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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549
 FORM 10-QSB  (X) QUARTERLY REPORT PURSUANT TO SECTION 13 or 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
 For the quarterly period ended September 30, 2004 OR   For the transition period from            to Commission File Number 1-9043 B.H.I.T. INC.  Delaware
    
    36-3361229(State or other jurisdiction of
    
    (I.R.S. Employerincorporation or organization)
    
    Identification No.)6950 South Edgerton Road, Brecksville, Ohio
    
    44141(Address of principal executive offices)
    
    (Zip Code)(440) 838-4700Registrants telephone number, including
area code
 Indicate by check mark whether the Registrant (1) has filed all reports
required to be filed by Section 13 or 15 (d) of the Securities Exchange Act
of 1934 during the preceding 12 months (or for such shorter period that the
Registrant was required to file such reports) and (2) has been subject to
such filing requirements for the past 90 days.
Yes (X)NO (  ). Shares of Common Stock Outstanding as of November 5, 2004: 14,988,051 Transitional Small Business Disclosure Format
    
    Yes (  ) No (X).




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B.H.I.T. INC. QUARTERLY REPORT ON FORM 10-QSB
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2004 TABLE OF CONTENTS  
 PAGEPART I FINANCIAL INFORMATIONITEM 1. Financial StatementsBalance Sheets as of September 30, 2004 (unaudited)
and December 31, 2003
    
    
    3Statements of Operations for the
three months ended September 30, 2004 and 2003 (unaudited)
    
    
    4Statements of Operations for the
nine months ended September 30, 2004 and 2003 (unaudited)
    
    
    5Statement of Stockholders Equity for the
nine months ended September 30, 2004 (unaudited)
    
    
    6Statements of Cash Flows for the
nine months ended September 30, 2004 and 2003 (unaudited)
    
    
    7Notes to Financial Statements (unaudited)
    
    
    8ITEM
2. Managements Discussion and Analysis of Financial Condition
and Results of Operations
    
    
    9-10ITEM 3. Controls and Procedures
    
    
    10PART II OTHER INFORMATIONITEM 1. Legal Proceedings
    
    
    11ITEM
6. Exhibits and Reports on Form 8-K
    
    
    11SIGNATURES
    
    
    12EX-31.1 Certification of CEOEX-31.2 Certification of CFOEX-32 Certification Pursuant to Section 906
  2




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B.H.I.T. INC. 
 Part I  FINANCIAL INFORMATION 
 Balance Sheets September 30, 2004
    
    December 31, 2003(Unaudited)ASSETSCURRENT ASSETSCash and cash equivalents
    
    $
    1,558,742
    
    
    $
    1,612,724Interest receivable
    
    
    2,125
    
    
    
    1,624Prepaid insurance
    
    
    1,770
    
    
    
    14,250Total Current Assets
    
    $
    1,562,637
    
    
    $
    1,628,598LIABILITIES AND STOCKHOLDERS EQUITYCURRENT LIABILITIESAccounts payable and other accrued expenses
    
    $
    38,971
    
    
    $
    38,621STOCKHOLDERS EQUITYShares of Common Stock, $0.01 par value,
20,000,000 shares authorized, 15,020,808 shares
issued at September 30, 2004
and December 31, 2003
    
    
    88,060,847
    
    
    
    88,060,847Accumulated deficit
    
    
    (86,528,992
    )
    
    
    (86,462,681
    )Treasury stock, at cost, for 32,757 shares
of Common Stock
    
    
    (8,189
    )
    
    
    (8,189
    )Total Stockholders Equity
    
    
    1,523,666
    
    
    
    1,589,977Total Liabilities and Stockholders Equity
    
    $
    1,562,637
    
    
    $
    1,628,598
 See accompanying notes to the Financial Statements. 3




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B.H.I.T. INC. 
 Statements of Operations
For the Three Months Ended September 30, 2004 and 2003  2004
    
    2003REVENUEInterest earned on cash and cash equivalents
    
    $
    5,962
    
    
    $
    4,897EXPENSESGeneral and administrative
    
    
    23,894
    
    
    
    27,376NET LOSS
    
    ($
    17,932
    )
    
    ($
    22,479
    )Basic and diluted net loss per share of Common
Stock (based on weighted average number of
shares outstanding of 14,988,051 in 2004 and 2003)
    
    ($
    0.001
    )
    
    ($
    0.001
    )
 See accompanying notes to the Financial Statements. 4




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B.H.I.T. INC. 
 Statements of Operations
For the Nine Months Ended September 30, 2004 and 2003  2004
    
    2003REVENUEInterest earned on cash and cash equivalents
    
    $
    14,848
    
    
    $
    16,043EXPENSESGeneral and administrative
    
    
    81,159
    
    
    
    89,084NET LOSS
    
    ($
    66,311
    )
    
    ($
    73,041
    )Basic and diluted net loss per share of Common
Stock (based on weighted average number of
shares outstanding of 14,988,051 in 2004 and 2003)
    
    ($
    0.004
    )
    
    ($
    0.005
    )
 See accompanying notes to the Financial Statements. 5




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B.H.I.T. INC. 
 Statement of Stockholders Equity
For the Nine Months Ended September 30, 2004  Common Stock
    
    
    
    Treasury StockShares
    
    
    
    AccumulatedIssued
    
    Amount
    
    Deficit
    
    Shares
    
    Amount
    
    TotalStockholders equity
December 31, 2003
    
    
    15,020,808
    
    
    $
    88,060,847
    
    
    
    ($86,462,681
    )
    
    
    32,757
    
    
    
    ($8,189
    )
    
    $
    1,589,977Net loss for the nine months ended
September 30, 2004
    

    
    
    
    
    
    
    
    
    
    (66,311
    )
    
    
    
    
    
    
    
    
    
    
    (66,311
    )Stockholders equity
September 30, 2004
    
    
    15,020,808
    
    
    $
    88,060,847
    
    
    
    ($86,528,992
    )
    
    
    32,757
    
    
    
    ($8,189
    )
    
    $
    1,523,666
 See accompanying notes to the Financial Statements. 6




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B.H.I.T. INC. 
 Statements of Cash Flows
For the Nine Months Ended September 30, 2004 and 2003  2004
    
    2003Operating Activities:Net Loss
    
    ($
    66,311
    )
    
    ($
    73,041
    )Adjustments to reconcile net loss to net cash
used in operating activities:Changes in assets and liabilities:Interest receivable
    
    
    (501
    )
    
    
    641Prepaid insurance
    
    
    12,480
    
    
    
    9,000Accounts payable and accrued expenses
    
    
    350
    
    
    
    (565
    )Net cash used in operating activities
    
    
    (53,982
    )
    
    
    (63,965
    )Cash and cash equivalents at beginning of period
    
    
    1,612,724
    
    
    
    1,712,815Cash and cash equivalents at end of period
    
    $
    1,558,742
    
    
    $
    1,648,850
 See accompanying notes to the Financial Statements. 7




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B.H.I.T. INC. 
 NOTES TO FINANCIAL STATEMENTS (Unaudited) NOTE 1. BASIS OF PRESENTATION B.H.I.T. Inc. (the Company) was organized under the laws of the State of
Massachusetts pursuant to a Declaration of Trust filed March 19, 1985 for the
purpose of investing in mortgage loans. The Company was subsequently
reorganized as a Delaware corporation on March 13, 1987. The accompanying financial statements have been prepared by the Company
pursuant to the rules and regulations of the Securities and Exchange
Commission. In the opinion of management, these financial statements give
effect to all normal recurring adjustments necessary to present fairly the
financial position of the Company as of September 30, 2004 and December 31,
2003, and the results of operations for the three months and nine months ended
September 30, 2004 and 2003, and cash flows for the nine months ended September
30, 2004 and 2003. The financial information included herein for the three months and nine
months ended September 30, 2004 and September 30, 2003 is unaudited. Although the Company believes that the disclosures included herein are
adequate to make the information not misleading, certain information and
footnote disclosures normally included in financial statements prepared in
accordance with generally accepted accounting principles have been omitted.
Accordingly, the accompanying financial statements should be read in
conjunction with the Companys latest annual report on Form 10-KSB for the
year ended December 31, 2003. The results of operations for the nine months ended September 30, 2004
presented are not necessarily indicative of the results to be expected for
the full 2004 year. 8




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B.H.I.T. INC. 
 ITEM 2. MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITIONS
AND RESULTS OF OPERATIONS GENERAL B.H.I.T. Inc. (the Company) was originally organized as a Massachusetts
business trust pursuant to a Declaration of Trust filed March 19, 1985 under
the name VMS Hotel Investment Trust, for the purpose of investing in mortgage
loans. The Company was subsequently reorganized as a Delaware corporation on
March 13, 1987. The Company changed its name from Banyan Hotel Investment
Fund to B.H.I.T. Inc. in 1998. Certain statements in this quarterly report, included within this
Managements Discussion and Analysis of Financial Conditions and Results of
Operations, which are not historical in nature, are intended to be, and
hereby identified as forward-looking statements within the meaning of the
Private Securities Litigation Reform Act of 1995. The Company cautions
readers that forward-looking statements, including without limitation, those
relating to the Companys future business prospects, revenues, working
capital, liquidity, capital needs, interest costs and income, are subject to
certain risks and uncertainties that could cause actual results to differ
materially from those indicated in such forward-looking statements due to
several important factors hereafter identified, among others, as well as
other risks and uncertainties identified from time-to-time in the Companys
reports filed with the United States Securities and Exchange Commission.
Readers of this report are cautioned not to place undue reliance upon these
forward-looking statements, which speak only as of the date hereof. The
Company undertakes no obligation to publicly release any revisions to these
forward-looking statements or reflect events or circumstances after the date
hereof. BUSINESS OPERATIONS AND HISTORY The Companys current operations relate primarily to servicing its cash
investment portfolio and seeking investments including mortgage loans for its
available funds. The business of the Company is not seasonal and the Company has no foreign or
export business. The Company does not segregate revenue or assets by
geographical region because such presentation would not be material to an
understanding of the Companys business. The Company was originally established to invest in mortgage loans
principally to entities affiliated with VMS Realty Partners. These loans were
collateralized by hotel and resort properties. As the result of a public offering that concluded January 13, 1986, the
Company received gross proceeds of $98,482,751. During the years 1989
through 1992 the Company experienced severe losses due primarily to a decline
in real estate property values and the resulting default on mortgage loans
held by the Company. The Company has recorded losses every year since 1989
resulting in the accumulated deficit totaling $86,528,992 on September 30,
2004. 9




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B.H.I.T. INC. BUSINESS OPERATIONS AND HISTORY (Continued) In September 2000, Arrowhead Holdings Corporation (Arrowhead) purchased
5,870,563 shares of the Companys stock, or 39.2% of the outstanding shares.
Subsequent purchases of the Companys shares by Arrowhead have resulted in
Arrowhead owning a total of 6,243,563 shares, or 41.7% of the outstanding
shares on September 30, 2004. RESULTS OF OPERATIONS Total revenue for the three months ended September 30, 2004, compared to the
same period in 2003, increased by $1,065 as the result of higher interest
earned on invested funds during the quarter. However, total revenue for the
nine months ended September 30, 2004 as compared to the same period in 2003,
has decreased by $1,195 due to reduced interest earned during the period. Total expenses for the three months and nine months ended September 30, 2004,
compared to the same period in 2003, decreased by $3,482 and $7,925,
respectively, due primarily to decreases in general insurance and outside
audit fees. Accordingly, the net loss for the three months and nine months ended
September 30, 2004, compared to the same periods in 2003, decreased by $4,547
and $6,730, respectively. LIQUIDITY AND CAPITAL RESOURCES Cash and cash equivalents consist of cash and short-term investments. The
Companys cash and cash equivalents balance at September 30, 2004 and
December 31, 2003 was $1,558,742 and $1,612,724, respectively. Cash and cash
equivalents decreased in the nine months of 2004 by $53,982 primarily as the
result of the Companys net loss of $66,311. At this time, there are no material commitments for capital expenditures. The
Companys cash is sufficient to meet its needs for anticipated operating
expenses. The Company deems its liquidity to be adequate. 
 ITEM 3. CONTROLS AND PROCEDURES Under the direction of our Chief Executive Officer and Chief Financial
Officer, we have evaluated disclosure controls and procedures and internal
control over financial reporting and concluded that (i) our disclosure
controls and procedures were effective as of September 30, 2004, and (ii) no
change in internal control over financial reporting occurred during the
quarter ended September 30, 2004 that has materially affected, or is
reasonably likely to materially affect, such internal control over financial
reporting. 10




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B.H.I.T. INC. 
 PART II  OTHER INFORMATION 
 ITEM 1. LEGAL PROCEEDINGS The Registrant is not aware of any material legal proceedings to which the
Company is a party or to which any of its property is subject. 
 ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K (a) EXHIBITS EXHIBIT 31.1 Certification of the Chief Executive Officer Pursuant
to Rule 13a-14(a) under the Exchange Act EXHIBIT 31.2 Certification of the Chief Financial Officer Pursuant
to Rule 13a-14(a) under the Exchange Act EXHIBIT 32 Certification Pursuant to 18 U.S.C. Section 1350 (b) REPORTS ON FORM 8-K NONE 11




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SIGNATURES Pursuant to the requirements of Section 13 or 15 (d) of the Securities
Exchange Act of 1934, the Registrant has duly caused this report to be signed
on its behalf by the undersigned thereunto duly authorized. B.H.I.T. Inc. By:
    
    /s/ John V. CurciJohn V. Curci
    
    Date: November 5, 2004Vice-President, Treasurer & Chief
Financial OfficerPrincipal Accounting Officer
 12