-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, RrrgrqKB7T8qyDmU5QLYDoJfB90EqZC8Ytp04bDVxI0ihb90dJl3Za2bKZt5+V+H vv89n8Oyc+9xZtZNy9DuxA== 0001087022-99-000004.txt : 19991213 0001087022-99-000004.hdr.sgml : 19991213 ACCESSION NUMBER: 0001087022-99-000004 CONFORMED SUBMISSION TYPE: 10SB12G PUBLIC DOCUMENT COUNT: 13 FILED AS OF DATE: 19991210 FILER: COMPANY DATA: COMPANY CONFORMED NAME: ALR TECHNOLOGIES INC CENTRAL INDEX KEY: 0001087022 STANDARD INDUSTRIAL CLASSIFICATION: COMMUNICATIONS EQUIPMENT, NEC [3669] STATE OF INCORPORATION: NV FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10SB12G SEC ACT: SEC FILE NUMBER: 000-26501 FILM NUMBER: 99771860 BUSINESS ADDRESS: STREET 1: 15446 BEL RED ROAD STREET 2: SUITE 310 CITY: REDMOND STATE: WA ZIP: 98052-5507 BUSINESS PHONE: 4253762578 MAIL ADDRESS: STREET 1: 15446 BEL RED ROAD STREET 2: SUITE 310 CITY: REDMOND STATE: WA ZIP: 98052-5507 10SB12G 1 1 ==================================================================== SECURITIES AND EXCHANGE COMMISSION 450 Fifth Street, N.W. Washington, D.C. 20549 ---------------------------------- 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) ================================================================= 2 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. 3 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. 4 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: 5 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. 6 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. 7 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." 8 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 9 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." 10 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. 11 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. 12 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 13 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. 14 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. 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. 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 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:
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 ($) ($) ($) ($) (#) ($) ($) 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) 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
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. 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. 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. 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. 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 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. 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. 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. 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 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 28 A LITTLE REMINDER (ALR) INC. Consolidated Balance Sheet $ United States
December 31, 1998 ASSETS 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 ===========
See accompanying notes to consolidated financial statements On behalf of the Board: /s/ Grey Rae /s/ Lorne Drever Director Director F-3 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
Six Months Ended Year Ended Year Ended 12/31/98 06/30/98 06/30/97 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 ============ ============ ============
See accompanying notes to consolidated financial statements F-4 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
Total Share Other Comprehensive Shareholders' Capital Comprehensive Income Equity (Note 8) Deficit Income (Loss) (Deficit) 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) ========= ========= ======== ============ ==========
See accompanying notes to consolidated financial statements F-5 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
Six Month Year Ended Year Ended period ended 12/31/98 06/30/98 06/30/97 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) ========= ========= =========
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 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 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 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 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 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 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 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 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 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 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. 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:
12/31/98 06/30/98 06/30/97 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) =========== ========== ==========
F-17 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 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 45 ALR TECHNOLOGIES INC. Consolidated Balance Sheet ($ United States) September 30, 1999 (Unaudited)
ASSETS 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 ===========
See accompanying notes to consolidated financial statements. 1 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)
1999 1998 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) =========== ==========
See accompanying notes to consolidated financial statements 2 47 ALR TECHNOLOGIES INC. Consolidated Statement of Cash Flows ($ United States) Nine month periods ended September 30, 1999 and September 30, 1998 (Unaudited)
1999 1998 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) =========== ==========
See accompanying notes to consolidated financial statements. 3 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 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 $1,000 which were then cancelled. 5 50 ALR TECHNOLOGIES INC. Notes to Consolidated Financial Statements ($ 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 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:
Capital Stock Additional Number of Paid in Shares Amount Capital 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 =========== ======== ===========
8 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 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 EX-3 2 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 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. 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 EX-3 3 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. 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. 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. 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 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. 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. 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. 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: 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 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 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. 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. EX-3 4 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 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 EX-3 5 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 EX-27 6
5 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. YEAR 9-MOS DEC-31-1998 DEC-31-1999 DEC-31-1998 SEP-30-1999 33,642 52,641 0 0 12,417 6,933 1,454 1,400 266,975 314,679 321,328 425,188 49,398 68,735 19,740 29,218 350,986 464,706 682,664 715,076 445,970 303,931 0 0 0 0 422,143 32,079 0 1,260,101 350,986 464,706 218,208 252,823 218,208 252,823 159,350 146,964 315,180 723,443 0 0 0 0 17,386 12,565 (256,322) (617,584) 0 0 (256,322) (617,584) 0 0 0 0 0 0 (256,322) (617,584) (0.01) (0.02) (0.01) (0.02)
EX-99 7 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; 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. 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. 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. 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. 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. 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. 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: 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. 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. 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. 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 EX-99 8 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". 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 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; 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. 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 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 EX-99 9 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; 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"; 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: 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. 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. 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 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; 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. 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 EX-99 10 100 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. 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". 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; 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"); 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: 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 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 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. 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 EX-99 11 109 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. 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 EX-99 12 111 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 EX-99 13 112 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: 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. 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 -----END PRIVACY-ENHANCED MESSAGE-----