Document and Entity Information
Document and Entity Information - USD ($) | 12 Months Ended | ||
Jul. 31, 2020 | Oct. 16, 2020 | Jan. 31, 2020 | |
Cover [Abstract] | |||
Entity Registrant Name | Healthcare Integrated Technologies Inc. | ||
Entity Central Index Key | 0001584693 | ||
Document Type | 10-K | ||
Document Period End Date | Jul. 31, 2020 | ||
Amendment Flag | false | ||
Current Fiscal Year End Date | --07-31 | ||
Entity Well-known Seasoned Issuer | No | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | No | ||
Entity Interactive Data Current | No | ||
Entity Filer Category | Non-accelerated Filer | ||
Entity Small Business Flag | true | ||
Entity Emerging Growth Company | false | ||
Entity Shell Company | false | ||
Entity Public Float | $ 12,995,000 | ||
Entity Common Stock, Shares Outstanding | 36,637,235 | ||
Document Fiscal Period Focus | FY | ||
Document Fiscal Year Focus | 2020 |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) | Jul. 31, 2020 | Jul. 31, 2019 |
CURRENT ASSETS | ||
Cash and cash equivalents | $ 78,072 | $ 725 |
Prepaid expenses | 46,938 | |
Total current assets | 125,010 | 725 |
OTHER ASSETS: | ||
Property and equipment, net | 2,453 | 18,392 |
Other intangibles, net | 33,958 | |
Total assets | 161,421 | 19,117 |
CURRENT LIABILITIES: | ||
Accounts payable and accrued expenses | 229,114 | 220,328 |
Accounts payable and accrued expenses, related party | 271,819 | 341,798 |
Payroll related liabilities | 861,019 | 472,078 |
Convertible notes | 600,000 | 750,000 |
Current portion of long-term debt | 20,651 | 3,209 |
Total current liabilities | 1,982,603 | 1,787,413 |
OTHER LIABILITIES: | ||
Long-term debt | 21,016 | 2,625 |
Total liabilities | 2,003,619 | 1,790,038 |
STOCKHOLDERS' DEFICIT: | ||
Common stock par value $0.001; 200,000,000 shares authorized; 36,474,661 and 32,487,500 shares issued and outstanding as of July 31, 2020 and July 31, 2019, respectively | 36,475 | 32,488 |
Additional paid-in capital | 9,564,989 | 8,582,166 |
Accumulated deficit | (11,443,662) | (10,385,575) |
Total stockholders' deficit | (1,842,198) | (1,770,921) |
Total liabilities and stockholders' deficit | $ 161,421 | $ 19,117 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - $ / shares | Jul. 31, 2020 | Jul. 31, 2019 |
Statement of Financial Position [Abstract] | ||
Common stock, par value | $ 0.001 | $ 0.001 |
Common stock, shares authorized | 200,000,000 | 200,000,000 |
Common stock, shares issued | 36,474,661 | 32,487,500 |
Common stock, shares outstanding | 36,474,661 | 32,487,500 |
Consolidated Statements of Oper
Consolidated Statements of Operations - USD ($) | 12 Months Ended | |
Jul. 31, 2020 | Jul. 31, 2019 | |
NET REVENUES: | ||
Contract staffing services | ||
Direct cost of services | ||
Gross margin | ||
OPERATING EXPENSES: | ||
Selling, general and administrative | 1,015,804 | 783,993 |
Total operating expense | 1,015,804 | 783,993 |
OPERATING LOSS | (1,015,804) | (783,993) |
OTHER EXPENSE: | ||
Interest expense | (40,762) | (38,931) |
Total other expense | (40,762) | (38,931) |
LOSS FROM CONTINUING OPERATIONS | (1,056,566) | (822,924) |
LOSS FROM DISCONTINUED OPERATIONS | (1,521) | (15,594) |
NET LOSS | $ (1,058,087) | $ (838,518) |
NET LOSS PER COMMON SHARE | ||
Basic and diluted | $ (0.03) | $ (0.03) |
WEIGHTED AVERAGE NUMBER OF COMMON SHARES OUTSTANDING | ||
Basic and diluted | 33,375,273 | 32,487,500 |
Statements of Changes in Stockh
Statements of Changes in Stockholders' Deficit - USD ($) | Common Stock [Member] | Additional Paid-In Capital [Member] | Accumulated Deficit [Member] | Total |
Balance at Jul. 31, 2018 | $ 32,488 | $ 8,287,656 | $ (9,547,057) | $ (1,226,913) |
Balance, shares at Jul. 31, 2018 | 32,487,500 | |||
Net loss | (838,518) | (838,518) | ||
Stock-based compensation | 294,510 | 294,510 | ||
Stock-based compensation, shares | ||||
Balance at Jul. 31, 2019 | $ 32,488 | 8,582,166 | (10,385,575) | (1,770,921) |
Balance, shares at Jul. 31, 2019 | 32,487,500 | |||
Net loss | (1,058,087) | (1,058,087) | ||
Issuance of equity for services | $ 500 | 115,141 | $ 115,641 | |
Issuance of equity for services, shares | 500,000 | 500,000 | ||
Issuance of common stock for conversion of debt and related accrued interest | $ 337 | 168,218 | $ 168,556 | |
Issuance of common stock for conversion of debt and related accrued interest, shares | 337,111 | |||
Stock-based compensation | $ 200 | 407,413 | 407,613 | |
Stock-based compensation, shares | 200,000 | |||
Sale of common stock | $ 2,950 | 292,050 | 295,000 | |
Sale of common stock, shares | 2,950,000 | |||
Balance at Jul. 31, 2020 | $ 36,475 | $ 9,564,988 | $ (11,443,662) | $ (1,842,198) |
Balance, shares at Jul. 31, 2020 | 36,474,611 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) | 12 Months Ended | |
Jul. 31, 2020 | Jul. 31, 2019 | |
CASH FLOWS FROM OPERATING ACTIVITIES | ||
Net loss | $ (1,058,087) | $ (838,518) |
Adjustments to reconcile loss to net cash used in operating activities: | ||
Depreciation and amortization | 4,769 | 9,617 |
Stock-based compensation | 407,613 | 294,510 |
Issuance of equity for services | 48,062 | |
Transfer of property and equipment and assumption of related liability for services | 6,022 | |
Changes in operating assets and liabilities (excluding effects of acquisitions): | ||
Accounts receivable, net | 14,527 | |
Prepaid expenses and other current assets | 648 | |
Accounts payable and accrued expenses | 27,341 | 61,926 |
Accounts payable, related party | 32,183 | |
Payroll related liabilities | 375,624 | 325,664 |
NET CASH USED BY OPERATING ACTIVITIES | (188,656) | (99,443) |
CASH FLOWS FROM FINANCING ACTIVITIES | ||
Proceeds from sale of common stock | 295,000 | |
Principal payments of long-term debt | (686) | (2,109) |
Proceeds from debt issuance | 41,667 | |
Proceeds from related party advances | 77,416 | 11,155 |
Payments of amounts owed to related parties | (147,395) | (75,800) |
NET CASH PROVIDED (USED) BY FINANCING ACTIVITIES | 266,002 | (66,754) |
Net change in cash and cash equivalents | 77,347 | (166,197) |
Cash and cash equivalents, beginning of period | 725 | 166,922 |
Cash and cash equivalents, end of period | 78,072 | 725 |
SUPPLEMENTAL CASH FLOW INFORMATION | ||
Cash paid for interest | 1,371 | 8,262 |
SIGNIFICANT NON-CASH INVESTING AND FINACING ACTIVITIES | ||
Issuance of common stock for prepaid services | 50,000 | |
Capital expenditures included in payroll related liabilities | 13,317 | |
Capital expenditures from non-cash compensation | 20,641 | |
Issuance of common stock for payment of accrued interest included in accounts payable and accrued expenses | 18,555 | |
Issuance of common stock for conversion of convertible debt | $ 150,000 |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 12 Months Ended |
Jul. 31, 2020 | |
Accounting Policies [Abstract] | |
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, 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 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 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. Reclassifications Certain prior period amounts have been reclassified to conform to current period presentation. 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 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. Concentration of Credit Risk Financial instruments that potentially expose the Company to credit risk consist of cash and cash equivalents, and accounts receivable. The Company is exposed to credit risk on its cash and cash equivalents in the event of default by the financial institutions to the extent account balances exceed the amount insured by the FDIC, which is $250,000. Accounts receivables potentially subject the Company to concentrations of credit risk. Company closely monitors extensions of credit. Estimated credit losses have been recorded in the consolidated financial statements. Recent credit losses have been within management’s expectations. 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 ASC 606 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. Prior to the discontinuance of its operations in February 2019, our Grasshopper Staffing, Inc. subsidiary (“Grasshopper Colorado”) earned revenue by providing specialized temporary staffing solutions to the cannabis industry. We provided temporary labor at an agreed upon rate per hour. Billings were invoiced on a per-hour basis as the temporary staffing services were delivered to the customer. Revenue from most of our temporary staffing services was recognized at a point in time. We applied the practical expedient to recognize revenue for these services at various intervals based on the number of hours completed and the agreed upon rate per hour at that time. 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. 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”. 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 June 2018, the FASB issued Accounting Standards Update (ASU) No. 2018-07, Compensation – Stock Compensation (Topic 718): Improvements to Nonemployee Share-Based Payment Accounting Revenue from Contracts with Customers “Revenue Recognition”). In July 2017, the FASB issued ASU 2017-11, “ Earnings Per Share (Topic 260), Distinguishing Liabilities from Equity (Topic 480) and Derivatives and Hedging (Topic 815): I. Accounting for Certain Financial Instruments with Down Round Features; II. Replacement of the Indefinite Deferral for Mandatorily Redeemable Financial Instruments of Certain Nonpublic Entities and Certain Mandatorily Redeemable Noncontrolling Interests with a Scope Exception” Recent 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 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 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 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 consolidated financial statements of the Company. |
Going Concern
Going Concern | 12 Months Ended |
Jul. 31, 2020 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Going Concern | NOTE 2 - GOING CONCERN The accompanying 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 approximately $1.1 million for the year ended July 31, 2020. As of July 31, 2020, the Company had cash and working capital deficit of approximately $78,000 and $1.86 million, respectively. 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 consolidated financial statements have been prepared assuming that the Company will continue as a going concern. The 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. |
Discontinued Operations
Discontinued Operations | 12 Months Ended |
Jul. 31, 2020 | |
Discontinued Operations and Disposal Groups [Abstract] | |
Discontinued Operations | NOTE 3 - DISCONTINUED OPERATIONS In February 2019, due to continuing operating losses, negative cash flow, limited prospects for future growth and a desire to focus on our healthcare technology products, management elected to discontinue the operations of its Grasshopper Colorado subsidiary. The loss from the operations from the subsidiary is presented separately on the consolidated income statement as discontinued operations. Discontinued operations consisted of the following for the fiscal years ended July 31, 2020 and 2019: July 31, 2020 July 31, 2019 Net revenue $ - $ 27,909 Operating expenses (719 ) (35,969 ) Interest expense (802 ) (7,534 ) Loss from discontinued operations $ (1,521 ) $ (15,594 ) |
Property and Equipment
Property and Equipment | 12 Months Ended |
Jul. 31, 2020 | |
Property, Plant and Equipment [Abstract] | |
Property and Equipment | NOTE 4 - PROPERTY AND EQUIPMENT Property and equipment, net consisted of the following at July 31, 2020 and 2019: July 31, 2020 July 31, 2019 Equipment $ 8,923 $ 23,923 Vehicles - 14,766 Subtotal 8,923 38,689 Less: accumulated depreciation (6,470 ) (20,297 ) Total property and equipment, net $ 2,453 $ 18,392 Depreciation expense for the fiscal years ended July 31, 2020 and 2019 was $4,769 and $7,317, respectively. |
Other Intangibles
Other Intangibles | 12 Months Ended |
Jul. 31, 2020 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Other Intangibles | NOTE 5 – OTHER INTANGIBLES Other intangibles, net consisted of the following at July 31, 2020 and 2019: July 31, 2020 July 31, 2019 Patents in process $ 27,299 $ - Website in process 5,327 - Internal use software in process 1,332 - Total other intangibles, net $ 33,958 $ - We incurred no amortization expense for the fiscal year ended July 31, 2020 as the assets have not been placed in service. At July 31, 2019, there were no intangible assets. |
Accounts Payable and Accrued Ex
Accounts Payable and Accrued Expenses | 12 Months Ended |
Jul. 31, 2020 | |
Payables and Accruals [Abstract] | |
Accounts Payable and Accrued Expenses | NOTE 6 - ACCOUNTS PAYABLE AND ACCRUED EXPENSES Accounts payable and accrued expenses consisted of the following at July 31, 2020 and 2019: July 31, 2020 July 31, 2019 Accounts payable $ 155,211 $ 168,062 Accrued interest expense 73,903 52,266 Accounts payable and accrued expenses 229,114 220,328 Accounts payable, related party 271,819 228,506 Accrued expenses, related party - 113,292 Accounts payable and accrued expenses, related party 271,819 341,798 Total accounts payable and accrued expenses $ 500,933 $ 562,126 Certain accounts payable and accrued expenses were misclassified in the prior year, which have been reclassified in the above tables. The impact of our prior year disclosures was immaterial and there was no impact to the consolidated financial statements from the change in classification. |
Payroll Related Liabilities
Payroll Related Liabilities | 12 Months Ended |
Jul. 31, 2020 | |
Other Liabilities Disclosure [Abstract] | |
Payroll Related Liabilities | NOTE 7 - PAYROLL RELATED LIABILITIES Payroll related liabilities consisted of the following at July 31, 2020 and 2019: July 31, 2020 July 31, 2019 Accrued officers’ payroll $ 858,154 $ 471,214 Payroll taxes payable 2,865 864 Total payroll related liabilities $ 861,019 $ 472,078 |
Debt
Debt | 12 Months Ended |
Jul. 31, 2020 | |
Debt Disclosure [Abstract] | |
Debt | NOTE 8 - DEBT We had the following debt obligations reflected at their respective carrying values on our consolidated balance sheets as of July 31, 2020 and 2019: July 31, 2020 July 31, 2019 5% Convertible promissory notes $ 600,000 $ 750,000 Paycheck Protection Program loan 41,667 - Ford Credit note - 5,834 Total debt obligations 641,667 755,834 Less current portion (620,651 ) (753,209 ) Long-term debt $ 21,016 $ 2,625 5% Convertible Promissory Notes On various dates during the month of March 2018 we issued a series of 5% Convertible Promissory Notes (collectively, the “5% Notes”) totaling $750,000 in net proceeds. We incurred no costs related to the issuance of the 5% Notes. The 5% Notes bear interest at the rate of five percent (5%) per annum, compounded annually and matured one-year from the date of issuance. At July 31, 2020 and 2019, accrued but unpaid interest on the 5% Notes was $73,903 and $52,266, respectively, which is included in accounts payable and accrued expenses on our consolidated balance sheets. The 5% 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% 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% Notes with a face amount of $150,000 and accrued interest expense of $18,555 were converted, at the option of the holders, into 337,111 shares of our common stock during fiscal 2020. On July 31, 2020, 5% Notes with a face amount of $275,000 and related accrued interest expense of $33,872, which matured on various dates during March 2019 are currently in default and are not convertible under the conversion terms. 5% Notes with a face amount of $325,000 and related accrued interest expense of $40,031 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%), 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 installments 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 expect to use the loan proceeds as permitted and apply for and receive forgiveness for the entire loan amount. As of July 31, 2020, we are still awaiting the SBA’s issuance of final rules for forgiveness of the loan balance prior to submitting our application for forgiveness. Ford Credit Note The Ford Credit note was assumed in our acquisition of IndeLiving Holdings, Inc. on March 13, 2018. The original retail installment contract was entered into on June 15, 2016 in the amount of $11,766. The note bears interest at the rate of 9.99% per annum and requires sixty (60) monthly installments of $251 per month. The installment note is collateralized by a 2013 Ford pickup truck. Effective February 21, 2020, the Company transferred the 2013 Ford pickup truck and other equipment in exchange for the transferee’s assumption of the Ford Credit note. |
Income Taxes
Income Taxes | 12 Months Ended |
Jul. 31, 2020 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | NOTE 9 - 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% as of July 31, 2020 and 2019 are as follows: July 31, 2020 July 31, 2019 Federal income tax benefit computed at the statutory rate $ (222,198 ) $ (176,089 ) Increase (decrease) resulting from: State income taxes, net of federal benefit (1,088 ) (6,459 ) Equity based compensation 89,933 61,847 Valuation allowance 133,113 119,019 Other 240 1,682 Income tax benefit, as reported $ - $ - The components of the net deferred tax asset as of July 31, 2020 and 2019 are as follows: July 31, 2020 July 31, 2019 Deferred tax assets: Net operating loss carryovers $ 537,764 $ 404,651 Valuation allowance (537,764 ) (404,651 ) 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 July 31, 2020 we have approximately $2.46 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, 2019, 2018 and 2017 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 year ended July 31, 2020 and 2019. As of July 31, 2020 and 2019, 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. |
Related Party Transactions
Related Party Transactions | 12 Months Ended |
Jul. 31, 2020 | |
Related Party Transactions [Abstract] | |
Related Party Transactions | NOTE 10 - 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 July 31, 2020 and 2019, related parties have advanced the Company $271,819 and $228,506, respectively. The advances are payable on demand and carry no interest. In addition, we have accrued expenses related to the January 15, 2016 consulting and advisory agreement with Platinum Equity Advisors, LLC (the “Platinum Agreement”), a related party. The Platinum Agreement was terminated on March 12, 2018 (the “Termination Date”) when Scott M. Boruff, the Chief Manager of Platinum, was appointed Chief Executive Officer of the Company. As of July 31, 2020 and 2019, the accrued amount owed under the Platinum Agreement is $-0- and $113,292, respectively. The amounts and terms of the above 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. |
Common Stock
Common Stock | 12 Months Ended |
Jul. 31, 2020 | |
Equity [Abstract] | |
Common Stock | NOTE 11 - COMMON STOCK At July 31, 2020 and 2019, we had 36,474,611 and 32,487,500 shares of common stock outstanding, respectively. We issued 3,987,111 shares during the fiscal year ended July 31, 2020, 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 200,000 shares were issued for the vesting of an employee stock grant. No shares were issued during the year ended July 31, 2019. On February 11, 2020, we completed a private placement of 1,000,000 shares of our common stock at a price of $0.10 per share resulting in net proceeds to the Company of $100,000. We incurred no cost related to the private placement. On March 18, 2020, we completed a private placement of 200,000 shares of our common stock at a price of $0.10 per share resulting in net proceeds to the Company of $20,000. We incurred no cost related to the private placement. On March 21, 2020, we executed an agreement with BrandMETTLE, LLC (“BrandMETTLE”) to serve as our advertising and marketing agency. Pursuant to the terms of the agreement, we issued 250,000 shares of our common stock to certain principals of BrandMETTLE at an estimated value of $0.18 per share. On July 8, 2020, we issued 56,048 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 $3,024 through the conversion date. Under the terms of the Note, the shares were issued at a conversion price of $0.50 per share. On July 8, 2020, we completed a private placement of 1,000,000 shares of our common stock at a price of $0.10 per share resulting in net proceeds to the Company of $100,000. We incurred no cost related to the private placement. On July 13, 2020, we completed a private placement of 250,000 shares of our common stock at a price of $0.10 per share resulting in net proceeds to the Company of $25,000. We incurred no cost related to the private placement. On July 16, 2020, we completed two (2) private placements totaling 500,000 shares of our common stock, each at a price of $0.10 per share, resulting in net proceeds to the Company of $50,000. We incurred no cost related to the private placements. On July 16, 2020, we issued 200,000 shares of common stock to an employee upon the vesting of a portion of a restricted stock grant. The grant date fair value of the shares issued was $0.35 per share. On July 17, 2020, we executed an agreement with Haygood Moody Hodge PLC (“HMH”) to provide general legal services to the Company. Pursuant to the terms of the agreement, we issued 250,000 shares of our common stock to a principal of HMH for prepaid legal services at an estimated value of $0.20 per share. On July 24, 2020, we issued 56,176 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 $3,088 through the conversion date. Under the terms of the Note, the shares were issued at a conversion price of $0.50 per share. On July 29, 2020, we issued 224,887 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 $3,088 through the conversion date. Under the terms of the Note, the shares were issued at a conversion price of $0.50 per share. |
Stock-Based Compensation
Stock-Based Compensation | 12 Months Ended |
Jul. 31, 2020 | |
Retirement Benefits [Abstract] | |
Stock-Based Compensation | NOTE 12 - 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 year ended July 31, 2020, we recorded $334,939 of compensation expense, net of capitalized expense of $20,641, related to stock options and warrants. During the year ended July 31, 2019, we recorded $294,510 of compensation expense related to stock options and warrants. The grant date fair value stock options and warrants during the year ended July 31, 2020 was $808,253. No stock options or warrants were granted during the year ended July 31, 2019. 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: July 31, 2020 July 31, 2019 Expected volatility 271.37 % - Expected term (in years) 3.25 - Risk-free interest rate 0.46 % - Dividend yield 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 years ended July 31, 2020 and 2019: July 31, 2020 July 31, 2019 Number of Weighted Number of Weighted Options and Average Options and Average Warrants Exercise Price Warrants Exercise Price Balance at beginning of year 2,500,000 $ 3.00 2,500,000 $ 3.00 Granted 3,850,000 0.25 - - Exercised - - - - Balance at end of year 6,350,000 $ 1.34 2,500,000 $ 3.00 Options and warrants exercisable 2,150,000 $ 1.85 625,000 $ 3.00 Summary of Restricted Stock Grants During the years ended July 31, 2020 and 2019, we recorded compensation expense of $72,674 and $-0-, respectively, related to restricted stock grants. The grant date fair value of restricted stock during the year ended July 31, 2020 was $175,000. There were no restricted stock grants during the year ended July 31, 2019. The following table summarizes our restricted stock activity for the years ended July 31, 2020 and 2019: July 31, 2020 July 31, 2019 Balance at beginning of year $ - $ - Granted 500,000 - Released (200,000 ) - Forfeited - - Balance at end of year $ 300,000 $ - |
Commitments and Contingencies
Commitments and Contingencies | 12 Months Ended |
Jul. 31, 2020 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | NOTE 13 – 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. |
Subsequent Events
Subsequent Events | 12 Months Ended |
Jul. 31, 2020 | |
Subsequent Events [Abstract] | |
Subsequent Events | NOTE 14 - SUBSEQUENT EVENTS On August 11, 2020 we agreed to repurchase 1,000,000 shares of our common stock from Acorn Management Partners, LLC (“AMP”). As consideration for the share repurchase, we issued a $50,000 promissory note bearing interest a 6.0% per annum and due one-year from the date of issuance (the “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. Upon receipt, the acquired shares were immediately canceled. 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. and the Company entered into a three-year Employment Agreement in which Dr. Reyes agreed to serve as our Chief Medical Officer. As compensation, we agreed to pay her an annual salary of $52,000 and she is entitled to discretionary bonuses as may be awarded from time to time by our Board of Directors. As additional compensation we granted her stock options to purchase 1,000,000 shares of our common stock at an exercise price of $0.40 per share, which was the closing price of common stock as reported on the OTC Markets on the date immediately preceding the date of the Employment Agreement. The options vested 150,000 shares immediately upon execution of the Employment Agreement with the remaining vesting equally in annual installments over three (3) years. The vesting date of any unvested options accelerates in the event of a Change in Control (as defined in the Employment Agreement). Dr. Reyes is also entitled to paid vacation and sick leave, and participation in any employee benefit plans or programs we may offer. The initial term of the Employment Agreement will automatically renew for an additional one-year term unless either party provides notice of non-renewal. The Employment Agreement terminates upon the death or disability of Dr. Reyes, and may be terminated by us for cause, or by Dr. Reyes for any reason. If the Employment Agreement is terminated for by us for cause, upon her death or disability, at non-renewal or by Dr. Reyes, she is only entitled to receive base salary accrued but not paid through the date of termination, and in the case of termination due to death or disability, a pro rata payment of the annual incentive earned for the year of termination. If the Employment Agreement is terminated by us without cause or by Dr. Reyes for good reason, we are obligated to pay her severance equal to one year’s base salary and any unpaid incentive compensation. In addition, if at any time during the term of the Employment Agreement Dr. Reyes’ employment is terminated by us without cause within two years after a Change in Control of our company, or in the 90 days prior the Change in Control at the request of the acquiror, we are obligated to pay her an amount equal to 2.99 times her annualized compensation. “Change in Control” is defined in the Employment Agreement to mean the acquisition by any person of beneficial ownership of our securities representing greater than 50% of the combined voting power of our then outstanding voting securities. The Employment Agreement contains customary invention assignment, non-compete and non-solicitation provisions. On October 13, 2020, we completed two (2) private placements 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. |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 12 Months Ended |
Jul. 31, 2020 | |
Accounting Policies [Abstract] | |
Basis of Presentation | Basis of Presentation The accompanying 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 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. |
Reclassifications | Reclassifications Certain prior period amounts have been reclassified to conform to current period presentation. |
Risk and Uncertainties | 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 | 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. |
Concentration of Credit Risk | Concentration of Credit Risk Financial instruments that potentially expose the Company to credit risk consist of cash and cash equivalents, and accounts receivable. The Company is exposed to credit risk on its cash and cash equivalents in the event of default by the financial institutions to the extent account balances exceed the amount insured by the FDIC, which is $250,000. Accounts receivables potentially subject the Company to concentrations of credit risk. Company closely monitors extensions of credit. Estimated credit losses have been recorded in the consolidated financial statements. Recent credit losses have been within management’s expectations. |
Cash and Cash Equivalents | 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 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 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 | 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 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 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 Recognition Revenue is recognized under ASC 606 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. Prior to the discontinuance of its operations in February 2019, our Grasshopper Staffing, Inc. subsidiary (“Grasshopper Colorado”) earned revenue by providing specialized temporary staffing solutions to the cannabis industry. We provided temporary labor at an agreed upon rate per hour. Billings were invoiced on a per-hour basis as the temporary staffing services were delivered to the customer. Revenue from most of our temporary staffing services was recognized at a point in time. We applied the practical expedient to recognize revenue for these services at various intervals based on the number of hours completed and the agreed upon rate per hour at that time. |
Advertising | Advertising Advertising costs are expensed as incurred in accordance with ASC 720-35, “ Advertising Costs |
Net Loss Per Common Share | 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 | 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. |
Business Combinations | 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 | 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”. 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 | Recently Adopted Accounting Pronouncements In June 2018, the FASB issued Accounting Standards Update (ASU) No. 2018-07, Compensation – Stock Compensation (Topic 718): Improvements to Nonemployee Share-Based Payment Accounting Revenue from Contracts with Customers “Revenue Recognition”). In July 2017, the FASB issued ASU 2017-11, “ Earnings Per Share (Topic 260), Distinguishing Liabilities from Equity (Topic 480) and Derivatives and Hedging (Topic 815): I. Accounting for Certain Financial Instruments with Down Round Features; II. Replacement of the Indefinite Deferral for Mandatorily Redeemable Financial Instruments of Certain Nonpublic Entities and Certain Mandatorily Redeemable Noncontrolling Interests with a Scope Exception” |
Recent Accounting Pronouncements | Recent 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 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 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 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 consolidated financial statements of the Company. |
Discontinued Operations (Tables
Discontinued Operations (Tables) | 12 Months Ended |
Jul. 31, 2020 | |
Discontinued Operations and Disposal Groups [Abstract] | |
Schedule of Discontinued Operations | Discontinued operations consisted of the following for the fiscal years ended July 31, 2020 and 2019: July 31, 2020 July 31, 2019 Net revenue $ - $ 27,909 Operating expenses (719 ) (35,969 ) Interest expense (802 ) (7,534 ) Loss from discontinued operations $ (1,521 ) $ (15,594 ) |
Property and Equipment (Tables)
Property and Equipment (Tables) | 12 Months Ended |
Jul. 31, 2020 | |
Property, Plant and Equipment [Abstract] | |
Schedule of Property and Equipment | Property and equipment, net consisted of the following at July 31, 2020 and 2019: July 31, 2020 July 31, 2019 Equipment $ 8,923 $ 23,923 Vehicles - 14,766 Subtotal 8,923 38,689 Less: accumulated depreciation (6,470 ) (20,297 ) Total property and equipment, net $ 2,453 $ 18,392 |
Other Intangibles (Tables)
Other Intangibles (Tables) | 12 Months Ended |
Jul. 31, 2020 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of Other Intangibles | Other intangibles, net consisted of the following at July 31, 2020 and 2019: July 31, 2020 July 31, 2019 Patents in process $ 27,299 $ - Website in process 5,327 - Internal use software in process 1,332 - Total other intangibles, net $ 33,958 $ - |
Accounts Payable and Accrued _2
Accounts Payable and Accrued Expenses (Tables) | 12 Months Ended |
Jul. 31, 2020 | |
Payables and Accruals [Abstract] | |
Schedule of Accounts Payable and Accrued Expenses | Accounts payable and accrued expenses consisted of the following at July 31, 2020 and 2019: July 31, 2020 July 31, 2019 Accounts payable $ 155,211 $ 168,062 Accrued interest expense 73,903 52,266 Accounts payable and accrued expenses 229,114 220,328 Accounts payable, related party 271,819 228,506 Accrued expenses, related party - 113,292 Accounts payable and accrued expenses, related party 271,819 341,798 Total accounts payable and accrued expenses $ 500,933 $ 562,126 |
Payroll Related Liabilities (Ta
Payroll Related Liabilities (Tables) | 12 Months Ended |
Jul. 31, 2020 | |
Other Liabilities Disclosure [Abstract] | |
Schedule of Payroll Related Liabilities | Payroll related liabilities consisted of the following at July 31, 2020 and 2019: July 31, 2020 July 31, 2019 Accrued officers’ payroll $ 858,154 $ 471,214 Payroll taxes payable 2,865 864 Total payroll related liabilities $ 861,019 $ 472,078 |
Debt (Tables)
Debt (Tables) | 12 Months Ended |
Jul. 31, 2020 | |
Debt Disclosure [Abstract] | |
Schedule of Debt Obligations | We had the following debt obligations reflected at their respective carrying values on our consolidated balance sheets as of July 31, 2020 and 2019: July 31, 2020 July 31, 2019 5% Convertible promissory notes $ 600,000 $ 750,000 Paycheck Protection Program loan 41,667 - Ford Credit note - 5,834 Total debt obligations 641,667 755,834 Less current portion (620,651 ) (753,209 ) Long-term debt $ 21,016 $ 2,625 |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Jul. 31, 2020 | |
Income Tax Disclosure [Abstract] | |
Schedule of Reconciliation of Provision for 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% as of July 31, 2020 and 2019 are as follows: July 31, 2020 July 31, 2019 Federal income tax benefit computed at the statutory rate $ (222,198 ) $ (176,089 ) Increase (decrease) resulting from: State income taxes, net of federal benefit (1,088 ) (6,459 ) Equity based compensation 89,933 61,847 Valuation allowance 133,113 119,019 Other 240 1,682 Income tax benefit, as reported $ - $ - |
Schedule of Components of Net Deferred Tax Asset | The components of the net deferred tax asset as of July 31, 2020 and 2019 are as follows: July 31, 2020 July 31, 2019 Deferred tax assets: Net operating loss carryovers $ 537,764 $ 404,651 Valuation allowance (537,764 ) (404,651 ) Net deferred tax asset, as reported $ - $ - |
Stock-Based Compensation (Table
Stock-Based Compensation (Tables) | 12 Months Ended |
Jul. 31, 2020 | |
Retirement Benefits [Abstract] | |
Schedule of Fair value of Stock Options Valuation Assumptions | 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: July 31, 2020 July 31, 2019 Expected volatility 271.37 % - Expected term (in years) 3.25 - Risk-free interest rate 0.46 % - Dividend yield None - |
Schedule of Stock Based Compensation Activities | The following table summarizes our options and warrant activity for the years ended July 31, 2020 and 2019: July 31, 2020 July 31, 2019 Number of Weighted Number of Weighted Options and Average Options and Average Warrants Exercise Price Warrants Exercise Price Balance at beginning of year 2,500,000 $ 3.00 2,500,000 $ 3.00 Granted 3,850,000 0.25 - - Exercised - - - - Balance at end of year 6,350,000 $ 1.34 2,500,000 $ 3.00 Options and warrants exercisable 2,150,000 $ 1.85 625,000 $ 3.00 |
Schedule of Restricted Stock Activity | The following table summarizes our restricted stock activity for the years ended July 31, 2020 and 2019: July 31, 2020 July 31, 2019 Balance at beginning of year $ - $ - Granted 500,000 - Released (200,000 ) - Forfeited - - Balance at end of year $ 300,000 $ - |
Nature of Operations and Summar
Nature of Operations and Summary of Significant Accounting Policies (Details Narrative) - USD ($) | 12 Months Ended | |
Jul. 31, 2020 | Jul. 31, 2019 | |
Accounting Policies [Abstract] | ||
Cash FDIC insured amount | $ 250,000 | |
Advertising costs | $ 50,927 | $ 8,746 |
Income tax description | 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% 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% of adjusted taxable income plus business interest income (30% 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% 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. |
Going Concern (Details Narrativ
Going Concern (Details Narrative) - USD ($) | 12 Months Ended | |
Jul. 31, 2020 | Jul. 31, 2019 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||
Net loss | $ (1,058,087) | $ (838,518) |
Cash | 78,072 | $ 725 |
Working capital deficit | $ 1,860,000 |
Discontinued Operations - Sched
Discontinued Operations - Schedule of Discontinued Operations (Details) - USD ($) | 12 Months Ended | |
Jul. 31, 2020 | Jul. 31, 2019 | |
Discontinued Operations and Disposal Groups [Abstract] | ||
Net revenue | $ 27,909 | |
Operating expenses | (719) | (35,969) |
Interest expense | (802) | (7,534) |
Loss from discontinued operations | $ (1,521) | $ (15,594) |
Property and Equipment (Details
Property and Equipment (Details Narrative) - USD ($) | 12 Months Ended | |
Jul. 31, 2020 | Jul. 31, 2019 | |
Property, Plant and Equipment [Abstract] | ||
Depreciation expenses | $ 4,769 | $ 7,317 |
Property and Equipment - Schedu
Property and Equipment - Schedule of Property and Equipment (Details) - USD ($) | Jul. 31, 2020 | Jul. 31, 2019 |
Subtotal | $ 8,923 | $ 38,689 |
Less: accumulated depreciation | (6,470) | (20,297) |
Total property and equipment, net | 2,453 | 18,392 |
Equipment [Member] | ||
Subtotal | 8,923 | 23,923 |
Vehicles [Member] | ||
Subtotal | $ 14,766 |
Other Intangibles (Details Narr
Other Intangibles (Details Narrative) - USD ($) | 12 Months Ended | |
Jul. 31, 2020 | Jul. 31, 2019 | |
Goodwill and Intangible Assets Disclosure [Abstract] | ||
Amortization expense | ||
Intangible assets | $ 33,958 |
Other Intangibles - Schedule of
Other Intangibles - Schedule of Other Intangibles (Details) - USD ($) | Jul. 31, 2020 | Jul. 31, 2019 |
Total other intangibles, net | $ 33,958 | |
Patents in Process [Member] | ||
Total other intangibles, net | 27,299 | |
Website in Process [Member] | ||
Total other intangibles, net | 5,327 | |
Internal Use Software in Process [Member] | ||
Total other intangibles, net | $ 1,332 |
Accounts Payable and Accrued _3
Accounts Payable and Accrued Expenses - Schedule of Accounts Payable and Accrued Expenses (Details) - USD ($) | Jul. 31, 2020 | Jul. 31, 2019 | Mar. 31, 2019 |
Payables and Accruals [Abstract] | |||
Accounts Payable | $ 155,211 | $ 168,062 | |
Accrued interest expense | 73,903 | 52,266 | $ 40,031 |
Accounts payable and accrued expenses | 229,114 | 220,328 | |
Accounts payable, related party | 271,819 | 228,506 | |
Accrued expenses, related party | 113,292 | ||
Accounts payable and accrued expenses, related party | 271,819 | 341,798 | |
Total accounts payable and accrued expenses | $ 500,933 | $ 562,126 |
Payroll Related Liabilities - S
Payroll Related Liabilities - Schedule of Payroll Related Liabilities (Details) - USD ($) | Jul. 31, 2020 | Jul. 31, 2019 |
Other Liabilities Disclosure [Abstract] | ||
Accrued officer's payroll | $ 858,154 | $ 471,214 |
Payroll taxes payable | 2,865 | 864 |
Total payroll related liabilities | $ 861,019 | $ 472,078 |
Debt (Details Narrative)
Debt (Details Narrative) - USD ($) | Mar. 27, 2020 | Jun. 15, 2016 | Mar. 31, 2019 | Mar. 31, 2018 | Jul. 31, 2020 | Jul. 31, 2019 |
Accrued unpaid interest on debt | $ 40,031 | $ 73,903 | $ 52,266 | |||
Debt instrument, face amount | $ 325,000 | |||||
5% Convertible Promissory Notes [Member] | ||||||
Debt interest rate, percentage | 5.00% | |||||
Proceeds from convertible debt | $ 750,000 | |||||
Accrued unpaid interest on debt | $ 73,903 | $ 52,266 | ||||
Debt instrument, description | The 5% 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% 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. | |||||
Debt instrument, maturity date | Mar. 31, 2021 | |||||
5% Convertible Promissory Notes [Member] | ||||||
Debt interest rate, percentage | 5.00% | |||||
Accrued unpaid interest on debt | $ 18,555 | |||||
Debt instrument, face amount | $ 150,000 | |||||
5% Convertible Promissory Notes [Member] | Holders [Member] | ||||||
Stock option | 337,111 | |||||
Notes [Member] | ||||||
Debt interest rate, percentage | 5.00% | |||||
Accrued unpaid interest on debt | $ 33,872 | |||||
Debt instrument, face amount | 275,000 | |||||
Paycheck Protection Program Loan [Member] | ||||||
Debt instrument, description | The loans bear interest at an annual rate of one percent (1%), 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 installments over the remaining 18-months of the loan term. | |||||
Paycheck Protection Program Loan [Member] | Mountain Commerce Bank [Member] | ||||||
Loan amount | $ 41,667 | |||||
Ford Credit Note [Member] | ||||||
Debt interest rate, percentage | 9.99% | |||||
Debt instrument, face amount | $ 11,766 | |||||
Debt instrument, payment term | P60M | |||||
Debt periodic payment, per month | $ 251 |
Debt - Schedule of Debt Obligat
Debt - Schedule of Debt Obligations (Details) - USD ($) | Jul. 31, 2020 | Jul. 31, 2019 |
Total debt obligations | $ 641,667 | $ 755,834 |
Less current portion | (620,651) | (753,209) |
Long-term debt | 21,016 | 2,625 |
5% Convertible Promissory Notes [Member] | ||
Total debt obligations | 600,000 | 750,000 |
Paycheck Protection Program Loan [Member] | ||
Total debt obligations | 41,667 | |
Ford Credit Note [Member] | ||
Total debt obligations | $ 5,834 |
Income Taxes (Details Narrative
Income Taxes (Details Narrative) - USD ($) | 12 Months Ended | |
Jul. 31, 2020 | Jul. 31, 2019 | |
Income Tax Disclosure [Abstract] | ||
Federal statutory rate | 21.00% | 21.00% |
Federal and state net operating loss carryovers | $ 2,460,000 | |
Tax expiration date, description | expiring in fiscal 2037 |
Income Taxes - Schedule of Reco
Income Taxes - Schedule of Reconciliation of Provision for Income Taxes (Details) - USD ($) | 12 Months Ended | |
Jul. 31, 2020 | Jul. 31, 2019 | |
Income Tax Disclosure [Abstract] | ||
Federal income tax benefit computed at the statutory rate | $ (222,198) | $ (176,089) |
State income taxes, net of federal benefit | (1,088) | (6,459) |
Equity based compensation | 89,933 | 61,847 |
Valuation allowance | 133,113 | 119,019 |
Other | 240 | 1,682 |
Income tax benefit, as reported |
Income Taxes - Schedule of Comp
Income Taxes - Schedule of Components of Net Deferred Tax Asset (Details) - USD ($) | Jul. 31, 2020 | Jul. 31, 2019 |
Income Tax Disclosure [Abstract] | ||
Deferred tax assets: Net operating loss carryovers | $ 537,764 | $ 404,651 |
Deferred tax assets: Valuation allowance | (537,764) | (404,651) |
Net deferred tax asset, as reported |
Related Party Transactions (Det
Related Party Transactions (Details Narrative) - USD ($) | Jul. 31, 2020 | Jul. 31, 2019 |
Due to related party | $ 271,819 | $ 228,506 |
Platinum Agreement [Member] | ||
Accrued expenses | $ 0 | $ 113,292 |
Common Stock (Details Narrative
Common Stock (Details Narrative) - USD ($) | Jul. 29, 2020 | Jul. 24, 2020 | Jul. 17, 2020 | Jul. 16, 2020 | Jul. 13, 2020 | Jul. 08, 2020 | Mar. 21, 2020 | Mar. 18, 2020 | Feb. 11, 2020 | Jul. 31, 2020 | Jul. 31, 2019 | Mar. 31, 2019 |
Common shares outstanding | 36,474,661 | 32,487,500 | ||||||||||
Shares issued during period for cash | 2,950,000 | |||||||||||
Shares issued during period for services | 500,000 | |||||||||||
Shares issued during the period conversion of debt | 337,111 | |||||||||||
Shares issued during the period employee stock | 200,000 | |||||||||||
Shares issued during period, new issues, value | $ 295,000 | |||||||||||
Accrued interest | $ 73,903 | $ 52,266 | $ 40,031 | |||||||||
Employee [Member] | Restricted Stock Grants [Member] | ||||||||||||
Shares issued during period, new issues | 200,000 | |||||||||||
Fair value of share price | $ 0.35 | |||||||||||
5% Convertible Promissory Note [Member] | Holders [Member] | ||||||||||||
Shares issued during period, new issues | 224,887 | 56,176 | 56,048 | |||||||||
Shares issued during period, new issues, value | $ 25,000 | $ 25,000 | $ 25,000 | |||||||||
Accrued interest | $ 3,088 | $ 3,088 | $ 3,024 | |||||||||
Debt instrument, conversion price | $ 0.50 | $ 0.50 | $ 0.50 | |||||||||
Haygood Moody Hodge PLC [Member] | ||||||||||||
Shares issued during period, new issues | 250,000 | |||||||||||
Share price | $ 0.20 | |||||||||||
Agreement [Member] | BrandMETTLE, LLC [Member] | ||||||||||||
Shares issued during period, new issues | 250,000 | |||||||||||
Shares issued, price per share | $ 0.18 | |||||||||||
Private Placement [Member] | ||||||||||||
Sale of stock, number of shares | 250,000 | 1,000,000 | 200,000 | 1,000,000 | ||||||||
Sale of stock, price per share | $ 0.10 | $ 0.10 | $ 0.10 | $ 0.10 | ||||||||
Proceeds from private placement | $ 25,000 | $ 100,000 | $ 20,000 | $ 100,000 | ||||||||
Two Private Placement [Member] | ||||||||||||
Sale of stock, number of shares | 500,000 | |||||||||||
Sale of stock, price per share | $ 0.10 | |||||||||||
Proceeds from private placement | $ 50,000 | |||||||||||
Issuance of Common Stock [Member] | ||||||||||||
Shares issued during period, new issues | 3,987,111 |
Stock-Based Compensation (Detai
Stock-Based Compensation (Details Narrative) - USD ($) | 12 Months Ended | |
Jul. 31, 2020 | Jul. 31, 2019 | |
Stock-based compensation expense | $ 407,613 | $ 294,510 |
Stock Options and Warrants [Member] | ||
Stock-based compensation expense | 334,939 | 294,510 |
Net of capitalized expense | 20,641 | |
Share-based payment award and warrants, options, grants in period | 808,253 | |
Restricted Stock Grants [Member] | ||
Stock-based compensation expense | 72,674 | 0 |
Share-based payment award and warrants, options, grants in period | $ 175,000 |
Stock-Based Compensation - Sche
Stock-Based Compensation - Schedule of Fair value of Stock Options Valuation Assumptions (Details) | 12 Months Ended | |
Jul. 31, 2020 | Jul. 31, 2019 | |
Retirement Benefits [Abstract] | ||
Expected volatility | 271.37% | 0.00% |
Expected term (in years) | 3 years 2 months 30 days | 0 years |
Risk-free interest rate | 0.46% | 0.00% |
Dividend yield | 0.00% | 0.00% |
Stock-Based Compensation - Sc_2
Stock-Based Compensation - Schedule of Stock Based Compensation Activities (Details) - Stock Options and Warrants [Member] - $ / shares | 12 Months Ended | |
Jul. 31, 2020 | Jul. 31, 2019 | |
Number of shares, Outstanding, Beginning balance | 2,500,000 | 2,500,000 |
Number of shares, Options and warrants granted | 3,850,000 | |
Number of shares, Options and warrants exercised | ||
Number of shares, Outstanding, Ending balance | 6,350,000 | 2,500,000 |
Number of shares, Options and warrants exercisable | 2,150,000 | 625,000 |
Weighted Avg. Exercise Price, Outstanding, Beginning balance | $ 3 | $ 3 |
Weighted Avg. Exercise Price, Options and warrants granted | 0.25 | |
Weighted Avg. Exercise Price, Options and warrants exercised | ||
Weighted Avg. Exercise Price, Outstanding, Ending balance | 1.34 | 3 |
Weighted Avg. Exercise Price, Exercisable Ending Balance | $ 1.85 | $ 3 |
Stock-Based Compensation - Sc_3
Stock-Based Compensation - Schedule of Restricted Stock Activity (Details) - Restricted Stock Grants [Member] - shares | 12 Months Ended | |
Jul. 31, 2020 | Jul. 31, 2019 | |
Restricted Stock Grants, Beginning | ||
Restricted Stock Grants, Granted | 500,000 | |
Restricted Stock Grants, Released | (200,000) | |
Restricted Stock Grants, Forfeited | ||
Restricted Stock Grants, Ending | 300,000 |
Commitments and Contingencies (
Commitments and Contingencies (Details Narrative) - USD ($) | Jun. 15, 2020 | Oct. 08, 2019 | Mar. 13, 2018 |
Scott M. Boruff [Member] | Boruff Employment Agreement [Member] | |||
Annual base salary | $ 300,000 | ||
Base salary description | 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. | ||
Charles B. Lobetti, III [Member] | Lobetti Employment Agreement [Member] | |||
Annual base salary | $ 104,000 | ||
Base salary description | 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. | ||
Kenneth M. Greenwood [Member] | Greenwood Employment Agreement [Member] | |||
Annual base salary | $ 257,000 | ||
Base salary description | 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. | ||
Kenneth M. Greenwood [Member] | Greenwood Employment Agreement [Member] | Inventory Purchases [Member] | |||
Annual base salary | $ 1,000,000 | ||
Kenneth M. Greenwood [Member] | Greenwood Employment Agreement [Member] | Revenue [Member] | |||
Annual base salary | $ 1,000,000 |
Subsequent Events (Details Narr
Subsequent Events (Details Narrative) - USD ($) | Oct. 13, 2020 | Sep. 01, 2020 | Aug. 15, 2020 | Aug. 11, 2020 | Jul. 29, 2020 | Jul. 24, 2020 | Jul. 08, 2020 | Jul. 31, 2020 | Jul. 31, 2019 | Mar. 31, 2019 |
Stock issued during the period new issue, value | $ 295,000 | |||||||||
Accrued interest | $ 73,903 | $ 52,266 | $ 40,031 | |||||||
5% Convertible Promissory Note [Member] | Holders [Member] | ||||||||||
Stock issued during the period new issue | 224,887 | 56,176 | 56,048 | |||||||
Stock issued during the period new issue, value | $ 25,000 | $ 25,000 | $ 25,000 | |||||||
Accrued interest | $ 3,088 | $ 3,088 | $ 3,024 | |||||||
Debt instrument, conversion price | $ 0.50 | $ 0.50 | $ 0.50 | |||||||
Subsequent Event [Member] | Two Private Placement [Member] | ||||||||||
Stock issued during the period new issue | 1,050,000 | |||||||||
Stock issued during the period new issue, value | $ 105,000 | |||||||||
Subsequent Event [Member] | Private Placement One [Member] | ||||||||||
Share price | $ 0.10 | |||||||||
Subsequent Event [Member] | Private Placement Two [Member] | ||||||||||
Share price | $ 0.10 | |||||||||
Subsequent Event [Member] | Dr. Reyes [Member] | Employment Agreement [Member] | ||||||||||
Debt instrument, term | 3 years | |||||||||
Annual base salary | $ 52,000 | |||||||||
Stock option exercised | 1,000,000 | |||||||||
Share price | $ 0.40 | |||||||||
Option vested | 150,000 | |||||||||
Installments term | 3 years | |||||||||
Debt instrument, description | In addition, if at any time during the term of the Employment Agreement Dr. Reyes' employment is terminated by us without cause within two years after a Change in Control of our company, or in the 90 days prior the Change in Control at the request of the acquiror, we are obligated to pay her an amount equal to 2.99 times her annualized compensation. "Change in Control" is defined in the Employment Agreement to mean the acquisition by any person of beneficial ownership of our securities representing greater than 50% of the combined voting power of our then outstanding voting securities. | |||||||||
Subsequent Event [Member] | 5% Convertible Promissory Note [Member] | Holders [Member] | ||||||||||
Stock issued during the period new issue | 112,624 | |||||||||
Stock issued during the period new issue, value | $ 50,000 | |||||||||
Accrued interest | $ 6,312 | |||||||||
Debt instrument, conversion price | $ 0.50 | |||||||||
Subsequent Event [Member] | Acorn Management Partners, LLC [Member] | ||||||||||
Stock issued during the period repurchased | 1,000,000 | |||||||||
Stock issued during the period repurchased, value | $ 50,000 | |||||||||
Debt instrument, interest rate | 6.00% | |||||||||
Debt instrument, term | 1 year | |||||||||
Stock issued during the period new issue | 1,000,000 |