|
[X]
|
QUARTERLY
REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES
|
|
EXCHANGE
ACT OF 1934 FOR THE QUARTERLY PERIOD ENDED SEPTEMBER 30,
2009
|
|
Large
Accelerated Filer
|
[ ]
|
Accelerated
Filer
|
[ ]
|
|
|
Non-accelerated
Filer
|
[ ]
|
Smaller
Reporting Company
|
[X]
|
|
|
(Do
not check if a smaller reporting company)
|
||||
|
ALR
TECHNOLOGIES INC.
|
||||||
|
Interim
Consolidated Balance Sheets
|
||||||
|
($
United States)
|
||||||
|
September
30
|
December
31
|
|||||
|
2009
|
2008
|
|||||
|
(Unaudited)
|
||||||
|
Assets
|
||||||
|
Current
assets:
|
||||||
|
Cash
|
$
|
414
|
$
|
7,901
|
||
|
Accounts
receivable, net of allowance of $908
|
-
|
5,048
|
||||
|
(December
31, 2008 - $748)
|
||||||
|
Prepaid
expenses and deposits
|
10,041
|
57,536
|
||||
|
Deferred
interest expenses (note 5)
|
-
|
50,400
|
||||
|
Total
current assets
|
10,455
|
120,885
|
||||
|
Equipment,
net of accumulated depreciation
|
4,808
|
6,109
|
||||
|
(net
of accumulated depreciation of $26,306;
|
||||||
|
December
31, 2008 - $25,005)
|
||||||
|
$
|
15,263
|
$
|
126,994
|
|||
|
Liabilities
and Shareholders' Deficiency
|
||||||
|
Current
liabilities:
|
||||||
|
Accounts
payable and accrued liabilities
|
$
|
879,395
|
$
|
1,088,256
|
||
|
Payroll
payable
|
18,050
|
18,050
|
||||
|
Interest
payable (note 5)
|
765,714
|
2,613,008
|
||||
|
Advances
payable (note 5)
|
513,391
|
2,289,982
|
||||
|
Promissory
notes payable (notes 5 and 7)
|
4,833,833
|
6,436,393
|
||||
|
Total
current liabilities
|
7,010,383
|
12,445,689
|
||||
|
Shareholders'
deficiency
|
||||||
|
Capital
stock (note 6)
|
||||||
|
350,000,000
common shares with a par
|
||||||
|
value
of $0.001 per share authorized
|
||||||
|
76,078,446
issued
|
||||||
|
(December
31, 2008 - 76,078,446)
|
76,078
|
76,078
|
||||
|
Commitment
to issue shares (note 6(c))
|
6,762,473
|
-
|
||||
|
Additional
paid-in capital
|
13,377,121
|
13,300,827
|
||||
|
Accumulated
deficit
|
(27,210,792)
|
(25,695,600)
|
||||
|
(6,995,120)
|
(12,318,695)
|
|||||
|
$
|
15,263
|
$
|
126,994
|
|||
|
Interim
Consolidated Statement of Loss and Deficit
|
|||||||||
|
($
United States)
|
|||||||||
|
Nine
months Ended September 30, 2009 and 2008
|
|||||||||
|
(Unaudited)
|
|||||||||
|
Three
months Ended
|
Nine
months Ended
|
||||||||
|
September
30
|
September
30
|
||||||||
|
2009
|
2008
|
2009
|
2008
|
||||||
|
Revenue
|
|||||||||
|
Sales
|
$
|
-
|
$
|
1,988
|
$
|
-
|
$
|
10,926
|
|
|
Cost
of sales
|
-
|
90
|
-
|
1,141
|
|||||
|
-
|
1,898
|
-
|
9,785
|
||||||
|
Expenses
|
|||||||||
|
Depreciation
|
434
|
306
|
1,301
|
916
|
|||||
|
Development
costs
|
100,947
|
46,500
|
216,197
|
283,836
|
|||||
|
Foreign
exchange (gain) loss
|
30,345
|
(6,805)
|
35,404
|
(11,782)
|
|||||
|
Interest
|
214,305
|
203,992
|
662,938
|
557,704
|
|||||
|
Professional
fees
|
54,390
|
16,522
|
89,036
|
52,312
|
|||||
|
Rent
|
9,218
|
14,172
|
24,920
|
40,745
|
|||||
|
Selling,
general and administration
|
243,127
|
205,918
|
485,396
|
489,297
|
|||||
|
652,766
|
480,605
|
1,515,192
|
1,413,028
|
||||||
|
Net
loss
|
(652,766)
|
(478,707)
|
(1,515,192)
|
(1,403,243)
|
|||||
|
Accumulated
deficit, beginning of period
|
(26,558,026)
|
(24,721,026)
|
(25,695,600)
|
(23,796,490)
|
|||||
|
Accumulated
deficit, end of period
|
$
|
(27,210,792)
|
$
|
(25,199,733)
|
$
|
(27,210,792)
|
$
|
(25,199,733)
|
|
|
Loss
per share, basic and diluted
|
$
|
(0.01)
|
$
|
(0.01)
|
$
|
(0.02)
|
$
|
(0.02)
|
|
|
Weighted
average shares outstanding,
|
|||||||||
|
-
basic and diluted
|
76,078,446
|
76,078,446
|
76,078,446
|
76,078,446
|
|||||
|
Interim
Consolidated Statement of Shareholders' Deficiency and Comprehensive
Loss
|
|||||||||||
|
($
United States)
|
|||||||||||
|
Nine
Months Ended September 30, 2009 and Year Ended December 31,
2008
|
|||||||||||
|
(Unaudited)
|
|||||||||||
|
Capital
Stock
|
Commitment
|
Additional
|
|
Total
|
|||||||
|
Number
|
to
Issue
|
Paid
in
|
Shareholders’
|
||||||||
|
of
Shares
|
Amount
|
Shares
|
Capital
|
Deficit
|
Deficiency
|
||||||
|
Balance,
December 31, 2007
|
76,078,446
|
$
|
76,078
|
$
|
-
|
$
|
12,951,235
|
$
|
(23,796,490)
|
$
|
(10,769,177)
|
|
Stock-based
compensation
|
349,592
|
349,592
|
|||||||||
|
Loss
and comprehensive loss
|
-
|
-
|
-
|
(1,899,110)
|
(1,899,110)
|
||||||
|
Balance,
December 31, 2008
|
76,078,446
|
76,078
|
-
|
13,300,827
|
(25,695,600)
|
(12,318,695)
|
|||||
|
Commitment
to issue shares
|
6,762,473
|
6,762,473
|
|||||||||
|
Stock-based
compensation
|
76,294
|
76,294
|
|||||||||
|
Loss
and comprehensive loss
|
(1,515,192)
|
(1,515,192)
|
|||||||||
|
Balance,
September 30, 2009 (unaudited)
|
76,078,446
|
$
|
76,078
|
$
|
6,762,473
|
$
|
13,377,121
|
$
|
(27,210,792)
|
$
|
(6,995,120)
|
|
Interim
Statement of Cash Flows
|
|||||||||
|
($
United States)
|
|||||||||
|
Nine
Months Ended September 30, 2009 and 2008
|
|||||||||
|
(Unaudited
)
|
|||||||||
|
Three
months Ended
|
Nine
months Ended
|
||||||||
|
September
30
|
September
30
|
||||||||
|
2009
|
2008
|
2009
|
2008
|
||||||
|
Cash
flows from operating activities:
|
|||||||||
|
Cash
received from customers
|
$
|
160
|
$
|
10,568
|
$
|
5,048
|
$
|
12,899
|
|
|
Cash
paid to suppliers and employees
|
(36,348)
|
(101,299)
|
(167,084)
|
(451,465)
|
|||||
|
Interest
paid
|
1,815
|
(3,270)
|
(330)
|
(9,737)
|
|||||
|
Net
cash provided by (used in) operating
|
|||||||||
|
activities
|
(34,373)
|
(94,001)
|
(162,366)
|
(448,303)
|
|||||
|
Cash
flows from financing activities:
|
|||||||||
|
Promissory
notes payable
|
34,180
|
18,000
|
154,879
|
518,000
|
|||||
|
Promissory
notes repaid
|
(50,000)
|
||||||||
|
Net
cash provided by financing activities
|
34,180
|
18,000
|
154,879
|
468,000
|
|||||
|
Increase
(decrease) in cash during the period
|
(193)
|
(76,001)
|
(7,487)
|
19,697
|
|||||
|
Cash,
beginning of period
|
607
|
98,671
|
7,901
|
2,973
|
|||||
|
Cash,
end of period
|
$
|
414
|
$
|
22,670
|
$
|
414
|
$
|
22,670
|
|
|
Non-cash
operating activities:
|
|||||||||
|
Stock-based
compensation
|
|||||||||
|
Financing
costs
|
$
|
16,272
|
$
|
8,886
|
$
|
54,044
|
$
|
104,534
|
|
|
Compensation
costs
|
-
|
16,800
|
22,250
|
143,791
|
|||||
|
Commitment
to issue shares from the settlement of promissory notes, accounts payable
and advances
|
6,762,473
|
-
|
6,762,473
|
-
|
|||||
|
$
|
6,778,745
|
$
|
25,686
|
$
|
6,838,767
|
$
|
248,325
|
||
|
September
30
|
December
31
|
||||
|
2009
|
2008
|
||||
|
Inventories,
at cost
|
$
|
263,520
|
$
|
263,520
|
|
|
Provision
for decline of value
|
(263,520)
|
(263,520)
|
|||
|
$
|
Nil
|
$
|
Nil
|
|
September
30
|
December
31
|
||||
|
2009
|
2008
|
||||
|
Interest
payable to:
|
|||||
|
Relatives
of directors
|
$
|
314,906
|
$
|
1,257,586
|
|
|
Companies
controlled by directors
|
-
|
5,790
|
|||
|
Directors
|
1,166
|
69,545
|
|||
|
Non-related
parties
|
449,642
|
1,280,087
|
|||
|
$
|
765,714
|
$
|
2,613,008
|
||
|
September
30
|
December
31
|
||||
|
2009
|
2008
|
||||
|
Advances
payable to:
|
|||||
|
Relatives
of directors
|
$
|
158
|
$
|
19,335
|
|
|
Companies
controlled by directors
|
65,525
|
1,089,663
|
|||
|
Directors
|
447,708
|
1,180,984
|
|||
|
$
|
513,391
|
$
|
2,289,982
|
||
|
Notes
to Interim Consolidated Financial Statements
|
||||
|
($
United States)
|
||||
|
Nine
months Ended September 30, 2009 and 2008
|
||||
|
(Unaudited)
|
||||
|
September
30
|
December
31
|
|||
|
2009
|
2008
|
|||
|
Promissory
notes payable to relatives of directors:
|
||||
|
Promissory
notes payable to a relative of a director, secured by a general
security
|
||||
|
agreement
bearing interest at the rate of 1% per month, due on
demand
|
$
|
845,618
|
$
|
2,029,328
|
|
Promissory
notes payable to a relative of a director, secured by a general
security
|
||||
|
agreement
bearing interest at the rate of 1.25% per month, due on
demand
|
51,347
|
251,347
|
||
|
Promissory
notes payable to relatives of a director, secured by a general
security
|
||||
|
agreement
bearing interest at the U.S. bank prime rate plus 1% per month, due on
demand
|
500,000
|
500,000
|
||
|
Promissory
notes payable, unsecured, from relatives of a director, bearing
interest
|
||||
|
at
0.625% per month, with $50,000 repayable on October 5, 2004 and
$60,000
|
||||
|
repayable
on July 28, 2006, which did not occur; currently due on demand
with
|
||||
|
The
same interest rate
|
110,000
|
110,000
|
||
|
Promissory
notes payable, unsecured, from relatives of a director, bearing
interest
|
||||
|
at
1% per month, due on demand
|
295,000
|
295,000
|
||
|
1,801,965
|
3,185,675
|
|||
|
Promissory
notes payable to directors:
|
||||
|
Promissory
notes payable to a director, unsecured, bearing interest at 1%
per
|
||||
|
month,
due on demand (Cdn $151,000)
|
-
|
123,306
|
||
|
-
|
123,306
|
|||
|
Promissory
notes payable to unrelated parties:
|
||||
|
Promissory
notes payable to, unsecured, bearing interest at 1% per
month,
|
||||
|
Repayable
September 30, 2009.
|
450,000
|
450,000
|
||
|
Promissory
notes payable to, unsecured, bearing interest at 1% per
month,
|
||||
|
which
did not occur; currently all due on demand with the same interest
rate
|
2,040,956
|
2,136,500
|
||
|
Promissory
notes payable, unsecured, bearing interest at 0.625% per month,
with
|
||||
|
$40,000
repayable on December 31, 2004, which did not occur; currently all
due
|
||||
|
on
demand with the same interest rate
|
40,000
|
40,000
|
||
|
Promissory
notes payable, secured by a guarantee from a director and relative of
a
|
||||
|
director,
bearing interest at 1% per month, with $200,000 repayable on July
31,
|
||||
|
2003,
which did not occur; currently all due on demand
|
230,000
|
230,000
|
||
|
Promissory
note payable, unsecured, non-interest bearing , repayable on July 17,
|
||||
|
2005,
which did not occur: currently due on demand
|
270,912
|
270,912
|
||
|
3,031,868
|
3,127,412
|
|||
|
Total
current promissory notes payable
|
$
|
4,833,833
|
$
|
6,436,393
|
|
Nine
months Ended
|
Year
Ended
|
|||||
|
September
30, 2009
|
December
31, 2008
|
|||||
|
(Unaudited)
|
(Audited)
|
|||||
|
Weighted
|
Weighted
|
|||||
|
Average
|
Average
|
|||||
|
Number
of
|
Exercise
|
Number
of
|
Exercise
|
|||
|
Options
|
Price
|
Options
|
Price
|
|||
|
Outstanding,
beginning of period
|
106,575,463
|
$
|
0.25
|
118,196,463
|
$
|
0.25
|
|
Granted
|
620,000
|
0.25
|
6,128,000
|
0.25
|
||
|
Cancelled
|
(5,827,000)
|
0.25
|
(12,500,000)
|
0.25
|
||
|
Expired
|
(61,542,463)
|
0.25
|
(5,249,000)
|
0.25
|
||
|
Outstanding,
end of period
|
39,826,000
|
$
|
0.25
|
106,575,463
|
$
|
0.25
|
|
Exercisable,
end of period
|
24,576,000
|
$
|
0.25
|
89,550,463
|
$
|
0.25
|
|
Number
of
|
Promissory
|
Total
|
|||||||||||
|
Shares
|
Interest
|
Notes
|
Advances
|
Accounts
|
Amount
|
||||||||
|
Subscribers
|
Subscribed
|
Payable
|
Payable
|
Payable
|
Payable
|
Cash
|
Subscribed
|
||||||
|
Relatives
of directors
|
66,507,896
|
$
|
803,897
|
$
|
831,876
|
$
|
1,689,623
|
$
|
-
|
$
|
-
|
$
|
3,325,396
|
|
Directors
|
21,141,225
|
511,418
|
140,832
|
404,811
|
-
|
-
|
1,057,061
|
||||||
|
Non-related
parties
|
47,800,342
|
1,099,792
|
802,258
|
108,000
|
369,966
|
10,000
|
2,390,016
|
||||||
|
Total
|
135,449,463
|
$
|
2,415,107
|
$
|
1,774,966
|
$
|
2,202,434
|
$
|
369,966
|
$
|
10,000
|
$
|
6,772,473
|
|
2009
|
2008
|
|||
|
(Unaudited)
|
(Unaudited)
|
|||
|
Product
development costs
|
||||
|
Directors
and officers
|
$
|
45,000
|
$
|
45,000
|
|
Stock-based
compensation in product development
|
||||
|
Directors
and officers
|
6,488
|
129,467
|
||
|
Interest
expense
|
||||
|
Directors
and officers
|
11,679
|
10,550
|
||
|
Relatives
of directors
|
273,787
|
259,140
|
||
|
Stock-based
compensation in interest expense
|
||||
|
Relatives
of directors
|
54,044
|
8,886
|
||
|
Compensation
|
||||
|
Directors
and officers
|
239,850
|
2239,850
|
||
|
Relatives
of directors
|
27,000
|
27,000
|
||
|
$
|
657,848
|
$
|
719,893
|
|
$
|
144,000
|
||
|
Stanley
Cruitt
|
$
|
156,600
|
|
|
Dr.
Jaroslav Tichy
|
$
|
60,000
|
|
Three
months Ended
|
Nine
months Ended
|
|||||||||||
|
September
30
|
September
30
|
|||||||||||
|
2009
|
2008
|
2009
|
2008
|
|||||||||
|
Net
loss for the period
|
$
|
(652,766)
|
$
|
(478,707)
|
$
|
(1,515,192)
|
$
|
(1,403,243)
|
||||
|
Add
items not affecting cash:
|
||||||||||||
|
Depreciation
|
434
|
306
|
1,301
|
916
|
||||||||
|
Foreign
exchange on note payable
|
24,055
|
(5,777)
|
30,641
|
(10,353)
|
||||||||
|
Stock-based
compensation:
|
||||||||||||
|
Product
development
|
-
|
-
|
22,250
|
143,791
|
||||||||
|
Interest
|
33,072
|
25,686
|
104,444
|
46,220
|
||||||||
|
Selling,
general and administration
|
-
|
-
|
-
|
|||||||||
|
Non-cash
working capital items:
|
||||||||||||
|
Receivable
and advances
|
160
|
33,580
|
5,048
|
1,973
|
||||||||
|
Inventories
|
-
|
79,593
|
-
|
58,619
|
||||||||
|
Prepaid
expenses
|
67,196
|
(37,828)
|
47,495
|
(40,128)
|
||||||||
|
Accounts
payable and accrued liabilities
|
493,476
|
289,146
|
1,141,647
|
753,902
|
||||||||
|
|
||||||||||||
|
$
|
(34,373)
|
$
|
(94,001)
|
$
|
(162,366)
|
$
|
(448,303)
|
|||||
|
Exhibit
No.
|
Description
|
|
10.1
|
License
and Commercialization Agreement with Pari Respiratory Equipment,
Inc.
|
|
31.1
|
Certification
of Principal Executive and Principal Financial Officer pursuant Section
302
|
|
of
the Sarbanes-Oxley Act of 2002.
|
|
|
32.1
|
Certification
of Chief Executive and Chief Financial Officer pursuant Section 906 of
the
|
|
Sarbanes-Oxley
Act of 2002.
|
|
|
ALR
TECHNOLOGIES INC.
|
||
|
(Registrant)
|
||
|
BY:
|
SIDNEY
CHAN
|
|
|
Sidney
Chan
|
||
|
President,
Principal Executive Officer, Principal Accounting Officer, Principal
Financial Officer Secretary/Treasurer and
Director
|
||
|
Exhibit
No.
|
Description
|
|
10.1
|
License
and Commercialization Agreement with Pari Respiratory Equipment,
Inc.
|
|
31.1
|
Certification
of Principal Executive and Principal Financial Officer pursuant Section
302
|
|
of
the Sarbanes-Oxley Act of 2002.
|
|
|
32.1
|
Certification
of Chief Executive and Chief Financial Officer pursuant Section 906 of
the
|
|
Sarbanes-Oxley
Act of 2002.
|
|