ASSOCIATED WITH AN EARLY-STAGE COMPANY THAT HAS ALMOST NO CASH ASSETS AND MINIMAL OPERATIONS, THE LACK OF ANY APPARENT FINANCIAL RESOURCES OF THE COMPANY, THE COMPANY'S INSOLVENCY IN THAT OUR TOTAL LIABILITIES EXCEED OUR TOTAL ASSETS, THE INTENSE COMPETITION THAT WE FACE FROM OTHER ESTABLISHED COMPETITORS, THE CLEAR LIKELIHOOD OF A BANKRUPTCY FILING THAT WOULD LIKELY RESULT IN THE TOTAL DESTRUCTION OF THE COMPANY WITH EACH COMMON STOCKHOLDER SUFFERING THE TOTAL LOSS ON THEIR INVESTMENT AND THE LEGAL UNCERTAINTIES THAT DIRECTLY AND INDIRECTLY IMPACT DEVELOPMENT-STAGE COMPANIES. WE HAVE NO HISTORY OF GENERATING ANY REVENUES FROM OUR PLANNED BUSINESS. ANY ONE OR MORE OF THESE OR OTHER RISKS COULD CAUSE ACTUAL RESULTS TO DIFFER MATERIALLY FROM THE FUTURE RESULTS INDICATED, EXPRESSED, OR IMPLIED IN SUCH FORWARD-LOOKING STATEMENTS. WE UNDERTAKE NO OBLIGATION TO UPDATE OR REVISE ANY FORWARD-LOOKING STATEMENT TO REFLECT EVENTS, CIRCUMSTANCES, OR NEW INFORMATION AFTER THE DATE OF THIS FORM 10-Q OR TO REFLECT THE OCCURRENCE OF UNANTICIPATED OR OTHER SUBSEQUENT EVENTS. MAKE NO MISTAKE: WE ARE INSOLVENT AND OUR COMMON STOCK SHOULD ONLY BE ACQUIRED BY PERSONS WHO CAN AFFORD THE TOTAL LOSS OF THEIR INVESTMENT SINCE OUR COMMON STOCK MUST BE CONSIDERED A "HIGH RISK" SECURITY. INVESTORS SHOULD NOTE THAT OUR COMMON STOCK DOES NOT CURRENTLY TRADE IN ANY STOCK MARKET (See Item 2 below).
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ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.
As used herein, the term "we," "our," "us," and the "Company" refers to
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
There is a high risk that the Company may be facing severe and prolonged
financial adversity, a filing in
WARNING: Matter of Ten Day Stop Trading Order & Related Risks. As noted in our
prior periodic filings with the
Further and as a result of the Order, we do not currently have a
If we are not successful in gaining a
Status as
We agree with our independent auditors in that there is substantial doubt about our ability to continue as a going concern since:
(a) our Total Current Liabilities exceed our Total Current Assets which are
currently
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(b) we have no cash assets and our Total Liabilities are in excess of
(c) as of
(d) we incurred losses of over
(e) we have over
In every respect, we are insolvent and anyone who acquires our Common Stock should be prepared to lose their entire investment. Our Common Stock, our Preferred Stock, and any other instrument that we have or will issue, should be considered a "HIGH RISK" investment suitable only for those persons who can afford the TOTAL LOSS of their investment.
Overall, we are a small company with minimal financial and managerial resources,
and our business model and all of our plans have not been reviewed or evaluated
by any independent third party. We incurred over
There is no assurance and there can be no assurance that we will ever 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 with positive cash flow. Moreover, we cannot assure you
that we will be successful in securing a
For the last eleven fiscal years, starting
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Any reading of this Quarterly Report on Form 10-Q should also include a reading
of Item 1A, Risk Factors in our Annual Report on Form 10-K for the fiscal year
ending
We are a small company with very limited 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 and meet our operating expenses. This is because we have generated only insignificant revenues from our operations during the last eleven 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 certain other related 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 this uncertainty.
On
Every person who is considering the purchase of our Common Stock, our Preferred
Stock or any other instrument that we may issue should fully appreciate that if
an agreement with
Highly Risky & Uncertain Agreements with Countries in
The following summarizes certain agreements that we currently have with five (5)
countries in
? There are implicit and very significant political risks in that each country
does not have an established rule of law and as a result, the rights and the
obligations of each of the parties to these agreements do not offer the level
of certainty or enforceability that is found in comparable agreements entered
into between parties in
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? There are political processes in each country that are not predictable but can
result in not just a sudden change of government but the wholesale abrogation
of existing agreements and contracts and thereby the destruction of our
property rights and contractual rights that otherwise, in another context, may
be assumed to be inviolate.
? There are many unforeseeable political forces and institutional challenges that
may arise which can directly or indirectly result in an adverse economic and
political environment that can effectively inhibit our ability to conduct our
planned business operations for months if not years.
? The vagaries and circumstances relating or involving the conduct of each of the
governments that is a counterparty to our agreements are not at all predictable
and the political systems and legal systems present in each of the countries do
not readily conform or allow any predictable legal outcomes which, as a result,
create risks that fundamentally undermine our investment of our resources in
each of the governmental agreements that we reached with each of these
governments and all of the collateral and related agreements that we entered
into which assumed the validity of the governmental agreements.
? In the event of any later dispute or controversy arising out of any one or more
of the governmental agreements that we have, we are likely to experience
significant challenges in enforcing our rights and ensuring that each
governmental entity that is the counterparty to our agreement, fulfills its
contractual obligations to us. As a result, we are exposed and likely will
remain exposed to many uncontrollable and very significant risks and
uncertainties in all of our dealings with each country and these very
significant risks far exceed the contractual risks associated with contracts in
It is in that context that we have entered into the following agreements in the
following countries and, as we have learned by our experiences, that we face
continuing significant risks and uncertainties which we inherently cannot
mitigate or avoid in any significant way. We caution you that these risks and
uncertainties are likely to remain at all times and any person who acquires our
Common Stock, our Preferred Stock or any other instrument that we have issued
will face the clear and unmistakable risk of a Total Loss of their investment.
That is, we have not had any experience where we have been successful in
operating or managing any health care program in any country. Thus, any person
who reads this Form 10-Q should understand that we have no experience, no track
record, and no obvious ability to manage and maintain any health care services
in any country at any time in the history of
The six (6) governmental agreements are as follows:
A.
On
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We have entered into four major concession agreements with four key governmental
institutions in
Project Description Kallo SPV
1
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 that is required
that would allow us to pursue and implement our plans in
Notwithstanding the many uncertainties and risks that we face, we continue to believe that the global need for standardized healthcare service delivery to all geographies and to all people is fundamental. And we believe that we can offer an innovative approach via our Kallo Integrated Delivery System - "KIDS".
And while we have not conducted any extensive market research or otherwise received any assessment from an independent consultant, we continue to believe that our approach is a unique and comprehensive concept which we developed based on our own internal firsthand 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.
We have adopted what we believe is a "strategic market approach" in that our strategy is to ensure that our potential customers (the counterparties to our health services agreements) undertake a well-informed decision that we hope will allow them to work with us to embrace a national strategy for healthcare infrastructure and a standardized healthcare services delivery model across the country. This led us to develop what we believe may be a structured business development process and management of the services that we seek to offer and the benefits that we seek to provide to each national health care agency in each country. However, we have no record of achieving any of our goals and we have not been successful in entering into any agreement with any country that has allowed us to demonstrate that our business strategy is viable. A s a result, there can be no assurance that our contemplated strategy and contemplated business is financially viable.
After many years of hard work in developing countries we believe that there is a dynamic shift in the thought process within the developing countries to consider innovative solutions leveraging technology for strengthening and advancing their healthcare infrastructure and services delivery for all citizens alike. Our assessments and our evaluations in all of these matters are based solely upon the determinations made internally by our management and we have not had the benefit of any independent and professional third-party evaluation in any of these matters. We may later discover that our assumptions, our analysis, and our assessments are fatally inaccurate and otherwise not commercially viable. In that event, investors in our Company should be prepared to lose all of their investment.
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B.
C. Eswatini. On
D.
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E. Mozambique. On
F.
In general, and as we have become more fully aware of the business landscape and the risks and uncertainties associated with efforts to conduct any business in countries where the rule of law can easily become subject to ever unpredictable and changing political pressures, we can not approach our business plans and strategies without deep concern that we face risks that we cannot realistically mitigate or otherwise contain. In that respect and when any business enterprise commits its limited financial and managerial resources to a business strategy where there is no certainty that the rule of law will be upheld and fully observed, the risks facing the enterprise are existential. For that reason, we face the clear and unmistakeable risk that our business and our assets may be entirely lost and we may have little or no recourse to protect the Company, its planned business and assets and the stockholders' investment. In that respect, any person who acquires our Common Stock, our Preferred Stock, or any debt instrument that we may issue, should be prepared to lose their entire investment.
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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 our planned operations will occur and there can be no assurance that we will achieve anything that is commercially viable given the significant risks and uncertainties inherent in our business and given that we are insolvent with no history of generating and sustaining any sales revenues, profits and positive cash flow during anytime in the past eleven (11) years.
However, any person who reads this Quarterly Report on Form 10-Q should know
that we are acutely aware that we face significant "political risks" in each and
every country where we seek to implement our contemplated business. These risks
are inherent and we are not able to mitigate or reduce our exposure to the
unpredictable and dramatic political risks that we face in
In that context and subject to the serious risks that we face, including but not
limited to: (a) our current state of insolvency; (b) the effect that the Ten Day
Stop Trading Order has had on our Common Stockholders; (c) the lack of any
market-maker for our Common Stock and the likelihood that, as a result of the
amendment to Rule 15c2-11 that will directly and adversely impact us and our
Common Stockholders likely in
Kallo Integrated Delivery System (KIDS)
The following are "Forward-Looking Statements" that are subject to the qualifications set forth on page 11 of this Form 10-Q and subject to the Risk Factors set forth herein.
MobileCareTM - as currently planned and subject to our ability to successfully implement our business plan, we plan to establish a mobile trailer that opens into a state of the art clinical setup in a vehicle equipped with the latest technology in healthcare. As currently envisioned, MobileCare TM may be able to instantly connect the onboard physician with specialists for on-demand consultation via satellite through its Telehealth system. In that respect and if we are successful, we believe that this would provide a 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 - if we are successful, we currently plan to establish prefabricated modular healthcare units focused in rural areas where no roads infrastructure is available. As currently planned and subject to our ability to successfully implement our business plan, these units are to be 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 command center - as currently planned and subject to our ability to
successfully implement our business plan, this center is to be located in the
Kallo headquarters in
Regional command centers, Clinical and Administrative - as currently planned and subject to our ability to successfully implement our business plan, we intend to establish centers which, if we are able to secure one or more contracts with a host country, we currently plan to locate centers 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 our planned global response center.
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Emergency Medical Services - as currently planned and subject to our ability to successfully implement our business plan, we seek to establish an ancillary organization that we hope will provide ground and air ambulance vehicles for emergency patient transport. We have now incorporated Medical Drone Services.
All of the foregoing is 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
plan to 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 in implementing
our business plan and if we have sufficient financial resources, 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 cannot be certain that we will achieve either or both of
these goals at any time in the future. We are currently insolvent, we have no
cash assets and we have liabilities in excess of
Business Overview
Our plans and strategies were developed internally without the benefit of any independent professional consultants but we believe that the global need for standardized healthcare service delivery to all geographies and to all people may be the fundamental business driver for the innovation of the Kallo Integrated Delivery System - "KIDS".
We developed what we believe may be a unique and comprehensive concept as a result of our internal assessments over the past 15 years. We believe that if we can implement our business plan and raise a sufficient amount of additional capital on reasonable terms and on a timely basis, we may be able to address what we believe may be the core business issues in the current healthcare systems with intricate orchestration of technologies both proprietary and off the shelf to create a standardized healthcare delivery model across the continuum of care.
If market conditions allow and if we are successful in raising additional
capital on reasonable terms, on a timely basis and in sufficient amounts and
avoid bankruptcy as well as the other very significant risks set forth in the
Risk Factors set forth herein and those set forth in Item 1A of our 2020 Form
10-K Annual Report for the fiscal year ending
We believe that our business development model, unique to KIDS, is planned to include 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 model. However, we have not received and we do not anticipate receiving any independent or third party evaluation of our plans, strategies, or business model and for this reason we may be exposed to significant additional existential problems that could result in the total destruction of the Company and, for our common stockholders, the total loss of their investment. Our Common Stock is suitable only for those investors who are able to suffer the TOTAL LOSS of their investment.
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We previously developed 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 that we would seek to implement if we were able to obtain sufficient managerial and financial resources that would be required to undertake these efforts.
In addition, and if we are successful in avoiding bankruptcy and the liquidation
of the Company as well as avoiding the effects of the other very significant
existential risks that we face, then we may proceed to implement our business
plan (with such revisions as we deem necessary in light of then existing
circumstances) that may allow us to raise additional capital on a timely basis
and in sufficient amounts while avoiding bankruptcy or insolvency, we may be
able to develop a network of financial institutions and banks across the globe
that we hope may be focused on humanitarian and healthcare projects. However,
given our recent adverse experience with the Kenya Contract, we remain far more
skeptical and entirely concerned that we may be facing unanticipated but
significantly greater risks and uncertainties that may well prevent us from
undertaking any of our plans as provided in each of the agreements with each of
the six countries, namely,
Go-To-Market Strategy
If we are successful in implementing our business plan, avoid bankruptcy and avoid other very significant existential risks that we face (as set forth herein) and provided that we are able to raise a sufficient amount of additional capital on reasonable terms, in sufficient amounts and on a timely basis, then we currently intend to implement what we call our "Our Sales Go-To-Market Strategy" - a strategy that 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 ofMobile 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
Kallo's Value Proposition
All of the above and the following is based on our internal assessments made by our three (3) corporate officers/directors without the benefit of any independent third party professional consultants:
? Laying the foundational elements in building the primary care infrastructure
for an entire country
? Providing Technologies for current and future adoption of advancements in
clinical services such as Telemedicine, remote maintenance and management etc.
? Creating operational policies and procedures to set higher standards of care
? Provide Education and training to build resource capacity within the country
? 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 geographies.
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Kallo's Key Market Differentiators
Notwithstanding the clear and unmistakable existential risks that we face, we know that we face ever-changing technology and competition from many others who possess greater managerial and financial resources, if we can avoid bankruptcy and insolvency and provided that wed can raise additional capital in sufficient amounts and on a timely basis, we believe that we may be able to offer and differentiate our services in our current market segment by currently offering a far more comprehensive and holistic healthcare delivery solution compared to that currently offered by others. However, we are well-aware that other competitors have significantly greater financial and managerial resources and we know that our competitors are familiar with our business plans and strategies which they can freely adopt in competing with us. However, we have invested considerable time and energy studying and understanding the healthcare needs of our target market segments.
Unequivocal Differentiators
Subject to our ability to avoid bankruptcy and the existential risks that we face, we may be able to offer what we describe as the following "Unequivocal Differentiators" - attributes that we may be able to offer and provide that we believe (based on our own internal assessments without the benefit of any independent third party professional consulting advice) may provide us with opportunities that may allow us to implement one or more parts of our business plan assuming that we have and can obtain sufficient amounts of additional financing on reasonable terms, in sufficient amounts and on a timely basis:
1. Care platforms (Point-of-care facilities -
Modular Hospitals) to be manufactured to North American and internationally accepted standards.
2. Programs, facilities and services to be set-up to proactively detect and treat
infectious diseases.
3. On-going Tele-health service support, leveraging to be established with both
local and international expertise.
4. On-going education, training, & certification programs to be offered through
Kallo University .
5. On-going service & maintenance programs to be provided for all facilities and
equipment.
6. Leverages local skillsets to be offered so as to provide employment
opportunities. Competitive Landscape
Based solely upon our own internal assessments without the benefit of any third party professional consulting advice, we believe that the 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.
We also believe that the Kallo Integrated Delivery System (KIDS) may, if we can avoid bankruptcy and the existential risks that we face and if circumstances allow, provide us with an ability to offer health care services in the under-developed, countries which may allow us, if we able to successfully implement our business plan, to provide developing and developed countries with the flexibility of deploying components of KIDS.
Need for additional capital
We have incurred significant and protracted operating losses since inception:
(a) we have an accumulated deficit of over
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As stated below, we may be in the "Zone of Insolvency." Under the corporate common law of many jurisdictions, a Board of Directors of a corporation that is in the "Zone of Insolvency" generally owe a duty of care to the holders of its debt instruments and other creditors to take steps to avoid or minimize the losses that such persons would otherwise incur. While we believe that we have acted with due regard to our duty of care to our stockholders and to our creditors, we cannot assure you that we have always acted with the requisite level to discharge our duties to each of the foregoing. In that event, holders of our Common Stock and holders of our Preferred Stock will likely suffer the total loss of their investment.
We cannot guarantee we will be successful in our business operations or in implementing our business plan. Our business is subject to significant risks and uncertainties inherent in the establishment of a business enterprise, including those risks set forth herein.
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 and that we will avoid any of the severe financial and nonfinancial consequences that commonly result when a corporation is insolvent and has had a history of losses with a large accumulated deficit.
There is no guarantee 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 Revenues
We did not generate any revenues during the nine months ended
We are insolvent, we incurred
We believe that we may be in the "Zone of Insolvency." Under the corporate common law of many jurisdictions, a Board of Directors of a corporation that is in the "Zone of Insolvency" generally owe a duty of care to the holders of its debt instruments and other creditors to take steps to avoid or minimize the losses that such persons would otherwise incur. While we believe that we have acted with due regard to our duty of care to our stockholders and to our creditors, we can not assure you that we have always acted with the requisite level to discharge our duties to each of the foregoing. In that event, holders of our Common Stock and holders of our Preferred Stock and holders of our debt instruments will very likely suffer the total loss of their investment.
Expenses
During the three months ended
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The decrease in our total expenses for the three months ended
During the nine months ended
The Company is operating with a minimal number of full-time employees and office space until such time as we may be able to secure new contracts, if any. As stated above, we face significant risks and uncertainties that we cannot control.
Net Loss
During the three months ended
During the nine months ended
We incurred over
Liquidity and capital resources
As at
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Cash used in operating activities amounted to
Cash provided by financing activities amounted to
There was no cash movement in investing activities during the current nine
months period ended
As of
As stated above, we believe that we may be in the "Zone of Insolvency." Under the corporate common law of many jurisdictions, a Board of Directors of a corporation that is in the "Zone of Insolvency" generally owe a duty of care to the holders of its debt instruments and other creditors to take steps to avoid or minimize the losses that such persons would otherwise incur. While we believe that we have acted with due regard to our duty of care to our stockholders and to our creditors, we cannot assure you that we have always acted with the requisite level to discharge our duties to each of the foregoing. In that event, our creditors may assert additional claims against us which would further destroy any value that may be otherwise recoverable by holders of our Common Stock, our Preferred Stock, our debt instruments and all of them.
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