##### Table of Contents



UNITED STATES
SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549
 FORM 10-QSB þ
    

QUARTERLY
REPORT PURSUANT TO SECTION 13 or 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934
 For the quarterly period ended March 31, 2005 OR o
    

TRANSITION
REPORT PURSUANT TO SECTION 13 or 15(d) OF THE SECURITIES EXCHANGE ACT
OF 1934For
the transition period from
          to
 Commission File Number 1-9043 B.H.I.T. INC.(Exact name of Registrant as specified in its charter)
 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 þ NO o. Shares of Common Stock Outstanding as of May 10, 2005: 14,988,051 Transitional Small Business Disclosure Format                                                                                 Yes o No þ.




---



B.H.I.T. INC. QUARTERLY REPORT ON FORM 10-QSB
FOR THE THREE MONTHS ENDED MARCH 31, 2005 TABLE OF CONTENTS PAGEPART I FINANCIAL INFORMATIONITEM 1. Financial StatementsBalance Sheets as of March 31, 2005 (unaudited)
and December 31, 2004
    
    3Statements of Operations for the
three months ended March 31, 2005 and 2004 (unaudited)
    
    4Statement of Stockholders Equity for the
three months ended March 31, 2005 (unaudited)
    
    5Statements of Cash Flows for the
three months ended March 31, 2005 and 2004 (unaudited)
    
    6Notes to Financial Statements (unaudited)
    
    7ITEM 2. Managements Discussion and Analysis of Financial Condition
and Results of Operations
    
    8-9ITEM 3. Controls and Procedures
    
    9PART II OTHER INFORMATIONITEM 1. Legal Proceedings
    
    10ITEM 6. Exhibits and Reports on Form 8-K
    
    10SIGNATURES
    
    11EX-31.1 CertificationEX-31.2 CertificationEX-32 Certification
  2




---



##### Table of Contents



B.H.I.T. INC. 
 Part I - FINANCIAL INFORMATION 
 Balance Sheets March 31, 2005
    
    
    December 31, 2004(Unaudited)ASSETSCURRENT ASSETSCash and cash equivalents
    
    $
    1,511,146
    
    
    $
    1,536,596Interest receivable on cash and cash equivalents
    
    
    3,458
    
    
    
    3,168Prepaid insurance and miscellaneous expenses
    
    
    4,981
    
    
    
    5,082Total Current Assets
    
    $
    1,519,585
    
    
    $
    1,544,846LIABILITIES AND STOCKHOLDERS EQUITYCURRENT LIABILITIESAccounts payable and other accrued expenses
    
    $
    32,135
    
    
    $
    33,162STOCKHOLDERS EQUITYShares of Common Stock, $0.01 par value,
20,000,000 shares authorized, 15,020,808 shares
issued at March 31, 2005
and December 31, 2004
    
    
    88,060,847
    
    
    
    88,060,847Accumulated deficit
    
    
    (86,565,208
    )
    
    
    (86,540,974
    )Treasury stock, at cost, for 32,757 shares
of Common Stock
    
    
    (8,189
    )
    
    
    (8,189
    )Total Stockholders Equity
    
    
    1,487,450
    
    
    
    1,511,684Total Liabilities and Stockholders Equity
    
    $
    1,519,585
    
    
    $
    1,544,846
 See accompanying notes
to the Financial Statements. 3




---



##### Table of Contents



B.H.I.T. INC.  
 Statements of Operations
 For the Three Months Ended March 31, 2005 and 2004
  2005
    
    
    2004REVENUEInterest earned on cash and cash equivalents
    
    $
    9,336
    
    
    $
    4,449EXPENSESGeneral and administrative
    
    
    33,570
    
    
    
    30,093NET LOSS
    
    ($
    24,234
    )
    
    ($
    25,644
    )Basic and
diluted net loss per share of Common Stock (based on weighted average number of
shares outstanding of 14,988,051 in 2005 and 2004)
    
    ($
    0.002
    )
    
    ($
    0.002
    )
 See accompanying notes to the Financial Statements. 4




---



##### Table of Contents



B.H.I.T. INC. 
 Statement of Stockholders Equity For the Three Months Ended March 31, 2005
 Common StockShares
    
    
    
    
    
    
    Accumulated
    
    
    Treasury StockIssued
    
    
    Amount
    
    
    Deficit
    
    
    Shares
    
    
    Amount
    
    
    TotalStockholders equity
December 31, 2004
    
    
    15,020,808
    
    
    $
    88,060,847
    
    
    
    ($86,540,974
    )
    
    
    32,757
    
    
    
    ($8,189
    )
    
    $
    1,511,684Net loss for the three
months ended
March 31, 2005
    
    
    
    
    
    
    
    
    
    
    (24,234
    )
    
    
    
    
    
    
    
    
    
    
    (24,234
    )Stockholders equity
(unaudited)
March 31, 2005
    
    
    15,020,808
    
    
    $
    88,060,847
    
    
    
    ($86,565,208
    )
    
    
    32,757
    
    
    
    ($8,189
    )
    
    $
    1,487,450
 See accompanying notes to the Financial Statements. 5




---



##### Table of Contents



B.H.I.T. INC.
 
 Statements of Cash Flows
For the Three Months Ended March 31, 2005 and 2004
(Unaudited) 2005
    
    
    2004Operating Activities:Net Loss
    
    ($
    24,234
    )
    
    ($
    25,644
    )Adjustments to reconcile net loss to net cash
used in operating activities:Changes in assets and liabilities:Interest receivable on cash and cash equivalents
    
    
    (290
    )
    
    
    168Prepaid insurance and miscellaneous expenses
    
    
    101
    
    
    
    3,347Accounts payable and accrued expenses
    
    
    (1,027
    )
    
    
    (4,418
    )Net cash used in operating activities
    
    
    (25,450
    )
    
    
    (26,547
    )Cash and cash equivalents at beginning of period
    
    
    1,536,596
    
    
    
    1,612,724Cash and cash equivalents at end of period
    
    $
    1,511,146
    
    
    $
    1,586,177
 See accompanying notes to the Financial Statements. 6




---



##### Table of Contents



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 March 31, 2005 and December 31, 2004, and the results
of operations and cash flows for the three months ended March 31, 2005 and 2004. The financial information included herein for the three months ended March 31, 2005 and March 31,
2004 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, 2004. The results of operations for the three months ended March 31, 2005 presented are not necessarily
indicative of the results to be expected for the full 2005 year. 7




---



##### Table of Contents



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 $86,565,208 on March 31, 2005. 8




---



##### Table of Contents



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 March 31, 2005. RESULTS OF OPERATIONS Total revenue for the three months ended March 31, 2005, compared to the same period in 2004,
increased by $4,887 as the result of higher interest earned on invested funds. Total expenses for the three months ended March 31, 2005, compared to the same period in 2004,
increased by $3,477 due primarily to increases in general insurance and professional fees. Accordingly, the net loss for the three months ended March 31, 2005, compared to the same period
in 2004, decreased by $1,410. LIQUIDITY AND CAPITAL RESOURCES Cash and cash equivalents consist of cash and short-term investments. The Companys cash and cash
equivalents balance at March 31, 2005 and December 31, 2004 was $1,511,146 and $1,536,596,
respectively. Cash and cash equivalents decreased in the three months of 2005 by $25,450
primarily as the result of the Companys net loss of $24,234. 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 March 31, 2005, and (ii) no
change in internal control over financial reporting occurred during the quarter ended March 31,
2005 that has materially affected, or is reasonably likely to materially affect, such internal
control over financial reporting. 9




---



##### Table of Contents



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) of the Exchange Act EXHIBIT 31.2 Certification of the Chief Financial Officer Pursuant to Rule
13a-14(a) of the Exchange Act EXHIBIT 32 Certification Pursuant to 18 U.S.C. Section 1350 (b) REPORTS ON FORM 8-K NONE 10




---



##### Table of Contents



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: May 10, 2005Vice-President, Treasurer & Chief Financial OfficerPrincipal Accounting Officer
 11