ALR TECHNOLOGIES INC Management's Discussion and Analysis of Financial Condition and Results of
Operations ("MD&A") is designed to provide a reader of our Unaudited Condensed
Consolidated Financial Statements and Notes thereto that are contained in this
quarterly report, with a narrative from the perspective of management. You
should also consider this information with the information included in our
Annual Report on Form 10-K for the year ended December 31, 2021 , and our other
filings with the SEC , including our quarterly and current reports that we have
filed since December 31, 2021 through the date of this report. This report
covers the three and six months ended June 30, 2022 .
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, 2021 .
This Form 10-Q includes "forward-looking statements", as such term is used
within the meaning of the Private Securities Litigation Reform Act of 1995.
These "forward-looking statements" are not based on historical fact and involve
assessments of certain risks, developments and uncertainties in our business
looking to the future. Such forward-looking statements can be identified by the
use of terminology such as "may", "will", "should", "expect", "anticipate",
"estimate", "intend", "continue", "believe", or the negatives or other
variations of these terms or comparable terminology. Forward-looking statements
may include projections, forecasts or estimates of future performance and
developments. Forward-looking statements contained in this Form 10-Q are based
upon assumptions and assessments that we believe to be reasonable as of the date
of this report. Whether those assumptions and assessments will be realized will
be determined by future factors, developments and events, which are difficult to
predict and may be beyond our control. Actual results, factors, developments and
events may differ materially from those we assumed and assessed. Risks,
uncertainties, contingencies and developments, including those identified in the
Risk Factors section of filings we make with the Securities and Exchange
Commission (the "SEC") pursuant to Sections 13(a), 13(c), 14 or 15(d) of the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), incorporated
by reference herein, could cause our future operating results to differ
materially from those set forth in any forward-looking statement. There can be
no assurance that any such forward-looking statement, projection, forecast or
estimate contained can be realized, or that actual returns, results or business
prospects will not differ materially from those set forth in any forward-looking
statement. Given these uncertainties, readers are cautioned not to place undue
reliance on such forward-looking statements. We disclaim any obligation to
update any such factors or to publicly announce the results of any revisions to
any of the forward-looking statements contained herein to reflect future
results, events or developments.
Except for the description of historical facts contained herein, this 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) be unable to 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
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.
Our consolidated financial statements are stated in
In this quarterly report, unless otherwise specified, all references to "common shares" refer to the common shares in our capital stock.
26
As used in this quarterly report, the terms "we", "us", "our", the "Company" and
"ALRT" mean
Overview ALRT is a data management company that developed a comprehensive approach to diabetes care that includes: (i) aFood and Drug Administration ("FDA") cleared and Health Insurance Portability and Accountability Act of 1996 ("HIPAA") compliant diabetes management system (as previously defined, the "Diabetes Solution") that collects data directly from blood glucose meters ("BGM") (and which was subsequently modified to integrate with continuous glucose monitoring ("CGM") devices), (ii) a patent pending Predictive A1C algorithm to track treatment success between lab reports, and (iii) an FDA-cleared Insulin Dosing Adjustment program. From this technology portfolio, the Company has developed the Diabetes Solution for human health, and the GluCurve, a modified version of the Diabetes Solution, for animal health ("GluCurve").
Recent Developments - Proposed Migration to
As reported in the Company's Current Report on Form 8-K datedMay 20, 2022 (the "May 20, 2022 Form 8-K"), onMay 17, 2022 , the Company entered into an Agreement and Plan of Merger and Reorganization with ALR Singapore and its wholly-owned subsidiary, ALR Delaware, relating to a proposed merger transaction for the sole purpose of changing the Company's jurisdiction of incorporation fromNevada
toSingapore . The Redomicile Merger Agreement provides that, upon the terms and subject to the conditions set forth therein, ALR Delaware will merge with and into the Company, and the Company will be the surviving entity and a wholly-owned subsidiary of ALR Singapore. ALR Delaware will cease to exist. At the closing of the Redomicile Merger, the stockholders of the Company will exchange their shares of common stock, and any options or warrants to purchase shares of common stock which they might hold, on a one-for-one basis, for ordinary shares and options or warrants to subscribe for ALR Singapore Ordinary Shares, as applicable. In order to facilitate the Redomicile Merger and to comply withSingapore law, (i) ownership of ALR Singapore, which was previously a wholly-owned subsidiary of the Company, was transferred to KAD, aSingapore private company owned by trust entities controlled by the Company's CEO,Sidney Chan , and (ii) ALRSingapore formed ALR Delaware as a new subsidiary corporation. At the effective time of the Redomicile Merger (the "Effective Time") ALRSingapore , together with the Company as its subsidiary, will own and continue to conduct the Company's business in substantially the same manner as is currently being conducted by the Company and its subsidiaries. Accordingly, for holders of Company common stock, much will remain unchanged following the Redomicile Merger. There will be some differences in stockholder rights, given the differences between the laws ofNevada andSingapore as they relate to companies incorporated in those jurisdictions. The ALR Singapore Ordinary Shares are expected to trade on the OTCQB, either under a new or the same ticker symbol under which the Company's shares of common stock are currently traded, and are expected to begin trading on the OTCQB as soon as possible following the Effective Time. 27 The Redomicile Merger Agreement contains customary closing conditions, including, among others, approval of the Redomicile Merger by the Company's stockholders, the effectiveness of the registration statement on Form F-4 filed by ALR Singapore related to the Redomicile Merger, and receipt of required regulatory approvals. The consent of the holders of a majority of the outstanding shares of the Company's common stock entitled to vote is required to approve and adopt the Redomicile Merger Agreement. The Board of Directors of the Company believes that the Redomicile Merger is advisable and in the best interests of the Company and its stockholders. Pursuant to the Redomicile Merger Agreement, the Board of Directors of the Company may exercise its discretion to terminate the agreement, and therefore abandon the Redomicile Merger, at any time prior to the Effective Time, including after the adoption of the Redomicile Merger Agreement by the Company's stockholders. The consolidated assets and liabilities of ALR Singapore and the Company, as its wholly-owned subsidiary, immediately after the Redomicile Merger and at the Effective Time, will be identical to the assets and liabilities of the Company immediately prior to the Redomicile Merger. The officers and directors of the Company immediately before the Redomicile Merger becomes effective will also serve as officers and directors of ALR Singapore at the Effective Time. In addition, pursuant toSingapore law, ALR Singapore is required to appoint certain officers and to have at least one director who is ordinarily resident inSingapore . Therefore, prior to the Redomicile Merger, and continuing upon effectiveness of the Redomicile Merger, ALR Singapore will appointBenjamin Szeto , as Secretary and Chief Legal Counsel, andChristine Kan , the spouse of CEOSidney Chan , as Vice President.Mr. Szeto andMs. Kan are both residents ofSingapore . Additionally,Ms. Kan , who is currently serving as a director of ALRSingapore , will continue to serve as a locally resident director following the Redomicile Merger. After the Redomicile Merger, it is also anticipated that at least initially, the officers and directors of the Company, as the wholly-owned subsidiary of ALR Singapore, will remain the same as prior to the Redomicile Merger. The Redomicile Merger will not result in any material change to the Company's business and will not have any effect on the relative equity interests of the Company's stockholders. The Redomicile Merger Agreement has been approved by the Boards of Directors of each of the Company, ALR Singapore, and ALR Delaware. Subject to the required approval of the Company's stockholders, requisite regulatory approvals, the effectiveness of the registration statement on Form F-4 filed by ALR Singapore related to the Redomicile Merger, and other customary closing conditions, the Redomicile Merger is expected to be completed during the third quarter of 2022. The foregoing summary of the Redomicile Merger Agreement does not purport to be complete and is qualified in its entirety by reference to the complete text of the Redomicile Merger Agreement, which is an exhibit to theMay 20, 2022 Form 8-K.
Additional information about the Redomicile Merger and where to find it: In connection with the proposed Redomicile Merger, ALR Singapore has filed with theUnited States Securities and Exchange Commission (the "SEC") a registration statement on Form F-4 for the purpose of registering the ordinary shares of ALRSingapore to be issued to the stockholders of the Company. The registration statement, if and when declared effective, will include a prospectus/information statement of the Company which will be sent to the stockholders of the Company in connection with approval of the Redomicile Merger and related matters by the stockholders of the Company, in addition to other matters. In addition, the Company may file other relevant documents concerning the proposed Redomicile Merger with theSEC .
This communication does not constitute an offer to sell or the solicitation of an offer to buy any securities or a solicitation of any vote or approval. Stockholders of the Company are urged to read the registration statement on Form F-4 and the prospectus/information statement to be included within the registration statement, and any other relevant documents to be filed with theSEC in connection with the proposed Redomicile Merger, because they will contain important information about the Company, ALR Singapore, and the proposed transaction. 28
Other Recent Developments-
OnJanuary 18, 2022 , the Company issued a prospectus whereby it distributed 101,025,592 subscription rights to its shareholders to purchase shares of common stock of the Company at a price of$0.05 per share. The rights were set to expire onFebruary 18, 2022 , and subsequently extended toMarch 15, 2022 . Management had untilAugust 12, 2022 to place the rights that were unexercised. The Company recognized share subscriptions receivable of$25 pursuant to its registration statement and issued a total of 500 shares of common stock for gross proceeds of$25 . The subscription rights were cancelled onJuly 7, 2022 . OnMarch 18, 2022 , the Company extended the commitment letters previously issued to two creditors who are relatives of the Chairman and Chief Executive Officer of the Company, offering them an aggregate 20,000,000 shares of common stock in exchange for the extinguishment of$1,541,000 in promissory notes and interest payable fromDecember 31, 2021 toDecember 31, 2022 . As the date of this Report, the offer letters have not been executed. OnMarch 18, 2022 , the Company modified 70,000,000 options previously granted to a number of advisors and independent contractors by extending the vesting period under vesting terms, which have not been met, fromSeptember 30, 2021 andDecember 31, 2021 toDecember 31, 2022 , and fromJune 30, 2022 toJune 30, 2023 . OnMarch 18, 2022 , the Company amended 2,500,000 options previously granted to an individual onOctober 4, 2021 by vesting 1,000,000 options and cancelling the remaining 1,500,000 options with performance conditions. During the period endedJune 30, 2022 ,$59,639 related to the 1,000,000 options that vested immediately was recorded.
Effective
On
OnJune 28, 2022 , ALR Singapore entered into a Supply Agreement with Infinovo. Pursuant to the Supply Agreement, Infinovo will manufacture and supply certain continuous glucose monitoring components necessary to the Company's diabetes management platform for animal health, known as GluCurve. The term of the Supply Agreement continues for three years fromAugust 1, 2022 , unless earlier terminated in accordance with the terms of the Supply Agreement. The Supply Agreement, however, will not become effective unless (i) ALR Singapore enters into a binding distribution agreement for the sale and distribution of GluCurve byJuly 31, 2022 , and (ii) ALR Singapore and Infinovo enter into a quality agreement byJuly 31, 2022 . There can be no assurance that the two conditions to effectiveness of the Supply Agreement will be satisfied. If the conditions are met and the agreement becomes effective, the Supply Agreement will automatically renew for additional one year terms unless ALRT Singapore or Infinovo provides written notice of its intent to terminate the Supply Agreement. The Supply Agreement provides for customary reasons to terminate the Supply Agreement
for cause with immediate effect. The closing conditions for the Supply Agreement between ALR Singapore and Infinovo were not met and the Supply Agreement has now terminated. The parties are now working on completing a new agreement whereby the closing condition for ALR Singapore to enter into a binding sales and distribution agreement for the GluCurve would beAugust 31, 2022 . Should the parties enter into a new manufacturing and supply agreement, it will not become effective unless ALRSingapore enters into a binding distribution agreement for the sale and distribution of GluCurve byAugust 31, 2022 . There can be no assurance that the parties will enter in such new agreement or that this condition to effectiveness of the new agreement will be satisfied. 29
Recent Developments - Subsequent to
OnJuly 7, 2022 , the Company granted the Chairman and Chief Executive Officer the option to acquire 115,500,000 shares of common stock of the Company at a price of$0.05 per share untilDecember 31, 2026 . OnAugust 4, 2022 , ALR Singapore entered into an Employment Agreement with the Chairman and Chief Executive Officer with an effective date ofJuly 1, 2022 . The terms of the Employment Agreement with ALR Singapore are materially similar to the existing services arrangement between ALRT except as follows:
· The incentive compensation whereby
sale of Company products has been amended to be in perpetuity and assignable.
Previously, the commission was based on the lifetime of
·
business or assets of ALRT or its affiliates.
In connection with entering into the Employment Agreement with ALR Singapore:
1)
2) the services agreement between ALRT andMr. Chan has terminated, and
3)
This Employment Agreement is executed and the Services Agreement is being terminated in connection with the Redomicile Agreement.
Additional Financing Promissory Notes
In
In
InMay 2022 , the Company received an advance from a related party for$25,000 , with a fixed interest amount of$2,000 , which will mature and be repayable
onAugust 31, 2022 . InJune 2022 , the Company received an advance from a related party for$25,000 , with a fixed interest amount of$2,000 , which will mature and be repayable
onAugust 31, 2022 . InJuly 2022 , the Company received an advance from a related party for SGD$500,000, with a fixed interest amount of$150 per day, which will mature and be repayable onAugust 31, 2022 . The Company may repay the promissory note at any time prior to the maturity date. The principal amount of SGD$500,000 was repaid onJuly 18, 2022 . Rights Offering
OnDecember 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 atDecember 31, 2021 , the Company issued 26,496,635 unrestricted shares of common stock related to proceeds received of$1,324,832 . The Company had untilOctober 29, 2021 to sell the remaining 101,025,592 shares of common stock for total proceeds of$5,051,280 , if exercised. OnDecember 14, 2021 , the Company filed a post-effective amendment to distribute subscription rights to purchase up to an aggregate 101,025,592 shares of our common stock at a price of$0.05 per share. Each stockholder as of the record date of theDecember 4, 2020 Form S-1 Registration Statement who received rights and had not previously exercised those subscription rights as of the expiration date ofJanuary 22, 2021 , received one subscription right for each previous subscription right held as at such time. The rights expiredMarch 15, 2022 . Pursuant to the terms of the offering, management may, in its discretion, allocate unexercised subscription rights to non-shareholders within 150 days (untilAugust 12, 2022 ) following the expiration date ofMarch 15, 2022 . InMarch 2022 , the Company recognized share subscription receivable of$25 pursuant to its registration statement and issued an additional 500 shares of common stock for gross proceeds of$25 . The subscription rights were cancelled onJuly 7, 2022 . 30 Results of Operations
Six months ended
Six Months Ended Six Months Ended Amount ($)
June 30, June 30, Increase / Percentage (%)
2022 2021 (Decrease) Increase / (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 250,000 240,000 10,000 4
Professional fees 525,000 356,000 169,000 47
Selling, general and administrative 1,009,000 424,000 585,000 138
Operating loss 1,784,000 1,020,000 764,000 75
Loss before other items 1,783,000 1,020,000 763,000 75
Other Items
Interest expense 1,110,000 2,284,000 (1,174,000 ) (51 )
Loss on settlement of debt - 33,000 (33,000 ) (100 )
Total other items 1,110,000 2,317,000 (1,207,000 ) (52 )
Net Loss $ 2,893,000 $ 3,337,000 (444,000 ) (13 )
31
The net loss for the six months ended June 30, 2022 was 13% ($444,000 ) lower
than the net loss at June 30, 2021 . Loss before other items and stock-based
compensation was $385,000 (44%) higher during the six months ended June 30,
2022 , as compared to the six months ended June 30, 2021 . We highlight that loss
before other items and stock-based compensation is a "non-GAAP financial
measure". This measure is calculated by removing those items from the net loss
presented on our unaudited condensed consolidated statements of operations. This
measure does not have a standardized meaning under U.S. GAAP. Management uses
this measure internally to evaluate its results of operations as it removes the
impact of stock-based compensation, non-operational losses and interest
accretion.
Six Months Ended Six Months Ended Amount ($) Percentage (%)
June 30, June 30, Increase / Increase /
2022 2021 (Decrease) (Decrease)
Loss Before Other Items$ 1,783,000 $ 1,020,000 763,000 75 Stock-based compensation included in selling, general and administrative expenses, professional fees and product development costs 519,000 141,000 378,000 268 Loss Before Other Items and Stock-based Compensation$ 1,264,000 $ 879,000 385,000 44
The net loss before interest and stock-based compensation for the Company's six months endedJune 30, 2022 increased by$385,000 due primarily to increased selling, general and administrative expenses as a result of costs incurred in relation to ALR Singapore and in relation to the rights offering.
Selling, General and Administrative
Selling, general and administrative costs incurred consist of salaries and consulting fees of management personnel, stock-based compensation for options vested 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 increased selling, general and administrative operating expenses, as compared to the same period in 2021. The selling, general and administrative expenses, excluding stock-based compensation, increased by$203,000 during 2022, as compared to 2021, primarily driven by an increase in salaries, payroll expenses and consulting fees paid to personnel related to GluCurve Pet CGM, mailing and printing of materials related to the rights offering in the current period offset by fees paid to a market research firm related to commercialization plans for the Company's GluCurve Pet CGM in the comparative period of the prior year. The components of selling, general and administrative expenses and the changes therein can be seen as follows: Six Months Ended Six Months Ended Amount ($) June 30, June 30, Increase / Selling, General and Administrative: 2022 2021 (Decrease) Salaries and consulting fees $ 479,000$ 305,000 174,000 Travel and trade shows 6,000 10,000 (4,000 )
Website and information technology 13,000 9,000 4,000 Transfer agent, filing fees and quotation costs 15,000 8,000 7,000 Market research consulting fees 10,000
44,000 (34,000 ) Payroll expenses 39,000 9,000 30,000 License and permits 1,000 10,000 (9,000 ) Shareholder communications 28,000 5,000 23,000 Foreign exchange 8,000 7,000 1,000 Other general and administrative costs 28,000 17,000 11,000 Subtotal 627,000 424,000 203,000 Stock-based compensation 382,000 - 382,000 Total$ 1,009,000 $ 424,000 585,000 32 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 Company incurred stock-based compensation expense of$119,000 during Q2 2022 related to the grant and vesting of options to its product development team compared to$98,000 during Q2 2021.
Professional fees
Professional fees incurred consists 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. Excluding the difference in net loss attributed to the vesting of stock options granted in the prior year, professional fees increased by$194,000 from the comparative period of the prior year. The increase in professional fees was mainly due to accounting and legal fees in the current period offset by recruiter fees paid in the comparative period of the prior year. During the period, the increase in accounting and legal fees related to:
· Assessing business structure alternatives, including evaluating and forming the
animal health division;
· Evaluating retaining additional personnel to support commercialization
strategies in
· Increased compensation paid to certain accounting professionals retained;
· Its proposed migration to
· Completing the rights offering financing, preparing subsequent amendments to
extend the rights offering and issuing the post-effective amendment to the
rights offering.
By type of professional cost, the variance can be seen as follows:
Six Months Ended Six Months Ended Amount ($)
June 30, June 30, Increase /
Professional fees: 2022 2021 (Decrease)
Corporate auditor $ 29,000 $ 14,000 15,000
Accounting fees 203,000 76,000 127,000
Tax consultant fees 14,000 40,000 (26,000 )
Legal fees 260,000 90,000 170,000
Recruiter fees - 48,000 (48,000 )Market consultants and outreach 1,000 45,000
(44,000 )
Subtotal 507,000 313,000 194,000
Stock-based compensation 18,000 43,000 (25,000 )
Total $ 525,000 $ 356,000 169,000
Interest expense
Interest expense was from the following sources for the six months ended
June 30, 2022 and 2021:
Six Months Ended Six Months Ended Amount ($)
June 30, June 30, Increase /
Interest expense: 2022 2021 (Decrease)
Interest expense incurred on
promissory notes $ 277,000 $ 264,000 13,000
Interest expense incurred on lines
of credit 778,000 671,000 107,000
Imputed interest on zero interest
loans 52,000 60,000 (8,000 )
Other interest 3,000 1,000 2,000
Subtotal 1,110,000 996,000 114,000
Interest expense incurred on stock
options modified - 1,288,000 (1,288,000 )
Total $ 1,110,000 $ 2,284,000 (1,174,000 )
33
Interest on Promissory Notes
The Company received an advance from two shareholders for an aggregate SGD$340,000 ($244,000 ), with a fixed interest amount of$10,000 , during the six months endedJune 30, 2022 . The Company also received an advance from two related parties for an aggregate$50,000 , with a fixed interest amount of$4,000 , during the six months endedJune 30, 2022 . There were no other significant changes in the amount of promissory notes outstanding as atJune 30, 2022 and 2021. The interest incurred on promissory notes was consistent during the six months endedJune 30, 2022 and 2021.
Interest on Lines of Credit
The Company has two line of credit facilities with balances as follows:
Six Months Ended Six Months Ended Amount ($)
June 30, June 30, Increase /
Lines of credit: 2022 2021 (Decrease)Line of credit provided by Sidney Chan$ 10,300,000 $ 9,941,000 359,000 Line of credit provided by Christine Kan 2,827,000
2,000,000 827,000 Total$ 13,127,000 $ 11,941,000 1,186,000
The principal balance of the lines of credit due to Mr.
The Company incurred interest on the lines of credit as follows:
Six Months Ended Six Months Ended Amount ($)
June 30, June 30, Increase /
Interest expense on lines of credit: 2022 2021 (Decrease)
Interest expense incurred on the
line of credit from Sidney Chan
during the period $ 617,000 $ 551,000 66,000
Interest expense incurred on the
line of credit from Christine Kan
during the period 161,000 120,000 41,000
Total $ 778,000 $ 671,000 107,000
Imputed Interest
During the 2022 and 2021 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 Intereston Promissory Notes above.
Liquidity and Capital Resources
As At Amount ($) Percentage (%)
June 30, As At Increase / Increase /
Working Capital 2022 December 31, 2021 (Decrease) (Decrease)
Current Assets $ 96,000 $ 193,000 (97,000 ) (50 )
Current Liabilities 26,355,000 24,505,000 1,850,000 8Working Capital Deficiency$ (26,259,000 ) $ (24,312,000 )
(1,947,000 ) 8
34
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 not commenced commercial revenue-generating activities.
The Company is expected to continue generating revenues in Singapore during the
2022 fiscal year; however, the amount and timing are uncertain. The revenues
generated in 2021 and 2022 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 GluCurve product, the timing
and amount of revenues from which are uncertain. 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
Current Liabilities
The Company has current liabilities of
June 30, Change Change
2022 December 31, 2021 ($) (%)
Accounts payable and accrued
liabilities $ 1,330,000 $ 1,130,000 200,000 18
Promissory notes to related
parties 3,092,000 3,042,000 50,000 2
Promissory notes to arm's length
parties 2,458,000 2,213,000 245,000 11
Interest payable 4,388,000 4,111,000 277,000 7
Lines of credit from related
parties 15,087,000 14,009,000 1,078,000 8
Total current liabilities $ 26,355,000 $ 24,505,000 1,850,000 8
Accounts payable and accrued liabilities
Accounts payable and accrued liabilities consists of trade payables and accrued liabilities of the Company. Accounts payable totaling approximately$1,075,000 and accrued liabilities totaling approximately$255,000 . Approximately$600,000 of accounts payable is more than one year old with the majority of these being more than ten years old.
The fluctuations in accounts payable occurred in the regular course of business.
Promissory notes to related parties and promissory notes payable to arm's length parties
The Company has promissory notes with 24 individuals or corporations that relate to historical amounts borrowed. With the exception of the SGD$340,000 advance received from arm's length parties and$50,000 received from related parties during the six month period endedJune 30, 2022 , there has been no new activity for several years. All of the promissory notes, other than the SGD$340,000 and$50,000 loan received during the current period, are past due and continue to accrue interest at their respective legal rates of interest (mostly 1% per month). During the six months endedJune 30, 2022 , the Company received an advance from two shareholders for SGD$340,000 ($244,000 ), with a fixed interest amount of$10,000 , dueAugust 31, 2022 , and from two related parties for$50,000 , with a fixed interest amount of$4,000 , dueAugust 31, 2022 .
Interest payable
Interest payable relates to the unpaid interest expense incurred on the
promissory notes to related parties and promissory notes to arm's length
parties. The change from
35
All of the promissory notes, except for the promissory notes received during the most recent six month period, and related interest payable, are overdue.
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