HITC Healthcare Integrated Technologies Inc (PK)

Item 1.01 Entry into a Material Definitive Agreement.

On February 9, 2022, Healthcare Integrated Technologies, Inc. (the “Company”) completed the sale of a Promissory Note in the principal amount of $600,000 (the “Note”) to AJB Capital Investments, LLC (“AJB”) for a purchase price of $534,000, in a private transaction exempt from registration under the Securities Act of 1933, as amended, in reliance on exemptions provided by Section 4(a)(2) and Rule 506(b) of Regulation D promulgated thereunder. AJB is an accredited or otherwise sophisticated investor who had access to business and financial information on the Company. We paid $9,000 in finder’s fees in connection with the sale of the Note. After payment of the finder’s fees and remaining closing cost, the sale of the Note resulted in $504,000 in net proceeds to the Company, of which $360,000 of net proceeds were used for the repayment of a then outstanding promissory note due and payable to AJB. The remaining net proceeds from the sale will be used for general working capital purposes.

The Note matures on August 9, 2023 (the “Maturity Date”), bears interest at a rate of 10% per annum, and, only following an event of default, is convertible into shares of the Company’s common stock at a conversion price equal to the lesser of the lowest trading price (i) during the previous twenty (20) trading day period ending on the issuance date of the Note, or (ii) during the previous twenty (20) trading day period ending on the date of conversion of the Note. The Note is also subject to covenants, events of defaults, penalties, default interest and other terms and conditions customary in transactions of this nature.

Pursuant to the terms the related Securities Purchase Agreement (the “SPA”), the Company granted AJB warrants to purchase up to 1,500,000 shares of our common stock at an exercise price of $0.10 per share (the “Warrants”). Warrants for the purchase of up to 1,000,000 shares of our common stock may be exercised on a cashless basis. The Warrants expire five (5) years from the date of issuance.

The obligations of the Company to AJB under the Note and the SPA are secured by a lien on the Company’s assets pursuant to a Security Agreement between the Company and AJB.

The information set forth above is qualified in its entirety by reference to the actual terms of the Promissory Note, Common Stock Purchase Warrants, Securities Purchase Agreement, and the Security Agreement, which have been filed as Exhibits 4.1, 4.2, 4.3, 10.1 and 10.2, respectively, to this Current Report on Form 8-K, and which are incorporated herein by reference.