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SECURITIES AND EXCHANGE COMMISSION
450 Fifth Street, N.W.
Washington, D.C. 20549
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FORM 10-SB
GENERAL FORM FOR REGISTRATION OF SECURITIES
OF SMALL BUSINESS ISSUERS
Under Section 12(b) and (g) of the Securities Exchange Act of 1934
ALR TECHNOLOGIES INC.
(Name of Small Business Issuer in its charter)
STATE OF NEVADA 88-0225807
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
15446 Bel-Red Road
Suite 310
Redmond, Washington 98052-5507
(Address of Principal Executive Offices, including zip code)
Issuer's telephone number, including area code: (425) 376-2578
Securities to be registered pursuant to Section 12(b) of the Act:
NONE
Securities to be registered pursuant to Section 12(g) of the Act:
Common Stock
(Title of class)
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PART I
ITEM 1. DESCRIPTION OF BUSINESS
Background
ALR TECHNOLOGIES, INC. (the "Company") was incorporated under the
laws of the State of Nevada on March 24, 1987 as Mo Betta Corp. On
December 28, 1998, the Company changed its name from Mo Betta Corp. to
ALR Technologies Inc.
Prior to April 1998, the Company was inactive. In April 1998, the
Company changed its business purpose to marketing and assemble a
pharmaceutical compliance device which was owned by A Little Reminder
(ALR) Inc. ("ALR").
On October 21, 1998, the Company entered into an agreement with
ALR whereby the Company would have the non-exclusive right to
distribute certain products of ALR described below.
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 36,553,130 shares of the Company's common stock thereby
making ALR a subsidiary corporation of the Company. ALR also has
outstanding 124,695 shares of Class B common stock, none of which is
owned by the Company.
ALR was incorporated pursuant to the Company Act of British
Columbia on May 24, 1996. ALR continued its jurisdiction under the
laws of Canada on September 23, 1996 and to the state of Wyoming on
July 31, 1998. ALR owns one subsidiary corporation, Timely Devices,
Inc. ("TDI"). TDI was founded in Edmonton, Alberta, Canada on July 27,
1994. ALR owns all of the total outstanding shares of TDI. TDI has
only one class of common stock outstanding.
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." Subsequently the
symbol was changed to "ALRT."
The Company has no history of operations and has not earned any
revenues. TDI, its wholly owned subsidiary corporation has been in
operation and earned revenues for the last three years.
Products
The Company currently, through its subsidiary corporation,
TDI, manufactures two products: the Reminder and the Program Station.
A description of the products; the retail price of the products; and
how the products differ from the two programming methods outlined in
"Product Research." The ALRT Medication Reminder(TM) (the "Reminder")
which is approximately 1" x 2" x 1/4" in size, is small enough to be
extremely mobile, yet reliable and effective in reminding patients to
take medications in a timely manner. Based upon programming by the
pharmacist or health care professional, the Reminder admits a sound in
order to alert a patient that it is time for his medication.
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The Reminder is programmed by the pharmacist or health care
professional by using a programming station (the "Program Station").
The Program Station is approximately 4" x 5" x 1" and fits conveniently
on the pharmacist's counter. The Reminder is inserted into to the
Program Station. The pharmacist enters the information schedule into
the Program Station and the same is transmitted through the Program
Station to the Reminder. Thereafter, the Reminder will alert the
patient when it is time for medication. The Reminder and the Program
Station are sold separately.
Benefits of a Reminder System
The Company believes that a reminder system benefits the patient
by alerting him to take his medication at prescribed times thereby
eliminating illness and sickness resulting from the patient's failure
to take his medication. Medication non-compliance often results in
further treatment complications which can become more expensive than
simple medication therapy.
In addition, where required doses of medication are missed by a
patient, bacteria become tolerant to the unconcentrated dosage which
can result in the medication becoming ineffective for the patient.
Further, by not taking the prescribed medication at the prescribed
times, bacteria develop resistance to certain prescription drugs and
often the overall efficacy of the drug is lost. In these cases, the
health of the patient is jeopardized and pharmaceutical drug
manufacturers ("Pharmas") must develop a new drug at an increased
expense in order to address that resistance. Hence medication
compliance creates a healthier customer.
Marketing Strategy
The Company currently has not targeted any particular market. The
Company's operations are limited to the North American geographical
area.
The Company intends to target Pharmas located in the United States
and Canada because North America is the largest single pharma market in
the world. The Company believes that by targeting Pharmas, the Pharmas
will insist upon the Company's products being recommended or included
with a prescriptive medicine. The Company also anticipates directing
its marketing efforts toward the Health Maintenance Organizations
("HMOs") which are constantly looking for ways to cut medical expenses.
The Company currently does not advertise its products through any
medium. The Company currently promotes its products via word of mouth
through its officers, directors and employees. The Company has created
a website for approximately $10,000 and does not anticipate doing
webcommerce at this time or make any further substantial expenditures
in connection therewith. The Company does not have any link
arrangements with other websites or any time-ins with any search
engines.
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The Company does not have any key customers. On the 4th day of
June, 1999, the Company entered into an exclusive Distribution
Agreement with Technilab Pharma ("TP") to market its products in
Canada. The term of the agreement is for a period of twelve months
commencing June 4, 1999. The agreement is subject to three successive
twelve month renewals, unless either party terminates the agreement
upon sixty days notice to the other party. The agreement calls for a
minimum initial order of CDN$650,000, which TP has paid CDN$277,000 and
minimum annual orders thereafter of CDN$750,000. TP and its officers
and directors are not related in any manner to the Company and any of
its officers and directors.
Manufacturing
There are a number of contract manufacturers located in the United
States, Mexico, and Canada that will be able to manufacture the
Company's Reminder and Program Station. The Company issues purchase
orders for work to be completed as required. There are no ongoing or
exclusive manufacturing agreements entered into with any of said
contract manufacturers.
The raw materials which are used to manufacture the Company's
products are readily available from the other sources and consist of
electronic components and casings.
The Reminder and Program Stations are manufactured by Electronics
Manufacturing Group, Inc. ("EMG") in Calgary, Alberta, Canada on a
purchase order basis. Assembly, testing, and packaging is completed by
ALR in Edmonton, Alberta, Canada. The Reminder and Program Stations are
shipped from the Company's office located in Edmonton, Alberta, Canada.
Patents and Licenses
The Company through ALR and TDI own the following patents and
proprietary rights:
1. Patent to the Reminder and Program System registered in the
United States in February 1997 (Patent No. 5,602,802) and pending
registration in Canada in October 1996 (No. A12,131,783).
2. Registered trademark "A Little Reminder," registration number
TMA 489,443.
The Company intends to register trademarks for TDI, ALRT, ALRT
Medication Reminder and ALR in the United States and Canada. While the
Company intends to register the foregoing trademarks, there is no
assurance that the trademarks will ever be registered or if registered
will protect the Company's rights thereunder.
Product Research
The Company is currently engaging in product research and
development to simplify the programming of the Reminder. The new
methods of programming the Reminder are "Serial" and "On-Screen" and
are outlined below:
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The Company spent $6,105 on product research and development in
the six month fiscal period ended December 31, 1998 and $35,202 and
$35,492 in the fiscal years ended June 30, 1998 and June 30, 1997,
respectively. The Company plans to spend $100,000 on product research
and development in the next fiscal year.
The Company intends to complete the development of the serial
method programming in the first quarter of 2000 and believes that this
method will be available to customers in the second half of 2000. The
Company intends to complete the on-screen programming method in the
second quarter of 2000 and believes that this product will be available
to customers in 2001. While the Company believes the foregoing events
will occur as described above, there is no assurance that the time
table for the programming methods will be available as indicated.
Serial Programming
This method of programming the Reminder makes use of software
running on a personal computer to send the alarm times through the
computer's serial port to a simplified programmer.
The serial programmer requires fewer components than the
stand-alone programmer and can therefore be manufactured at
significantly lower cost.
The programmers can be installed in pharmacies at much lower cost.
This will allow the Company more flexibility in providing incentives to
expand the base of installed programmers. Software-driven programming
is faster and more convenient in higher volumes than stand-alone
programming.
On-Screen Programming
This method of programming makes use of software running on a
personal computer to send the alarm times to the Reminder through the
computer screen. This method is completely software-driven and requires
no separate hardware or programmer. Onscreen programming is currently
under development.
This will be the least expensive method since no hardware beyond
the pharmacist's personal computer is involved. The only costs are the
up-front software development costs to the Company.
This method will be made available over the Internet. The task of
programming a Reminder can then be accomplished instantly, anywhere, by
anyone authorized to do so by the Company.
Competition
The Company competes with other corporations that produce
medication compliance devices, some of whom have greater financial,
marketing and other resources than the Company.
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The principal methods of competition are patient information
strategies and compliance packaging. The Company believes that the
approximate number of competitors are six, but the Company does not
have any information to estimate its share of the market. The
competing medication devices are information pamphlets, compliance
packaging, and other forms of devices. The devices include clocks,
labels, organization systems and pagers.
The Company is not aware of larger companies with greater
resources that have established web sites to sell medication compliance
devices.
Employees
The Company presently employs five persons, two of whom are
officers of the Company. The Company intends to hire additional
employees on an as-needed basis.
Offices
The Company's corporate offices are located at 15446 Bel-Red Road,
Suite 310, Redmond, Washington 98052-5507, telephone (425) 376-2578.
The Company leases 1,000 square feet of office space from Group Health
Cooperative pursuant to a written lease. The term of the lease is two
years and the monthly rental payment is $1,690.00. The lease commenced
on March 15, 1999 and will expire on March 31, 2001.
ALR leases offices located at 650 Georgia Street, Suite 2000,
Vancouver, British Columbia V6B 4N8, telephone (604) 685-0992. ALR
leases 1,077 square feet of office space from Grosvenor International
Canada Limited on a month to month basis. The monthly rental is
CDN$1,605.
TDI leases office space located at 18161 102 Avenue, Edmonton,
Alberta, Canada, telephone (780) 448-0510. TDI leases 2,350 square feet
of space from York Realty, Inc. pursuant to a written lease. The term
of the lease is sixty (60) months and the monthly rental payment is
US$1,460.00. The lease commenced on June 1, 1998 and will expire on
May 31, 2003.
Public Relations
The Company handles investor relations internally with costs that
do not exceed $3,000 per month.
Risks Associated with the Year 2000
The Year 2000 issue is the result of computer programs written
using two digits rather than four to define the applicable year. As a
result, date sensitive software may recognize a date using "00" as the
year 1900 rather than the year 2000. This could result in system
failures or miscalculations causing disruptions of operations,
including among others, temporary inability to process transactions,
send invoices, or engage in similar normal business activities.
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The Company has reviewed ALR's information technology and non-
information technology to identify and Year 2000 problems and found
them to be Year 2000 compliant. The Company has also communicated with
its vendors that supply raw materials for the manufacture of the
Company's products and communicated with the Company's manufactures to
determine if they are Year 2000 compliant. In the course of the
investigation, the Company has not encountered any material Year 2000
deficiencies with the third party vendors and manufacturers.
To date, the Company has not incurred any material costs directly
associated with ALR's compliance efforts, except compensation expense
associated with ALR's salaried employees who have devoted sometime to
ALR's assessment and remediation efforts.
The Company may not have identified and corrected all Year 2000
problems. Year 2000 problems may involve significant time and expense
and unremediated problems could materially adversely affect ALR's
business, financial condition and operating results. Neither the
Company nor ALR have contingency plans to address risks associated with
unremediated Year 2000 problems.
Future planned acquisitions will most likely involve hardware and
software which is relatively new and therefore management does not
anticipate that it will incur significant operating expenses or be
required to invest heavily in computer systems improvements to be Year
2000 compliant. As the Company makes arrangements with significant
hardware and software suppliers, the Company intends to determine the
extent to which the Company's systems may be vulnerable should those
third parties fail to address and correct their own Year 2000 issues
and take measures to reduce the Company's exposure, such as, finding
alternative suppliers or requiring the suppliers to correct Year 2000
compliance issues prior to the Company acquiring the product. The
Company anticipates that this will be an ongoing process. There can be
no assurances that the systems of suppliers or other companies on which
the Company may rely on will be converted in a timely manner and will
not have a materially adverse effect on the Company's systems. The
Company believes that it is taking the steps necessary regarding Year
2000 compliance issues with respect to matters within its control.
However, no assurance can be given that the Company's systems will be
made Year 2000 compliant in a timely manner or that the Year 2000
problem will not have a material adverse effect on the Company's
business, financial condition and results of operations.
Risk Factors.
1. Limited History of Operations and Reliance on Expertise of
Certain Persons. The Company has no history of operations. The
management of the Company and the growth of the Company's business
depends on certain key individuals who may not be easily replaced if
they should leave the Company.
2. Market Acceptance. The Company's success and growth will
depend upon the Company's ability to market its existing products. The
Company's success may depend in part upon the market's acceptance of,
and the Company's ability to deliver and support its products. See
"Business - Products."
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3. Liquidity; Need for Additional Financing. The Company
believes that it will need additional cash during the next twelve
months. Assuming the Company has no sales and is unable to sell any
securities, the Company believes that it can continue operations for a
period of three months. If the Company is unable to generate a
positive cash flow before its cash is depleted , it will be required to
curtail operations substantially, and seek additional capital. There
is no assurance that the Company will be able to obtain additional
capital if required, if capital is available, or to obtain it on terms
favorable to the Company. The Company is currently suffering from a
lack of liquidity that it believes will impair its short-term marketing
and sales efforts and adversely affect its results for the current
quarter and until additional cash is received. The Company is
planning to offer 6,000,000 shares of common stock at an offering price
of $0.25 per share pursuant to Reg. 506 of the Securities Act of 1933.
As of the date hereof, the Company has not prepared an offering
memorandum, offered or sold any securities. the offering proceeds are
received. See "Financial Statements."
4. Technology Risk. The Company and its competitors utilize
different applications of known technology. Should a competitor
develop a technological breakthrough that cannot be adapted to the
Company's systems or develop a more effective application of existing
technology, the Company's products would be at risk of becoming
obsolete.
5. Competition. Some of the Company's competitors have
substantially greater financial, technical and marketing resources than
the Company. In addition, the Company's products compete indirectly
with numerous other products. The Company competes with clocks,
pagers, labels and information systems, all of which, indirectly,
reminder a person to take his medication. As the markets for the
Company's products expand, the Company expects that additional
competition will emerge and that existing competitors may commit more
resources to those markets.
6. Product Defects. In the event any of the Company's products
prove defective, the Company may be required to redesign or recall
products. While the Company has not had a recall to date, a redesign
or recall could cause the Company to incur significant expenses,
disrupt sales and adversely affect the reputation of the Company and
its products, any one or a combination of which could have a material
adverse affect on the Company's financial performance.
7. Product Reliability; Warranty. The Company's products have
not been in service for a sufficient time to determine their
reliability. The Company has not conducted any independent tests of
its products. Failure of a substantial number of the Company's
products would result in severe damage to the Company's reputation and
a large warranty expense for the Company.
8. Patents and Trademarks. The Company and ALR presently hold
certain patents and trademarks and are attempting to expand their
patent and trademark protection. While the Company believes that
patent rights are important and protect the Company's proprietary
rights in the patented technologies, there can be no assurance that any
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future patent application will ultimately mature as an issued patent,
or that any present or future patents of the Company will prove valid
or provide meaningful protection from competitors. See "Business -
Patents and Trademarks."
9. Reliance Upon Directors and Officers. The Company is wholly
dependent, at the present, upon the personal efforts and abilities of
its officers and directors. See "Business" and "Management."
10. Issuance of Additional Shares. Approximately 42,921,554
shares of Common Stock or 57.23% of the 75,000,000 authorized shares of
Common Stock of the Company are unissued. The Board of Directors has
the power to issue such shares, subject to shareholder approval, in
some instances. Although the Company presently has no commitments,
contracts or intentions to issue any additional shares to other
persons, other than in the exercise of options and warrants, the
Company may in the future attempt to issue shares to acquire products,
equipment or properties, or for other corporate purposes. Any
additional issuance by the Company, from its authorized but unissued
shares, would have the effect of diluting the interest of existing
shareholders. See "Description of Securities."
11. Indemnification of Officers and Directors for Securities
Liabilities. The Company's Bylaws provide that the Company will
indemnify any Director, Officer, agent and/or employee as to those
liabilities and on those terms and conditions as are specified in laws
of the state of Nevada. Further, the Company may purchase and maintain
insurance on behalf of any such persons whether or not the corporation
would have the power to indemnify such person against the liability
insured against. The foregoing could result in substantial
expenditures by the Company and prevent any recovery from such
Officers, Directors, agents and employees for losses incurred by the
Company as a result of their actions. Further, the Company has been
advised that in the opinion of the Securities and Exchange Commission,
indemnification is against public policy as expressed in the Securities
Act of 1933, as amended, and is, therefore, unenforceable.
12. Cumulative Voting, Preemptive Rights and Control. There are
no preemptive rights in connection with the Company's Common Stock.
Shareholders may be further diluted in their percentage ownership of
the Company in the event additional shares are issued by the Company in
the future. Cumulative voting in the election of Directors is not
provided for. Accordingly, the holders of a majority of the shares of
Common Stock, present in person or by proxy, will be able to elect all
of the Company's Board of Directors. See "Description of the
Securities."
13. No Dividends Anticipated. At the present time the Company
does not anticipate paying dividends, cash or otherwise, on its Common
Stock in the foreseeable future. Future dividends will depend on
earnings, if any, of the Company, its financial requirements and other
factors. See "Dividend Policy."
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14. Impact of Year 2000 Issue. The Company has reviewed its
internal computer systems and products and their capability of
recognizing the year 2000 and years thereafter. The Company expects
that any costs relating to ensuring such systems to be year 2000
compliant will not be material to the financial condition or results of
operations of the Company.
Safe Harbor Provisions
Except for the description of historical facts contained herein,
this Form 10-SB contains certain forward-looking statements concerning
future applications of the technologies to be acquired by the Company
and the Company's proposed services and future prospects, that involve
risks 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 under "Item 2, Management's Discussion and Analysis
or Plan of Operations" 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 which could cause
actual results to differ materially from those described in the
forward-looking statements.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION
The Company has been largely inactive since its incorporation and
hence has not yet received revenues from operations, profitability or
break-even cash flow. See "Item 7. Certain Relationships And Related
Transactions."
The Company has inadequate cash to maintain operations during the
next twelve months. In order to meet its cash requirements the Company
will have to raise additional capital through the sale of securities or
loans. As of the date hereof, the Company has issued 250,000 shares of
common stock for cash proceeds of $125,000 and has made a
non-transferable rights offering to certain shareholders allowing the
holder to acquire one share of common stock for cash proceeds of $0.50
per share. Under the rights offering 253,816 shares were issued in
consideration of $126,908 Other than the foregoing, and as disclosed in
this Form 10-SB, the Company has not made sales of additional
securities and there is no assurance that it will be able to raise
additional capital through the sale of securities in the future.
In November 1999, a subsidiary of the Company borrowed CDN$550,000
from the Bank of Montreal. This loan is for a term of six months with
interest payable at prime plus two percent. The Company has not
initiated any other negotiations for loans to the Company and there is
no assurance that the Company will be able to raise additional capital
in the future through loans. In the event that the Company is unable
to raise additional capital, it may have to suspend or cease
operations.
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Though the Company's subsidiary TDI initiated sales through a
distribution contract with Novopharm Quebec in December 1996,
substantive sales were not commenced until the fourth quarter of 1997.
The current generation of product began production in September 1998
and has proven to be reliable.
The Company is continuing to develop product enhancements that
will provide significant savings to production costs and increase
market penetration. The product enhancements consist of programming
alternatives and new features such as new casting designs. The Company
is also experimenting with changing the beeping patterns to cover a
range of frequencies to accommodate the needs of the hearing impaired.
The Company does not intend to purchase a plant or significant
equipment.
The Company will hire employees on an as needed basis. The
Company expects to hire additional employees during the next six
months, however the Company cannot at this time determine the number of
employees it will be hiring.
The Company expects to earn revenues in the fourth quarter of
1999. There is no assurance, however, that the Company will earn said
revenues.
RESULTS OF OPERATIONS - JULY 1, 1997 THROUGH SEPTEMBER 30, 1999.
While the Company has been in the development stage as defined in
Statement of Financial Accounting Standards No. 7 and has lacked
operating results since its incorporation, its main subsidiary, ALR has
had operating results since July 1, 1996. The following is an analysis
of those results.
The Company did not have sufficient sales for the 1997 and 1998
fiscal years to cover overhead and realize the lowest production costs.
In the latter part of 1998 and early 1999 the costs of ALRT's
acquisition of ALR put further strain on the Company's capital
resources. In June 1999, the Company entered into a new distribution
agreement with Technilab to sell its product in Canada and sales were
down while that transaction was occurring. The Company is now recording
sales in the fourth quarter of 1999 from the new distribution
agreement.
For the Period January 1, 1999 through September 30, 1999
Sales for the period were $252,823 and cost of goods sold were
$146,964. This resulted in a gross margin of $105,859 or 41.8%. Sales
are reduced from the September 30, 1998 results of $316,042 due to the
change in distribution in 1999 from Novapharm to Technilab. After the
acquisition in early 1999, the Company changed its Canadian
distribution and the positive impact of that change did not start
materializing until the fourth quarter of 1999.
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The Selling, general and administrative expenses were $106,384 for
the nine months ended September 30, 1999 as compared to $107,011 for
the same period ending September 30, 1998. Theses costs are higher than
the twelve month period ended June 30, 1998 of $83,716 due to opening
a new head office in Redmond Washington and incurring additional staff
expenses.
The Company incurred Professional fees of $126,682 and Consulting
fees of $169,473 for the nine months ending September 30, 1999 as
compared to $86,483 for the same period ending September 30, 1998. The
increase in fees is comprised primarily of legal and accounting
expenses incurred in the acquisition of ALR by ALRT and ALRT becoming
a public company.
Wages and Benefits expenses increased to $169,677 for the nine
months ending September 30, 1999 from $70,193 for the comparable nine
month period ending September 30, 1998, due to hiring new staff. The
Company hired a new Chairman and Vice President of Technology. The
Chairman has since been terminated but may be replaced in 2000. The
Company also plans additional staff in 2000 as sales increase.
A net loss of $617,584 was realized for the period as compared to
a net loss of $274,952 in 1998. The increased losses were due to the
professional fees incurred in the acquisition of ALR by ALRT,
consulting fees paid for corporate development and new staff hired. The
Company expects professional and consulting fees to reduce in the
future and the salaries are now lower due to the termination of the
Chairman, Mike Best, although a new Chief Executive Officer may be
hired in 2000. The Company has sold additional product in the fourth
quarter of 1999 and expects higher sales revenue in the near future
which will help offset the fixed costs associated with operating the
Company. There is no assurance, however, that the Company will
increase its sales revenue in the near future.
Inventory increased to $314,679 at September 30, 1999 from
$266,975 on December 31, 1998 as a result of the orders anticipated in
the new Technilab distribution agreement. Inventory levels will decline
as a result of sales in the fourth quarter of as product is shipped to
Technilab.
Prepaid expenses increased to $43,232 on September 30, 1999 from
$1,021 on December 31, 1998 as a result of an advance to a Vice
President (Lorne Drever) of $40,146.
Accounts payable increased to $424,561 on September 30, 1999 from
$372,775 on December 31, 1998 as a result of the new inventory
purchased and accrual of professional fees. The payables are
anticipated to be reduced by December 31, 1999 from the proceeds of
sales to Technilab.
For the Period July 1, 1998 through December 31, 1998
Sales for the six month period ended December 31, 1998 were
$218,208 as compared to $409,870 for the previous twelve months ended
June 30, 1998. Production costs remained high due to the small volumes
and the Company lost $256,322 as compared to $248,556 for the year
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ended June 30, 1998. ALR sold over 20,000 units of product at an
average price of $10.80 per unit. Because production levels are
inadequate to receive substantial discounts for quantity purchase of
parts and supplies, Costs of Goods Sold was 73% of Revenues, resulting
in a gross margin of 27%. The Company anticipates as sales increase,
the costs of goods sold as a percentage of revenues will be
substantially reduced due to economies of scale form larger production
runs. Selling, general and administrative costs increased to $79,780
for the six month period compared to The annual expenses of $83,716 in
1997 due to opening a new Head Office in Redmond Washington and hiring
additional staff. Professional fees increased to $130,427 from $42,392
the year prior due to the costs that ALRT incurred in becoming a public
company.
For the Period July 1, 1997 through June 30, 1998
Sales were $409,870 and costs of goods sold $297,024 resulting in
a gross profit of $112,846. Sales increased three fold over results
from the year ended June 30, 1997 due in large part to a more reliable
product and an emphasis by ALR's main customer to increase product
sales during this period.
Expenses were $339,556 for the period. Professional fees and
other costs of combination for the two businesses were substantially
absent relative to costs associated with same during six month period
ended December 31, 1998.
LIQUIDITY AND CAPITAL RESOURCES.
The Company has issued 32,078,446 shares of its Common Stock to
shareholders of ALR, officers, directors and others. The Company has
no operating history and no material assets other than the assets of
ALR.
Cash Balances
At September 30, 1999, the Company's cash balance was $52,641,
compared to $7,464 at September 30, 1998. At December 31, 1998, the
Company's cash balance was $33,642, at June 30, 1998 the cash balance
was $35,935 and at June 30, 1997, the Company had a bank overdraft of
$22,604.
Short and Long Term Liquidity
With respect to the Company's short-term liquidity, the Company's
"current ratio" (current assets divided by current liabilities) as of
September 30, 1999 was 0.59 compared to 0.69 as of September 30, 1998.
The Company's current ratio as of December 31, 1998 was 0.47 compared
to 0.76 as of June 30, 1998 and 0.58 as of June 30, 1997. The greater
the current ratio, the greater the short-term liquidity of the Company.
With respect to the Company's long-term liquidity, the Company
will continue to depend almost exclusively on equity financing through
private placements and warrant and option exercises until such time, if
ever, that the Company's sales increase to a level sufficient to
support the Company's overheads.
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Cash Used in Operating Activities
Cash used by the Company in operating activities during the nine
months ended September 30, 1999 totaled $470,875, compared to $401,990
for the nine months ended September 30, 1998. The Company incurred a
net loss of $617,584 in the nine months ended September 30, 1999,
compared to a net loss of $274,952 for the nine months ended September
30, 1998. Cash used by the Company in operating activities during the
six month period ended December 31, 1998 totaled $207,627. The Company
incurred a net loss during this period of $256,322. Cash used in
operating activities during fiscal years ended June 30, 1998 and 1997
totaled $282,186 and $157,775, respectively, including net losses of
$248,556 and $257,517, respectively.
Cash Proceeds from Financing Activities
During the nine months ended September 30, 1999, the Company
raised net cash proceeds from equity financing in the amount of
$921,006, compared to $442,922 for the nine months ended September 30,
1998. During the six month period ended December 31, 1998, the Company
raised net cash proceeds from equity financing in the amount of $95,219
compared to the twelve months ended June 30, 1998 where net cash
proceeds were $489,141. In the fiscal year ended June 30, 1997, there
were no equity financings.
At this time the Company does not have the resources to meet all
of its obligations, but is implementing plans that will generate
sufficient cash flows over the next 12 months. The Company requires
approximately $25,000 per month to pay basic overhead and further
product development will only be undertaken if there is sufficient
capital available. Plans to improve liquidity include; 1) reduce
inventory by selling product to Technilab in the fourth quarter of
1999, 2) raise additional equity as required. and 3) generate new sales
from products now under development by the second quarter of 2000. None
of these events are certain and may jeopardize the Company's ability to
meet its obligations if they are not completed.
The Company has three loans outstanding that aggregate $237,996
that are past their due date. None of the lenders have called their
loans and the Company intends to renegotiate or repay the loans as
liquidity improves. There are no assurances, however, that none of the
lenders will commence legal action in the future.
ITEM 3. DESCRIPTION OF PROPERTIES
The Company does not currently own any real property. The
Company's corporate offices are located at 15446 Bel-Red Road, Suite
310, Redmond, Washington 98052-5507, telephone (425) 376-2578. The
Company leases 1,000 square feet of office space from Group Health
Cooperative pursuant to a written lease. The term of the lease is two
years and the monthly rental payment is $1,690.00. The lease commenced
on March 15, 1999 and will expire on March 31, 2001.
<PAGE> 15
ALR leases offices located at 650 Georgia Street, Suite 200,
Vancouver, British Columbia V6B 4N8, telephone (604) 685-0992. ALR
leases 1,077 square feet of office space from Grosvenor International
Canada Limited on a month-to-month basis. The monthly rental is
CDN$1,605.
TDI leases office space located at 18161 102 Avenue, Edmonton,
Alberta, Canada, telephone (780) 448-0510. TDI leases 2,350 square
feet of space from York Realty, Inc. pursuant to a written lease. The
term of the lease is sixty (60) months and the monthly rental payment
is CDN$1,460.00. The lease commenced on June 1, 1998 and will expire
on May 31, 2003.
The Company owns no other property. TDI owns inventory consisting
of Reminders and Program Stations and raw materials.
ITEM 4. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
MANAGEMENT
The following table sets forth, as of December 2, 1999, the
beneficial shareholdings of persons or entities holding five percent or
more of the Company's common stock, each director individually, each
named executive officer and all directors and officers of the Company
as a group. Each person has sole voting and investment power with
respect to the shares of Common Stock shown, and all ownership is of
record and beneficial.
Amount and
Nature of
Name and Address Beneficial Percent
of Beneficial Owner Owner Position of Class
John C. Baldwin 1,279,000 President and 3.99%
Chilco Street a member of the
Vancouver, B.C. Board of Directors
Canada
Lorne Drever 850,000 Vice President and 2.65%
4503 154th Street Member of the
Edmonton, AB T6H 5K6 Board of Directors
Greg Rae 0 Vice President of 0.00%
258 E. 26th Ave. Technology and
Vancouver, B.C. Member of the
Canada V5V 2H3 Board of Directors
All officers and 2,129,000 6.64%
directors as a group.
(3 persons)
No arrangements exist which may result in a change in control of
the Company.
<PAGE> 16
The Company has adopted a non-qualified incentive stock option
plan and granted options to Michael Best, a former Chief Executive
Officer of the Company and to Mr. Norman R. van Roggen a former
director of the Company. Messrs. Best and van Roggen each received
options to purchase up to 100,000 shares of common stock at an exercise
price of $0.50 per share. The options expire two years from June 4,
1999. The Company has promised to prepare and file a Form S-8
registration statement with the Securities and Exchange Commission
registering the shares issued and issuable under the non-qualified
stock option plan which include Messrs. Best and van Roggen's shares.
As of the date hereof, said Form S-8 registration statement has not
been filed with the Commission. Other than the foregoing, the Company
has not granted any other stock options or stock appreciation rights to
any other individuals as of the date hereof.
ITEM 5. DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS
The name, age and position held by each of the directors and
officers of the Company are as follows:
Name Age Position Held
John C. Baldwin 44 President and member of the Board of
Directors
Lorne Drever 38 Vice President and member of the Board
of Directors
Greg Rae 35 Vice President - Technology and member
of the Board of Directors
All directors have a term of office expiring at the next annual general
meeting of the Company, unless re-elected or earlier vacated in
accordance with the Bylaws of the Company. All officers have a term of
office lasting until their removal or replacement by the board of
directors.
John C. Baldwin - President and a member of the Board of Directors of
the Company and ALR.
Mr. John C. Baldwin has been President and a member of the Board
of Directors of the Company and ALR since September 16, 1999. Since
1989, Mr. Baldwin has been President of Corporate Performance Systems,
Inc. Corporate Performance Systems, Inc. is engaged in the business of
consulting start-up corporations.
Lorne Drever - Vice President and member of the Board of Directors of
the Company and ALR.
Mr. Lorne Drever was appointed to the position of Vice President
and member of the Board of Directors of the Company and ALR on June 4,
1999. Mr. Drever founded TDI and has served as President of TDI since
1995. Prior to becoming President of TDI, Mr. Drever was engaged in
the business of consulting corporations with respect to streamlining
work flows and paper flows within inter-office and intra-office
<PAGE> 17
systems. Prior to the foregoing, Mr. Drever was employed as a teacher.
Mr. Drever hold a Bachelor of Education degree and a Bachelor or
Physical Education degree from the University of Alberta.
Greg Rae - Vice President of Technology and a member of the Board of
Directors of the Company and ALR.
Mr. Greg Rae has been Vice President of Technology and a member of
the Board of Directors of the Company and ALR since January 1999.
Since 1993, Mr. Rae has been a consultant and project manager of
Spearhead Systems located in Vancouver, British Colombia which is
engaged in the business of providing technology and automation
solutions for corporate clients.
Promoters
Mr. Sidney Chan and his corporation, The Knight's Group of
Companies, are deemed to be promoters of the Company. Mr. Sidney Chan
and the Knight's Group of Companies are paid any out-of-pocket expenses
incurred by them in promoting the Company's stock and products.
ITEM 6. EXECUTIVE COMPENSATION
Directors and Officers of the Company, both past and present, have
received the following compensation:
<TABLE>
<CAPTION>
SUMMARY COMPENSATION TABLE
(a) (b) (c) (d) (e) (f) (g) (h) (i)
Other Restricted Securities All
Name and Annual Stock Underlying LTIP Other
Principal Compen- Options/ Compen-
Position Year Salary Bonus sation Award(s) SARs Payouts sation
($) ($) ($) ($) (#) ($) ($)
<S> <C> <C> <C> <C> <C> <C> <C> <C>
John C.
Baldwin 1998 0 0 0 0 0 0 0
President &1997 0 0 0 0 0 0 0
Director 1996 0 0 0 0 0 0 0
Lorne
Drever 1998 43,902 0 0 0 0 0 0
CEO & 1997 24,390 0 0 0 0 0 0
Director 1996 18,293 0 0 0 0 0 0
Michael
Best 1998 0 0 0 0 0 0 0
CEO & 1997 0 0 0 0 0 0 0
Director 1996 0 0 0 0 0 0 0
(resigned)
Robert
Eadie 1998 0 0 0 0 0 0 0
President 1997 0 0 0 0 0 0 0
& Director 1996 0 0 0 0 0 0 0
(resigned)
<PAGE> 18
Gregory
Rae 1998 0 0 0 0 0 0 0
Vice 1997 0 0 0 0 0 0 0
President 1996 0 0 0 0 0 0 0
& Director
Norman van 1998 0 0 0 0 0 0 0
Roggen 1997 0 0 0 0 0 0 0
Director 1996 0 0 0 0 0 0 0
(resigned)
Michael 1998 0 0 0 0 0 0 0
Morrison 1997 0 0 0 0 0 0 0
President 1996 0 0 0 0 0 0 0
& Director
(resigned)
Rita
Dickson 1998 0 0 0 0 0 0 0
Secretary 1997 0 0 0 0 0 0 0
(resigned) 1996 0 0 0 0 0 0 0
</TABLE>
The Company has not granted any stock options or stock
appreciation rights to its officers or directors other than those
granted to Messrs. Best and van Roggen.
On June 4, 1999, the Company entered into a termination agreement
with Michael Best, the Company's former Chief Executive Officer and
Chairman of the Board of Directors. Under the terms of the agreement
with Mr. Best, the Company paid Mr. Best the sum of $14,999.97.
Further, upon execution of the agreement the Company paid Mr. Best
$10,000 for expenses. Mr. Best was also granted an option, pursuant to
the Company's non-qualified incentive stock option plan (the "Plan"),
to purchase 100,000 shares of the Company's common stock at an exercise
price of $0.50 per share. The option will expire two years from June
4, 1999. The Company also agreed to register the Plan and Mr. Best's
options and underlying shares on a Form S-8 registration statement.
Mr. Best will receive a commission of $0.10 for each Reminder and 3%
for each Program Station sold to Ely Lilly through December 31, 2000.
Further, Mr. Best will receive $0.07 for each Reminder and 2.1% for
each Program Station sold to Planet RX, soma.com and Drugstore.com
through December 31, 2000. Finally, the Company will indemnify Mr. Best
against all claims made against him by anyone as a result of his acts
as Chief Executive Officer of the Company.
On June 4, 1999, the Company entered into termination agreement
with Norman van Roggen, a former member of the Board of Directors.
Under the terms of the agreement, Mr. van Roggen, was granted an
option, pursuant to the Company's non-qualified incentive stock option
plan (the "Plan"), to purchase 100,000 shares of the Company's common
stock at an exercise price of $0.50 per share. The option will expire
two years from June 4, 1999. The Company also agreed to register the
Plan and Mr. van Roggen's options and underlying shares on a Form S-8
registration statement. Finally, the Company will indemnify Mr. van
Roggen against all claims made against him by anyone as a result of his
acts as a Director of the Company.
The Company does not have any long-term incentive plans and
accordingly no grants were made in the 1998 fiscal year.
<PAGE> 19
There are no standard or other arrangements pursuant to which the
Company's directors were compensated in their capacity as such during
the 1998 fiscal year.
There are no compensation arrangements for employment, termination
of employment or change-in-control between the Company and the Named
Executive Officers.
The Company intends to pay the following salaries to its officers
in 1999, subject to the Company generating sufficient revenues to pay
the same.
John C. Baldwin $ -0-
Lorne Drever $ 60,000
Gregory Rae $ 60,000
The Company anticipates generating revenues from the sale of
Reminder and the Programming Station in the fourth quarter of 1999.
ITEM 7. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
In 1987, the Company issued 11,000 shares of common stock to
Michael Morrison, the Company's sole officer and director.
On March 6, 1996, Michael Morrison sold 500 of the aforementioned
shares of common stock to Mr. Mark Gavard.
On April 21, 1998, Michael Morrison sold 10,000 of the
aforementioned shares of common stock to Robert Eadie and resigned as
the Company's sole officer and director and Robert G. Eadie was
appointed sole director of the Company and Rita S. Dickson was
appointed Secretary of the Company.
On October 21, 1998, the Company amended its articles of
incorporation increasing the authorized capital of the Company to
75,000,000 shares of common stock $0.001 par value per share. Further,
the Company authorized a stock split on the basis of 1,000 for 1.
On October 22, 1998, the Company executed a distribution agreement
with ALR wherein the Company acquired a non-exclusive right to
distribute and market the Reminder and the Program Station.
On October 22, 1998, Rita Dickson resigned as the Company's
Secretary.
On December 28, 1998 the Company changed its name to ALR
Technologies, Inc.
On April 30, 1999, the Company completed the acquisition of 99.9%
of the outstanding Class A shares of common stock of A Little Reminder
(ALR) Ltd.
On April 30, 1999, the Company concluded a rights offering.
<PAGE> 20
On June 13, 1998, ALR loaned TDI $100,000 as evidence by
promissory note of the same date. The interest rate on the loan is 1%
above the prime rate charged commercial customers for unsecured
commercial loans by The Royal Bank of Canada, Vancouver Branch. The
loan was due and payable on July 15, 1998, but remains unpaid as of the
date hereof.
On February 17, 1999, 706166 Alberta Ltd., 745797 Alberta Ltd.,
Dean Drever and Sandra Ross entered into a lock-up agreement (the
"Lock-Up Agreement") wherein said shareholders agreed not to dispose of
an aggregate of 8,000,000 Class A common shares of ALR's common stock.
The Lock-Up Agreement further provides that upon certain conditions
being met, said shareholders will submit for cancellation an aggregate
of 6,000,000 shares of the Company's common stock. The terms of the
lock-up agreement have been met and the 6,000,000 shares have been
returned to the Company.
A voluntary pooling agreement, dated July 27, 1998, (the "Pooling
Agreement") initially among two shareholders of the ALR, being 706166
Alberta Ltd. and 745797 Alberta Ltd., Russell & DuMoulin (the
"Trustee"), and all shareholders who subsequently agreed to be bound by
the terms of the Pooling Agreement (collectively the "Pooled
Shareholders"), the Pooled Shareholders holding an aggregate of
20,000,000 Common Shares of ALR (the "Pooled Shares"), agreed to
deliver and have delivered the Pooled Shares to the Trustee.
The Pooling Agreement allowed for the transfer of the Pooling
Shares within the Pool. As at the date hereof, the Pooled Shareholders
have transferred a portion of their Pooled Shares to a number of
entities, none of whom beneficially owned, directly or indirectly, more
than 10% of the outstanding Common Shares of ALR. All of the
transferees of such Pooled Shares agreed to be bound by the terms and
conditions of the Pooling Agreement.
The provisions of the Pooling Agreement further provided that the
pooling agreement would apply to any shares or securities into which
the Pooled Shares may be converted, changed, reclassified, redivided,
redesignated, subdivided or consolidated of the ALR that may be
received by the registered holder of the Pooled Shares on a
reorganization, amalgamation, consolidation or merger, statutory or
otherwise. Consequently, ALR Pooled Shares were exchanged for shares
of common stock of the Company and are now subject to the terms of the
Pooling Agreement.
The Trustee was authorized to release any shares that may be the
subject of the Pooling Agreement to the registered holder of such
shares, pro rata, on the following basis:
a. 20% one year from April 30, 2000 (the "First Release");
b. 20% three (3) months following the First Release;
c. 20% six (6) months following the First Release;
d. 20% nine (9) months following the First Release; and
e. 20% twelve (12) months following the First Release.
<PAGE> 21
It is a condition of the Lock-Up Agreement that the Pooled
Shareholders shall have agreed to be bound by the terms of an amended
pooling agreement. The Pooled Shareholders have entered into an
amended pooling agreement dated February 17, 1999 (the "Amended Pooling
Agreement") substantially on the same terms and conditions as the
Pooling Agreement. The Amended Pooling Agreement provides for the
termination and replacement of the Pooling Agreement with the Amended
Pooling Agreement. The Amended Pooling Agreement further provides that
upon certain conditions occurring, the remaining 2,000,000 Offered
Shares to be held by the Principal Shareholders after such surrender
will be released by the Trustee, pro rata, on the following basis:
a. 20% on October 1, 1999; and
b. 20% on each of three (3), six (6), nine (9), and twelve (12)
months following October 31, 1999.
released from Pool in the manner provided for in the original Pooling
Agreement. The conditions have been met and the initial 20% of the
shares were released on October 1, 1999 and an additional 20% will be
released each quarter thereafter.
On June 4, 1999, Michael Best resigned as Chief Executive Officer
and a Director of the Company and Norman van Roggen resigned as a
Director of the Company.
On June 4, 1999, the Company entered into a termination agreement
with Michael Best, the Company's former Chief Executive Officer and
Chairman of the Board of Directors. Under the terms of the agreement
with Mr. Best, the Company has paid Mr. Best the sum of $14,999.97.
Further, upon execution of the agreement the Company paid Mr. Best
$10,000 for expenses. Mr. Best was also granted an option, pursuant to
the Company's non-qualified incentive stock option plan (the "Plan"),
to purchase 100,000 shares of the Company's common stock at an exercise
price of $0.50 per share. The option will expire two years from June
4, 1999. The Company also agreed to register the Plan and Mr. Best's
options and underlying shares on a Form S-8 registration statement.
Mr. Best will receive a commission of $0.10 for each Reminder and 3%
for each Program Station sold to Ely Lilly through December 31, 2000.
Further, Mr. Best will receive $0.07 for each Reminder and 2.1% for
each Program Station sold to Planet RX, soma.com and Drugstore.com
through December 31, 2000. Finally, the Company will indemnify Mr.
Best against all claims made against him by anyone as a result of his
acts as Chief Executive Officer of the Company.
On June 4, 1999, the Company entered into termination agreement
with Norman van Roggen, a former member of the Board of Directors.
Under the terms of the agreement, Mr. van Roggen, was granted an
option, pursuant to the Company's non-qualified incentive stock option
plan (the "Plan"), to purchase 100,000 shares of the Company's common
stock at an exercise price of $0.50 per share. The option will expire
two years from June 4, 1999. The Company also agreed to register the
Plan and Mr. van Roggen's options and underlying shares on a Form S-8
registration statement. Finally, the Company will indemnify Mr. van
Roggen against all claims made against him by anyone as a result of his
acts as a Director of the Company.
<PAGE> 22
On September 20, 1999, the Company entered into an agreement to
acquire certain notes receivable with a face value of CDN$1,000,000
from two shareholders of the Company through the issuance of notes
payable in the amount of CDN$1,000,000. The notes receivable, which
are secured by a pledge of 5,000,000 shares of the Company, are in
default and the note holders are in the process of realizing on the
5,000,000 shares. The notes payable are due on December 31, 1999. The
notes payable are limited recourse as the Company has the option to
return the notes receivable to the vendor in full settlement of the
notes payable. Whether the notes payable will be paid or whether the
notes receivable will be returned to the vendor has not been determined
at this time.
ITEM 8. LEGAL PROCEEDINGS
There are no material legal proceedings to which the Company is
subject to or which are anticipated or threatened, other than as listed
below:
The Company's subsidiary corporation, TDI is a defendant in
a lawsuit captioned Sony of Canada, Ltd., Plaintiff, v. Timely
Devices, Inc., Defendant, Case No. 9903-16077 pending in the Court
of Queen's Bench of Alberta, Judicial District of Edmonton wherein
the plaintiff obtained a judgment against TDI in the amount of
CDN$47,697.43 on an open account. The Company subsequently made
a payment to reduce the amount owing to CDN$24,213.72.
The Company and Sidney Chan and Knight's Financial Ltd.,
promoters of the Company are parties in a lawsuit captioned David
T.M. Chai, Helen Yee Wah Lee, and Margaret Chau-Ramos, Plaintiffs
v. ALR Technologies, Inc., Sidney Chan, Knight's Financial Ltd.,
et al., Defendants, Case No. C995320 pending in the Supreme Court
of British Columbia, wherein the plaintiffs allege that the
defendants breach a contract, committed negligent acts, and
breached their fiduciary duties to the plaintiffs. The plaintiffs
are seeking to recover approximately $141,000 actual damages, an
undisclosed amount of punitive damages, court costs and attorney's
fees.
ITEM 9. MARKET PRICE OF AND DIVIDENDS ON THE COMPANY'S COMMON EQUITY
AND OTHER SHAREHOLDER MATTERS
The Company's shares are traded on the Bulletin Board operated by
the National Association of Securities Dealers, Inc. (the "Bulletin
Board") under the trading symbol "ALRT" The Company's shares did not
begin trading until December 21, 1998. Summary trading by quarter for
the 1998 and 1997 fiscal years and the first quarter of 1999 are as
follows:
Fiscal Quarter High Bid [1] Low Bid [1]
1999
Third Quarter 0.72 0.18
Second Quarter 1.5625 0.35
First Quarter 2.375 0.6875
<PAGE> 23
1998
Fourth Quarter 0.10 0.09
Third Quarter 0.00 0.00
Second Quarter 0.00 0.00
First Quarter 0.00 0.00
1997
Fourth Quarter 0.00 0.00
Third Quarter 0.00 0.00
Second Quarter 0.00 0.00
First Quarter 0.00 0.00
[1] These quotations reflect inter-dealer prices, without retail
mark-up, mark-down or commission and may not represent actual
transactions.
At November 30, 1999, there were 32,078,446 common shares of the
Company issued and outstanding.
At May 17, 1999, there were 130 holders of record including common
shares held by brokerage clearing houses, depositories or otherwise in
unregistered form. The beneficial owners of such shares are not known
by the Company.
No cash dividends have been declared by the Company nor are any
intended to be declared. The Company is not subject to any legal
restrictions respecting the payment of dividends, except that they may
not be paid to render the Company insolvent. Dividend policy will be
based on the Company's cash resources and needs and it is anticipated
that all available cash will be needed for working capital.
From July 7, 1997 to April 7, 1998, the common stock of ALR traded
in a range of $0.15 to $1.55 per share on the Vancouver Stock Exchange.
The common shares were subsequently halted from trading on the
Vancouver Stock Exchange on April 7, 1998 pending a change of business
purpose. On July 27, 1998, ALR requested that ALR's common shares be
delisted from the Vancouver Stock Exchange.
The Company's common stock is covered by a Securities and Exchange
Commission rule that imposes additional sales practice requirements on
broker-dealers who sell such securities to persons other than
established customers and accredited investors, generally institutions
with assets in excess of $5,000,000 or individuals with net worth in
excess of $1,000,000 or annual income exceeding $200,000 or $300,000
jointly with their spouse. For transactions covered by the rule, the
broker-dealer must make a special suitability determination for the
purchaser and transaction prior to the sale. Consequently, the rule
may affect the ability of broker-dealers to sell our securities and
also may affect the ability of purchasers of our stock to sell their
shares in the secondary market.
<PAGE> 24
ITEM 10. RECENT SALES OF UNREGISTERED SECURITIES
The Company was incorporated in 1987. In the past three fiscal
years, the Company has issued the following unregistered securities for
the following consideration. There were no underwriters engaged and no
underwriting discounts or commissions paid. All issues were made
pursuant to exemptions from registration contained in Reg. 504 or
Section 4(2) of the 1933 Securities Act (the "Act").
In 1987, the Company issued 11,000 shares of Common Stock to
Michael Morrison. The shares were issued pursuant to Reg. 4(2) of the
Securities Act. Subsequently, Mr. Morrison sold 500 shares of the
aforementioned 11,000 shares to Mark Gavard and also sold 10,000 of the
foregoing shares to Robert Eadie, the Company's President and the
shares were split on a 1,000 for 1 basis. As a result, Robert Eadie
received the equivalent of 10,000,000 shares of common stock and
Messrs. Morrison and Gavard each held the equivalent of 500,000 shares
of common stock.
In November 1998, the Company completed the sale of 41,500 shares
of its common stock at $0.50 per share to 42 individuals in
consideration of $20,750. The foregoing shares were sold pursuant to
Reg. 504 of the Act and a Form D was filed with the Securities and
Exchange Commission on November 2, 1998.
On March 17, 1999, the Company sold 250,000 shares of common stock
at $0.50 per share to one individual in consideration of $125,000. The
foregoing shares were sold pursuant to Reg. 504 of the Act and a Form
D was filed with the Securities and Exchange Commission on November 2,
1998.
In April 1999, the Company acquired 99.9% of the issued and
outstanding Class A shares of common stock of A Little Reminder (ALR)
Ltd. In conjunction therewith, the Company issued 36,533,130 shares of
common stock. The total value of all assets carried on the balance
sheet of ALR on the date of the transaction was $240,729. No deduction
for depreciation or liabilities was made from value so carried on the
balance sheet. The foregoing shares were issued pursuant to Reg. 504
of the Act and a Form D was filed with the Commission on February 4,
1999.
In March 1999, the Company issued rights to U.S. holders of common
stock of the Company. The exercise price of the rights was $0.50 per
share. The rights could only be exercised by U.S. residents and the
rights expired on April 30, 1999. A total of 253,816 rights were
exercised in consideration of $126,908. The rights and underlying
shares were issued pursuant to Reg. 504 of the Act and a Form D was
filed with the Commission on February 19, 1999.
<PAGE> 25
ITEM 11. DESCRIPTION OF SECURITIES.
The Company's securities consist of common stock with a par value
of $0.001 per share. The Company's authorized capital is 75,000,000
common shares of which 32,078,446 common shares are issued and
outstanding. All of the Company's common stock, both issued and
unissued, is of the same class and ranks equally as to dividends,
voting powers and participation in the assets of the Company on a
winding-up or dissolution. No common shares have been issued subject
to call or assessment. Each common share is entitled to one vote with
respect to the election of directors and other matters. The shares of
common stock do not have cumulative voting rights. Therefore, the
holders of a majority of shares voting for the election of directors
can elect all the directors then standing for election, if they chose
to do so, and in such event the holders of the remaining shares will
not be able to elect any directors.
The common shares have no preemptive or conversion rights, and no
provisions for redemption, purchase for cancellation, surrender of
sinking fund or purchase fund. Provisions as to the creation or
modifications, amendments or variations of such rights or such
provisions are contained in the Private Corporations Act, Chapter 78,
Nevada Revised Statutes.
Neither the Articles of Incorporation nor the Bylaws of the
Company contain provisions which would delay, defer or prevent a change
in control of the Company.
The Company's transfer agent is Pacific Stock Transfer Company,
5844 Pecos Street, Suite D, Las Vegas, Nevada 89120, telephone (702)
361-3033, facsimile (702) 732-7890.
ITEM 12. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
The constating documents of the Company provide that the Company
shall indemnify any director, officer, employee or agent of the Company
to the full extent permitted by the laws of the State of Nevada.
Chapter 78, rules 78.7502, 78.751 and 78.752 of the Nevada Revised
Statutes contain the provisions which, subject to certain restrictions,
in general provide for the Company's ability to indemnify, and thereby
limit the personal liability of, the directors and officers of the
Company against certain liabilities. Officers and directors of the
Company are indemnified generally against expenses, actually and
reasonably, incurred in connection with proceedings, whether civil or
criminal, provided that it is determined that they acted in good faith,
were not found guilty and, in any criminal matter, had reasonable cause
to believe their conduct was not unlawful.
ITEM 13. FINANCIAL STATEMENTS.
The financial statements begin on the following page.
<PAGE> 26
INDEPENDENT AUDITORS' REPORT
The Board of Directors and Shareholders of
A Little Reminder (ALR) Inc.
We have audited the accompanying consolidated balance sheet of A Little
Reminder (ALR) Inc. as at December 31, 1998 and the related
consolidated statements of loss, shareholders' equity (deficit), and
cash flows for the six month period then ended. These consolidated
financial statements are the responsibility of the Company's
management. Our responsibility is to express an opinion on these
consolidated financial statements based on our audit.
We conducted our audit in accordance with generally accepted auditing
standards. Those standards require that we plan and perform an audit
to obtain reasonable assurance whether the financial statements are
free of material misstatement. An audit includes examining, on a test
basis, evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles
used and significant estimates made by management, as well as
evaluating the overall financial statement presentation. We believe
that our audit provides a reasonable basis for our opinion.
In our opinion, these consolidated financial statements present fairly,
in all material respects, the financial position of the Company as at
December 31, 1998 and the results of its operations and cash flows for
the six month period then ended in accordance with generally accepted
accounting principles.
The accompanying financial statements have been prepared assuming that
the Company will continue as a going concern. As discussed in note 1
to the financial statements, the Company has suffered recurring losses
and negative cash flow from operations and has a net capital
deficiency, conditions that raise substantial doubt about its ability
to continue as a going concern. Management's plans in regards to these
matters are also described in note 1. The financial statements do not
include any adjustments that might result from the outcome of this
uncertainty.
/s/ KPMG LLP
Kelowna, Canada
March 29, 1999, except for note 11, as to which the date is April 12,
1999.
F-1
<PAGE> 27
INDEPENDENT AUDITORS' REPORT
The Board of Directors and Shareholders of
A Little Reminder (ALR) Inc.
We have audited the accompanying consolidated statements of loss,
shareholders' equity (deficit), and cash flows of A Little Reminder
(ALR) Inc. for the years ended June 30, 1998 and 1997. These
consolidated financial statements are the responsibility of the
Company's management. Our responsibility is to express an opinion on
these consolidated financial statements based on our audit.
We conducted our audit in accordance with generally accepted auditing
standards. Those standards require that we plan and perform an audit
to obtain reasonable assurance whether the financial statements are
free of material misstatement. An audit includes examining, on a test
basis, evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles
used and significant estimates made by management, as well as
evaluating the overall financial statement presentation. We believe
that our audit provides a reasonable basis for our opinion.
In our opinion, these consolidated financial statements present fairly,
in all material respects, the results of its operations and cash flows
of the Company for the years ended June 30, 1998 and 1997 in accordance
with generally accepted accounting principles.
The accompanying financial statements have been prepared assuming that
the Company will continue as a going concern. As discussed in note 1
to the financial statements, the Company has suffered recurring losses
and negative cash flow from operations and has a net capital
deficiency, conditions that raise substantial doubt about its ability
to continue as a going concern. Management's plans in regards to these
matters are also described in note 1. The financial statements do not
include any adjustments that might result from the outcome of this
uncertainty.
/s/ Mosbrey & Associates
Edmonton, Canada
February 19, 1999
Chartered Accountants
F-2
<PAGE> 28
A LITTLE REMINDER (ALR) INC.
Consolidated Balance Sheet
$ United States
<TABLE>
<CAPTION>
December 31,
1998
ASSETS
<S> <C>
Current assets:
Cash $ 33,642
Accounts receivable, net of allowance of $1,454 10,963
Income taxes recoverable 8,727
Inventories (note 4) 266,975
Prepaid expenses 1,021
-----------
321,328
Capital assets (note 5) 29,658
-----------
$ 350,986
===========
LIABILITIES AND SHAREHOLDERS' EQUITY (Deficit)
Current liabilities:
Accounts payable and accrued liabilities $ 372,775
Demand loan (note 6) 48,914
Current portion of long term debt (note 7) 260,975
-----------
682,664
Long term debt (note 7) 136,081
Shareholders' equity (deficit):
Share capital (note 8) 422,143
Deficit (958,605)
Accumulated other comprehensive income 68,703
-----------
(467,759)
Related party transactions (note 9)
Commitment (note 10)
Subsequent events (note 11)
-----------
Year 2000 Issue (note 12) $ 350,986
===========
</TABLE>
See accompanying notes to consolidated financial statements
On behalf of the Board:
/s/ Grey Rae /s/ Lorne Drever
Director Director
F-3
<PAGE> 29
A LITTLE REMINDER (ALR) INC.
Consolidated Statement of Loss
$ United States
Six month period ended December 31, 1998 and years ended June 30, 1998
and 1997
<TABLE>
<CAPTION>
Six Months
Ended Year Ended Year Ended
12/31/98 06/30/98 06/30/97
<S> <C> <C> <C>
Sales $ 218,208 $ 409,870 $ 133,352
Cost of sales 159,350 297,024 114,031
----------- ----------- -----------
58,858 112,846 19,321
Expenses
Amortization 4,124 8,894 12,823
Development costs 6,105 35,202 35,492
Foreign exchange loss 13,149 - -
Interest on long term
debt 17,386 20,738 8,472
Professional fees 130,427 42,392 24,601
Rent 8,571 23,124 13,062
Selling, general and
administrative 79,780 83,716 62,721
Wages and benefits 55,638 125,490 122,002
------------ ------------ ------------
315,180 339,556 279,173
------------ ------------ ------------
Net loss before the
undernoted 256,322 226,710 259,852
Other income (expense):
(Loss) gain on disposal
of capital assets - (16,126) 2,335
Loss on write-off of
loan receivable - (5,720) -
------------ ------------ ------------
- (21,846) 2,335
------------ ------------ ------------
Net loss for the period $ 256,322 $ 248,556 $ 257,517
============ ============ ============
Loss per Class A share $ (0.01) $ (0.01) $ (0.01)
============ ============ ============
Weighted average Class
A shares outstanding 31,404,279 20,789,863 20,000,000
============ ============ ============
</TABLE>
See accompanying notes to consolidated financial statements
F-4
<PAGE> 30
A LITTLE REMINDER (ALR) INC.
Consolidated Statement of Shareholders' Equity (Deficit)
$ United States
Six month period ended December 31, 1998 and years ended June 30, 1998
and 1997
<TABLE>
<CAPTION>
Total
Share Other Comprehensive Shareholders'
Capital Comprehensive Income Equity
(Note 8) Deficit Income (Loss) (Deficit)
<S> <C> <C> <C> <C> <C>
Balance,
June 30, 1996 $ 206,051 $ (196,210) $ - $ - $ 9,841
Net loss - (257,517) - (257,517) (257,517)
Foreign exchange
translation adjustment
(note 2(a)) - - 5,006 5,006 5,006
Comprehensive
income (loss) (252,511)
---------- ---------- -------- ----------- ----------
Balance,
June 30, 1997 206,051 (453,727) 5,006 (242,670)
Net change in share
capital (note 8) 99,739 - - - 99,739
Net loss - (248,556) - (248,556) (248,556)
Foreign exchange
translation
adjustment
(note 2(a)) - - 36,341 36,341 36,341
Comprehensive income
(loss) (212,215)
---------- --------- --------- ----------- ----------
Balance,
June 30, 1998 305,790 (702,283) 41,347 (355,146)
Net change in
share capital
(note 8) 116,353 - - - 116,353
Net loss - (256,322) - (256,322) (256,322)
Foreign exchange
translation
adjustment
(note 2(a)) - - 27,356 27,356 27,356
Comprehensive income
(loss) (228,966)
--------- --------- --------- ------------ ----------
Balance,
December
31, 1998 $ 422,143 $(958,605) $ 68,703 $ (467,759)
========= ========= ======== ============ ==========
</TABLE>
See accompanying notes to consolidated financial statements
F-5
<PAGE> 31
A LITTLE REMINDER (ALR) INC.
Consolidated Statement of Cash Flows
$ United States
Six month period ended December 31, 1998 and years ended June 30, 1998
and 1997
<TABLE>
<CAPTION>
Six Month
Year Ended Year Ended period ended
12/31/98 06/30/98 06/30/97
<S> <C> <C> <C>
Cash flows from operating activities (note 13):
Cash received from customers $ 221,547 $ 601,719 $ 170,489
Cash paid to suppliers and employees (419,744) (983,122) (383,175)
Interest paid on long term debt (9,430) (29,482) (115,959)
---------- ---------- ----------
Net cash used by operating
activities (207,627) (282,186) (157,775)
Cash flows from financing activities:
Proceeds from long term debt 42,990 135,886 340,286
Repayment of long term debt (15,130) (96,598) (210,239)
Class A shares issued for net cash
assets on business combination 91,401 - -
Class A shares issued for cash 95,219 489,141 -
Class A shares acquired - (203,860) -
---------- ---------- ----------
Net cash provided by financing
activities 214,480 324,569 130,047
Cash flows from investing activities:
Purchase of capital assets (8,467) (8,990) (24,168)
Proceeds on disposal of capital assets - - 20,112
---------- ---------- ----------
Net cash used in investing
activities (8,467) (8,990) (4,056)
Foreign currency translation adjustment (679) 25,146 5,565
---------- ---------- ----------
Increase (decrease) in cash (2,293) 58,539 (26,219)
Cash (bank overdraft),
beginning of period 35,935 (22,604) 3,615
---------- ---------- ----------
Cash (bank overdraft), end of period $ 33,642 $ 35,935 $ (22,604)
========= ========= =========
</TABLE>
The Company's non cash investing activities for all periods presented
consists solely of net assets acquired in the business combination
described in note 3.
See accompanying notes to consolidated financial statements
F-6
<PAGE> 32
A LITTLE REMINDER (ALR) INC.
Notes to Consolidated Financial Statements
$ United States
December 31, 1998
A Little Reminder (ALR) Inc. was incorporated under the laws of British
Columbia on May 24, 1996 under the name 4052 Investments Ltd. On July
25, 1996, the name of the Company was changed to Tren Exploration Inc.
On September 23, 1996, the Company was continued under the federal laws
of Canada. On July 29, 1998, the Company's name was changed to A
Little Reminder (ALR) Inc.
The principal business activity of the Company includes the design,
marketing, and distribution of a medication compliance device called
the ALR system.
1. Basis of presentation:
These consolidated financial statements have been prepared in
accordance with generally accepted accounting principles on a going
concern basis which presumes the realization of assets and the
discharge of liabilities in the normal course of operations in the
foreseeable future.
The Company's ability to continue as a going concern is dependent upon
its ability to obtain financing to repay its current obligations and
its ability to achieve profitable operations. The outcome of these
matters cannot be predicted at this time.
These consolidated financial statements do not give effect to any
adjustments which could be necessary should the Company be unable to
continue as a going concern and, therefore, be required to realize its
assets and discharge its liabilities in other than the normal course of
business and at amounts differing from those reflected in the
consolidated financial statements.
Management plans to obtain financing through the exercise of
outstanding warrants (see note 11 (c)) and expand its operations into
the United States through a business combination with a United States
public company (see note 11 (a)).
2. Significant accounting policies:
a) Translation of financial statements
For the all periods presented, A Little Reminder (ALR) Inc.
operated primarily in Canada, and its operations were conducted
primarily in Canadian currency. These statements are presented in
United States currency for the convenience of readers accustomed
to United States currency. The method of translation applied was
as follows:
i) Assets and liabilities are translated at the rate of exchange
in effect at the balance sheet date, being US $1.00 per
CDN$1.5333 (June 30, 1998 - US$1.00 per CDN$1.4716; June 30,
1997 - US$1.00 per CDN$1.3810).
F-7
<PAGE> 33
A LITTLE REMINDER (ALR) INC.
Notes to Consolidated Financial Statements (continued)
$ United States
December 31, 1998
2. Significant accounting policies (continued):
a) Translation of financial statements (continued)
Revenues and expenses are translated at the average exchange rate
for the six month period ended December 31, 1998, being US$1.00
per CDN$1.5285 (year ended June 30, 1998 - US$1.00 per CDN$1.4216;
year ended June 30, 1997 - US$1.00 per CDN$1.3685).
i) The net adjustment arising from the translation is included
in accumulated other comprehensive income.
b) Basis of consolidation
The consolidated financial statements include the accounts of the
Company and its wholly owned subsidiary, Timely Devices Inc.
("TDi"). All significant intercompany balances and transactions
have been eliminated on consolidation.
Effective July 27, 1998, Tren Exploration Inc. ("Tren") acquired
100% of the outstanding Class A common shares of A Little Reminder
(ALR) Inc. ("ALR (old)") through an exchange of shares. As ALR
(old) shareholders obtained control of Tren through the exchange
of their Class A common shares for Class A common shares of Tren,
the acquisition of ALR (old) has been accounted for in these
consolidated financial statements as a reverse acquisition.
Effective July 29, 1998, ALR (old) was wound up into Tren and, as
a result, Tren acquired 100% of the outstanding common shares of
TDi. Also on this date, Tren changed its name to A Little
Reminder (ALR) Inc. ("ALR (new)"). ALR (old) was not active for
the period from July 1, 1998 to July 27, 1998, the date of
acquisition. Consequently, the consolidated statements of loss,
shareholders' equity (deficit) and cash flows reflect the results
of operations and changes in financial position of TDi, for the
six month period ended December 31, 1998, combined with those of
its legal parent, Tren and subsequently ALR (new), from
acquisition on July 27, 1998, in accordance with generally
accepted accounting principles for reverse acquisitions.
In these notes to the consolidated financial statements, the
Company, prior to the business combination, is referred to as
"Tren", and after completion of the business combination, is
referred to as "ALR (new)".
c) Use of estimates
The preparation of financial statements in conformity with
generally accepted accounting principles requires management to
make estimates and assumptions that affect the reported amounts of
assets and liabilities and disclosures of contingent assets and
liabilities at the date of the financial statements and the
reported amounts of revenues and expenses during the reporting
period. Actual results could differ from those estimates.
F-8
<PAGE> 34
A LITTLE REMINDER (ALR) INC.
Notes to Consolidated Financial Statements (continued)
$ United States
December 31, 1998
2. Significant accounting policies (continued):
d) Financial instruments
The fair values of cash, accounts receivable, income taxes
recoverable and accounts payable and accrued liabilities
approximate their carrying values due to the relatively short
periods to maturity of these instruments. It is not possible to
arrive at a fair value for the demand loan as the maturity date is
not determinable.
The fair value of the Royal Bank of Canada loan, note payable and
grant repayable approximate their carrying value because they bear
interest at rates which are not significantly different from
current market rates. It is not practical to determine a fair
value for the promissory note payable and shareholders' loans due
to the nature of the amounts and the absence of a market for such
financial instruments. The fair value of the General Motors
Acceptance Corporation financing agreement is not materially
different from its carrying value. Fair value has been estimated
by discounting future principal and interest cash flows at the
current rate available for the same or similar instrument. The
maximum credit risk exposure for all financial assets is the
carrying value of the asset.
e) Inventories
Raw material inventory is stated at the lower of cost and
replacement cost. Finished goods inventory is stated at the lower
of cost and net realizable value. Cost for all inventories is
determined using a weighted average cost method.
f) Capital assets
Capital assets are stated at cost. Amortization is provided using
the declining balance method at the following annual rates:
Asset Rate
Automotive equipment 30%
Computer equipment 30%
Office equipment 20%
Production equipment 30%
g) Loss per Class A share
Loss per Class A share has been calculated using the weighted
average number of Class A shares issued and outstanding during the
period. The number of issued and outstanding Class A shares of
TDi at June 30, 1997 and 1996 reflect the equivalent amount of
Tren Class A shares issued in exchange for TDi Class A shares at
those dates. The full exercise of the warrants referred to in
note 8 (c) are anti-dilutive and consequently loss per Class A
share on a diluted basis has not been presented.
F-9
<PAGE> 35
A LITTLE REMINDER (ALR) INC.
Notes to Consolidated Financial Statements (continued)
$ United States
December 31, 1998
3. Business combination:
Effective July 27, 1998, ALR (old) and Tren executed a business
combination agreement. Tren issued 22,437,500 Class A common shares to
the shareholders of ALR (old) in consideration for all of the issued
and outstanding Class A common shares of ALR (old) on the basis of
1.022 Class A common shares of Tren for every Class A common share of
ALR (old). As the former shareholders of ALR (old) obtained control of
Tren through the share exchange, this transaction has been accounted
for in these financial statements as a reverse acquisition and the
purchase method of accounting has been applied. Under reverse
acquisition accounting, ALR (old) is considered to have acquired Tren
with the results of Tren's operations included in the consolidated
financial statements from the date of acquisition. The acquisition has
been recorded at the net asset value of Tren at the date of
acquisition. The acquisition details are as follows:
Net assets
Cash $ 32,704
Advances to TDi 123,942
Accounts payable and accrued liabilities (74,294)
Demand loan (48,914)
---------
$ 33,438
---------
Consideration given for net assets acquired
22,437,500 Class A common shares issued $ 33,438
---------
As ALR (old) is deemed to be the continuing entity, share capital of
ALR (new) has been decreased by $1,804,343 (note 8 (b)) as a result of
accounting for this combination as a reverse takeover.
The consolidated statements of loss and deficit and cash flows reflect
the results of operations and changes in financial position of TDi, the
legal subsidiary, for the six month period ended December 31, 1998,
combined with those of ALR (new) (formerly Tren) the legal parent, from
July 27, 1998, being the effective date of the acquisition, to December
31, 1998.
Under reverse takeover accounting principles and the purchase method of
accounting, the results of operations of Tren are included in the
consolidated financial statements only from the effective date of the
acquisition.
F-10
<PAGE> 36
A LITTLE REMINDER (ALR) INC.
Notes to Consolidated Financial Statements (continued)
$ United States
December 31, 1998
3. Business combination (continued):
The following table sets forth unaudited pro-forma statements of
operations data of the Company which reflects adjustments to the
consolidated financial statements to present the business combinations
of Tren, ALR (old) and TDi as if the combinations were effective July
1, 1996 and 1997:
12/31/98 06/30/98 06/30/97
(Unaudited) (Unaudited) (Unaudited)
Sales $ 218,208 $ 409,870 $ 133,352
----------- ----------- -----------
Net loss for the period $ 260,464 $ 1,562,862 $ 1,421,229
----------- ----------- -----------
Loss per Class A share $ (0.01) $ (0.08) $ (0.07)
----------- ----------- -----------
The pro-forma financial information does not necessarily reflect the
results of operations that would have occurred had Tren, ALR (old) and
TDi constituted a single entity during such periods.
4. Inventories:
Raw materials $ 260,065
Finished goods 6,910
---------
$ 266,975
=========
5. Capital assets:
Accumulated Net book
Cost amortization value
Automotive equipment $ 21,209 $ 9,981 $ 11,228
Computer equipment 7,620 4,840 2,780
Office equipment 10,440 1,716 8,724
Production equipment 10,129 3,203 6,926
-------- -------- --------
$ 49,398 $ 19,740 $ 29,658
-------- -------- --------
6. Demand loan:
The demand loan is payable to a former shareholder of the Company, is
unsecured, does not bear interest, and has no stated terms of
repayment.
F-11
<PAGE> 37
A LITTLE REMINDER (ALR) INC.
Notes to Consolidated Financial Statements (continued)
$ United States
December 31, 1998
7. Long term debt:
Royal Bank of Canada loan $ 87,961
General Motors Acceptance Corporation, financing agreement
repayable in monthly instalments of $346 (CDN$530) including
interest at 10.90% per annum, due October 1, 2001; secured by
specific automotive equipment with a carrying value of $11,227
10,162
Note payable, unsecured, bearing interest at prime plus 1.5% and
due on January 31, 1999
138,403
Promissory note payable to a company owned by a former director,
unsecured, bearing interest at prime plus 1% per annum and due
July 15, 1998.
67,498
Grant repayable to the Province of Alberta, Canada, unsecured,
repayable at 5% of the Company's annual gross revenue and due on
January 30, 1999. Overdue payments bear interest at prime rate
plus 2% per annum. At December 31, 1998 $19,006 of payments were
overdue.
22,827
Shareholders' loans, unsecured, bearing no interest and with no
stated terms of repayment
70,205
---------
397,056
Current portion due within one year 260,975
---------
$ 136,081
=========
F-12
<PAGE> 38
A LITTLE REMINDER (ALR) INC.
Notes to Consolidated Financial Statements (continued)
$ United States
December 31, 1998
7. Long term debt (continued):
The Royal Bank of Canada loan is repayable in monthly principal
instalments of $2,772 (CDN$4.250) on January 1, 1999 and increasing by
$65 (CDN$100) per month thereafter. The loan bears interest at the
Royal Bank prime rate plus 4.5% per annum and is secured by a general
security agreement, postponement of all shareholders' loans and
personal guarantees of the principal shareholders.
The aggregate maturities of long term debt, excluding shareholders'
loans, for each of the three years subsequent to December 31, 1998 are
as follows:
1999 - $260,975; 2000 - $45,947; 2001 - $19,929.
8. Share capital:
a) Authorized:
Unlimited number of Class A voting common shares without par
value.
Unlimited number of Class B voting common shares without par
value, non-participating, redeemable for $0.01 per share and
convertible into Class A shares for a period of two years
following the date the Company receives receipt for the filing of
a prospectus from any Security Commission in Canada at a
conversion price of $0.26 (CDN$0.40) per Class A share for the
first year and $0.30 (CDN$0.46) per Class A share for the second
year.
Unlimited number of Class C preferred shares, non-voting without
par value
b) Issued and outstanding:
12/31/98 06/30/98 06/30/97
Class A Shares (See below) $ 617,799 $ - $ -
Class A shares of ALR (old) - 509,650 -
Class A shares of Tdi - - 1
124,695 Class B shares 1 - -
Class D shares of Tdi - - 206,050
--------- --------- ---------
617,800 509,650 206,051
Treasury shares (6,000,000
Class A shares) (195,657) - -
Investment in Class A
shares of Tren - (203,860) -
--------- --------- ---------
$ 422,143 $ 305,790 $ 206,051
--------- --------- ---------
F-13
<PAGE>
<PAGE> 39
A LITTLE REMINDER (ALR) INC.
Notes to Consolidated Financial Statements (continued)
$ United States
December 31, 1998
8. Share capital (continued):
b) Issued and outstanding (continued):
The continuity of the Company's issued and outstanding Class A shares
is as follows:
Number of
shares Amount
TDi
Balance, June 30, 1997 and 1996 100 $ 1
Exchanged into ALR (old) Class A
shares at 200,000 Class A shares
for each TDi Class A share 19,999,900 -
---------- ---------
Class A shares of ALR (old) issued
to TDi shareholders, at time of
business combination on
November 21, 1997 20,000,000 $ 1
========== =========
ALR (old)
Balance, September 4, 1997 (date of
incorporation) - $ -
Issued for note receivable determined
to have no value and written off 450,000 -
Class A shares issued to acquire
Class A shares of TDi (above)
recorded at the carrying value
of ALR (old) net assets 20,000,000 1
---------- ---------
ALR (old) balance, November 21, 1997
after business combination with Tdi 20,450,000 1
Issued for cash at CDN $0.50 (US$0.33)
per share 1,500,000 489,141
---------- ---------
Balance, June 30, 1998 21,980,000 489,142
Exchanged into Tren Class A shares of
4 shares for each ALR (old) Class A
share not held in escrow and 1 Class
A share for each ALR (old) Class A
share held in escrow 487,500 -
---------- ---------
Class A shares of Tren issued to
ALR (old) shareholders at time of
business combination on July 27, 1998 22,437,500 $ 489,142
========== =========
F-14
<PAGE> 40
A LITTLE REMINDER (ALR) INC.
Notes to Consolidated Financial Statements (continued)
$ United States
December 31, 1998
8. Share capital (continued):
b) Issued and outstanding (continued):
Number of
shares Amount
ALR (new)
Tren balance, June 30, 1998 10,253,180 $ 2,293,485
Reduction in the book value of Tren's
Class A share capital to that of
ALR (old) - (1,804,343)
---------- ------------
Tren balance, July 26, 1998, prior
business combination with ALR (old) 10,253,180 489,142
Class A shares of Tren issued to
acquire Class A shares of ALR (old)
(above), recorded at the carrying
value of Tren net assets 22,437,500 33,438
---------- ------------
Tren balance, July 27, 1998, after
business combination with ALR (old) 32,690,680 522,580
Issued on the exercise of warrants for
cash at $0.26 (CDN$0.40) per share 365,000 95,219
---------- ------------
ALR (new) balance, December 31, 1998 33,055,680 $ 617,799
========== ============
c) Warrants:
The Company has 6,487,000 (June 30, 1998 - nil) warrants
outstanding at December 31, 1998. Each warrant entitles the
holder to acquire one Class A share of the Company for $0.26
(CDN$0.40) per share. The warrants are non-transferable and non-
assignable and may only be exercised by the beneficial owner of
the warrants as of June 9, 1998. The warrants expire on January
29, 1999 (see note 11 (b)). The continuity of outstanding
warrants for the six month period ended December 31, 1998 is as
follows:
Number
Outstanding, June 30, 1998 -
Warrants outstanding, July 27, 1998, after
business combination 6,852,000
Warrants exercised in the period (365,000)
---------
Outstanding, December 31, 1998 6,487,000
---------
F-15
<PAGE> 41
A LITTLE REMINDER (ALR) INC.
Notes to Consolidated Financial Statements (continued)
$ United States
December 31, 1998
9. Related party transactions:
During the six month period ended December 31, 1998, the Company had
selling, general and administrative expenses to directors and
affiliated companies in the amount of $14,733. At December 31, 1998,
the Company had a promissory note payable of $67,498 to a company owned
by a former director and loans from shareholders of $70,205. Terms of
amounts payable to the company owned by a former director and the loans
from shareholders are disclosed in note 7.
10. Commitment:
The Company rents premises and a vehicle under operating leases with
various expiry dates to May 31, 2003. The annual rent payable in each
of the next five years under these leases is as follows:
1999 - $19,244; 2000 - $11,449; 2001 - $11,449; 2002 - $11,449; 2003 -
$4,770.
11. Subsequent events:
a) Offer to acquire outstanding and issued Class A shares:
Subsequent to December 31, 1998 the Company's shareholders
received an offer to transfer their Class A shares to ALR
Technologies Inc. ("ALRT"), a Company listed on the NASD OTCBB, in
exchange for an equal number of common shares of ALRT. Through
the exchange of shares, the Company's shareholders would obtain
control of ALRT. The offer is open for acceptance until April 30,
1999,
Under reverse takeover accounting principles and the purchase
method of accounting, the results of operations of ALRT will be
included in the consolidated financial statements only from the
effective date of the acquisition.
The following table sets forth unaudited pro-forma statements of
operations data of the Company which reflects adjustments to the
consolidated financial statements to present the business
combination with ALRT as if the combination was effective July 1,
1996 and 1997.
12/31/98 06/30/98 06/30/97
(Unaudited) (Unaudited) (Unaudited)
Sales $ 218,208 $ 409,870 $ 133,352
---------- ---------- ----------
Net loss for the period $ 276,897 $ 248,556 $ 257,517
---------- ---------- ----------
Loss per common share
of ALRT $ (0.01) $ (0.01) $ (0.01)
---------- ---------- ----------
The pro-forma financial information does not necessarily reflect the
results of operations that would have occurred had the Company and ALRT
constituted a single entity during such periods.
<PAGE>
<PAGE> 42
A LITTLE REMINDER (ALR) INC.
Notes to Consolidated Financial Statements (continued)
$ United States
December 31, 1998
11. Subsequent events (continued):
b) Extension of warrant expiry date:
Subsequent to December 31, 1998 the expiry date of the outstanding
warrants was extended to April 30, 1999.
c) Exercise of warrants:
i) Subsequent to December 31, 1998, 3,491,000 warrants have been
exercised for total cash proceeds of $910,715.
12. Year 2000 Issue:
The Company is in the process of contacting critical suppliers and
customers whose computerized systems interface with the Company's
systems, regarding their plans and progress in addressing their Year
2000 Issues. The Company has received varying information from such
third parties on the state of compliance or expected compliance. The
Company has not developed a Year 2000 remediation plan and has not
developed a contingency plan in the event that any critical supplier or
customer is not compliant.
The failure to correct a material Year 2000 problem could result in an
interruption in, or a failure of, certain normal business activities or
operations. Such failures could materially and adversely affect the
Company's operations, liquidity and financial condition. Due to the
general uncertainty inherent in the Year 2000 problem and the
uncertainty of the Year 2000 readiness of third party suppliers and
customers, the Company is unable to determine at this time whether the
consequences of Year 2000 failures will have a material impact on the
Company's operations, liquidity or financial condition.
13. Reconciliation of net loss for the period to net cash used by
operating activities:
<TABLE>
<CAPTION>
12/31/98 06/30/98 06/30/97
<S> <C> <C> <C>
Net loss for the period $ (256,322) $ (248,556) $ (257,517)
Adjustments to reconcile
net loss for the period
to net cash used by
operating activities:
Amortization 4,124 8,894 12,823
Loss (gain) on disposal
of capital assets - 16,126 (2,335)
Loss on write-off of
loan receivable - 5,720 -
Interest accrued and
included in long term debt 5,942 - -
Allowance for doubtful
accounts 1,454 - -
Change in non-cash operating
working capital 37,175 (64,370) 89,254
----------- ---------- ----------
48,695 (33,630) 99,742
Net cash used by operating
activities $ (207,627) $ (282,186) $ (157,775)
=========== ========== ==========
</TABLE>
F-17
<PAGE> 43
A LITTLE REMINDER (ALR) INC.
Notes to Consolidated Financial Statements (continued)
$ United States
December 31, 1998
14. Income taxes:
The tax effects of temporary differences that give rise to deferred tax
assets and liabilities are presented below:
Deferred tax assets (net):
Capital assets, principally due to difference
in tax and accounting amortization $ 1,996
Losses for income tax purposes carried forward 359,426
Share issue costs 104,328
Foreign exploration and development expenditures 531,870
----------
Gross deferred tax assets 997,620
Less valuation allowance (997,620)
Net deferred tax assets $ -
The valuation allowance at July 1, 1998 was $276,222. The net change
in the valuation allowance for the six month period ended December 31,
1998 was an increase of $721,398.
The ultimate realization of deferred tax assets is dependent upon the
generation of future taxable income during the periods in which those
temporary differences become deductible. In the case of foreign
exploration and development expenditures, the ultimate realization of
the deferred tax asset is dependent upon the generation of taxable
resource property income. In order to fully realize the deferred tax
assets, the Company will need to generate future taxable income of
approximately $2,341,786 and $1,175,404, in order to realize deferred
tax assets other than the foreign exploration and development
expenditure deferred tax asset, prior to the expiration of the loss
carryforwards in 2002. The Company has yet to realize taxable income
in any preceding year of operations. Based on the history of tax
losses, management is unable to assert that it is more likely than not
that the Company will realize the benefits of these differences and, as
such, a valuation allowance equal to the gross deferred assets has been
assessed.
Subsequently, recognized tax benefits relating to the valuation
allowance for deferred tax assets as of December 31, 1998 will be
reported in the consolidated statement of loss and deficit, in the year
it is determined that it is more likely than not that they will be
realized.
F-18
<PAGE> 44
A LITTLE REMINDER (ALR) INC.
Notes to Consolidated Financial Statements (continued)
$ United States
December 31, 1998
15. Canadian generally accepted accounting principles reconciliation:
The consolidated financial statements have been prepared in accordance
with generally accepted accounting principles ("GAAP") in the United
States. These principles, as applied to the Company's consolidated
financial statements, are not materially different than Canadian GAAP
16. Comparative figures:
Certain comparative figures have been reclassified to conform with the
financial statement presentation adopted in the current year.
F-19
<PAGE> 45
ALR TECHNOLOGIES INC.
Consolidated Balance Sheet ($ United States)
September 30, 1999
(Unaudited)
<TABLE>
<CAPTION>
ASSETS
<S> <C>
Current assets:
Cash and short term investments $ 52,641
Accounts receivable 5,533
Income taxes recoverable 9,103
Inventories 314,679
Prepaid expenses, deposits and advances 43,232
-----------
425,188
Capital assets, net of accumulated amortization 39,518
-----------
$ 464,706
===========
LIABILITIES AND SHAREHOLDERS' EQUITY (DEFICIT)
Current liabilities:
Accounts payable and accrued liabilities $ 424,561
Demand loan 51,020
Current portion of long term debt 239,495
-----------
715,076
Long term debt 13,416
Shareholders' equity (deficit)
Capital stock 32,079
Additional paid in capital 1,260,101
Deficit (1,576,189)
Accumulated other comprehensive income 20,223
-----------
(263,786)
-----------
$ 464,706
===========
</TABLE>
See accompanying notes to consolidated financial statements.
1
<PAGE> 46
ALR TECHNOLOGIES INC.
Consolidated Statement of Loss and Comprehensive Income (Loss) and
Deficit ($ United States)
Nine month periods ended September 30, 1999 and September 30, 1998
(Unaudited)
Consolidated Statement of Loss and Comprehensive Income (Loss)
<TABLE>
<CAPTION>
1999 1998
<S> <C> <C>
Sales $ 252,823 $ 316,042
Cost of sales 146,964 220,992
----------- ----------
105,859 95,050
Expenses:
Amortization 8,537 8,481
Consulting fees 136,711 -
Development costs 9,244 34,628
Foreign exchange (gain) loss (3,148) 17,769
Interest on long term debt 12,565 13,767
Investor relations 20,000 -
Market development 47,228 -
Professional fees 191,290 86,483
Rent 24,955 10,700
Selling, general and administrative 106,384 107,011
Wages and benefits 169,677 70,193
----------- ----------
723,443 349,032
----------- ----------
Net earnings (loss) before the
undernoted (617,584) (253,982)
Other expense:
Loss on disposal of capital assets - (15,596)
Loss on write-off of loan receivable - (5,374)
----------- ----------
- (20,970)
----------- ----------
Net loss for the period (617,584) (274,952)
Other comprehensive income (loss):
Foreign currency translation
adjustment (48,480) 43,976
----------- ----------
Comprehensive income (loss) $ (666,064) $ (230,976)
=========== ==========
Loss per share $ (0.02) $ (0.01)
=========== ==========
Weighted average number of shares
outstanding 30,251,743 32,364,711
=========== ==========
Consolidated Statement of Deficit:
Deficit, beginning of period $ (958,605) $ (510,677)
Net loss for the period (617,584) (274,952)
----------- ----------
Deficit, end of period $(1,576,189) $ (784,628)
=========== ==========
</TABLE>
See accompanying notes to consolidated financial statements
2
<PAGE> 47
ALR TECHNOLOGIES INC.
Consolidated Statement of Cash Flows ($ United States)
Nine month periods ended September 30, 1999 and September 30, 1998
(Unaudited)
<TABLE>
<CAPTION>
1999 1998
<S> <C> <C>
Cash flows from operating activities:
Cash received from customers $ 258,225 $ 300,508
Cash paid to suppliers and employees (716,536) (688,731)
Interest paid on long term debt (12,565) (13,767)
----------- ----------
Net cash used by operating activities (470,875) (401,990)
Cash flows from financing activities:
Proceeds from long term debt - 104,493
Repayment of long term debt (201,389) (140,695)
Shares issued for cash 921,006 442,922
Shares issued for net cash assets
on acquisition (258,129) 156,836
Class A shares acquired - (195,925)
----------- ----------
Net cash provided by financing
activities 461,488 367,631
Cash flows from investing activities:
Purchase of capital assets (11,442) (13,917)
----------- ----------
Net cash used in investing activities (11,442) (13,917)
Foreign currency translation adjustment (3,641) 7,625
----------- ----------
Increase (decrease) in cash during
the period (24,470) (40,651)
Cash, beginning of period 77,111 33,187
=========== ==========
Cash, end of period $ 52,641 $ 7,464
=========== ==========
Reconciliation of net loss for the
period to net cash used by
operating activities
Net loss for the period $ (617,584) $ (274,952)
Adjustments to reconcile net loss
for the period to net cash used by
operating activities
Amortization 8,537 8,481
Loss on disposal of capital assets - 15,596
Loss on write-off of loan receivable - 5,374
Changes in non-cash operating
working capital 138,172 (156,489)
----------- ----------
Net cash used by operating activities $ (470,875) $ (401,990)
=========== ==========
</TABLE>
See accompanying notes to consolidated financial statements.
3
<PAGE> 48
ALR TECHNOLOGIES INC.
Notes to Consolidated Financial Statements ($ United States)
Nine month periods ended September 30, 1999 and September 30, 1998
(Unaudited)
1. Basis of presentation
The financial statements are prepared in accordance with
accounting principles generally accepted in the United States for
interim financial reporting and pursuant to the instructions of
the United States Securities and Exchange Commission Regulation
S-B. While these financial statements reflect all normal recurring
adjustments which are, in the opinion of management, necessary for
fair presentation of the results of the interim period, they do
not include all of the information and footnotes required by
generally accepted accounting principles for complete financial
statements. For further information, refer to the financial
statements and footnotes thereto included in the Company's Form
10-SB dated December 9, 1999.
2. Significant accounting policy
Basis of consolidation
The consolidated financial statements include the accounts of the
ALR Technologies Inc. ("ALR Tech") and its wholly-owned
subsidiaries, A Little Reminder (ALR) Inc. ("ALR Inc.") and Timely
Devices Inc. All significant intercompany balances and
transactions have been eliminated on consolidation.
Effective April 30, 1999, the Company acquired 99.96% of the
issued outstanding Class A common shares of ALR Inc. through an
exchange of shares. As ALR Inc. shareholders obtained control of
ALR Tech through the exchange of their Class A common shares for
common shares of ALR Tech, the acquisition of ALR Inc. has been
accounted for in these consolidated financial statements as a
reverse acquisition. Consequently, the consolidated statements of
loss and deficit and cash flows reflect the results of operations
and changes in financial position of ALR Inc. for the six month
period ended June 30, 1998, combined with those of its legal
parent, ALR Tech from acquisition on April 30, 1999, in accordance
with generally accepted accounting principles for reverse
acquisitions.
The 0.04% non-controlling interest of ALR Inc. has not been
presented in the consolidated financial statements as the amount
is not material.
4
<PAGE> 49
ALR TECHNOLOGIES INC.
Notes to Consolidated Financial Statements ($ United States)
Nine month periods ended September 30, 1999 and September 30, 1998
(Unaudited)
3. Business combination
Effective April 30, 1999, ALR Tech and ALR Inc. executed a
business combination agreement. ALR Tech issued 36,533,130 common
shares to the shareholders of ALR Inc. in consideration for 99.96%
of the issued and outstanding Class A common shares of ALR Inc. on
the basis of one common share of ALR Tech for every Class A common
share of ALR Inc. As the former shareholders of ALR Inc. obtained
control of ALR Tech through the share exchange, this transaction
has been accounted for in these financial statements as a reverse
acquisition and the purchase method of accounting has been
applied. Under reverse acquisition accounting, ALR Inc. is
considered to have acquired ALR Tech with the results of ALR Tech's
operations included in the consolidated financial statements from
the date of acquisition. The acquisition has been recorded at the
net asset value of ALR Tech at the date of acquisition. The
acquisition details are as follows:
Net assets
Cash $ 43,469
Prepaid expenses 191,492
Capital assets 5,768
Accounts payable and accrued liabilities (56,726)
Advances from ALR Inc. (253,151)
---------
Consideration given for net assets acquired
36,533,130 common shares issued $ (69,148)
=========
As ALR Inc. is deemed to be the continuing entity, share capital
has been increased by $1,078,670 (note 4(b)) as a result of
accounting for this combination as a reverse takeover.
In conjunction with this business combination, 6,000,000 shares of
ALR Tech were returned for cancellation and the Company acquired
an additional 10,000,000 shares for $1,000 which were then
cancelled.
5
<PAGE> 50
ALR TECHNOLOGIES INC.
Notes to Consolidated Financial Statements ($ United States)
Nine month periods ended September 30, 1999 and September 30, 1998
(Unaudited)
3. Business combination (continued)
The consolidated statements of loss and deficit and cash flows
reflect the results of operations and changes in financial
position of ALR Inc, the legal subsidiary, for the six month
period ended June 30, 1999, combined with those of ALR Tech, the
legal parent, from April 30, 1999, being the effective date of the
acquisition, to June 30, 1999.
The following table sets forth the pro-forma consolidated
statement of operations data of the Company which reflects
adjustments to the consolidated financial statements to present
the business combination of ALR Tech and ALR Inc. as if the
combinations were effective January 1, 1998 and 1999:
September 30 September 30
1999 1998
(Unaudited) (Unaudited)
Sales $ 252,823 $ 316,042
---------- ----------
Net loss for the period $ (937,813) $ (306,527)
---------- ----------
Loss per share $ (0.03) $ (0.01)
========== ==========
The pro-forma financial information does not necessarily reflect
the results of operations that would have occurred had ALR Tech
and ALR Inc. constituted a single entity during such periods.
7
<PAGE> 51
ALR TECHNOLOGIES INC.
Notes to Consolidated Financial Statements ($ United States)
Nine month periods ended September 30, 1999 and September 30, 1998
(Unaudited)
4. Capital stock
a) Authorized:
The authorized capital stock of the Company consists of 75,000,000
common shares with a par value of $0.001 per share.
b) Issued and outstanding:
The continuity of the Company's issued and outstanding common
shares is as follows:
<TABLE>
<CAPTION>
Capital Stock Additional
Number of Paid in
Shares Amount Capital
<S> <C> <C> <C>
Balance, December 31, 1998 11,041,500 $ 11,042 $ 20,708
Issued for cash at $0.50
per share 503,816 504 251,404
----------- -------- -----------
11,545,316 11,546 272,112
Increase in book value of
ALR Tech's share capital
to that of ALR Inc. 36,532 1,042,138
----------- -------- -----------
Balance, April 30, 1999 prior
to business combination
with ALR Inc. 11,545,316 48,078 1,314,250
Shares issued to acquire
shares of ALR Inc.,
recorded at the carrying
value of ALR Tech's
net assets 36,533,130 (69,148)
Common shares acquired
and retired (16,000,000) (16,000) 15,000
----------- -------- -----------
Balance, September 30, 1999 32,078,446 $ 32,078 $ 1,260,102
=========== ======== ===========
</TABLE>
8
<PAGE> 52
ITEM 14. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS.
There have been no changes in or disagreements with the Company's
independent accountant.
ITEM 15. INDEX TO FINANCIAL STATEMENTS AND EXHIBITS.
(a) Financial Statements:
(b) Exhibits:
Exhibit
Number Description
3.1 Initial Articles of Incorporation.
3.2 Bylaws
3.3 Articles of Amendment to the Articles of Incorporation,
as filed.
3.4 Articles of Amendment to the Articles of Incorporation,
as filed.
27 Financial Data Schedule.
99.1 Distribution Agreement between the Company and ALR.
99.2 Pooling Agreement
99.3 Amended Pooling Agreement
99.4 Lock-Up Agreement
99.5 Termination Agreement with Michael Best.
99.6 Termination Agreement with Norman van Roggen.
99.7 Assignment Agreement
<PAGE> 53
SIGNATURES
In accordance with Section 12 of the Securities Exchange Act of
1934, the Company has caused this signature page to be signed on its
behalf by the undersigned, thereunto duly authorized.
ALR TECHNOLOGIES INC.
BY: /s/ John C. Baldwin
John C. Baldwin
Further each officer and director certifies that he has read the
foregoing Form 10-SB registration statement; knows the contents
thereof; and, warrants that the information contained therein is true
and correct and does not omit any material information required be
disclosed pursuant to the rules and regulations of the Securities and
Exchange Commission.
Name Title Date
/s/ John C. Baldwin President and a member December 8, 1999
John C. Baldwin of the Board of Directors
/s/ Lorne Drever Vice President and a December 8, 1999
Lorne Drever Member of the Board
of Directors
/s/ Greg Rae Vice President - Technology December 8, 1999
Greg Rae and a member of the Board of
Directors
<PAGE> 54
ARTICLES OF INCORPORATION
OF
MO BETTA CORP.
The undersigned, to form a Nevada corporation,
CERTIFIES THAT:
I. NAME: The name of the corporation is:
MO BETTA CORP.
II. PRINCIPAL OFFICE: The location of the principal office of
this corporation within the State of Nevada is 6121 Lakeside Drive,
Suite 250, Reno, Nevada 89511; this corporation may maintain an
office or offices in such other place within or without the State
of Nevada as may be from time to time designated by the Board of
Directors or by the corporation; and this corporation may conduct
business of every kind or nature, including the meetings of
Directors or Stockholders, within Nevada, as well as without the
State of Nevada.
III. PURPOSE: The purpose for which this corporation. is
formed is:
To engage in any lawful activity.
IV. AUTHORIZATION OF CAPITAL STOCK: The amount of the total
authorized capital stock of the corporation shall be TWENTY FIVE
THOUSAND DOLLARS ($25,000.00), consisting of Twenty Five Thousand
(25,000) shares of common stock with a par value of $1.00 per
share.
V. INCORPORATOR: The name and post office address of the
incorporator signing these Articles of Incorporation is as follows:
NAME POST OFFICE ADDRESS
Jennifer Johnson 6121 Lakeside Drive
Suite 250
Reno, Nevada 89511
<PAGE> 55
VI. DIRECTORS: The governing board of this corporation shall
be known as directors, and the first board shall be one (1) in
number. The corporation shall have only one (1) shareholder at
present.
So long as all of the shares of this corporation are
owned beneficially and of record by either one or two shareholders,
the number of directors may be fewer than three, but not fewer than
the number of shareholders. Otherwise, the number of directors
shall not be fewer than three.
Subject to the foregoing limitations, the number of
directors may, at any time or times, be increased or decreased by
a duly adopted amendment to these Articles of Incorporation, or in
such manner as provided in the By-Laws of this corporation.
The name and post office address of the director
constituting the first Board of Directors is as follows:
NAME POST OFFICE ADDRESS
Michael J. Morrison 6121 Lakeside Drive
Suite 250
Reno, NV 89511
VII. STOCK NON-ASSESSABLE: The capital stock or the holders
thereof, after the amount of the subscription price has been paid
in, shall not be subject to any assessment whatsoever to pay the
debts of the corporation.
VIII. TERM OF EXISTENCE: This corporation shall have
perpetual existence.
IX. CUMULATIVE VOTING: No cumulative voting shall be in the
election of directors.
X. PREEMPTIVE RIGHTS: Stockholders shall not be entitled to
preemptive rights.
<PAGE> 56
THE UNDERSIGNED, being the incorporator hereinbefore named for
the purpose of forming a corporation pursuant to the General
Corporation Law, of the State of Nevada, does make and file these
Articles of Incorporation, hereby declaring and certifying the
facts herein stated are true, and, accordingly, has hereunto set
her hand this 23rd day of 1987.
/s/ Jennifer Johnson
Jennifer Johnson
STATE OF NEVADA )
) ss.
COUNTY OF WASHOE )
On this 23rd day of March, 1987, before me, a Notary Public,
personally appeared Jennifer Johnson who acknowledged she executed
the above instrument.
/s/ Michael J. Morrison
Notary Public
[SEAL]
MICHAEL J. MORRISON
Notary Public - State at Nevada
Appointment Recorded in Washoe County
MY APPOINTMENT EXPIRES JULY 7. 1990
<PAGE> 57
BYLAWS
OF
ALR TECHNOLOGIES INC
I. SHAREHOLDER'S MEETING.
.01 Annual Meetings.
The annual meeting of the shareholders of this Corporation, for
the purpose of election of Directors and for such other business
as may come before it, shall be held at the registered office of
the Corporation, or such other places, either within or without
the State of Nevada, as may be designated by the notice of the
meeting, on the first week in June of each and every year, at
1:00 p.m., commencing in 2000, but in case such day shall be a
legal holiday, the meeting shall be held at the same hour and
place on the next succeeding day not a holiday.
.02 Special Meeting.
Special meetings of the shareholders of this Corporation may be
called at any time by the holders of ten percent (10%) of the
voting shares of the Corporation, or by the President, or by the
Board of Directors or a majority thereof. No business shall be
transacted at any special meeting of shareholders except as is
specified in the notice calling for said meeting. The Board of
Directors may designate any place, either within or without the
State of Nevada, as the place of any special meeting called by
the president or the Board of Directors, and special meetings
called at the request of shareholders shall be held at such
place in the State of Nevada, as may be determined by the Board
of Directors and placed in the notice of such meeting.
.03 Notice of Meeting.
Written notice of annual or special meetings of shareholders
stating the place, day, and hour of the meeting and, in the case
of a special meeting, the purpose or purposes for which the
meeting is called shall be given by the secretary or persons
authorized to call the meeting to each shareholder of record
entitled to vote at the meeting. Such notice shall be given not
less than ten (10) nor more than fifty (50) days prior to the
date of the meeting, and such notice shall be deemed to be
delivered when deposited in the United States mail addressed to
the shareholder at his/her address as it appears on the stock
transfer books of the Corporation.
.04 Waiver of Notice.
Notice of the time, place, and purpose of any meeting may be
waived in writing and will be waived by any shareholder by
his/her attendance thereat in person or by proxy. Any
shareholder so waiving shall be bound by the proceedings of any
such meeting in all respects as if due notice thereof had been
given.
<PAGE> 58
.05 Quorum and Adjourned Meetings.
A majority of the outstanding shares of the Corporation entitled
to vote, represented in person or by proxy, shall constitute a
quorum at a meeting of shareholders. A majority of the shares
represented at a meeting, even if less than a quorum, may
adjourn the meeting from time to time without further notice.
At such adjourned meeting at which a quorum shall be present or
represented, any business may be transacted which might have
been transacted at the meeting as originally notified. The
shareholders present at a duly organized meeting may continue to
transact business until adjournment, notwithstanding the
withdrawal of enough shareholders to leave less than a quorum.
.06 Proxies.
At all meetings of shareholders, a shareholder may vote by proxy
executed in writing by the shareholder or by his/her duly
authorized attorney in fact. Such proxy shall be filed with the
secretary of the Corporation before or at the time of the
meeting. No proxy shall be valid after eleven (11) months from
the date of its execution, unless otherwise provided in the
proxy.
.07 Voting of Shares.
Except as otherwise provided in the Articles of Incorporation or
in these Bylaws, every shareholder of record shall have the
right at every shareholder's meeting to one (1) vote for every
share standing in his/her name on the books of the Corporation,
and the affirmative vote of a majority of the shares represented
at a meeting and entitled to vote thereat shall be necessary
for the adoption of a motion or for the determination of all
questions and business which shall come before the meeting.
II. DIRECTORS.
.01 General Powers.
The business and affairs of the Corporation shall be managed by
its Board of Directors.
.02 Number, Tenure and Qualifications.
The number of Directors of the Corporation shall be not less
than one nor more than thirteen. Each Director shall hold
office until the next annual meeting of shareholders and until
his/her successor shall have been elected and qualified.
Directors need not be residents of the State of Nevada or
shareholders of the Corporation.
<PAGE> 59
.03 Election.
The Directors shall be elected by the shareholders at their
annual meeting each year; and if, for any cause the Directors
shall not have been elected at an annual meeting, they may be
elected at a special meeting of shareholders called for that
purpose in the manner provided by these Bylaws.
.04 Vacancies.
In case of any vacancy in the Board of Directors, the remaining
Director, whether constituting a quorum or not, may elect a
successor to hold office for the unexpired portion of the terms
of the Director whose place shall be vacant, and until his/her
successor shall have been duly elected and qualified.
.05 Resignation.
Any Director may resign at any time by delivering written notice
to the secretary of the Corporation.
.06 Meetings.
At any annual, special or regular meeting of the Board of
Directors, any business may be transacted, and the Board may
exercise all of its powers. Any such annual, special or regular
meeting of the Board of Directors of the Corporation may be held
outside of the State of Nevada, and any member or members of the
Board of Directors of the Corporation may participate in any
such meeting by means of a conference telephone or similar
communications equipment by means of which all persons
participating in the meeting can hear each other at the same
time; the participation by such means shall constitute presence
in person at such meeting.
A. Annual Meeting of Directors.
Annual meetings of the Board of Directors shall be held
immediately after the annual shareholders' meeting or at
such time and place as may be determined by the Directors.
No notice of the annual meeting of the Board of Directors
shall be necessary.
B. Special Meetings.
Special meetings of the Directors shall be called at any
time and place upon the call of the president or any
Director. Notice of the time and place of each special
meeting shall be given by the secretary, or the persons
calling the meeting, by mail, radio, telegram, or by
personal communication by telephone or otherwise at least
one (1) day in advance of the time of the meeting. The
purpose of the meeting need not be given in the notice.
Notice of any special meeting may be waived in writing or
by telegram (either before or after such meeting) and will
be waived by any Director in attendance at such meeting.
<PAGE> 60
C. Regular Meetings of Directors.
Regular meetings of the Board of Directors shall be held at
such place and on such day and hour as shall from time to
time be fixed by resolution of the Board of Directors. No
notice of regular meetings of the Board of Directors shall
be necessary.
.07 Quorum and Voting.
A majority of the Directors presently in office shall constitute
a quorum for all purposes, but a lesser number may adjourn any
meeting, and the meeting may be held as adjourned without
further notice. At each meeting of the Board at which a quorum
is present, the act of a majority of the Directors present at
the meeting shall be the act of the Board of Directors. The
Directors present at a duly organized meeting may continue to
transact business until adjournment, notwithstanding the
withdrawal of enough Directors to leave less than a quorum.
.08 Compensation.
By resolution of the Board of Directors, the Directors may be
paid their expenses, if any, of attendance at each meeting of
the Board of Directors and may be paid a fixed sum for
attendance at each meeting of the Board of Directors or a stated
salary as Director. No such payment shall preclude any Director
from serving the Corporation in any other capacity and receiving
compensation therefor.
.09 Presumption of Assent.
A Director of the Corporation who is present at a meeting of the
Board of Directors at which action on any corporate matter is
taken shall be presumed to have assented to the action taken
unless his/her dissent shall be entered in the minutes of the
meeting or unless he/she shall file his/her written dissent to
such action with the person acting as the secretary of the
meeting before the adjournment thereof or shall forward such
dissent by registered mail to the secretary of the Corporation
immediately after the adjournment of the meeting. Such right to
dissent shall not apply to a Director who voted in favor of such
action.
.10 Executive and Other Committees.
The Board of Directors, by resolution adopted by a majority of
the full Board of Directors, may designate from among its
members an executive committee and one of more other committees,
each of which, to the extent provided in such resolution, shall
have and may exercise all the authority of the Board of
Directors, but no such committee shall have the authority of the
Board of Directors, in reference to amending the Articles of
Incorporation, adoption a plan of merger or consolidation,
recommending to the shareholders the sale, lease, exchange, or
other disposition of all of substantially all the property and
<PAGE> 61
assets of the dissolution of the Corporation or a revocation
thereof, designation of any such committee and the delegation
thereto of authority shall not operate to relieve any member of
the Board of Directors of any responsibility imposed by law.
.11 Chairman of Board of Directors.
The Board of Directors may, in its discretion, elect a chairman
of the Board of Directors from its members; and, if a chairman
has been elected, he/she shall, when present, preside at all
meetings of the Board of Directors and the shareholders and
shall have such other powers as the Board may prescribe.
.12 Removal.
Directors may be removed from office with or without cause by a
vote of shareholders holding a majority of the shares entitled
to vote at an election of Directors.
III. ACTIONS BY WRITTEN CONSENT.
Any corporate action required by the Articles of Incorporation,
Bylaws, or the laws under which this Corporation is formed, to be
voted upon or approved at a duly called meeting of the Directors or
shareholders may be accomplished without a meeting if a written
memorandum of the respective Directors or shareholders, setting forth
the action so taken, shall be signed by all the Directors or
shareholders, as the case may be.
IV. OFFICERS.
.01 Officers Designated.
The Officers of the Corporation shall be a president, one or
more vice presidents (the number thereof to be determined by the
Board of Directors), a secretary and a treasurer, each of whom
shall be elected by the Board of Directors. Such other
Officers and assistant officers as may be deemed necessary may
be elected or appointed by the Board of Directors. Any Officer
may be held by the same person, except that in the event that
the Corporation shall have more than one director, the offices
of president and secretary shall be held by different persons.
.02 Election, Qualification and Term of Office.
Each of the Officers shall be elected by the Board of Directors.
None of said Officers except the president need be a Director,
but a vice president who is not a Director cannot succeed to or
fill the office of president. The Officers shall be elected by
the Board of Directors. Except as hereinafter provide, each of
said Officers shall hold office from the date of his/her
election until the next annual meeting of the Board of Directors
and until his/her successor shall have been duly elected and
qualified.
<PAGE> 62
.03 Powers and Duties.
The powers and duties of the respective corporate Officers shall
be as follows:
A. President.
The president shall be the chief executive Officer of the
Corporation and, subject to the direction and control of
the Board of Directors, shall have general charge and
supervision over its property, business, and affairs.
He/she shall, unless a Chairman of the Board of Directors
has been elected and is present, preside at meetings of the
shareholders and the Board of Directors.
B. Vice President.
In the absence of the president or his/her inability to
act, the senior vice president shall act in his place and
stead and shall have all the powers and authority of the
president, except as limited by resolution of the Board of
Directors.
C. Secretary.
The secretary shall:
1. Keep the minutes of the shareholder's and of the
Board of Directors meetings in one or more books
provided for that purpose;
2. See that all notices are duly given in accordance
with the provisions of these Bylaws or as
required by law;
3. Be custodian of the corporate records and of the
seal of the Corporation and affix the seal of the
Corporation to all documents as may be required;
4. Keep a register of the post office address of
each shareholder which shall be furnished to the
secretary by such shareholder;
5. Sign with the president, or a vice president,
certificates for shares of the Corporation, the
issuance of which shall have been authorized by
resolution of the Board of Directors;
6. Have general charge of the stock transfer books
of the corporation; and,
7. In general perform all duties incident to the
office of secretary and such other duties as from
time to time may be assigned to him/her by the
president or by the Board of Directors.
<PAGE> 63
D. Treasurer.
Subject to the direction and control of the Board of
Directors, the treasurer shall have the custody, control
and disposition of the funds and securities of the
Corporation and shall account for the same; and, at the
expiration of his/her term of office, he/she shall turn
over to his/her successor all property of the Corporation
in his/her possession.
E. Assistant Secretaries and Assistant Treasurers.
The assistant secretaries, when authorized by the Board of
Directors, may sign with the president or a vice president
certificates for shares of the Corporation the issuance of
which shall have been authorized by a resolution of the
Board of Directors. The assistant treasurers shall,
respectively, if required by the Board of Directors, give
bonds for the faithful discharge of their duties in such
sums and with such sureties as the Board of Directors shall
determine. The assistant secretaries and assistant
treasurers, in general, shall perform such duties as shall
be assigned to them by the secretary or the treasurer,
respectively, or by the president or the Board of
Directors.
.04 Removal.
The Board of Directors shall have the right to remove any
Officer whenever in its judgment the best interest of the
Corporation will be served thereby.
.05 Vacancies.
The Board of Directors shall fill any office which becomes
vacant with a successor who shall hold office for the unexpired
term and until his/her successor shall have been duly elected
and qualified.
.06 Salaries.
The salaries of all Officers of the Corporation shall be fixed
by the Board of Directors.
V. SHARE CERTIFICATES
.01 Form and Execution of Certificates.
Certificates for shares of the Corporation shall be in such form
as is consistent with the provisions of the Corporation laws of
the State of Nevada. They shall be signed by the president and
by the secretary, and the seal of the Corporation shall be
affixed thereto. Certificates may be issued for fractional
shares.
<PAGE> 64
.02 Transfers.
Shares may be transferred by delivery of the certificates
therefor, accompanied either by an assignment in writing on the
back of the certificates or by a written power of attorney to
assign and transfer the same signed by the record holder of the
certificate. Except as otherwise specifically provided in these
Bylaws, no shares shall be transferred on the books of the
Corporation until the outstanding certificate therefor has been
surrendered to the Corporation.
.03 Loss or Destruction of Certificates.
In case of loss or destruction of any certificate of shares,
another may be issued in its place upon proof of such loss or
destruction and upon the giving of a satisfactory bond of
indemnity to the Corporation. A new certificate may be issued
without requiring any bond, when in the judgment of the Board of
Directors it is proper to do so.
VI. BOOKS AND RECORDS.
.01 Books of Accounts, Minutes and Share Register.
The Corporation shall keep complete books and records of
accounts and minutes of the proceedings of the Board of
Directors and shareholders and shall keep at its registered
office, principal place of business, or at the office of its
transfer agent or registrar a share register giving the names of
the shareholders in alphabetical order and showing their
respective addresses and the number of shares held by each.
.02 Copies of Resolutions.
Any person dealing with the Corporation may rely upon a copy of
any of the records of the proceedings, resolutions, or votes of
the Board of Directors or shareholders, when certified by the
president or secretary.
VII. CORPORATE SEAL.
The following is an impression of the corporate seal of this
Corporation:
<PAGE> 65
VIII. LOANS.
Generally, no loans shall be made by the Corporation to its Officers
or Directors, unless first approved by the holder of two-third of the
voting shares, and no loans shall be made by the Corporation secured
by its shares. Loans shall be permitted to be made to Officers,
Directors and employees of the Company for moving expenses, including
the cost of procuring housing. Such loans shall be limited to
$25,000.00 per individual upon unanimous consent of the Board of
Directors.
IX. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
.01 Indemnification.
The Corporation shall indemnify any person who was or is a party
or is threatened to be made a party to any proceeding, whether
civil, criminal, administrative or investigative (other than an
action by or in the right of the Corporation) by reason of the
fact that such person is or was a Director, Trustee, Officer,
employee or agent of the Corporation, or is or was serving at
the request of the Corporation as a Director, Trustee, Officer,
employee or agent of another corporation, partnership, joint
venture, trust or other enterprise, against expenses (including
attorneys' fees), judgment, fines and amounts paid in settlement
actually and reasonably incurred by such person in connection
with such action, suit or proceeding if such person acted in
good faith and in a manner such person reasonably believed to be
in or not opposed to the best interests of the Corporation, and
with respect to any criminal action or proceeding, had no
reasonable cause to believe such person's conduct was unlawful.
The termination of any action, suit or proceeding by judgment,
order, settlement, conviction, or upon a plea of nolo contendere
or its equivalent, shall not, of itself, create a presumption
that the person did not act in good faith and in a manner which
such person reasonably believed to be in or not opposed to the
best interests of the Corporation, and with respect to any
criminal action proceeding, had reasonable cause to believe that
such person's conduct was unlawful.
.02 Derivative Action
The Corporation shall indemnify any person who was or is a party
or is threatened to be made a party to any threatened, pending or
completed action or suit by or in the right of the Corporation to
procure a judgment in the Corporation's favor by reason of the fact
that such person is or was a Director, Trustee, Officer, employee or
agent of the Corporation, or is or was serving at the request of the
Corporation as a Director, Trustee, Officer, employee or agent of
another corporation, partnership, joint venture, trust or other
enterprise, against expenses (including attorney's fees) and amount
paid in settlement actually and reasonably incurred by such person in
connection with the defense or settlement of such action or suit if
such person acted in good faith and in a manner such person
reasonably believed to be in or not opposed to the best interests of
the Corporation, and, with respect to amounts paid in settlement, the
<PAGE> 66
in settlement of the suit or action was in the best interests of
the Corporation; provided, however, that no indemnification
shall be made in respect of any claim, issue or matter as to
which such person shall have been adjudged to be liable for
gross negligence or willful misconduct in the performance of
such person's duty to the Corporation unless and only to the
extent that, the court in which such action or suit was brought
shall determine upon application that, despite circumstances of
the case, such person is fairly and reasonably entitled to
indemnity for such expenses as such court shall deem proper.
The termination of any action or suit by judgment or settlement
shall not, of itself, create a presumption that the person did
not act in good faith and in a manner which such person
reasonably believed to be in or not opposed to the best
interests of the Corporation.
.03 Successful Defense.
To the extent that a Director, Trustee, Officer, employee or
Agent of the Corporation has been successful on the merits or
otherwise, in whole or in part in defense of any action, suit or
proceeding referred to in Paragraphs .01 and .02 above, or in
defense of any claim, issue or matter therein, such person shall
be indemnified against expenses (including attorneys' fees)
actually and reasonably incurred by such person in connection
therewith.
.04 Authorization.
Any indemnification under Paragraphs .01 and .02 above (unless
ordered by a court) shall be made by the Corporation only as
authorized in the specific case upon a determination that
indemnification of the Director, Trustee, Officer, employee or
agent is proper in the circumstances because such person has met
the applicable standard of conduct set forth in Paragraphs .01
and .02 above. Such determination shall be made (a) by the
Board of Directors of the Corporation by a majority vote of a
quorum consisting of Directors who were not parties to such
action, suit or proceeding, or (b) is such a quorum is not
obtainable, by a majority vote of the Directors who were not
parties to such action, suit or proceeding, or (c) by
independent legal counsel (selected by one or more of the
Directors, whether or not a quorum and whether or not
disinterested) in a written opinion, or (d) by the Shareholders.
Anyone making such a determination under this Paragraph .04 may
determine that a person has met the standards therein set forth
as to some claims, issues or matters but not as to others, and
may reasonably prorate amounts to be paid as indemnification.
.05 Advances.
Expenses incurred in defending civil or criminal action, suit or
proceeding shall be paid by the Corporation, at any time or from
time to time in advance of the final disposition of such action,
suit or proceeding as authorized in the manner provided in
<PAGE> 67
Paragraph .04 above upon receipt of an undertaking by or on
behalf of the Director, Trustee, Officer, employee or agent to
repay such amount unless it shall ultimately be by the
Corporation is authorized in this Section.
.06 Nonexclusivity.
The indemnification provided in this Section shall not be deemed
exclusive of any other rights to which those indemnified may be
entitled under any law, bylaw, agreement, vote of shareholders
or disinterested Directors or otherwise, both as to action in
such person's official capacity and as to action in another
capacity while holding such office, and shall continue as to a
person who has ceased to be a Director, Trustee, Officer,
employee or agent and shall inure to the benefit of the heirs,
executors, and administrators of such a person.
.07 Insurance.
The Corporation shall have the power to purchase and maintain
insurance on behalf of any person who is or was a Director,
Trustee, Officer, employee or agent of the Corporation, or is or
was serving at the request of the Corporation as a Director,
Trustee, Officer, employee or agent of another corporation,
partnership, joint venture, trust or other enterprise, against
any liability assessed against such person in any such capacity
or arising out of such person's status as such, whether or not
the corporation would have the power to indemnify such person
against such liability.
.08 "Corporation" Defined.
For purposes of this Section, references to the "Corporation"
shall include, in addition to the Corporation, an constituent
corporation (including any constituent of a constituent)
absorbed in a consolidation or merger which, if its separate
existence had continued, would have had the power and authority
to indemnify its Directors, Trustees, Officers, employees or
agents, so that any person who is or was a Director, Trustee,
Officer, employee or agent of such constituent corporation or of
any entity a majority of the voting stock of which is owned by
such constituent corporation or is or was serving at the request
of such constituent corporation as a Director, Trustee, Officer,
employee or agent of the corporation, partnership, joint
venture, trust or other enterprise, shall stand in the same
position under the provisions of this Section with respect to
the resulting or surviving Corporation as such person would have
with respect to such constituent corporation if its separate
existence had continued.
<PAGE> 68
X. AMENDMENT OF BYLAWS.
.01 By the Shareholders.
These Bylaws may be amended, altered, or repealed at any regular
or special meeting of the shareholders if notice of the proposed
alteration or amendment is contained in the notice of the
meeting.
.02 By the Board of Directors.
These Bylaws may be amended, altered, or repealed by the
affirmative vote of a majority of the entire Board of Directors
at any regular or special meeting of the Board.
XI. FISCAL YEAR.
The fiscal year of the Corporation shall be set by resolution of the
Board of Directors.
XII. RULES OF ORDER.
The rules contained in the most recent edition of Robert's Rules or
Order, Newly Revised, shall govern all meetings of shareholders and
Directors where those rules are not inconsistent with the Articles of
Incorporation, Bylaws, or special rules or order of the Corporation.
XIII. REIMBURSEMENT OF DISALLOWED EXPENSES.
If any salary, payment, reimbursement, employee fringe benefit,
expense allowance payment, or other expense incurred by the
Corporation for the benefit of an employee is disallowed in whole or
in part as a deductible expense of the Corporation for Federal Income
Tax purposes, the employee shall reimburse the Corporation, upon
notice and demand, to the full extent of the disallowance. This
legally enforceable obligation is in accordance with the provisions
of Revenue Ruling 69-115, 1969-1 C.B. 50, and is for the purpose of
entitling such employee to a business expense deduction for the
taxable year in which the repayment is made to the Corporation. In
this manner, the Corporation shall be protected from having to bear
the entire burden of disallowed expense items.
<PAGE> 69
EXHIBIT 3.3
CERTIFICATE OF AMENDMENT
TO
ARTICLES OF INCORPORATION
OF
MO BETTA CORP.
The undersigned, being the President and Secretary of Mo Betta
Corp., hereby declare that the original Articles of the corporation
were filed with the Secretary of State of the State of Nevada on
March 24. 1987. Pursuant to the provisions of NRS 78.385-390 at a
duly noticed and convened meeting on October 21, 1998, the
Shareholders of the corporation, representing a majority of the
voting power of the company's Common Stock unanimously voted for
the following amendment to the Articles of Incorporation changing
the total authorized capital stock from 25,000 shares of Common
Stock, par value $1.00, to 75,000,000 shares of Common Stock, par
value $0.001
Article IV shall be amended as follows:
ARTICLE IV. AUTHORIZATION OF CAPITAL STOCK The amount of
the total authorized capital stock of the corporation shall be
Seventy-Five Thousand Dollars ($75,000), consisting of
Seventy-Five Million (75,000,000) shares of Common Stock, par
value $.001 per share.
The total number of shares of Common Stock of the Company
issued and outstanding on October 2. 1998 were forward split
on the basis of 1000 for 1. This does not affect the total
authorized shares or the par value
As a result of the split, any fractional shares shall be
rounded up to the next whole share
This amendment and the share split shall be effective on
filing of this Amended Certificate
<PAGE> 70
THE UNDERSIGNED, being the President and Secretary of Mo Betta
Corp. hereby declares and certifies that the facts herein stated
are true and, accordingly, has hereunto set his hand this 22nd day
of October, 1998
/s/ Robert G. Eadie
Robert Gregory Eadie, President and Secretary
STATE OF NEVADA )
) ss.
COUNTY OF WASHOE )
On this 22nd day of October, 1998, before me, a Notary Public
appeared Robert Gregory Eadie, personally known or proven to me to
be the President and Secretary respectively, of Mo Betta Corp. and
that he executed the above instrument.
/s/ Michael J. Morrison
MICHAEL J. Morrison
Notary Public - State of Nevada
Appointment Recorded in Washoe County
No. 94-0957-2 - Expires August 24, 2002
<PAGE> 71
EXHIBIT 3.4
CERTIFICATE OF AMENDMENT
TO
ARTICLES OF INCORPORATION
OF
MO BETTA CORP.
The undersigned, being the President and Secretary of Mo Betta
Corp., hereby declare that the original Articles of the corporation
were filed with the Secretary of State of the State of Nevada on March
24, 1987 and amended on October 22, 1998. Pursuant to the provisions of
NRS 78.385-390, at a duly noticed and convened meeting on October 21,
1998, the Shareholders of the corporation, representing a majority of
the voting power of the company's Common Stock unanimously voted for
the following amendment to the Articles of Incorporation.
Article I shall be amended as follows:
ARTICLE 1. NAME: The name of the corporation is:
ALR TECHNOLOGIES INC.
This amendment shall be effective on filing of this Amended
Certificate.
THE UNDERSIGNED, being the President and Secretary of Mo Betta
Corp. hereby declares and certifies that the facts herein stated are
true and, accordingly, has hereunto set his hand this 7th day of
December, 1998.
/s/ Robert G/ Eadie
Robert Gregory Eadie, President and Secretary
PROVINCE OF BRITISH COLUMBIA )
) ss.
COUNTRY OF CANADA )
On this 7th day of December, 1998, personally appeared before me,
a notary public in and for said county and state, Robert Gregory Eadie,
who, being duly sworn by me, did say that he is the President and
Secretary of Mo Betta Corp., that the foregoing document was signed on
behalf of said corporation by him; and that said corporation authorized
him to execute the same.
/s/ John Lauinger
Barrister & Solicitor
100- 1075 West Georgia Street
Vancouver, BC V6E 3G2
Ph (604) 631-4763
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information extracted from the
Consolidated Statement of Financial Condition at December 31, 1998 Audited and
September 30, 1999 (Unaudited) and the Statement of Income for the six months
ended December 31, 1998 (Audited) and the nine months ended 09/30/99 Unaudited)
and is qualified in its entirety by reference to such finanical statements.
</LEGEND>
<S> <C> <C>
<PERIOD-TYPE> YEAR 9-MOS
<FISCAL-YEAR-END> DEC-31-1998 DEC-31-1999
<PERIOD-END> DEC-31-1998 SEP-30-1999
<CASH> 33,642 52,641
<SECURITIES> 0 0
<RECEIVABLES> 12,417 6,933
<ALLOWANCES> 1,454 1,400
<INVENTORY> 266,975 314,679
<CURRENT-ASSETS> 321,328 425,188
<PP&E> 49,398 68,735
<DEPRECIATION> 19,740 29,218
<TOTAL-ASSETS> 350,986 464,706
<CURRENT-LIABILITIES> 682,664 715,076
<BONDS> 445,970 303,931
0 0
0 0
<COMMON> 422,143 32,079
<OTHER-SE> 0 1,260,101
<TOTAL-LIABILITY-AND-EQUITY> 350,986 464,706
<SALES> 218,208 252,823
<TOTAL-REVENUES> 218,208 252,823
<CGS> 159,350 146,964
<TOTAL-COSTS> 315,180 723,443
<OTHER-EXPENSES> 0 0
<LOSS-PROVISION> 0 0
<INTEREST-EXPENSE> 17,386 12,565
<INCOME-PRETAX> (256,322) (617,584)
<INCOME-TAX> 0 0
<INCOME-CONTINUING> (256,322) (617,584)
<DISCONTINUED> 0 0
<EXTRAORDINARY> 0 0
<CHANGES> 0 0
<NET-INCOME> (256,322) (617,584)
<EPS-BASIC> (0.01) (0.02)
<EPS-DILUTED> (0.01) (0.02)
</TABLE>
<PAGE> 73
EXHIBIT 99.1
DISTRIBUTION AGREEMENT
THIS DISTRIBUTION AGREEMENT is made and dated for reference
effective as of the 21st day of October, 1998.
BETWEEN:
A Little Reminder (ALR) Inc., a company continued under the
laws of the State of Wyoming and having an address for delivery
located at 2000-650 West Georgia Street, Vancouver, B.C., Canada,
V6B 4N8 (hereinafter referred to as the "Producer")
OF THE FIRST PART
AND
Mo Betta Corp., a company duly incorporated under the laws of
the State of Nevada and having an address for delivery located at
Suite 220, 1495 Ridgeview Drive, Reno, Nevada, 89509 (hereinafter
referred to as the "Distributor")
OF THE SECOND PART
WHEREAS:
A. The Producer has developed a unique and patented
medication compliance system to remind patients to ingest time
sensitive medication;
B. The system is known as A Little Reminder (ALR)[TM] (the
"ALR");
C. The Distributor desires to obtain the non-exclusive right
to distribute and market the ALR in the United States of America
and Canada (the "Area");
D. The Producer has agreed to grant and the Distributor
desires to obtain the rights from the Producer (collectively the
"Rights") with respect to the ALR or in respect of any invention or
discovery by the Producer of any product or device similar in
design and/or function to, or designed or appropriate for use with,
or improving on the ALR, for the distribution and sale of the ALR
(including the ALR as it may be improved in the future and any
product or device similar in design and/or function, or improving
on the ALR) throughout the Area;
<PAGE> 74
E. In order to maintain the Rights in good standing in
accordance with the terms of the Agreement the Distributor will be
required to purchase at least $5,000,000 worth of the ALR from the
Producer during the first year term of this Agreement, and should
the Distributor fail to purchase at least $5,000,000 worth of the
ALR during the initial term of this Agreement then the Distributor
shall have thereby, without any further act, immediately terminated
its Rights under this Agreement and, thereupon, the parties hereto
acknowledge and agree that all residual and contingent rights and
obligations of both parties under the terms of this Agreement shall
also immediately terminate;
F. In order to maintain the Rights in good standing in
subsequent years, the Producer and Distributor agree to set amounts
to be purchased (the "Target") no later than January 1 of each
subsequent year the Agreement is in effect.
G. If the Producer and Distributor fail to agree to Target,
for the term of this Agreement, the Target will be set at a level
25% higher than that of the previous calendar year.
H. The Distributor acknowledges that the Rights to market
and distribute the ALR are unique and valuable assets of the
Producer; and
I. The parties hereto wish to commit to writing the terms,
covenants and conditions of their respective rights and duties with
respect to the aforesaid,
NOW THEREFORE THIS AGREEMENT WITNESSETH that is consideration
of the mutual covenants and agreements herein contained, and
subject to the terms and provisions hereinafter set out, the
parties hereto covenant and agree each with the others as follows:
Article 1
GRANT
Grant of Rights
The Producer hereby grants to the Distributor the Rights
during the continuance of this Agreement to distribute and market
the ALR, within the Area, using the ALR and such other items as the
Producer may hereafter offer for sale in connection with the ALR.
<PAGE> 75
Article 2
DISTRIBUTION AND SUPPLY
2.1 Supply and Pricing of ALR
The ALR will be supplied by the Producer to the Distributor,
at prices published by the Producer from time to time, on the
following basis
(A) The Distributor shall be responsible for and shall
applicable, in connection with the sale of ALR,
(B) Discount of 40% of the published prices will be provided
to the Distributor;
(C) The Producer shall be required to advise the Distributor
at least thirty days before any proposed increase in the
price of ALR and associated products to be charged by the
Producer to the Distributor under the terms of this
Agreement;
(D) Subject to delays beyond the control of the Producer,
shipment of the Distributor's order shall be made by the
Producer within thirty days of the receipt of a purchase
order from the Distributor with respect to the supply of
ALR and associated products;
(E) All shipments of ALR and associated products to the
Distributor shall be delivered by the Producer to the
Distributor at the Distributor's designated place of
business, factory or warehouse located in the Area and
such shipment shall only be FOB such designation if such
shipment has an invoiced price in excess of $10,000; and
(F) All purchase orders given by the Distributor to the
Producer at the time of delivery of Product shall be
accompanied for each such order by payment in either cash
or by certified cheque, money order or bank draft unless
otherwise agreed to between the parties hereto. There
shall be no term of credit advanced from the Producer to
the Distributor unless the same is agreed upon by the
parties hereto in writing.
<PAGE> 76
2.2 Delay
The Producer shall not be liable for any delays in delivery
beyond the control of the Producer, and shall endeavour to meet any
delivery date requested by the Distributor.
2.3 Risk
Except with respect to ALR and associated products which is
found to be defective or with respect to damage which is caused to
such Product in transport and outside the control of the
Distributor, all ALR and associated products shipped by the
Producer to the Distributor shall be at the risk of the Distributor
following shipment from the location or locations specified by the
Producer in paragraph "2.1(E)" hereinabove.
2.4 Warranties, Etc.
Any warranty, terms of sale or other promises made by the
Distributor to a customer of the Distributor, or to any other
person, which is not included in the Producer's warranty shall be
the Distributor's responsibility to fulfill, and the Producer shall
have and take no obligation or responsibility to the Distributor or
its customers with respect to the same.
Article 3
NAME OF THE PRODUCER'S SYSTEM AND OF THE PRODUCT
3.1 Ownership of Trade Marks
The distributor agrees that the trade mark and/or trade name
A Little Reminder ALR[TM], a medication compliance device and other
trade marks or trade names used in connection with the Producer's
business are owned by the Producer and identify the wares and
services produced and performed by the Producer. Neither this
Agreement nor the operation of the distribution business
contemplated by this Agreement confers or shall be deemed to confer
upon the Distributor any interest in the trade marks or trade names
now or hereafter owned or adopted by the Producer (the "Producer's
Trade Marks") including, without limiting the generality of the
foregoing, the trade mark and/or trade name.
<PAGE> 77
3.2 Prohibition against Disputing Producer's Rights
The Distributor covenants and agrees not to, during or after
the term of this Agreement, contest the title to the Producer's
Trade Marks, in any way dispute or impugn the validity of the
Producer's Trade Marks or take any action to the detriment of the
Producer's interests therein. The Distributor acknowledges that by
reason of unique nature of the ALR and the Producer's aforesaid
property rights and by reason of the Distributor's knowledge of and
association with the ALR and associated products during the term
hereof, the aforesaid covenant, both during the term of this
Agreement and thereafter, is reasonable and commensurate for the
protection of the legitimate business interests of the Producer.
3.3 Infringement of Trade Marks
The Distributor shall immediately notify the Producer of any
infringement of or challenge to the Producer's use of any of the
Producer's Trade Marks as soon as it shall become aware of the
infringement or challenge.
Article 4
DISTRIBUTOR IS INDEPENDENT AND NOT AGENT
4.1 Independent Contractor
The Distributor shall be an independent contractor and not an
employee of the Producer, and the Producer assumes no obligations,
contractual or otherwise, existing or which may arise with respect
to the Distributor's operations. Nothing contained herein shall
constitute a partnership or joint venture between the parties
hereto, and all sales made by the Distributor shall be in the
Distributor's name without reference to the Producer if deemed so.
4.2 Distributor not Agent
The Distributor shall have no right to pledge the credit of
the Producer, and the Distributor is not, and shall not describe
itself as, the agent of the Producer or the manufacturer of any of
the ALR.
<PAGE> 78
Article 5
DURATION OF AGREEMENT
5.1 Commencement
The Agreement shall be effective as and from the 21st day of
October, 1998.
5.2 Expiration
Subject to earlier termination for failure to meet Target, the
Agreement will expire on December 31, 2008.
5.3 The First Year
For the purposes of this Agreement, the first year is defined
as October 21, 1998 to December 31, 1999.
5.4 Subsequent Years
Subsequent years will mean calendar year starting on January
1, 2000.
Article 6
CERTAIN COST OF PRODUCER
6.1 Costs Related to Assistance
Where the Producer provides training or sales promotion
assistance within the Area at the Distributor's request, the
Distributor shall pay to the Producer the Producer's actual costs
incurred in connection therewith.
Article 7
ADDITIONAL COVENANTS AND AGREEMENTS OF THE PRODUCER
7.1 Producer will Supply
The Producer agrees to supply ALR and associated products to
the Distributor, upon the request of the Distributor, pursuant to
the terms of this Agreement.
<PAGE> 79
7.2 Product Liability Insurance
If required, the Producer agrees to provide to the
Distributor, not more frequently than annually and upon the
Distributor's written request to do so, with evidence of product
liability insurance.
Article 8
ADDITIONAL COVENANTS AND AGREEMENTS OF THE DISTRIBUTOR
8.1 Restriction to Area
The Distributor covenants and agrees with the Producer that
the Distributor will not at any time deal in the ALR and associated
products or sell or solicit sale for the ALR and associated
products except within the Area agree upon.
8.2 Standards of Operation, Record, Etc.
During the currency of this Agreement the Distributor shall:
(A) Maintain a proper place of business, including a
telephone answering service, easily accessible to
purchasers or potential purchasers of ALR and associated
products form the Distributor during normal business
hours in different time zones;
(B) Service the ALR and associated products at all
distribution locations in the Area efficiently and at
reasonable and competitive rates, such services to
include attending each distribution location at least
once every month unless otherwise agreed to in writing by
the Producer;
(C) Maintain sufficient stock to service and properly replace
all of the ALR and associated products sold by the
Distributor; and
(D) Make diligent efforts to sell the ALR and associated
products within the Area.
<PAGE> 80
8.3 Claims Etc. against the Producer
The Distributor hereby covenants and agrees to indemnify and
save harmless the Producer from and against all claims, demands,
damage, loss, costs and expense incurred by reason of any act,
neglect, default or representation of or by the Distributor, its
employees or otherwise arising in connection with the use and
employment of the ALR and associated products or the sales of the
ALR and associated products, save where the same is caused solely
by the act or omission of the Producer.
Article 9
ASSIGNMENT
9.1 Assignment by Distributor
The Distributor shall not assign this Agreement or any rights
hereunder in whole or in part unless it shall have first requested
and obtained the consent in writing of the Producer to such
proposed assignment.
9.2 Assignment by Producer
This Agreement and all rights hereunder may be assigned or
transferred by the Producer at any time provided that the
Producer's assignee agrees to expressly honour the terms and
conditions of this Agreement.
9.3 Deemed Assignment
The change in control of the Distributor shall be deemed to be
an assignment of this Agreement and therefore subject to paragraph
9.1 hereinabove.
Article 10
INDEMNIFICATION
10.1 In consideration of the premises and as an inducement to
the Producer to enter into this Agreement with the Distributor, the
Distributor does hereby covenant and agree with the Producer:
<PAGE> 81
(A) To make the due and punctual payment of all monies and
charges payable under this Agreement,
(B) To effect prompt and complete performance of all and
singular the terms, covenants, conditions and provisions
of this Agreement contained on the part of the
Distributor to be kept, observed and performed; and
(C) To indemnify and save harmless the Producer from any
loss, costs or damages arising out of any failure to pay
monies and charges due under this Agreement to the
Producer and/or the failure of the Distributor to perform
any of the terms, covenants, conditions and provisions
hereof.
10.2 This indemnity is absolute and unconditional and the
obligation of the Distributor shall not be released, discharged,
mitigated, impaired or affected by:
(A) Any extension of time, indulgences or modifications which
the Producer may extend or make the Distributor in
respect of the performance of any of the obligations of
the Distributor under any one or more of the provisions
of this Agreement;
(B) Any waiver by or failure of the Producer to enforce any
of the terms, covenants, conditions and provisions of
this Agreement;
(C) Any assignment of this Agreement or its rights hereunder
by the Distributor or by any trustee, receiver or
liquidator; or
(D) Any consent which the Producer may give to any such
assignment.
<PAGE> 82
Article 11
DEFAULT AND TERMINATION
11.1 Default of Distributor
This Agreement may be terminated, at the sole option of the
Producer, without prejudice to any other right or remedy of the
Producer herein or existing at law, upon the happening of any of
the following events:
(A) The failure of the Distributor to effect prompt and
complete performance, within sixty days of written notice
from the Producer to do so, of all and singular the
terms, covenants, conditions and provisions in this
Agreement contained on the part of the Distributor to be
kept, observed and performed; or
(B) The Distributor ceasing to carry on business or
threatening to cease carrying on business.
11.2 Default by Producer
Where the Producer has failed, following sixty days' written
notice from the Distributor to do so, to effect prompt and complete
performance of all and singular the terms, covenants, conditions
and provisions in this Agreement contained on the part of the
Producer to be kept, observed and performed, the Distributor may at
its sole option terminate this Agreement.
Article 12
GENERAL PROVISIONS
12.1 Notices
All notices, directions, or other instruments required to be
given hereunder shall be in writing and may be given by mailing the
same by prepaid registered mail or delivering the same to the party
entitled to receive the same at its address as indicated on the
front pages of this Agreement, or at such other address as a party
hereto may in writing advise. Any notice, direction or other
instrument aforesaid if delivered shall be deemed to have been
given or made on the third business day following the day on which
it was mailed. During the period of any mail strike notices shall
only be given by personal delivery.
<PAGE> 83
12.2 Time of the Essence
Time shall be of the essence of this Agreement.
12.3 Successor and Assigns
This Agreement shall ensure to the benefit of and be binding
upon the parties hereto and their respective heirs, executors,
administrators, successors, the assigns of the Producer and the
permitted assigns of the Distributor.
12.4 Entire Agreement
This instrument contains the entire agreement of the parties
hereto and no representations, inducements, promises or agreements
not embodied herein shall be of any force or effect, unless the
same are set forth in writing signed by the parties hereto.
12.5 Invalid Provisions
Should any part of this Agreement for any reason be declared
invalid or unenforceable, such decision shall not affect the
validity of any remaining portion, which remaining portion shall
remain in force and effect as if this Agreement had been executed
with the invalid or unenforceable portion thereof eliminated.
12.6 Applicable Law
This Agreement shall be construed in accordance with the laws
of the State of Nevada.
12.7 Number and Gender
All terms and words used in this Agreement, regardless of the
number and gender in which they are used, shall be deemed and
construed to include any other numbers, singular or plural, and any
other gender, masculine, feminine or neuter, or body corporate, as
the contest or sense of this Agreement may so require.
12.8 Captions
The captions appearing in this Agreement are inserted for
convenience of reference only and shall not affect the
interpretation of this Agreement.
<PAGE> 84
IN WITNESS WHEREOF, the undersigned has executed this
Agreement this 21st day of October, 1998.
A LITTLE REMINDER (ALR) INC. MO BETTA CORP.
By: /s/ John C. Baldwin By: /s/ Robert G. Eadie
<PAGE> 85
EXHIBIT.99.2
VOLUNTARY POOLING AGREEMENT
THIS AGREEMENT is dated for reference the 27th day of July,
1998.
BETWEEN:
THE UNDERSIGNED SHAREHOLDERS OF TREN EXPLORATION INC. (TO BE
RENAMED A LITTLE REMINDER (AM INC.)
(collectively referred to as the "Shareholders" and
individually as "Shareholder")
OF THE FIRST PART
AND:
RUSSELL & DUMOULIN, Barristers & Solicitors of 2100 1075
West Georgia Street, Vancouver, B.C., V6E 3G2
(hereinafter called the "Trustee")
OF THE SECOND PART.
WHEREAS the Shareholders are desirous of placing in Pool the
shares owned by them in Tren Exploration Inc., (the "Company"),
being in respect of each of the Shareholders the number of shares
set opposite its name in Schedule "A" to this Agreement, upon and
subject to the terms and conditions hereinafter more particularly
set out;
NOW THEREFORE THIS AGREEMENT WITNESSES that in consideration
of the premises and in consideration of the sum of Ten Dollars
($10.00) now paid by the parties hereto, each to the other, (the
receipt whereof is hereby acknowledged) and in further
consideration of the mutual covenants and conditions hereinafter
contained, the parties hereto agree as follows:
1. Definitions
In this Agreement:
(a) "Acknowledgment" means the acknowledgment and agreement
to be bound in the form attached as Schedule "B" to this
Agreement;
(b) "Approval Date" shall mean the first day the shares of
the Company are quoted on the NASDAQ Bulletin Board;
(c) "Shares" means the Class A common shares of the Company
set out in Schedule "A".
<PAGE> 86
2. Release of Shares from Pool
The Shareholders hereby severally agree each with the other
and with the Trustee, that they will respectively deliver or cause
to be delivered to the Trustee on or before the Approval Date
certificates for their Shares in the Company as set out in the said
Schedule "A" to be held by the Trustee and released, subject as
hereinafter provided, pro rata on the following basis:
(a) 20% of the Shares one year from the Approval Date;
(b) 20% of the Shares three (3) months following the first
release of shares pursuant to section 2(a) hereof;
(c) 20% of the Shares six (6) months following the first
release of shares pursuant to section 2(a) hereof;
(d) 20% of the Shares nine (9) months following the first
release of shares pursuant to section 2(a) hereof;
(e) 20% of the Shares twelve (12) months following the first
release of shares pursuant to section 2(a) hereof.
3. Acknowledgment by Trustee
Each of the Shareholders shall be entitled to a letter or
receipt from the Trustee stating the number of Shares represented
by certificates held for it by the Trustee subject to the terms of
this Agreement, but such letter or receipt shall not be assignable.
4. Alterations of Capital
The parties hereto agree that the provisions of this agreement
relating to the Shares shall apply mutatis mutandis to any shares
or securities into which the Shares may be converted, changed,
reclassified, redivided, redesignated, subdivided or consolidated
and to any shares or securities of the Company or of any successor
or continuing company or corporation of the Company that may be
received by the registered holder of the Shares on a
reorganization, amalgamation, consolidation or merger, statutory or
otherwise, including the release calculation which will be adjusted
so that the proportion of the Shares available for release is
unaffected by the alteration of the capital of the Company.
5. Transfer of Shares Within Pool
No transfer of Shares by any Shareholder shall be effective
and no application shall be made to the Company to register any
such transfer until the proposed transferee enters into an
agreement with the other parties hereto to the same effect as this
Agreement. The Trustee shall not effect a transfer of the Shares
within pool unless the Trustee has received a copy of an
<PAGE> 87
Acknowledgment executed by the person to whom the Shares are
to be transferred. Notwithstanding the execution of an
Acknowledgment by such a person, the transferor shall not be
released from its obligations under this Agreement unless it has
transferred all of its Shares.
6. Dividends, Distributions and Voting of Shares
The Shareholders will be entitled to receive all dividend
payments and distributions of capital, if any, from the Shares
while the Shares are subject to this Agreement, and may exercise
all voting rights attached to the Shares.
7. Amendment of Agreement
Schedule A to this agreement shall be amended upon:
(a) a transfer of Shares pursuant to section 5, or
(b) a release of Shares from pool pursuant to section 2,
and the Trustee shall note the amendment on the Schedule A in its
possession.
8. Indemnification of Trustee
The parties hereto agree that in consideration of the Trustee
agreeing to act as Trustee as aforesaid, the Undersigned do hereby
covenant and agree from time to time and at all times hereinafter
well and truly to save, defend, and keep harmless and fully
indemnify the Trustee, its successors and assigns, from and against
all loss, costs, charges, damages and expenses which the Trustee,
its successors or assigns, may at any time or times hereafter bear,
sustain, suffer or be put to for or by reason or on account of its
acting as Trustee pursuant to this Agreement.
9. Trustee not Obliged to Defend Actions
It is further agreed by and between the parties hereto, and
without restricting the foregoing indemnity, that in case
proceedings should hereafter be taken in any Court respecting the
Shares hereby pooled, the Trustee shall not be obliged to defend
any such action or submit its rights to the Court until it shall
have been indemnified by other good and sufficient security in
addition to the indemnity hereinbefore given against costs of such
proceedings.
10. Resignation of Trustee
(a) If the Trustee wishes to resign as Trustee in respect of
the Shares, the Trustee shall give notice to the
Shareholders;
<PAGE> 88
(b) If the Shareholders wish the Trustee to resign as Trustee
in respect of the Shares, the Shareholders shall give
notice to the Trustee;
(c) A notice referred to in subsection (a) or (b) hereof
shall be in writing and delivered to the Shareholders or
the Trustee at their respective addresses set out on the
first page or Schedule A of this agreement, and the
notice shall be deemed to have been received on the date
of delivery. The Shareholders or the Trustee may change
their address for notice by giving notice to the other
party in accordance with this agreement;
(d) The resignation of the Trustee shall be effective and the
Trustee shall cease to be bound by this agreement on the
date that is 30 days after the date of receipt of the
notice referred to in subsection (a) or (b) hereof or on
such other date as the Trustee and the Shareholders may
agree upon.
11. Further Assurances
The parties hereto shall execute and deliver any further
documents and perform any acts necessary to carry out the intent of
this agreement.
12. Time
Time is of the essence of this agreement.
13. Governing Laws
This agreement shall be construed in accordance with and bound
by the laws of British Columbia and the laws of Canada applicable
in British Columbia.
14. Enurement
This Agreement shall enure to the benefit of and be binding
upon the parties hereto and each of their heirs, executors,
administrators, successors and permitted assigns.
15. Execution in Counterpart
This Agreement may be executed in several parts in the same
form and such part as so executed shall together constitute one
original agreement, and such parts, if more than one, shall be read
together and construed as if all the signing parties hereto had
executed one copy of this Agreement.
<PAGE> 89
IN WITNESS WHEREOF the Undersigned and the Trustee have
executed these presents as and from the day and year first above
written.
706166 Alberta Ltd.
Per: /s/ illegible signature
Authorized Signatory
745797 Alberta Ltd.
Per: /s/ illegible signature
Authorized Signatory
Russell & DuMoulin
Per: /s/ illegible signature
Authorized Signatory
SCHEDULE "A" to a Voluntary Pooling Agreement dated the 27th
day of July, 1998
Number of Class "A"
Name of Shareholder Common Shares held
706166 Alberta Ltd. 12,000,000
Name (please print)
c/o 2600 Manulife Place
10180 - 101 Street
Edmonton, Alberta
T5J 3Y2
Address
745797 Alberta Ltd. 8,000,000
Name (please print)
c/o 2600 Manulife Place
10180 - 101 Street
Edmonton, Alberta
T5J 3Y2
Address
<PAGE> 90
SCHEDULE "B"
ACKNOWLEDGMENT AND AGREEMENT TO BE BOUND
To: Russell & DuMoulin
2100 - 1075 West Georgia Street
Vancouver, B. C.
V6E 3G2
I acknowledge that
(a) I have entered into an agreement with _______________
under which _____________ shares of ______________ (the
"Shares") will be transferred to me upon receipt of
regulatory approval, if applicable, and
(b) the Shares are held in pool subject to a Voluntary
Pooling Agreement dated for reference _________________
19____ (the "Pooling Agreement"), a copy of which is
attached as Schedule A to this acknowledgment.
In consideration of $1.00 and other good and valuable
consideration (the receipt and sufficiency of which is
acknowledged) I agree, effective upon receipt of regulatory
approval of the transfer to me of the Shares, if applicable, to be
bound by the Pooling Agreement in respect of the Shares as if I
were an original signatory to the Pooling Agreement.
Dated at _____________________, this _____ day of ___________,
19____.
Where the transferee is an individual:
SIGNED, SEALED & DELIVERED by )
______________________ in the )
presence of: )
)
)
______________________________ )
Witness ) _________________________
) [transferee]
)
______________________________ )
Name )
)
______________________________ )
Address
<PAGE> 91
EXHIBIT 99.3
AMENDED POOLING AGREEMENT
THIS AGREEMENT is dated for reference the 17th day of February,
1999.
BETWEEN:
THE UNDERSIGNED SHAREHOLDERS OF A LITTLE REMINDER (ALR) INC. (FORMERLY
TREN EXPLORATION INC.)
(collectively referred to as the "Shareholders" and individually
as "Shareholder")
OF THE FIRST PART
AND:
A LITTLE REMINDER INC., a company continued under the laws of the State
of Wyoming and having an office at 2050 650 West Georgia Street,
Vancouver, B.C., V6B 4N7
(the "Company")
OF THE SECOND PART
AND:
RUSSELL & DUMOULIN, Barristers & Solicitors of 2100 1075 West Georgia
Street, Vancouver, B.C., V6E 3G2
(hereinafter called the "Trustee")
OF THE THIRD PART
WHEREAS the Shareholders own an aggregate of 20,000,000 Class "A"
Common shares (the "Shares") in the capital of A Little Reminder (ALR)
Inc. (the "Company") in the amounts set out opposite their names in
Schedule "A" attached to this Agreement;
AND WHEREAS the Shareholders are all parties to a Voluntary
Pooling Agreement dated July 27, 1998 (the "Original Pooling
Agreement"), a copy of which is attached as Schedule "B" to this
Agreement, and pursuant to which the Trustee holds the Shares in Pool;
<PAGE> 92
AND WHEREAS the parties wish to terminate and replace the Original
Pooling Agreement upon the terms and conditions set out herein;
NOW THEREFORE THIS AGREEMENT WITNESSES that in consideration of
the premises and in consideration of the sum of Ten Dollars ($10.00)
now paid by the parties hereto, each to the other, (the receipt whereof
is hereby acknowledged) and in further consideration of the mutual
covenants and conditions hereinafter contained, the parties hereto
agree as follows:
1. Definitions
(a) "Acknowledgment" means the acknowledgment and agreement to be
bound in the form attached as Schedule "C" to this Agreement;
(b) "ALRT Shares" means the 8,000,000 common shares in the
capital of ALR Technologies Inc. to be issued to the Released
Shareholders upon completion of an offer to purchase all of
the issued and outstanding Class A Common Shares of the
Company;
(c) "Approval Date" shall mean the first day the shares of the
Company are quoted on the OTC Bulletin Board or, in the event
the shares of the Company are exchanged, pursuant to an offer
to purchase, for shares of a company, already quoted on the
OTC Bulletin Board, then the termination date of such offer
to purchase;
(d) "Early Release Shares" means 2,000,000 of the ALRT Shares to
be held by the Remaining Shareholders in accordance with
Schedule "D" attached to this Agreement;
(e) "Cancellation Shares" means 6,000,000 of the ALRT Shares to
be surrendered for cancellation to ALRT by the Released
Shareholders in accordance with Schedule "D" attached to this
Agreement;
(f) "Remaining Shareholders" means those Shareholders who are not
Released Shareholders;
(g) "Remaining Shares" means, the 12, 000,000 Shares which are
not Released Shares;
(h) "Shareholders" means those holders of 20,000,000 Class A
common shares of the Company as set out in Schedule "A";
<PAGE> 93
(i) "Shares" means the 20,000,000 Class A common shares of the
Company as set out in Schedule "A" comprised of the Released
Shares and the Remaining Shares;
(j) "Released Shareholders" means those Shareholders who are the
registered and beneficial owners of the 8,000,000 Released
Shares in the amounts set out opposite their names in Section
4 hereof; and
(k) "Released Shares" means the 8,000,000 Shares owned by the
Released Shareholders as described in Section 4 hereof.
2. Termination of Original Pooling Agreement
The parties hereto hereby confirm, and agree that the Original
Pooling Agreement shall cease and determine and be of no further force
and effect, effective as of the date hereof.
3. Placement of Shares in Pool
The Shareholders hereby jointly and severally agree each with the
other and with the Trustee that the Trustee shall continue to hold
certificates for their Shares in the Company as set out in the said
Schedule "A" to be held by the Trustee on the terms contained herein.
4. Released Shareholders and Released Shares subject to Pool
In the event the conditions as set out in Section 5 hereof have
been fulfilled, the Released Shares owned by the Released Shareholders
as set out in the table below shall be released from Pool and returned
to such Released Shareholder in accordance with Section 6 hereof:
Released Shareholder Number of Released Shares
706166 Alberta Ltd. 3,400,000
745797 Alberta Ltd. 3,100,000
Dean Drever 750,000
Sandra Ross 750,000
TOTAL 8,000,000
=========
5. Conditions
In the event the following conditions have been fulfilled, the
Released Shares shall be held by the Trustee and released from Pool to
the Released Shareholders in accordance with Section 6 hereof:
<PAGE> 94
(a) pursuant to an offer to purchase (the "Offer") by ALR
Technologies Inc. ("ALRT"), the Released Shareholders shall
have received an aggregate of 8,000,000 common shares in the
capital stock of ALRT (the "ALRT Shares") in exchange for
submitting their 8,000,000 Released Shares under such Offer;
and
(b) the Released Shareholders shall have agreed for nominal.
consideration to surrender for cancellation to ALRT an
aggregate of 6,000,000 of the ALRT Shares obtained by the
Released Shareholders under the Offer (the "Cancellation
Shares"), leaving the Released Shareholders with an aggregate
of 2,000,000 ALRT Shares (the "Early Release Shares") in the
numbers set out opposite their names in Schedule "D" attached
hereto.
6. Release of Early Release Shares
In the event the conditions set out in Section 5 hereof are
fulfilled, the Early Release Shares will be released from Pool and
returned to the Released Shareholders, pro rata, on the following
basis:
(a) 20% of the Early Release Shares on July 1, 1999;
(b) 20% of the Early Release Shares three (3) months following
the first release of shares pursuant to subsection (a)
hereof;
(c) 20% of the Early Release Shares six (6) months following the
first release of shares pursuant to subsection (a) hereof;
(d) 20% of the Early Release Shares nine (9) months following the
first release of shares pursuant to subsection (a) hereof;
and
(e) 20% of the ALRT Shares twelve (12) months following the first
release of shares pursuant to subsection (a) hereof.
7. Release of Cancellation Shares
In the event the conditions in section 5 hereof have been
fulfilled then the 6,000,000 Cancellation Shares shall be released from
Pool and surrendered by the Released Shareholders to ALRT for
cancellation in the numbers set out opposite their names in Schedule
"D" attached to this Agreement.
<PAGE> 95
8. Release of Remaining Shares from Pool
In the event the conditions in Section 5 hereof have been
fulfilled, then the Remaining Shares shall be released from Pool and
returned to the Remaining Shareholders or, in the event the conditions
in Section 5 hereof have not been fulfilled, then all of the Shares
shall be released from Pool and returned to the Shareholders, subject
to the terms. of this Agreement, pro rata, on the following basis:
(a) 20% of the Remaining Shares, or Shares as the case may be,
one year from the Approval Date;
(b) 20% of the Remaining Shares, or Shares as the case may be,
three (3) months following the first release of shares
pursuant to section 6(a) hereof;
(c) 20% of the Remaining Shares, or Shares as the case may be,
six (6) months following the first release of shares
pursuant to section 6(a) hereof;
(d) 20 % of the Remaining Shares, or Shares as the case may be
nine (9) months following the first release of shares
pursuant to section 6(a) hereof;
(e) 20% of the Remaining Shares, or Shares as the case may be,
twelve (12) months following the first release of shares
pursuant to section 6(a) hereof.
9. Alterations of Capital
The parties hereto agree that the provisions of this agreement
relating to the Shares shall apply mutatis mutandis to any shares or
securities into which such shares may be converted, changed,
reclassified, redivided, redesignated, subdivided or consolidated and
to any shares or securities of the Company or of any successor or
continuing company or corporation of the Company that may be received
by the registered holder of the Shares on a reorganization,
amalgamation, consolidation or merger, statutory or otherwise,
including the release calculation which will be adjusted so that the
proportion of the Shares available for release is unaffected by the
alteration of the capital of the Company.
<PAGE> 96
10. Transfer of Shares Within Pool
No transfer of Shares by any Shareholder shall be effective and no
application shalt be made to the Company to register any such transfer
until the proposed transferee enters into an agreement with the other
parties hereto to the same effect as this Agreement. The Trustee shall
not effect a transfer of the Shares within pool unless the Trustee has
received a copy of an Acknowledgment in the form attached hereto as
Schedule C executed by the person to whom the Shares are to be
transferred. Notwithstanding the execution of an Acknowledgment by such
a person, the transferor shall not be released from its obligations
under this Agreement unless it has transferred all of its Shares.
11. Dividends, Distributions and Voting of Shares
The Shareholders will be entitled to receive all dividend payments
and distributions of capital, if any, from the Shares while the Shares
are subject to this Agreement, and may exercise all voting rights
attached to the Shares.
12. Amendment of Agreement
Schedule A to this Agreement shall be amended upon a transfer of
Shares pursuant to section 10, and the Trustee shall note the amendment
on the Schedule A in its possession.
13. Scope of Trustee's Duties and Indemnification ion of Trustee
In exercising its duties and obligations as set forth in this
Agreement, the Trustee will act in good faith and with impartiality
towards each of the Company and the Shareholders.
The Trustee will have no duties or obligations in respect of the
Shares other than those specifically set forth herein. The Trustee will
not be bound in any way by any other contract or agreement between the
parties hereto (except to the extent that the Trustee will consider the
terms of the Share Exchange Agreement) whether or not the Trustee has
knowledge thereof or of its terms and conditions and the Trustee's only
duty, liability and responsibility shall be to hold and deal with the
Shares in accordance with this Agreement. The Trustee will be entitled,
unless it has knowledge to the contrary, to assume that any notice and
evidence received pursuant to these instructions from either the
Company or the Shareholders has been duly executed by the party by whom
it purports to have been signed and the Trustee will not be obligated
to enquire into the sufficiency or authority of any signatures
<PAGE> 97
appearing on such notice or evidence. In the event that the Trustee is
given written notice of any disagreement between the Company and the
Shareholders resulting in adverse claims or demands being made in
connection with the Shares or a disagreement as to the Shares to be
released by the Trustee, the Trustee will not release the Shares until
(a) the rights of all parties shall have been fully and finally
adjudicated by a court of competent jurisdiction; or
(b) the Company and the Shareholders give the Trustee written
notice as to their agreement as to the release of the Shares.
In the event that the Trustee is given notice of any disagreement
between the Company and the Shareholders resulting in adverse claims or
demand being made in connection with the Shares or a disagreement as to
the Shares to be released by the Trustee, the Trustee may, at its
discretion, interplead the Shares by delivering the Shares to a court
of competent jurisdiction.
The Company will pay the Trustee on the basis of the Trustee's
hourly rates for legal services, plus taxes and disbursements, for the
performance of the Trustee's duties pursuant to this Agreement.
The Company and the Shareholders, jointly and severally, release,
indemnify and save harmless the Trustee from all costs, charges,
claims, demands, damages, losses and expenses resulting from the
Trustee's compliance in good faith with this agreement,
14. Trustee not Obliged to Defend Actions
It is further agreed by and between the parties hereto, and
without restricting the foregoing indemnity, that in case proceedings
should hereafter be taken in any Court respecting the Shares hereby
pooled, the Trustee shall not be obliged to defend any such action or
submit its rights to the Court until it shall have been indemnified by
other good and sufficient security in addition to the indemnity
hereinbefore given against costs of such proceedings.
15. Resignation of Trustee
If the Trustee wishes to resign as Trustee in respect of the
Shares, the Trustee shall give notice to the Shareholders;
<PAGE> 98
If the Shareholders wish the Trustee to resign as Trustee in
respect of the Shares, the Shareholders shall give notice to the
Trustee;
A notice referred to in subsection (a) or (b) hereof shall be in
writing and delivered to the Shareholders or the Trustee at their
respective addresses set out on the first page or Schedule A of this
agreement, and the notice shall be deemed to have been received on the
date of delivery. The Shareholders or the Trustee may change their
address for notice by giving notice to the other party in accordance
with this agreement;
The resignation of the Trustee shall be effective and the Trustee
shall cease to be bound by this agreement on the date that is 30 days
after the date of receipt of the notice referred to in subsection (a)
or (b) hereof or on such other date as the Trustee and the Shareholders
may agree Upon.
16. Further Assurances
The parties hereto shall execute and deliver any further documents
and perform any acts necessary to carry out the intent of this
agreement.
17. Time
Time is of the essence of this agreement.
18. Governing Laws
This agreement shall be construed in accordance with and bound by
the laws of British Columbia and the laws of Canada applicable in
British Columbia.
19. Enurement
This Agreement shall enure to the benefit of and be binding upon
the parties hereto and each of their heirs, executors, administrators,
successors and permitted assigns.
<PAGE> 99
20. Execution in Counterpart and by Facsimile
This Agreement may be executed in several parts in the same form,
and by facsimile, and such part as so executed shall together
constitute one original agreement, and such parts, if more than one,
shall be read together and construed as if all the signing parties
hereto had executed one copy of this Agreement,
IN WITNESS WHEREOF the Undersigned and the Trustee have executed
these presents as and from the day and year first above written.
A Little Reminder (ALR) Inc.
Per: /s/ illegible signature
Authorized Signatory
Russell & DuMoulin
Per: /s/ illegible signature
Authorized Signatory
<PAGE> 100
EXHIBIT 99.4
ALR Technologies Inc.
1940-400 Burrard St., Vancouver, B.C., Canada, V6C 3A6
Tel: (604) 618-3400 Fax: (604) 669-7678
February 17, 1999
Those Persons Set Forth in
Schedule "A" Hereto
c/o Timely Devices Inc.
201, 10323 - 178 Street
Edmonton AB T5S IR5
Dear Sirs/Mesdames:
The undersigned (the "Offeror") understands that the persons set forth
in Schedule "A" hereto are the registered and beneficial owners of an
aggregate of 8,000,000 Class A common shares (the "Subject Shares") of
A Little Reminder (ALR) Inc. (the "Corporation"). The persons set forth
in Schedule "A" are hereinafter collectively referred to as the
"Shareholders".
I THE OFFER
1.1 The Offeror is prepared to make, and following the execution of
this letter agreement by all of the Shareholders, will make a
take-over bid (the "Offer") for all of the issued and outstanding
Class A common shares (the "Common Shares") of the Corporation on
the terms and conditions herein set forth.
1.2 The Offer shall consist of an offer to purchase all of the issued
and outstanding Common Shares in exchange for an equal number of
common shares of the Offeror (the "Offered Shares") made by way of
a take-over bid and take-over bid circular prepared in accordance
with the requirements of the Securities Act (British Columbia) and
all other applicable securities legislation and the regulations
thereunder.
1.3 The Offer shall expire no later than the 21st day following the
mailing thereof, unless extended by the Offeror.
1.4 The Offeror shall have the right to vary the Offer in such manner
as the Offeror considers necessary or desirable and is not
inconsistent with any of the provisions of this Agreement or
applicable securities legislation and the regulations thereunder.
<PAGE> 101
2 AGREEMENT TO TENDER
2.1 Subject to the terms and conditions hereof, each Shareholder as
set forth in Schedule "A" hereby severally and irrevocably agrees
to deposit the Common Shares beneficially owned or controlled by
such Shareholder under the Offer not later than the 10th day after
the date on which the Offer is made and, notwithstanding the
rights granted to such Shareholder by applicable securities
legislation or the terms of the Offer, further irrevocably agrees
that thereafter such Shareholder will not withdraw any of the
Common Shares deposited by such Shareholder under the Offer until
the earliest of
(a) the first day on which withdrawal rights are available to
such Shareholder under applicable securities legislation
after the making of any amendment or variation of the Offer
the result or effect of which is to decrease the number of
Common Shares sought;
(b) the date on which the Offer expires or is terminated without
the Offeror taking up and paying for the Subject Shares
deposited under the Offer; and
(c) the date on which this agreement is terminated pursuant to
Article 6 hereof.
2.2 Each Shareholder as set forth in Schedule "A" hereby severally and
irrevocably agrees immediately upon the conditions set out in this
section being met, to surrender for cancellation to the Offeror,
for nominal consideration, that number of Offered Shares set
opposite their name in Schedule "B" attached hereto, such
surrender and cancellation being subject to the following
conditions:
(a) that each of 706166 Alberta Ltd. and 745797 Alberta Ltd. (the
"Altaco's") shall have received payment in full for the sale
of an aggregate of 5,000,000 Common Shares pursuant to share
purchase agreements dated December 8, 1998 entered into by
the Altaco's and various purchasers; and
(b) all parties to the Pooling Agreement dated July 27, 1998 (the
"Pooling Agreement") agreeing to terminate and replace the
Pooling Agreement with an Amended Pooling Agreement in
substantially the form attached hereto as Schedule "C".
<PAGE> 102
3 OBLIGATION TO ACCEPT AND TAKE UP THE SUBJECT SHARES
3.1 Upon the terms and subject to the conditions of the Offer,
the Offeror will accept and take up, all Common Shares of the
Corporation deposited and not withdrawn under the Offer
promptly after the expiry thereof, and in any event within
the time period prescribed by applicable securities laws. The
Offeror may not extend the Offer, where all the terms and
conditions thereof have been complied with, except those
waived by the Offeror, unless the Offeror first takes up all
Common Shares deposited thereunder and not withdrawn.
3.2 Upon completion of the Offer and upon the obligations of the
Shareholders contained in section 2 hereof having been
fulfilled, the Offeror hereby agrees to assume any and all
past, present or future debts and liabilities of the
Corporation and its subsidiary, Timely Devices Inc.
4 REPRESENTATIONS, WARRANTIES AND COVENANTS OF THE SHAREHOLDERS
4.1 Each Shareholder severally represents and warrants to the
Offeror, and acknowledges that the Offeror is relying upon
such representations and warranties in entering into this
Agreement that:
(a) such Shareholder has good and sufficient power,
authority and right to enter into this agreement and to
complete the transaction contemplated hereby;
(b) assuming the due execution and delivery of this
agreement by the Offeror, upon the execution and
delivery hereof by such Shareholder, this agreement
shall be a legal, valid and binding obligation of such
Shareholder enforceable by the Offeror against such
Shareholder of the transactions contemplated hereby and
will not constitute a violation of or default under, or
conflict with, any contract, commitment, agreement,
arrangement, understanding or restriction of any kind to
which such Shareholder is a party or by which such
Shareholder is bound;
<PAGE> 103
(c) such Shareholder is the beneficial owner of the number
of Common Shares indicated in Schedule "A" attached
hereto and such Common Shares represent all of the
Common Shares beneficially owned or over which control
or direction is exercised by such Shareholder free and
clear of all liens, charges, encumbrances, security
interests and other rights of others whatsoever and has
good and sufficient power, authority and right to
transfer or cause to be transferred the legal and
beneficial title to such Common Shares to the Offeror
with good and marketable title thereto, subject to the
terms of the Pooling Agreement pursuant to which each
Shareholder has agreed to deposit their Common Shares
with Russell & DuMoulin;
(d) such Shareholder has no knowledge of any material change
(as such term is defined in the Securities Act (British
Columbia)) in the affairs of the Corporation and its
subsidiaries that has not been generally disclosed; and
(e) the foregoing representations and warranties will be
true, correct and complete on the date on which the
Offer is made and on the date on which the Offeror
purchases the Common Shares,
4.2 Each Shareholder severally covenants and agrees with the Offeror
that after the date hereof such Shareholder will use its best
efforts to cause its representatives and advisors not to, directly
or indirectly:
(a) solicit, initiate, invite, encourage or continue any
inquiries or proposals from, or negotiations with, any
person, company or other entity other than the Offeror or any
of its affiliates relating to the purchase of Common Shares,
any amalgamation, merger or other form of business
combination involving the Corporation or any of its
subsidiaries, any sale, lease, exchange or transfer of all or
a substantial portion of the assets of the Corporation or any
of its subsidiaries, or any take-over bid, reorganization,
recapitalization, liquidation or winding-up of or other
business combination or other transaction involving the
Corporation or any of its subsidiaries with any person other
than the Offeror or any of its affiliates (a "Proposed
Transaction");
<PAGE> 104
(b) enter into any agreement, discussion or negotiations with any
person, company or other entity other than the Offeror or any
of its affiliates with respect to a Proposed Transaction or
potential Proposed Transaction;
(c) furnish or cause to be furnished any non-public information
concerning the business, results of operations, assets,
liabilities, prospects, financial condition or affairs of the
Corporation or any of its subsidiaries to any person, company
or other entity other than the Offeror and its
representatives, other than as disclosed prior to the date
hereof; or
(d) take any action that might reasonably be expected to reduce
the likelihood of success of the Offer.
The Shareholders will notify the Offeror promptly if any such
discussions or negotiations are sought or if any proposal in
respect of a Proposed Transaction is received, being considered or
indicated to be forthcoming.
4.3 Each Shareholder severally covenants and agrees with the Offeror,
so long as such Shareholder is not entitled to withdraw the Common
Shares owned by such Shareholder form the Offer, to exercise all
voting rights attached to the Common Shares owned by such
Shareholder to vote against any resolution to be considered by
the, shareholders of the Corporation that, if approved, could
reasonably be considered to reduce the likelihood of success of
the Offer.
4.4 Each Shareholder severally covenants and agrees with the Offeror
that, so long as such Shareholder is not entitled to withdraw the
Common Shares owned by such Shareholder from the offer, such
Shareholder will exercise the voting rights attached to his Common
Shares and use his reasonable endeavours to cause the Corporation
and its subsidiaries to carry on their respective businesses in
the regular and ordinary course consistent with past practice and
not to take or make any of the actions or proposals referred to in
subsection (d) of section 1.3 hereof.
5 REPRESENTATIONS AND WARRANTIES OF THE OFFEROR
5.1 The Offeror represents and warrants to each Shareholder, and
acknowledges that each Shareholder is relying upon such
representations and warranties in entering into this
agreement, that:
<PAGE> 105
(a) it has good and sufficient power, authority and right to
enter into this agreement and to complete the transaction
contemplated hereby;
(b) upon the due execution and delivery of this agreement by the
Shareholders, this agreement shall be a legal, valid and
binding obligation of the Offeror enforceable by each
Shareholder against the Offeror in accordance with its terms,
and the consummation by it of the transaction contemplated
hereby will not constitute a violation of or default order,
or conflict with, any contract, commitment, agreement,
arrangement, understanding or restriction of any kind to
which it is a party or by which it is bound;
(c) the foregoing representations and warranties will be true,
correct and complete on the date on which the Offer is made
and on the date on which the Offeror purchases the Subject
Shares.
6 TERMINATION
6.1 The obligations hereunder of a particular Shareholder shall
terminate at the option of such Shareholder upon written notice
given by such Shareholder to the Offeror:
(a) if the Offeror has not made the Offer by midnight (Vancouver
time), on February 25, 1999 (or within seven (7) days
thereafter), or such later date as permitted by this
Agreement (provided it was required to. do so in accordance
with Article 1 hereof); or
(b) if, the Offer having been made by the time referred to in
subsection (a), the Offeror has not, for any reason
whatsoever, taken up the Subject Shares under the Offer by
5:00 p.m. (Vancouver time), on the Termination Date of the
Offer or, if the Offer is made after February 25, 1999 as
permitted by this Agreement, the 60th day following the date
thereof.
6.2 If any of the Shareholders has breached or failed to perform and
satisfy any of its covenants or agreements herein contained in a
material respect or any of the representations and warranties of
any such Shareholder contained herein is not true and correct in
a material respect, the Offeror may by notice in writing given to
the Shareholders terminate this agreement; provided, however, that
<PAGE> 106
if Shareholders holding not more than 5% of the Subject Shares
breach or fail to perform and satisfy any of their covenants or
agreements contained herein in a material respect or any of the
representations and warranties of such Shareholder set forth
herein are not true and correct in a material respect, and each of
the other Shareholders are in fall compliance with its
obligations, representations, warranties and covenants hereunder,
the Offeror shall not be entitled to terminate this agreement as
aforesaid.
6.3 If the Offeror has breached or failed to perform any of its
covenants or agreements herein contained in a material respect or
any of the representations and warranties of the Offeror set forth
herein are not true and correct in any material respect, the
Shareholders may by notice in writing given to the Offeror
terminate this agreement,
6.4 In the event of the termination of this agreement as provided in
section 6.2 and 6.3 above, or the termination of this agreement by
each of the Shareholders as provided in section 6.1 above, this
agreement shall forthwith become void and of no further force or
effect and there shall be no liability on the part of any party
hereto, provided that the foregoing shall not relieve any party
from any liability for any breach of this agreement.
7 REGULATORY APPROVALS
7.1 Each Shareholder covenants that, so long as such Shareholder
is not entitled to withdraw any of the Subject Shares from
the Offer, such Shareholder shall co-operate with the Offeror
in obtaining all governmental and regulatory approvals
required to permit the Offeror to make an Offer in accordance
with its, terms and acquire Common Shares thereunder.
8 GENERAL
8.1 No disclosure of this subject matter of this agreement shall
be made by any Shareholder or by the Offeror except to their
respective counsel or to any other professional advisor
engaged by them or to the board of directors of the
Corporation or as may be required by applicable law or
regulatory authorities; provided, however, that the foregoing
shall not prevent the Offeror from disclosing the terms of
this agreement in the Offer in such manner as the Offeror or
its counsel, acting reasonably, considers appropriate after
<PAGE> 107
consultation with counsel to the Corporation. Subject to
compliance with any disclosure obligation imposed by law, the
parties shall co-ordinate the making and dissemination of any
public announcement relating to the subject matter of this
agreement,
8.2 Each Shareholder shall exercise in fall irrevocably release,
surrender or waive, on terms and conditions satisfactory to
the Offeror, all outstanding options or other entitlements
granted to or held by such Shareholder to purchase or
otherwise acquire authorized and unissued Common Shares under
any option, right, privilege or other entitlement, and shall
deposit any Common Shares so acquired under the Offer in
accordance with the provisions of this agreement.
8.3 This agreement shall be binding upon and shall enure to the
benefit of and be enforceable by each Shareholder and the
Offeror and their respective successors and permitted
assigns,
8.4 The representations, warranties and covenants of each
Shareholder and of the Offeror herein shall survive the
consummation of the Offer and the purchase of Common Shares
by the Offeror thereunder and shall continue in fall force
and effect.
8.5 Time is of the essence of this agreement.
8.6 Any notice or other communication required or permitted to be
given hereunder shall be sufficiently given if delivered:
(a) in the case of any of the Shareholders, to the address
appearing on the first page of this letter; and
(b) in the case of the Offeror, to the address appearing on
the first page of this letter;
or at such other address as the party to which such notice or
other communication is to be given has last notified the
party given the same in the manner provided in this section,
8.7 All references to Common Shares herein shall include any
shares into which the Common Shares may be reclassified,
subdivided, redivided, consolidated or converted by amendment
to the articles of the Corporation and the prices per shall
referred to herein shall be amended accordingly.
<PAGE> 108
8.8 Words signifying the singular numbers shall include, whenever
appropriate, the plural and vice versa; and words signifying
the masculine gender shall include, whenever appropriate, the
feminine or neuter gender.
8.9 This agreement and the rights and obligations of the parties
hereto shall be governed by and construed in accordance with
the laws of the Province of British Columbia and the federal
laws of Canada applicable therein.
9 ACCEPTANCE
9.1 If you are in agreement with the foregoing, kindly signify your
acceptance by signing the second copy of this letter and
delivering it to the Offeror in the manner provided below prior to
5:00 p.m. (Vancouver time), on ___________, 1998, failing which
the offer constituted by this letter shall terminate and be of no
further effect. letter may be signed in two or more counterparts
that together shall be domed to constitute one valid and binding
agreement.
Yours truly,
ALR TECHNOLOGIES INC.
By: /s/ Michael R. Best,
MICHAEL R. BEST,
Chairman and Chief Executive Officer
In consideration of your agreement to make the Offer as described above
and other good and valuable consideration, the receipt and sufficiency
of which are hereby acknowledged, each of the undersigned Shareholders
hereby irrevocably accepts the foregoing as of this 17th day of
February, 1999.
706166 ALBERTA LTD.
By: /s/ Lorne Drever /s/ Dean Drever
Lorne Drever, President DEAN DREVER
745797 ALBERTA LTD.
By: /s/ Debbie MacNutt /s/ Sandra L. Ross
Debbie MacNutt, President SANDRA ROSS
<PAGE> 109
EXHIBIT 99.5
ALR TECHNOLOGIES INC.
15446 Bel-Red Road
Redmond, Washington 98052-5507
Phone: (425) 376-ALRT (2578)
Fax: (425) 376-2580
June 4. 1999
VIA FAX (No. 250-537-9975)
Mr, Mike Rest
Salt Spring Island, BC
Dear Mr. Best:
We set out below the terms of a proposal as per your
conversations with John Baldwin as follows:
(a) You agree to provide your written resignation as a director
and officer of ALR Technologies Inc. (the "Corporation") effective
today. The Corporation will promptly make all required statutory
filings and announcements and will promptly copy you with these.
(b) In lieu of notice of termination of employment, the
Corporation will pay you the sum of US$14,999.97 in three payment of
$4,999.99 each by cheque dated June 30, July 31 and August 31, 1999.
Post-dated cheques are attached.
(c) You agree to waive any fees and expenses due under your
present contract from May 31. 1999 to date. A bank draft for expenses
to such dare in the sum of US$10,000 is attached.
(d) As previously agreed you will receive a grant of options to
purchase 100,000 shares of the Corporation at US$0.05 per share
exercisable for two years under the Corporation's incentive stock
option plan. This grant will be subject to the obtaining of any
required regulatory approvals and the filing of a Form 10-SB and Form
S-8 as required by United States securities legislation. The
Corporation will file the Form S-8 within 15 days of Form 10-SB going
"effective" (estimated 60 days from filing date)
(e) You will receive a commission on sales, of the following
products of the Corporation sold by you until December 31, 2000 as
follows:
- 10 cents (US$0.10) a unit on beepers; and
- 3% an programming stations.
You will have exclusive sales rights on sales to Ely Lilly (and
on sales commissions until December 31. 2000.
You and Greg Rae will have exclusive sales rights on sales to
Soma, Planet RX, Drugstore.com and Commissions (at the above
rates) will be Split 70% to yourself and 30% with Greg Rae. At
your option and at your expense, you may cause an audit to be
made of the Corporation's records and, with consent of the
purchasers, of the purchasers' records of such sales.
<PAGE> 110
(f) A letter of indemnity in the form of the attached is
delivered together with this letter.
(g) The Corporation hereby delivers to you the original signed
letter of complaint from Ms. Debbie McNutt and the original signed
letter releasing any claims upon execution hereof.
(h) The Corporation will accept an assignment from you of your
cellular phone contract and will indemnify you against and hold you
harmless from any liability in that connection. The Corporation will
forward you a cheque forthwith for US$330 in respect of your out-
of-pocket cost for the security deposit for your apartment.
(i) This letter agreement is intended to resolve all claims
between yourself and the Corporation, ALR (A Little Reminder) Inc.,
Timely Devices Inc. and all directors and officers (and former
directors and officers) of such entities. You agree, at the requests
and expense of the Corporation, to enter into mutual releases of all
claims with the foregoing.
This proposal is open for acceptance until 12:00 noon on Monday,
June 7. 1999 and, if you are in agreement, you should sign your
acceptance where indicated below.
Yours truly,
ALR TECHNOLOGIES INC,
/s/ Robert G. Eadie
Director
The foregoing is accepted
/s/ Michael Best
Michael Best
<PAGE> 111
EXHIBIT 99.6
ALR TECHNOLOGIES INC.
15446 Bel-Red Road
Redmond, Washington 98052-5507
Phone; (425) 376-ALRT (2578)
Fax: (425) 376-2580
June 7, 1999
VIA FAX MR. 664-3795
Mr. Norman van Roam
Suite 505 - 318 Homer Street
Vancouver, BC V6B 2V3
Dear Mr. van Roggen:
We set out below the terms of a proposal as per your
conversations with John Baldwin as follows:
(a) You agree to provide your written resignation as a director
and officer of ALR Technologies Inc. (the "Corporation") effective
today. The Corporation will promptly make all required statutory
filings and announcements and will promptly copy you with these.
(b) You will receive a grant of options to purchase 100,000
shares of the Corporation at US$0.50 per share exercisable for two
years. This grant will be subject to the obtaining of any required
regulatory approvals and the filing of a Form 10-SB and Form S-8 as
required by United States securities legislation. The Corporation
will the the Form S-8 within 15 days of Form 10-SB going "effective"
(estimated 60 days from filing date).
(c) A letter of indemnity in the form of the attached is
delivered together with this letter.
(d) This letter agreement is intended to resolve all claims
between yourself and the Corporation, ALR (A Little Reminder) Inc.,
Timely Devices Inc. and all directors and officers (and former
directors and officers) of such entities. You agree, at the request
and expense of the Corporation, to enter into mutual releases of all
claims with the foregoing.
This proposal is open for acceptance until 12.00 noon on Monday,
June 7.,1999 and, if you are in agreement, you should sign your
acceptance where indicated below.
Yours truly,
ALR TECHNOLOGIES INC.
_______________________
Director
The foregoing is accepted
/s/ Norman van Roggen
Norman van Roggen
<PAGE> 112
EXHIBIT 99.7
ASSIGNMENT AGREEMENT
This Assignment Agreement made as of the 20th day of September,
1999
BETWEEN:
706166 ALBERTA LTD. and 745797 Alberta Ltd., Alberta
companies each having its registered office at 2600
Manulife Place, 10180 - 101 Street, Edmonton, Alberta,
T5J 3Y2
(collectively, the "Assignors")
OF THE FIRST PART
AND:
ALR TECHNOLOGIES INC., a Nevada company having an
office at 15446 Bel-Red Road, Redmond, Washington,
98052-5507
(the "Assignee")
OF THE SECOND PART
WHEREAS:
A. Pursuant to Share Purchase Agreements dated for reference the
4th day of December, 1998, the Assignors sold a total of 5,000,000
Class A Common shares of A Little Reminder (ALR) Inc. (the "ALR
Shares") to those parties noted in Schedule "A" hereto (collectively,
the "Purchasers") for an aggregate purchase price of $1,000,000
($CDN.);
B. The purchase price was evidenced by four promissory notes
from the Purchasers (the "Notes"), copies of which are attached
hereto as Schedule B, and secured by pledge agreements from each of
the Purchasers (the "Pledge Agreements");
C. Pursuant to an Offer to Purchase dated March 2, 1999, the ALR
Shares were subsequently exchanged by the Purchasers for 5,000,000
Common shares of the Assignee (the "ALRT Shares");
D. The ALRT Shares are subject to the terms of an Amended
Pooling Agreement dated February 17, 1999 (the "Pooling Agreement");
and
E, The Assignors desire to assign to the Assignee the Assignors'
interest in and to the Notes and the Pledge Agreements;
NOW THEREFORE THIS AGREEMENT WITNESSETH that for good and
valuable consideration paid by the Assignee to the Assignors (the
receipt and sufficiency of which is hereby acknowledged), the parties
hereto agree as follows:
<PAGE> 113
1. Assignment
1.1 The Assignors hereby assign, transfer and set over unto the
Assignee all of the Assignors' right, title and interest in and to
the Notes and Pledge Agreements, and all other rights and benefits
which now are or which hereafter may be vested in the Assignors as
security for the Notes.
1.2 The Assignors covenant with the Assignee that the Assignors
will not at any time after the date of this Agreement receive and
accept payment on account of the Notes, except in trust for the
Assignee and if the payments are received, shall forthwith pay such
sum to the Assignee. The Assignors covenant not to do any act which
may result in the Assignee being prevented or hindered from enforcing
the payment of the Notes or the security represented by the Pledge
Agreements.
1.3 On the Closing (as defined in subsection 2.1 hereof), the
Assignee will pay to the Assignors, as consideration for the
assignment of the Notes and the Pledge Agreements and in accordance
with the terms of section 2 hereof, the sum of $1,000,000 ($CDN.)
(the "Assignment Price") as follows:
Assignor Assignment Price
706166 Alberta Ltd. $ 500,000
745797 Alberta Ltd. $ 500,000
----------
$1,000,000
2. Closing
2.1 The closing of the transactions contemplated by this
Assignment Agreement (the "Closing") will take place on September 21,
1999, or on such other date as the parties shall agree.
2.2 On Closing, the Assignee will deliver to each of the
Assignors or the Assignors' solicitors, as payment for the Assignment
Price, the following documents duly executed by the Assignee:
(a) promissory notes for the Assignment Price in the form
attached hereto as Schedule "C" and
(b) a pledge agreement in the form attached hereto as Schedule
"D".
3. Representations and Warranties
3.1 The Assignors hereby represent and warrant to the Assignee
that neither the whole nor any part of the Notes or the Pledge
Agreements have been previously assigned, pledged, encumbered,
transferred or otherwise dealt with by the Assignors.
3.2 The Assignee hereby represents and warrants to the Assignors
that the Assignee is aware that the Notes are currently in default
and that the Notes are not assignable without the prior written
consent of the Purchasers, which consent has not been obtained.
<PAGE> 114
4. General Provisions
4.1 The Assignors and the Assignee covenant and agree to execute
and deliver all such further documents and instruments and do all
other acts and things as may be necessary or convenient to carry out
the full intent and meaning of this Assignment and to effect the
assignment of the Notes and the Pledge Agreements to the Assignee.
4.2 The Assignors covenant and agree that the Assignors will
immediately deliver or arrange for the delivery to the Assignee of
6,000,000 shares in the capital of the Assignee registered in the
name of the Assignors, Dean Drover and Sandra Ross and currently held
in trust pursuant to the terms of the Amended Pooling Agreement (the
"Cancellation Shares") as follows:
Assignor Cancellation of Shares
to be Delivered
766166 Alberta Ltd. 2,550,000
745797 Alberta Ltd. 2,325,000
Dean Drover 562,500
Sandra Ross 562,500
The Assignee covenants and agrees that it will hold the Cancellation
Shares, at the Assignee's sole discretion, until such time as the
Assignee determines that it is practicable to return the Cancellation
Shares to the Assignee's transfer agent for cancellation.
4.3 This Agreement shall ensure to the benefit of and be binding
upon the parties hereto and their respective successors and assigns.
4.4 This Agreement may be executed in as many counterparts as
may be necessary and by facsimile and each such agreement or
facsimile so executed shall be deemed to be an original and such
counterpart shall constitute one and the same instrument.
IN WITNESS WHEREOF the parties have duly executed this Agreement
as of the day and year first above written.
706166 ALBERTA LTD.
Per: /s/ illegible
Authorized Signatory
745797 ALBERTA LTD.
Per: /s/ illegible
Authorized Signatory
ALR TECHNOLOGIES INC.
Per: /s/ Grey Rae
Authorized Signatory
