UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

[X]	QUARTERLY REPORT UNDER TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE QUARTERLY PERIOD ENDED MARCH 31, 2018
	OR
[   ]	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

Commission file number 000-30414

ALR TECHNOLOGIES INC.

(Exact name of registrant as specified in its charter)

NEVADA

(State or other jurisdiction of incorporation or organization)

88-0225807

(I.R.S. Employer Identification No.)

7400 Beaufont Springs Drive Suite 300

Richmond, VA 23225

(Address of principal executive offices, including zip code.)

(804) 554-3500

(Telephone number, including area code)

Indicate by check mark whether the issuer (1) has filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the last 90 days. YES [ x ] NO [ ]

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (SS 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). YES [X] NO [ ]

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer, “accelerated filer,” “non-accelerated filer,” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check one):

Large Accelerated Filer	[   ]	Accelerated Filer	[   ]
Non-accelerated Filer	[   ]	Smaller Reporting Company	[X]
(Do not check if smaller reporting company)

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). YES [ ] NO [ X ]

APPLICABLE ONLY TO CORPORATE ISSUERS:

State the number of shares outstanding of each of the issuer’s classes of common equity, as of the latest practicable date: 242,777,909 as of May 15, 2018. 

ALR TECHNOLOGIES INC.

TABLE OF CONTENTS

PART I.  FINANCIAL INFORMATION
Item 1.	Financial Statements.
	Condensed  Balance Sheets (unaudited)	4
	Condensed  Statements of Operations (unaudited)	5
	Condensed  Statements of Cash Flows (unaudited)	6
	Notes to Condensed  Financial Statements (unaudited)	7
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations.	18
Item 3.	Quantitative and Qualitative Disclosures About Market Risk.	28
Item 4.	Controls and Procedures.	28
	PART II.  OTHER INFORMATION
Item 1.	Legal Proceedings.	29
Item 1A.	Risk Factors.	29
Item 3.	Defaults Upon Senior Securities.	29
Item 5.	Other Information.	29
Item 6.	Exhibits.	29
Signatures		30

PART I. FINANCIAL INFORMATION

ITEM 1. CONDENSED FINANCIAL STATEMENTS.

ALR TECHNOLOGIES INC.

Condensed Financial Statements

March 31, 2018 and 2017

(unaudited)

Index	Page
Condensed Balance Sheets	4
Condensed Statements of Operations	5
Condensed Statements of Cash Flows	6
Notes to Condensed Financial Statements	7 – 17

ALR TECHNOLOGIES INC.

Condensed Balance Sheets

($ United States)

	March 31 2018			December 31, 2017
	(unaudited)
Assets
Current assets:
Cash	$	444		$	3,111
Total assets	$	444		$	3,111
Liabilities and Stockholders' Deficit
Current liabilities:
Accounts payable and accrued liabilities	$	1,014,758		$	1,038,073
Related party promissory notes payable		2,891,966			2,891,966
Nonrelated party promissory notes payable		2,394,353			2,394,353
Interest payable on promissory notes payable		4,439,473			4,307,256
Lines of credit from related parties		15,833,701			15,347,842
Total liabilities		26,574,251			25,979,490
Stockholders' Deficit
Preferred stock:
Authorized: 500,000,000 (December 31, 2017 - 500,000,000) shares of preferred stock with a par value of $0.001 per share
Shares issued and outstanding: Nil (December 31, 2017 - Nil) shares of preferred stock were issued and outstanding
Common stock:
Authorized: 10,000,000,000 (December 31, 2017 - 10,000,000,000) shares of common stock with a par value of $0.001 per share
Shares issued and outstanding: 242,777,909 shares of common stock (December 31, 2017 - 242,777,909 shares of common stock).		242,777			242,777
Additional paid-in capital		49,712,328			48,308,919
Accumulated deficit		(76,528,912	)		(74,528,075	)
Stockholders’ deficit		(26,573,807	)		(25,976,379	)
Total liabilities and stockholders’ deficit	$	444		$	3,111

See accompanying notes to the condensed financial statements.

4

ALR TECHNOLOGIES INC.

Condensed Statements of Operations

($ United States)

(Unaudited)

	Three months ended
	March 31,
	2018			2017
Expenses
General, selling and administration	$	1,060,587		$	90,932
Product development costs		240,634			100,629
Professional fees		222,875			39,913
Loss from operations		1,524,096			231,474
Other expenses
Interest		476,741			456,239
Total other expenses		476,741			456,239
Net loss	$	(2,000,837	)	$	(687,713	)
Loss per share - basic and diluted	$	(0.00	)	$	(0.00	)
Weighted average shares outstanding, - basic and diluted		242,777,909			242,777,909

See accompanying notes to the condensed financial statements.

5

ALR TECHNOLOGIES INC.

Condensed Statements of Cash Flows

($ United States)

(Unaudited)

	Three Months Ended
	March 31,
	2018			2017
OPERATING ACTIVITIES
Net loss	$	(2,000,837	)	$	(687,713	)
Stock-based compensation-product development costs		184,867			1,012
Stock-based compensation-selling, general and administration		977,469			724
Stock-based compensation-professional fees		211,183			—
Non-cash imputed interest expenses		29,890			38,014
Accrued interest on line of credit		314,634			291,778
Changes in operating assets and liabilities:
Decrease in prepaid expenses		—			1,429
Increase (decrease) in accounts payable and accrued liabilities		(23,315	)		45,644
Increase in interest payable		132,217			126,218
Net cash used in operating activities		(173,892	)		(182,895	)
FINANCING ACTIVITIES
Proceeds from borrowings on line of credit		171,225			186,155
Net cash provided by financing activities		171,225			186,155
Change in cash		(2,667	)		3,260
Cash, beginning of period		3,111			2,607
Cash, end of period	$	444		$	5,867

See accompanying notes to the condensed financial statements.

6

ALR TECHNOLOGIES INC.

Notes to Condensed Financial Statements

($ United States)

(Unaudited)

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. 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 Diabetes Management System. The Company is currently seeking pilot programs to deploy its product.

These financial statements have been prepared in accordance with Generally Accepted Accounting Principles in the United States of America (“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 three month periods ended March 31, 2018 and 2017 of $2,000,837 and $687,713. In addition, losses incurred for the years ended December 31, 2017 and 2016 were $2,842,025 and $10,093,733. As of March 31, 2018, the Company is unable to self-finance its operations, has a working capital deficit of $26,573,807 (December 31, 2017 - $25,976,379), accumulated deficit of $76,528,912 (December 31, 2017 - $74,528,075), 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, interest payable, lines of credit and promissory notes payable totaling $26,574,251 currently due, due on demand or considered delinquent. There is no assurance that the Company will not face additional legal action from creditors regarding the above debts. 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. The Company has obtained short-term financing from its Chairman’s family through lines of credit facilities with available borrowing in principal amount up to $10,500,000 (As of March 31, 2018 the total principal balance outstanding was $10,569,474)(note 4). During 2018 the Company has continued to receive financing from the Chairman in excess of the borrowing limit of the line of credit it has available. The amounts received by the Company from the Chairman have been borrowed under the same terms as the line of credit. The Company and the Chairman have not formalized a new agreement for the amount of borrowing available.

The resolution of whether the Company is able to continue as a going concern is dependent upon the realization of management’s plans. The Company plans to raise needed capital through the exercise of share options, increase to existing debt facilities or the acquisition of new debt facilities, 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.

7

ALR TECHNOLOGIES INC.

Notes to Condensed Financial Statements

($ United States)

(Unaudited)

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 rate. 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 2018. 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 and future debt arrangements it obtains.

While the Company strongly believes that its capital resources will be sufficient in the near term, 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.

2.       Significant Accounting Policies

The unaudited condensed financial statements as of March 31, 2018 and for the period then ended have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”). Certain information and note disclosures normally included in annual financial statements prepared in accordance with accounting principles generally accepted in the United States have been condensed or omitted pursuant to those rules and regulations, although the Company believes that the disclosures made are adequate to make the information not misleading.

In the opinion of management, all adjustments necessary to present fairly the financial position as of March 31, 2018 and December 31, 2017 and the results of operations, and cash flows as of March 31, 2018 and 2017, and for the periods then ended, have been made. Those adjustments consist of normal and recurring adjustments.

These unaudited condensed financial statements should be read in conjunction with the financial statements and notes thereto included in the Annual Report on Form 10-K for the fiscal year ended December 31, 2017.

The results of operations for the three month period ended March 31, 2018, are not necessarily indicative of the results to be expected for the full year.

8

ALR TECHNOLOGIES INC.

Notes to Condensed Financial Statements

($ United States)

(Unaudited)

3.       Promissory notes and interest 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				March 31, 2018		December 31, 2017
Promissory notes payable to relatives of directors collateralized by a general security agreement on all the assets of the Company, due on demand:
	i.	Interest at 1% per month	$	875,619	$	875,619
	ii.	Interest at 1.25% per month		51,347		51,347
	iii.	Interest at the U.S. bank prime rate plus 1%		500,000		500,000
Promissory notes payable, unsecured, to relatives of a director, bearing interest at 1% per month, due on demand				1,465,000		1,465,000
Total Promissory Notes Payable to Related Parties			$	2,891,966	$	2,891,966

9

ALR TECHNOLOGIES INC.

Notes to Condensed Financial Statements

($ United States)

(Unaudited)

3.       Promissory notes and interest 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				March 31,		December 31,
				2018		2017
Unsecured promissory notes payable to unrelated lenders:
	i.	Interest at 1% per month, repayable on March 31, 2009, due on demand	$	450,000	$	450,000
	ii.	Interest at 1% per month, with $50,000 repayable on December 31, 2004, $75,000 repayable on August 18, 2007, $75,000 repayable on November 19, 2007 and the balance due on demand. All are due on demand, accruing interest at the same rate.		887,455		887,455
	iii.	Interest at 0.625% per month, with $50,000 repayable on October 5, 2004, $40,000 repayable on December 31, 2004, and $60,000 repayable on July 28, 2006, all due on demand		150,000		150,000
	iv.	Non-interest-bearing, repayable on July 17, 2005, due on demand		270,912		270,912
	v.	Interest at 0.667% per month, repayable at $25,000 per month beginning October 2009, none repaid to date		310,986		310,986
	vi.	Interest at 0.667% per month, with $125,000 due January 15, 2011		125,000		125,000
Promissory notes payable, secured by a guarantee from the Chief Executive Officer, bearing interest at 1% per month				200,000		200,000
Total Promissory Notes Payable to Unrelated Parties			$	2,394,353	$	2,394,353

c)       Interest payable

A summary of the interest payable activity is as follows:

	Interest Payable
Balance, December 31, 2017	$	3,629,913
Interest incurred on promissory notes payable		504,873
Transfer from implicit interest to interest payable on promissory note		172,470
Balance, December 31, 2017		4,307,256
Interest incurred on promissory notes payable		132,217
Balance, March 31, 2018	$	4,439,473

10

ALR TECHNOLOGIES INC.

Notes to Condensed Financial Statements

($ United States)

(Unaudited)

3.       Promissory notes and interest payable (continued)

c)       Interest payable (continued)

	March 31,		December 31,
	2018		2017
Related parties (relatives of the Chairman)		2,330,310	$	2,255,529
Non-related parties		2,109,163		2,051,727
		4,439,473	$	4,307,256

Historically, all interest payable incurred is from interest incurred at the stated rate of promissory notes issued by the Company. 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 three months ended March 31, 2018, the Company incurred interest expense of $476,742 (2017: $456,239) substantially as follows:

- $132,217 (2017: $126,218) incurred on promissory notes payables as shown in note 3(b);

- $314,634 (2017: $292,007) incurred on lines of credit payable, and

- $29,890 (2017: $38,014) 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.

11

ALR TECHNOLOGIES INC.

Notes to Condensed Financial Statements

($ United States)

(Unaudited)

4.        Lines of Credit

As of March 31, 2018, the Company had two lines of credit as follows:

Creditor	Interest Rate	Borrowing Limit	Repayment Terms	Amount Outstanding	Accrued Interest	Total	Security	Purpose
Chairman	1% per Month	$8,500,000	Due on Demand	$8,569,474	$3,707,842	$12,277,316	General Security over Assets	General Corporate Requirements
Wife of Chairman	1% per Month	$2,000,000	Due on Demand	$2,000,000	$1,556,385	$1,556,385	General Security over Assets	General Corporate Requirements
Total		$10,500,000		$10,569,474	$5,264,227	$15,833,701

The Chairman has continued to provide financing to the Company in excess of the line of credit borrowing limit available under the same terms as the existing line of credit facility.

As of December 31, 2017, the Company had two lines of credit as follows:

Creditor	Interest Rate	Borrowing Limit		Repayment Terms	Principal Borrowed		Accrued Interest		Total Outstanding	Security	Purpose
Chairman	1% per Month	$8,500,000		Due on Demand	$8,398,249		$3,453,208		$11,851,457	General Security over Assets	General Corporate Requirements
Wife of Chairman	1% per Month	$2,000,000		Due on Demand	$2,000,000		$1,496,385		$3,496,385	General Security over Assets	General Corporate Requirements
Total			$10,500,000			$10,569,475	$4,949,593	$15,347,842

5.       Capital Stock

a) Authorized Capital Stock

i. Common Stock

During the period ended March 31, 2018:

None

During the year ended December 31, 2017:

On January 27, 2017, the Company’s Board of Directors approved a 100:1 reverse share split of the Company’s common stock. Subsequently, on February 22, 2018, the Company’s Board of Directors proposed a reversal of such reverse share split. The initial reverse share split and subsequent reversal are pending approval from regulatory bodies. On May 3, 2018, the Company filed a stock split with the State of Nevada to affect the reversal of the reverse share split.

12

ALR TECHNOLOGIES INC.

Notes to Condensed Financial Statements

($ United States)

(Unaudited)

5.       Capital Stock (continued)

a) Authorized Capital Stock (continued)

i. Common Stock (continued)

On December 21, 2017, the Company’s shareholders holding a majority of the issued capital stock consented in writing to increase the authorized shares of common stock of the Company from two billion shares (2,000,000,000) to ten billion shares (10,000,000,000) shares. The increase in the authorized shares of common stock of the Company is pending approval from regulatory bodies.

ii. Preferred Stock

500,000,000 shares of preferred stock with a par value of $0.001 per share.

b)       Issued Capital Stock

During the period ended March 31, 2018:

There were no capital stock issuances for the three month period ended March 31, 2018.

During the year ended December 31, 2017:

There were no capital stock issuances for the year ended December 31, 2017.

6.        Additional paid-in capital

Stock options

A summary of stock option activity is as follows:

		Three Months Ended			Year Ended
		March 31, 2018			December 31, 2017
		Number of		Weighted Average	Number of		Weighted Average
		Options		Exercise Price	Options		Exercise Price
Outstanding, beginning of period	4,963,851,500		$	0.002	4,962,301,500	$	0.002
Granted	47,200,000		$	0.015	6,500,000	$	0.002
Cancelled		(1,500,000)	$	(0.015)	(4,950,000)	$	(0.061)
Outstanding, end of period		5,009,511,500	$	0.002	4,963,851,500	$	0.002
Exercisable, end of period		4,983,851,500	$	0.002	4,958,201,500	$	0.002

13

ALR TECHNOLOGIES INC.

Notes to Condensed Financial Statements

($ United States)

(Unaudited)

6.        Additional paid-in capital (continued)

Stock options (continued)

During the period ended March 31, 2018:

On January 31, 2018, the Company granted 9 consultants and advisors the option to acquire a total of 47,000,000 shares of common stock of the Company at a price of $0.015 per share for a term of five years and 1 advisor the option to acquire 200,000 shares of common stock of the Company at a price of $0.03 per share until April 18, 2019. Options to acquire 24,000,000 shares of common stock will vest based on achievements of performance milestones by one consulting group. The fair value of the options granted totalled $2,722,605, of which, $1,338,207 related to vested options was recorded as compensation expense and $1,384,399 related to options with performance vesting conditions was not recorded.

The Company recorded $35,512 in compensation expense related to vesting of stock options granted in previous years.

During the year ended December 31, 2017:

On November 27, 2017, the Company:

· granted 10 individuals the option to acquire a total of 6,500,000 shares of common stock of the Company at a price of $0.015 per share for a term of five years. 2,350,000 of the approved options were to a director of the Company and 4,150,000 were to consultants of the Company, and

· extended the life of the option held by 4 consultants to acquire an aggregate of 2,200,000 shares of common stock to November 27, 2022.

The Company recorded compensation expense of $194,970 related to the grant of options. There was no compensation expense related to the extension of life of the options.

The Company recorded a further $5,259 in compensation expense related to vesting of stock options granted in previous years.

14

ALR TECHNOLOGIES INC.

Notes to Condensed Financial Statements

($ United States)

(Unaudited)

6.        Additional paid-in capital (continued)

Stock options (continued)

Options Outstanding:

The options outstanding at March 31, 2018 and December 31, 2017 were as follows:

	March 31, 2018					December 31, 2017
Expiry Date	Options	Exercise Price		Intrinsic Value		Options	Exercise Price		Intrinsic Value
April 18, 2019	200,000	$	0.030	$	0.015	-		-	$	-
May 21, 2019	500,000	$	0.030	$	0.015	500,000	$	0.030	$	0.01
July 25, 2019	1,000,000	$	0.015	$	0.030	1,000,000	$	0.030	$	0.01
August 1, 2019	1,250,000	$	0.015	$	0.030	1,250,000	$	0.030	$	0.01
January 30, 2020	2,400,000	$	0.015	$	0.030	2,400,000	$	0.030	$	0.01
May 29, 2020	560,000,200	$	0.002	$	0.043	560,000,200	$	0.002	$	0.038
July 1, 2021	4,390,001,300	$	0.002	$	0.043	4,390,001,300	$	0.002	$	0.038
November 27, 2022	7,200,000		0.015	$	0.030	8,700,000	$	0.015	$	0.025
January 31, 2023	47,000,000		0.015	$	0.030	-	$	-	$	-
Total	5,009,551,500	$	0.002		0.043	4,963,851,500	$	0.002	$	0.038
Weighted Average Remaining Contractual Life			3.15					3.38

The expense incurred related to stock options was allocated as follows:

	Three Months Ended March 31, 2018		Three Months Ended March 31, 2017
Product development expense	$	184,867	$	1,012
Professional expense		211,183		—
Selling, general and administration expenses:		977,469		724
	$	1,373,519	$	1,736

15

ALR TECHNOLOGIES INC.

Notes to Condensed Financial Statements

($ United States)

(Unaudited)

Stock options (continued)

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:

	March 31, 2018			December 31, 2017
Risk-free interest rate		2.52	%		2.34	%
Expected life		5 years			5 years
Expected dividends		0	%		0	%
Expected volatility		325	%		330	%
Forfeiture rate		0	%		0	%

The weighted average fair value for the options granted during the three months ended March 31, 2018 was $0.06 (December 31, 2017: $0.03).

7.       Related party transactions and balances

	Three Months Ended March 31, 2018		Three Months Ended March 31, 2017
Related party transaction included within interest expense:
Interest expenses on promissory notes issued to relatives of the Chairman and Chief Executive Officer of the Company	$	74,782	$	74,782
Interest expense on lines of credit payable to the Chairman and Chief Executive Officer of the Company and his spouse	$	314,634	$	291,778
Related party transactions including within selling, general and administration expenses:
Consulting fees to the Chairman and Chief Executive Officer of the Company accrued on the line of credit available to the Company	$	47,400	$	47,400

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.

16

ALR TECHNOLOGIES INC.

Notes to Condensed Financial Statements

($ United States)

(Unaudited)

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 $1,123,168 (December 31, 2017 - $1,113,768), of these promissory notes and related accrued interest have been fully recognized and recorded by the Company. The Company has accrued interest of $178,471 (December 31, 2017 - $172,471) related to one of these promissory notes.

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 $180,000 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 salary. 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.

ii. Sale of Business

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, and

- 5% of sales price in excess of $200,000,000.

17

ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.

Forward Looking Statements

The following information must be read in conjunction with the unaudited Financial Statements and Notes thereto included in Item 1 of this Quarterly Report and the audited Financial Statements and Notes thereto and Management’s Discussion and Analysis or Plan of Operations contained in the Company’s Annual Report on Form 10-K for the year ended December 31, 2017. Except for the description of historical facts contained herein, the Form 10-Q contains certain forward-looking statements concerning future applications of the Company’s technologies and the Company’s proposed services and future prospects, that involve risk and uncertainties, including the possibility that the Company will: (i) be unable to commercialize services based on its technology, (ii) ever achieve profitable operations, or (iii) not receive additional financing as required to support future operations, as detailed herein and from time to time in the Company’s future filings with the Securities and Exchange Commission and elsewhere. Such statements are based on management’s current expectations and are subject to a number of factors and uncertainties that could cause actual results to differ materially from those described in the forward-looking statements.

Although we believe that the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee future results, levels of activity, performance or achievements. Except as required by applicable law, including the securities laws of the United States, we do not intend to update any of the forward-looking statements to conform these statements to actual results.

Our financial statements are stated in United States dollars and are prepared in accordance with United States generally accepted accounting principles.

In this quarterly report, unless otherwise specified, all references to “common shares” refer to the common shares in our capital stock.

As used in this quarterly report, the terms “we”, “us”, “our”, the “Company” and “ALRT” mean ALR Technologies Inc, unless otherwise indicated.

Overview

ALR TECHNOLOGIES, INC. (the “Company” or “ALRT”) was incorporated under the laws of the State of Nevada on March 24, 1987 as Mo Betta Corp. In April 1998, the Company changed its business purpose to marketing a pharmaceutical compliance device.

On October 21, 1998, the Company entered into an agreement with A Little Reminder Inc. (“ALR”) whereby the Company would have the non-exclusive right to distribute certain products of ALR described below.

In December 1998, the common shares of the Company began trading on the Bulletin Board operated by the National Association of Securities Dealers Inc. under the symbol “MBET.” On December 28, 1998, the Company changed its name from Mo Betta Corp. to ALR Technologies Inc. Subsequently the symbol was changed to “ALRT.”

In April 1999, the Company acquired 99.9% (36,533,130) of the issued and outstanding Class A shares of common stock of ALR in exchange for 36,533,130 shares of the Company’s common stock thereby making ALR a subsidiary corporation of the Company. ALR also had outstanding 124,695 shares of Class B common stock, none of which was owned by the Company.

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ALR was incorporated pursuant to the Company Act of British Columbia on May 24, 1996. ALR owned one subsidiary corporation, Timely Devices, Inc. (“TDI”). TDI was founded in Edmonton, Alberta, Canada on July 27, 1994. ALR owned all of the total outstanding shares of TDI. TDI had only one class of common stock outstanding.

On July 31, 2000, the Company sold all of its shares of ALR. From that point onward, the Company focused on developing its own technology, products and performed its own marketing.

On April 15, 2008, the Company incorporated a wholly-owned subsidiary in Canada under the name Canada ALRTech Health Systems Inc. This subsidiary was wound up during 2017.

In late 2011, the Company relocated its headquarters to 7400 Beaufont Springs Drive, Suite 300, Richmond, Virginia, 23225.

During 2011, the Company received FDA clearance and achieved HIPPA compliance for its Diabetes Management System. With these key achievements and successful clinical trials completed, the Company began implementing its commercialization strategy which included a pilot program with patients in Kansas in 2014. The Company obtained significant findings from this pilot program which led to the development of its Insulin Dosage Adjustment.

During 2017, the Company received FDA clearance for IDA and submitted worldwide patent application under the patent cooperation treaty to the World Intellectual Property Organization for its Predictive A1C innovation. The Company is actively seeking to commence revenue generating activities for its Diabetes Management System.

Recent Developments

On January 27, 2017, the Company’s Board of Directors approved a 100:1 reverse share split of the Company’s common stock. The Company cannot complete its stock split due to its deficient reporting status with the SEC. Subsequently, on February 22, 2018, the Company’s Board of Directors proposed a reversal of such share split. The initial reverse share split and subsequent reversal are pending approval from the SEC and other regulatory bodies.

On November 27, 2017, the Company’s Board of Directors approved the grant of the option to acquire up to 8,700,000 shares of common stock of the Company at a price of $0.015 per share for a term of five years. 2,200,000 of the approved options were to a director of the Company and 6,500,000 were to consultants of the Company.

On January 31, 2018, the Company’s Board of Directors approved the following grants:

· the option to acquire 47,000,000 shares of common stock of the Company at a price of $0.015 per share for a term of five years to 9 consultants of the Company, and

· the option to acquire 200,000 shares of common stock of the Company at a price of $0.015 per share until April 19, 2019 to 1 consultant of the Company.

Of the options granted with a term of five years, options to acquire a total of 11,000,000 shares of common stock were granted to three relatives of the Chairman of the Board.

Recent Developments – Subsequent to March 31, 2018

On May 3, 2018, the Company affected the reversal of the reserve share split by filing completing the filing with the State of Nevada.

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Products

ALR Technologies products utilize internet-based technologies to facilitate healthcare provider’s ability to monitor their patient’s health and ensure adherence to health maintenance activities.

The ALRT Diabetes Management System is a remote monitoring and care facilitation program that allows patients to upload the blood glucose data from their glucometers. ALRT Health Data Monitors monitor that data and, based on clinician approved protocols, provide advice, support and interventions when patients show blood glucose readings that are out of an acceptable range or if they are failing to test their blood glucose as prescribed. The ALRT System has been successfully proven in a clinical trial that demonstrated this type of remote care is associated with significant lowering of A1c levels. The study concluded that continuing intervention using an internet based glucose monitoring system is an effective way of improving glucose control compared to conventional care. A second clinical trial demonstrated that this type of Internet-based Blood Glucose Monitoring System (IBGMS) was associated with comparable reductions in A1c levels with that of more expensive Continuing Glucose Monitoring Systems (CGMS).

In the future, the Company may seek to adapt its System to be used in the management of other chronic diseases. The Company may be required to obtain additional clearance from the FDA prior to commencing selling activities in the United States for other disease states.

ALRT Diabetes Management System

Diabetes is a leading cause of death, serious illness and disability across North America. In the United States, it is estimated that 26 million people have diabetes, with 4.5 million people being classified as insulin dependent. By the year 2030, it is expected that 1 in 10 adults, globally, will have diabetes (diagnosed and undiagnosed instances). By the year 2050, it is expected that 1 in 3 United States adults will have diabetes (diagnosed and undiagnosed instances). We believe diabetes is a global pandemic.

As a result, medical costs due to diabetes and its complications are enormous. In the United States, such costs are estimated to be over $245 billion a year. In Canada, where it is estimated there are 2 million people with diabetes, healthcare costs associated with diabetes is estimated to be more than $13 billion annually.

Diabetes is a lifelong chronic disease with no cure. However, people with diabetes can take steps to control their disease and reduce the risk of developing the associated serious complications, thereby controlling healthcare costs. The Canadian Diabetes Association Clinical Practice Guidelines Expert Committee reports that “Successful diabetes care depends on the daily commitment of persons with diabetes mellitus to self-manage through the balance of lifestyle and medication. Diabetes care should be organized around a multi- and interdisciplinary diabetes healthcare team that can establish and sustain a communication network between the person with diabetes and the necessary healthcare and community systems.”

However, as noted in Patrick Connole, “UnitedHealthcare, Other Large Insurers Seek Better Adherence to Diabetes Care”, Health Plan Week, February 11, 2013 Volume 23 Issue 5, 80% of United States patients with diabetes do not follow their prescribed care plan.

Furthermore, in Treatment intensification for patients with type 2 diabetes and poor glycaemic control by Fu and Sheenan, it was noted that out 11,525 patients investigated with an A1c greater than 8% patients received intensification as follows:

• 37% within 6 months;
• 11% within 6-12 months, and
• 52% never

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ALRT Diabetes Management System (continued)

A study in 2013 by Khunti, Wolden, Thorstead, Anderson and Davies entitled Clinical inertia in people with type 2 diabetes: a retrospective cohort study of more than 80,000 people found that patients it took on average 19 months to escalate patients with an average A1c of 8.7% from single medication to dual therapy and 82 months to escalate patients with an average A1c of 8.8% from dual medication to triple therapy. Furthermore, they found that it took approximately 20 years to advance patients with an average A1c of over 9% to insulin. At the end of the study, less than 50% of the patients had their treatment intensified.

The Company’s Diabetes Management System provides an affordable and easy to use tool to provide the communication network as recommended by the Committee. Our Diabetes Management System includes a communications software platform that also enables health professionals to remotely monitor the health progress to patients with diabetes. This facilitates more timely and effective communication and coordination of care to these patients. This also results in positive behavior patterning, or re-patterning, of the patients.

The Diabetes Management System and the Company’s universal upload cable, are compatible with the majority of the major brands of glucose meters available for sale in the United States.

In August 2010, the Company received the results of a clinical trial conducted by Dr. Hugh Tildesley using the ALRT Health-e-Connect System. The trial showed A1c dropping from 8.8% to 7.6% for the Intervention Group using ALRT’s Health-e-Connect System as part of a diabetes management program. The A1c test is important in diabetes treatment management as a long-term measure of control over blood glucose for diabetes patients. According to Center for Disease Control and Prevention, “In general, every percentage drop in A1c blood test results (e.g. from 8% to 7%), can reduce the risk of microvascular complications (eye, kidney and nerve diseases) by 40%.”The trial served as the basis for an article titled “Effect of Internet Therapeutic Intervention on A1c Levels in Patients with Type 2 Diabetes Treated with Insulin” was published in the August 2010 Diabetes Care publication.

In July 2011, the follow-up results of the Dr. Tildesley clinical trial were published in the Canadian Journal of Diabetes. Dr. Tildesley conducted a 12 month study using Health-e-Connect System as an Internet Based Blood Glucose Monitoring System (IBGMS) to provide intensive blood glucose control to determine the effects of internet based blood glucose monitoring on A1c levels in patients with type 2 diabetes treated with insulin. Dr Tildesley concluded that, “While IBGMS intervention was not a substitute for the patient–physician interaction in a clinical setting, it significantly improved A1c and, over time, we observed better glycemic control and patient satisfaction.”

In October 2011, the Company received 510(k) clearance from the U.S. Food and Drug Administration (FDA) for its Diabetes Management System (then known as the Health-e-Connect System) for remote monitoring of patients in support of effective diabetes management programs. The 510(k) clearance enables the Company to commence with the United States marketing and sales launch of its Health-e-Connect System.

On July 28, 2014, the Company entered into a pilot service agreement with Kansas City Metropolitan Physician Association (KCMPA), one of the nation's premier Accountable Care Organizations (ACO). Under the agreement, KCMPA, which made diabetes management a key focus of its Quality Improvement Plan, enrolled up to 200 of its patients with Type 2 diabetes into ALRT's Diabetes Management System. The pilot service agreement was effective nine months from the beginning date of patient enrollment and the intent was to allow 6 months of use for each patient enrolled in the system. The pilot program between ALRT and KCMPA represented the first commercial deployment of ALRT's Diabetes Management System. On September 9, 2014, the Company began enrolling patients with Type 2 diabetes and A1c levels above 8 percent into the pilot program trialing the Diabetes Management System.

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ALRT Diabetes Management System (continued)

In September 2014, the Company initiated its pilot program with one of the Kansas City Metropolitan Physician Association clinics to deploy its Diabetes Management System for up to 200 patients that fit certain criteria. As a result of the pilot program findings and general industry trends, the Company proceeded with developing three new innovations:

· Insulin Dosage Adjustment uses both American Diabetes Association (ADA) and American Association of Clinical Endocrinologists (AACE) guidelines for adjusting insulin, and

· Predictive A1c, which converts blood glucose data uploaded into our Diabetes Management Systems and converts the large amount of data into a predicted or simulated A1C

· Diabetes Therapy Review allows the healthcare providers to change care plans for patients on a timely basis based on the results of Predictive A1c and overall how patients are managing their diabetes

On January 1, 2015, the Center for Medicaid and Medicare Services began reimbursing physicians for the non-face-to-face management of Medicare patients with two or more serious chronic diseases. Physicians would be paid a per-patient-per-month fee for “Chronic Care Management” and the examination of data from a remote monitoring platform is considered a reimbursable activity by CMS. Therefore, the company modified its System to conform to the requirements of the CMS reimbursement. These modifications permit the company to market to medical groups throughout the United States with a product that will help physicians to draw down this new reimbursement as well as to potentially improve the outcomes of their patients.

On February 18, 2015, the Company filed a 510(k) application with the FDA to add a remote insulin dosing recommendation feature to the Company’s Diabetes Management System. The company utilized the publicly available algorithm of the AACE & ADA. This feature allows the company to regularly run a patient’s blood glucose data (and other key data) through the AACE and ADA algorithm. When the algorithm indicated that the patient’s dose may not be optimal, the Diabetes Management System would provide the heathcare provider that a dose change may be warranted and what the change would be based on AACE and ADA guidelines. The decision about the dose change would rest entirely with the healthcare provider. However, this new feature may make a significant contribution to improving the outcomes of diabetes patients if it allowed healthcare provider to keep their patients at the optimal dose for longer periods.

Preliminary data from the KCMPA pilot program indicated that a number of patients had achieved reductions in their A1c levels. On April 17, 2015, the company signed a commercial contract with one of the KCMPA clinics, the Clay-Platte Family Medicine Clinic, to provide remote monitoring services. The Company has provided these services to date to Clay-Platte at no charge as it has provided the Company with continuous users as a sample population for its own strategic planning and business plan. The Company continues to actively provide services to Clay-Platte for certain of its patients.

On June 20, 2017, the Company filed a worldwide patent application under the PCT for its Predictive A1c feature to the World Intellectual Property Office.

On September 18, 2017, the Company received clearance from the FDA for its Insulin Dosage Adjustment feature within the Company’s Diabetes Management System.

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Critical Accounting Policies and Going Concern

Our discussion and analysis of our results of operations and liquidity and capital resources are based on our unaudited condensed financial statements for the three months ended March 31, 2018 and 2017, which have been prepared in accordance with GAAP.

The preparation of these financial statements requires us to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses, and disclosure of contingent assets and liabilities. We base our estimates on historical and anticipated results, trends, and various other assumptions that we believe are reasonable under the circumstances, including assumptions as to future events. These estimates form the basis for making judgments about the carrying value of assets and liabilities that are not readily apparent from other sources. By their nature, estimates are subject to an inherent degree of uncertainty. Actual results may materially differ from our estimates.

The Company’s condensed financial statements have been prepared 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. See note 1 of the condensed financial statements.

Due to our being a development stage company and not having generated significant revenues, in the Notes to our financial statements, we have included disclosure regarding concerns about our ability to continue as a going concern.

Results of Operations

		Three Months   Ended  March 31
					Percentage	Amount
		2018		2017	Increase /	Increase /
					(Decrease)	(Decrease)
Operating Expenses
General, selling and administrative	$	1,060,587	$	90,932	1066	969,655
Product development		240,634		100,629	139	140,005
Professional fees		222,875		39,913	451	182,962
Total Operating Expenses		1,524,096		231,474	557	1,292,622
Other Items
Interest expenses		476,741		456,239	4	20,502
Net Loss	$	2,000,837	$	687,713	191	1,313,124

The net loss for the Company’s three month period ended March 31, 2018 was significantly impacted by the grant of options to incentivize personnel as follows as compared to the same period on the previous year:

	Three Months Ended March 31, 2018			Three Months Ended March 31, 2017
Options Granted as Compensation		47,200,000			N/A
Value of Options Granted as Consideration	$	0.06			N/A
Percentage of Net Loss		69	%		N/A

The net loss for the three months ended March 31, 2018 was 191% ($1,310,124) higher than the net loss at March 31, 2017 as a result of the grant of options with a fair value of $1,338,000 during as consideration for services received. The fair value from the grant of the options in three months ended March 31, 2018 accounted for 102% of the total change in net loss as compared to 2017. Of the 47,200,000 options to acquire shares of common stock granted, 24,000,000 (a fair value of approximately $1.4M) did not vest during the period.

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Results of Operations (continued)

General, selling and administrative expenses. General, selling and administrative costs consist of salaries and consulting fees of management personnel, stock-based compensation for options granted to management personnel, travel and trade show costs, rent of the Company’s corporate office, website costs, information technology costs and general costs incurred through day-to-day operations. From the three month period ended March 31, 2018 as compared to the three month period ended March 31, 2017, there was both a significant increase and variance in the total expense incurred related primarily to the grant of stock options. By type of general and administrative cost, the variance can be seen as follows:

		Three Months Ended March 31,		Three Months Ended March 31,		Amount Increase / (Decrease)
		2018		2017
General, selling and administrative:
Salaries & consulting fees	$	56,000	$	56,000	-
Stock based compensation		977,000		1,000	976,000
Travel and trade-shows		11,000		17,000	(6,000)
Rent of corporate offices		1,000		2,000	(1,000)
Website & information technology		4,000		7,000	(3,000)
Other general & administrative costs		12,000		8,000	4,000
Total	$	1,061,000	$	91,000	970,000

During Q1 2018, aside from the grant of stock options the Company slightly reduced its general and administrative operating expenditures as compared to the same period in 2017. The cash-based general & administrative expenditure decreased by approximately $6,000 during Q1 2018 as compared to the Q1 2017.

Product development costs. Substantially all of the product development costs incurred related to a) services provided by contractors of the Company b) expenses incurred for product development and c) stock-based compensation for options granted to members of the product development team. The change in balance from the previous year relates primarily to an increase in external consulting services related to the grant of stock options to development personnel under contract.

Professional fees. Professional costs incurred consist of consulting and advisory fees of certain professionals retained, audit fees, legal fees, diabetes care facilitators and stock-based compensation for options granted to professionals. During the period, there was a significant increase in professional fees. By type of professional cost, the variance can be seen as follows:

	Three Months Ended March 31, 2018			Three Months Ended	Amount Increase / (Decrease)
				March 31,
				2017
Professional fees:
Corporate auditor - Quarterly review	$	-	$	-	-
Stock based compensation		211,000		-	211,000
Legal Fees		4,000		26,000	(22,000)
Professionals retained		8,000		14,000	(6,000)
Total	$	223,000	$	40,000	183,000

The increase in professional fees can be attributed to the Company granting stock options to certain professionals during the period.

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Results of Operations (continued)

Interest expense. Interest expense was from the following sources for the three months ended March 31, 2018 and 2017:

	Three months ended March 31, 2018		Three months ended March 31, 2017
Interest expense
Interest expense incurred on promissory notes	$	132,000	$	126,000
Interest expense incurred on lines of credit		315,000		292,000
Imputed interest on zero interest loans		30,000		38,000
Total	$	477,000	$	456,000

Interest on Promissory Notes

There was not any substantial changes in the amount of promissory notes outstanding from March 31, 2017 to March 31, 2018. During the previous year, the Company transferred amounts from imputed interest to interest on promissory notes and continued recording interest on the outstanding principal during the current period. Related to its promissory notes outstanding, the Company anticipates interest expense to be consistent with the results for the three months ended March 31, 2018 moving forward.

Interest on Lines of Credit

The Company has two line of credit facilities that had balances as follows:

		March 31, 2018		March 31, 2017	Amount ($) Increase / (Decrease)
Lines of Credit:
Line of Credit provided by Sidney Chan	$	8,569,000	$	7,814,000	$	755,000
Line of Credit provided by Christine Kan		2,000,000		2,000,000		-
Total	$	10,569,000	$	9,814,000	$	755,000

The Company incurred interest on the lines of credit as follows:

Interest Expense on Line of Credit:		Three Months		Three Months		Amount ($)
		Ended March 31,		Ended March 31,		Increase / (Decrease)
		2018		2017
Interest expense incurred on line of credit from Sidney Chan during the year	$	255,000	$	232,000	$	23,000
Interest expense incurred on line of credit from Christine Kan during the year		60,000		60,000		-
Total	$	315,000	$	292,000	$	23,000

Imputed Interest

During the 2018 and 2017 periods, the Company had certain zero interest promissory notes and accounts payable in excess of one year. Pursuant to the company’s accounting policy, these zero interest amounts are considered to be financing items in nature and are assigned a deemed interest rate (1% per month). The interest incurred on these is expensed as imputed interest and the instead of increasing the liabilities of the Company, it is allocated to equity under the financial statement line item “additional paid-in capital”. The change from the prior year is related to the discussion included under Interest on Promissory Notes above.

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Liquidity and Capital Resources

Working Capital
		As At March 31, 2018		As At December 31, 2017	Amount ($) Increase / (Decrease)	Percentage (%) Increase / (Decrease)
Current Assets	$	-	$	3,000	(3,000)	(100)
Current Liabilities	$	26,574,000	$	25,979,000	595,000	2
Working Capital (Deficiency)	$	26,574,000	$	(25,976,000)	598,000	2

The Company has a severe working capital deficiency. It does not have ability to service is current liabilities for the next twelve months and is reliant on its line of credit facilities to meet its on-going operations. Until the Company has revenue producing activities that exceed its operating requirements, it will be unable to service its current liabilities and the working capital deficit will continue to increase. As of the date of this management discussion and analysis, the Company has not commenced revenue generating activities, nor does it know when they will commence. There is substantial doubt about the Company’s ability to repay its current liabilities in the near term or anytime in the future which could ultimately lead to business failure.

Current Assets

The Company’s nominal current assets as at March 31, 2018 consist substantially of cash. The Company’s current assets as at December 31, 2017 consist substantially of cash.

Current Liabilities

The Company has current liabilities of $26,571,000 as at March 31, 2018 as compared to $25,979,000 as at December 31, 2017. Current liabilities were as follows:

	March 31, 2018		December 31, 2017		Change $			Change %
Accounts payable and accrued liabilities	$	1,015,000	$	1,038,000		(23,000	)		(2	)
Interest payable		4,439,000		4,307,000		132,000			3
Lines of credit to related parties		15,834,000		15,348,000		486,000			3
Promissory notes payable to related parties		2,892,000		2,892,000		—			0
Promissory notes payable		2,394,000		2,394,000		—			0
Total current liabilities	$	26,574,000	$	25,979,000		595,000			2

The increase in interest payable of $132,000 relates to accrued interest incurred on promissory notes at their stated rates of interest. All of the promissory notes and related interest payable are overdue.

The fluctuations in accounts payables occurred as part of operations.

The increase in the lines of credit payable of approximately $486,000 is attributable to borrowings of

- $171,000 to fund operations, product development activities, overhead and its sales and marketing program.

- $315,000 of unpaid interest incurred on the principal of the borrowed amounts.

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Cash Flows
	Three Months Ended			Three Months Ended
	March 31, 2018			March 31, 2017
Cash Flows used in Operating Activities	$	(174,000	)	$	(183,000	)
Cash Flows provided by Financing Activities	$	171,000		$	186,000
Net change in Cash During Period	$	(3,000	)	$	3,000

Cash Balances and Working Capital

As of March 31, 2018, the Company’s cash balance was $444 compared to $3,111 as of December 31, 2017.

Cash Used in Operating Activities

Cash used by the Company in operating activities during the three months period ended March 31, 2018 was $183,000 in comparison with $303,000 used during the same period last year. The Company’s expenditures from operations were used as follows (approximate amounts):

	Three Months Ended		Three Months Ended
	March 31, 2018		March 31, 2017
Product Development Consulting and Expenses	$	60,000	$	83,000
Management and Employees Compensation		56,000		56,000
Professional Fees		25,000		10,000
Travel and Trade Shows		11,000		17,000
Other		22,000		17,000
Cash used in Operations	$	174,000	$	183,000

The majority of the expenditures were to repay advances payable, overdue accounts payable owing to certain consultants, pay product development costs, pay accrued professional fees and selling and administration costs associated with operating the business.

Cash Proceeds from Financing Activities

Cash sourced by the Company from financing activities during the three month period ended March 31, 2018 was $171,000 in comparison with $186,000 sourced during the same period last year. The funds sourced from lines of credit provided by Chairman of the Board and a relative of the Chairman of the Board. The loans received in 2018 and 2017 covered the operating, product development and market development requirements for the Company repaid certain accounts payable.

Short and Long Term Liquidity

As of March 31, 2018, the Company does not have the current financial resources and committed financing to enable it to meet its administrative overhead, product development budgeted costs and debt obligations over the next 12 months.

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All of the Company’s debt financing are due on demand or overdue. The Company will seek to obtain creditors’ consents to delay repayment of these loans until it is able to replace these financings with funds generated by operations, replacement debt or from equity financings through private placements or the exercise of options and warrants. While 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. The Company has faced litigation from creditors in the past and is currently being sued by one creditor. There is no assurance that additional creditors will not make claims against the Company in the future. Failure to obtain either replacement financing or creditor consent to delay the repayment of existing financing could result in the Company having to curtail operations.

Tabular Disclosure of Contractual Obligations:

	Payments due by period
				Less than		1-3		3-5		More Than
		Total		1 year		years		years		5 Years
Accounts payable & accrued liabilities	$	1,015,000	$	1,015,000	$	—	$	—	$	—
Interest payable		4,439,000		4,439,000		—		—		—
Line of credit		15,834,000		15,834,000		—		—		—
Promissory notes to related parties		2,892,000		2,892,000		—		—		—
Promissory notes to arm’s length parties		2,394,000		2,394,000		—		—		—
	$	26,574,000	$	26,574,000	$	—	$	—	$	—

The Company will continue to use the funds available from the line of credit to cover administrative overhead and product development requirements until such time it can establish cash flows from operations. In the next six months, the Company anticipates the amount borrowed from the line of credit to increase as compared to the past six months as it expects to commercially launch its Diabetes Management System during this period.

Off Balance Sheet Arrangements

The Company has no off balance sheet financing arrangements that have or are reasonably likely to have a current or future effect on the Company’s financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources, that is material to investors.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK.

The Company is a smaller reporting company as defined by Rule 12b-2 of the Securities Exchange Act of 1934 and is not required to provide the information under this item.

ITEM 4. CONTROLS AND PROCEDURES.

Under the supervision and with the participation of our management, including the Principal Executive Officer and Principal Financial Officer, we have evaluated the effectiveness of our disclosure controls and procedures as required by Exchange Act Rule 13a-15(b) as of the end of the period covered by this report. Based on this assessment, we found our internal and disclosure controls over financial reporting to be not effective for the following reasons:

1) insufficient written policies and procedures for reporting requirements and accounting and financial reporting with respect to the requirements and application of US GAAP and SEC disclosure requirements; and

While the Company is working to remedy these deficiencies as its business activities evolve, there were no changes in our internal or disclosure controls over financial reporting during the quarter ended March 31, 2018 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

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PART II. OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS.

There were no other changes from the period beginning January 1, 2018 to the date of this 10Q.

ITEM 1A. RISK FACTORS.

We are a smaller reporting company as defined by Rule 12b-2 of the Securities Exchange Act of 1934 and are not required to provide the information under this item.

ITEM 3. DEFAULTS UPON SENIOR SECURITIES.

As at March 31, 2018, the Company had promissory notes payable and related interest payable, totalling $9,725,792 in default.

ITEM 5. OTHER INFORMATION.

None

ITEM 6. EXHIBITS.

Exhibit		Incorporated by reference			Filed
No.	Document Description	Form	Date	Number	herewith
3.1	Initial Articles of Incorporation.	10-SB	12/10/99	3.1
3.2	Bylaws.	10-SB	12/10/99	3.2
3.3	Articles of Amendment to the Articles of Incorporation, dated October 22, 1998.	10-SB	12/10/99	3.3
3.4	Articles of Amendment to the Articles of Incorporation, dated December 7, 1998.	10-SB	12/10/99	3.4
3.5	Articles of Amendment to the Articles of Incorporation, dated January 6, 2005.	8-K	1/20/05	3.1
3.6	Amendment to Bylaws, dated October 13, 2011	8-K	10/17/11
3.7	Amendment to Bylaws, dated April 10, 2012	8-K	4/16/12
10.1	Consulting Agreement with Endocrine Research Society Inc.	10-KSB	10/01/13	10.1
14.1	Code of Ethics.	10-KSB	4/14/03	14.1
31.1	Certification of Principal Executive Officer and Principal Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.				X
32.1	Certification of Chief Executive Officer and Chief Financia Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.				X
99.01	Distribution Agreement with Mo Betta Corp.	10-SB	12/10/99	99.1
99.02	Pooling Agreement.	10-SB	12/10/99	99.2
99.03	Amended Pooling Agreement.	10-SB	12/10/99	99.3
99.04	Lock-Up Agreement.	10-SB	12/10/99	99.4
99.19	Audit Committee Charter.	10-KSB	3/31/14	99.19
99.20	Disclosure Committee Charter.	10-KSB	4/14/03	99.20
99.30	Nomination Committee Charter	10-KSB	3/31/14	99.30
99.40	Compensation Committee Charter	10-KSB	3/31/14	99.40

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SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities and Exchange Act of 1934, the Registrant has duly caused this amended report to be signed on its behalf by the undersigned, thereunto duly authorized, on this 15th day of May 2018.

ALR TECHNOLOGIES, INC.
(Registrant)
BY:	SIDNEY CHAN
	Sidney Chan
	Principal Executive Officer, Principal Accounting Officer, Principal Financial Officer, Secretary/Treasurer and Director

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