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Management Discussion

• There was no revenue for the three month periods ended March 31, 2021 and 2020.
• Expenses for the three month period ended March 31, 2021 decreased by $30,000 when compared to the same period in 2020. This change reflects a $30,000 decrease in legal and professional expenses and a $3,000 decrease in consulting and accounting fees-related party which is offset by an increase of $1,000 in interest expense and an increase of $2,000 in general and administrative expenses.
• Interest expense relating to the Company’s outstanding debt, held by non-related parties, increased by $1,000 during the three month period ended March 31, 2021 compared to the same period in 2020. Interest expense relating to the Company’s outstanding debt for the 6% subordinated convertible debentures, increased by $7,000 primarily as a result of interest compounding on past due balances. Interest expense relating to the 6.5% subordinated debentures decreased by $2,000 compared to the same period in 2020. The debentures were surrendered in 2020 with the escheatment to the respective states of the debenture holders In addition, interest expense for notes payable decreased by $4,000 due to a decrease in the average prime interest rate to 3.25% for the three months ended March 31, 2021 compared to 4.42% for the same period in 2020.