| Summary of Significant Accounting Policies | 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™ with AI Vision™,
is an ambient fall detection solution designed for continuing care communities and at home use. SafeSpace includes hardware devices utilizing
RGB, radar and other sensor technology coupled with our internally developed 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 April 30, 2021 and the results of operations and cash flows for the periods presented. The
results of operations for the nine months ended April 30, 2021 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 nine months ended April 30, 2020,
we reclassified $1,515 in loss from discontinued operations to selling, general and administrative expense and interest expense and for
the three months ended April 30, 2020, we reclassified $17 in loss from discontinued operations to selling, general and administrative
expense. The reclassifications had no impact on previously reported net income. 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. No loss has been experienced and management does not believe we are exposed to any significant credit risk. 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. Derivative Liability Options, warrants, convertible notes, or other contracts,
if any, are evaluated to determine if those contracts, or embedded components of those contracts, qualify as derivatives to be separately
accounted for in accordance with paragraph 815-10-05-4 and Section 815-40-25 of the FASB Accounting Standards Codification. The result
of this accounting treatment is that the fair value of the embedded derivative is marked-to-market each balance sheet date and recorded
as either an asset or a liability. The change in fair value is recorded in the consolidated statement of operations as other income or
expense. Upon conversion, exercise or cancellation of a derivative instrument, the instrument is marked to fair value at the date of conversion,
exercise, or cancellation and then the related fair value is reclassified to equity. In circumstances where the embedded
conversion option in a convertible instrument is required to be bifurcated, and there are also other embedded derivative instruments in
the convertible instrument that are required to be bifurcated, the bifurcated derivative instruments are accounted for as a single, compound
derivative instrument. The classification of derivative
instruments, including whether such instruments should be recorded as liabilities or as equity, is re-assessed at the end of each reporting
period. Equity instruments that are initially classified as equity that become subject to reclassification are reclassified to liability
at the fair value of the instrument on the reclassification date. Derivative instrument liabilities will be classified in the balance
sheet as current or non-current based on whether or not net-cash settlement of the derivative instrument is expected within 12 months
of the balance sheet date. The Company adopted Section 815-40-15
of the FASB Accounting Standards Codification (“Section 815-40-15”) We utilize a binomial option
pricing model to compute the fair value of the derivative liability and to mark to market the fair value of the derivative at each balance
sheet date. We record the change in the fair value of the derivative as other income or expense in the consolidated statements of operations. The Company had a derivative liability of $153,191
as of April 30, 2021. We had no derivative liability at July 31, 2020. Revenue Recognition Revenue is recognized under Accounting Standards Codification
(“ASC”) 606, “ Revenue from Contracts with Customers Advertising Advertising costs are expensed as incurred in accordance
with ASC 720-35, “ Advertising Costs 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 Stock-Based Compensation The Company accounts for stock-based compensation
in accordance with ASC Topic 718, “ Compensation – Stock Compensation” 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 13. 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 Topic 740, “Income Taxes”. 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 2017 Tax Act In addition, the CARES Act raises the corporate charitable
deduction limit to 25% of taxable income and makes qualified improvement property generally eligible for 15-year cost-recovery and 100%
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”. 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 Recent Accounting Pronouncements In December 2019, the FASB issued authoritative guidance
intended to simplify the accounting for income taxes (ASU 2019-12, “ Income Taxes Simplifying the Accounting
for Income Taxes income In August 2020, the FASB issued ASU 2020-06 Debt
- Debt with Conversion and Other Options and Derivatives and Hedging - Contracts in Entity’s Own Equity Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity 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, that when adopted, will have a material
impact on the interim consolidated financial statements of the Company. |
