This section of the report includes a number of forward-looking statements that
reflect our current views with respect to future events and financial
performance. Forward-looking statements are often identified by words like:
believe, expect, estimate, anticipate, intend, project and similar expressions,
or words which, by their nature, refer to future events. You should not place
undue certainty on these forward-looking statements, which apply only as of the
date of this report. These forward-looking statements are subject to certain
risks and uncertainties that could cause actual results to differ materially
from historical results or our predictions. All funds are reflected in United
States dollars unless otherwise indicated.
We are a small company with limited financial and managerial resources and we
are insolvent. There is substantial doubt that we can continue as an on-going
business for the next twelve months unless we obtain additional capital to pay
our bills. This is because we have generated insignificant revenues from our
operations during the last eight years. We have been able to remain in business
as a result of investments, in debt or equity securities, by our officers and
directors and by other unrelated parties. We expect to incur operating losses in
the foreseeable future and our ability to continue as a going concern is
dependent upon our ability to raise additional money through investments by
others and achieve profitable operations. There is no assurance that we will be
able to raise additional money or that additional money or that additional
financing will be available to us on satisfactory terms or that we will be able
to achieve profitable operations. The consolidated statements were prepared
under the assumption that we will continue as a going concern, however, there
can be no assurance that such financial support shall be ongoing or available on
terms or conditions acceptable to the Company. This raises substantial doubt
about our ability to continue as a going concern. The consolidated financial
statements do not include any adjustments that might result from the outcome of
For the last eight fiscal years, starting January 2010, our management and board
of directors have raised funds through a personal and professional network of
investors. This has enabled product and business development, continued
operations, and generation of customer interest. In order to continue
operations, management has contemplated several options to raise capital and
sustain operations in the next 12 months. These options include, but are not
limited to, debt and equity offers to existing shareholders, debt and equity
offers to independent investment professionals and through various other
financing alternatives. We currently believe that if we can secure sufficient
additional capital on a timely basis, in sufficient amounts and on reasonable
terms and if we are successful in securing at least one project that likely will
enable us to continue operations for the next 12 months. There can be no
guarantee that we will receive sufficient additional capital on a timely basis
and on reasonable terms that will allow is to continue to remain in business.
Currently we have not received any commitment from any third party to provide
the additional capital that we believe we will require to sustain our Company as
a corporate entity or otherwise allow us to meet our financial obligations.
On April 8, 2017, the Company entered into an agreement with FE Pharmacy Inc.
whereby in consideration for the issuance of 475,000,000 common stock of Kallo,
FE Pharmacy Inc. assumed and will pay all of the Company's outstanding
indebtedness as of April 7, 2017. Management believes that with this agreement
in place, it can concentrate on bringing the potential projects as detailed
below to fruition and any additional funding can be met through one of the three
options mentioned above.
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In 2017 the Government of Ghana initiated several discussions with us, to
revisit how the Ministry of Defense - Military Hospital requirements, the
Ministry of Health healthcare infrastructure requirements and the Ministry of
Education Teaching Hospital infrastructure requirements can be met using the
Kallo Integrated Delivery Model. The success of these discussions confirmed
Ghana's continued belief in the Kallo Integrated Delivery System, as the best
solution for the nation's healthcare infrastructure development, which is very
encouraging for our continued business in Ghana.
On June 20, 2017, our branch office was legally registered in Ghana. A valid tax
identification number was issued and this number is to be used by us in all of
our anticipated business that we hope to conduct within Ghana. We have
incorporated four SPVs (Special Purpose Vehicles / Companies) to oversee the
various projects we seek to undertake in Ghana. The SPVs are all incorporated
under the laws of Ghana as private companies. Based on our internal management
assessments conducted without the benefit of any independent third-party review
or evaluation, we believe that our business plans involving Ghana are sound and
may offer us significant business opportunities. However, we cannot assure you
that we will be able to obtain sufficient financing on reasonable terms and on a
timely basis that will allow us to pursue these opportunities.
We have entered into four major concession agreements with four key governmental
institutions in Ghana. We have also, through our SPVs has entered into the
following concession arrangements for the construction and operation of various
hospital facilities in Ghana:
Project Description Kallo SPV
1 Tamale Military Hospital project K-TMH Ghana Limited
2 Cape Coast Teaching Hospital project K-UCC Cape Coast Limited
3 Sunyani Teaching Hospital project K-UENR Sunyani Limited
4 Ho Teaching Hospital project K-UHAS Ho Limited
These agreements are effective upon execution and the concession period will
start from the date on which financial close is achieved with the Lenders and
all conditions precedent are satisfied or waived. The financing has not closed
yet and there is no guarantee that financial close will be achieved.
Plan of Operation
The following plan of operation contains forward-looking statements, which
involve risks and uncertainties. Our actual results could differ materially from
those anticipated in these forward-looking statements as a result of certain
factors, including those set forth elsewhere in this document. Because of the
speculative nature of our operations and the nature of the African countries we
are attempting to do business with, there is no assurance that any of the
planned operations will occur.
To the extent that we are financially able and if circumstances allow, we plan
to continue to develop components of Kallo Integrated Delivery System:
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Kallo Integrated Delivery System (KIDS)
MobileCareTM - a mobile trailer that opens into a state of the art clinical
setup in a vehicle equipped with the latest technology in healthcare. More than
just a facility, MobileCare TM can instantly connect the onboard physician with
specialists for on-demand consultation via satellite through its Telehealth
system. This is truly a holistic approach to delivering healthcare to the
remotely located. For many rural communities, the nearest hospital, doctor or
nurse may be hundreds of kilometers away. In many cases, this gap can be bridged
using Telehealth technology that allows patients, nurses and doctors to talk as
if they were in the same room.
RuralCareTM - prefabricated modular healthcare units focused in rural areas
where no roads infrastructure is available. They are equipped to provide
primary healthcare including X-Ray, ultrasound, surgery, pharmacy and lab
services. Ranging from 1,200 to 3,800 square feet, these clinics can be up and
running in disaster zones or rural areas in as little as one week. Similar to
the MobileCare TM product, RuralCare TM also utilizes satellite communications
to access the Telehealth system.
Our overall healthcare mission is to "reach the unreached". Based on our own
internal assessments conducted by our officers and without the benefit of any
independent third party evaluation, we believe that may be able to offer
end-to-end solution that may include the following:
Global response center - located in the Kallo headquarters in Canada, this is
the escalation point for the coordination of delivery of Telehealth and eHealth
support. It consists of both the Clinical Command Center and the Administrative
Regional response centers, Clinical and Administrative Command centers - located
in the urban area hospitals and connected with satellite communications, these
centers coordinate all aspects of the healthcare delivery solution with the
Mobile clinics and Rural clinics including clinical services, Telehealth
services, pharmacy and medical consumable coordination as well as escalations to
the Global response center.
Kallo University - provides education, training and development of local
resources for all aspects of the healthcare delivery which includes clinical,
engineering and administration.
Emergency Medical Services - provides ground and air ambulance vehicles for
emergency patient transport. We have now incorporated Medical Drone Services.
Based solely on our internal management assessments conducted without the
benefit of any independent third-party review or evaluation, we believe that our
end-to-end delivery solution is equipped with necessary medical equipment as per
regional healthcare requirements. We also install our copyrighted software and
third party software as required along with a five (5) year support agreement
renewable after the five (5) year initial term that includes the medical
equipment, software licenses, installation implementation and training. If we
are successful then we anticipate that may, if circumstances are favorable,
allow us to generate an ongoing revenue stream for service, maintenance,
spare-parts, and consumables. However, we can not assure you that even if we are
able to achieve these goals that we can do so at levels that may allow us to
achieve and sustain positive cash flow and profitability. We have incurred
significant and protracted losses and we have no record of achieving and
sustaining positive cash flow and profitability and we can not be certain that
we will achieve either or both of these goals at any time in the future.
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The Global need for standardized healthcare service delivery to all geographies
and to all people is the fundamental business driver for the innovation of the
Kallo Integrated Delivery System - "KIDS".
This unique and comprehensive concept was developed based on first hand
discovery and a detailed study of ground realities and causal analysis over 15
years. The business issues in the current healthcare systems are addressed by
intricate orchestration of technologies both proprietary and off the shelf to
create a standardized healthcare delivery model across the continuum of care.
A strategic market approach was defined for customers to take a well-informed
decision and to work with Kallo on a national strategy for healthcare
infrastructure and a standardized healthcare services delivery model across the
country. This led to the development of a structured business development
process and management for business success.
The business development model, unique to KIDS, included in-country stakeholder
workshops and white-board sessions on the KIDS concept and its application in
their context of healthcare infrastructure and healthcare services delivery
Kallo instituted the concept of conducting detailed Clinical, Engineering and
Technology studies led by Kallo to establish detailed requirements for
preparation of a customized proposal for the country and a phased roll out plan.
In addition, Kallo has addressed the major issue of financing such large
initiatives in under developed countries by developing a network of financial
institutions and Banks across the globe focused on humanitarian and healthcare
Our Sales Go-To-Market Strategy is segmented based on the varying needs of our
customers in the following three categories:
1. Full solution with Kallo Integrated Delivery System (KIDS) - typically
longer sales cycle and includes the end to end solution of Mobile Clinics,
Rural Poly Clinics, Global and Regional response centers, Clinical and
Administrative command centers, telehealth support, Kallo University
training, pharmacy and medical consumable support and Emergency services
with ground and air ambulance vehicles. This solution is focused on the
end-to-end healthcare needs of developing countries.
2. Medical Tourism
3. COVID-19 Rapid Response Program
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Kallo's Value Proposition
º Laying the foundational elements in building the primary care
infrastructure for an entire country
º Providing Technologies for current and future adoption of advancements in
clinical services such as Telemedicine, remote maintenance and management
º Creating operational policies and procedures to set higher standards of
º Provide Education and training to build resource capacity within the
º KIDS provide a modular and flexible Point-of-Care facility to enable
healthcare services from cities to the most rural areas in a given country
and helps overcome inequalities in healthcare services across all
Kallo's Key Market Differentiators
Kallo differentiates itself in our market segment by offering the most
comprehensive and holistic healthcare deliver solution available to meet the
needs of developing countries and countries with rural and remote populations.
Kallo has invested considerable time and energy studying and understanding the
healthcare needs of our target market.
1. Care platforms (Point-of-care facilities - Mobile Clinics, Rural clinics &
Modular Hospitals) manufactured to North American and internationally accepted
2. Programs, facilities and services set-up to proactively detect and treat
3. On-going Tele-health service support, leveraging both local and international
4. On-going education, training, & certification programs offered through Kallo
5. On-going service & maintenance programs for all facilities and equipment
6. Leverages local skillsets and creates employment opportunities
Healthcare landscape is the most complex industry at large. It has developed in
each area of its function in an isolated fashion and hence today we have
disparate functions, technologies and infrastructure. Globally healthcare
industry leaders are working hard to bring a synchronized approach in patient
encounter, diagnosis and treatment including preventive care. Kallo has leaped
into the future with the KIDS concept and have successfully brought together
technologies including global telemedicine, infrastructure and functional
expertise leading the industry and have created the Kallo business ecosystem.
Kallo Integrated Delivery System (KIDS) has been the key to our success in the
under-developed, countries and will take a lead into developing and developed
countries with the flexibility of deploying components of KIDS.
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Need for additional capital
We have incurred significant and protracted operating losses since inception and
have an accumulated deficit and a working capital deficit at March 31, 2019. We
expect to incur additional losses as we execute our go to market strategy. This
raises substantial doubt about the Company's ability to continue as a going
We cannot guarantee we will be successful in our business operations. Our
business is subject to risks inherent in the establishment of a business
enterprise, including limited capital resources and possible cost overruns due
to price increases in services and products.
To become profitable and competitive, we anticipate that we will have to sell
our products and services in sufficient volumes and with margins that may allow
us to achieve profitability. We cannot assure you or anyone that we will be
successful in these efforts.
There is no guaranty that we will obtain sufficient additional financing on a
timely basis and on reasonable terms. If financing is not available on
satisfactory terms, we may be unable to continue, develop, or expand our
operations. Any equity financing will likely result in immediate and substantial
dilution of existing stockholders.
Results of operations
We did not generate any revenues during the three months ended March 31, 2019 or
2018. However, we are pursuing what we hope may be suitable business
opportunities that, based on our own internal management assessments conducted
without the benefit of any independent third-party review or evaluation, may
offer us commercially feasible and appropriate opportunities. However, we cannot
assure you that we will be successful in any of these matters or, if we achieve
any success, that it will allow to achieve and sustain positive cash flow and
During the three months ended March 31, 2019 we incurred total expenses of
$1,804,738, including $1,672,873 in salaries and compensation, $32,897 in
professional fees, $27,442 in interest and financing costs, $64,736 in loss on
foreign exchange, $1,086 in selling and marketing and $5,704 as other expenses
whereas during the three months ended March 31, 2018 we incurred total expenses
of $66,328, including $101,945 in salaries and compensation, $17,155 in
professional fees. $27,442 in interest and financing costs, $83,934 in gain on
foreign exchange and $3,720 as other expenses.
The increase in our total expenses for the three months ended March 31, 2019
from the comparative period is mainly due to an increase in salaries and
compensation of $1,570,928 due to non-cash stock-based compensation of
$1,574,480, an increase in professional fees of $15,742, an increase of $148,670
in foreign exchange loss. The negative change in foreign exchange is due to the
depreciation of the US dollar vis a vis the Canadian dollar.
The Company is operating with a minimal number of full time employees and office
space until it can secure new contracts.
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During the three months ended March 31, 2019 we did not generate any revenues
and incurred a net loss of $1,804,738 compared to a net loss of $66,328 during
the same period in 2018. The main reasons were the increase in salaries and
compensation and foreign exchange loss as discussed above. In that respect, we
cannot assure you that we will be successful in reducing our losses at any time
in the future and we may face significant and protracted financial losses and we
cannot guarantee that we will achieve any of our business goals.
Liquidity and capital resources
As at March 31, 2019, the Company had no current assets and current liabilities
of $6,304,396, indicating working capital deficiency of $6,304,396. As of March
31, 2019, we had no assets and our total liabilities were $6,304,396 comprised
of $3,426,576 in accounts payable and accrued liabilities, convertible loans
payable of $1,088,499, short term loans of $65,031 and liability for issuable
shares of $1,724,290.
Cash used in operating activities amounted to $26,343 during the three months
ended March 31, 2019, primarily as a result of the net loss adjusted for
non-cash items and various changes in operating assets and liabilities.
Cash provided by financing activities amounted to $26,343 from proceeds from
short term loans payable.
There was no cash movement in investing activities during the current three
months period ended March 31, 2019.
As of March 31, 2019, our Total Liabilities exceeded our Total Assets and we
were insolvent. In that respect we face all the risks and uncertainties of any
insolvent corporation that could easily result in stockholders losing all or
substantially all of their investment. Our common stock and our preferred stock
are securities that should only be acquired by persons who can accept the HIGH
RISK of such an investment.
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