The following discussion of our financial condition and results of operations should be read in conjunction with our unaudited condensed consolidated interim financial statements, the notes to those financial statements and other financial information appearing elsewhere in this document. In addition to historical information, the following discussion and other parts of this document contain forward-looking statements that reflect plans, estimates, intentions, expectations and beliefs. Actual results could differ materially from those discussed in the forward-looking statements. Factors that could cause or contribute to such differences include, but are not limited to, those set forth in the "Risk Factors" in Part II, Item 1A of this Quarterly Report.

The discussion provided in this Quarterly Report should be read in conjunction with our Annual Report on Form 10-K for the year ended May 31, 2021, filed with the United States Securities and Exchange Commission (the "SEC") on August 30, 2021.





Overview

We were incorporated as Plandel Resources, Inc. under the laws of the State of Nevada on March 19, 2010. On March 24, 2014, we changed our name to Sports Asylum, Inc. and on September 30, 2014, we changed our name to Cell MedX Corp. to reflect our new business direction. On April 26, 2016, we formed a subsidiary, Cell MedX (Canada) Corp., (the "Subsidiary") under the laws of the Province of British Columbia.

We are a biotech company focused on the discovery, development and commercialization of therapeutic and non-therapeutic products that promote general health, pain relief, wellness and alleviate complications associated with medical conditions including, but not limited to: diabetes, Parkinson's disease, high blood pressure, neuropathy and kidney function. Our Subsidiary is engaged in development and manufacturing of therapeutic devices based on our proprietary eBalance® Technology, which harnesses power of microcurrents and their effects on human body.

Current uncertainty with respect to continued expansion of the COVID-19 pandemic

We are cognizant of the continued expansion of the COVID-19 pandemic and the resulting global implications. To date, we have experienced minor disruptions to our day-to-day operations associated with delayed services resulting from various COVID-19 restrictions and shortage of man power experienced by some of our service providers. We caution that there continues to be a possibility for increase of the restrictions currently in place, or addition of new restrictions currently not known to us. The impact of these restrictions on our operations, if implemented, is currently unknown but could be significant.





Recent Corporate Developments

The following corporate developments occurred during the quarter ended August 31, 2021, and up to the date of the filing of this report:

Private Placement Financing

On August 9, 2021, we closed our private placement financing and issued 400,000 shares for total gross proceeds of $100,000.

Exercise of Warrants

During the three-month period ended August 31, 2021, we issued 300,000 shares on exercise of warrants to acquire shares at $0.20 per share for total proceeds of $60,000.

Update on eBalance® Research and Development Activities

In September 2021, the Company submitted a premarket notification (510K) to the U.S. Food and Drug Administration (FDA) for the eBalance® Home System and eBalance® Pro System.

The eBalance® Pro System and eBalance® Home System, are microcurrent electrotherapy systems intended to administer a specific variety of therapeutic microcurrent algorithms for temporary relief of pain associated with sore/aching muscles in the shoulders, waist, back, neck, upper extremities (arms) and lower extremities (legs) due to strain from exercise or normal household- or work-related activities, as well as for general relaxation.

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The eBalance® Pro System is intended for use by professionals in the clinical setting and the eBalance® Home System is intended for home use by laypersons.

In addition, on August 16, 2021, the Canadian Intellectual Property Office approved the Company's EBALANCE trademark application number 1867918 and issued certificate of registration number 1,104,935 registering the trademark EBALANCE in the name of the Company.

The Company's applications to register EBALANCE as a trademark in the United States, which the Company filed with the United States Patent and Trademark Office on December 11, 2017, continue to be under review.

Results of Operations for the Three Months ended August 31, 2021 and 2020

Our operating results for the three-month periods ended August 31, 2021 and 2020, and the changes in the operating results between those periods are summarized in the table below.





                                       Three Months Ended
                                                             Percentage
                                    August 31,   August 31,  Increase/
                                       2021         2020     (Decrease)
Sales                                $    1,197  $     1,467    (18.4)%
Cost of goods                             (325)        (369)    (11.9)%
Gross margin                                872        1,098    (20.6)%
Operating expenses
Amortization                                540          736    (26.6)%
Consulting fees                          64,814       76,940    (15.8)%
Distribution expenses                         -          261   (100.0)%

General and administrative expenses 134,089 32,780 309.1% Research and development costs

           35,841       85,137    (57.9)%
Total operating expenses                235,284      195,854      20.1%
Interest                                  4,940        6,446    (23.4)%
Net loss                             $  239,352  $   201,202      19.0%




Revenues

During the three-month period ended August 31, 2021, we recognized $1,197 in revenue from monthly recurring revenue associated with the eBalance® treatment packages. The cost attributed to this revenue was $325.

During the three-month period ended August 31, 2020, we recognized $1,467 in revenue from monthly recurring revenue associated with the eBalance® treatment packages. The cost attributed to this revenue was $369.

As of the date of this Quarterly Report on Form 10-Q, we continue research and further development of our eBalance® Technology and devices based on this technology. During the summer of 2020, Health Canada granted our eBalance® Home and Pro Systems Class II medical device licenses, which allow us to market our eBalance® devices for wellness and pain management. Our certification with U.S. Food and Drug Administration (FDA) continues to be ongoing; at the time of this Quarterly Report on Form 10-Q we have submitted a premarket notification (510K) to the FDA for the eBalance® Home System and eBalance® Pro System, which, when approved, will allow us to demonstrate that the eBalance® Home System and eBalance® Pro System are at least as safe and effective as a legally marketed device available on the market. Once this submission is approved, it will allow us to start our commercial activity in the USA.





Operating Expenses

During the three-month period ended August 31, 2021, our operating expenses increased by 20.1% from $195,854 we incurred during the three months ended August 31, 2020, to $235,284 we incurred during the three months ended August 31, 2021. The most significant changes were as follows:

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·During the three-month period ended August 31, 2021, our consulting fees decreased by $12,126, or 15.8%, from $76,940 we incurred during the three-month period ended August 31, 2020, to $64,814 we incurred during the three-month period ended August 31, 2021.

·Our research and development fees for the three-month period ended August 31, 2021, decreased by $49,296, or 57.9%, from $85,137 we incurred during the three-month period ended August 31, 2020, to $35,841 we incurred during the three-month period ended August 31, 2021. The lower research and development fees during the three-month period ended August 31, 2021, were associated with our decision to suspend further development of the eBalance® devices until such time that our 510(K) notification to the FDA is finalized and submitted.

·Our general and administrative fees for the three-month period ended August 31, 2021, increased by $101,309, or 309.1%, from $32,780 we incurred during the three-month period ended August 31, 2020, to $134,089 we incurred during the three-month period ended August 31, 2021. The largest two factors that contributed to this change were associated with fluctuation in foreign exchange rates, which, during the three-month period ended August 31, 2021, resulted in $47,382 loss, as compared to $42,450 gain during the comparative period, and our expenditures on corporate communications, which increased by $14,212 to $56,475 we recorded during the three-month period ended August 31, 2021, as compared to $42,263 we incurred during the three-month period ended August 31, 2020. Other factors that affected our general and administrative fees were associated with a $1,500 increase to our management fees, which increased from $9,000 we incurred during the three-month period ended August 31, 2020, to $10,500 for the three-month period ended August 31, 2021; a $4,274 increase to our filing and regulatory fees, which increased from $5,856 we incurred during the three-month period ended August 31, 2020, to $10,130 for the three-month period ended August 31, 2021; and a $2,620 increase to our office expenses, which increased from $1,554 we incurred during the three-month period ended August 31, 2020, to $4,174 for the three-month period ended August 31, 2021.

These increases were in part offset by a $9,943 decrease to our professional fees, as during the three-month period ended August 31, 2021, we did not incur any legal fees, as compared to $9,943 we incurred during the comparative period;

a $511 decrease to our accounting and audit fees, which decreased from $5,011 we incurred during the three-month period ended August 31, 2020, to $4,500 for the three-month period ended August 31, 2021; and to a smaller extent decreases in bank fees, and travel and entertainment fees, which decreased to $281 and $647 respectively.





Other Items

During the three-month period ended August 31, 2021, we accrued $4,940 (August 31, 2020 - $6,446) in interest associated with the outstanding notes payable. Of this interest, $3,346 (August 31, 2020 - $805) represented interest we accrued on the notes payable we issued to our related parties.

Liquidity and Capital Resources





Working Capital



                              As at             As at       Percentage
                         August 31, 2021    May 31, 2021      Change
Current assets           $        101,285   $      51,047     98.4%
Current liabilities             1,655,962       1,628,300      1.7%
Working capital deficit  $    (1,554,677)   $ (1,577,253)     (1.4)%

As of August 31, 2021, we had a cash balance of $63,772, a working capital deficit of $1,554,677 and cash flows used in operations of $151,325 for the period then ended. During the three-month period ended August 31, 2021, we funded our operations with $100,000 received from our private placement financing, $60,000 from exercise of warrants, and $34,000 we borrowed under a loan agreement accumulating interest at 6% per annum, compounded monthly, and due on demand.

We did not generate sufficient cash flows from our operating activities to satisfy our cash requirements for the period ended August 31, 2021. The amount of cash we have generated from our operations to date is significantly less than our current debt obligations. There is no assurance that we will be able to generate sufficient cash from our

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operations to repay the amounts owing under the outstanding notes and advances payable, or to service our other debt obligations. If we are unable to generate sufficient cash flow from our operations to repay the amounts owing when due, we may be required to raise additional financing from other sources. The outcome of these matters cannot be predicted with any certainty at this time and raises substantial doubt that we will be able to continue as a going concern.

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