Item 8.01 Other Events.
1. Letter of March 22, 2021
On March 23, 2021, we received a letter dated March 22, 2021 (the "Letter") from
the Cabinet Secretary for the National Treasury & Planning, the Republic of
Kenya (the "Cabinet Secretary") informing us that the project and agreements
that we previously entered into with Techno-Investment Module Ltd., a
corporation formerly domiciled in the Republic of Belarus, and now domiciled in
the Kingdom of Spain ("TIM") and the Republic of Kenya, namely, the Project
Contract and the Loan Contract (the "Project") have been put on hold. The Letter
further stated that current news speculations published by the (Kenya-based)
Business Daily news concerning Kenya's agreement with Kallo have been disclosed
without (the Cabinet Secretary's) concern (and, as a result) the government has
decided that it is in the interest (of the Republic of Kenya) to put the project
The Cabinet Secretary further explained in his Letter that the Republic of Kenya
is undergoing preparations for upcoming elections and concerns related to
certain (unstated) allegations in the media could cause serious political
Nonetheless the Cabinet Secretary further stated in the Letter that the Project
is not being terminated but put on hold for a certain period of time. The
Cabinet Secretary did not provide any assurances with respect to if or when the
Project will proceed as originally intended and we have not received any
additional communication from the Cabinet Secretary regarding the status of the
Project or whether the Project will be implemented, if at all.
In light of the statements made by the Cabinet Secretary in the unexpected
Letter that we received, there is a clear risk that the Project (that we had
hoped would be undertaken in Kenya and which was previously the subject of the
Form 8-K that we filed with the Securities and Exchange Commission on August 10,
2020) may not be realized and, more than that, that all of the efforts that we
and TIM expended in connection with the Project will not result in any financial
gain for Kallo, Inc.
In that context, we are reminded of the inherent significant and continuing high
risks and uncertainties associated with all of our business transactions and
agreements involving foreign countries and our inability to mitigate all such
risks and uncertainties.
We expended significant managerial time and financial resources in anticipation
that the agreements that we entered for the Project would be implemented. It now
appears that the agreements for the Project and the anticipated transactions
underlying those agreements will not be realized for reasons that are beyond our
control and with the result that our investment of our managerial time and
financial resources will be lost.
A copy of the Letter and our response of March 23, 2021 to the Letter are each
attached to this Form 8-K.
Overall and in light of our receipt of the Letter, which was entirely
unexpected, we cannot assure any holder of our Common Stock, our Preferred
Stock, or any of our debt instruments, that the matters set forth in the Letter
will be satisfactorily resolved or are later resolved on terms that are
commercially reasonable or which otherwise would allow us to achieve our
original business and financial objectives. We are a small company with limited
financial and managerial resources and we cannot be assured that the foreign
governments that are counter-parties to the agreements or understandings that we
enter into will not later determine that the terms of any agreement or
understandings that we have with them (or any other collateral or related
agreements or understandings) are not in their interest.
In that sense and in these circumstances we face the clear and unmistakable
risks of significant and continuing losses. At present we have not been
successful in undertaking and implementing our business strategy in any country.
There can be no assurance that we will be successful in implementing our
business strategy or otherwise achieving any of our goals and, in so doing,
achieve any measure of profitability or positive cash flow or if we do, that we
can sustain any measure of profitability or positive cash flow.
We remain financially insolvent since our Total Liabilities exceed our Total
Assets and in the fiscal year ending December 31, 2020 we incurred losses in
excess of nine million dollars ($9,000,000). In that context and given the high
risks that we face, any reader of this Form 8-K should carefully consider the
Risk Factors set forth in Item 1a in our Annual Report on Form 10-K for the
fiscal year ending December 31, 2020. At the same time, no person should acquire
our Common Stock, our Preferred Stock, or any of our debt instruments who cannot
afford to lose their entire investment.
2. Order of Suspension of Trading
On March 24, 2021 we were informed that the Securities and Exchange Commission,
pursuant to Section 12(k) of the Securities Exchange Act of 1934, as amended,
suspended trading of our Common Stock for a period from 9:30 A.M., EDT on March
24, 2021 through 11:59 P.M. on April 7, 2021.
We are disappointed by this trading suspension and while we are hopeful that we
may be able to resolve any matters that resulted in the trading suspension, we
have not yet undertaken discussions with the staff at the Securities and
Exchange Commission that would allow us to accurately understand all of their
concerns. In that light we cannot assure you that we will successfully resolve
their concerns or whether we can regain the tradability of our Common Stock
either within the ten (10) day suspension period or if ever.
We are a small company and due to our state of insolvency, we may not be able to
undertake and obtain the funds needed to undertake the necessary and customary
steps needed to successfully regain tradability of our Common Stock. For these
and other reasons, any person who acquires our Common Stock, our Preferred
Stock, or any of our debt instruments should be prepared to lose their entire
As we have said previously, our stockholders are reminded that our business
strategy involves significant risks and uncertainties over which we have little
or no control. These risks and uncertainties are far higher today given the
current uncertain environment of the COVID-19 and the global pandemic and we do
not anticipate that these risks and uncertainties will decline in any material
respect at any time in the foreseeable future.
Item 9.01 Exhibits.
Exhibit Number Description
(1) Letter of March 22, 2021 from the Cabinet Secretary, the
National Treasury and Planning, Republic of Kenya; and
(2) Letter of March 23, 2021 from John Cecil to the Cabinet
Secretary, the National Treasury and Planning, Republic of
© Edgar Online, source Glimpses