10-Q: Healthcare Integrated Technologies Reports Q2 2025 Results, Cites Expansion and AI Focus
Sentiment:
Quarterly Report
Healthcare Integrated Technologies, Inc. reports its financial results for the quarter ended January 31, 2025, highlighting its focus on AI-driven safety solutions and expansion into new markets.
Capital raiseThe company received $6,998,900 in net proceeds from the sale of its common stock at an average price of $0.114 per share during the six months ending January 31, 2025.The company issued 70,206,754 unregistered shares of its common stock, of which 61,365,514 shares were issued for cash, 500,000 shares for a loan modification fee, 281,240 shares were issued for the payment of accrued expenses, 60,000 shares were issued for services and 8,000,000 were issued for compensation during the six months ended January 31, 2025.The Company received stock subscription agreements for 3,587,300 shares at $ 0.126 per share, however, the Company had not received a cash payment of $ 452,000 with the agreements at January 31, 2025.
Worse than expectedThe company reported a significantly larger net loss for both the three and six months ended January 31, 2025, compared to the same periods in the prior year.The company did not generate any revenue during the three and six months ended January 31, 2025, while it had revenue of $21,769 in the prior year.Net cash used by operating activities increased significantly from $187,571 provided in the prior year to $873,002 used in the current year.
Summary
- Healthcare Integrated Technologies, Inc. reported financial results for the quarter ended January 31, 2025.
- The company is focused on AI-ambient technology solutions for safety and security across various sectors.
- HITC is marketing products and solutions that utilize advanced AI monitoring tools to enhance resident safety, reduce the risk of injuries, and improve overall care efficiency.
- The company has expanded its services beyond senior living facilities into schools and transportation.
- HITC has launched five more innovative solutions: SafeFace Access Control, SafeFace Time Compliance, SafeGuard Wander Protection, SafeTrace Rapid Investigations, and SafeSchool.
- The company's strategy emphasizes world-class executive experience, operational leaders, and business development team members.
- HITC aims to capture substantial market share in existing and emerging verticals, including senior living, schools, and transportation.
- As of the filing date, the Company has approximately $9,000,000 in cash and cash equivalents from recent private placements.
- The company believes this adequately supports the Company's five-year strategic plan enabling strategic initiatives, such as acquisitions, investments in advanced AI technology, and the expansion of its technology development team.
- The business did not produce revenue during the three-month period ending January 31, 2025.
- The company recognized $21,769 of revenue for professional fees from its contract for the three-month period ending January 31, 2024.
- Net cash used by operating activities was $873,002 for the six months ended January 31, 2025 as compared to net cash provided by operating activities of $187,571 for the six months ended January 31, 2024.
- Net cash provided by financing activities was $6,903,656 for the six months ending January 31, 2025.
Sentiment
Score: 5
Explanation: The sentiment is neutral. While the company has secured significant funding and is expanding its product line, it is not yet generating revenue and is experiencing increasing losses. The future success of the company depends on its ability to convert its investments into revenue and achieve profitability.
Positives
- The company has approximately $9,000,000 in cash and cash equivalents from recent private placements.
- The company believes this adequately supports the Company's five-year strategic plan enabling strategic initiatives, such as acquisitions, investments in advanced AI technology, and the expansion of its technology development team.
- Net cash provided by financing activities was $6,903,656 for the six months ending January 31, 2025.
Negatives
- The business did not produce revenue during the three-month period ending January 31, 2025.
- Net cash used by operating activities was $873,002 for the six months ended January 31, 2025.
Risks
- The company currently does not have a revenue source and will continue to have negative cash flow from operations for the near future.
- There is a lawsuit against the company's subsidiaries due to an alleged guarantee of a loan the Lender made to BERI, an entity related to the Company through common management control.
- 5% Notes with face amounts totaling $175,000 have matured and are currently in default for non-payment of principal and related accrued interest of $71,145 as of the filing date of this interim report.
- The AMP Note is currently in default for non-payment of the principal amount of $50,000 and related accrued interest of $13,512 as of the filing date of this report.
Future Outlook
Management believes the current cash position adequately supports the Company's five-year strategic plan, enabling strategic initiatives, such as acquisitions, investments in advanced AI technology, and the expansion of its technology development team.
Management Comments
- HITC emphasizes world-class executive experience, operational leaders and business development team members who know how to achieve significant results in an expedited fashion.
- This team has a systematic growth focus maximizing our patented ambient AI innovative technology to help save lives.
- We have added new technology team members who are IT executives, architects and engineers, who are leveraging AI to maximize global market penetration.
- The primary objective is to capture substantial market share in existing and emerging verticals, including senior living, schools, transportation, with plans to expand into commercial buildings and prisons, and beyond.
- A key new strength lies in HITCs dedicated professional salesforce, passionate about saving lives and harnessing the power of ambient AI technology to help save lives.
Industry Context
The company is operating in the growing market of AI-driven safety and security solutions, targeting healthcare, education, and transportation sectors. The focus on ambient AI technology aligns with the increasing demand for proactive and preventative safety measures in various industries.
Comparison to Industry Standards
- It is difficult to compare HITC to industry standards due to its early stage and unique combination of AI and safety solutions.
- Companies like Vintra and Athena Security offer AI-powered video analytics for security, but HITC's specific focus on ambient AI and diverse target markets differentiates it.
- Compared to established players in the healthcare technology space like Cerner or Allscripts, HITC is a smaller, more specialized company with a focus on AI-driven safety solutions.
- The company's financial performance should be assessed against its ability to secure contracts and generate revenue in its target markets, as well as its ability to manage operating expenses and maintain a healthy cash position.
Management Changes
| Role | Previous Person | New Person | Effective Date | Reason |
|---|---|---|---|---|
| Board of Directors | Micheal Coach Burt | 2024-08-23 | Appointment | |
| Chief Financial Officer | Timothy R. Brady | 2024-10-01 | Appointment as Fractional CFO | |
| Chief Financial Officer | Timothy R. Brady | 2024-12-01 | Appointment as Full-time CFO | |
| Chief Customer Officer | Caleb Dixon | 2024-11-05 | Appointment | |
| Vice President of Sales Enablement & International Expansion | Theo Davies | 2024-12-09 | Appointment | |
| Senior Living Consultant | Katie Piperata | 2024-12-18 | Engagement | |
| President and Chief Strategy Officer | Dustin Hillis | 2024-12-30 | Promotion | |
| Capital Advisory Role with Investor Relations | Justin Freishtat | 2025-01-07 | Joined | |
| Chief Product Architect | Ken Greenwood | Ken Greenwood | 2025-03-11 | Change in title and responsibilities |
Legal Proceedings
- Apex Funding Source, LLC filed a lawsuit against the company's subsidiaries, Grasshopper Staffing, Inc. and Indeliving Holdings, Inc., due to an alleged guarantee of a loan the Lender made to BERI, an entity related to the Company through common management control.
- The lawsuit is an action for BERIs breach of a loan agreement and failure to pay $ 4,705,900 in principal and interest to the Lender when due.
Related Party Transactions
- The company has periodically relied on short term loans from related parties, primarily shareholders.
- For compensation after August 1, 2023, we entered into a Non-Employee Chief Executive Officer Engagement Agreement (the Contract CEO Agreement) with Platinum Equity Advisors, LLC (Platinum Equity), a related party, to provide the services of our CEO and Chairman of the Board of Directors.
- On December 31, 2024, we issued a Promissory Note to Platinum Equity Advisors, LLC in the principal amount of $ 373,957 which includes $ 51,283 of unamortized deferred financing costs.
Stakeholder Impact
- Shareholders: The company's increasing losses and reliance on equity financing may negatively impact shareholder value.
- Employees: The company's expansion and new product launches may create new opportunities for employees.
- Customers: The company's focus on AI-driven safety solutions may improve safety and security for customers in various industries.
- Creditors: The company's default on senior securities may negatively impact creditors.
Next Steps
- The company expects an install date of August 2025 for its SafeSchool product and service with Brentwood Academy in Nashville, Tennessee.
- The company will continue to focus on strategic initiatives, such as acquisitions, investments in advanced AI technology, and the expansion of its technology development team.
Key Dates
| Date | Description |
|---|---|
| 2018-03-31 | Various dates during the month of March 2018, we issued a series of 5 % Convertible Promissory Notes (collectively, the 5 % Notes) totaling $ 750,000 in net proceeds. |
| 2020-08-11 | On August 11, 2020 we agreed to repurchase 1,000,000 shares of our common stock from Acorn Management Partners, LLC (AMP). |
| 2023-06-12 | On June 12, 2023, we issued a Promissory Note to Platinum Equity Advisors, LLC, a related party (the Platinum Note 1), in the principal amount of $ 372,069. |
| 2023-09-18 | On September 18, 2023, Apex Funding Source, LLC (the Lender) filed a lawsuit in the Supreme Court of the State of New York, County of New York, naming Grasshopper Staffing, Inc. and Indeliving Holdings, Inc., both of which are wholly owned subsidiaries of the Company, as defendants in the suit. |
| 2023-12-12 | On December 12, 2023 we issued a new promissory note to Platinum Equity Advisors, LLC in the principal amount of $ 390,673 (the Platinum Note 2) as full payment of the Platinum Note 1 principal and accrued interest due on such date. |
| 2024-01-31 | On January 31, 2024, we entered into a Non-Employee Chief Executive Officer Engagement Agreement (the Contract CEO Agreement) with Platinum Equity Advisors, LLC (Platinum) to provide the services of Scott M. Boruff as Chief Executive Officer and Chairman of the Board of Directors of the Company for a term of three (3) years. |
| 2024-04-18 | On April 18, 2024, the Lender filed a motion seeking partial summary judgment on its First Cause of Action against BERI and its Second Cause of Action against Scott M. Boruff in the amount of $ 4,705,900 , plus their actual and reasonable attorneys fees. |
| 2024-06-12 | On June 12, 2024, we issued a Promissory Note to Platinum Equity Advisors, LLC, a related party (the Platinum Note 3), in the principal amount of $ 410,207. |
| 2024-08-01 | Effective as of August 1, 2023, the Company shall pay Platinum an annual base fee of $ 102,000. |
| 2024-08-23 | On August 23, 2024, we appointed Micheal Coach Burt to our Board of Directors. |
| 2024-09-01 | On September 1, 2024, we issued 250,000 unregistered shares of our common stock to a consultant pursuant to the terms of a consulting agreement. |
| 2024-09-20 | On September 20, 2024, we completed a private placement of 1,000,000 unregistered shares of our common stock at a price of $ 0.10 per share resulting in net proceeds to the Company of $ 100,000. |
| 2024-09-26 | On September 26, 2024, we completed a private placement of 1,000,000 unregistered shares of our common stock at a price of $ 0.10 per share resulting in net proceeds to the Company of $ 100,000. |
| 2024-10-01 | On October 1, 2024, we appointed Timothy R. Brady as Fractional Chief Financial Officer and on December 1, 2024, appointed him to full-time Chief Financial Officer. |
| 2024-10-08 | On October 8, 2024, we completed multiple private placements of 2,000,000 unregistered shares of our common stock at a price of $ 0.10 per share resulting in net proceeds to the Company of $ 200,000. |
| 2024-10-10 | On October 10, 2024, we completed multiple private placements of 3,500,000 unregistered shares of our common stock at a price of $ 0.10 per share resulting in net proceeds to the Company of $ 350,000. |
| 2024-10-18 | On October 18, 2024, we completed a private placement of 1,000,000 unregistered shares of our common stock at a price of $ 0.10 per share resulting in net proceeds to the Company of $ 100,000. |
| 2024-10-19 | On October 19, 2024, we issued 250,000 shares of common stock to a consultant pursuant to the terms of a consulting agreement entered on October 19, 2022. |
| 2024-10-21 | On October 21, 2024, we completed multiple private placements of 1,000,000 unregistered shares of our common stock at a price of $ 0.10 per share resulting in net proceeds to the Company of $ 100,000. |
| 2024-10-22 | On October 22, 2024, we completed multiple private placements of 2,000,000 unregistered shares of our common stock at a price of $ 0.10 per share resulting in net proceeds to the Company of $ 200,000. |
| 2024-10-24 | On October 24, 2024, we completed multiple private placements of 2,300,000 unregistered shares of our common stock at a price of $ 0.10 per share resulting in net proceeds to the Company of $ 230,000. |
| 2024-10-25 | On October 25, 2024, we completed multiple private placements of 6,520,000 unregistered shares of our common stock at a price of $ 0.10 per share resulting in net proceeds to the Company of $ 652,000. |
| 2024-10-29 | On October 29, 2024, we completed a private placement of 1,000,000 unregistered shares of our common stock at a price of $ 0.10 per share resulting in net proceeds to the Company of $ 100,000. |
| 2024-10-31 | On October 31, 2024, we completed a private placement of 1,000,000 unregistered shares of our common stock at a price of $ 0.10 per share resulting in net proceeds to the Company of $ 100,000. |
| 2024-11-01 | On November 1, 2024, we completed a private placement of 1,000,000 unregistered shares of our common stock at a price of $ 0.10 per share resulting in net proceeds to the Company of $ 100,000. |
| 2024-11-05 | On November 5, 2024, we announced the appointment of Caleb Dixon as Chief Customer Officer to focus on enhancing customer engagement and satisfaction. |
| 2024-11-06 | On November 6, 2024, we completed a private placement of 200,000 unregistered shares of our common stock at a price of $ 0.10 per share resulting in net proceeds to the Company of $ 20,000. |
| 2024-11-11 | On November 11, 2024, we completed a private placement of 2,000,000 unregistered shares of our common stock at a price of $ 0.10 per share resulting in net proceeds to the Company of $ 200,000. |
| 2024-11-13 | On November 13, 2024, we issued 500,000 shares of common stock to a previous lender pursuant to a make whole provision included as part of a loan modification fee. |
| 2024-11-19 | On November 19, 2024, we issued 60,000 unregistered shares of our common stock for settlement of accounts payables. |
| 2024-12-01 | On December 1, 2024, we issued 250,000 shares of common stock to a consultant pursuant to the terms of their consulting agreement. |
| 2024-12-05 | On December 5, 2024, we issued 2,000,000 shares of common stock to a consultant pursuant to the terms of their consulting agreement. |
| 2024-12-09 | On December 9, 2024, we announced the appointment of Theo Davies as Vice President of Sales Enablement & International Expansion |
| 2024-12-18 | On December 18, 2024, we announced the engagement of Katie Piperata as a Senior Living Consultant for the Company's Healthcare division. |
| 2024-12-20 | On December 20, 2024, we issued 500,000 unregistered shares of our common stock to a member of our Board of Directors as compensation for serving on the Board at their resignation. |
| 2024-12-30 | On December 30, 2024, we announced the promotion of Dustin Hillis to President and Chief Strategy Officer. |
| 2024-12-31 | On December 31, 2024, we issued a new promissory note to Platinum Equity Advisors, LLC in the principal amount of $ 373,957 (the Platinum Note 4) as full payment of the Platinum Note 3 principal and accrued interest due. |
| 2025-01-01 | On January 1, 2025, we issued 250,000 shares of common stock to consultants pursuant to the terms of their consulting agreement |
| 2025-01-02 | On January 2, 2025, we issued 100,000 shares of common stock to consultants pursuant to the terms of their consulting agreement. |
| 2025-01-06 | On January 6, 2025, we completed a private placement of 909,091 unregistered shares of our common stock at a price of $ 0.11 per share resulting in net proceeds to the Company of $ 100,000. |
| 2025-01-07 | On January 7, 2025, we announced that Justin Freishtat joined in a capital advisory role with Investor Relations. |
| 2025-01-15 | On January 15, 2025, we completed a private placement of 793,650 unregistered shares of our common stock at a price of $ 0.126 per share resulting in net proceeds to the Company of $ 100,000. |
| 2025-01-20 | On January 20, 2025, we issued 150,000 shares of common stock to consultants pursuant to the terms of their consulting agreement. |
| 2025-01-24 | On January 24, 2025, we completed a private placement of 793,650 unregistered shares of our common stock at a price of $ 0.126 per share resulting in net proceeds to the Company of $ 100,000. |
| 2025-01-26 | On January 26, 2025, we completed multiple private placements of 4,799,566 unregistered shares of our common stock at a price of $ 0.123 per share resulting in net proceeds to the Company of $ 590,200. |
| 2025-01-27 | On January 27, 2025, we completed multiple private placements of 2,587,300 unregistered shares of our common stock at a price of $ 0.126 per share resulting in net proceeds to the Company of $ 326,000. |
| 2025-01-28 | On January 28, 2025, we completed multiple private placements of 6,793,650 unregistered shares of our common stock at a price of $ 0.126 per share resulting in net proceeds to the Company of $ 856,000. |
| 2025-01-29 | On January 29, 2025, the agreement was updated, and the executive became entitled to a 5% override on any and all Company sales, including initial sales and subsequent recurring sales. |
| 2025-01-30 | On January 30, 2025, we completed multiple private placements of 4,380,951 unregistered shares of our common stock at a price of $ 0.126 per share resulting in net proceeds to the Company of $ 552,000. |
| 2025-01-31 | On January 31, 2025, we completed multiple private placements of 3,974,600 unregistered shares of our common stock at a price of $ 0.126 per share resulting in net proceeds to the Company of $ 500,800. |
| 2025-03-06 | On March 6, 2025, we received our first order and deposit from Brentwood Academy in Nashville, Tennessee, for our SafeSchool product and service with an expected install date of August 2025. |
| 2025-03-11 | On March 11, 2025, we appointed Ken Greenwood, as our Chief Product Architect. |
| 2025-03-12 | As of March 12, 2025, there were 179,105,470 shares of common stock of the Registrant outstanding. |
| 2025-03-14 | Report date. |
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