Item 8.01 Other Events.
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1.
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Letter of March 22, 2021
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On March 23, 2021, we received a letter
dated March 22, 2021 (the “Letter”) from the Cabinet Secretary for the National Treasury & Planning, the Republic
of Kenya (the “Cabinet Secretary”) informing us that the project and agreements that we previously entered into with
Techno-Investment Module Ltd., a corporation formerly domiciled in the Republic of Belarus, and now domiciled in the Kingdom of
Spain (“TIM”) and the Republic of Kenya, namely, the Project Contract and the Loan Contract (the “Project”)
have been put on hold. The Letter further stated that current news speculations published by the (Kenya-based) Business Daily news
concerning Kenya’s agreement with Kallo have been disclosed without (the Cabinet Secretary’s) concern (and, as a result)
the government has decided that it is in the interest (of the Republic of Kenya) to put the project on hold.
The Cabinet Secretary further explained
in his Letter that the Republic of Kenya is undergoing preparations for upcoming elections and concerns related to certain (unstated)
allegations in the media could cause serious political complications.
Nonetheless the Cabinet Secretary further
stated in the Letter that the Project is not being terminated but put on hold for a certain period of time. The Cabinet Secretary
did not provide any assurances with respect to if or when the Project will proceed as originally intended and we have not received
any additional communication from the Cabinet Secretary regarding the status of the Project or whether the Project will be implemented,
if at all.
In light of the statements made by the
Cabinet Secretary in the unexpected Letter that we received, there is a clear risk that the Project (that we had hoped would be
undertaken in Kenya and which was previously the subject of the Form 8-K that we filed with the Securities and Exchange Commission
on August 10, 2020) may not be realized and, more than that, that all of the efforts that we and TIM expended in connection with
the Project will not result in any financial gain for Kallo, Inc.
In that context, we are reminded of the
inherent significant and continuing high risks and uncertainties associated with all of our business transactions and agreements
involving foreign countries and our inability to mitigate all such risks and uncertainties.
We expended significant managerial time
and financial resources in anticipation that the agreements that we entered for the Project would be implemented. It now appears
that the agreements for the Project and the anticipated transactions underlying those agreements will not be realized for reasons
that are beyond our control and with the result that our investment of our managerial time and financial resources will be lost.
A copy of the Letter and our response
of March 23, 2021 to the Letter are each attached to this Form 8-K.
Overall and in light of our receipt of
the Letter, which was entirely unexpected, we cannot assure any holder of our Common Stock, our Preferred Stock, or any of our
debt instruments, that the matters set forth in the Letter will be satisfactorily resolved or are later resolved on terms that
are commercially reasonable or which otherwise would allow us to achieve our original business and financial objectives. We are
a small company with limited financial and managerial resources and we cannot be assured that the foreign governments that are
counter-parties to the agreements or understandings that we enter into will not later determine that the terms of any agreement
or understandings that we have with them (or any other collateral or related agreements or understandings) are not in their interest.
In that sense and in these circumstances
we face the clear and unmistakable risks of significant and continuing losses. At present we have not been successful in undertaking
and implementing our business strategy in any country. There can be no assurance that we will be successful in implementing our
business strategy or otherwise achieving any of our goals and, in so doing, achieve any measure of profitability or positive cash
flow or if we do, that we can sustain any measure of profitability or positive cash flow.
We remain financially insolvent since
our Total Liabilities exceed our Total Assets and in the fiscal year ending December 31, 2020 we incurred losses in excess of nine
million dollars ($9,000,000). In that context and given the high risks that we face, any reader of this Form 8-K should carefully
consider the Risk Factors set forth in Item 1a in our Annual Report on Form 10-K for the fiscal year ending December 31, 2020.
At the same time, no person should acquire our Common Stock, our Preferred Stock, or any of our debt instruments who cannot afford
to lose their entire investment.
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2.
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Order of Suspension of Trading
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On March 24, 2021 we were informed that
the Securities and Exchange Commission, pursuant to Section 12(k) of the Securities Exchange Act of 1934, as amended, suspended
trading of our Common Stock for a period from 9:30 A.M., EDT on March 24, 2021 through 11:59 P.M. on April 7, 2021.
We are disappointed by this trading suspension
and while we are hopeful that we may be able to resolve any matters that resulted in the trading suspension, we have not yet undertaken
discussions with the staff at the Securities and Exchange Commission that would allow us to accurately understand all of their
concerns. In that light we cannot assure you that we will successfully resolve their concerns or whether we can regain the tradability
of our Common Stock either within the ten (10) day suspension period or if ever.
We are a small company and due to our
state of insolvency, we may not be able to undertake and obtain the funds needed to undertake the necessary and customary steps
needed to successfully regain tradability of our Common Stock. For these and other reasons, any person who acquires our Common
Stock, our Preferred Stock, or any of our debt instruments should be prepared to lose their entire investment
As we have said previously, our stockholders
are reminded that our business strategy involves significant risks and uncertainties over which we have little or no control. These
risks and uncertainties are far higher today given the current uncertain environment of the COVID-19 and the global pandemic and
we do not anticipate that these risks and uncertainties will decline in any material respect at any time in the foreseeable future.
Item 9.01 Exhibits.
