Notes to Consolidated Financial
Statements
For the Years Ended December 31,
2020 and 2019
($ United States)
1. Basis
of presentation, nature of operations and going concern
ALR
Technologies Inc. (the “Company”) was incorporated under the laws of the State of Nevada on March 24, 1987. On
May 16, 2020, the Company incorporated a wholly owned subsidiary, ALR Technologies Sg Pte. Ltd., under the Companies Act
of Singapore. The Company has developed its Diabetes Management Solution, which is a comprehensive approach to diabetes care consisting
of data collection, predictive A1C, insulin dosage adjustment suggestions, performance tracking, remote monitoring and diabetes
test supplies. The Company is seeking commercial opportunities to deploy the Diabetes Management Solution in the United States
of America, Canada and Singapore.
These
consolidated financial statements have been prepared in accordance with U.S. GAAP in U.S. dollars and on a going concern basis,
which presumes the realization of assets and the discharge of liabilities and commitments in the normal course of operations for
the foreseeable future. Several adverse conditions cast substantial doubt on the validity of this assumption. The Company has
incurred significant losses over the past several fiscal years (2020 - $5,916,017; 2019 - $9,005,537), is currently
unable to self-finance its operations, has a working capital deficit of $21,760,608 (2019 - $31,088,266), accumulated deficit
of $93,571,762 (2019 - $87,655,745), limited resources, no source of operating cash flow and no assurance that sufficient
funding will be available to conduct continued product development activities. If the Company is able to finance its required
product development activities, there is no assurance the Company’s current projects will be commercially viable or profitable.
The Company has debts comprised of accounts payable and accrued liabilities, interest payable, lines of credit and promissory
notes payable totaling $21,889,457 (2019 - $31,090,104) currently due, due on demand or considered delinquent. There is no
assurance that the Company will not face additional legal action from creditors regarding delinquent accounts payable, promissory
notes payable and interest payable. Any one or a combination of the above conditions could result in the failure of the business
and cause the Company to cease operations.
The
Company’s ability to continue as a going concern is dependent upon the continued financial support of its creditors and
its ability to obtain financing to fund working capital and overhead requirements, fund the development of the Company’s
product line, and ultimately, the Company’s ability to achieve profitable operations and repay overdue obligations. Management
has obtained short-term financing from related parties through line of credit facilities with available borrowing in principal
amount up to $12,300,000. As of December 31, 2020, the total principal balance outstanding was $11,539,125. The resolution
of whether the Company is able to continue as a going concern is dependent upon the realization of management’s plans. When
additional financing is required, the Company plans to raise needed capital through the exercise of share options and by future
common share private placements. There can be no assurance that the Company will be able to raise any additional debt or equity
capital from the sources described above or that the lenders in the line of credit arrangements will maintain the availability
of borrowing from the line. If management is unsuccessful in obtaining short-term financing or achieving long-term profitable
operations, the Company will be required to cease operations.
In
March 2020, the World Health Organization declared coronavirus, COVID-19, a global pandemic. This contagious disease outbreak,
which has continued to spread, and any related adverse public health developments, has adversely affected workforces, economies
and financial markets globally, potentially leading to an economic downturn. The impact on the Company is not currently determinable,
but management continues to monitor the situation. Management does not expect that COVID-19 will have a significant impact on
the Company; however, it could have a potential impact the Company’s ability to raise money, market its products to attract
customers or procure equipment and parts for its glucose monitoring system.
ALR TECHNOLOGIES INC.
Notes to Consolidated Financial
Statements
For the Years Ended December 31,
2020 and 2019
($ United States)
1. Basis
of presentation, nature of operations and going concern (continued)
All
of the Company’s debt is either due on demand or is in default, while continuing to accrue interest at its stated rates.
The Company will seek to obtain creditors’ consents to delay repayment of the outstanding promissory notes payable and related
interest thereto, until it is able to replace this financing with funds generated by operations, recapitalization with replacement
debt or from equity financings through private placements. While some of the Company’s creditors have agreed to extend repayment
deadlines in the past, there is no assurance that they will continue to do so in the future. In the past, creditors have successfully
commenced legal action against the Company to recover debts outstanding. In those instances, the Company was able to obtain financing
from related parties to cover the verdict or settlement; however, there is no assurance that the Company would be able to obtain
the same financing in the future. If the Company is unsuccessful in obtaining financing to cover any potential verdicts or settlements,
the Company will be required to cease operations.
The
Company’s activities will necessitate significant uses of working capital beyond 2020. Additionally, the Company’s
capital requirements will depend on many factors, including the success of the Company’s continued product development and
distribution efforts. The Company plans to continue financing its operations with the lines of credit it has available.
2. Significant
accounting policies
|
a)
|
Basis
of consolidation
|
These
consolidated financial statements include the accounts of the Company and its wholly-owned subsidiary, ALR Technologies Sg Pte.
Ltd., which was incorporated on May 16, 2020 in Singapore and is currently inactive. All significant intercompany balances and
transactions have been eliminated on consolidation.
|
b)
|
Stock-based
compensation
|
The
Company follows the fair value method of accounting for stock-based compensation. The Company estimates the fair value of share-based
payment awards on the date of grant using an option pricing model. The value of the portion of the award that is ultimately expected
to vest is recognized as an expense over the requisite service period in the Company’s consolidated financial statements.
The Company estimates the fair value of the stock options using the Black-Scholes option pricing model. The Black-Scholes option
pricing model requires the input of highly subjective assumptions, including the option’s expected life and the price volatility
of the underlying stock.
ALR TECHNOLOGIES INC.
Notes to Consolidated Financial
Statements
For the Years Ended December 31,
2020 and 2019
($ United States)
2. Significant
accounting policies (continued)
Income
taxes are accounted for under the asset and liability method. Deferred income tax assets and liabilities are recognized for the
differences between the consolidated financial statement carrying amounts of existing assets and liabilities and their respective
tax basis, and operating loss carry-forwards that are available to be carried forward to future years for tax purposes.
Deferred
income tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which
those temporary differences are expected to be recovered or settled. The effect on deferred income tax assets and liabilities
of a change in tax rates is recognized in income in the period that includes the enactment date. When it is not considered to
be more likely than not that a deferred income tax asset will be realized, a valuation allowance is provided for the excess.
The
Company follows the accounting requirements associated with uncertainty in income taxes using the provisions of Financial Accounting
Standards Board Accounting Standards Codification 740 Income Taxes. Using that guidance, tax positions initially need to
be recognized in the consolidated financial statements when it is more-likely-than-not the positions will be sustained upon examination
by the tax authorities. It also provides guidance for derecognition, classification, interest and penalties, accounting in interim
periods, disclosure and transition. As of December 31, 2020, the Company has no uncertain tax positions that qualify for
either recognition or disclosure in the financial statements.
The
preparation of consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions
that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of
the consolidated financial statements, the measurement of stock-based compensation, the fair value of financial instruments, and
the reported amounts of revenues and expenses during the reporting period. Management believes the estimates are reasonable; however,
actual results could differ from those estimates.
Basic
loss per common share is calculated by dividing net loss by the weighted average number of common shares outstanding during the
year. Diluted loss per common share is calculated by dividing the net loss by the sum of the weighted average number of common
shares outstanding and the dilutive common equivalent shares outstanding during the year. Common equivalent shares consist of
the shares issuable upon exercise of stock options and warrants calculated using the treasury stock method. Common equivalent
shares are not included in the calculation of the weighted average number of shares outstanding for diluted loss per common share
when the effect would be anti-dilutive.
ALR TECHNOLOGIES INC.
Notes to Consolidated Financial
Statements
For the Years Ended December 31,
2020 and 2019
($ United States)
2. Significant
accounting policies (continued)
Comprehensive
income is the overall change in the net assets of the Company for a period, other than changes attributable to transactions with
stockholders. It is made up of net income and other comprehensive income. Other comprehensive income consists of net income and
other gains and losses affecting stockholders' equity that under U.S. GAAP are excluded from net income. The Company has no items
of other comprehensive income (loss) in any period presented. Therefore, as presented in the Company's consolidated statements
of operations, net loss equals comprehensive loss.
|
g)
|
Fair
value of financial instruments
|
The
Company’s financial instruments include cash, accounts payable, promissory notes payable, interest payable and lines of
credit. The fair values of these financial instruments approximate their carrying values due to the relatively short periods to
maturity of these instruments. For fair value measurement, U.S. GAAP establishes a three-tier hierarchy that prioritizes the inputs
used in the valuation methodologies in measuring fair value:
Level
1 — observable inputs that reflect quoted prices (unadjusted) for identical assets or liabilities in active markets.
Level
2 — includes other inputs that are directly or indirectly observable in the marketplace.
Level
3 — unobservable inputs that are supported by little or no market activity.
Cash
is measured at level 1 inputs.
|
h)
|
Recently adopted
and issued accounting pronouncements
|
|
|
Issued
|
|
|
|
|
|
The Company has implemented all new
accounting pronouncements that are in effect and may impact its financial statements. The Company
does not believe that there are any other new accounting pronouncements that have been issued that
might have a material impact on its financial position or statements of operations.
|
ALR TECHNOLOGIES INC.
Notes to Consolidated Financial
Statements
For the Years Ended December 31,
2020 and 2019
($ United States)
3. Interest,
advances and promissory notes payable
a) Promissory
notes payable to related parties
A
summary of the promissory notes payable to related parties is as follows:
Promissory Notes Payable to Related Parties
|
|
December 31, 2020
|
|
December 31, 2019
|
Promissory notes payable to relatives of directors collateralized by a general security agreement over all the assets of the Company, past maturity:
|
|
|
|
|
|
|
|
|
i. Interest at 1% per month
|
|
$
|
720,619
|
|
|
$
|
720,619
|
|
ii. Interest at 1.25% per month
|
|
|
51,347
|
|
|
|
51,347
|
|
iii. Interest at the U.S. bank prime rate plus 1%
|
|
|
100,000
|
|
|
|
100,000
|
|
iv. Interest at 0.5% per month
|
|
|
695,000
|
|
|
|
695,000
|
|
|
|
|
|
|
|
|
|
|
Promissory notes payable, unsecured, to relatives of a director, bearing interest at 1% per month, past maturity
|
|
|
1,465,000
|
|
|
|
1,465,000
|
|
Total Promissory Notes Payable to Related Parties
|
|
$
|
3,031,966
|
|
|
$
|
3,031,966
|
|
All
amounts past maturity continue to accrue interest at their stated rate and are considered due on demand.
ALR TECHNOLOGIES INC.
Notes to Consolidated Financial
Statements
For the Years Ended December 31,
2020 and 2019
($ United States)
3. Interest,
advances and promissory notes payable (continued)
b) Promissory
notes payable to unrelated parties
A
summary of the promissory notes payable to unrelated parties is as follows:
Promissory Notes Payable to Unrelated Parties
|
|
December 31, 2020
|
|
December 31, 2019
|
Unsecured promissory notes payable to unrelated lenders, past maturity:
|
|
|
|
|
|
|
|
|
i. Interest at 1% per month
|
|
$
|
1,337,456
|
|
|
$
|
1,337,456
|
|
i. Interest at 0.667% per month
|
|
|
435,985
|
|
|
|
435,985
|
|
ii. Interest at 0.625% per month
|
|
|
150,000
|
|
|
|
150,000
|
|
iii. Non-interest-bearing
|
|
|
270,912
|
|
|
|
270,912
|
|
|
|
|
|
|
|
|
|
|
Promissory notes payable, secured by a guarantee from the Chief Executive Officer, bearing interest at 1% per month past maturity
|
|
|
60,000
|
|
|
|
60,000
|
|
Total Promissory Notes Payable to Unrelated Parties
|
|
$
|
2,254,353
|
|
|
$
|
2,254,353
|
|
All
amounts past maturity continue to accrue interest at their stated rate and are considered due on demand.
ALR TECHNOLOGIES INC.
Notes to Consolidated Financial
Statements
For the Years Ended December 31,
2020 and 2019
($ United States)
3. Interest,
advances and promissory notes payable (continued)
c) Interest
payable
A
summary of the interest payable activity is as follows:
Balance, December 31, 2018
|
|
$
|
4,836,127
|
|
Interest incurred on promissory notes payable
|
|
|
528,870
|
|
Balance, December 31, 2019
|
|
|
5,364,997
|
|
Interest incurred on promissory notes payable
|
|
|
528,871
|
|
Interest payable retired through issuance of shares
|
|
|
(2,318,542
|
)
|
Balance, December 31, 2020
|
|
$
|
3,575,326
|
|
Interest
payable is due to related and non-related parties as follows:
|
|
December 31, 2020
|
|
December 31, 2019
|
Related parties (relatives of the Chairman)
|
|
$
|
873,666
|
|
|
$
|
2,876,280
|
|
Non-related parties
|
|
|
2,701,660
|
|
|
|
2,488,717
|
|
|
|
$
|
3,575,326
|
|
|
$
|
5,364,997
|
|
The
payment terms, security and any interest payable are based on the underlying promissory notes payable that the Company has outstanding.
d) Interest
expense
During
the year ended December 31, 2020, the Company incurred interest expense of $2,116,466 (2019 - $5,261,137) as follows:
|
·
|
$1,464,077
(2019 - $1,365,967) incurred on lines of credit payable as shown in note 4;
|
|
·
|
$528,871
(2019 - $528,870) incurred on promissory notes (note 3(a)) and other payables;
|
|
·
|
$123,518
(2019 - $122,488) incurred from the calculation of imputed interest on accounts
payable outstanding for longer than one year, advances payable and promissory notes payable,
which had no stated interest rate; and
|
|
·
|
$nil
(2019 - $3,243,812) incurred related to 1) the grant of options as consideration
for receiving an increase to the borrowing limit on the line of credit between the Company
and the Chairman, and 2) the modification of options held by the Chairman and his spouse
that were granted in connection with financing provided to the Company.
|
ALR TECHNOLOGIES INC.
Notes to Consolidated Financial
Statements
For the Years Ended December 31,
2020 and 2019
($ United States)
4. Lines
of credit
As
of December 31, 2020, the Company has two lines of credit as follows:
Creditor
|
Interest
Rate
|
Borrowing
Limit
|
Repayment
Terms
|
Principal
Borrowed
|
Accrued
Interest
|
Total
Outstanding
|
Security
|
Purpose
|
Chairman
and CEO
|
1%
per Month
|
$10,300,000
|
Due
on Demand
|
$
9,539,125
|
$
314,967
|
$
9,854,092
|
General
Security over Assets
|
General
Corporate Requirements
|
Wife
of Chairman
|
1%
per Month
|
2,000,000
|
Due
on Demand
|
2,000,000
|
60,000
|
2,060,000
|
General
Security over Assets
|
General
Corporate Requirements
|
Total
|
|
$
12,300,000
|
|
$
11,539,125
|
$
374,967
|
$
11,914,092
|
|
|
On
September 21, 2020, the Company, the Chairman and the Chairman’s spouse agreed to retire principal of $1,038,967 and accrued
interest of $8,642,491 pursuant to two shares for debt agreements (note 5(b)).
As
of December 31, 2019, the Company has two lines of credit as follows:
Creditor
|
Interest
Rate
|
Borrowing
Limit
|
Repayment
Terms
|
Principal
Borrowed
|
Accrued
Interest
|
Total
Outstanding
|
Security
|
Purpose
|
Chairman
and CEO
|
1%
per Month
|
$10,300,000
|
Due
on Demand
|
$
9,757,325
|
$
5,576,997
|
$
15,334,322
|
General
Security over Assets
|
General
Corporate Requirements
|
Wife
of Chairman
|
1%
per Month
|
2,000,000
|
Due
on Demand
|
2,000,000
|
1,976,385
|
3,976,385
|
General
Security over Assets
|
General
Corporate Requirements
|
Total
|
|
$
12,300,000
|
|
$
11,757,325
|
$
7,553,382
|
$
19,310,707
|
|
|
On
December 11, 2019, the Company and the Chairman entered into an amendment agreement to increase the borrowing limit on the line
of credit provided by the Chairman to the Company from $8,500,000 to $10,300,000. The terms of amounts to be advanced under the
amendment are consistent with the line of credit. In connection with the line of credit, the Company granted the Chairman the
option to acquire 120,000,000 shares of common of the Company at a price of $0.015 per share for a term of five years (note 6).
5. Capital
stock
a)
Authorized share capital
10,000,000,000
shares of common stock with a par value of $0.001 per share.
500,000,000
shares of preferred stock with a par value of $0.001 per share.
ALR TECHNOLOGIES
INC.
Notes to Consolidated Financial
Statements
For the Years Ended December 31,
2020 and 2019
($ United States)
5. Capital
stock (continued)
b)
Issued share capital
During
the year ended December 31, 2020:
|
i)
|
On
February 11, 2020, the Company issued 2,000,000 restricted shares of common stock at
a price of $0.04 per share with a value of $80,000 in exchange for the retirement of
$60,000 of accounts payable and $20,000 for the provision of services.
|
|
ii)
|
On
August 24, 2020, the Company issued 242,800 restricted shares of common stock at a price
of $0.05 per share for proceeds of $12,140.
|
|
iii)
|
On
September 21, 2020, the Company entered into two shares for debt agreements with the
Chairman and his spouse to issue an aggregate 240,000,000 restricted shares of common
stock at a price of $0.05 per share for a purchase price of $12,000,000 in exchange for
the retirement of $12,000,000 of liabilities comprised of:
|
|
·
|
Promissory
Notes - Accrued interest - $ 2,318,542
|
|
·
|
Line
of Credit - Accrued interest - $ 8,642,491
|
|
·
|
Line
of Credit - Principal - $ 1,038,967
|
|
iv)
|
On
December 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 common stock at a price of
$0.05 per share for maximum aggregate offering proceeds of $6,376,111 (note 13).
The Company collected subscriptions of $200,000 related to management’s right to
allocate unsubscribed shares of common stock.
|
During
the year ended December 31, 2019:
On
June 19, 2019, the Company issued 26,000,000 shares of common stock of the Company to two individuals for the exercise of stock
options as follows:
|
·
|
25,000,000
shares at an exercise price of $0.002 per share for a purchase price of $50,000. As consideration,
the Company retired accrued interest owing to the Chairman on his line of credit totaling
$50,000; and
|
|
·
|
1,000,000
shares at an exercise price of $0.015 per share for a purchase price of $15,000. As consideration,
the Company retired accounts payable totaling $15,000.
|
ALR TECHNOLOGIES
INC.
Notes to Consolidated Financial
Statements
For the Years Ended December 31,
2020 and 2019
($ United States)
6. Additional
paid-in capital
Stock
options
A
summary of stock option activity is as follows:
|
|
Year Ended
December 31, 2020
|
|
Year Ended
December 31, 2019
|
|
|
Number of Options
|
|
Weighted Average Exercise Price
|
|
Number of Options
|
|
Weighted Average Exercise Price
|
Outstanding, beginning of year
|
|
|
5,236,401,500
|
|
|
|
0.003
|
|
|
|
5,014,851,500
|
|
|
$
|
0.002
|
|
Granted
|
|
|
139,800,000
|
|
|
|
0.047
|
|
|
|
254,050,000
|
|
|
$
|
0.028
|
|
Exercised
|
|
|
—
|
|
|
|
—
|
|
|
|
(26,000,000
|
)
|
|
$
|
(0.003
|
)
|
Cancelled
|
|
|
(13,500,000
|
)
|
|
|
(0.034
|
)
|
|
|
(6,500,000
|
)
|
|
$
|
(0.015
|
)
|
Outstanding, end of year
|
|
|
5,362,701,500
|
|
|
|
0.004
|
|
|
|
5,236,401,500
|
|
|
$
|
0.003
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Exercisable, end of year
|
|
|
5,202,701,500
|
|
|
|
0.003
|
|
|
|
5,154,901,500
|
|
|
$
|
0.003
|
|
During
the year ended December 31, 2020:
On
April 1, 2020, the Company granted one consultant the option to acquire 10,000,000 shares of common stock at a price of $0.035
per share for a term of five years. The fair value of the options granted totaling $391,843 was fully recorded at grant.
On
May 12, 2020, the Company amended the option to acquire 40,000,000 shares of common stock granted on June 12, 2019 to extend the
period of vesting from May 31, 2020 to December 31, 2020. None of these options have vested to date.
On
May 18, 2020, the Company granted one consultant the option to acquire 500,000 shares of common stock of the Company at a price
of $0.035 per share until May 17, 2024. The fair value of the options granted totaling $18,725 was fully recorded at grant.
On
June 1, 2020, the Company granted one consultant the option to acquire 10,000,000 shares of common stock of the Company at a price
of $0.035 per share until May 31, 2025 subject to performance vesting conditions. The fair value of the options granted totaling
$621,853 was not recorded, as it cannot be determined that it is more likely than not that
the performance condition will be met.
ALR TECHNOLOGIES INC.
Notes to Consolidated Financial
Statements
For the Years Ended December 31,
2020 and 2019
($ United States)
6. Additional
paid-in capital (continued)
Stock
options (continued)
During
the year ended December 31, 2020: (continued)
On
June 5, 2020, the Company granted one sales agent the option to acquire 10,000,000 shares of common stock of the Company at a
price of $0.035 per share until May 31, 2025 subject to the agent enrolling 20,000 patients into the ALRT Diabetes Solution by
May 31, 2021. The fair value of the options granted totaling $494,868 was not recorded,
as it cannot be determined that it is more likely than not that the performance condition will be met.
On
September 1, 2020, the Company granted thirteen individuals the option to acquire an aggregate 74,500,000 options at an exercise
price of $0.05 per share; 22,000,000 stock options, which vested at the time of grant, will expire on May 17, 2024 and 52,500,000
stock options, which vest upon achievement of performance conditions, will expire on May 31, 2025. None of the stock options with
performance vesting conditions have vested. The fair value of the options granted totals $3,854,619, of which $1,137,397
related to the stock options that have vested was recorded and $2,717,222 related to the options that have not vested was not
recorded.
On
October 12, 2020, the Company granted eight individuals the option to acquire an aggregate 34,800,000 options at an exercise price
of $0.05 per share until May 31, 2025; 18,300,000 vested at the time of grant and 16,500,000 of the stock options granted will
vest upon achievement of performance conditions. None of the stock options with performance vesting conditions have vested. The
fair value of the options granted totals $2,434,053, of which $1,279,973 related to the
stock options that have vested was recorded and $1,154,080 related to the options that have not vested was not recorded.
During
the year ended December 31, 2020, the Company recorded a further $79 in compensation expense relating to the vesting of stock
options granted in previous years.
During
the year ended December 31, 2019:
On
February 4, 2019, the Company granted a consultant the option to acquire a total of 2,500,000 shares of common stock of the Company
at a price of $0.035 per share for a term of five years. The fair value of the options granted totaled $99,723 and was fully recorded
at grant.
On
March 15, 2019, the Company granted an option to acquire 9,150,000 shares of common stock of the Company at a price of $0.035
per share for a term of five years. The option to acquire 2,500,000 shares of common stock was granted to one consultant and the
option to acquire 6,650,000 shares of common stock was granted to one director. The fair value of the options granted totaled
$364,058 and was fully recorded at grant.
ALR TECHNOLOGIES INC.
Notes to Consolidated Financial
Statements
For the Years Ended December 31,
2020 and 2019
($ United States)
6. Additional
paid-in capital (continued)
Stock
options (continued)
During
the year ended December 31, 2019: (continued)
On
April 12, 2019, the Company modified options to acquire 564,350,200 shares of common stock of the Company by extending the expiry
date to April 12, 2024. The options modified had:
|
·
|
exercise
prices ranging from $0.002 to $0.03 per share; and
|
|
·
|
expiration
dates ranging from April 19, 2019 to May 29, 2020 immediately prior to the modification.
|
The
fair value related to the extension of the life of the options totaled $1,150,060 and was recorded at the modification date.
On
May 6, 2019, the Company granted options to acquire 13,000,000 shares of common stock of the Company at a price of $0.035 per
share for a term of five years to three directors of the Company. The fair value of the options granted totaled $467,845 and was
fully recorded at grant.
On
May 17, 2019, the Company granted options to acquire 27,900,000 shares of common stock of the Company at a price of $0.035 per
share for a term of five years to eleven consultants, one director and one employee of the Company. The fair value of the options
granted totaled $1,059,856 and was fully recorded at grant.
On
May 31, 2019, the Company granted options to acquire 10,000,000 shares of common stock of the Company at a price of $0.035 per
share for a term of one year to one consultant. The option to acquire 10,000,000 shares will vest based
on achievements of performance milestones. The fair value of the options granted totaling $399,722 was
not recorded, as it cannot be determined that it is more likely than not that the performance conditions will be met. These options
expired on May 30, 2020.
On
June 12, 2019, the Company granted options to acquire 40,000,000 shares of common stock of the Company at a price of $0.05 per
share until May 15, 2024 to three sales agents. The option to acquire 40,000,000 shares will vest based
on achievements of performance milestones. The fair value of the options granted totaling $1,595,316 was
not recorded, as it cannot be determined that it is more likely than not that the performance conditions will be met.
On
June 17, 2019, the Company granted options to acquire 5,000,000 shares of common stock of the Company at a price of $0.035 per
share for a term of five years to one advisor. The fair value of the options granted totaled
$189,865 and was fully recorded at grant.
On
June 17, 2019, the Company granted options to acquire 5,000,000 shares of common stock of the Company at a price of $0.05 per
share for a term of five years to a sales agent. The option to acquire 5,000,000 shares will vest based
on achievements of performance milestones. The fair value of the options granted totaled $189,833 was not recorded, as it cannot
be determined that it is more likely than not that the performance conditions will be met.
ALR TECHNOLOGIES
INC.
Notes to Consolidated Financial
Statements
For the Years Ended December 31,
2020 and 2019
($ United States)
6. Additional
paid-in capital (continued)
Stock
options (continued)
During
the year ended December 31, 2019: (continued)
On
June 24, 2019, options granted on January 31, 2018 to acquire 24,000,000 shares of common stock at a price of $0.015 for a term
of five years that were subject to vest based on the achievement of certain performance milestones were modified as follows:
|
·
|
the
option to acquire 4,000,000 shares of common stock was cancelled; and
|
|
·
|
the
performance conditions were modified.
|
No
compensation expense was reversed related to the cancellation of the unvested options as no compensation expense related to these
options had been previously recorded. No compensation expense related to the modification of the options was recorded, as the
change in vesting conditions did not make it more likely than not that the performance conditions will be met.
On
July 15, 2019, the Company granted a consultant options to acquire 7,500,000 shares of common stock of the Company at a price
of $0.035 per share exercisable until February 3, 2024. The fair value of the options granted totaled $318,530 and was fully recorded
at grant.
On
August 16, 2019, the Company granted a consultant the option to acquire an aggregate 2,500,000 shares of common stock of the Company
at a price of $0.05 per share. The option to acquire 2,500,000 shares will vest based on achievements of performance milestones.
The fair value of the options granted totaling $108,655 was not recorded, as it cannot be determined that it is more likely than
not that the performance conditions will be met.
On
September 6, 2019, the Company granted a consultant the option to acquire 1,000,000 shares of common stock of the Company at a
price of $0.05 per share for a term of five years. The option to acquire 1,000,000 shares will vest based
on achievements of performance milestones. The fair value of the options granted totaling $40,863 was
not recorded, as it cannot be determined that it is more likely than not that the performance conditions will be met.
On
September 17, 2019, the Company granted a consultant the option to acquire 5,000,000 shares of common stock of the Company at
a price of $0.035 per share for a term of five years. The fair value of the options granted totaled $194,850 and was fully recorded
at grant.
On
October 3, 2019, the Company granted two advisors the option to acquire an aggregate 3,500,000 shares of common stock of the Company
at a price of $0.035 per share for a term of five years. Options to acquire 2,500,000 shares of common stock will vest upon the
advisor entering into a full-time role with the Company. The fair value of the options granted totaled $136,399 of which $38,971
has been recorded related to the vested options.
ALR TECHNOLOGIES
INC.
Notes to Consolidated Financial
Statements
For the Years Ended December 31,
2020 and 2019
($ United States)
6. Additional
paid-in capital (continued)
Stock
options (continued)
On
October 24, 2019, the Company granted two advisors the option to acquire an aggregate 2,000,000 shares of common stock of the
Company at a price of $0.035 per share for a term of five years. The fair value of the options granted totaled $63,940 and was
fully recorded at grant.
On
December 11, 2019, the Company granted one creditor the option to acquire 120,000,000 shares of common stock of the Company at
a price of $0.015 per share for a term of five years in connection with receiving line of credit financing (note 4). The
fair value of the options granted totaled $2,158,441 and
was fully recorded upon the Company entering into the financing agreement with the creditor.
During
the year ended December 31, 2019, the Company recorded a further $18,630 in compensation expense related to vesting of stock
options granted in previous years.
ALR TECHNOLOGIES
INC.
Notes to Consolidated Financial
Statements
For the Years Ended December 31,
2020 and 2019
($ United States)
6. Additional
paid-in capital (continued)
Stock
options (continued)
Outstanding
The
options outstanding at December 31, 2020 and 2019 were as follows:
|
December 31,
2020
|
December 31,
2019
|
Expiry
Date
|
Options
|
Exercise
Price
|
Intrinsic
Value
|
Options
|
Exercise
Price
|
Intrinsic
Value
|
|
|
|
|
|
|
|
|
|
|
|
May
30, 2020
|
-
|
$
|
-
|
$
|
-
|
10,000,000
|
$
|
0.035
|
$
|
-
|
July
1, 2021
|
4,365,001,300
|
$
|
0.002
|
$
|
0.069
|
4,365,001,300
|
$
|
0.002
|
$
|
0.015
|
November
27, 2022
|
6,950,000
|
$
|
0.015
|
$
|
0.056
|
7,200,000
|
$
|
0.015
|
$
|
0.002
|
January
31, 2023
|
40,500,000
|
$
|
0.015
|
$
|
0.056
|
40,500,000
|
$
|
0.015
|
$
|
0.002
|
June
13, 2023
|
5,000,000
|
$
|
0.015
|
$
|
0.056
|
5,000,000
|
$
|
0.015
|
$
|
0.002
|
October
1, 2023
|
300,000
|
$
|
0.050
|
$
|
0.021
|
300,000
|
$
|
0.050
|
$
|
-
|
February
3, 2024
|
10,000,000
|
$
|
0.035
|
$
|
0.036
|
10,000,000
|
$
|
0.035
|
$
|
-
|
March
14, 2024
|
9,150,000
|
$
|
0.035
|
$
|
0.036
|
9,150,000
|
$
|
0.035
|
$
|
-
|
April
12, 2024
|
560,000,200
|
$
|
0.002
|
$
|
0.069
|
560,000,200
|
$
|
0.002
|
$
|
0.015
|
April
12, 2024
|
3,900,000
|
$
|
0.015
|
$
|
0.056
|
4,150,000
|
$
|
0.015
|
$
|
0.002
|
April
12, 2024
|
200,000
|
$
|
0.030
|
$
|
0.041
|
200,000
|
$
|
0.030
|
$
|
-
|
May
6, 2024
|
13,000,000
|
$
|
0.035
|
$
|
0.036
|
13,000,000
|
$
|
0.035
|
$
|
-
|
May
17, 2024
|
40,000,000
|
$
|
0.050
|
$
|
0.021
|
40,000,000
|
$
|
0.050
|
$
|
-
|
May
17, 2024
|
25,400,000
|
$
|
0.035
|
$
|
0.036
|
27,900,000
|
$
|
0.035
|
$
|
-
|
May
17, 2024
|
22,000,000
|
$
|
0.050
|
$
|
0.021
|
-
|
$
|
-
|
$
|
-
|
June
17, 2024
|
5,000,000
|
$
|
0.050
|
$
|
0.021
|
5,000,000
|
$
|
0.050
|
$
|
-
|
June
17, 2024
|
5,000,000
|
$
|
0.035
|
$
|
0.036
|
5,000,000
|
$
|
0.035
|
$
|
-
|
August
16, 2024
|
2,500,000
|
$
|
0.050
|
$
|
0.021
|
2,500,000
|
$
|
0.050
|
$
|
-
|
September
6, 2024
|
1,000,000
|
$
|
0.050
|
$
|
0.021
|
1,000,000
|
$
|
0.050
|
$
|
-
|
September
17, 2024
|
5,000,000
|
$
|
0.035
|
$
|
0.036
|
5,000,000
|
$
|
0.035
|
$
|
-
|
October
3, 2024
|
3,500,000
|
$
|
0.035
|
$
|
0.036
|
3,500,000
|
$
|
0.035
|
$
|
-
|
October
24, 2024
|
2,000,000
|
$
|
0.035
|
$
|
0.036
|
2,000,000
|
$
|
0.035
|
$
|
-
|
December
11, 2024
|
120,000,000
|
$
|
0.015
|
$
|
0.056
|
120,000,000
|
$
|
0.015
|
$
|
0.002
|
April
1, 2025
|
10,000,000
|
$
|
0.035
|
$
|
0.036
|
-
|
$
|
-
|
$
|
-
|
May
31, 2025
|
20,000,000
|
$
|
0.035
|
$
|
0.036
|
-
|
$
|
-
|
$
|
-
|
May
31, 2025
|
87,300,000
|
$
|
0.050
|
$
|
0.021
|
-
|
$
|
-
|
$
|
-
|
Total
|
5,362,701,500
|
$
|
0.004
|
$
|
0.066
|
5,236,401,500
|
$
|
0.003
|
$
|
0.014
|
|
|
|
|
|
|
|
|
|
|
|
Weighted
Average Remaining Contractual Life
|
|
|
1.05
|
|
|
|
|
1.96
|
|
|
ALR TECHNOLOGIES INC.
Notes to Consolidated Financial
Statements
For the Years Ended December 31,
2020 and 2019
($ United States)
6. Additional
paid-in capital (continued)
Stock
options (continued)
The
fair value of the stock options granted and vested was allocated as follows:
|
|
December 31, 2020
|
|
December 31, 2019
|
Product development expense
|
|
$
|
1,156,195
|
|
|
$
|
1,243,644
|
|
Professional expense
|
|
|
741,564
|
|
|
|
392,677
|
|
Selling, general and administrative expenses
|
|
|
930,258
|
|
|
|
1,244,636
|
|
Interest
|
|
|
—
|
|
|
|
3,243,812
|
|
|
|
$
|
2,828,017
|
|
|
$
|
6,124,769
|
|
The
Company uses the fair value method for determining stock-based compensation for all options granted during the fiscal periods.
The fair value was determined using the Black-Scholes option pricing model based on the following weighted average assumptions:
|
|
December 31, 2020
|
|
December 31, 2019
|
Risk-free interest rate
|
|
|
0.20
|
%
|
|
|
1.84
|
%
|
Expected life
|
|
|
4.6 years
|
|
|
|
5 years
|
|
Expected dividends
|
|
|
0
|
%
|
|
|
0
|
%
|
Expected volatility
|
|
|
312
|
%
|
|
|
306
|
%
|
Forfeiture rate
|
|
|
0
|
%
|
|
|
0
|
%
|
The
weighted average fair value for the options granted during 2020 was $0.06 (2019 - $0.03).
ALR TECHNOLOGIES INC.
Notes to Consolidated Financial
Statements
For the Years Ended December 31,
2020 and 2019
($ United States)
7. Related
party transactions and balances
|
|
Year Ended December 31, 2020
|
|
Year Ended December 31, 2019
|
Related party transactions included within interest expense:
|
|
|
|
|
|
|
|
|
Interest expense on promissory notes issued to relatives of the Chairman and Chief Executive Officer of the Company
|
|
$
|
315,926
|
|
|
$
|
321,626
|
|
Interest expense on lines of credit payable to the Chairman and Chief Executive Officer of the Company and his spouse
|
|
$
|
1,464,077
|
|
|
$
|
1,365,967
|
|
Interest expense related to the modification of stock options held by the Chairman and Chief Executive Officer of the Company and his spouse related to financing provided
|
|
$
|
—
|
|
|
$
|
1,085,371
|
|
Interest expense related to stock options granted to the Chairman and Chief Executive Officer of the Company related to the increase of the borrowing limit of a line of credit
|
|
$
|
—
|
|
|
$
|
2,158,441
|
|
|
|
|
|
|
|
|
|
|
Related party transactions included within selling, general and administrative expenses:
|
|
|
|
|
|
|
|
|
Consulting fees to the Chairman and Chief Executive Officer of the Company accrued on the line of credit available to the Company
|
|
$
|
249,600
|
|
|
$
|
189,600
|
|
Selling, general and administrative expenses related to the grant of stock options to four directors of the Company
|
|
$
|
—
|
|
|
$
|
770,421
|
|
Selling, general and administrative expenses related to the modification of stock options to three directors of the Company
|
|
$
|
—
|
|
|
$
|
29,204
|
|
Consulting fees to a relative of the Chairman and Chief Executive Officer of the Company
|
|
$
|
—
|
|
|
$
|
120,000
|
|
Interest
on promissory notes payable to related parties, management compensation and compensation paid to a relative of a director have
been recorded at the exchange amount, which is the amount agreed to by the parties. Options granted to related parties have been
recorded at their estimated fair value.
ALR TECHNOLOGIES INC.
Notes to Consolidated Financial
Statements
For the Years Ended December 31,
2020 and 2019
($ United States)
8. Commitments
and contingencies
a)
Contingencies
The
Company has had three judgments against it relating to overdue promissory notes and accrued interest, and a fourth creditor has
demanded repayment of an overdue promissory note and accrued interest. To date, the Company has not repaid any of these promissory
notes and related accrued interest and could be subject to further action. The legal liability, totaling $1,226,567, of these
promissory notes and related accrued interest have been fully recognized and recorded by the Company. The Company has accrued
interest of $244,472 related to one of these promissory notes.
On
September 23, 2020, the Superior Court of Forsyth County, North Carolina issued a Civil Summons in regards to one of the above
noted judgement of $551,576, consisting of the principal amount of $300,000 and accrued interest of $251,576, as of the date of
the Civil Summons. An Order for Mediated Settlement Conference in Superior Court and Trial Calendar Notice was issued and a tentative
trial date in the absence of a mediated settlement has been set for June 28, 2021.
b)
Commitments
The
Company has a consulting arrangement with Mr. Sidney Chan, Chief Executive Officer and Chairman of the Board of Directors of the
Company. Under the terms of the contract, Mr. Chan will be paid $240,000 per annum for services as Chief Executive Officer. The
contract can be terminated at any time with thirty days’ notice and the payment of two years’ annual compensation.
Should the contract be terminated, all debts owed to Mr. Chan and his spouse must be immediately repaid. The initial term of the
contract is for one year and automatically renews for continuous one-year terms. Also, under the terms of the contract are the
following:
|
i.
|
Incentive
revenue bonus
|
Mr.
Chan will be entitled to a 1% net sales commission from the sales of any of the Company’s products at any time during his
life, regardless if Mr. Chan is still under contract with the Company.
If
more than 50% of the Company’s stock or assets are sold, Mr. Chan will be compensated for entering into non-compete agreements
based on the selling price of the Company or its assets as follows:
·
2% of sales price up to $24,999,999 plus
·
3% of sales price between $25,000,000 and $49,999,999 plus
·
4% of sales price between $50,000,000 and $199,999,999 plus
·
5% of sales price in excess of $200,000,000.
ALR TECHNOLOGIES INC.
Notes to Consolidated Financial
Statements
For the Years Ended December 31,
2020 and 2019
($ United States)
9. Financial
instruments
The
Company’s financial instruments consist of cash, accounts payable, interest payable, promissory notes payable to unrelated
parties, promissory notes payable to related parties and lines of credit from related parties.
The
fair values of cash and certain accounts payable approximate their carrying values due to the relatively short periods to maturity
of these instruments.
Certain
accounts payable have been outstanding longer than one year. The Company has recorded imputed interest at a rate of 1% per month
over the period the payables have been outstanding for longer than one year, with a corresponding amount recognized in additional
paid-in capital. The calculated amount represents the implicit compensation for the use of funds beyond a reasonable term for
regular trade payables.
For
the purposes of fair value analysis, promissory notes payable to related parties and promissory notes payable to unrelated parties
can be separated into two classes of financial liabilities:
|
i.
|
Interest-bearing
promissory notes, lines of credit and related interest payable; and
|
|
ii.
|
Non-interest-bearing
promissory notes past due.
|
The
interest-bearing promissory notes payable are all delinquent and have continued to accrue interest at their stated rates. The
Company currently does not have the funds to extinguish these debts and will continue to incur interest until such time as the
liabilities are extinguished. There is not an active market for delinquent loans for a Company with a similar financial position.
Management asserts the carrying values of the promissory notes and related interest payable are a reasonable estimate of fair
value, as they represent the Company’s best estimate of their legal obligation for these debts. As there is no observable
market for interest rates on similar promissory notes, the fair value was estimated using Level 2 inputs in the fair value hierarchy.
The
Company has one non-interest-bearing promissory note payable past due. There is not an active market for default loans not bearing
interest nor is there an observable market for lending to companies with a financial position similar to the Company. The Company
has recorded imputed interest at a rate of 1% per month over the life of the promissory notes, with a corresponding amount recognized
in additional paid-in capital representing the implicit compensation for the use of funds. Management asserts the payment date
for these amounts cannot be reasonably determined. Management further asserts there is not a determinable interest rate for arm’s
length borrowings based on the current financial position of the Company and asserts the carrying value is the best estimate of
the Company’s legal liability and represents the fair value for the promissory note. This would be considered a Level 2
input in the fair value hierarchy.
ALR TECHNOLOGIES INC.
Notes to Consolidated Financial
Statements
For the Years Ended December 31,
2020 and 2019
($ United States)
9. Financial
instruments (continued)
The
financial instrument that potentially subjects the Company to credit risk consists of cash. The Company only has an immaterial
cash balance and is not exposed to significant credit risk.
Market
risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate due to changes in market prices.
Market risk comprises two types of risk: interest rate risk and foreign currency risk.
Interest
rate risk consists of two components:
To
the extent that payments made or received on the Company’s monetary assets and liabilities are affected by changes in the
prevailing market interest rates, the Company is exposed to interest rate cash flow risk.
The
Company is exposed to interest rate cash flow risk on promissory notes payable of $500,000, which incur a variable interest rate
of prime plus 1%. A hypothetical change of 1% on interest rates would increase or decrease net loss and comprehensive loss by
$5,000.
To
the extent that changes in prevailing market interest rates differ from the interest rate on the Company’s monetary assets
and liabilities, the Company is exposed to price risk.
The
Company’s promissory notes payable consist of $100,000 of variable interest rate notes and $5,186,319 of fixed interest
rate notes. All of these notes are past due and are currently due on demand while interest continues to accrue. Due to the delinquency
of the fixed interest rate promissory notes payable, there is no active market for these instruments and fluctuations in market
interest rates do not have a significant impact on their estimated fair values as of December 31, 2020.
At
December 31, 2020, the effect on net loss and comprehensive loss of a hypothetical change of 1% in market interest rate cannot
be reasonably determined.
ALR TECHNOLOGIES INC.
Notes to Consolidated Financial
Statements
For the Years Ended December 31,
2020 and 2019
($ United States)
9. Financial
instruments (continued)
|
c)
|
Market
risk (continued)
|
|
ii.
|
Foreign
currency risk
|
The
Company incurs certain accounts payable and expenses in Canadian dollars and is exposed to fluctuations in changes in exchange
rates between the U.S. and Canadian dollars. As at December 31, 2020, the effect on net loss and comprehensive loss of a
hypothetical change of 10% between the U.S. and Canadian dollars would not be material. The Company has not entered into any foreign
currency contracts to mitigate risk.
10. Income
taxes
The
provision for income taxes differs from the result that would be obtained by applying the statutory tax rate of 21% (2019 -
21%) to income before income taxes. The difference results from the following items:
|
|
December 31,
2020
|
|
December 31,
2019
|
Computed expected benefit of income taxes
|
|
$
|
(1,242,363
|
)
|
|
$
|
(1,891,163
|
)
|
Stock-based compensation
|
|
|
593,885
|
|
|
|
1,286,201
|
|
Non-deductible interest expense
|
|
|
79,418
|
|
|
|
25,722
|
|
Expiry of tax credits
|
|
|
929,432
|
|
|
|
18,486
|
|
True up of prior year balances
|
|
|
1,214,608
|
|
|
|
37,917
|
|
Increase (decrease) in valuation allowance
|
|
|
(1,574,980
|
)
|
|
|
522,837
|
|
Income tax provision
|
|
$
|
—
|
|
|
$
|
—
|
|
The
components of the net deferred income tax asset, the statutory tax rate and the amount of the valuation allowance are as follows:
|
|
December 31,
2020
|
|
December 31,
2019
|
Net operating loss carried forward
|
|
$
|
37,125,837
|
|
|
$
|
44,625,741
|
|
Tax rate
|
|
|
21
|
%
|
|
|
21
|
%
|
Deferred income tax assets
|
|
|
7,796,426
|
|
|
|
9,371,406
|
|
Valuation allowance
|
|
|
(7,796,426
|
)
|
|
|
(9,371,406
|
)
|
Net deferred income tax asset
|
|
$
|
—
|
|
|
$
|
—
|
|
ALR TECHNOLOGIES INC.
Notes to Consolidated Financial
Statements
For the Years Ended December 31,
2020 and 2019
($ United States)
10. Income
taxes (continued)
The
potential benefit of the deferred income tax asset has not been recognized in these consolidated financial statements since it
cannot be assured that it is more likely than not that such benefit will be utilized in future years. The Company believes that
the available objective evidence creates sufficient uncertainty regarding the realizability of the deferred income tax assets
such that a full valuation allowance has been recorded.
The
operating losses amounting to $37,126,000 for utilization in the United States of America, the jurisdiction where they were incurred,
will expire between 2021 and 2040 if they are not used. The following table lists the fiscal year in which the loss was incurred
and the expiration date of the operating loss carryforwards:
Fiscal
Year
|
Amount
|
Expiry
Date
|
2001
|
$
|
3,681,000
|
2021
|
2002
|
|
2,504,000
|
2022
|
2003
|
|
2,776,000
|
2023
|
2004
|
|
1,251,000
|
2024
|
2005
|
|
1,304,000
|
2025
|
2006
|
|
1,532,000
|
2026
|
2007
|
|
1,480,000
|
2027
|
2008
|
|
1,600,000
|
2028
|
2009
|
|
1,723,000
|
2029
|
2010
|
|
823,000
|
2030
|
2011
|
|
1,747,000
|
2031
|
2012
|
|
1,639,000
|
2032
|
2013
|
|
1,403,000
|
2033
|
2014
|
|
2,595,000
|
2034
|
2015
|
|
1,619,000
|
2035
|
2016
|
|
1,171,000
|
2036
|
2017
|
|
928,000
|
2037
|
2018
|
|
720,000
|
2038
|
2019
|
|
3,921,000
|
2039
|
2020
|
|
2,709,000
|
2040
|
Total
|
$
|
37,126,000
|
|
ALR TECHNOLOGIES INC.
Notes to Consolidated Financial
Statements
For the Years Ended December 31,
2020 and 2019
($ United States)
11. Operating segments
The Company has one operating segment,
development of diabetes hardware and software. The Company’s geographical
segments are summarized as follows:
|
December 31,
2020
|
December 31,
2019
|
|
|
|
Current and Total Assets
|
|
|
|
|
Other
|
$
|
7,632
|
|
-
|
Singapore
|
|
20,000
|
$
|
-
|
United States
|
|
101,217
|
|
1,838
|
|
$
|
128,849
|
$
|
1,838
|
|
|
|
|
|
Net Loss
|
|
|
|
|
Singapore
|
$
|
-
|
$
|
-
|
United States
|
|
(5,916,017)
|
|
(9,005,537)
|
|
$
|
(5,916,017)
|
$
|
(9,005,537)
|
12. Supplemental
information with respect to cash flows
|
|
December
31,
2020
|
|
December
31,
2019
|
Common
stock issued to retire accounts payable
|
|
$
|
60,000
|
|
|
$
|
—
|
|
Common
stock issued to retire interest payable
|
|
$
|
2,318,542
|
|
|
$
|
—
|
|
Common
stock issued to retire line of credit payable
|
|
$
|
9,681,458
|
|
|
$
|
—
|
|
13. Subsequent
events
|
a)
|
The
Company collected subscriptions of $524,832 pursuant to its registration statement and
issued a total of 14,496,635 shares of common stock. Included in this issuance was 4,000,000
shares of common stock to satisfy its obligation to issue shares of common stock. The
Company has until April 22, 2021 to sell the remaining 113,025,592 shares of common stock.
|
|
b)
|
The
Company received proceeds of $12,000 pursuant to the exercise of options to acquire 800,000
shares of common stock at a price of $0.015 per share.
|
|
c)
|
On
January 28, 2021, the Company’s board of directors approved the grant of the option
to acquire an aggregate 47,000,000 shares of common stock at a price of $0.05 per share
to eight individuals. All of the shares will vest according to performance or time-based
conditions. Options to acquire 37,000,000 shares of common stock will expire December
31, 2025 and options to acquire 10,000,000 shares of common stock will expire May 17,
2024. As of the date of the audit report, none of the options granted had vested.
|
|
d)
|
On
February 22, 2021, the Company’s board of directors approved the grant of the option
to acquire an aggregate 5,000,000 shares of common stock at a price of $0.05 per share
until May 17, 2024 to three individuals. As of the date of the audit report, none of
the options granted had vested.
|