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1. Basis of Presentation, Nature of Operations and Going Concern
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3 Months Ended |
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Jun. 30, 2013
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| Basisof Presentation Natureof Operationsand Going Concern [Abstract] | |
| Basisof Presentation Natureof Operationsand Going Concern |
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 as Mo Betta Corp. On October 21, 1998 the Company
acquired a subsidiary, which was subsequently disposed of,
through a reverse take-over acquisition. On December 28,
1998, the Company changed its name to ALR Technologies Inc.
On April 15, 2008, the Company incorporated a wholly-owned
subsidiary in Canada under the name Canada ALRTech Health
Systems Inc. The Company has developed a compliance
monitoring system that will allow for health care
professionals to remotely monitor patient health conditions
and provide patient health management. On October 17, 2011
the Company announced that it had received Section 510(k)
clearance from the United States Food and Drug Administration
for its Health-e-Connect System. The Company is preparing to
commercialize its Health-e-Connect system in preparation for
its commercial launch.
These
condensed consolidated financial statements have been
prepared in accordance with accounting principles generally
accepted in the United States of America (“U.S.
GAAP”) 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 six month period ended June 30, 2013 and 2012 of
$1,571,231 and $3,888,374 respectively. In
addition, losses incurred for the years ended December 31,
2012 and 2011 were $8,328,660 and $5,276,669 respectively. As
of June 30, 2013, the Company is currently unable to
self-finance its operations, has a working capital deficit of
$13,750,252 ($12,469,814 at December 31, 2012), an
accumulated stockholders’ deficit of $47,431,958
($45,860,727 at December 31, 2012), limited resources, no
source of operating cash flow, and no assurance that
sufficient funding will be available to conduct continued
product development activities required. 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, advances,
interest, lines of credit and promissory notes payable
totalling $13,786,116 currently due, due on demand or
considered delinquent. There is no assurance that the Company
will not face legal action from creditors regarding
delinquent accounts payable, payroll payable, advances,
promissory notes and interest payable. Any one or a
combination of these 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 lines of credit
facilities with available borrowing of $6 million (As of June
30, 2013 the total balance outstanding was $5,479,704
including principal of $4,803,776 and accrued interest). The
ability of the Company to continue as a going concern is
dependent upon the realization profitable operations. If
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 or that the lenders of 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.
All
of the Company’s debt is either due on demand or is in
default and is now due on demand and continues to accrue
interest at its stated rates. Certain overdue creditors have
demanded repayment and have not yet been repaid by the
Company as there are no funds available to make the
repayments. The Company will make the necessary repayments
when funds are generated and available from operations 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 could be required to cease
operations.
The
Company’s activities will necessitate significant uses
of working capital beyond 2013. 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
line of credit it currently has available and will seek
additional sources if required, as determined by
management.
There
is no assurance that the Company’s activities will
generate sufficient revenues to sustain its operations
without additional capital, or if additional capital is
needed, that such funds, if available, will be obtainable on
terms satisfactory to the Company.
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