ALR TECHNOLOGIES INC. – 10-Q – MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.

Forward-Looking Statements


The following information must be read in conjunction with the unaudited
Condensed Consolidated Financial Statements and Notes thereto included in Item 1
of this Quarterly Report and the audited Consolidated Financial Statements and
Notes thereto and Management's Discussion and Analysis or Plan of Operations
contained in the Company's Annual Report on Form 10-K for the year ended
December 31, 2020.



Except for the description of historical facts contained herein, the Form 10-Q
contains certain forward-looking statements concerning future applications of
the Company's technologies and the Company's proposed services and future
prospects, that involve risk and uncertainties, including the possibility that
the Company will: (i) be unable to commercialize services based on its
technology, (ii) ever achieve profitable operations, or (iii) not receive
additional financing as required to support future operations, as detailed
herein and from time to time in the Company's future filings with the Securities
and Exchange Commission ("SEC") and elsewhere. Such statements are based on
management's current expectations and are subject to a number of factors and
uncertainties that could cause actual results to differ materially from those
described in the forward-looking statements.



Although we believe that the expectations reflected in the forward-looking
statements are reasonable, we cannot guarantee future results, levels of
activity, performance or achievements. Except as required by applicable law,
including the securities laws of the United States, we do not intend to update
any of the forward-looking statements to conform these statements to actual
results.



Our consolidated financial statements are stated in United States dollars and
are prepared in accordance with United States generally accepted accounting
principles.

In this quarterly report, unless otherwise specified, all references to “common
shares” refer to the common shares in our capital stock.

As used in this quarterly report, the terms “we”, “us”, “our”, the “Company” and
“ALRT” mean ALR Technologies Inc., unless otherwise indicated.

Overview



ALR TECHNOLOGIES, INC. was incorporated under the laws of the state of Nevada on
March 24, 1987 as Mo Betta Corp. In April 1998, the Company changed its business
purpose to marketing a pharmaceutical compliance device.



In December 1998, the common shares of the Company began trading on the Bulletin
Board operated by the National Association of Securities Dealers Inc. under the
symbol "MBET." On December 28, 1998, the Company changed its name from Mo Betta
Corp. to ALR Technologies Inc. Subsequently, the symbol was changed to "ALRT".



During 2011, the Company received Food and Drug Administration ("FDA") clearance
and achieved Health Insurance Portability and Accountability Act of 1996 (HIPAA)
compliance for its earlier version of the Diabetes Solution. With these key
achievements and successful clinical trials completed, the Company undertook a
pilot program in 2014. The Company obtained significant findings from this pilot
program, which led to the development of its Insulin Dosage Adjustment ("IDA").



During 2017, the Company received FDA clearance for its IDA and submitted
worldwide patent application under the patent cooperation treaty to the World
Intellectual Property Organization for the Predictive A1C innovation it has
licensed from its Chief Executive Officer. The Company is actively seeking to
commence revenue-generating activities for its Diabetes Solution in Singapore
and is conducting further pilot programs in the United States and Singapore.

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Recent Developments


On January 28, 2021, the Company's Board of Directors approved the grant of
options to six individuals to acquire an aggregate 32,000,000 shares of common
stock at an exercise price of $0.05 per share with expiry dates between May 17,
2024 and December 31, 2025. All of the options granted have vesting conditions,
of which 12,000,000 are time-based vesting conditions and 20,000,000 are
performance-based vesting conditions.



On February 22, 2021, the Company granted three individuals the option to
acquire an aggregate 5,000,000 shares of common stock at an exercise price of
$0.05 per share until May 17, 2024. All of the options granted will not vest
until immediately before expiry.



On April 14, 2021, the Company's Board of Directors approved the grant of
options to five individuals to acquire an aggregate 28,500,000 shares of common
stock at a price of $0.05 per share until December 31, 2025. The options to
acquire shares will vest according to performance or time-based conditions and
none of these options granted had vested as of the date of this report.



The Company entered into two Debt Settlement Agreements whereby the Company has
agreed to issue an aggregate 4,400,000 shares of common stock to two creditors
of the Company to extinguish $194,186 in accounts payable and $23,000 in
promissory notes and interest. The shares were issued on May 10, 2021. The
Company also issued commitment letters to two creditors offering them an
aggregate of 20,000,000 shares of common stock in exchange for the
extinguishment of $1,511,377 in promissory notes and interest payable prior
to
December 31, 2021.



On May 12, 2021, the Company's Board of Directors amended the option to acquire
2,000,000 shares, previously granted on January 28, 2021 to a consultant, to
3,000,000 shares of common stock at a price of $0.05 per share until
December 31, 2025. All other terms of the January 28, 2021 grant remain the same
and the options are subject to performance vesting conditions.



On May 31, 2021, the Company granted one consultant the option to acquire
5,000,000 shares of common stock of the Company at a price of $0.05 per share
until December 31, 2025 subject to performance vesting conditions.


On June 1, 2021, the Company announced that it is taking steps to redomicile the
Company to Singapore. As part of the process, the Company intends to effect a
share exchange plan of merger under the laws of Nevada and Singapore in which
shareholders will exchange their shares of the Company for shares in a Singapore
entity, on a one-for-one basis, with the Singapore entity becoming the parent
company. The transaction will be subject to shareholder approval and approval of
the relevant corporate and securities regulatory authorities in both
jurisdictions where required.



On June 8, 2021, the Company announced the establishment of the ALRT Animal
Health Division, a new business division, which will introduce the world's first
and only Continuing Glucose Monitoring System ("CGMS") for diabetic companion
animals.



On June 22, 2021, the Company provided termination notices to four individuals
which included that they would have 30 days to exercise their options, or those
options would be cancelled. As a result, a total of 22,500,000 stock options
granted in 2019 with an exercise price of $0.035 expired unexercised on July 22,
2021.



On June 27, 2021, the Company's Board of Directors cancelled 7,400,000 stock
options granted in previous years to three individuals with an average exercise
price of $0.033. These individuals have not provided services to the Company
since mid-2020. All of the options had vested in previous years.

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On June 27, 2021, the Company's Board of Directors approved the grant of the
option to acquire an aggregate 21,000,000 shares of common stock at a price of
$0.05 per share until June 30, 2026 to four individuals. All of the options will
vest according to performance or time-based conditions. None of these options
have vested to date.


On June 30, 2021, the Company amended the option to acquire 4,365,001,300 shares
of common stock granted on July 1, 2016 by extending the expiry date from
July 1, 2021 to April 12, 2024. All of the options had vested in previous years.

Effective July 22, 2021, the Company cancelled 22,500,000 stock options
exercisable at $0.035 related to the termination of certain contractors and
advisors.


On July 19, 2021, the Company elected to extend the outside date to place the
remaining rights under the rights offering from July 31, 2021 to October 29,
2021. The Company plans to extend the rights offering further to March 31,
2022
(see below under Financing).


On August 27, 2021, the Company granted a member of our Board of Directors the
option to acquire 5,000,000 shares of common stock at a price of $0.05 per share
until June 30, 2026. The options were fully vested at grant.



Recent Developments – Subsequent to September 30, 2021


On October 4, 2021, the Company granted two individuals the option to acquire an
aggregate 17,500,000 options at an exercise price of $0.05 per share until
September 30, 2026; 15,000,000 of the options will vest according to time-based
conditions and 2,500,000 will vest according to performance-based conditions.



The Company plans to file a post effective amendment to extend the outside date
to place the remaining rights under the rights offering from October 29, 2021 to
March 31, 2022 (see below under Financing).



Financing



Rights Offering


On December 4, 2020, the Company filed a Form S-1 Registration Statement to
distribute subscription rights to purchase up to an aggregate 127,522,227 shares
of our common stock at a price of $0.05 per share. As at September 30, 2021, the
Company issued 26,496,635 unrestricted shares of common stock related to
proceeds received of $1,324,832. The Company had until October 29, 2021 to sell
the remaining 101,025,592 shares of common stock for total proceeds of
$5,051,280, if exercised. The Company plans to extend the rights offering until
March 31, 2022.



Exercise of Stock Options


On February 8, 2021, the Company issued 800,000 shares of common stock for
proceeds of $12,000 for the exercise of options at $0.015 per share.

Products



ALRT has developed its Diabetes Solution product by utilizing internet-based
technologies to facilitate the healthcare provider's ("HCPs") ability to monitor
their diabetes patients' health and ensure adherence to health maintenance
activities.



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The ALRT Diabetes Solution is a remote monitoring and care facilitation platform
that allows patients to upload the blood glucose data from their blood glucose
meters on a weekly basis. The ALRT System processes and converts each data set
to a predictive A1C value and shares it with the patient's physician. The System
provides the physician with therapy advancement suggestions based on current
clinical practice guidelines. Patients receive therapy assessments and
adjustments in much shorter cycles, keeping A1Cs at target, mitigating diabetes
complications and lowering costs of care.



ALRT previously conducted a clinical trial utilizing manual blood glucose data
analysis and follow-up care. The trial demonstrated that remote diabetes care is
associated with significant lowering of A1C levels. The study concluded that
continuing intervention using an internet-based glucose monitoring system is an
effective way of improving glucose control compared to conventional care. A
second clinical trial demonstrated that this type of Internet-based Blood
Glucose Monitoring System ("IBGMS") was associated with comparable reductions in
A1C levels with that of more expensive CGMS. The Company is planning further
trials to demonstrate the added value of the predictive A1C and therapy
advancement features of the ALRT System.



In the future, the Company may seek to adapt its Diabetes Solution to be used in
the management of other chronic diseases. The Company may be required to obtain
additional clearance from the FDA prior to commencing selling activities in the
United States for other chronic health conditions.



Diabetes is a leading cause of death, serious illness and disability across
North America. By the year 2030, it is expected that 1 in 10 adults, globally,
will have diabetes (diagnosed and undiagnosed instances). We believe diabetes is
a global pandemic.



Data from the American Diabetes Association ("ADA") shows 30 million Americans
have diabetes and 84 million have prediabetes. That is 1 in 3 Americans coping
with the disease or serious threat of it. The total cost of diagnosed diabetes
is staggering at $327 billion annually ($237 billion in direct medical costs and
$90 billion in reduced productivity), putting serious drag on an already
strained healthcare system. Taking a broader view, the global cost of diabetes
was estimated at a whopping $825 billion annually in 2016.



Diabetes is a lifelong chronic disease with no cure. However, people with
diabetes can take steps to control their disease and reduce the risk of
developing the associated serious complications, thereby controlling healthcare
costs. The Canadian Diabetes Association Clinical Practice Guidelines Expert
Committee reports that, "Successful diabetes care depends on the daily
commitment of persons with diabetes mellitus to self-manage through the balance
of lifestyle and medication. Diabetes care should be organized around a multi-
and interdisciplinary diabetes healthcare team that can establish and sustain a
communication network between the person with diabetes and the necessary
healthcare and community systems". Diabetes incidence rates, economic costs and
human costs are increasing even though we know how to control the disease. The
Diabetes Control and Complication Trial conducted from 1983 to 1993 outlined
management as follows:

· Testing blood glucose levels four or more times per day;

· Injecting insulin at least three times a day or using an insulin pump;

· Adjusting insulin dose according to food intake and exercise;

· Following a diet and exercise plan; and

· Monthly visits to healthcare team.

We believe there are five causes why diabetes is not controlled:

 1. Patient non-adherence;


 2. Unreliable data;


 3. Data overload;


 4. Clinical inertia; and

5. Insulin under-prescription.


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Patient Non-adherence



As noted in Patrick Connole, "UnitedHealthcare, Other Large Insurers Seek Better
Adherence to Diabetes Care", Health Plan Week, February 11, 2013, Volume 23,
Issue 5, 80% of United States patients with diabetes do not follow their
prescribed care plan. Central to conventional diabetes care is patient
self-management.



Unreliable Data



As noted in Gonder-Frederick, L.A., et al, "Self Measurement of Blood Glucose:
Accuracy of Self-Reporting Data and Adherence to Recommended Regimen" Diabetes
Care, Volume 11, no. 7, July 1988, 77% of patient data contain errors.



Data Overload



HCPs face a lack of timely and reliable blood glucose data, resulting in delays
to advance therapy and sub-optimal insulin dosing. The amount of patient data
for clinicians to analyze is too vast and significant during 15-minute clinical
appointments, and the information they have is unreliable.



Clinical Inertia



As noted in Khunti, K., et al, "Clinical Inertia in People with Type 2 Diabetes:
A Retrospective Cohort Study of More than 80,000 People." Diabetes Care, Volume
36, no. 11, July 2013, across over 80,000 patients, when A1C goals were not met,
therapy intensification was late across every measure. It took on average 19
months to escalate patients with an average A1C of 8.7% from single medication
to dual therapy and 82 months to escalate patients with an average A1C of 8.8%
from dual medication to triple therapy. Furthermore, they found that it took
approximately 20 years to advance patients with an average A1C of over 9% to
insulin. At the end of the study, less than 50% of the patients had their
treatment intensified.



Furthermore, in Treatment intensification for patients with type 2 diabetes and
poor glycaemic control by Fu and Sheenan, it was noted that out of 11,525
patients investigated with an A1C greater than 8% patients received
intensification as follows:

· 37% within 6 months;

· 11% within 6-12 months; and

 · 52% never.



Failure to respond to higher than targeted A1C with treatment intensification
puts patients with escalated A1C at risk for complications and
diabetes-associated co-morbidities.

Insulin Under-prescription


Insulin dosing is complex requiring review of large amounts of data, which takes
significant amounts of time. We believe HCPs routinely under-prescribe insulin
to ensure they avoid insulin dosage adjustments, which could result in
hypoglycemia for their patients.



Cleveland Clinic Study


A team at Cleveland Clinic examined historical electronic medical record data of
more than 7,300 patients with type 2 diabetes and concluded that there is a
pervasiveness of clinical inertia for the management of type 2 diabetes in
real-world clinical practice settings.


The selected patients had an A1C value of ? 7% on a stable regimen of two oral
anti-diabetic agents for at least 6 months (from 2005 to 2016). The median time
to treatment intensification after A1C was above target was longer than one
year. For patients with an A1C of ? 9%, therapy was not intensified in 44%
of
patients.

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According to lead study author Dr. Kevin Pantalone of Cleveland Clinic'sEndocrinology & Metabolism Institute, "Short of a patient reporting
non-adherence to their existing regimen of diabetes therapies, it is hard to
imagine a reason why treatment intensification was not observed more frequently,
when indicated, particularly in patients with an A1C ? 9%. In general, if
intensification does not occur, the A1C can be expected to stay the same or get
worse, it is not magically going to get better".(emphasis added)



ALRT Diabetes Solution



ALR Technologies Inc. has created the Diabetes Solution to address the diabetes
marketplace globally. The Company's Diabetes Solution consists of hardware,
software and diabetes test supplies. We designed the Diabetes Solution to be
focused on the HCP and is agnostic and proactive. Our software operates on iOS,
Android, Windows and MacOS systems. Enrollment into the ALRT Diabetes Solution
will include a branded glucometer, diabetes test strips, lancets and a carrying
case. Our technology collects all the blood glucose data from the glucometers,
uploads it to a secure account and ships diabetes test strips as required. The
patient data is aggregated to a predictive A1C value for a comprehensive view of
the treatment plan and patient adherence to the plan, with the data available
(and messaged) to authorized people.



The ALRT Diabetes Solution addresses the five causes for not controlling
diabetes with:

· Active patient monitoring;

· Direct meter uploads;

· Machine intelligent data processing;

· Predictive A1C; and

· Insulin dosage adjustment.


Active Patient Monitoring



Industry data indicates that 50% or more of people on medications do not take
them as prescribed, and that this non-compliance contributes to 10% of
hospitalizations and billions of dollars spent annually in excessive and
preventable healthcare costs. Reminding a person to take an action is the first
step in our system; monitoring their actions and their data is the second, and
intervention when needed is the important follow-up.



The ALRT System monitors patient uploads and the underlying data providing more
timely access to patient blood glucose data. Our system initiates interventions
by notifying the HCP of out-of-range results, or failure to upload data in
accordance with the requirements of the care plan. The ALRT System does not rely
upon the patient for uploading data. The ALRT Diabetes Solution provides the
notifications and audit trail needed for achieving best practice results. Its
performance tracking allows care teams to identify areas in treatment plans that
require change of improvement.



Direct Meter Uploads


Data is uploaded via Bluetooth directly from the glucometer into the ALRT
application. This ensures that the data is accurate and reliable based on the
results of testing.

Machine Intelligent Data Processing

Our machine intelligence processes large amounts of data, notifies relevant
stakeholders and flags patients for review making collaboration real time.
Across segments and populations, this also provides significant data points on
use of diabetes test strips and insulin, which may be significant for businesses
in those industries.



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Predicative A1C



Included in the Diabetes Solution is Predictive A1C. Predictive A1C is a
patent-pending unique feature for monitoring the effectiveness of care plans.
This technology utilizes data diagnostics to compare targeted A1C with indicated
results. Weekly patient blood glucose data is evaluated, and HCPs are notified
as needed for care plan review when blood glucose values exceed parameters set
by the HCPs. Our platform provides HCPs with patient prioritization reports and
alerts based on the Predictive A1C measures and other related diagnostics.
Predictive A1C was designed to assist HCPs in addressing clinical inertia in
diabetes care.



Insulin Dose Adjustment



Included in the Diabetes Solution is Insulin Dose Adjustment. IDA is an
FDA-cleared feature that makes optimal insulin adjustment suggestions to HCPs
based on dosing guidelines from organizations like the ADA. This ensures that
HCPs are making timely insulin dosage assessments based on the blood testing
results uploaded. ALRT's next phase of technology advancement will produce an
algorithm for advancing non-insulin diabetes therapies according to clinical
practice guidelines.


Evolution of the Diabetes Solution


In August 2010, the Company received the results of a clinical trial conducted
by Dr. Hugh Tildesley using the ALRT Health-e-Connect System, which was an
earlier version of the Diabetes Solution. The trial showed A1C dropping from
8.8% to 7.6% for the Intervention Group using ALRT's Health-e-Connect System as
part of a diabetes management program. The A1C test is important in diabetes
treatment management as a long-term measure of control over blood glucose for
diabetes patients. According to the Center for Disease Control and Prevention,
"In general, every percentage drop in A1C blood test results (e.g., from 8% to
7%), can reduce the risk of microvascular complications (eye, kidney and nerve
diseases) by 40%". The trial served as the basis for an article titled Effect of
Internet Therapeutic Intervention on A1C Levels in Patients with Type 2 Diabetes
Treated with Insulin, which was published in the August 2010 Diabetes Care
publication.



In July 2011, the follow-up results of the Dr. Tildesley clinical trial were
published in the Canadian Journal of Diabetes. Dr. Tildesley conducted a
12-month study using the Health-e-Connect System as an IBGMS to provide
intensive blood glucose control to determine the effects of internet-based blood
glucose monitoring on A1C levels in patients with type 2 diabetes treated with
insulin. Dr. Tildesley concluded that, "While IBGMS intervention was not a
substitute for the patient-physician interaction in a clinical setting, it
significantly improved A1C and, over time, we observed better glycemic control
and patient satisfaction".



In October 2011, the Company received 510(k) clearance from the FDA for remote
monitoring of patients in support of effective diabetes management programs. The
510(k) clearance enabled the Company to commence with the United States
marketing and sales launch of its Health-e-Connect System. The Health-e-Connect
System has since evolved to be part of the ALRT Diabetes System.



In September 2014, the Company initiated its pilot program with one of the
Kansas City Metropolitan Physician Association ("KCMPA") clinics to deploy its
Diabetes Solution. Data from the KCMPA pilot program indicated that a number of
patients had achieved reductions in their A1C levels. Furthermore, the data
indicated that patients that left the pilot program had increases in A1C
subsequent.



On February 18, 2015, the Company filed a 510(k) application with the FDA to add
a remote insulin dosing recommendation feature to the Company's Diabetes
Solution. The Company utilized the publicly available algorithm of the American
Association for Clinical Endocrinologists ("AACE") and ADA. This feature allows
the Company to regularly run a patient's blood glucose data (and other key data)
through the AACE and ADA algorithm. When the algorithm indicates that the
patient's dose may not be optimal, the Diabetes Solution would provide the HCP
that a dose change may be warranted and what the change would be based on AACE
and ADA guidelines. The decision about the dose change would rest entirely with
the HCP. However, this new feature may make a significant contribution to
improving the outcomes of diabetes patients if it allowed HCPs to keep their
patients at the optimal dose for longer periods. On September 18, 2017, the
Company received clearance from the FDA for its IDA feature within the Company's
Diabetes Solution.

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On June 20, 2017, the Company's Chief Executive Officer filed a worldwide patent
application under the Patent Cooperation Treaty to the World Intellectual
Property Organization for the Predictive A1C feature. The Company holds the
rights to use the Predictive A1C feature. During 2019, the Company and the
Chairman have entered into the National Phase for the applications by applying
to target member countries.


During 2019, the Company added automated patient management to the Diabetes
Solution. The Company is also seeking to have a private label glucometer,
diabetes test strips, lancets and carrying cases produced as part of the
Diabetes Solution. The Company is in talks with a manufacturer that has global
operations.

During 2019, the Company initiated support for CGMS with the ALRT Diabetes
Solution. CGM has become the standard of care for patients with type 1 diabetes
and is quickly gaining favor with type 2 diabetes patients who use insulin.

ALRT Pre-Diabetes System



A prevention-based feature of the Diabetes Solution, the ALRT Prediabetes
System, has been designed in direct response to discussions with government
healthcare authorities for a scalable solution to the growing problem of
prediabetes. The Prediabetes Solution provides patients with educational videos
and supplemental content formatted for mobile devices and a private online
community to discuss disease management (e.g., support, weight loss, diet,
etc.). Most importantly, the System tracks patients and reminds them to test
their A1C according to payer protocols.



ALR GluCurve for Pets



ALR Technologies Inc. has developed the GluCurve Pet CGM to address an unmet
need in diabetes care for felines and canines by combining the hardware of a
CGMS with the software of an adapted version of its Diabetes Solution platform
for use by veterinarians in animal health.



The GluCurve Pet CGM platform allows the blood glucose readings from the medical
device placed on the pet to be uploaded to the cloud where the data is processed
and converted into daily glucose curve graphs and data sets that can be reviewed
and compared by the veterinarian at any time. The system provides the doctor
with insulin dose calculators and recommendations based on current clinical
practice guidelines.



The current method to monitor glucose levels in diabetic felines and canines is
to prepare an in-clinic glucose curve that consists of the following steps:

1. The pet is dropped off at a veterinary clinic;

2. The pet is given an insulin shot;

3. The clinic staff will draw blood every 2 hours for 10-12 hours, performing the

following steps each time:

a. test the blood in a blood glucose meter;

b. record readings;

c. plot the data into a graph;

d. assess the effectiveness of the insulin dose and glycemic control; and

4. The pet is picked up by their owner.

The GluCurve Pet CGM solves the multiple issues that arise from doing an
in-clinic glucose curve:

 · Inaccurate data;


· Manual process of data collection, review and analysis; and

· Burden on the clinic staff and the pet owner.

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Inaccurate Data



A CGM is placed on the pet by the veterinarian in minutes and the pet is sent
home where the glucose readings will be automatically taken and uploaded for up
to 14 days, which eliminates the stress on the animal from being housed in the
clinic and from getting its blood drawn, which can elevate glucose levels. A CGM
also provides readings every 5 minutes, which gives better insight to the
veterinarian of the highs and lows of the pet's glucose levels throughout the
day, which are often missed when only checking every 2 hours during an in-clinic
glucose curve.


Manual Process of Data Collection, Review and Analysis

A CGM automatically uploads 288 glucose readings per day to the ALRT cloud where
the data is analyzed, organized, then displayed on the platform for the
veterinarian to view. The GluCurve Pet CGM platform provides patient management
of diabetic pets so historical data can also be reviewed and compared.



Burden on Clinic Staff and Pet Owner


A CGM is placed on the pet in minutes, after which they are sent home, greatly
reducing the time spent by the staff during an in-clinic glucose curve of caring
for the pet and manually drawing blood and recording readings every 2 hours. The
platform also greatly reduces the time needed by the doctor to review and make
insulin dose adjustments by offering dosing calculators, guidelines and decision
flowcharts based on current clinical practice guidelines.



Results of Operations – Nine Months Ended September 30, 2020


Nine months ended September 30, 2021 compared to Nine months ended September 30,
2020



                                         Nine Months Ended      Nine Months Ended       Amount ($)      Percentage (%)
                                           September 30,          September 30,         Increase /        Increase /
                                               2021                   2020              (Decrease)        (Decrease)

Revenue                                 $           2,000                     -              2,000              100
Cost of revenue                                    (1,000 )                   -             (1,000 )            100
Gross margin                                        1,000                     -              1,000              100

Operating Expenses
 Product development costs                        369,000              1,447,000        (1,078,000 )            (74 )
 Professional fees                                574,000                508,000            66,000               13
 Selling, general and administration            1,152,000                360,000           792,000              220
Operating Loss                                  2,095,000              2,315,000          (220,000 )            (10 )

Loss before other items                         2,094,000              2,315,000          (221,000 )            (10 )

Other Items
 Interest expense                               2,802,000              1,578,000         1,224,000               78
 Loss on settlement of debt                        34,000                     -             34,000              100
Total Other Items                               2,836,000              1,578,000         1,258,000               80

Net Loss                                $       4,930,000              3,893,000         1,037,000               27




The net loss for the nine months ended September 30, 2021 was 27% ($1,037,000)
higher than the net loss at September 30, 2020. Loss before other items and
stock-based compensation was $642,000 (84%) higher during the nine months ended
September 30, 2021, as compared to the nine months ended September 30, 2020. We
highlight that loss before other items and stock-based compensation is a
"non-GAAP financial measure". This measure is calculated by removing those items
from the net loss presented on our unaudited condensed consolidated statements
of operations. This measure does not have a standardized meaning under U.S.
GAAP. Management uses this measure internally to evaluate its results of
operations, as it removes the impact of stock-based compensation,
non-operational losses and interest accretion.

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                                     Nine Months Ended      Nine Months Ended      Amount ($)     Percentage (%)
                                       September 30,          September 30,        Increase /       Increase /
                                           2021                   2020             (Decrease)       (Decrease)

Loss Before Other Items             $       2,094,000              2,315,000        (221,000 )            (10 )
Stock-based compensation
included in selling, general and
administration expense,
professional fees and product
development costs                             685,000              1,548,000        (863,000 )            (56 )
Loss Before Other Items and
Stock-based Compensation            $       1,409,000                767,000         642,000               84





The loss before interest and stock-based compensation for the Company's nine
months ended September 30, 2021 increased by $642,000 due primarily to increased
professional fees of $388,000 and personnel costs of $253,000.

· The Company incurred increased professional costs related to assessing business

structure alternatives;

· The Company has retained additional personnel to support commercialization

strategies in Singapore and the United States;

· The Company has incurred professional costs related to its proposed migration

to Singapore; and

· The Company has retained additional personnel related to evaluating and forming

   its pet division.



Selling, General and Administration

Selling, general and administration costs incurred consist of salaries and
consulting fees of management personnel, stock-based compensation for options
granted to management personnel, travel and trade show costs, rent of the
Company's corporate office, website development costs and general costs incurred
through day-to-day operations.



During the period, the Company had an increase in selling, general and
administration expenses, primarily driven by an increase in salaries and
consulting fees paid to personnel and to a market research firm related to
commercialization plans for the Company's Diabetes Solution. The components of
selling, general and administration expenses and the changes therein can be
seen
as follows:



                                           Nine Months Ended        Nine Months Ended        Amount ($)
                                             September 30,            September 30,          Increase /
Selling, General and Administration:             2021                     2020               (Decrease)
Salaries and consulting fees              $         524,000                  271,000            253,000
Travel and trade shows                               12,000                   20,000             (8,000 )
Website and information technology                   17,000                   12,000              5,000
Transfer agent, filing fees and
quotation costs                                      16,000                   38,000            (22,000 )
Market research consulting fees                      44,000                       -              44,000
License and permits                                  19,000                    8,000             11,000
Other general and administration
costs                                                66,000                   11,000             55,000
Stock-based compensation                            454,000                       -             454,000
Total                                     $       1,152,000                  360,000            792,000




  33




During Q3 2021, the Company had increased selling, general and administration
operating expenses, as compared to the same period in 2020. The cash-based
selling, general and administration expenses increased by $338,000 during Q3
2021, as compared to Q3 2020, which was primarily related to increased personnel
costs and market research consulting fees.



Product development costs

Substantially all of the product development costs incurred related to a)
services provided by contractors of the Company, and b) expenses incurred for
product development. The change in balance from the previous year relates
primarily to changes in composition of our technical team in the current year,
as compared to the previous year. The Company incurred stock-based compensation
expense of $160,000 during Q3 2021 related to the grant and vesting of options
to its product development team compared to $1,156,000 during Q3 2020. The
reduction in product development costs related to stock-based compensation
expenses of $996,000 for the nine months ended September 30, 2021 accounted for
92% of the reduction in total product development costs from the nine months
ended September 30, 2020.



Professional fees

Professional costs incurred consist of consulting and advisory fees of certain
professionals retained, audit fees, tax consultant fees, recruiter fees, legal
fees and stock-based compensation for options granted to professionals. During
the period, there was a significant increase in professional fees related to:

· The recruitment of certain personnel;

· The engagement of additional accounting personnel; and

· Legal and tax advice obtained related to corporate structure analysis.

By type of professional cost, the variance can be seen as follows:

                                   Nine Months Ended     Nine Months Ended     Amount ($)
                                     September 30,         September 30,       Increase /
Professional fees:                       2021                  2020            (Decrease)
Corporate auditor                 $          18,000                22,000         (4,000 )
Accounting fees                             113,000                47,000         66,000
Tax consultant fees                          43,000                    -          43,000
Legal fees                                  202,000                33,000        169,000
Recruiter fees                               48,000                    -          48,000
Market consultants and outreach              34,000                    -   
      34,000
Professionals retained                       45,000                14,000         31,000
Stock-based compensation                     71,000               392,000       (321,000 )
Total                             $         574,000               508,000         66,000




Excluding the difference in net loss attributed to the grant of stock options in
the prior year, professional fees increased by $387,000 from the comparative
period of the prior year, as indicated above.



Interest expense

Interest expense was from the following sources for the nine months ended
September 30, 2021 and 2020:

                                           Nine Months Ended        Nine Months Ended        Amount ($)
                                             September 30,            September 30,          Increase /
Interest expense:                                2021                     2020               (Decrease)
Interest expense incurred on
promissory notes                          $         396,000                  397,000             (1,000 )
Interest expense incurred on lines
of credit                                         1,031,000                1,089,000            (58,000 )
Interest expense incurred on stock
options modified                                  1,288,000                       -           1,288,000
Imputed interest on zero interest
loans                                                86,000                   92,000             (6,000 )
Other interest                                        1,000                       -               1,000
Total                                     $       2,802,000                1,578,000          1,224,000


  34






Interest expense incurred on stock options modified of $1,288,000 related to the
modification of stock options held by the Chairman and Chief Executive Officer
of the Company and his spouse related to financing provided.



Interest on Promissory Notes

On May 10, 2021, the Company issued 2,000,000 shares of common stock with a fair
market price of $0.057 to a creditor to extinguish $20,000 in promissory notes
and $3,000 in accrued interest on promissory notes. There were no other
significant changes in the amount of promissory notes outstanding as at
September 30, 2021 and 2020. The interest incurred on promissory notes was
consistent during the nine months ended September 30, 2021 and 2020.



Interest on Lines of Credit

The Company has two line of credit facilities with balances as follows:

                                               Nine Months Ended         Nine Months Ended         Amount ($)
                                                 September 30,             September 30,           Increase /
Lines of credit:                                      2021                      2020               (Decrease)
Line of credit provided by Sidney Chan        $       10,093,000                 9,366,000            727,000
Line of credit provided by Christine Kan               2,000,000           
     2,000,000                 -
Total                                         $       12,093,000                11,366,000            727,000




The principal balance of the line of credit due to Mr. Sidney Chan decreased, as
principal of $1,038,967 was retired through the issuance of shares on
September 21, 2020. This decrease was offset by advances to Mr. Chan under the
line of credit to finance the operations of the Company.



The Company incurred interest on the lines of credit as follows:

                                           Nine Months Ended        Nine Months Ended        Amount ($)
                                             September 30,            September 30,          Increase /
Interest expense on lines of credit:             2021                     2020               (Decrease)
Interest expense incurred on the
line of credit from Sidney Chan
during the period                         $         851,000                  909,000            (58,000 )
Interest expense incurred on the
line of credit from Christine Kan
during the period                                   180,000                  180,000                 -
Total                                     $       1,031,000                1,089,000            (58,000 )




Imputed Interest

During the 2021 and 2020 periods, the Company had certain zero interest
promissory notes and accounts payable in excess of one year. Pursuant to the
Company's accounting policy, these zero interest amounts are considered to be
financing items in nature and are assigned a deemed interest rate (1% per
month). The interest incurred on these is expensed as imputed interest and,
instead of increasing the liabilities of the Company, it is allocated to equity
under the financial statement line item additional paid-in capital. The change
from the prior period is related to the discussion included under Interest
on
Promissory Notes above.



  35



Liquidity and Capital Resources

                                         As At                                   Amount ($)      Percentage (%)
                                     September 30,            As At              Increase /        Increase /
Working Capital                          2021           December 31, 2020        (Decrease)        (Decrease)
Current Assets                      $     106,000                 129,000           (23,000 )            (18 )
Current Liabilities                    23,350,000              21,889,000         1,461,000                7
Working Capital Deficiency          $ (23,244,000 )           (21,760,000 )      (1,484,000 )              7





The Company has a severe working capital deficiency. It does not have the
ability to service its current liabilities for the next twelve months and is
reliant on its line of credit facilities to meet its ongoing operations. Until
the Company has revenue-producing activities that exceed its operating
requirements, it will be unable to service its current liabilities and the
working capital deficit will continue to increase. As of the date of this
report, the Company has commenced minimal revenue-generating activities. The
Company is expecting to continue generating revenues in Singapore during the
2021 and 2022 fiscal years; however, the amount and timing are uncertain. The
revenues generated in 2021 and 2022 from its operations in Singapore are not
expected to be sufficient to finance the ongoing operations of the business and
repay the current liabilities. The Company is also evaluating opportunities for
its Pet GluCurve product, the timing and amount of revenues from which are
uncertain. The Company is seeking to complete its Rights Offering that would
provide additional financing of $5,051,000, which is significantly less than the
current liabilities outstanding. There is substantial doubt about the Company's
ability to repay its current liabilities in the near term or any time in the
future, which could ultimately lead to business failure.



Current Assets


The Company’s nominal current assets as at September 30, 2021 and December 31,
2020
consist of cash and prepaid expenses.

Current Liabilities



The Company has current liabilities of $23,350,000 at September 30, 2021, as
compared to $21,889,000 at December 31, 2020. Current liabilities are as
follows:



                                     September 30,                                Change           Change
                                         2021           December 31, 2020           ($)              (%)
Accounts payable and accrued
liabilities                         $   1,056,000               1,114,000          (58,000 )             (5 )
Promissory notes to related
parties                                 3,042,000               3,032,000           10,000                0
Promissory notes to arm's length
parties                                 2,213,000               2,254,000          (41,000 )             (2 )
Interest payable                        3,979,000               3,575,000          404,000               11
Lines of credit from related
parties                                13,060,000              11,914,000        1,146,000               10
Total current liabilities           $  23,350,000              21,889,000        1,461,000                7




The fluctuations in accounts payable occurred in the regular course of business.
Accounts payable of $194,000 was extinguished from the issuance of shares of
common stock.


The increase in interest payable relates to:

· $396,000 of accrued interest incurred on promissory notes at their stated rates

of interest;

· $11,000 for the reclassification from promissory notes to arm’s length parties

to interest payable; and

· $3,000 extinguished from the issuance of shares of common stock.

All of the promissory notes and related interest payable is overdue.

  36



The increase in the lines of credit payable of $1,146,000 is attributable to
borrowings of:

· $554,000 to fund operations, product development activities, overhead, and its

sales and marketing program;

· $439,000 of interest repayment toward interest payable; and

· $1,031,000 of unpaid interest incurred on the principal of the borrowed

   amounts.




Cash Flows



                                                     Nine Months Ended           Nine Months Ended
Cash Flows                                           September 30, 2021          September 30, 2020
Cash flows used in Operating Activities             $       (1,302,000 )        $         (661,000 )
Cash flows provided by Financing Activities                  1,251,000                     660,000
Net Decrease in Cash During Period                  $          (51,000 )   
    $           (1,000 )




Cash Balances


As of September 30, 2021, the Company’s cash balance was $14,922 compared to
$66,190 as of December 31, 2020.

Cash Used in Operating Activities


Cash used by the Company in operating activities during the nine months ended
September 30, 2021 was $1,302,000 in comparison with $661,000 used during the
same period last year. The Company's expenditures from operations were used as
follows (approximate amounts):



Cash Used in Operating Activities                    Nine Months Ended     
     Nine Months Ended
Reconciliation                                       September 30, 2021          September 30, 2020
Net loss                                            $       (4,930,000 )$       (3,893,000 )
Stock-based compensation incurred for
product development, selling, general and
administration, professional fees and
interest expense                                             1,973,000                   1,548,000
Non-cash imputed interest expense                               86,000                      92,000
Loss on debt settlement                                         34,000                          -
Net purchases with balances owing in
accounts payable and accrued liabilities                       137,000                     106,000
Retainers and prepaid services                                 (29,000 )                        -
Accrued interest on lines of credit                          1,031,000                   1,089,000
Accrued interest from promissory notes                         396,000                     397,000
Cash used in operating activities                   $       (1,302,000 )
    $         (661,000 )




The expenditures incurred were to fund the operating activities of the business.

  37



Cash Proceeds from Financing Activities

Cash sourced by the Company from financing activities during the nine months
ended September 30, 2021 was $1,251,000 in comparison with $660,000 sourced
during the same period last year. The funds were sourced as follows:

Cash from Financing Activities                       Nine Months Ended           Nine Months Ended
Reconciliation                                       September 30, 2021          September 30, 2020
Proceeds from Rights Offering                       $        1,125,000          $              -
Proceeds from exercise of options                               12,000                         -
Net proceeds from line of credit from Mr.
Sidney Chan                                                    114,000                    660,000
Cash provided by financing activities               $        1,251,000
    $         660,000



Short- and Long-Term Liquidity

As of September 30, 2021, the Company does not have the current financial
resources and committed financing to enable it to meet its administrative
overhead, product development budgeted costs and debt obligations over the next
12 months.


All of the Company's debt financing is due on demand or overdue. The Company
will seek to obtain creditors' consents to delay repayment of these loans until
it is able to replace these financings with funds generated by operations,
replacement debt, or from equity financings through private placements or the
exercise of options and warrants. While the Company is seeking to complete its
Rights Offering, there is no certainty that it will be able to do so. If the
Company is not able to complete the Rights Offering, it will not have sufficient
funds to repay the debt financing past maturity and it will be due on demand.
While the Company's creditors have agreed to extend repayment deadlines in the
past, there is no assurance that they will continue to do so in the future. The
Company has faced litigation from creditors in the past and is currently being
sued by one creditor. There is no assurance that additional creditors will not
make claims against the Company in the future. Failure to obtain either
replacement financing or creditor consent to delay the repayment of existing
financing could result in the Company having to cease operations.



Tabular Disclosure of Contractual Obligations:

                                                          Payments Due by Period
                                                     Less                                          More
                                                    Than 1           1-3            3-5           Than 5
                                   Total             Year           Years          Years          Years
Accounts payable and accrued
liabilities                    $  1,056,000$  1,056,000     $       -      $       -      $       -
Promissory notes to related
parties                           3,042,000        3,042,000             -              -              -
Promissory notes to arm's
length parties                    2,213,000        2,213,000             -              -              -
Interest payable                  3,979,000        3,979,000             -              -              -
Lines of credit                  13,060,000       13,060,000             -              -              -
                               $ 23,350,000$ 23,350,000     $       -      $       -      $       -




  38




The Company will continue to use the funds available from the lines of credit to
cover administrative overhead and product development requirements until such
time it can establish cash flows from operations. In the next nine months, the
Company anticipates the amount borrowed from the lines of credit to increase
compared to the past nine months, as it expects to commercially launch its
Diabetes Management System before December 31, 2021.



Critical Accounting Policies and Going Concern

Our discussion and analysis of our results of operations and liquidity and
capital resources are based on our unaudited condensed consolidated financial
statements for the nine months ended September 30, 2021 and 2020, which have
been prepared in accordance with U.S. GAAP.



The preparation of these condensed consolidated financial statements requires us
to make estimates and judgments that affect the reported amounts of assets,
liabilities, revenues and expenses, and disclosure of contingent assets and
liabilities. We base our estimates on historical and anticipated results, trends
and various other assumptions that we believe are reasonable under the
circumstances, including assumptions as to future events. These estimates form
the basis for making judgments about the carrying values of assets and
liabilities that are not readily apparent from other sources. By their nature,
estimates are subject to an inherent degree of uncertainty. Actual results may
differ materially from our estimates.



The Company's condensed consolidated financial statements have been prepared on
a going concern basis, which presumes the realization of assets and the
discharge of liabilities and commitments in the normal course of operations for
the foreseeable future. See note 1 of the unaudited condensed consolidated
financial statements.



Due to our being a development stage company and not having generated
significant revenues, in the notes to our condensed consolidated financial
statements, we have included disclosure regarding concerns about our ability to
continue as a going concern.

Off-Balance Sheet Arrangements


The Company has no off-balance sheet financing arrangements that have or are
reasonably likely to have a current or future effect on the Company's financial
condition, changes in financial condition, revenues or expenses, results of
operations, liquidity, capital expenditures or capital resources, that is
material to investors.

39

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