The following discussion of our financial condition and results of operations should be read in conjunction with our unaudited condensed consolidated interim financial statements, the notes to those financial statements and other financial information appearing elsewhere in this document. In addition to historical information, the following discussion and other parts of this document contain forward-looking statements that reflect plans, estimates, intentions, expectations and beliefs. Actual results could differ materially from those discussed in the forward-looking statements. Factors that could cause or contribute to such differences include, but are not limited to, those set forth in the "Risk Factors" in Part II, Item 1A of this Quarterly Report.

The discussion provided in this Quarterly Report should be read in conjunction with our Annual Report on Form 10-K for the year ended May 31, 2021, filed with the United States Securities and Exchange Commission (the "SEC") on August 30, 2021.





Overview

We were incorporated as Plandel Resources, Inc. under the laws of the State of Nevada on March 19, 2010. On March 24, 2014, we changed our name to Sports Asylum, Inc. and on September 30, 2014, we changed our name to Cell MedX Corp. to reflect our new business direction. On April 26, 2016, we formed a subsidiary, Cell MedX (Canada) Corp., (the "Subsidiary") under the laws of the Province of British Columbia.

We are a biotech company focused on the discovery, development and commercialization of therapeutic and non-therapeutic products that promote general health, pain relief, wellness and alleviate complications associated with medical conditions including, but not limited to: diabetes, Parkinson's disease, high blood pressure, neuropathy and kidney function. Our Subsidiary is engaged in development and manufacturing of therapeutic devices based on our proprietary eBalance® Technology, which harnesses power of microcurrents and their effects on human body.

Current uncertainty with respect to continued expansion of the COVID-19 pandemic

We are cognizant of the continued expansion of the COVID-19 pandemic and the resulting global implications. To date, we have experienced minor disruptions to our day-to-day operations associated with delayed services resulting from various COVID-19 restrictions and shortage of manpower experienced by some of our service providers. We caution that there continues to be a possibility for increase of the restrictions currently in place, or addition of new restrictions currently not known to us. The impact of these restrictions on our operations, if implemented, is currently unknown but could be significant.





Recent Corporate Developments

The following corporate developments occurred during the quarter ended November 30, 2021, and up to the date of the filing of this report:

Update on eBalance® Research and Development Activities

In September 2021, the Company submitted a premarket notification (510K) to the U.S. Food and Drug Administration (FDA) for the eBalance® Home System and eBalance® Pro System.

The eBalance® Pro System and eBalance® Home System, are microcurrent electrotherapy systems intended to administer a specific variety of therapeutic microcurrent algorithms for temporary relief of pain associated with sore/aching muscles in the shoulders, waist, back, neck, upper extremities (arms) and lower extremities (legs) due to strain from exercise or normal household- or work-related activities, as well as for general relaxation.

The eBalance® Pro System is intended for use by professionals in the clinical setting and the eBalance® Home System is intended for home use by laypersons.

On August 16, 2021, the Canadian Intellectual Property Office approved the Company's EBALANCE trademark application number 1867918 and issued certificate of registration number 1,104,935 registering the trademark EBALANCE in the name of the Company.

The Company's applications to register EBALANCE as a trademark in the United States, which the Company filed with the United States Patent and Trademark Office on December 11, 2017, continue to be under review.

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Results of Operations for the Three and Six Months ended November 30, 2021 and 2020

Our operating results for the three- and six-month periods ended November 30, 2021 and 2020, and the changes in the operating results between those periods are summarized in the table below.





                    Three Months Ended                        Six Months Ended
                                             Percentage                               Percentage
                November 30,   November 30,  Increase/   November 30,   November 30,  Increase/
                    2021           2020      (Decrease)      2021           2020      (Decrease)
Sales            $      1,671  $       1,871    (10.7)%  $       2,868  $       3,338    (14.1)%
Cost of goods           (863)          (988)    (12.7)%        (1,188)        (1,357)    (12.5)%
Gross margin              808            883     (8.5)%          1,680          1,981    (15.2)%
Operating
expenses
Amortization              203            632    (67.9)%            743          1,368    (45.7)%
Consulting
fees                   64,294         62,447       3.0%        129,108        139,387     (7.4)%
Distribution
expenses                    -              -       n/a%              -            261   (100.0)%
General and
administrative
expenses               75,390         80,723     (6.6)%        209,479        113,503      84.6%
Research and
development
costs                  31,456         38,538    (18.4)%         67,297        123,675    (45.6)%
Total
operating
expenses              171,343        182,340     (6.0)%        406,627        378,194       7.5%
Interest                5,442          7,879    (30.9)%         10,382         14,325    (27.5)%
Net loss         $    175,977  $     189,336     (7.1)%  $     415,329  $     390,538       6.3%




Revenues

During the three-month period ended November 30, 2021, we recognized $1,200 in revenue from sales of eBalance® devices and $471 we received from monthly recurring revenue associated with the eBalance® treatment packages. The cost attributed to this revenue was $863. During the comparative three-month period ended November 30, 2020, we recognized $1,871 in revenue, which consisted of monthly recurring revenue associated with the eBalance® treatment packages. The cost attributed to this revenue was $988.

During the six-month period ended November 30, 2021, we recognized $1,200 in revenue from sales of eBalance® devices and $1,668 we received from monthly recurring revenue associated with the eBalance® treatment packages. The cost attributed to this revenue was $1,188. During the comparative six-month period ended November 30, 2020, we recognized $3,338 in revenue, which consisted of monthly recurring revenue associated with the eBalance® treatment packages. The cost attributed to this revenue was $1,357.

As of the date of this Quarterly Report on Form 10-Q, we continue research and further development of our eBalance® Technology and devices based on this technology. During the summer of 2020, Health Canada granted our eBalance® Home and Pro Systems Class II medical device licenses, which allow us to market our eBalance® devices for wellness and pain management. Our certification with U.S. Food and Drug Administration (FDA) continues to be ongoing; at the time of this Quarterly Report on Form 10-Q we have submitted a premarket notification (510K) to the FDA for the eBalance® Home System and eBalance® Pro System, which, when approved, will allow us to demonstrate that the eBalance® Home System and eBalance® Pro System are at least as safe and effective as a legally marketed predicate device available on the market. Once this submission is approved, it will allow us to start our commercial activity in the USA.





Operating Expenses

During the three-month period ended November 30, 2021, our operating expenses decreased by 6.0% from $182,340 we incurred during the three months ended November 30, 2020, to $171,343 we incurred during the three months ended November 30, 2021. The largest change was associated with foreign exchange fluctuation during the period, which, for the three-month period ended November 30, 2021, resulted in a loss of $17,056, as compared to a gain of $4,717 during the comparative period ended November 30, 2020. Other most significant expenses during this period included $33,010 in corporate communication fees (November 30, 2020 - $51,319), $31,456 we incurred in research and development costs (November 30, 2020 - $38,538), $64,294 in consulting fees (November 30, 2020 - $62,447), $3,500 in accounting and audit fees (November 30, 2020 - $5,012), and $10,500 in management fees (November 30, 2020 - $10,500).

On a year-to-date basis, the most significant changes were as follows:

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·During the six-month period ended November 30, 2021, our consulting fees decreased by $10,279, or 7.4%, from $139,387 we incurred during the six-month period ended November 30, 2020, to $129,108 we incurred during the three-month period ended November 30, 2021.

·Our research and development costs for the six-month period ended November 30, 2021, decreased by $56,378, or 45.6%, from $123,675 we incurred during the six-month period ended November 30, 2020, to $67,297 we incurred during the six-month period ended November 30, 2021. The lower research and development costs during the six-month period ended November 30, 2021, were associated with our decision to suspend further development of the eBalance® devices until such time that our 510(K) notification to the FDA is finalized and submitted.

·Our general and administrative expenses for the six-month period ended November 30, 2021, increased by $95,976, or 84.6%, from $113,503 we incurred during the six-month period ended November 30, 2020, to $209,479 we incurred during the six-month period ended November 30, 2021. The largest factor that contributed to this change was associated with fluctuation in foreign exchange rates, which, during the six-month period ended November 30, 2021, resulted in $64,438 loss, as compared to $47,167 gain during the comparative period. Other factors that affected our general and administrative expenses were associated with a $1,500 increase to our management fees, which increased from $19,500 we incurred during the six-month period ended November 30, 2020, to $21,000 for the six-month period ended November 30, 2021; a $1,977 increase to our filing and regulatory fees, which increased from $15,199 we incurred during the six-month period ended November 30, 2020, to $17,176 for the six-month period ended November 30, 2021; and a $3,286 increase to our office expenses, which increased from $3,845 we incurred during the six-month period ended November 30, 2020, to $7,131 for the six-month period ended November 30, 2021.

·These increases were in part offset by a $14,296 decrease to our professional fees, from $14,471 we incurred during the six-month period ended November 30, 2020, to $175 we incurred during the six-month period ended November 30, 2021; a $4,097 decrease to our expenditures on corporate communications, which decreased from $93,582 we incurred during the six-month period ended November 30, 2020, to $89,485 we incurred during the six-month period ended November 30, 2021; a $2,023 decrease to our accounting and audit fees, which decreased from $10,023 we incurred during the six-month period ended November 30, 2020, to $8,000 for the six-month period ended November 30, 2021; and, to a smaller extent, decreases in bank fees, and travel and entertainment fees, which decreased to $661 and $1,413 respectively.





Other Items

During the three-month period ended November 30, 2021, we accrued $5,442 (November 30, 2020 - $7,879) in interest associated with the outstanding notes payable. On a year-to-date basis, we accrued $10,382 (November 30, 2020 - $14,325) in interest associated with the outstanding notes payable. Of this interest, $7,191 (November 30, 2020 - $1,354) represented interest we accrued on the notes payable to our related parties.

Liquidity and Capital Resources





Working Capital



                               As at              As at       Percentage
                         November 30, 2021    May 31, 2021      Change
Current assets           $           72,172   $      51,047     41.4%
Current liabilities               1,781,118       1,628,300      9.4%
Working capital deficit  $      (1,708,946)   $ (1,577,253)      8.3%

As of November 30, 2021, we had a cash balance of $37,147, a working capital deficit of $1,708,946 and cash flows used in operations of $268,249 for the period then ended. During the six-month period ended November 30, 2021, we funded our operations with $100,000 received from our private placement financing, $60,000 from exercise of warrants, and $124,875 we borrowed under non-arms-length loan agreements accumulating interest at 6% per annum, compounded monthly, and due on demand.

We did not generate sufficient cash flows from our operating activities to satisfy our cash requirements for the period ended November 30, 2021. The amount of cash we have generated from our operations to date is

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significantly less than our current debt obligations. There is no assurance that we will be able to generate sufficient cash from our operations to repay the amounts owing under the outstanding notes and advances payable, or to service our other debt obligations. If we are unable to generate sufficient cash flow from our operations to repay the amounts owing when due, we may be required to raise additional financing from other sources. The outcome of these matters cannot be predicted with any certainty at this time and raises substantial doubt that we will be able to continue as a going concern.

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