
financing sources, including term notes, until such time that funds provided by operations are sufficient to fund working capital
requirements. There is no guarantee that additional capital or debt financing will be available when and to the extent required,
or that if available, it will be on terms acceptable to us. The interim consolidated financial statements do not include any adjustments
that might result from the outcome of this uncertainty. The “Going Concern Qualification” might make it substantially
more difficult to raise capital.

 

Critical
Accounting Policies and Estimates

 

Our
interim consolidated financial statements and related public financial information are based on the application of accounting
principles generally accepted in the United States (“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, 2020 Annual Report.

 

We
believe the following critical policies impact our more significant judgments and estimates used in preparation of our financial
statements.

 

Use
of Estimates

 

We
prepare our financial statements in conformity with U.S. GAAP. These principals require 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 financial statements and the reported amounts of revenues and expenses during the reporting period. Management believes that
these estimates are reasonable and have been discussed with the Board; however, actual results could differ from those estimates.

 

Impairment
of Long-Lived Assets

 

Long-lived
assets such as property, equipment and identifiable intangibles are reviewed for impairment 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
from its undiscounted cash flows, an impairment loss is recognized for the difference between the carrying amount and fair value
of the asset. When fair values are not available, we estimate fair value using the expected future cash flows discounted at a
rate commensurate with the risk associated with the recovery of the assets. We did not recognize any impairment losses for any
periods presented.

 

 

Stock-Based
Compensation

 

We
issue options and warrants to consultants, directors, and officers as compensation for services. These options and warrants are
valued using the Black-Scholes model, which focuses on the current stock price and the volatility of moves to predict the likelihood
of future stock moves. This method of valuation is typically used to estimate the value of stock options and warrants based on
the price of the underlying stock.

 

Fair
Value of Financial Instruments

 

Fair
value estimates used in preparation of the financial statements are based upon certain market assumptions and pertinent information
available to management. The respective carrying value of certain on-balance-sheet financial instruments approximated their fair
values. These financial instruments include cash, accounts payable, note payable and amounts due to related parties. Fair values
were assumed to approximate carrying values for these financial instruments since they are short-term in nature and their carrying
amounts approximate fair values or they are receivable or payable on demand.

 

Capital
Resources

 

We
had no material commitments for capital expenditures as of October 31, 2020.

 

Off-Balance
Sheet Arrangements

 

The
Company has no off-balance sheet arrangements as of October 31, 2020.

 

ITEM
3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.

 

We
do not hold any derivative instruments and do not engage in any hedging activities.

 

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.

 

PART
II – OTHER INFORMATION

 

ITEM
1. LEGAL PROCEEDINGS.

 

The
Company is currently not involved in any litigation that the Company believes could have a materially adverse effect on the Company’s
financial condition or results of operations. On January 2, 2020, a sworn account lawsuit was filed against our IndeLiving Holdings,
Inc. (“IndeLiving”) subsidiary and our CEO Scott M. Boruff by our previous Certified Public Accounting Firm, RBSM
LLP demanding payment of $28,007 for services rendered. We have filed our Answer and IndeLiving filed a breach of contract Counterclaim
on February 24, 2020 demanding repayment of a $7,500 retainer paid to RBSM LLP by IndeLiving for services that we allege were
not provided. Given the early state of the proceedings in this case, we currently cannot assess the probability of losses, but
we can reasonably estimate that the range of losses in this case will be immaterial since the full amount of the lawsuit has previously
been recorded in the consolidated financial statements.

 

ITEM
1A. RISK FACTORS.

 

Not
required for smaller reporting companies.

 

ITEM
2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

 

On
October 13, 2020, we issued 550,000 shares of our common stock at a price of $0.10 per share to an accredited investor resulting
in net proceeds to the Company of $55,000. We incurred no cost related to the private transaction. The net proceeds were 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
October 13, 2020, we issued 500,000 shares of our common stock at a price of $0.10 per share to an accredited investor resulting
in net proceeds to the Company of $50,000. We incurred no cost related to the private transaction. The net proceeds were 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{14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3} Convertible Promissory Notes (collectively, the “5{14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3}
Notes”) totaling $750,000 in face amount. The 5{14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3} Notes bear interest at the rate of five percent (5{14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3}) per annum, compounded
annually, and matured one-year from the date of issuance. As of October 31, 2020, 5{14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3} Notes with a face amounts totaling $200,000
have been converted into commons stock of the Company, 5{14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3} Notes with face amounts totaling $325,000 have been previously amended
to extend their maturity date to March 31, 2021, and 5{14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3} Notes with face amounts totaling $225,000 matured on various dates during
March 2019 and are currently in default for non-payment of principal and interest. As of December 11, 2020, principal and
accrued interest of approximately $32,000 are due on the notes in default.

 

ITEM
4. MINE SAFETY DISCLOSURES

 

Not
applicable.

 

ITEM
5. OTHER INFORMATION

 

None.

 

 

ITEM
6. EXHIBITS

 

 

**
Executive Compensation Agreement

 

 

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:
December 11, 2020
   
  By: /s/
Scott M. Boruff
   

Scott
M. Boruff

President,
Chief Executive Officer

(Principal Executive Officer)

 

  Healthcare
Integrated Technologies, Inc.
     
Date:
December 11, 2020
   
  By: /s/
Charles B. Lobetti, III
    Charles
B. Lobetti, III
   

Chief Financial Officer

(Principal Financial Officer)

 

 

 

Exhibit 31.1

 

CERTIFICATION OF PRINCIPAL EXECUTIVE OFFICER

PURSUANT TO 18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO SECTION 302 OF THE

SARBANES-OXLEY ACT OF 2002

 

I, Scott M. Boruff, certify that:

 

  1. I have reviewed
this Quarterly Report on Form 10-Q (this “Report”) of Healthcare Integrated Technologies, Inc.; 
     
  2. Based on my knowledge,
this Report does not contain any untrue statement of a material fact or omit to state a material fact necessary to
make the statements made, in light of the circumstances under which such statements were made, not misleading with respect
to the period covered by this Report;
     
  3. Based on my knowledge,
the financial statements, and other financial information included in this Report, fairly present in all material respects
the financial condition, results of operations and cash flows of the Registrant as of, and for, the periods presented
in this Report;
     
  4. The Registrant’s
other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as
defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal controls over financial reporting (as defined in Exchange
Act Rules 13a-15(f) and 15d-15(f)) for the Registrant and have:

 

  a) designed such disclosure
controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure
that material information relating to the Registrant, including its consolidated subsidiaries, is made known to us
by others within those entities, particularly during the period in which this Report is being prepared;
     
  b) designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
     
  c) evaluated the effectiveness
of the Registrant’s disclosure controls and procedures and presented in this Report our conclusions about
the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this Report based
on such evaluation;
     
  d) disclosed in this
Report any change in the Registrant’s internal control over financial reporting that occurred during the
Registrant’s most recent fiscal quarter (the Registrant’s fourth fiscal quarter in the case of an
annual report) that has materially affected, or is reasonably likely to materially affect, the Registrant’s internal
control over financial reporting;

 

  5. The Registrant’s
other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial
reporting, to the Registrant’s auditors and the audit committee of the Registrant’s board of directors
(or persons performing the equivalent functions):

 

  a) all significant
deficiencies and material weaknesses in the design or operation of internal controls over financial reporting which are reasonably
likely to adversely affect the Registrant’s ability to record, process, summarize and report financial information;
and
     
  b) any fraud, whether
or not material, that involves management or other employees who have a significant role in the Registrant’s
internal controls over financial reporting.

 

Date: December 11,
2020
By: /s/ Scott M. Boruff
   

Scott M. Boruff

Chief Executive Officer

(Principal Executive
Officer)

 

 

 

Exhibit 31.2

 

CERTIFICATION OF PRINCIPAL
FINANCIAL OFFICER

PURSUANT TO 18 U.S.C.
SECTION 1350,

AS ADOPTED PURSUANT
TO SECTION 302 OF THE

SARBANES-OXLEY ACT
OF 2002

 

I, Charles B. Lobetti, III, certify that:

 

  1. I have reviewed
this Quarterly Report on Form 10-Q (this “Report”) of Healthcare Integrated Technologies, Inc.; 
     
  2. Based on my knowledge,
this Report does not contain any untrue statement of a material fact or omit to state a material fact necessary to
make the statements made, in light of the circumstances under which such statements were made, not misleading with respect
to the period covered by this Report;
     
  3. Based on my knowledge,
the financial statements, and other financial information included in this Report, fairly present in all material respects
the financial condition, results of operations and cash flows of the Registrant as of, and for, the periods presented
in this Report;
     
  4. The Registrant’s
other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as
defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal controls over financial reporting (as defined in Exchange
Act Rules 13a-15(f) and 15d-15(f)) for the Registrant and have:

 

  a) designed such disclosure
controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure
that material information relating to the Registrant, including its consolidated subsidiaries, is made known to us
by others within those entities, particularly during the period in which this Report is being prepared;
     
  b) designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
     
  c) evaluated the effectiveness
of the Registrant’s disclosure controls and procedures and presented in this Report our conclusions about
the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this Report based
on such evaluation;
     
  d) disclosed in this
Report any change in the Registrant’s internal control over financial reporting that occurred during the
Registrant’s most recent fiscal quarter (the Registrant’s fourth fiscal quarter in the case of an
annual report) that has materially affected, or is reasonably likely to materially affect, the Registrant’s internal
control over financial reporting;

 

  5. The Registrant’s
other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial
reporting, to the Registrant’s auditors and the audit committee of the Registrant’s board of directors
(or persons performing the equivalent functions):

 

  a) all significant
deficiencies and material weaknesses in the design or operation of internal controls over financial reporting which are reasonably
likely to adversely affect the Registrant’s ability to record, process, summarize and report financial information;
and
     
  b) any fraud, whether
or not material, that involves management or other employees who have a significant role in the Registrant’s
internal controls over financial reporting.

 

Date: December 11,
2020
By: /s/ Charles B. Lobetti, III
   

Charles B. Lobetti, III

Chief Financial Officer

(Principal Financial
Officer)

 

 

 

Exhibit 32.1

 

CERTIFICATION OF PRINCIPAL EXECUTIVE OFFICER

PURSUANT TO 18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO SECTION 906 OF THE

SARBANES-OXLEY ACT OF 2002

 

In connection with the Quarterly Report of
Healthcare Integrated Technologies, Inc. (the “Company”), on Form 10-Q for the period ended October 31, 2020
as filed with the Securities and Exchange Commission on the date hereof (the “Report”), Scott M. Boruff, Chief
Executive Officer of the Company, certifies, pursuant to 18 U.S.C. section 1350 of the Sarbanes-Oxley Act of 2002, that:

 

  (1) The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
     
  (2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

 

Date: December 11,
2020
By: /s/ Scott M. Boruff
   

Scott M. Boruff

Chief Executive Officer

(Principal Executive Officer)

 

 

Exhibit 32.2

 

CERTIFICATION OF PRINCIPAL FINANCIAL OFFICER

PURSUANT TO 18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO SECTION 906 OF THE

SARBANES-OXLEY ACT OF 2002

 

In connection with the Quarterly Report of
Healthcare Integrated Technologies, Inc. (the “Company”), on Form 10-Q for the period ended October 31, 2020
as filed with the Securities and Exchange Commission on the date hereof (the “Report”), Charles B. Lobetti, III, Chief
Financial Officer of the Company, certifies, pursuant to 18 U.S.C. section 1350 of the Sarbanes-Oxley Act of 2002, that:

 

  (1) The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
     
  (2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

 

Date: December 11,
2020
By: /s/ Charles B. Lobetti, III
   

Charles B. Lobetti, III

Chief Financial Officer

(Principal Financial Officer)

 

 

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