SCHEDULE
14C INFORMATION
Information
Statement Pursuant to Section 14(c) of
the Securities
Exchange Act of 1934
Check the appropriate box:
|
[ ]
|
Preliminary Information Statement
|
|
[ ]
|
Confidential, for Use of the Commission
Only (as permitted by Rule 14c-5(d)(2))
|
|
[X]
|
Definitive
Information Statement
|
ALR TECHNOLOGIES
INC.
(Name of Registrant
as Specified In Its Charter)
Payment of Filing Fee (Check the
appropriate box):
[ ] Fee
computed on table below per Exchange Act Rules 14c-5(g) and 0-11.
|
1.
|
Title
of each class of securities to which transaction applies:
|
|
2.
|
Aggregate
number of securities to which transaction applies:
|
|
3.
|
Per
unit price or other underlying value of transaction computed pursuant to Exchange Act
Rule 0-11 (set forth amount on which filing fee is calculated and state how it was determined):
|
|
4.
|
Proposed
maximum aggregate value of transaction:
|
|
[ ]
|
Fee paid previously with preliminary
materials.
|
|
[ ]
|
Check box if any part of the fee
is offset as provided by Exchange Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid previously.
Identify the previous filing by registration statement number, or the Form or Schedule and the date of the filing.
|
|
1.
|
Amount
previously paid:
|
|
2.
|
Form,
Schedule or Registration Statement No.:
|
ALR TECHNOLOGIES
INC.
7400
Beaufont Springs Drive
Suite 300
Richmond,
VA 23225
(804)
554-3500
INFORMATION
STATEMENT
Introduction
This
information statement is being mailed or otherwise furnished to stockholders of ALR TECHNOLOGIES INC., a Nevada corporation (the
“Company” or “We”) in connection with the prior receipt by the Board of Directors of approval by written
consent of the holders of a majority of our common stock of proposals to elect Sidney Chan, Dr. Alfonso Salas, Kenneth Robulak,
Peter Stafford and Ronald Cheng to our board of directors.
This information statement
is being first sent to stockholders on or about July 8, 2019.
WE
ARE NOT ASKING YOU FOR A PROXY
AND
YOU ARE REQUESTED NOT TO SEND US A PROXY
Vote Required
The
proposed action requires the approval of a majority of the outstanding shares of common stock. Each holder of common stock is
entitled to one (1) vote for each share held for each director. The record date for the purpose of determining the number of shares
outstanding, and for determining stockholders entitled to vote, is the close of business on June 28, 2019 (the “Record Date”).
As of the record date, we had 268,777,909 shares of common stock issued and outstanding. Holders of the shares have no preemptive
rights. All outstanding shares are fully paid and non-assessable. The transfer agent for the common stock is Pacific Stock Transfer
Company, 6725 Via Austi Parkway, Suite 300, Las Vegas, Nevada 89119 (the “Transfer Agent”). The Transfer Agent’s
telephone number is 1 (800) 785-7782.
On
July 5, 2019, shareholders holding a majority of the outstanding shares of our common stock executed a written consent approving
the election of Sidney Chan, Dr. Alfonso Salas, Kenneth Robulak, Peter Stafford and Ronald Cheng to our board of directors.
Meeting Not Required
Nevada
Revised Statutes 78.320(2) provides that any action required or permitted to be taken at a meeting of stockholders may be taken
without a meeting if, before or after the action, a written consent thereto is signed by the stockholders holding at least a majority
of the voting power.
Furnishing Information
This
information statement is being furnished to all holders of our common stock. The Form 10-K for the year ending December 31, 2018
and all subsequent filings may be viewed on the Securities and Exchange Commission web site at www.sec.gov in the EDGAR Archives
and are incorporated herein by reference. We are presently current in the filing of all reports required to be filed with the
Securities and Exchange Commission.
Dissenters Rights of Appraisal
There
are no dissenter’s rights of appraisal applicable this action to amend the articles of incorporation and create a class
of preferred stock.
Proposals by Security holders
No security holders entitled
to vote has transmitted any proposals to be acted upon by you.
Vote Obtained
The following individuals
own the number of shares and percentages set forth opposite their
names:
|
Sidney Chan
|
39,845,000
|
14.82%
|
|
Christine
Kan
|
103,153,482
|
38.38%
|
|
Total
|
142,998,482
|
53.20%
|
On
July 5, 2019, the foregoing persons or entities executed a written consent approving the election of Sidney Chan, Dr. Alfonso
Salas, Kenneth Robulak, Peter Stafford and Ronald Cheng to our board of directors.
PROPOSAL
NO. 1
NOMINEES
Each
of our directors serves until his or her successor is elected and qualified. Each of our officers is elected by the board of directors
to a term of one (1) year and serves until his or her successor is duly elected and qualified, or until he or she is removed from
office. The board of directors has audit, nominating and compensation committees.
The name, address, age
and position(s) of our present officers and directors are set forth below:
Name
and Address
|
Age
|
Position(s)
|
Sidney Chan
|
68
|
Director since August 1997.
|
7400 Beaufont Springs Dr., Suite 300
|
|
Chairman of the Board of Directors, Secretary,
|
Richmond, VA 23225
|
|
Principal Executive Officer, Principal Financial
|
|
|
Officer and Principal Accounting Officer.
|
|
|
|
Dr. Alfonso Salas
|
59
|
Director since August 21, 2012.
|
7400 Beaufont Springs Dr., Suite 300
|
|
|
Richmond, VA 23225
|
|
|
|
|
|
Kenneth Robulak
|
71
|
Director since August 21, 2012.
|
7400 Beaufont Springs Dr., Suite 300
|
|
|
Richmond, VA 23225
|
|
|
|
|
|
Peter Stafford
|
82
|
Director since August 1, 2014.
|
7400 Beaufont Springs Dr., Suite 300
|
|
|
Richmond, VA 23225
|
|
|
|
|
|
Ronald Cheng
|
68
|
Director since January 30, 2015
|
7400 Beaufont Springs Dr., Suite 300
|
|
|
Richmond, VA 23225
|
|
|
The foregoing persons
are our directors, and where disclosed, officers.
Background of our directors
and director nominees
Sidney Chan - Chairman
of the Board of Directors, Chief Executive Officer, Chief Financial Officer, Chief Accounting Officer, Secretary, Treasurer and
a Member of the Board of Directors of the Company
Mr.
Chan joined ALR Technologies Inc. in August 1997. He has been instrumental in the Company’s financing, product development
and corporate development. Mr. Chan has led the product development of the Company’s Diabetes Management System. Mr. Chan
possesses in-depth knowledge of the equity markets and investment industry, as well as a strong fundamental background in the
responsibilities of corporate development and operations. Mr. Chan is an engineer and obtained his Bachelor of Engineering (Mining)
degree with distinction in Mineral Economics from McGill University in 1973.
Dr. Alfonso Salas - Member of
the Board of Directors of the Company
Dr.
Salas graduated with distinction from Universidad Metroplitana of Barranquilla, Colombia in 1983 with a Doctor of Medicine degree.
He began practicing in Santa Marta, Columbia in rural medical facilities and the opened a private practice in 1984. He then worked
as a physician with a number of shipping companies and became Medical Director in the office of the Ministry of Social Security
and Labor of Columbia in 1991 doing medical assessments for work related accidents. In 1993 Dr. Salas was appointed Director of
a Medical Service Plan of Columbia and with a support staff of more than thirty people, maintained a caseload, provided assessment
procedures and referral services to hospitals, clinics, and
specialists
and organized and monitored clinical trials and clinical research in the pharmaceutical and medical field. Since 1995 Dr. Salas
has operated his own business in Vancouver, British Columbia, providing medical based consulting services for corporations with
a focus on budgeting, research and medical services.
Kenneth Robulak - Member of
the Board of Directors of the Company
From
December 14, 1999 to January 31, 2001 and since August 21, 2012, Mr. Robulak was a member of our board of directors and from April
4, 2000 to January 31, 2001 Mr. Robulak was our chief financial officer, secretary, treasurer and vice president. Mr. Robulak
resigned as an officer and director on January 31, 2001. At the time of his resignation, Mr. Robulak did not have any disagreements
with us relating to our operations, policies, or practices. Since July 2007, Mr. Robulak has worked as a marketing consultant
to Tecno Metal Products, LLC, a technology based manufacturing Company with operations in Dallas, Texas and Guadalajara, Mexico.
Mr. Robulak earned a Bachelor of Commerce degree in finance and marketing and is a Fellow of the Institute of Canadian Bankers
Peter Stafford - Member of the
Board of Directors of the Company
Mr.
Stafford is a retired lawyer and business consultant, having practised with Fasken Martineau DuMoulin LLP, a major Canadian based
international law firm, and its predecessor firms, from 1966 to 2013, except for several years spent as in-house counsel for clients
of the firm. From 1989 until his retirement from full-time practice in 2006, Mr. Stafford served as senior partner in Fasken Martineu
DuMoulin LLP, including leading the start of its Johannesburg, South Africa office in 2003. He was a director and subsequently
secretary of WEX Pharmaceuticals Inc. (TSX listed) from September 2001 to its amalgamation in May 2011, a director and board chair
of BC Bancorp (TSX listed) from October 1986 until its merger with Canadian Western Bank in November 1996, a director of Nissho
Iwai (Canada) Ltd. a subsidiary of Nissho Iwai Corp. (now Sojitz Corp.) from June 1997 until October 2003 and a director of China
One Corporation (TSX-V listed) from March 2007 until it was acquired in December 2008
.
From
August 2013 to March 2018, Mr. Stafford was a director, secretary and audit committee chair of Russell Breweries Inc. (TSX-V:
RB). Mr. Stafford also served as Director of two private companies, Pikes Peak Resources Inc. from 2007 to 2012 and Paraguay Minerals
Inc., from 2007 to date. Mr. Stafford obtained his Bachelor of Arts from the University of Cape Town in 1957 and obtained an LL.B.
from the University of South Africa in 1960.
Ronald Cheng – Member
of the Board of Directors of the Company
Mr.
Cheng is a lawyer retired from Osler, Hoskin and Harcourt LLP, a major Canadian based international law firm, where he practiced
as a partner from 1980 until his retirement in March 2014. He regularly appeared as counsel before the Canadian International
Trade Tribunal, Canadian federal courts and on NAFTA and WTO matters and advised on NAFTA and other trade agreements. He represented
and provided strategic advice to corporations including startups, trade associations and governments in anti-dumping, countervail
and safeguard litigation, customs matters, commodity tax and government procurement disputes, as well import and export monitoring
and controls. Mr. Cheng was listed in the Lexpert® Guides to Leading US/Canada Cross-border Litigation Lawyers and with highest
listings in other leading legal directories such as Chambers, Martindale-Hubbell® and Best Lawyers® . Mr. Cheng received his Bachelor
of Arts from Amherst College in 1972 and a Juris Doctor degree from the University of Toronto in 1974.
Involvement in Certain Legal
Proceedings
During
the past ten years, Messrs. Chan, Robulak, Stafford, Cheng and Dr. Salas have not been the subject of the following events:
|
1.
|
A
petition under the Federal bankruptcy laws or any state insolvency law was filed by or
against, or a receiver, fiscal agent or similar officer was appointed by a court for
the business or property of such person, or any partnership in which he was a general
partner at or within two years before the time of such filing, or any corporation or
business association of which he was an executive officer at or within two years before
the time of such filing;
|
|
2.
|
Convicted
in a criminal proceeding or is a named subject of a pending criminal proceeding (excluding
traffic violations and other minor offenses);
|
|
3.
|
The
subject of any order, judgment, or decree, not subsequently reversed, suspended or vacated,
of any court of competent jurisdiction, permanently or temporarily enjoining him from,
or otherwise limiting, the following activities;
|
|
i)
|
Acting
as a futures commission merchant, introducing broker, commodity trading advisor, commodity
pool operator, floor broker, leverage transaction merchant, any other person regulated
by the Commodity Futures Trading Commission, or an associated person of any of the foregoing,
or as an investment adviser, underwriter, broker or dealer in securities, or as an affiliated
person, director or employee of any investment company, bank, savings and loan association
or insurance company, or engaging in or continuing any conduct or practice in connection
with such activity;
|
|
ii)
|
Engaging
in any type of business practice; or
|
|
iii)
|
Engaging
in any activity in connection with the purchase or sale of any security or commodity
or in connection with any violation of Federal or State securities laws or Federal commodities
laws;
|
|
4.
|
The
subject of any order, judgment or decree, not subsequently reversed, suspended or vacated,
of any Federal or State authority barring, suspending or otherwise limiting for more
than 60 days the right of such person to engage in any activity described in paragraph
3.i in the preceding paragraph or to be associated with persons engaged in any such activity;
|
|
5.
|
Was
found by a court of competent jurisdiction in a civil action or by the Commission to
have violated any Federal or State securities law, and the judgment in such civil action
or finding by the Commission has not been subsequently reversed, suspended, or vacated;
|
|
6.
|
Was
found by a court of competent jurisdiction in a civil action or by the Commodity Futures
Trading Commission to have violated any Federal commodities law, and the judgment in
such civil action or finding by the Commodity Futures Trading Commission has not been
subsequently reversed, suspended or vacated;
|
|
7.
|
Was
the subject of, or a party to, any Federal or State judicial or administrative order,
judgment, decree, or finding, not subsequently reversed, suspended or vacated, relating
to an alleged violation of:
|
|
i)
|
Any
Federal or State securities or commodities law or regulation; or
|
|
ii)
|
Any
law or regulation respecting financial institutions or insurance companies including,
but not limited to, a temporary or permanent injunction, order of disgorgement or restitution,
civil money penalty or temporary or permanent cease-and-desist order, or removal or prohibition
order, or
|
|
iii)
|
Any
law or regulation prohibiting mail or wire fraud or fraud in connection with any business
entity; or
|
|
8.
|
Was
the subject of, or a party to, any sanction or order, not subsequently reversed, suspended
or vacated, of any self-regulatory organization (as defined in Section 3(a)(26) of the
Exchange Act (15 U.S.C. 78c(a)(26))), any registered entity (as defined in Section 1(a)(29)
of the Commodity Exchange Act (7 U.S.C. 1(a)(29))), or any equivalent exchange, association,
entity or organization that has disciplinary authority over its members or persons associated
with a member.
|
Audit Committee and Charter
We
have a separately-designated audit committee of the board. The Audit Committee is composed of three members of our board of directors:
Mr. Sidney Chan, Mr. Kenneth Robulak and Dr. Alfonso Salas. Mr. Robulak and Dr. Salas are deemed independent. Mr. Chan holds office
as Chief Executive Officer of the Company. Our audit committee is responsible for: (1) selection and oversight of our independent
accountant; (2) establishing procedures for the receipt, retention and treatment of complaints regarding accounting, internal
controls and auditing matters; (3) establishing procedures for the confidential, anonymous submission by our employees of concerns
regarding accounting and auditing matters; (4) engaging outside advisors; and, (5) funding for the outside auditory and any outside
advisors engagement by the audit committee. A copy of our audit committee charter is filed as Exhibit 99.19 with our 2013 Form
10-K on March 31, 2014.
Audit Committee Financial Expert
None
of our directors or officers have the qualifications or experience to be considered a financial expert. We believe the cost related
to retaining a financial expert at this time is prohibitive. Further, because of our limited operations, we believe the services
of a financial expert are not warranted and the members of our Audit Committee have an appropriate level of financial knowledge
and experience.
Code of Ethics
We
have adopted a corporate code of ethics. We believe our code of ethics is reasonably designed to deter wrongdoing and promote
honest and ethical conduct; provide full, fair, accurate, timely and understandable disclosure in public reports; comply with
applicable laws; ensure prompt internal reporting of code violations; and provide accountability for adherence to the code. A
copy of the code of ethics is filed as Exhibit 14.1 with our 2003 Form 10-K on April 14, 2004.
Disclosure Committee and Committee
Charter
We
have a disclosure committee and disclosure committee charter. Our disclosure committee is comprised of all of our officers and
directors. The purpose of the committee is to provide assistance to the Chief Executive Officer and the Chief Financial Officer
in fulfilling their responsibilities regarding the identification and disclosure of material information about us, and the accuracy,
completeness and timeliness of our financial reports. A copy of the disclosure committee charter is filed as Exhibit 99.2 with
our 2003 Form 10-K on April 14,
2004.
Compensation Committee and Charter
We
have a separately-designated compensation committee of the board. The compensation committee is composed of three members of our
board of directors: Mr. Sidney Chan, Mr. Kenneth Robulak and Dr. Alfonso Salas. Mr. Robulak and Dr. Salas are deemed independent.
Mr. Chan holds office as Chief Executive Officer of the Company. Our compensation committee is responsible for making recommendations
on appropriate compensation packages for directors, executives and employees that will be competitive directly with compensation
packages offered by medical technology or pre-commercialization companies and also industries that source executives and employees
directly from the same talent pool. A copy of our compensation committee charter is filed as Exhibit 99.7 with our 2014 Form 10-Q
on August 14, 2013.
Nomination Committee and Charter
We
have a separately-designated nomination committee of the board. The nomination committee is composed of three members of our board
of directors: Mr. Sidney Chan, Mr. Kenneth Robulak and Dr. Alfonso Salas. Mr. Robulak and Dr. Salas are deemed independent. Mr.
Chan holds office as Chief Executive Officer of the Company. Our nomination committee is responsible for evaluating and recommending
candidates as directors of the Company as well as evaluating the current board of directors. A copy of our nomination charter
is filed as Exhibit 99.1 with our 2014 Form 10-Q on August 14, 2013.
Section 16(a) of the Securities
Exchange Act of 1934
Section
16(a) of the Securities Exchange Act of 1934, as amended, requires the Company’s directors, officers and persons who beneficially
owned more than ten percent of the Company’s common stock to file reports of ownership and changes in ownership of common
stock.
Based
solely upon a review of Forms 3, 4 and 5 furnished to the Company during the fiscal years 2017, 2018 and the fiscal year to date
of 2019, Messrs., Chan, Robulak, Stafford, Cheng and Dr. Salas have filed all Form 3s and 4s required by law.
EXECUTIVE
COMPENSATION
The
following table sets forth the compensation paid by us during the last three fiscal years for our officers. This information includes
the dollar value of base salaries, bonus awards and number of stock options granted, and certain other compensation, if any. The
compensation discussed addresses all compensation awarded to, earned by, or paid to our named executive officers.
The
following table sets forth information with respect to compensation paid by the Company to officers and directors during the three
most recent fiscal years.
Summary
Compensation Table
|
|
|
|
|
|
Non-Equity
|
Non-qualified
|
|
|
|
|
|
|
Stock
|
Option
|
Incentive
|
Deferred
|
All
|
|
Name
and
|
|
Salary
|
Bonus
|
Awards
|
Awards
|
Plan
|
Earnings
|
Other
|
Total
|
Principal
Position
|
Year
|
(US$)
|
(US$)
|
(US$)
|
(US$)
|
(US$)
|
(US$)
|
(US$)
|
(US$)
|
(a)
|
(b)
|
(c)
|
(d)
|
(e)
|
(f)
|
(g)
|
(h)
|
(i)
|
(j)
|
Sidney
Chan [1][2]
|
2018
|
180,000
|
0
|
0
|
0
|
0
|
0
|
9,600
|
189,600
|
Chairman,
CEO,
|
2017
|
180,000
|
0
|
0
|
0
|
0
|
0
|
9,600
|
189,600
|
President
and CFO
|
2016
|
180,000
|
0
|
0
|
0
|
0
|
0
|
9,600
|
189,600
|
|
|
|
|
|
|
|
|
|
|
Bill
Smith [3]
|
2018
|
0
|
0
|
0
|
0
|
0
|
0
|
0
|
0
|
President
|
2017
|
0
|
0
|
0
|
0
|
0
|
0
|
0
|
0
|
(resigned
01/31/16)
|
2016
|
15,500
|
0
|
0
|
0
|
0
|
0
|
0
|
15,500
|
|
[1]
|
All
other compensation includes automobile allowance.
|
|
[2]
|
Salaries
and other annual compensation for fiscal 2018, 2017 and 2016 totaling $189,600 in each
year respectively has accrued against the line of credit payable provided by Mr. Chan
to the Company. Options granted to acquire shares of common stock of the Company to Mr.
Chan and his spouse for providing operating lines of credit to the Company are not included
in the table above.
|
|
[3]
|
Resigned
as President and member of the Board of Directors effective January 31, 2016.
|
Outstanding
Equity Awards at July 8, 2019
|
|
|
Equity
|
|
|
|
Equity
|
|
|
|
Incentive
|
|
|
|
Incentive
|
|
Number of
|
Number of
|
Plan Awards:
|
|
|
Number of
|
Plan Awards:
|
|
Securities
|
Securities
|
Securities
|
|
|
Shares or
|
Number of
|
|
Underlying
|
Underlying
|
Underlying
|
|
|
Units of
|
Unearned
|
|
Unexercised
|
Unexercised
|
Unexercised
|
Option
|
Option
|
Stock
|
Shares, Units
|
|
Options
|
Options
|
Unearned
|
Exercise
|
Expiration
|
that have
|
that have
|
Name
|
Exercisable
|
Unexercisable
|
Options
|
Price
|
Date
|
not Vested
|
not vested
|
(a)
|
(b)
|
(c)
|
(d)
|
(e)
|
(f)
|
(g)
|
(h)
|
Sidney Chan
|
4,925,001,500
|
0
|
0
|
$0.00
|
2021/2024
|
0
|
0
|
Dr. Alfonso Salas
|
5,000,000
|
0
|
0
|
$0.04
|
2024
|
0
|
0
|
Kenneth Robulak
|
10,000,000
|
0
|
0
|
$0.015-
$0.035
|
2024
|
0
|
0
|
Ronald Cheng
|
5,000,000
|
0
|
0
|
$0.015-
$0.035
|
2024
|
0
|
0
|
Peter Stafford
|
5,000,000
|
0
|
0
|
$0.015-
$0.035
|
2024
|
0
|
0
|
Mr. Sidney Chan
On
March 6, 2011, Mr. Chan was granted the option to acquire 20,000,000 shares of common stock of the Company, exercisable at $0.125
per share. For each dollar the Company borrowed on the line of credit from Mr. Chan, eight stock options became exercisable. The
option to acquire the 20,000,000 shares was set to expire on March 5, 2016.
On June 27, 2012, the
option granted to Mr. Chan on March 6, 2011 to acquire 20,000,000 shares of common stock was modified as follows:
|
i.
|
The
options in respect of shares not vested were vested immediately, and
|
|
ii.
|
The
exercise price of the option was reduced from $0.125 per share to $0.07 per share and
subsequently reduced to $0.05 per share on December 28, 2012.
|
On
June 27, 2012, the Company granted Mr. Chan the option to acquire 15,750,000 shares of common stock of the Company with an exercise
price of $0.07 per share until March 6, 2016. On December 28, 2012, the exercise price of this option granted on June 27, 2012
was reduced to $0.05 per share.
On December 28, 2012, the Company
granted Mr. Chan the option to acquire:
|
i.
|
14,250,000
shares of common stock of the Company at an exercise price of $0.05 per share
|
|
ii.
|
50,000,000 shares of common stock of the Company
at an exercise price of $0.03 per share
|
The options granted to
acquire 64,250,000 shares of common stock were exercisable until December 28, 2017.
Mr. Sidney Chan (continued)
On April 1,
2014, the Company and Mr. Chan agreed to amend the existing credit agreement to increase the borrowing limit on the line of credit
provided to the Company from $4,000,000 to $5,500,000. In exchange for increasing the borrowing limit, the Company:
|
i.
|
granted Mr. Chan the
option to acquire 83,333,400 shares of common stock of the Company at a price of $0.03 per share for a term of five years,
|
|
ii.
|
reduced the exercise
price of Mr. Chan’s option to acquire 35,750,000 shares of common stock of the Company, granted June 2012, from $0.05 per
share to $0.03 per share,
|
|
iii.
|
reduced the exercise
price of Mr. Chan’s option to acquire 14,250,000 shares of common stock of the Company, granted December 2012, from $0.05
per share to $0.03 per share,
|
|
iv.
|
granted Ms. Kan the
option to acquire 26,666,700 shares of common stock of the Company at an exercise price of $0.03 per share for a term of five
years.
|
|
v.
|
reduced the exercise
price of the option granted January 2011 to the spouse of Mr. Chan (Ms. Kan), to acquire 20,000,000 shares of common stock of
the Company from $0.05 per share to $0.03 per share, and
|
On May 29,
2015, the Company and Mr. Chan agreed to amend the existing credit agreement to increase the borrowing limit on the line of credit
provided to the Company from $5,500,000 to $7,000,000. In exchange for Mr. Chan increasing the borrowing limit the Company:
|
i.
|
reduced the exercise
price of the 230,000,100 shares of common stock under option to Mr. Chan and his spouse from $0.03 per share to $0.015 per share;
|
|
ii.
|
extended the expiry
date of the 230,000,100 shares of common stock under option to Mr. Chan to be five years from the date of execution of the amended
credit agreement;
|
|
iii.
|
granted Mr. Chan the
right and option to purchase, an additional 329,999,967 shares of common stock at a price of $0.015 per share for a term of five
years from the date of execution of the amended credit agreement.
|
On July 1,
2016, the Company and Mr. Chan agreed to amend the existing credit agreement to increase the borrowing limit on the line of credit
provided to the Company from $7,000,000 to $8,500,000. In exchange for Mr. Chan increasing the borrowing limit the Company:
|
i.
|
reduced the exercise
price of the 560,000,200 shares of common stock under option to Mr. Chan and his spouse from $0.015 to $0.002;
|
|
ii.
|
granted Mr. Chan and
his spouse the right and option to purchase, an additional 4,390,001,300 shares of common stock at a price of $0.002 per share
for a term of five years
|
On April 12, 2019, the
expiry date of May 29, 2020 for the option held by Mr. Chan and his spouse to acquire 560,000,200 shares of common stock at a
price of $0.002 was extended to April 12, 2024.
On June 19, 2019, Mr.
Chan exercised his option to acquire 25,000,000 shares of common stock of the Company at a price of $0.002 per share by providing
his forgiveness of an outstanding debt owed by the Company to him in the amount of $50,000.
Dr. Alfonso Salas
On May 6,
2019, the Company granted Dr. Salas the option to acquire 4,000,000 shares of common stock at a price of $0.035 per share for
a term of five years. On May 17, 2019, the Company granted Dr. Salas the option to acquire 1,000,000 shares of common stock at
a price of $0.035 per share for a term of five years.
Mr. Kenneth Robulak
On July 25,
2014, the Company granted Mr. Robulak the option to acquire 1,000,000 shares of common stock at a price of $0.03 for a term of
five years. On July 2, 2015, the exercise price of the option to acquire 1,000,000 shares of common stock was reduced from $0.03
per share to $0.015 per share. On November 27, 2017, the Company granted Mr. Robulak the option to acquire 2,350,000 shares of
common stock at a price of $0.015 for a term of five years. On March 15, 2019, Mr. Robulak was granted the option to acquire 6,650,000
shares of common stock at a price of $0.035 per share for a term of five years. On April 12, 2019, the expiry date of July 25,
2019 for the option held by Mr. Robulak to acquire 1,000,000 shares of common stock of the Company at a price of $0.015 per share
was extended to April 12, 2024.
Mr. Peter Stafford
On August 1, 2014, the
Company granted Mr. Stafford the option to acquire 500,000 shares of common stock at a price of $0.03 for a term of five years.
On July 2, 2015, the exercise price of the option to acquire 500,000 shares of common stock of the Company was reduced from $0.03
per share to $0.015 per share. On April 12, 2019, the expiry date of August 1, 2019 for the option held by Mr. Stafford to acquire
500,000 shares of common stock of the Company at a price of $0.015 was extended to April 12, 2024. On May 6, 2019, the Company
granted Mr. Stafford the option to acquire 4,500,000 shares of common stock at a price of $0.035 per share for a term of five
years.
Mr. Ronald Cheng
On August 1, 2014, the
Company granted Mr. Cheng the option to acquire 500,000 shares of common stock at a price of $0.03 for a term of five years. On
July 2, 2015, the exercise price of the option to acquire 500,000 shares of common stock of the Company was reduced from $0.03
per share to $0.015 per share. On April 12, 2019, the expiry date of August 1, 2019 for the option held by Mr. Cheng to acquire
500,000 shares of common stock of the Company at a price of $0.015 was extended to April 12, 2024. On May 6, 2019, the Company
granted Mr. Cheng the option to acquire 4,500,000 shares of common stock at a price of $0.035 per share for a term of five years.
Option Exercises
and Stock Vested for the year ended December 31, 2018
|
Number
of Shares
|
Value
Realized
|
Number
of Shares
|
Value
Realized
|
|
Acquired
On Exercise
|
On
Exercise
|
Acquired
On Vesting
|
On
Vesting
|
Name
|
(#)
|
($)
|
(#)
|
($)
|
(a)
|
(b)
|
(c)
|
(d)
|
(e)
|
Sidney
Chan
|
0
|
0
|
0
|
0
|
Dr.
Alfonso Salas
|
0
|
0
|
0
|
0
|
Kenneth
Robulak
|
0
|
0
|
0
|
0
|
Peter
Stafford
|
0
|
0
|
0
|
0
|
Ronald
Cheng
|
0
|
0
|
0
|
0
|
The
Company does not have any long-term incentive plans. The Company has contractual compensation arrangements with the following
individuals:
Sidney Chan
The Company
has a consulting arrangement with Mr. Sidney Chan, Chief Executive Officer and Chairman of the Board of Directors of the Company.
Under the terms of the contract, Mr. Chan is paid $180,000 per annum for services, receive a vehicle allowance of $800 per month,
receive health care insurance and receive club allowances. The contract can be terminated at any time with thirty days’
notice and the payment of two years annual salary. Should the contract be terminated, all debts owed to Mr. Chan and his spouse
must be immediately repaid. The initial term of the contract is for one year and automatically renews for continuous one year
terms. Also under the terms of the contract are the following:
|
i.
|
Incentive
Revenue Bonus
|
Mr.
Chan will be entitled to a 1% net sales commission from the sales of any of the Company’s products at any time during his
life, regardless if Mr. Chan is still under contract with the Company.
If
more than 50% of the Company’s stock or assets are sold, Mr. Chan will be compensated for entering into non-compete agreements
based on the selling price of the Company or its assets as follows:
|
-
|
2%
of sales price up to $24,999,999 plus
|
|
-
|
3%
of sales price between $25,000,000 and $49,999,999 plus
|
|
-
|
4%
of sales price between $50,000,000 and $199,999,999 plus
|
|
-
|
5%
of sales price in excess of $200,000,000
|
Compensation of Directors
The
Board of Directors consist five members, Mr. Sidney Chan, Mr. Kenneth James Robulak, Dr.
Alfonso Salas, Mr. Peter
Stafford and Mr. Ronald Cheng. Mr. Kenneth Robulak, Dr. Alfonso Salas, Mr. Peter Stafford and Mr. Ronald Cheng are
independent directors.
The
Company’s Board of Directors unanimously resolved that members receive no cash compensation for their services; however,
they are reimbursed for travel expenses incurred in serving on the Board of Directors. Independent directors are compensated from
time to time through the grant of options to purchase shares of common stock of the Company. Directors whom are also Officers
or consultants of the Company are compensated for those positions as disclosed under Executive Compensation for those positions.
No
additional amounts are payable to the members of the Company’s Board of Directors for committee participation or special
assignments.
Compensation for the Directors
for the year ended December 31, 2018 was as follows:
|
Fees
|
|
|
|
Nonqualified
|
|
|
|
Earned
or
|
|
|
Non-Equity
|
Deferred
|
|
|
|
Paid
in
|
Stock
|
Option
|
Incentive
Plan
|
Compensation
|
All
Other
|
|
|
Cash
|
Awards
|
Awards
|
Compensation
|
Earnings
|
Compensation
|
Total
|
Name
|
(US$)
|
(US$)
|
(US$)
|
(US$)
|
(US$)
|
(US$)
|
(US$)
|
(a)
|
(b)
|
(c)
|
(d)
|
(e)
|
(f)
|
(g)
|
(h)
|
Sidney
Chan
|
0
|
0
|
0
|
0
|
0
|
0
|
0
|
Dr.
Alfonso Salas
|
0
|
0
|
0
|
0
|
0
|
0
|
0
|
Kenneth
Robulak
|
0
|
0
|
0
|
0
|
0
|
0
|
0
|
Mr.
Peter Stafford
|
0
|
0
|
0
|
0
|
0
|
0
|
0
|
Mr.
Ronald Cheng
|
0
|
0
|
0
|
0
|
0
|
0
|
0
|
Indemnification
Under
our Bylaws, we may indemnify an officer or director who is made a party to any proceeding, including a lawsuit, because of his
position, if he/she acted in good faith and in a manner he/she reasonably believed to be in our best interest. We may advance
expenses incurred in defending a proceeding. To the extent that the officer or director is successful on the merits in a proceeding
as to which he/she is to be indemnified, we must indemnify him/her against all expenses incurred, including attorney’s fees.
With respect to a derivative action, indemnity may be made only for expenses actually and reasonably incurred in defending the
proceeding, and if the officer or director is judged liable, only by a court order. The indemnification is intended to be to the
fullest extent permitted by the laws of the State of Nevada.
Regarding
indemnification for liabilities arising under the Securities Act of 1933, as amended, which may be permitted to directors or officers
under Nevada law, we are informed that, in the opinion of the Securities and Exchange Commission, indemnification is against public
policy, as expressed in the Act and is, therefore, unenforceable.
CERTAIN
RELATIONSHIPS AND TRANSACTIONS
All
transactions with related parties were incurred in the normal course of operations and measured at the exchange amount, which
is the amount of consideration and agreed upon by the transaction parties.
Year Ended December 31, 2018
During
the 2018 fiscal year, the Company incurred interest expense of $299,125 on $2,891,966 of promissory notes due to relatives of
Sidney Chan and interest expense of $1,287,822 on $11,024,235 of amounts outstanding on the lines of credit payable to Sidney
Chan and Christine Kan. During the year ended December 31, 2018, the Company borrowed $625,985 on the line of credit provided
by Sidney Chan. As at December 31, 2018, the accrued interest on promissory notes owed to relatives of Sidney Chan was $2,554,654.
As at December 31, 2018, the accrued interest on the lines of credit was $6,237,416.
Year Ended December 31, 2017
During
the 2017 fiscal year, the Company incurred interest expense of $299,125 on $2,891,966 of promissory notes due to relatives of
Sidney Chan and interest expense of $1,202,250 on $10,398,249 of amounts outstanding on the lines of credit payable to Sidney
Chan and Christine Kan. During the year ended December 31, 2017, the Company borrowed $770,030 on the line of credit provided
by Sidney Chan. As at December 31, 2017, the accrued interest on promissory notes owed to relatives of Sidney Chan was $2,255,529.
As at December 31, 2017, the accrued interest on the lines of credit was $4,949,593.
SECURITY
OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The
following table sets forth, as of the date of this report, the total number of shares owned beneficially by each of our directors,
officers and key employees, individually and as a group, and the present owners of 5% or more of our total outstanding shares.
The stockholder listed below has direct ownership of his/her shares and possesses sole voting and dispositive power with respect
to the shares.
|
Direct
Amount of
|
|
|
Percent
|
Name
of Beneficial Owner
|
Beneficial
Owner
|
|
Position
|
of
Class
|
Sidney
Chan
|
143,498,482
|
[1] [2]
|
Chairman,
Chief Executive Officer, Chief Financial
|
53.4%
|
|
|
|
Officer
and member of the Board of Directors
|
|
|
|
|
|
|
Dr.
Alfonso Salas
|
1,557,738
|
[3]
|
Member
of the Board of Directors
|
0.6%
|
|
|
|
|
|
Kenneth
Robulak
|
1,190,000
|
[4]
|
Member
of the Board of Directors
|
0.4%
|
|
|
|
|
|
Peter
Stafford
|
500,000
|
[5]
|
Member
of the Board of Directors
|
0.2%
|
|
|
|
|
|
Ronald
Cheng
|
1,205,800
|
[6]
|
Member
of the Board of Directors
|
0.5%
|
|
|
|
|
|
All
Officers and Directors
|
147,972,020
|
|
|
55.1%
|
as
a group (5 people)
|
|
|
|
|
|
[1]
|
39,845,000
shares are held in the name of Sidney Chan, 500,000 shares are held in the name of KRS
Retraction
|
Limited, and, 103,153,482
shares are owned by Christine Kan, Mr. Chan’s wife.
|
[2]
|
Mr.
Chan and his wife also hold the option to acquire 4,925,001,500 shares of common stock
of the Company.
|
|
[3]
|
Dr.
Salas also holds the option to acquire 5,000,000 shares of common stock of the Company.
|
|
[4]
|
Mr.
Robulak also holds the option to acquire 10,000,000 shares of common stock of the Company.
|
|
[5]
|
Mr.
Stafford also holds the option to acquire 5,000,000 shares of common stock of the Company.
|
|
[6]
|
Mr.
Cheng also holds the option to acquire 5,000,000 shares of common stock of the Company.
|
AUDIT
COMMITTEE REPORT
From
January 1, 2018 to December 31, 2018, the Audit Committee was composed of three members of the Board of Directors. The Audit Committee
and the Board of Directors met three times to approve its filings as follows 1) the 2016 annual report, 2) its three 2017 quarterly
reports and 3) its 2018 quarterly reports. Each member of the Audit Committee was present for the three meetings, except for Dr.
Salas who was absent for one meeting. The board of directors met 4 times in the fiscal year ended December 31, 2018. Each member
of the board of directors attended all of the meetings except for Mr. Cheng who was absent for two of the meetings and Dr. Salas
who was absent for one meeting.
FEES
PAID TO INDEPENDENT REGISTERED PUBLIC ACCOUNTANTS
The
aggregate fees billed for each of the last two fiscal years for professional services rendered by the principal accountant for
audit of the Company’s financial statements included in its Form 10-K and review of its consolidated financial statements
included in the its Form 10-Qs or services that are normally provided by the accountant in connection with statutory and regulatory
filings or engagements for those fiscal years was:
2018
|
$20,000
|
DMCL
LLP
|
2017
|
$20,000
|
DMCL
LLP
|
The
aggregate fees billed in each of the last two fiscal years for assurance and related services by the principal accountants that
are reasonably related to the performance of the audit or review of the Company’s consolidated financial statements and
are not reported in the preceding paragraph:
2018
|
$12,000
|
DMCL
LLP
|
2017
|
$12,000
|
DMCL
LLP
|
The
aggregate fees billed in each of the last two fiscal years for professional services rendered by the principal accountant for
tax compliance, tax advice, and tax planning was:
2018
|
$2,000
|
DMCL
LLP
|
2017
|
$2,000
|
DMCL
LLP
|
The
aggregate fees billed in each of the last two fiscal years for the products and services provided by the principal accountant,
other than the services reported in paragraphs (1), (2), and (3) was:
2018
|
$0
|
DMCL
LLP
|
2017
|
$0
|
DMCL
LLP
|
(5)
The Company’s audit committee’s pre-approval policies and procedures described in paragraph (c)(7)(i) of Rule
2-01 of Regulation S-X were that the audit committee pre-approve all accounting related activities prior to the performance of
any services by any accountant or auditor.
(6)
The percentage of hours expended on the principal accountant’s engagement to audit the Company’s consolidated
financial statements for the most recent fiscal year that were attributed to work performed by persons other than the principal
accountant’s full time, permanent employees was 0%.
By Order of the Board
of Directors
/s/ SIDNEY CHAN
Sidney Chan
Chairman of the Board
of Directors, Chief Executive
Officer and Chief Financial
Officer
ALR Technologies (QB) (USOTC:ALRT)
Historical Stock Chart
From Apr 2024 to May 2024
ALR Technologies (QB) (USOTC:ALRT)
Historical Stock Chart
From May 2023 to May 2024