THE FOLLOWING DISCUSSION OF OUR PLAN OF OPERATIONS 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 discussion summarizes the significant factors affecting the consolidated
financial statements, financial condition, liquidity, and cash flows of
Healthcare Integrated Technologies, Inc, for the fiscal years ended July 31,
2021 and 2020 and the interim periods included herein. The following discussion
and analysis should be read in conjunction with the consolidated financial
statements and notes included elsewhere in this Form 10-K.



Executive Overview



Healthcare Integrated Technologies, Inc. and its subsidiaries 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.



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.



12

Financial and Operating Results





We continue to utilize funds raised from the private sales of our common stock,
issuance of debt, and short-term advances from related parties to provide cash
for our operations, which allowed us to continue refining our initial product
and readying it for pilot testing, developing our future product offerings and
adding talented individuals to our management team. Highlighted achievements for
the fiscal year ended July 31, 2021 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% 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% 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.

? On December 2, 2020, we completed a private placement transaction 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.

? On December 14, 2020, the U.S. Small Business Administration (the "SBA")

forgave the entire principal balance of $41,667 and related accrued interest

charges of $264 then due under our Paycheck Protection Program loan we closed

with Mountain Commerce Bank on April 30, 2020.

? On February 2, 2021, we entered into a Securities Purchase Agreement with AJB

Capital Investments, LLC ("AJB Capital"), pursuant to which AJB Capital

purchased a Promissory Note (the "AJB Note") in the principal amount of

$360,000 for an aggregate purchase price of $320,400. The transaction resulted

in $300,700 in net proceeds to the Company after payment of closing cost and a

finder's fee of $6,408. In addition, we issued 1,333,334 shares of common

stock to the purchaser of the note as an origination fee.

? On February 18, 2021, we issued 57,766 shares of common stock to the holder of

a $25,000 5% Convertible Promissory Note (the "Note") in exchange for the Note

plus accrued interest of $3,883 through the conversion date. Under the terms

of the Note, the shares were issued at a conversion price of $0.50 per share.

? On February 23, 2021, we issued 231,250 shares of common stock to the holder

of a $100,000 5% Convertible Promissory Note (the "Note") in exchange for the

Note plus accrued interest of $15,625 through the conversion date. Under the

terms of the Note, the shares were issued at a conversion price of $0.50 per


    share.

? On April 30, 2021, we entered into a common stock Subscription Agreement

with an accredited investor. Under the terms of the Subscription

Agreement, the investor agreed to purchase 2,000,000 shares of our common

stock at a purchase price of $0.10 per share through a series of payments,


        and with the initial payment of $50,000 due upon execution of the
        Subscription Agreement.




13

? On May 3, 2021, we issued 233,422 shares of common stock to the holder of a

$100,000 5% Convertible Promissory Note (the "Note") in exchange for the Note

plus accrued interest of $16,711 through the conversion date. Under the terms

of the Note, the shares were issued at a conversion price of $0.50 per share.

? On May 13, 2021, we issued 25,000 to a vendor in settlement of a $5,000

balance that was previously included in accounts payable. Under the terms of


    the settlement, the shares were issued at a price of $0.20 per share.




Results of Operations



Revenues



We had no revenues in fiscal 2021 or 2020. 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 years ended July 31, 2021 and 2020:





                                  For the Years Ended July 31,
                                     2021                2020          $ Variance        %Variance


Officers' salaries              $       531,342       $   423,371     $    107,971                26 %
Equity-based compensation               621,776           407,613          214,163                53 %
Professional fees                        97,500           110,471          (12,971 )             (12 )%
Advertising and marketing                 5,297            66,948          (61,651 )             (92 )%
Depreciation and amortization             8,571             4,769          

 3,802                80 %
Other                                    10,148             3,351            6,797               203 %
Total                           $     1,274,634       $ 1,016,523     $    258,111                25 %




Officers' Salaries - Officers' salaries, net of capitalized amounts, increased
$107,971 over 2020, or 26%. The increase is attributable to the uncapitalized
portion of our CTO's salary for the entire period, eleven months of salary for
our new CMO, and our CFO's salary at an increased rate for the entire period. In
2020, Officers' salaries only included the salary of our CEO, and our CFO's
salary for approximately ten months.



Stock-Based Compensation - Stock-based compensation expense increased $214,163,
or 53%, 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 new CMO, as well as a restricted stock grant to our CFO.



Professional Fees - Professional fees decreased $12,971, or 12%, from 2020.
Accounting fees decreased $38,725 in 2021 after the filing of our July 31, 2019
Comprehensive Form 10-K that was filed in March 2020. The decrease in accounting
fees was partially offset by an increase in legal and consulting fees of
$28,528.



Advertising and Marketing - Advertising and marketing expense decreased $61,651
from 2020, or 92%. In 2020 we engaged BrandMETTLE as our advertising agency and
incurred additional advertising expense from the issuance of common stock for
services under our agreement.



Depreciation and Amortization - Depreciation and amortization expense increased
$3,802 over the same period in the prior year. The increase results from
amortization expense related to new intangible assets placed in service in 2021
partially offset by declining depreciation expense as older assets become fully
depreciated and/or disposed of.



14

Other - Other expense increased $6,797, over 2020. The increase is primarily due to increased travel and entertainment expenses from capital raising efforts.





Other Income (Expense)

The table below presents a comparison of our other income (expense) for the years ended July 31, 2021 and 2020:





                                       For the Years Ended July 31,
                                        2021                  2020          $ Variance       %Variance

Interest expense                   $      (227,900 )     $      (41,564 )   $  (186,336 )            448 %
Derivative expense                         (97,201 )                  -         (97,201 )              -
Change in fair value of
derivative liability                        89,669                    -          89,669                -
Debt forgiveness                            41,931                    -          41,931                -
Lawsuit settlement                          13,110                    -          13,110                -
Total                              $      (180,391 )     $      (41,564 )   $  (138,827 )            334 %





Interest Expense - Interest expense increased $186,336 over the same period in
the prior year. The increase is primarily due to the $180,000 amortization of
debt discount and related interest payments of $17,806 on the AJB Capital
Investments, LLC note (the AJB Note") issued during the current period. The
increase was partially offset by a reduction in outstanding 5% convertible notes
for 2021 due to note conversions.



Derivative Expense - Derivative expense is $97,201 for the year ended July 31,
2021. The expense is attributable to the excess of the fair market value of the
derivative liability associated with our new AJB Note over the net book value of
the note at issuance. We incurred no derivative expense in the year ended July
31, 2020.




Change in Fair Value of Derivative Liability - The change in the fair value of
the derivative liability associated with our new AJB Note reflects a gain of
$89,669 on the change in fair value at the date of issuance of the note to its
fair value at July 31, 2021. We incurred no change in derivative liabilities in
the year ended July 31, 2020.



Debt Forgiveness - Income from debt forgiveness was $41,931 for the year ended
July 31, 2021. The income results from the forgiveness of our Small Business
Administration Paycheck Protection Program loan, plus related accrued interest,
on December 14, 2021. We had no debt forgiveness income in the year ended July
31, 2020.



Lawsuit Settlement - Income from lawsuit settlements was $13,110 for the year
ended July 31, 2021. The income results from the settlement of a lawsuit with
RBSM on May 27, 2021. We had no income from lawsuit settlements in the year
ended July 31, 2020.

Liquidity and Capital Resources





Working Capital



The following table summarizes our working capital for the fiscal years ending
July 31, 2021 and 2020:



                              July 31, 2021       July 31, 2020
Current assets               $        49,018     $       125,010
Current liabilities               (2,259,432 )        (1,982,603 )

Working capital deficiency $ (2,210,414 ) $ (1,857,593 )






Current assets for the year ended July 31, 2021 decreased as compared to July
31, 2020 due to a decrease in cash and cash equivalents and prepaid legal fees,
primarily resulting from the payment of amounts owed to related parties and the
amortization of prepaid legal fees in 2021.



Current liabilities for the year ended July 31, 2021 increased as compared to
July 31, 2020. The increase is primarily due to our new Acorn Management
Partners, LLC and AJB Capital Investments, LLC short-term notes payable in 2021
and the continued accrual of officer's compensation, with such increases being
partially offset by a net decrease in related party accounts payable and accrued
expenses, and a decrease in our outstanding 5% convertible promissory notes and
related accrued interest expense from the conversion of the notes into common
stock.

Net Cash Used by Operating Activities





We currently do not have a revenue source and will continue to have negative
cash flow from operations for the near future. The factors in determining
operating cash flows are largely the same as those that affect net earnings,
except for non-cash expenses such as depreciation and amortization, stock-based
compensation, amortization of debt discount, derivative expense and changes in
fair value of assets and liabilities, which affect earnings but do not affect
cash flow. Net cash used by operating activities was $592,192 for the year ended
July 31, 2021 as compared to $188,655 for the year ended July 31, 2020. The
$403,537 increase in cash used during 2021 is primarily attributable to an
increase in cash payments of officer's compensation.

Net Cash Used by Investing Activities





Net cash used by investing activities was $60,608 for the year ended July 31,
2021. The amount is comprised of cash paid for the filing of patent and
trademark applications and for the development of software for our internal use.
We had no cash flows from investing activities during the year ended July 31,
2020.

Net Cash Provided by Financing Activities





Net cash provided by financing activities was $586,171 for the year ended July
31, 2021, which represents a $320,169 increase over the year ended July 31,
2020. During 2021, we received $355,000 from the sale of common stock in four
private transactions, which is a $60,000 increase over the cash received from
common stock sales in 2020. In addition, we received $300,700 in net proceeds
from the issuance of promissory notes, which is a $259,033 increase in the cash
received from the issuance of promissory notes in 2020.



15







At this time, we cannot provide investors with any assurance that we will be
able to obtain sufficient funding from debt financings 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
July 31, 2021.



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, 2021,
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 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 consolidated financial statements and related public financial information
are based on the application of U.S. GAAP. U.S. GAAP requires the use of
estimates; assumptions, judgments and subjective interpretations of accounting
principles that have an impact on the assets, liabilities, revenues and expense
amounts reported. These estimates can also affect supplemental information
contained in our external disclosures including information regarding
contingencies, risk and financial condition. We believe our use of estimates and
underlying accounting assumptions adhere to U.S. GAAP and are consistently and
conservatively applied. We base our estimates on historical experience and on
various other assumptions that we believe to be reasonable under the
circumstances. Actual results may differ materially from these estimates under
different assumptions or conditions. We continue to monitor significant
estimates made during the preparation of our financial statements.

Our significant accounting policies are summarized in Note 1 of our consolidated financial statements.

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





Use of Estimates



The preparation of consolidated financial statements in conformity with U.S.
GAAP requires management to make estimates and assumptions that affect the
reported amounts of assets and liabilities and disclosure of contingent assets
and liabilities at the date of the consolidated financial statements and the
reported amounts of revenues and expenses during the reporting period. Actual
results could differ from those estimates. We base our estimates on experience
and various other assumptions that are believed to be reasonable under the
circumstances. We evaluate our estimates and assumptions on a regular basis and
actual results may differ from those estimates.

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.



16







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 Financial Accounting
Standards Board (the "FASB") Accounting Standards Codification ("ASC"). 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.



17








The Company adopted Section 815-40-15 of the FASB ASC ("Section 815-40-15") to
determine whether an instrument (or an embedded feature) is indexed to the
Company's own stock. Section 815-40-15 provides that an entity should use a two-
step approach to evaluate whether an equity-linked financial instrument (or
embedded feature) is indexed to its own stock, including evaluating the
instrument's contingent exercise and settlement provisions.

We utilize a binomial option pricing model to compute the fair value of the derivative liability and to mark to market the fair value of the derivative at each balance sheet date. We record the change in the fair value of the derivative as other income or expense in the consolidated statements of operations.





Revenue Recognition



Revenue is recognized under ASC 606, "Revenue from Contracts with Customers"
using the modified retrospective method. Under this method, the Company follows
the five-step model provided by ASC Topic 606 in order to recognize revenue in
the following manner: 1) Identify the contract; 2) Identify the performance
obligations of the contract; 3) Determine the transaction price of the contract;
4) Allocate the transaction price to the performance obligations; and 5)
Recognize revenue. An entity recognizes revenue for the transfer of promised
goods or services to customers in an amount that reflects the consideration for
which the entity expects to be entitled in exchange for those goods or services.
The Company's revenue recognition policies remained substantially unchanged as a
result of the adoption of ASC 606, and there were no significant changes in
business processes or systems.



Stock-Based Compensation



The Company accounts for stock-based compensation in accordance with ASC Topic
718, "Compensation - Stock Compensation" ("ASC 718") which establishes financial
accounting and reporting standards for stock-based employee compensation. It
defines a fair value-based method of accounting for an employee stock option or
similar equity instrument. The Company accounts for compensation cost for stock
option plans, if any, in accordance with ASC 718.



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.



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.



Capital Resources

We had no material commitments for capital expenditures as of July 31, 2021.





18

Off-Balance Sheet Arrangements

We had no off-balance sheet arrangements as of July 31, 2021 or 2020.

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