ALDA Pharmaceuticals Corp. (Form: 20FR12G, Received: 03/20/2006 13:52:57)

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 20-F

(Mark One)
x REGISTRATION STATEMENT PURSUANT TO SECTION 12(b) OR (g) OF THE SECURITIES EXCHANGE ACT OF 1934

¨ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the fiscal year ended June 30, 2005

¨ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

¨ SHELL COMPANY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934

Date of Event requiring this shell company report

For the transition period from ___________________ to ______________________

Commission file number: ____________________________________________

ALDA PHARMACEUTICALS CORP.
(Exact name of Registrant as specified in its charter)

Not applicable
(Translation of Company’s name into English)

Province of British Columbia, Canada
(Jurisdiction of incorporation or organization)

635 Columbia St. New Westminster, B.C., Canada, V3M 1A7
(Address of principal executive offices)

Securities registered or to be registered pursuant to Section 12(b) of the Act.

Title of each class	Name of each exchange on which registered
Not Applicable	Not Applicable

Securities registered or to be registered pursuant to Section 12(g) of the Act.

Common Shares Without Par Value
(Title of Class)

Securities for which there is a reporting obligation pursuant to Section 15(d) of the Act.

None
(Title of Class)

Indicate the number of outstanding shares of each of the issuer’s classes of capital or common stock as of the close of the period covered by the annual report.

15,784,404 common shares

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.
Yes ¨ No ¨

If this report is an annual or transition report, indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Yes ¨ No ¨

Indicate by check mark whether the Company (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the Company was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.
Yes ¨ No ¨

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, or a non- accelerated filer. See definition of “accelerated filer and large accelerated filer” in Rule 12b-2 of the Exchange Act (check one):
Large accelerated filer ¨ Accelerated filer ¨ Non-Accelerated filer x

Indicate by check mark which financial statement item the Company has elected to follow.
Item 17 x Item 18 ¨

(APPLICABLE ONLY TO ISSUES INVOLVED IN BANKRUPTCY PROCEEDING DURING THE PAST FIVE YEARS)

Indicate by check mark whether the Company has filed all documents and reports required to be filed by Sections 12, 13 or 15(d) of the Securities Exchange Act of 1934 subsequent to the distribution of securities under a plan confirmed by a court.
Yes ¨ No ¨

The information set forth in this Annual Report on Form 20-F is as at February 28, 2005 unless an earlier or later date is indicated.

Financial information is presented in accordance with accounting principles generally accepted in Canada. Measurement differences between accounting principles generally accepted in Canada and in the United States, as applicable to the Company, are set forth in Item 5 of this Annual Report and in Note 17 to the accompanying Financial Statements of the Company.

FORM 20-F REGISTRATION STATEMENT
TABLE OF CONTENTS

		Page

Part I		5

Item 1.	Identity of Directors, Senior Management and Advisors	5
Item 2.	Offer Statistics and Expected Timetable	6
Item 3.	Key Information	6
Item 4.	Information on the Company	13
Item 5.	Operating and Financial Review and Prospects	20
Item 6.	Directors, Senior Management and Employees	23
Item 7.	Major Shareholders and Related Party Transactions	31
Item 8.	Financial Information	32
Item 9.	The Offer and Listing	33
Item 10.	Additional Information	35
Item 11.	Quantitative and Qualitative Disclosures About Market Risk	39
Item 12.	Description of Securities Other Than Equity Securities	39

Part II		40

Item 13.	Defaults, Dividend Arrearages and Delinquencies	40
Item 14.	Material Modifications to the Rights of Security Holders and Use of Proceeds	40
Item 15.	Controls and Procedures	40
Item 16.	Reserved	40
Item 16A.	Audit Committee Financial Expert	40
Item 16B.	Code of Ethics	40
Item 16C.	Principal Accountant Fees and Services	40
Item 16D.	Exemptions from the Listing Standards for Audit Committee	40
Item 16E.	Purchases of Equity Securities by the Company and Affiliated Purchasers	40

Part III		40

Item 17.	Financial Statements	40
Item 18.	Financial Statements	40
Item 19.	Exhibits	40

INTRODUCTION

The Company was incorporated by registration of its Memorandum and Articles under the BC Companies Act on May 30, 2000 under the name “Duft Biotech Capital Ltd.”

On November 26, 2003 the Company changed its name to ALDA Pharmaceuticals Corp. The Company is still a British Columbia, Canada company.

The authorized capital of ALDA consists of one class of shares: 100,000,000 shares of common stock. There are no Indentures or Agreements limiting the payment of dividends and there are no conversion rights, special liquidation rights, pre-emptive rights or subscription rights.

BUSINESS OF ALDA PHARMACEUTICALS CORP.

ALDA is principally in the business of developing infection control products for industrial and consumer use.

FINANCIAL AND OTHER INFORMATION

ALDA’s reporting currency and domestic currency is Canadian Dollars. In this Registration Statement, unless otherwise specified, all dollar amounts are expressed in Canadian Dollars (“CDN$” or “$”). The Government of Canada permits a floating exchange rate to determine the value of the Canadian Dollar against the U.S. Dollar (US$). Comparisons of historic exchange rates between the US$ and the CDN$ are contained in Section 3.A.3.

FORWARD-LOOKING STATEMENTS

This Registration Statement on Form 20-F contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, principally in ITEM #4, “Information on the Company” and ITEM #5, “Management’s Discussion and Analysis of Financial Condition and Results of Operations”. These statements may be identified by the use of words like “plan,” “expect,” “aim,” “believe,” “project,” “anticipate,” “intend,” “estimate,” “will,” “should,” “could” and similar expressions in connection with any discussion, expectation, or projection of future operating or financial performance, events or trends. In particular, these include statements about the Company’s strategy for growth, future performance or results of current sales and production, interest rates, foreign exchange rates, and the outcome of contingencies, such as acquisitions and/or legal proceedings and intellectual property issues.

Forward-looking statements are based on certain assumptions and expectations of future events that are subject to risks and uncertainties. Actual future results and trends may differ materially from historical results or those projected in any such forward-looking statements depending on a variety of factors, including, among other things, the factors discussed in this Registration Statement under ITEM #3, “Key Information, Risk Factors” and factors described in documents that we may furnish from time to time to the Securities and Exchange Commission. We undertake no obligation to update publicly or revise any forward-looking statements because of new information.

Measurement Conversion Information

Canada uses the metric measurement system. In this registration statement, metric measures are used with respect to ALDA’s products described herein. For ease of reference, the following conversion factors are provided to compare to the US measurement system:

Imperial Measure	Metric Unit	Imperial Measure	Metric Unit
1 mile	1.609 kilometres	2,204 pounds	1 tonne
1 yard	0.9144 metre	2,000 pounds/1 short ton	0.907 tonnes
1 acre	0.405 hectare	1 troy ounce	31.103 grams
1 US gallon	3.785 litres	1 imperial gallon	4.546 litres

PART I

ITEM 1. IDENTITY OF DIRECTORS SENIOR MANAGEMENT AND ADVISERS

1.A.1. Directors and senior management

Table No. 1 lists as of 02/28/2006 the names of the Directors of the Company.

	Table No. 1
	Directors

Name and Residential Address	Age	Date First Elected of Appointed

Terrance G. Owen	60	May 30, 2000
635 Columbia Street
New Westminster, BC Canada V3M 1A7

Peter Chen (1)	43	May 30, 2000
635 Columbia Street
New Westminster, BC Canada V3M 1A7

Eugene Hodgson (1)	49	October 12, 2004
1400 – 601 West Hastings Street
Vancouver, BC Canada V6B 5A6

Linda Allison (1)	59	June 30, 2003
3074 Spencer Place
West Vancouver, BC Canada V7V 3C9

Ronald Zokol	56	November 13, 2003
470 West Tower 555 West 12 ^th Avenue
Vancouver, BC Canada V5Z 3X7

William F. McCoy	51	March 17, 2005
735 Thornapple Drive
Naperville, Ill. USA 60540

(1) Member of Audit Committee

1.A.2. Senior Management
Table No. 2 lists the names of the Senior Management of the Company. The Senior Management serves at the pleasure of the Board of Directors.

	Table No. 2
	Senior Management

Name and Position	Age	Date of First Appointment
Terrance Owen, President & CEO	60	May 30, 2000
Peter Chen, CFO and Secretary	43	May 30, 2000

Mr. Owen’s business functions, as President and CEO of the Company, include overall supervision of all officers and consultants, strategic planning and business development and operations and also include strategic planning, business development, operations, liaison with auditors-accountants-lawyers-regulatory authorities-financial community/ shareholders; preparation/payment/organization of the expenses/taxes/activities of the Company, and reporting to the Board of Directors.

Mr. Chen’s business functions, as CFO, include financial statement preparation, accounting, liaising with auditors-accountants-lawyers-regulatory authorities and preparation/payment/organization of the expenses/taxes/activities of the Company, and reporting to the Board of Directors

Mr. Chen’s business functions, as Corporate Secretary, include attending and be the secretary of all meetings of the Board, shareholders and committees of the Board and shall entering or causing to be entered in records kept for that purpose minutes of all proceedings thereat; gives or causes to be given, as and when instructed, all notices to shareholders, Directors, officers, auditors and members of committees of the Board; is the custodian of the stamp or mechanical device generally used for affixing the corporate seal of the Company and of all books, records and instruments belonging to the Company, except when some other officer or agent has been appointed for that purpose; and in the future can have such other powers and duties as the Board of the chief executive officer may specify. Mr. Chen may delegate all or part of his duties as Corporate Secretary to a nominee or to corporate counsel from time to time.

1.B. Legal Advisors

The legal advisors for the Company are Getz Prince Wells, Barristers & Solicitors, 1810 – 1111 West Georgia St. Vancouver, B.C. V6E 4M3 Phone 604-605-4293 Fax 604 685-9798. The Company has retained CD Farber Law Corp. to assist in drafting of this report on Form 20F but that firm does not provide other legal services to the Company.

The Company’s Bank is the Canadian Imperial Bank of Commerce. Its business address and telephone number are 554 6 ^th Street, New Westminster, British Columbia Canada V3L 3B5 Tel: (604) 665-7925.

1.C. Auditors

The auditors for the Company are Berris Mangan, Chartered Accountants, of 1827 West 5 ^th Avenue, Vancouver, British Columbia, Canada, V6J 1P5.

ITEM 2. OFFER STATISTICS AND EXPECTED TIMETABLE

No disclosure necessary.

ITEM 3. KEY INFORMATION

3.A.1. Selected Financial Data

The selected financial data should be read in conjunction with the financial statements and other financial information included elsewhere in the Registration Statement.

The Company has not declared any dividends since incorporation and does not anticipate that it will do so in the foreseeable future. The present policy of the Company is to retain all available funds for use in its operations and the expansion of its business.

Table No. 3 is derived from the financial statements of the Company, which have been prepared in accordance with Canadian Generally Accepted Accounting Principles (GAAP) and Canadian/USA.

Generally Accepted Auditing Standards (GAAS). All material numerical differences between Canadian GAAP and US GAAP, as applicable to the Company, are described in footnotes to the financial statements.

Table No. 3
Selected Financial Data
(CDN$ in 000, except per share data)

	Year	Year	Year	Year	Year
	Ended	Ended	Ended	Ended	Ended
	2005	2004	2003	2002	2001

CANADIAN GAAP

Revenue	239,271	111,363	0	0	0
Income (Loss) for the Period	(796,301)	(731,479)	(53,479)	(69,590)	(12,551)
Basic Income (Loss) Per Share	(0.06)	(0.08)	(0.02)	(0.03)	(0.01)
Dividends Per Share	0	0	0	0	0
Wtg. Avg. Shares (000)	13,663,856	9,027,179	2,407,502	2,277,845	1,176,475
Period-end Shares	15,784,404	12,784,404	2,451,475	2,376,475	1,176,475

Working Capital	138,548	415,167	49,304	163,991	50,008
Long-Term Debt	0	0	0	0	0
Capital Stock	1,856,285	1,607,620	279,309	258,059	92,500
Shareholders’ Equity (Deficit)	271,028	800,222	182,984	184,418	79,949
Total Assets	300,893	830,764	286,544	189,773	83,982

US GAAP
Net Loss	(796,301)	(731,479)	(53,479)	(69,590)	(12,551)
Loss Per Share	(0.06)	(0.08)	(0.02)	(0.03)	(0.01)
Shareholders’ Equity	271,028	800,222	182,984	184,418	79,949
Total Assets	300,893	830,764	286,544	189,773	83,982

3.A.3. Exchange Rates

In this Registration Statement, unless otherwise specified, all dollar amounts are expressed in Canadian Dollars (CDN$). The Government of Canada permits a floating exchange rate to determine the value of the Canadian Dollar against the U.S. Dollar (US$).

Table No. 4 sets forth the exchange rates for the Canadian Dollar at the end of five most recent fiscal years ended June 30, 2005, the average rates for the period, and the range of high and low rates for the period. The data for each month during the most recent six months is also provided.

For purposes of this table, the rate of exchange means the noon buying rate in New York City for cable transfers in foreign currencies as certified for customs purposes by the Federal Reserve Bank of New York. The table sets forth the number of US Dollars required under that formula to buy one Canadian Dollar. For example, where the number “0.8704” is quoted in the upper left hand number in the table, it means that it took on average in February 2006, 87.04 cents US to purchase one Canadian dollar. For all periods presented, the Canadian dollar has been worth less than one US dollar.

Table No. 4
U.S. Dollar/Canadian Dollar

Period	Average	Low	High	Close
March 2006 (not available)
February 2006	0.8704	0.8680	0.8725	0.8704
January 2006	0.8641	0.8605	0.8669	0.8645
December 2005	0.8613	0.8587	0.8633	0.8611
November 2005	0.8467	0.8437	0.8491	0.8468
October 2005	0.8492	0.8461	0.8520	0.8491
September 2005	0.8492	0.8461	0.8516	0.8493

Three Months Ended 09/30/2005	0.8278	0.8136	0.8516	0.8493
Three Months Ended 12/31/2005	0.8524	0.8437	0.8633	0.8611

Fiscal Year Ended 06/30/2005	0.8064	0.7462	0.8474	0.8403
Fiscal Year Ended 06/30/2004	0.7194	0.6329	0.7752	0.7752
Fiscal Year Ended 06/30/2003	0.6369	0.6211	0.6622	0.6239
Fiscal Year Ended 06/30/2002	0.6451	0.6250	0.6711	0.6289
Fiscal Year Ended 06/30/2001	0.6667	0.6410	0.6944	0.6667

3.B. Capitalization and Indebtedness

Table No. 5 sets forth the capitalization and indebtedness of the Company as of June 30, 2005. Subsequent to the June 30, 2005 period end, the Company has completed one private placement of securities which increased the number of outstanding shares by 3,916,000 common shares and increased the number of outstanding share purchase warrants by 3,916,000 share purchase warrants exercisable until December, 2006 at $0.10 per warrant.

No warrants have been exercised subsequent to the June 30, 2005 period end and no options have been exercised, granted or cancelled subsequent to the June 30, 2005 period end.

Table No. 5
Capitalization and Indebtedness

As of June 30, 2005

SHAREHOLDERS’ EQUITY
Common shares issued and outstanding	15,784,404
Share Capital	$1,856,285
Contributed Surplus	$78,143
Retained Earnings (deficit)	$(1,663,400)
Net Stockholders’ Equity	$271,028
TOTAL CAPITALIZATION

Stock Options Outstanding (2):	1,290,000
Warrants Outstanding (1):	9,220,500
Capital Leases:	None
Guaranteed Debt	None
Secured Debt:	None

(1) Of the 9,220,500 warrants outstanding, 6,000,000 were exercisable until November 13, 2005 (and have now expired) at an exercise price of $0.235 and 3,220,500 are exercisable until September 15, 2006 at an exercise price of $0.20.
(2) See Table 11 for exercise prices and terms of these options.

3.C. Reasons for the Offer and Use of Proceeds

No disclosure necessary.

3.D. Risk Factors

Risks pertaining to the Company:

The Company's limited operating history makes it difficult to evaluate the Company’s current business and forecast future results

The Company has only a limited operating history. This limited operating history leads the Company to believe that period-to-period comparisons of its operating results may not be meaningful and that the results for any particular period should not be relied upon as an indication of future performance.

The Company has no significant source of operating cash flow and failure to generate revenues in the future could cause the Company to go out of business

Based upon current plans, the Company expects to incur operating losses in future periods. This will happen because there are continuing expenses associated with the marketing and production of the company’s products. The Company may not be successful in generating revenues in the future. Failure to generate revenues could cause the Company to go out of business.

If the Company raises further funds through equity issuances, the price of its securities could decrease

Additional funds raised by the Company through the issuance of equity or convertible debt securities will cause the Company’s current stockholders to experience dilution and possibly lower the trading price of its shares. Such securities may grant rights, preferences or privileges senior to those of the Company’s common stockholders.

The Company could enter into debt obligations and not have the funds to repay these obligations

The Company does not have any contractual restrictions on its ability to incur debt and, accordingly, the Company could incur significant amounts of indebtedness to finance its operations. Any such indebtedness could contain covenants, which would restrict the Company’s operations. The Company might not be able to repay indebtedness. The Company does not plan on entering into any debt obligations in the next twelve months.

The Company has a history of generating limited revenues and the continuing failure to generate further revenues could cause the Company to cease operations

The Company has no history of pre-tax profit. The Company sustained operating losses for each of the fiscal years ended June 30, 2005, 2004 and 2003 of $796,301, $731,479 and $53,479 respectively. ALDA has sustained operating losses for its last audited year of operation being fiscal 2005 of $1,663,400. The continued operation of the Company will be dependent upon its ability to generate operating revenues and to procure additional financing. The Company may not be successful in generating revenues or raising capital in the future. Failure to generate revenues or raise capital could cause the Company to cease operations.

As the Company is a Canadian company it may be difficult for U.S. shareholders of the Company to effect service on the Company or to realize on judgments obtained in the United States

The Company is a Canadian corporation. A majority of its directors and officers are residents of Canada and a significant part of its assets are, or will be, located outside of the United States. As a result, it may be difficult for shareholders resident in the United States to effect service within the United States upon the Company, directors, officers or experts who are not residents of the United States, or to realize in the United States judgments of courts of the United States predicated upon civil liability of any of the Company, directors or officers under the United States federal securities laws. If a judgment is obtained in the U.S. courts based on civil liability provisions of the U.S. federal securities laws against the Company or its directors or officers, it will be difficult to enforce the judgment in the Canadian courts against the Company and any of the Company’s non-U.S. resident executive officers or directors. Accordingly, United States shareholders may be forced to bring actions against the Company and its respective directors and officers under Canadian law and in Canadian courts in order to enforce any claims that they may have against the Company or its directors and officers. Nevertheless, it may be difficult for United States shareholders to bring an original action in the Canadian courts to enforce liabilities based on the U.S. federal securities laws against the Company and any of the Company’s non-U.S. resident executive officers or directors.

The Company’s future performance is dependent on key personnel. The loss of the services of any of the Company’s executives or Board of Directors could have a material adverse effect on the Company

The Company’s performance is substantially dependent on the performance and continued efforts of the Company’s executives and its Board of Directors. The loss of the services of any of the Company’s executives or Board of Directors could have a material adverse effect on the Company business, results of operations and financial condition. The Company currently does not carry any key person insurance on any of executives of members of the board of directors.

The Company has not declared any dividends since its inception in 2000, and has no present intention of paying any cash dividends on its common stock in the foreseeable future

The Company has not declared any dividends since its inception in 2000, and has no present intention of paying any cash dividends on its common stock in the foreseeable future. The payment by the Company of dividends, if any, in the future, rests in the discretion of the Company's Board of Directors and will depend, among other things, upon the Company's earnings, its capital requirements and financial condition, as well as other relevant factors.

There is no assurance that the patent application filed for T36 or other products will be approved.

There is also no assurance that future patent applications will be successful. A lack of patent protection will significantly alter the competitive environment and possibly allow competitors to infringe on the technology of the company’s business.

There is no assurance that ALDA will be able to secure the funds needed for future development .

Many of the company’s products still require laboratory testing in order to obtain required regulatory approvals. A lack of funds will impair the ability of the company to complete such tests. A lack of funds will also impair the company’s ability to establish marketing and sales plans once the products have been approved for sale. If adequate financing is not available when required, the company may be required to delay, scale back or eliminate various activities and may be unable to continue in operation. The company may seek such additional financing through debt or equity offerings, but there can be no assurance that such financing will be available on terms acceptable to the company or at all. Any equity offering will result in dilution to the ownership interests of the company’s shareholders and may result in dilution to the value of such interests.

There is no assurance that research and development being conducted by the company to create new products will be successful.

The company is conducting research and development on new product but the outcomes of research and development are never certain. For example, there is no assurance that any new products will be developed or that any new products that do result will have a competitive advantage or market acceptance, will not be superseded by the new products of competitors, will not infringe on the patents of other companies or that other companies will not develop products that infringe on patents obtained by the company for its new products.

Limited brand awareness .

Market knowledge of the company’s name is limited. The company will need to devote considerable resources to educate new markets about the products the company offers. In establishing new markets, the company will be competing with companies that are potentially already entrenched in such markets or that may be better funded than the company.

The Company’s Business has limited sales and marketing experience .

The company’s business has limited experience in marketing and selling its products. The company will have to expend substantial funds to promote and develop the it’s products. The company’s success in this regard will depend on the quality of the it’s products and it’s ability to develop and implement an effective sales and marketing strategy. Failure to achieve these objectives will have a material adverse effect on the company and on its results of operations and financial condition.

Conflicts of interest .

The directors and officers of the company will not be devoting all of their time to the affairs of the company. The directors and officers of the company are directors and officers of other companies. The directors and officers of the company will be required by law to act in the best interests of the company. They will have the same obligations to the other companies in respect of which they act as directors and officers. Discharge by the directors and officers of their obligations to the company may result in a breach of their obligations to the other companies and, in certain circumstances, this could expose the company to liability to those companies. Similarly, discharge by the directors and officers of their obligations to the other companies could result in a breach of their obligation to act in the best interests of the company. Such conflicting legal obligations may expose the company to liability to others and impair its ability to achieve its business objectives.

Management of the Company can through their stock ownership in the Company influence all matters requiring approval by the Company’s stockholders

Management of the Company own collectively as of February 28, 2006, 3,076,761 shares being 15.62% of the Company's issued and outstanding shares of common stock. These stockholders, if acting together, will be able to significantly influence all matters requiring approval by the Company's stockholders, including the election of directors and the approval of mergers or other business combination transactions.

The value and transferability of the Company shares may be adversely impacted by the limited trading market for the Company’s common stock, the penny stock rules and futures share issuance. There is no market for the Company’s common stock in the United States.

No assurance can be given that a market for the Company’s common stock will be quoted on an exchange in the U.S. or on the NASD's Over the Counter Bulletin Board.

The sale or transfer of the Company common stock by shareholders in the United States may be subject to the so-called "penny stock rules."

Under Rule 15g-9 of the Exchange Act, a broker or dealer may not sell a "penny stock" (as defined in Rule 3a51-1) or effect the purchase of a penny stock by any person unless:

(a) such sale or purchase is exempt from Rule 15g-9;

(b) prior to the transaction the broker or dealer has (1) approved the person's account for transaction in penny stocks in accordance with Rule15g-9, and (2) received from the person a written agreement to the transaction setting forth the identity and quantity of the penny stock to be purchased; and

The SEC adopted regulations that generally define a penny stock to be any equity security other than a security excluded from such definition by Rule 3a51-1. Such exemptions include, but are not limited to (1) an equity security issued by an issuer that has (i) net tangible assets of at least $2,000,000, if such issuer has been in continuous operations for at least three years, (ii) net tangible assets of at least $5,000,000, if such issuer has been in continuous operation for less than three years, or (iii) average revenue of at least $6,000,000 for the preceding three years; (2) except for purposes of Section 7(b) of the Exchange Act and Rule 419, any security that has a price of $5.00 or more; and (3) a security that is authorized or approved for authorization upon notice of issuance for quotation on the NASDAQ Stock Market, Inc.'s Automated Quotation System. It is likely that shares of the Company’s common stock, assuming a market were to develop in the US therefore, will be subject to the regulations on penny stocks; consequently, the market liquidity for the common stock may be adversely affected by such regulations limiting the ability of broker/dealers to sell the Company’s common stock and the ability of shareholders to sell their securities in the secondary market in the US.

Moreover, the Company shares may only be sold or transferred by the Company shareholders in those jurisdictions in the US in which an exemption for such "secondary trading" exists or in which the shares may have been registered.

Risks Pertaining to the Industry

Registration of products may not occur in a timely manner

Government agencies, such as the Environmental Protection Agency in the United States and Health Products and Food Branch in Canada, need to provide approvals of the company’s products. Such agencies can take from three to twelve months to give their approvals. Significant delays could lead to slower revenue growth than anticipated. In addition, regulatory delays can allow time for competitors to devise strategies to prevent market penetration. There is no assurance that government agencies will accept for registration any of the company’s products.

Risk of infringement .

The company is unaware of any infringement claims being made against the company or its products or processes except that Johnson Diversey, Inc. (“JDI”) has taken action against the Company for use of the trademark Viralex which JDI claimed infringed on their trademark, Virex. The action was settled by the Company agreeing to cease to use the name. The Company instead now uses the trademark “T36” for its products that is registered in both Canada and the US.

There can be no assurances that third parties will not assert infringement claims in the future or require the company to obtain a license for the intellectual property rights of such third parties. There can be no assurance that such a license, if required, will be available on reasonable terms or at all. If the company does not obtain such a license, it could encounter delays in the introduction of products or could find that the development, manufacture or sale of products requiring such a license could be prohibited.

Risk of earlier invention .

Since patent applications are maintained in secrecy for a period of time after filing, and since publication of discoveries in the scientific or patent literature often lags behind actual discoveries, the company cannot be certain that it was the first creator of inventions covered by pending patent applications, or that it was the first to file patent applications for such inventions. The company might have to participate in interference proceedings in the U.S. Patent and Trademark Office to determine priority of invention, at substantial cost. There can be no assurance that the company’s patents, if issued, would be held valid or enforceable by a court.

There may be limited ability to defend the patents if and when they are issued

Litigation among pharmaceutical companies can be intense and costly. The Company might not have the financial ability to defend its patents, if issued, against larger industry players. Litigation may be necessary to enforce patents issued or assigned to the company, or to determine the scope and validity of a third party's proprietary rights. Additionally, there can be no assurances that the company would prevail in any such action. An adverse outcome in litigation or in an interference or other proceeding in a court or patent office could subject the company to significant liabilities, require disputed rights to be licensed from other parties or require the company to cease using certain technology or products, any of which may have a material adverse effect on the company’s business.

The market for disinfectant products is competitive.

Competitors are already well established in the market for disinfectant products. The introduction of a new product into an existing market can be met with aggressive marketing, price cutting and distribution impediments by competitors. To obtain market share, the company’s business must penetrate a market with established competitors and to obtain sufficient recognition to be able to displace existing disinfectant products. Substantial funds will have to be spent on marketing and education. Competitors may be developing new technologies and new products that will offer significant improvements over existing products, including those offered by the company. There can be no assurance that others will not independently develop similar products, duplicate any of the Company’s products or, if patents are issued to the Company, design around such patents. There can be no assurance that a competitor's technology or product would be found to infringe such patents.

ITEM 4. INFORMATION ON THE COMPANY

4.A. History and Development of the company

The Company was incorporated by registration of its Memorandum and Articles under the BC Companies Act on May 30, 2000 under the name “Duft Biotech Capital Ltd.”

On November 26, 2003 the Company changed its name to ALDA Pharmaceuticals Corp. The Company is still a British Columbia, Canada company.

The head office of the Company is located at 635 Columbia Street, New Westminster, British Columbia, Canada, V3M 1A7. The Company’s telephone number is (604) 521-8300.

The contact person is: Mr. Terrance Owen, President and CEO or Mr. Peter Chen, CFO and Secretary.

The Company’s common stock has been listed for trading on the TSX-Venture Exchange since July, 2001.

ALDA is in the business of developing and marketing disinfectant products. On November 13, 2003, ALDA acquired the assets of ALDA Pharmaceuticals Inc. (“API”). API was a private British Columbia company, incorporated on February 16, 1996 which developed and marketed disinfectant products. The sole shareholder of API was, and is, Allen Shapiro, who is still employed in a consulting capacity by the Company as its Manager of Business Development.

The Company’s fiscal year ends June 30.

Financings

The Company has financed its operations since inception through funds raised in private placements of common shares:

Fiscal Year	Nature of Share Issuance	Number of Shares	Amount ($)

Fiscal 2001	Private Placement @ $0.085	1,176,475	$100,000.38

Fiscal 2002	Canadian Prospectus Offering (IPO) @$0.17	1,200,000	$204,000.00

Fiscal 2003	Broker’s Warrant Shares on Canadian	150,000	$25,500.00
	Prospectus Offering (IPO) @ $0.17

Fiscal 2004	Private Placement @ $0.15	346,666	$52,000.00
	Private Placement @ $0.20	6,200,000	$1,240,000

Fiscal 2005	Private Placement @ $0.10	3,000,000	$300,000

Fiscal 2006 (to date)	Private Placement @$0.05	3,916,000	$195,800

4.B. Business Overview

The Company was established in order to develop and commercialize disinfectant products. We have called the disinfectant “T36 Disinfectant”.

T36 Disinfectant is a mixture of Ethanol, O-phenyl phenol, Benzalkonium chloride and other ingredients (including lemon fragrance and water). All of these component chemicals are bio-degradable.

We are attempting to patent or secure proprietary protection for the specific combination of these products although the ingredients are all common chemical compounds.

During its first five years, Company’s primary focus has been on product development.

The Company’s first product, a surface disinfectant called “Viralex”, the product we now call T36 Disinfectant, was launched in September of 2001. It is being sold primarily to (i) “First Responder” organizations including ambulance, fire fighters and police forces in Canada; (ii) dental clinics; and (iii) beauty and hair care salons and spas.

In studies conducted by independent laboratories in Canada and the United States, T36 Disinfectant has demonstrated efficacy against more than 50 different bacteria, fungi and viruses.

-efficacy study conducted by British Columbia Research Inc. (University of British Columbia, Vancouver, Canada) under the supervision of Dr. Ernie Lee, dated February 10, 1997: concluded the T36 Disinfectant successfully killed the test organisms (Staphylococcus epidermis, Pseudomonas aeruginosa, Serratia marcesens, Mycobacterium tuberculosis, Herpes Simplex Virus-1 and Poliovirus-1) in compliance with test standards accepted by Health Canada’s Therapeutic Product Directorate;

-efficacy study conducted by Dr. Richard Stokes of the University of British Columbia in conjunction with the British Columbia Children’s Hospital, dated June 6, 1997: concluded that the T36 Disinfectant was efficacious as against Mycobacterium tuberculosis;
-efficacy tests completed September 17, 1997 against HIV at the St. Paul’s Hospital, John Ruedy Immunodeficiency Clinic (Vancouver, Canada) under the supervision of Dr. Brian Conway concluded that T36 was 100% efficacious on the HIV virus on contact and still had 100% efficacy at dilution of 1:43 (one part T36 to 43 parts water); and
-efficacy studies conducted by Viromed Biosafety Laboratories of Minneapolis, Minnesota, completed on February 23, 2000 concluded the T36 Disinfectant successfully killed the test organisms (Staphylococcus aureus, Pseumomonas aeruginosa, Salmonella choleraesuis, Human Immunodeficiency Virus Type I, Herpes simplex Virus Type 1, Trichophyton mentagrophytes and Poliovirus Type 1) in compliance with test standards accepted by the Environmental Protection Agency of the United States.

T36 Disinfectant acts against polio within 3 minutes and tuberculosis within 5 minutes. Polio and tuberculosis are benchmark micro-organisms because they are the most difficult to kill. Efficacy against polio and tuberculosis demonstrates a high level of disinfection capability. Toxicology studies conducted in the United States and Canada have also shown that T36 Disinfectant is safe to use and is non-corrosive and non-caustic (studies conducted by Products Safety Labs in labs in East Brunswick, New Jersey, USA and completed in November, 1999).

T36 Disinfectant’s Heath Canada Drug Identification Number or DIN is 02231344.

The Company is also in various stages of development of other product applications for the T36 Disinfectant including:

Plan Of Operations

Source of Funds for the remainder of Fiscal 2006 and for Fiscal 2007

The Company’s primary source of funds since incorporation has been and continues to be through the issuance of common shares although our sales revenues are rising.

Disinfectant cleaner – This product has been recognized by Health Canada to kill bacteria, fungi and viruses within 10 minutes (compared to the 3-5 minute time for T36 Disinfectant) and has passed internal company toxicology and consumer testing. It is intended for use in hospitals, cruise lines, airlines and consumer applications that don’t require a product as fast acting as T36 Disinfectant and is more economical (cheaper) than T36 Disinfectant. The Health Canada DIN for this product is 02272989. The Company is developing a concentrated product it hopes to market in 2006 that has not yet received a DIN number.
Hand Sanitizer: The Company’s recently released (February, 2006) hand sanitizer product is being marketed through its current distributors to existing customers. The Health Canada DIN for this product is 02247771. To date, there have been no significant sales of this product (approximately Cdn $500 to February 28, 2006.
Anti-viral soap – The Company is developing an anti-viral, anti-bacterial soap based on the T36 Disinfectant product. No final product has been marketed to date, no Health Canada DIN has been applied for or received and no product release date has been set.
Microbicide gel – This product has been formulated and needs to be tested for efficacy and toxicity. It is designed as a personal lubricant to prevent the transmission of sexually transmitted infections (“STI’s”). It is most likely that the a licensee or joint venture partner working in the area of STI prevention will be sought to undertake the testing and market development after the Company files a patent application.
Anti-fungal hand sanitizer – This product provides efficacy against fungus and has entered the Health Canada registration process but no exact date can be given for its approval or product release.
Personal Disinfectant and Disinfectant Wipes – a product designed for consumers in the general public, test marketing is expected to occur in March of 2006. No final product has been marketed to date, no Health Canada DIN has been applied for or received and no product release date has been set.

Plan of Operations

Source of Funds for the remainder of Fiscal 2006 and for Fiscal 2007

The Company's primary source of funds since incorporation has been and continues to be through the issuance of common shares although our sales revenues are rising.

As of February 28, 2006, the Company had a working deficit of approximately $105,000.

Use of Funds for Fiscal 2006/2007

For the 18 months ending June 30, 2007 (the end of Fiscal 2007) the Company estimates that it will require the following to fund planned operations:

General Office and Administrative Expenses:	$700,000
New Products Research and Development:	$100,000
US securities fees and expenses (related to Form 20F filing):	$ 20,000
Sales and Marketing:	$100,000
Patenting activities:	$ 30,000
Regulatory activities (1):	$150,000
New Product Sample Inventory / Production (2):	$ 20,000

Total:	$1,120,000

Less Anticipated Revenue:	$600,000

Additional Funds required:	$520,000

Working Capital (as of February 28, 2006):	$ 87,000

TOTAL ADDITIONAL FUNDS REQUIRED:	$433,000

	(1)	Regulatory Activities refers to performance of toxicology, efficacy and other studies required to secure FDA, EPA and other regulatory approvals so that the Company can sell in markets outside of Canada and also refer to securing Health Canada Drug Identification Numbers / approvals for the Company’s new products.
	(2)	New Product Sample Inventory / Production refers to the costs of producing samples for market / consumer testing of those products the Company is developing.

Anticipated Changes to Facilities/Employees

Management of the Company anticipates no changes to either its facilities or personnel / number of employees in the remainder of Fiscal 2006 and in Fiscal 2007.

As distribution and sales are done on a wholesale price basis, sales revenue changes do not result in changes in the number of personnel or the Company’s facilities.

As production is being performed on a contract basis with Norwood Packaging Ltd. (see Exhibit 4.B.) changes in product sales do not result in changes to the Company’s facilities or personnel.

United States vs. Foreign Sales/Assets

All of the Company’s assets are located in Canada.

All of the Company’s sales to date have been in Canada.

Material Effects of Government Regulations

At this time, our sales are primarily in Canada and, as a result, government regulations in Canada affect us most significantly. However, we hope to commence sales in the United States and China as well and, as a result, have also disclosed the effects of government regulations in these markets as they will likely affect us in the future:

Canada:

In Canada, our products must be registered with Health Canada, a federal government department responsible for the oversight of drugs and other products. T36 Disinfectant as a disinfectant, disinfectant cleaner and hand sanitizer have received approval from Health Canada, as evidenced by the Drug Identification Numbers given in Item 4(B) above, for sale in Canada.

T36 Disinfectant has a Drug Identification Number (“DIN”) issued by Health Canada.

Any production facilities must have an Establishment License that verifies its adherence to Good Manufacturing Practices as set out by a division of Health Canada. Norwood Packaging Ltd., which produces the Company’s products under contract (see Exhibit 4.B.) has an Establishment License.

T36 Disinfectant has also been approved in Canada by the Canadian Food Inspection Agency for use in “Registered Establishments” which include meat processing plants, restaurants, breweries, wineries and other commercial food processing establishments.

United States:

In the United States, our products must be registered with the Environmental Protection Agency (“EPA”) and the Food and Drug Administration (“FDA”).

The Company has entered into an agreement with Phigenics, LLC (see Exhibit 4.A. for details of the Company’s contract with Phigenics) where Phigenics will provide services to the Company in preparing EPA and FDA submissions to secure approval of T36 Disinfectant and, possibly, the Company’s future disinfectant cleaner and hand sanitizer products.

The Company cannot say when, or even if, submissions to the EPA and the FDA will be completed. The Company cannot predict the timing of FDA or EPA approval, if such approval can be obtained.

China:

In China, the Company must have its products tested for toxicology and efficacy at the Centers for Disease Control (“CDC”) in the People’s Republic of China. The CDC should not be confused with the CDC in Atlanta, Georgia, although both organizations share the same name.

Upon completion of testing at the CDC, products are registered for sale within China.

The Company has entered into an agreement with Fuzhou Xinmei Biotech Co. Ltd. which provides that, in exchange for licensing, distribution and production rights in China, Fuzhou agrees to make all efforts to register T36 Disinfectant for sale in China.

Fuzhou is obligated to register T36 Disinfectant in China within six (6) months of obtaining completed technical and study information from the Company which technical and study information they will forward to the CDC in China.

The Company provided a second set of samples to Fuzhou in January, 2006 and hopes that registration will be completed by the end of 2006.

The Company cannot guarantee that the Chinese government will approve the sale of T36 Disinfectant, or any other product and cannot say with certainty when approval might be obtained.

Malaysia:

The Company has a licensing and distribution agreement with Linns Corporation Sdn Bhd (see Exhibit 4.F.). On the Company’s behalf, Linns submitted its T36 Disinfectant to the National Pharmaceutical Control Bureau, Ministry of Health, Malaysia and received approval in January of 2005 to sell T36 Disinfectant in Malaysia.

However, because the T36 Disinfectant could be flammable, the Company needs approval from Malaysia’s Department of Fire & Rescue before T36 Disinfectant can be stored at Linn’s warehouse. This approval has not yet been obtained.

Seasonality
No disclosure necessary.

Dependency upon Patents/Licenses/Contracts/Processes

If we are able to further commercialize and increase sales for T36, we may be dependent, for future revenues and growth, on patent and trademark protection to protect our revenues and growth.

Patents:

We have a number of patents applications pending in the following jurisdictions:

Canada:
Canadian Patent Application number #2,495,938 filed on August 20, 2002.

European Union:
European Patent Office Application number #02754054.1 -2113 filed on August 20, 2002.

China:
Chinese Patent Office Patent Application #02829642.7 filed on August 20, 2002.

United States:
US Patent Office Patent Application #10/525,110 filed on August 20, 2002.

Malaysia:
No patent protection or intellectual property protection / trademarks have been sought by the Company in Malaysia.

None of these patents has yet been finally approved. The Company cannot estimate when, if at all, the patents will be approved

Trademarks:

We have successfully trademarked the trademark “T36” in Canada (April 22, 2004) and in the United States (November 2, 2004). The trademark in the United States is a Principal Register marks and not a foreign registry mark.

We have successfully trademarked the ALDA Pharmaceuticals logo in Canada (July 16, 2004) and in the United States (January 18, 2005) as a Principal Register mark.

Sources/Availability of Raw Materials and Production

T36 is comprised of Ethanol, O-phenyl phenol, Benzalkonium chloride and other ingredients (including lemon fragrance and water). All of these chemical raw materials are commonly produced in industrialized countries by a number of manufacturers and are generally considered safe to transport (although they have a low value to weight ratio which means it is likely cheaper to source raw materials from local producers instead of shipping raw materials from other markets).

As a result, we are not vulnerable to raw materials shortages or vulnerable to loss of access to supply from any one producer.

We have entered into a production contract with Norwood Packaging Ltd. (see Exhibit 4.B.) and anticipate entering into production contracts for each area in which we would market and sell the T36 Disinfectant or other products.

We do not have production facilities or anticipate leasing, building or acquiring production facilities.

Principal markets and Potential Product Markets

At this time, the Company’s sales have principally been to (i) “First Responder” organizations including ambulance, fire fighters and police forces in Canada; (ii) dental clinics; and (iii) beauty and hair care salons and spas. There are no reliable market estimates of the size of the disinfectant / disinfectant cleaner market in these segments.

The Company hopes to expand its product sales to hospital and related consumers in the near future.

The Company also hopes to expand its product sales to the United States and China. However, as detailed in Item 4B Material Effects of Government Regulation, the Company’s products must first receive regulatory approval in any new sales jurisdiction and obtaining this approval can be costly and time consuming.

There is no available estimate of the size of the Canadian market for disinfectant products or products similar to those of the Company. No estimates are available as well for the US or overseas markets.

“Disinfectant Products” are a very broad category of products and, where estimates are available of market size, appear to include many products dissimilar to those of the Company and also include consumer products (eg. widely marketed consumer brand name hand soaps). As well, particularly in the market niches where the Company’s sales have been to date (as described in (i) to (iii) above) there are a number of private company producers of disinfectant products whose sales figures are not public. No industry trade organization exists which can provide estimates of disinfectant sales, in product categories, in Canada or the United States.

Marketing, Distribution and Sales Channels

The Company does not directly market its products to end consumers.

The Company’s marketing and distribution / sales model is a simple one: it markets its products to wholesalers of similar products who then market the products to end consumers.

The wholesale industry for disinfectants, cleaners, cleaning and hospital supplies and similar consumer products is fragmented (that is, there are a large number of wholesalers). As a result, no competitor of the Company exercises significant control over distribution. However, the Company must convince each new wholesaler it targets first to carry its products, often in place of other existing products, and also to make the Company’s products available to the wholesaler’s customers.

The Company’s products and name are not immediately recognizable to end consumers and, as a result, wholesalers do have to make some effort to generate sales (compared to that which would be associated with a product familiar to end consumers).

This difficulty, which all new companies face in marketing their products, is probably the greatest challenge for the Company: how to get end consumers to recognize and request its products from wholesalers given the Company’s limited budget for incentives or advertising.

The Company markets it products to wholesalers through its two full-time sales and marketing representatives, trade shows and product promotional materials / flyers.

4.C. Organization structure

The company is not part of a group and has only one subsidiary, Sirona Therapeutics Corp., formerly ALDA Institute for Preventative Health Care Inc., a company incorporated in British Columbia.

On January 12, 2005 the Company transferred the rights to the therapeutic applications of its T36 Disinfectant to its wholly owned subsidiary, Sirona Therapeutics Corp. (“Sirona”). ALDA will retain ownership of the technologies and Sirona will undertake financing, patenting and registration of any therapeutic products developed and based on the T36 Disinfectant.

4.D. Property, Plant and Equipment

The Company has executive offices at 635 Columbia Street, New Westminister, British Columbia, V3M 1A7 which consist of 3,178 square feet. The Company leases its offices on a renewable one year lease basis at Cdn $2,845.00 per month (see Exhibit 4.D. for lease agreement).

The Company contracts out its manufacturing and has no present intention of leasing or acquiring manufacturing facilities (see Exhibit 4.B. for production contract with Norwood Packaging Ltd.).

Item 4A Unresolved Staff Comments

No disclosure necessary.

ITEM 5. OPERATING AND FINANCIAL REVIEW AND PROSPECTS

This discussion should be read in conjunction with the audited financial statements of the Company and related notes included therein.

5.A. Operating Results of ALDA

Overview

Over the course of the Company’s operating history, the Company has successfully secured the required government and regulatory approvals to market and sell its T36 Disinfectant products in Canada. This has resulted in sales as described in Results of Operations below and, to date, all of the Company’s sales have been in Canada.

Canada, however, while it is a developed industrial economy, is not a particularly large market relative to economies such as the United States or China.

To achieve profitability and greatly increase sales, the Company must first secure government and regulatory approval of its products in markets outside of Canada.

Although sales in Canada have grown over the Company’s operating history, the Company has not been successful in securing required government and regulatory approvals for the sales of its products outside of Canada. Each government or regulatory jurisdiction tends to require efficacy studies or safety studies of differing content or quality. The regulatory approval process to date has been costly both in terms of working capital and in terms of management time and attention.

Results of Operations

The Company has been actively marketing its T36 Disinfectant product since November 13, 2003 (the June 30, 2004 financial year). We have not presented previous financial periods here as the Company, prior to the June 30, 2004 financial year, was engaged primarily in research and development and not active operations for sales and marketing of products. As a result, its results of operations in those previous periods would be misleading or irrelevant to the discussion of results of operations in the last two financial years. The period ended June 30, 2004 represents only 7 months of sales vs. 12 months of sales in the year ended June 30, 2005 as a result of accounting beginning in November, 2003 when the acquisition of API was completed.

The Company’s sales, over the last two financial years, have increased. As well, its unit cost of sales has decreased, for the most part due to one time start up costs associated with beginning production in the 2004 period.

However, the Company is still operating overall with a significant loss from operations. This reflects, to a great extent, the costs associated with trying to register for sale its products in jurisdictions other than Canada and ongoing administrative and management costs.

To generate a net profit, the Company believes that it must register for sale its products in another major market, such as the United States or China or both, to achieve sales economies or achieve significant sales of its newer products such as the hand sanitizer and disinfectant cleaners.

Sales
For the year ended June 30, 2005, sales were $239,271 compared to $111,363 for the previous year (which was actually seven and a half months) ending June 30, 2004. Revenues from interest on bank deposits were $4,933 in the year ended June 30, 2003. The Company’s sales of T36 Disinfectant products have increased during this time period.

Cost of Sales
For the year ended June 30, 2005, cost of sales was $150,075 compared to $122,842 for the previous year ending June 30, 2004. The relatively high cost of sales in the year ending June 30, 2004 was due, in part, to one time costs associated with start up operations in production.

Gross Profit (Loss)
For the year ended June 30, 2005, gross profit was $89,196 as compared to a loss of $11,479 in the previous year ending June 30, 2004. As noted above with cost of sales, starting production of the Company’s T36 Disinfectant product and securing raw material inventory, warehousing space and other items contributed to the loss in the 2004 period.

Consulting / Management Services Fees
Consulting fees for the year ended June 30, 2005 were $210,561 as compared to $224,622 for the year ended June 30, 2004. The consulting fees primarily represent remuneration for management services provided to the Company by management services companies controlled by the Company’s President, Terrance Owen; its CFO, Peter Chen; and its Manager of Business Development, Allan Shapiro (see ITEM 7 under Related Party Transactions).

Advertising and Promotion
Advertising and promotion costs for the year ended June 30, 2005 were $27,685 compared to $26,456 for the year ended June 30, 2004. Costs in this category include advertising in selected trade journals, printing costs for brochures and other materials prepared for the purposes of promoting the Company’s T36 Disinfectant product.

Loss from Operations
The loss from operations was $553,028 for the year ended June 30, 2005 as compared to $548,062 for the year ended June 30, 2004. The losses were due, in large part, not to a loss on sales (see Gross Profit (Loss) above) but to the many costs incurred to establish a basis for further growth of the Company (costs associated with patenting the Company’s products, costs associated with attempting to secure US and foreign regulatory approval of the Company’s products and producing prototypes of products, such as disinfectant wipes, which contain the Company’s T36 Disinfectant or similar active ingredients).

5.B. Liquidity and capital resources

The Company had working capital of approximately $87,000 as of February 28, 2006. As described in ITEM 4.B. Plan of Operations, the Company believes that it requires $433,000 in additional working capital to complete its planned business activities over the 18 month period ending with the end of its Fiscal 2007 on June 30, 2007.

While the Company has (as described above in Results of Operations) experienced sales revenues growth, these revenues are not sufficient, at this time, to enable the Company to expand its activities in seeking regulatory approval in markets outside of Canada or to enable it to develop and market new products.

If it is unable to secure additional equity financing, the Company may not be able to continue as an operating business. The Company is operating at a loss and its sales revenues do not currently cover even its general and administrative expenses.

Critical Accounting Policies

Please refer to the Notes to the audited financial statements

Recent Accounting Pronouncements

	a)	Stock-based compensation

		Effective July 1, 2001, the Company adopted the new recommendations of the Canadian Institute of Chartered Accountants Accounting Handbook Section 3870, Stock-based Compensation and Other Stock-based Payments ("CICA 3870"). The new recommendations were applied prospectively to all stock-based payments to employees and non-employees granted on or after July 1, 2001.

		Under CICA 3870, prior to July 1, 2003, the Company was not required to record compensation expense for stock-based compensation awards granted to employees, except for employee awards that were direct awards of stock, called for settlement in cash or other assets, or were stock appreciation rights that called for settlement by the issuance of equity instruments. Consequently the adoption of the standard had no impact on the figures presented other than the pro forma disclosure contained in Note 8(d).

		During the year ended June 30, 2004, CICA 3870 was amended to require the use of the fair value-based method to account for stock options granted to employees. In accordance with the revised recommendations, the Company has prospectively applied the fair value-based method to all stock options granted to employees on or after July 1, 2003, whereby compensation cost is measured at fair value at the date of grant and is expensed over the vesting period.

	b)	Impairment of long-lived assets

		Effective July 1, 2003, the Company adopted the recommendations of the Canadian Institute of Chartered Accountants Handbook Section 3063, Impairment of long-lived assets. The new recommendations were applied prospectively to all long-lived assets held for use by the Company after July 1, 2003.

5.C. Research and development, patents and licenses etc .

The Company expects to spend approximately $100,000 on research and development of its products in the remainder of Fiscal 2006 and in Fiscal 2007 in total.

Some of these funds will, it is anticipated, by expended in preparing submissions to the FDA and the EPA under the Phigenics, LLC contract (see Exhibit 4.A.) which provides that Phigenics will seek FDA and EPA approval of the Company’s products.

Because it is impossible to predict if the EPA or FDA will request further studies or reviews of the Company’s products, or what cost such studies or reviews would incur, it is not possible to say if this budget will suffice to allow Phigenics to complete submissions on the Company’s behalf.

The Company does not presently have the working capital to fund its Research and Development expenditures described above.

5.D. Trend information

There are no market or other trends, other than as disclosed below, which the Company believes materially affect its business prospects.

The Company’s existing customers and the general public are becoming more aware of disinfectant products. The continuing spread of antibiotic resistant bacteria is contributing to this awareness and a perception that there is a growing need or demand for products similar to those the Company produces.

This has resulted in growth in the market for disinfectant products, in particular consumer products which provide antibacterial soaps and lotions. No reliable quantification of the growth these product sales have experienced is available and no growth or future growth can be reliably predicted.

The Company does believe that the demand for its T36 Disinfectant product, or at least for similar products, will increase.

5.E. Off-balance sheet arrangements

The Company does not have any off-balance sheet arrangements.

5.F. Tabular disclosure of contractual obligations

The Company does not have any long-term debt obligations, capital (finance) lease obligations, operating lease obligations, purchase obligations or other long-term liabilities reflected on the Company’s balance sheet.

5.G. Safe Harbor

This Registration Statement on Form 20-F contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, principally in ITEM #4, “Information on the Company” and ITEM #5. These statements may be identified by the use of words like “plan,” “expect,” “aim,” “believe,” “project,” “anticipate,” “intend,” “estimate,” “will,” “should,” “could” and similar expressions in connection with any discussion, expectation, or projection of future operating or financial performance, events or trends. In particular, these include statements about the Company’s strategy for growth, future performance or results of current sales and production, interest rates, foreign exchange rates, and the outcome of contingencies, such as acquisitions and/or legal proceedings and intellectual property issues.

ITEM 6. DIRECTORS, SENIOR MANAGEMENT AND EMPLOYEES

A. Directors and Senior Management

The following table sets forth certain information as of June 30, 2005 about the Company’s current directors and senior management. There have been no subsequent changes to the Company’s current directors and senior management:

Table No. 6: Directors and Senior Management:

Name	Age	Position	Other Reporting Companies in Canada or the United States
Name	Age	Position	Company	Position
Terrance Owen	60	President, CEO and Director	None	n/a
Peter Chen	43	Secretary, CFO and Director	None	n/a
Eugene Hodgson	49	Director	Sea Breeze Power Corp.	Officer
Linda Allison	59	Director	None	n/a
Ronald Zokol	56	Director	None	n/a
William McCoy	51	Director	None	n/a

Terrance Owen – President, CEO and Director

President & Chief Executive Officer of Duft Biotech since May 2000; President of Helix Biotech ULC, a laboratory providing DNA testing services for paternity, immigration and forensic cases, from December 1980 to April 2002; President of Helix BioPharma Corp., a biopharmaceutical company focused on drug delivery, drug discovery, drug development, drug distribution and drug licensing, from July 1995 to June 1998.

Peter Chen – Secretary, CFO and Director

Self-employed financial consultant since 1994; financial consultant with Whitaker Consulting Ltd., an internet consultant group involved in web design and generating internet traffic to client sites, from February 2000 to August 2001; President of CME Managing Consultants Inc., a consulting firm offering financial analysis and due diligence services to the mining industry, from January 1997 to January 2000; Financial Officer of CME Consulting Ltd. from February 1994 to January 2000.

Eugene Hodgson - Director

Mr. Hodgson is the President of Seeds Capital Inc., and E.A. Hodgson and Associates. He currently serves as both CFO and Director of Sea Breeze Power Inc. and is a Director and co-founder of the “Families for School Seismic Safety” in B.C.. Mr. Hodgson is a former Director of the Vancouver Board of Trade and Treasurer of the Liberal Party of Canada (for B.C.)

Linda Allison - Director

President of Snowdon & Associates Management Consultants Ltd., a management consulting company that has provided professional services to pharmaceutical, biotechnology, medical device and high technology companies, since 1984; President, CEO & a director of MDX Medical Inc., a biomedical company that develops medical imaging technologies for the improved diagnosis and treatment of cancer, from 2003 to 2004; President, CEO & a director of Genesis Bioventures Inc., a biomedical holding company that invested in companies developing novel diagnostics and therapeutics in the areas of cancer and neurological disorders, from August 2000 to February 2001.

Ron Zokol - Director

Dr. Zokol graduated from the Faculty of Dentistry at the University of British Columbia in 1974 and has been practicing dentistry for the last 26 years. He is the director of the Pacific Institute for Implant Dentistry and a Diplomat of the American Board of Oral Implantology, lecturing internationally in the fields of implant surgery and prosthodontics. In 1986, Dr. Zokol was elected President of the Vancouver and District Dental Society. Currently he also teaches advanced reconstructive dentistry.

Dr.William McCoy – Director

Dr. McCoy is Chief Technology Officer for Phigenics, LLC, a life sciences technology company based in Chicago, Illinois. He serves on the World Health Organization (WHO) committee. Dr. McCoy received the Intellectual Property Law Association “2001 Inventor of the Year” award and has commissioned to write a book for The International Water Association.

The Directors have served in their respective capacities since their election and/or appointment and will serve until the next Annual General Meeting or until a successor is duly elected, unless the office is vacated in accordance with the Articles/By-Laws of the Company.

The Senior Management serves at the pleasure of the Board of Directors.

No Director and/or Senior Management had been the subject of any order, judgment, or decree of any governmental agency or administrator or of any court or competent jurisdiction, revoking or suspending for cause any license, permit or other authority of such person or of any corporation of which he is a Director and/or Senior Management, to engage in the securities business or in the sale of a particular security or temporarily or permanently restraining or enjoining any such person or any corporation of which he is an officer or director from engaging in or continuing any conduct/practice/employment in connection with the purchase or sale of securities, or convicting such person of any felony or misdemeanor involving a security or any aspect of the securities business or of theft or of any felony.

There are no family relationships between any two or more Directors or Senior Management.

There are no arrangements or understandings with major shareholders, customers, suppliers or others, pursuant to which any person referred to above was selected as a Director or member of senior management.

6.B. Compensation

Cash Compensation
Total compensation accrued and/or paid (directly and/or indirectly) to all Directors/Senior Management during the year ended 06/30/2005 is detailed in Table No. 7 below:

Table No. 7
Annual Compensation of Senior Management

Name and Principal Position	Year	Annual Compensation			Long Term Compensation			All Other Compen- sation ($)
		Salary ($)	Bonus ($)	Other Annual Compen- sation ($)	Awards		Payouts
					Securities Under Option/ SAR's Granted (#)	Shares/ Units Subject to Resale Restrictions ($)	LTIP Pay- outs ($)





Terrance G. Owen, Chief Executive Officer (1)	2005 2004 2003	Nil Nil Nil	Nil Nil Nil	$70,000 $75,000 Nil	Nil 32,363 Nil	Nil Nil Nil	Nil Nil Nil	Nil Nil Nil



Peter Chen, Chief Financial Officer (2)	2005 2004 2003	Nil Nil Nil	Nil Nil Nil	$64,000 $58,000 Nil	Nil 120,000 Nil	Nil Nil Nil	Nil Nil Nil	Nil Nil Nil

	(1)	Consulting/management fees (“other annual compensation” of $70,000 and $75,000) were paid to a management consulting company owned by Terrance Owen;
	(2)	Consulting/management fees (“other annual compensation of $64,000 and $58,000) were paid to a management consulting company owned by Peter Chen.

Table No. 8
Stock Option Grants to directors and officers in Fiscal 2005 Ended 06/30/2005 and Fiscal 2006 thru 02/28/2006

Name	Number of	% Of Total	Exercise Price per	Grant Date	Expiration Date	Mkt. Value of
	Options	Options	Share			Securities
	Granted	Granted on				Underlying
						Options on Date
						of Grant

William McCoy	20,000	3.7%	$0.20	02/28/2005	02/28/2007	$4,000.00

William McCoy	80,000	14.90%	$0.20	04/04/2005	04/04/2007	$16,000.00

Eugene Hodgson	100,000	18.3%	$0.20	12/22/2005	12/21/2007	$8,000.00

The following table gives certain information concerning stock option exercises during Fiscal 2004 by our Senior Management and Directors. It also gives information concerning stock option values.

Table No. 9
Aggregated Stock Options Exercises in Fiscal 2005
Fiscal Year-end Unexercised Stock Options
Fiscal Yearend Stock Option Values
Senior Management/Directors

Name	Number of Shares	Aggregate Value	Value of Unexercised In-the-Money
	Acquired on	Realized (2)	Options at Fiscal Year-End
	Exercise (1)		Exercisable/Unexercisable (3)
Terry Owen	0	0	0
William McCoy	0	0	0
Peter Chen	0	0	0
Ron Zokol	0	0	0
Linda Allison	0	0	0
Allen Shapiro	0	0	0
Eugene Hodgson	0	0	0

	(1)	No stock options were exercised during Fiscal 2005.
	(2)	As no stock options were exercised, no aggregate value was realized from their exercise.
	(3)	The market value of the Company’s shares was below the exercise price of issued and outstanding options as at the end of Fiscal 2005. As a result, there was a 0 value to the value of options held by directors and officers and no options were “In-the-Money” at Fiscal Year End.

______________________________________________________________________________

Director Compensation . The Company had no formal plan for compensating its Directors for their service in their capacity as Directors. Directors are entitled to reimbursement for reasonable travel and other out-of-pocket expenses incurred in connection with attendance at meetings of the Board of Directors. The Board of Directors may award special remuneration to any Director undertaking any special services on behalf of the Company other than services ordinarily required of a Director. Other than indicated below no Director received any compensation for his services as a Director, including committee participation and/or special assignments.

Stock Options . The Company may grant stock options to Directors, Senior Management and employees. 300,000 stock options were granted and none were exercised during Fiscal 2005 and during Fiscal 2006 thru 02/28/2006. Refer to ITEM #6.E., "Share Ownership" and Table No. 8 for information about stock option grants. Table 8 excludes 100,000 share purchase options granted to Aaron Genereaux, a non-officer and non-director employee, which were granted on August 1, 2004 at an exercise price of $0.20 and have a term of 2 years.

Change of Control Remuneration . The Company had no plans or arrangements in respect of remuneration received or that may be received by Executive Officers of the Company in Fiscal 2005 to compensate such officers in the event of termination of employment (as a result of resignation, retirement, change of control) or a change of responsibilities following a change of control, where the value of such compensation exceeds US$60,000 per Senior Management.

Other Compensation . No Senior Management/Director received “other compensation” in excess of the lesser of US$25,000 or 10% of such officer's cash compensation, and all Senior Management/Directors as a group did not receive other compensation which exceeded US$25,000 times the number of persons in the group or 10% of the compensation.

Bonus/Profit Sharing/Non-Cash Compensation . Except for the stock option program discussed in ITEM #6.E., the Company had no material bonus or profit sharing plans pursuant to which cash or non-cash compensation is or may be paid to the Company's Directors or Senior Management.

Pension/Retirement Benefits . No funds were set aside or accrued by the Company during Fiscal 2005 to provide pension, retirement or similar benefits for Directors or Senior Management.

6.C. Board Practices

6.C.1. Terms of Office . Refer to ITEM 6.A.1.

6.C.2. Directors’ Service Contracts . --- No Disclosure Necessary ---

6.C.3. Board of Director Committees.
The Company has an Audit Committee, which recommends to the Board of Directors the engagement of the independent auditors of the Company and reviews with the independent auditors the scope and results of the Company’s audits, the Company’s internal accounting controls, and the professional services furnished by the independent auditors to the Company. The current members of the Audit Committee are:Peter Chen (the Company’s CFO), Eugene Hodgson (non-management Director) and Linda Allison (non-management Director). The Audit Committee met four times during the year ended 06/30/2005 to discuss and approve the Company’s audited and quarterly financial statements. The Audit Committee also met subsequent to the Company’s last Annual General Meeting of shareholders.

6.D. Employees

As of 06/30/2005 and as of the date of filing of this Registration Statement, the Company had 2 full-time sales and marketing employees, one full-time general administrative employee and three persons (its President, Terry Owen and its CFO, Peter Chen as well as Dr. Allan Shapiro, who conducts product research) employed full-time. The Company does not have any part-time employees.

The Company has no plans to increase its numbers of employees unless sales revenues increase and permit hirings.

6.E. Share Ownership
Table No. 10 lists, as of 02/28/2006, Directors and Senior Management who beneficially own the Company's voting securities, consisting solely of common shares, and the amount of the Company's voting securities owned by the Directors and Senior Management as a group.

Table No. 10
Shareholdings of Directors and Senior Management
Shareholdings of 5% Shareholders

______________________________________________________________________________

Title of	Amount and Nature of
Class	Beneficial Ownership	Percent of
Name of Beneficial Owner		Class (3)

Common Terrance Owen (1)	1,056,000	5.36%
Common Linda Allison	600,000	3.04%
Common Allan Shapiro (2)	1,641,688	8.33%
Common Peter Chen (4)	113,325	0.57%
Common Eugene Hodgson	0	0.00%
Common Ronald Zokol	205,748	1.31%
Common William McCoy	0	0.00%
Total Directors/Management 5% Holders	3,076,761	15.62%

(1)	includes 24,000 shares owned by Patricia Genereaux, the spouse of Terrance Owen
(2)	includes 828,175 shares held by 513947 BC Ltd., a company owned by Allan Shapiro and 107,973 shares registered in the name of Margaret Shapiro, the spouse of Allan Shapiro
(3)	based on 19,700,404 outstanding as of 02/28/2006
(4)	includes

Stock Options . The terms of incentive options grantable by the Company are done in accordance with the rules and policies of the TSX Venture Exchange and the British Columbia Securities Commission, including the number of common shares under option, the exercise price and expiry date of such options, and any amendments thereto. The

Company adopted a formal written stock option plan (the "Plan") on December 13, 2005. (A copy of the Company’s Stock Option Plan is included with this document as Exhibit 4.E.)

Such “terms and conditions”, including the pricing of the options, expiry and the eligibility of personnel for such stock options; and are described below.

The principal purposes of the Company’s stock option program are to (a) assist the company in attracting, retaining, and motivating directors, officers and employees of the Company and, (b) to closely align the personal interests of such directors, officers and employees with the interests of the Company and its shareholders.

The Plan provides that stock options may be granted to service providers for the Company. The term “service providers” means (a) any full or part-time employee or Officer, or insider of the Company or any of its subsidiaries; (b) any other person employed by a company or individual providing management services to the Company; (c) any other person or company engaged to provide ongoing consulting services for the Company or any entity controlled by the Company or (d) any individual engaged to provide services that promote the purchase or sale of the issued securities (any person in (a), (b), (c) or (d) hereinafter referred to as an “Eligible Person”); and (e) any registered retirement savings plan established by such Eligible Person, or any corporation controlled by such Eligible Person, the issued and outstanding voting shares of which are, and will continue to be, beneficially owned, directly or indirectly, by such Eligible Person and/or spouse, children and/or grandchildren of such Eligible Person. For stock options to Employees, Consultants or Management Company Employees, the Company must represent that the optionee is a bona fide Employee, Consultant or Management Company Employee as the case may be. The terms “insider” “Controlled” and “subsidiary” shall have the meanings ascribed thereto in the Securities Act (Ontario) from time to time. Subject to the foregoing, the board of directors or Committee, as applicable, shall have full and final authority to determine the persons who are to be granted options under the Plan and the number of shares subject to each option.

The Plan shall be administered by the board of directors of the Company or a committee established by the board of directors for that purpose. Subject to approval of the granting of options by the board of directors or Committee, as applicable, the Company shall grant options under the Plan.

The Plan provides that the aggregate number of shares of the Company, which may be issued and sold under the Plan, will not exceed 10% of the issued shares of the Company. The Company shall not, upon the exercise of any option, be required to issue or deliver any shares prior to (a) the admission of such shares to listing on any stock exchange on which the Company’s shares may them be listed, and (b) the completion of such registration or other qualification of such shares under any law, rules or regulation as the Company shall determine to be necessary or advisable. If any shares cannot be issued to any optionee for whatever reason, the obligation of the Company to issue such shares shall terminate and any option exercise price paid to the Company shall be returned to the optionee.

If a stock option expires or otherwise terminates for any reason without having been exercised in full, the number of common shares reserved for issuance under that expired or terminated stock option shall again be available for the purposes of the Plan. Any stock option outstanding when the Plan is terminated will remain in effect until it is exercised or it expires. The Plan provides that it is solely within the discretion of the Board to determine who should receive stock options and in what amounts, subject to the following conditions:

(a)	options will be non-assignable and non-transferable except that they will be exercisable by the personal representative of the option holder in the event of the option holder’s death;
(b)	options may be exercisable for a maximum of five years from grant date;
(c)	options to acquire no more than 5% of the issued shares of the Company may be granted to any one individual in any 12-month period;
(d)	options to acquire no more than 2% of the issued shares of the Company may be granted to any one consultant in any 12-month period;
(e)	options to acquire no more than an aggregate of 2% of the issued shares of the Company may be granted to an employee conducting investor relations activities (as defined in TSX Venture Exchange Policy 1.1), in any 12 month period;
(f)	options to acquire no more than 10% of the issued shares of the Company may be granted to any insiders in any 12- month period;

(g)	options held by an option holder who is a director, employee, consultant or management company employee must expire within 90 days after the option holder ceases to be a director, employee, consultant or management company employee;
(h)	options held by an option holder who is engaged in investor relations activities must expire within 30 days after the option holder ceases to be employed by the Company to provide investor relations activities; and
(i)	in the event of an option holder’s death, the option holder’s personal representative may exercise any portion of the option holder’s vested outstanding options for a period of one year following the option holder’s death.

The Plan provides that other terms and conditions may be attached to a particular stock option, such terms and conditions to be referred to in a schedule attached to the option certificate. Stock options granted to directors, senior officers, employees or consultants will vest when granted unless otherwise determined by the Board on a case by case basis, other than stock options granted to consultants performing investor relations activities, which will vest in stages over 12 months with no more than one-fourth of the options vesting in any three month period.

The price at which an option holder may purchase a common share upon the exercise of a stock option will be as set forth in the option certificate issued in respect of such option and in any event will not be less than the discounted market price of the Company’s common shares as of the date of the grant of the stock option (the “Award Date”). The market price of the Company’s common shares for a particular Award Date will typically be the closing trading price of the Company’s common shares on the day immediately preceding the Award Date, or otherwise in accordance with the terms of the Plan. Where there is no such closing price or trade on the prior trading day “market price” shall mean the average of the most recent bid and ask of the shares of the Company on any stock exchange on which the shares are listed or dealing network on which the shares of the Company trade.

In no case will a stock option be exercisable at a price less than the minimum prescribed by each of the organized trading facilities or the applicable regulatory authorities that would apply to the award of the stock option in question.

Common shares will not be issued pursuant to stock options granted under the Plan until they have been fully paid for by the option holder. The Company will not provide financial assistance or loans to option holders to assist them in exercising their stock options.

The names and titles of the Directors/Executive Officers/Employees of the Company to whom outstanding stock options have been granted and the number of common shares subject to such options are set forth in Table No. 11 as of 02/28/2006, as well as the number of options granted to them. There are no other outstanding stock options.

Table No. 11
Stock Options Outstanding

Name	Number of	Exercise Price per	Grant Date	Expiration Date
	Options Granted	Share
Terrance Owen	117,647	$0.17	08/02/2001	07/31/2006
Peter Chen	30,000	$0.17	08/02/2001	07/31/2006
Bruce Schmidt	90,000	$0.17	08/02/2001	07/31/2006
Aaron Genereaux	100,000	$0.20	08/01/2004	08/01/2006
Eugene Hodgson	100,000	$0.20	12/22/2004	12/22/2006
William F. McCoy	20,000	$0.20	02/28/2005	02/28/2007
William F. McCoy	80,000	$0.20	04/04/2005	04/04/2007
Total	537,647
Total Consultants	0
Total Outstanding	537,647

Item 7. MAJOR SHAREHOLDERS AND RELATED PARTY TRANSACTIONS

7.A. Major Shareholders

As of June 30, 2005 to the best of the Company’s knowledge, the following parties have ownership of 5% or greater of the Company’s common shares, all of which have the same voting rights attached thereto as all other common shares of the Company:

Name	Number of Common Shares Held	Percentage of Common Shares Held (calculated as a percentage of issued and outstanding on February 28, 2006)




Terry Owen (1)	1,056,000	5.36%
Allan Shapiro (2)	1,641,688	8.33%

Notes

(1)	Shares held by Terry Owen include 24,000 registered in the name of his spouse, Patricia Genereaux

(2)	Allan Shapiro is the owner of 513947 BC Ltd., which owns 828,715 shares and his spouse, Margaret Shapiro, is the registered owner of 107,973 shares. The shares owned by both have been included in Allan Shapiro’s number of common shares held

Other than as disclosed above the Company is not aware of any other company, any foreign government or any other person, jointly or severally, that directly or indirectly controls the Company. The Company is not aware of any arrangements the operation of which may at a future date result in a change in control of the Company.

7.A.1.a. Holdings By Major Shareholders .
Refer to ITEM #6.E and Table No. 10.

7.A.1.b. Significant Changes in Major Shareholders’ Holdings .
---No Disclosure Required---

7.A.1.c. Different Voting Rights . The Company’s major shareholders do not have different voting rights.

7.A.2. Canadian Share Ownership .
On 02/28/2006, the Company’s shareholders’ list showed 19,700,404 common shares outstanding and 51 registered shareholders. The Company has researched the indirect holding by depository institutions and other financial institutions estimates that there are: 50 holders of record resident in Canada, holding 19,685,055 common shares; 0 holders of record resident in the USA, holding 0 common shares; and, 1 holder of record resident elsewhere holding 15,439 common shares.

7.A.3. Control of the Company The Company is a publicly owned Canadian corporation, the shares of which are owned primarily Canadian residents and other foreign residents. The Company is not controlled by any foreign government or other person(s) except as described in ITEM #4.A., “History and Growth of the Company”, and ITEM #6.E., “Share Ownership”.

7.A.4. Change of Control of Company Arrangements
---No Disclosure Necessary---

7.B. Related Party Transactions

During the 2005 year, the Company incurred consulting fees of $134,000 (2004: $133,001; 2003: $12,000) to companies controlled by Peter Chen and Terry Owen. The fees were for management services rendered to the Company.

During the 2005 year, the Company incurred premises rent of $25,265 (2004: $21,562; 2003: 18,412) to Duft Enterprises Corp., which is a company owned by Terry Owen, Director and President of the Company.

During the 2005 year, the Company incurred consulting fees of $70,000 (2004: $75,000; 2003: $nil) to Allen Shapiro, a major shareholder and senior officer / manager of the Company. Mr. Shapiro was also the vendor of assets to the Company as described in ITEM 4.A regarding his company “API”.

During the 2004 year, the Company incurred interest expense of $836 to a company controlled by a director in respect to a loan advanced by that company.

Other than as disclosed above, there were no related party transactions of the Company for the previous three fiscal years.

Accounting Fees
The Company paid accounting fees of $14,500 and $23,100 to Berris Mangan, Chartered Accountants during the years ended 06/30/2004 and 06/30/2005, respectively.

Indirect Payments
---No Disclosure Required---

Shareholder Loans
---No Disclosure Required---

Amounts Owing to Senior Management/Directors

There is no money owing to members of senior management of members of the Board of Directors.

There have been no transactions since 06/30/2005, or proposed transactions, which have materially affected or will materially affect the Company in which any director, executive officer, or beneficial holder of more than 5% of the outstanding common shares, or any of their respective relatives, spouses, associates or affiliates has had or will have any direct or material indirect interest.

7.C. Interests of Experts and Counsel
---No Disclosure Required---

ITEM 8. FINANCIAL INFORMATION

8.A. Consolidated Statements and Other Financial Information
The Company's financial statements are stated in Canadian Dollars (CDN$) and are prepared in accordance with Canadian Generally Accepted Accounting Principles (GAAP), the application of which, in the case of the Company, conforms in all material respects for the periods presented with United States GAAP, except as discussed in footnotes to the financial statements.

The financial statements as required under ITEM #17 are attached hereto and found immediately following the text of this Registration Statement. The audit reports of Berris Mangan, Chartered Accountants (formerly BME & Partners, Chartered Accountants), are included herein immediately preceding the financial statements.

Audited Financial Statements:
Fiscal 2005/2004/2003 Ended June 30, 2005

8.A.7. Legal/Arbitration Proceedings

The Directors and the management of the Company do not know of any material, active or pending, legal proceedings against them; nor is the Company involved as a plaintiff in any material proceeding or pending litigation, other than as described below:

The Company is the plaintiff in an action for defamation filed in the Vancouver Court Registry of the Province of British Columbia on June 25, 2004. The Action Number for the action is No. S043563. The defendants in this action are Virox Technologies Inc. and one of its principals, Randy Pilon. No trial date has been set for this action as of yet. The Company has filed an offer for settlement for Cdn $10,000 plus costs which is outstanding.

The Company was the defendant in one action over its use of the trademark “Viralex” for its T36 product. The action was dismissed by consent of the parties in May of 2005. The action number for this action was Canadian Federal Court Trial Division File No. p-484-03.

The Directors and the management of the Company know of no active or pending proceedings against anyone that might materially adversely affect an interest of the Company.

8.B. Significant Changes

----No Disclosure Required----

ITEM 9. THE OFFER AND LISTING

9.A. Common Share Trading Information

The Company's common shares trade on the TSX Venture Exchange in Toronto, Ontario, Canada, under the symbol "APH". The Company applied for listing on the TSX Venture Exchange and began trading on the TSX Venture Exchange on July 31, 2001 under its former name, Duft Biotech Capital Ltd. and under its former symbol, DUF.

Table No. 12 lists the high, low and closing sales prices on the TSX Venture Exchange for the last six months, last ten fiscal quarters, and last five fiscal years.

_____________________________________________________________________________

Table No. 12
TSX Venture Exchange
And TSX Toronto Stock Exchange (TSE)
Common Shares Trading Activity
- Sales -
Canadian Dollars

Period	High	Low

Month ended 02/28/06	0.105	0.08
Month Ended 01/31/06	0.10	0.06
Month Ended 12/31/05	0.08	0.06
Month Ended 11/30/05	0.085	0.055
Month Ended 10/31/05	0.09	0.065
Month Ended 09/30/05	0.095	0.06

Fiscal Year Ended 06/30/2005	0.18	0.06
Fiscal Year Ended 06/30/2004	0.15	0.24
Fiscal Year Ended 06/30/2003	0.27	0.15
Fiscal Year Ended 06/30/2002	0.60	0.19
Fiscal Year Ended 06/30/2001	-----	------

Fiscal Quarter Ended 12/31/2005	0.095	0.055
Fiscal Quarter Ended 09/30/2005	0.095	0.04
Fiscal Quarter Ended 06/30/2005	0.115	0.06
Fiscal Quarter Ended 03/30/2005	0.14	0.09
Fiscal Quarter Ended 12/31/2004	0.13	0.08
Fiscal Quarter Ended 09/30/2004	0.18	0.08
Fiscal Quarter Ended 06/30/2004	0.22	0.15
Fiscal Quarter Ended 03/30/2004	0.23	0.16
Fiscal Quarter Ended 12/31/2003	0.21	0.17
Fiscal Quarter Ended 09/30/2003	0.18	0.235

_____________________________________________________________________________

9.A.5. Common Share Description

Registrar/Common Shares Outstanding/Shareholders

The authorized capital of ALDA consists of one class of shares: 100,000,000 common shares. There are no Indentures or Agreements limiting the payment of dividends and there are no conversion rights, special liquidation rights, pre-emptive rights or subscription rights.

Pacific Corporate Trust Company of Canada, a wholly owned division of Computershare Trust Company of Canada (located at 510 Burrard Street, Vancouver, British Columbia Canada V5K 1A1) is the registrar and transfer agent for the common shares.

Stock Options

Refer to ITEM 6.E., Table No. 9 (Aggregate Option Exercises) and Table No. 11 (Stock Options Outstanding) for additional information regarding the Company’s stock options.

Table No. 13 lists, as of 02/28/2006, share purchase warrants (options to purchase common shares) outstanding, the date the share purchase warrants were issued, the exercise price, and the expiration date of the share purchase warrants. These warrants were issued in conjunction with private placements of the Company’s securities and all holders of the Company’s warrants are resident in Canada.

Table No. 13
Share Purchase Warrants Outstanding (2)

______________________________________________________________________________

Effective	Number of	Number of Share	Exercise	Expiration Date of
Date of	Share	Purchase	Price	Share Purchase
Issuance	Purchase	Warrants Still		Warrants
	Warrants	Outstanding
	Originally
	Issued

March 15, 2005	3,220,500	3,220,500	$0.20	September 15, 2006

December 21, 2005	3,916,000	3,916,000	$0.10	December 21, 2006

_____________________________________________________________________________

	(1)	Issued pursuant to a private placement which closed in December of 2005
	(2)	A total of 6,000,000 warrants exercisable at $0.235 were outstanding as of the last financial year end, June 30, 2005, but these warrants expired on November 13, 2005 and have not been included in the table (although they are included in the attached June 30, 2005 financial statements)

9.A.6. Differing Rights
---No Disclosure Necessary---

9.A.7.a. Subscription Warrants/Right
---No Disclosure Necessary---

9.A.7.b. Convertible Securities/Warrants
---No Disclosure Necessary---

9.C. Stock Exchanges Identified

The common shares trade on the TSX Venture Exchange headquartered in Toronto, Ontario. Refer to ITEM #9.A.4 for trading information and history.

ITEM 10. ADDITIONAL INFORMATION

10.A. Share Capital

10.A.1. Authorized/Issued Capital .

As of 02/28/2006, there were 100,000,000 common shares authorized. At 02/28/2006 there were outstanding 19,700,404 common shares issued.

As of 06/30/2005, there were 100,000,000 common shares authorized. At 06/30/2005 there were 15,784,404 common shares issued.

As of 06/30/2004, there were 100,000,000 common shares authorized. At 06/30/2004 there were 12,784,404 common shares issued.

As of 06/30/2003, there were 100,000,000 common shares authorized. At 06/30/2003 there were 2,451,475 common shares issued.

As of 06/30/2002, there were 100,000,000 common shares authorized. At 06/30/2002 there were 2,376,475 common shares issued.

As of 06/30/2001, there were 100,000,000 common shares authorized. At 06/30/2001 there were 1,176,475 common shares issued.

During the last five years, less than 1% of the capital has been “paid for” with assets other than cash.

10.A.2. Shares Not Representing Capital.
---No Disclosure Necessary---

10.A.3. Shares Held By Company.
---No Disclosure Necessary---

10.A.4. Stock Options/Share Purchase Warrants
10.A.5. Stock Options/Share Purchase Warrants
---Refer to Table No. 10 and Table No. 13.---

10.A.6. History of Share Capital
The Company has financed its operations through funds raised in public/private placements of common shares and warrants:

______________________________________________________________________________

Fiscal Year	Nature of Share Issuance	Number of Shares	Amount ($)

Fiscal 2001	Private Placement @ $0.085	1,176,475	$100,000.38

Fiscal 2002	Canadian Prospectus Offering (IPO) @$0.17	1,200,000	$204,000.00

Fiscal 2003	Broker’s Warrant Shares on Canadian	150,000	$25,500.00
	Prospectus Offering (IPO) @ $0.17

Fiscal 2004	Private Placement @ $0.15	346,666	$52,000.00
	Private Placement @ $0.20	6,200,000	$1,240,000

Fiscal 2005	Private Placement @ $0.10	3,000,000	$300,000

Fiscal 2006 (to date)	Private Placement @$0.05	3,916,000	$195,800

(1) The table above omits from inclusion a total of 3,711,263 common shares which were issued to 513947 BC Ltd. (a company controlled by Dr. Allan Shapiro) and formerly named ALDA Pharmaceuticals Inc. or “API” which were issued for acquisition of assets from that company (see ITEM 4.A. History and Development of the Company).

_____________________________________________________________________________

10.A.7. Resolutions/Authorizations/Approvals
---No Disclosure Necessary---

10.B. Memorandum and Articles of Association

See Exhibit 1.

10.C. Material Contracts

On August 9,2005 the Company signed an agreement (the “Phigenics Agreement”) appointed Phigenics, LLC to manage EPA Registration and assist with U.S. sales. See Exhibit 4.A.

On October 4, 2005 the Company signed a manufacturing agreement with Norwood Packaging Ltd. of Surrey British Columbia, Canada to manufacture its T36 Disinfectant antibacterial product. See Exhibit 4.B.

The Company has also entered into a contract with Fuzhou Xinmei Biotech Co. Ltd. (“Fuzhou”) to licence its T36 Disinfectant product in China. The contract calls for Fuzhou to manufacture T36 Disinfectant products in China at its own manufacturing facilities. See Exhibit 4.C.

10.D. Exchange Controls

Canada has no system of exchange controls. There are no Canadian restrictions on the repatriation of capital or earnings of a Canadian public company to non-resident investors. There are no laws in Canada or exchange restrictions affecting the remittance of dividends, profits, interest, royalties and other payments to non-resident holders of the Company’s securities, except as discussed in ITEM 10, ”Taxation" below.

Restrictions on Share Ownership by Non-Canadians: There are no limitations under the laws of Canada or in the organizing documents of the Company on the right of foreigners to hold or vote securities of the Company, except that the Investment Canada Act may require review and approval by the Minister of Industry (Canada) of certain acquisitions of "control" of the Company by a "non-Canadian". The threshold for acquisitions of control is generally defined as being one-third or more of the voting shares of the Company. "Non-Canadian" generally means an individual who is not a Canadian citizen, or a corporation, partnership, trust or joint venture that is ultimately controlled by non-Canadians.

10.E. Taxation

Canadian Federal Income Tax Considerations
The following is a brief summary of some of the principal Canadian federal income tax consequences to a holder of common shares of the Company (a "U.S. Holder") who deals at arm's length with the Company, holds the shares as capital property and who, for the purposes of the Income Tax Act (Canada) (the "Act") and the Canada – United States Income Tax Convention (the "Treaty"), is at all relevant times resident in the United States, is not and is not deemed to be resident in Canada and does not use or hold and is not deemed to use or hold the shares in carrying on a business in Canada. Special rules, which are not discussed below, may apply to a U.S. Holder that is an insurer that carries on business in Canada and elsewhere.

Under the Act and the Treaty, a U.S. Holder of common shares will generally be subject to a 15% withholding tax on dividends paid or credited or deemed by the Act to have been paid or credited on such shares. The withholding tax rate is 5% where the U.S. Holder is a corporation that beneficially owns at least 10% of the voting shares of the Company and the dividends may be exempt from such withholding in the case of some U.S. Holders such as qualifying pension funds and charities.

In general, a U.S. Holder will not be subject to Canadian income tax on capital gains arising on the disposition of shares of the Company unless (i) at any time in the five-year period immediately preceding the disposition, 25% or more of the shares of any class or series of the capital stock of the Company was owned by (or was under option of or subject to an

interest of) the U.S. holder or persons with whom the U.S. holder did not deal at arm's length, and (ii) the value of the common shares of the Company at the time of the disposition derives principally from real property (as defined in the Treaty) situated in Canada. For this purpose, the Treaty defines real property situated in Canada to include rights to explore for or exploit mineral deposits and other natural resources situated in Canada, rights to amounts computed by reference to the amount or value of production from such resources, certain other rights in respect of natural resources situated in Canada and shares of a corporation the value of whose shares is derived principally from real property situated in Canada.

The US Internal Revenue Code provides special anti-deferral rules regarding certain distributions received by US persons with respect to, and sales and other dispositions (including pledges) of stock of, a passive foreign investment company. A foreign corporation, such as the Company, will be treated as a passive foreign investment company if 75% or more of its gross income is passive income for a taxable year or if the average percentage of its assets (by value) that produce, or are held for the production of, passive income is at least 50% for a taxable year. The Company believes that it was not a passive foreign investment company for the taxable year ended 12/31/2003 and, furthermore, expects to conduct its affairs in such a manner so that it will not meet the criteria to be considered passive foreign investment company in the foreseeable future.

Dividends
A Holder will be subject to Canadian withholding tax ("Part XIII Tax") equal to 25%, or such lower rate as may be available under an applicable tax treaty, of the gross amount of any dividend paid or deemed to be paid on common shares. Under the Canada-U.S. Income Tax Convention (1980) as amended by the Protocols signed on 6/14/1983, 3/28/1984, 3/17/1995, and 7/29/1997 (the "Treaty"), the rate of Part XIII Tax applicable to a dividend on common shares paid to a Holder who is a resident of the United States and who is the beneficial owner of the dividend, is 5%. If the Holder is a company that owns at least 10% of the voting stock of the Company paying the dividend, and, in all other cases, the tax rate is 15% of the gross amount of the dividend. The Company will be required to withhold the applicable amount of Part XIII Tax from each dividend so paid and remit the withheld amount directly to the Receiver General for Canada for the account of the Holder.

Disposition of Common Shares
A Holder who disposes of a common share, including by deemed disposition on death, will not normally be subject to Canadian tax on any capital gain (or capital loss) thereby realized unless the common share constituted "taxable Canadian property" as defined by the Tax Ac t. Generally, a common share of a public corporation will not constitute taxable Canadian property of a Holder if the share is listed on a prescribed stock exchange unless the Holder or persons with whom the Holder did not deal at arm's length alone or together held or held options to acquire, at any time within the five years preceding the disposition, 25% or more of the shares of any class of the capital stock of the Company. The Canadian Venture Exchange is a prescribed stock exchange under the Tax Ac t. A Holder who is a resident of the United States and realizes a capital gain on a disposition of a common share that was taxable Canadian property will nevertheless, by virtue of the Treaty, generally be exempt from Canadian tax thereon unless (a) more than 50% of the value of the common shares is derived from, or from an interest in, Canadian real estate, including Canadian mineral resource properties, (b) the common share formed part of the business property of a permanent establishment that the Holder has or had in Canada within the 12 month period preceding the disposition, or (c) the Holder is an individual who (i) was a resident of Canada at any time during the 10 years immediately preceding the disposition, and for a total of 120 months during any period of 20 consecutive years, preceding the disposition, and (ii) owned the common share when he ceased to be resident in Canada.

A Holder who is subject to Canadian tax in respect of a capital gain realized on a disposition of a common share must include three quarters of the capital gain (taxable capital gain) in computing the Holder's taxable income earned in Canada. The Holder may, subject to certain limitations, deduct three-quarters of any capital loss (allowable capital loss) arising on a disposition of taxable Canadian property from taxable capital gains realized in the year of disposition in respect to taxable Canadian property and, to the extent not so deductible, from such taxable capital gains realized in any of the three preceding years or any subsequent year.

United States Taxation
For federal income tax purposes, an individual who is a citizen or resident of the United States or a domestic corporation ("U.S. Taxpayer") will recognize a gain or loss on the sale of the Company's common shares equal to the difference between the proceeds from such sale and the adjusted tax basis of the common shares. The gain or loss will be a capital gain or capital loss if the Company's common shares are a capital asset in U.S. Taxpayer's hands.

For federal income tax purposes, a U.S. Taxpayer will be required to include in gross income dividends received on the Company's common shares. A U.S. Taxpayer who pays Canadian tax on a dividend on common shares will be entitled, subject to certain limitations, to a credit (or alternatively, a deduction) against federal income tax liability. A domestic corporation that owns at least 10% of the voting shares should consult its tax advisor as to applicability of the deemed paid foreign tax credit with respect to dividends paid on the Company's common shares.

Under a number of circumstances, United States Investor acquiring shares of the Company may be required to file an information return with the Internal Revenue Service Center where they are required to file their tax returns with a duplicate copy to the Internal Revenue Service Center, Philadelphia, PA 19255. In particular, any United States Investor who becomes the owner, directly or indirectly, of 10% or more of the shares of the Company will be required to file such a return. Other filing requirements may apply, and United States Investors should consult their own tax advisors concerning these requirements.

The US Internal Revenue Code provides special anti-deferral rules regarding certain distributions received by US persons with respect to, and sales and other dispositions (including pledges) of stock of, a passive foreign investment company. A foreign corporation, such as the Company, will be treated as a passive foreign investment company if 75% or more of its gross income is passive income for a taxable year or if the average percentage of its assets (by value) that produce, or are held for the production of, passive income is at least 50% for a taxable year. The Company believes that it was not a passive foreign investment company for the taxable year ended 12/31/2004 and, furthermore, expects to conduct its affairs in such a manner so that it will not meet the criteria to be considered passive foreign investment company in the foreseeable future.

10.F. Dividends and Paying Agents
The Company has not declared any dividends on its common shares for the last five years and does not anticipate that it will do so in the foreseeable future. The present policy of the Company is to retain future earnings for use in its operations and the expansion of its business.

Notwithstanding the aforementioned: the Company is unaware of any dividend restrictions; has no specific procedure for the setting of the date of dividend entitlement; but might expect to set a record date for stock ownership to determine entitlement; has no specific procedures for non-resident holders to claim dividends, but might expect to mail their dividends in the same manner as resident holders. The Company has not nominated any financial institutions to be the potential paying agents for dividends in the United States.

10.G. Statement by Experts
The Company’s auditor for its financial statements for each of the preceding three years was Berris Mangan, Chartered Accountants (formerly BME & Partners, Chartered Accountants). Their audit report for Fiscal 2005/2004/2003 is included with the related financial statements in this Registration Statement with their consent attached hereto as an exhibit.

10.H. Document on Display
--- No Disclosure Necessary ---

ITEM 11. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
--- No Disclosure Necessary ---

ITEM 12. DESCRIPTION OF SECURITIES OTHER THAN EQUITY SECURITIES
12.A. Debt Securities                                 --- No Disclosure Necessary ---
12.B. Warrants and Rights                        --- No Disclosure Necessary ---
12.C. Other Securities                                --- No Disclosure Necessary ---
12.D. American Depository Shares          -- No Disclosure Necessary ---

PART II

ITEM 13. DEFAULTS, DIVIDEND ARREARAGES AND DELINQUENCIES
--- No Disclosure Necessary ---

ITEM 14. MATERIAL MODIFICATIONS TO THE RIGHTS OF SECURITY HOLDERS AND USE OF PROCEEDS
--- No Disclosure Necessary ---

ITEM 15. CONTROLS AND PROCEDURES

The Company carried out an evaluation, under the supervision and with the participation of the Company’s management, including the Company’s President, of the effectiveness of the design and operation of the Company’s “disclosure controls and procedures” [as defined in the Exchange Act Rule 13a-15(e)] as of the end of the period covered by this report. Based upon that evaluation, the President concluded that the Company’s disclosure controls and procedures are effective in timely alerting them to material information relating to the Company required to be included in the Company’s periodic SEC filings, and that information is recorded, processed, summarized and reported as and when required.

There was no significant change in the Company’s internal control over financial reporting that occurred during the Company’s most recently completed fiscal year ended 06/30/2005 that has materially affected, or is reasonably likely to materially affect, the Company’s internal control over financial reporting. Nor were there any significant deficiencies or material weaknesses in the Company's internal controls requiring corrective actions.

ITEM 16. RESERVED

ITEM 16A. AUDIT COMMITTEE FINANCIAL EXPERT
ITEM 16B. CODE OF ETHICS
ITEM 16C. PRINCIPAL ACCOUNTING FEES AND SERVICES
ITEM 16D. EXEMPTIONS FROM THE LISTING STANDARDS FOR AUDIT COMMITTEES
ITEM 16E. PURCHASES OF EQUITY SECFURITIES BY THE COMPANY/AFFILIATED PURCHASERS
---Not Applicable---

PART III

ITEM 17. FINANCIAL STATEMENTS

The Company's financial statements are stated in Canadian Dollars (CDN$) and are prepared in accordance with Canadian Generally Accepted Accounting Principles (GAAP), the application of which, in the case of the Company, conforms in all material respects for the periods presented with United States GAAP, except as discussed in footnotes to the financial statements.

The financial statements as required under ITEM #17 are attached hereto and found immediately following the text of this Registration Statement. The audit report of Berris Mangan Chartered Accountants, is included herein immediately preceding the audited financial statements.

Audited Financial Statements: see exhibits

ITEM 18. FINANCIAL STATEMENTS

The Company has elected to provide financial statements pursuant to ITEM #17.

ITEM 19. EXHIBITS

The financial statements thereto as required under ITEM #17 are attached hereto and found immediately following the text of this Registration Statement. The report of the Company’s independent auditors for the audited financial statements are included herein immediately preceding the audited financial statements.

Audited Consolidated Financial Statements for the fiscal years ending June 30, 2005, 2004 and 2003:

Auditor’s Reports, dated August 5, 2005

Consolidated Balance Sheets at June 30, 2005 and June 30, 2004.

Consolidated Statements of Operations and Deficit for the fiscal years ending June 30, 2005, 2004 and 2003

Consolidated Statements of Cash Flows for the fiscal years ending June 30, 2005, 2004 and 2003

Notes to Consolidated Financial Statements

(B) Index to Exhibits:

1.	Articles of Incorporation

2.	Instruments defining the rights of holders of the securities being registered
		*See Exhibit Number 1*

3.	Voting Trust Agreements – N/A

4.	Material Contracts
	a.	Letter of Agreement with Phigenics LLC regarding US registration and distribution of the Company’s products dated July 21, 2005;
	b.	Production Agreement with Norwood Packaging Ltd.;
	c.	Product licensing and distribution agreement dated October 26, 2004 with Fuzhou Xinmei Biotech Co. Ltd.;
	d.	Office Premises Lease Agreement;
	e.	Stock Option Plan
	f.	Product licensing and distribution agreement dated August 1, 2004 with Linns Corporation Sdn Bhd of Malaysia

5.	List of Foreign Patents – N/A

6.	Calculation of earnings per share – N/A

7.	Explanation of calculation of ratios – N/A

8.	List of Subsidiaries – N/A (the Company has only one subsidiary)

9.	Statement pursuant to the instructions to Item 8.A.4, regarding the financial statements filed in registration statements for initial public offerings of securities – N/A

23.1	Consent of Independent Accountants

SIGNATURES

The registrant hereby certifies that it meets all of the requirements for filing on Form 20-F and that it has duly caused and authorized the undersigned to sign this registration report on its behalf.

Dated: February 28, 2006	ALDA PHARMACEUTICALS CORP.

	By: /s/ Terrance Owen
	Terrance Owen,
	President and CEO

ALDA PHARMACEUTICALS CORP.

CONSOLIDATED FINANCIAL STATEMENTS

(EXPRESSED IN CANADIAN DOLLARS)

FOR THE YEARS ENDED JUNE 30, 2005, 2004 AND 2003

F-i

AUDITORS' REPORT

To the Shareholders of ALDA Pharmaceuticals Corp.

We have audited the consolidated balance sheets of ALDA Pharmaceuticals Corp. as at June 30, 2005 and 2004 and the consolidated statements of operations and deficit and cash flows for the years ended June 30, 2005, 2004 and 2003. These financial statements are the responsibility of the company's management. Our responsibility is to express an opinion on these financial statements based on our audit.

We conducted our audit in accordance with Canadian generally accepted auditing standards and the standards of the Public Company Accounting Oversight Board (United States). 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.

In our opinion these consolidated financial statements present fairly, in all material respects, the financial position of the company as at June 30, 2005 and 2004 and the results of its operations and its cash flows for the years ended June 30, 2005, 2004 and 2003 in accordance with Canadian generally accepted accounting principles, consistently applied.


Vancouver, Canada
August 05, 2005	Chartered Accountants

F-ii

COMMENTS BY AUDITORS FOR U.S READERS ON CANADA-U.S. REPORTING DIFFERENCE

In the United States, reporting standards for auditors require the addition of an explanatory paragraph (following the opinion paragraph) when the financial statements are affected by conditions and events that cast substantial doubt on the Company's ability to continue as a going concern, such as those described in Note 1 to the financial statements. Our report to the shareholders dated August 5, 2005 is expressed in accordance with Canadian reporting standards which do not permit a reference to such events and conditions in the auditors' report when these are adequately disclosed in the financial statements.


Vancouver, Canada
August 05, 2005	Chartered Accountants

F-iii

	ALDA PHARMACEUTICALS CORP.	F-1.
	CONSOLIDATED BALANCE SHEETS
	(EXPRESSED IN CANADIAN DOLLARS)
	AS AT JUNE 30

		2005			2004

ASSETS
Current Assets
Cash and equivalents	$	71,663		$	226,151
Receivables		32,105			54,649
Inventory		43,668			144,916
Prepaids		12,989			12,005
Note receivable (Note 5)		7,988			7,988

		168,413			445,709

Property And Equipment (Note 6)		16,480			24,055

Intangible Assets (Note 7)		116,000			361,000

	$	300,893		$	830,764

LIABILITIES
Current Liabilities
Accounts payable and accrued liabilities	$	29,865		$	30,542


SHARE CAPITAL AND DEFICIT

Share Capital (Note 8(b))		1,856,285			1,607,620

Contributed Surplus (Note 8(f))		78,143			59,701

Deficit		(1,663,400	)		(867,099	)

		271,028			800,222

	$	300,893		$	830,764

Contingent Liabilities (Note 11)

Approved By The Directors

“Terrance Owen”	Director


“Peter Chen”	Director

See accompanying notes to the financial statements

	ALDA PHARMACEUTICALS CORP.	F-2.
	CONSOLIDATED STATEMENTS OF OPERATIONS AND DEFICIT
	(EXPRESSED IN CANADIAN DOLLARS)
	FOR THE YEARS ENDED JUNE 30

		2005			2004			2003


Sales	$	239,271		$	111,363		$	-

Cost Of Sales		150,075			122,842			-

Gross Profit (Loss)		89,196			(11,479	)		-

Expenses
Advertising and promotion		27,685			26,456			-
Amortization		8,217			4,382			566
Conferences		12,035			11,437			-
Consulting (Notes 13(a) and (c))		210,561			224,622			12,000
Filing fees		21,544			20,262			9,146
Interest and bank charges (Note 13(d))		1,685			2,055			177
Investor relations		90,779			59,038			-
Legal and accounting		57,833			45,763			13,086
Office and miscellaneous		30,426			28,564			5,025
Product development		-			2,100			-
Product registration		54,293			38,280			-
Rent (Note 13(b))		25,265			21,562			18,412
Travel		4,512			6,402			-
Wages and benefits		97,389			45,660			-

		642,224			536,583			58,412

Loss From Operations		(553,028	)		(548,062	)		(58,412	)

Other Income (Loss)
Interest income		1,727			5,583			4,933
Impairment loss on intangible assets (Note 7)		(245,000	)		(179,000	)		-
Loss on legal settlement (Note 10)		-			(10,000	)		-

		(243,273	)		(183,417	)		4,933


Loss For The Year		(796,301	)		(731,479	)		(53,479	)

Deficit, Beginning Of Year		(867,099	)		(135,620	)		(82,141	)
Deficit, End Of Year	$	(1,663,400	)	$	(867,099	)	$	(135,620	)

Basic and diluted loss per share	$	0.06		$	0.08		$	0.02

Weighted average number of shares outstanding		13,663,856			9,027,179			2,407,502

See accompanying notes to the financial statements

	ALDA PHARMACEUTICALS CORP.	F-3.
	CONSOLIDATED STATEMENTS OF CASH FLOWS
	(EXPRESSED IN CANADIAN DOLLARS)
	FOR THE YEARS ENDED JUNE 30

		2005			2004			2003

Cash Provided By (Used For)

Operating Activities
Net loss for the year	$	(796,301	)	$	(731,479	)	$	(53,479	)
Items not involving cash:
Amortization		8,217			4,382			566
Stock-based compensation (Note 8(d))		16,237			23,701			-
Impairment loss on intangible assets		245,000			179,000			-

		(526,847	)		(524,396	)		(52,913	)

Changes in non-cash working capital items:
Decrease (increase) in receivables		22,544			(39,729	)		(7,645	)
Decrease (increase) in inventory		101,248			(129,916	)		-
Decrease (increase) in prepaids		(984	)		(12,005	)		-
Increase (decrease) in accounts
payable and accrued liabilities		(677	)		(49,414	)		74,601

		(404,716	)		(755,460	)		14,043

Investing Activities
Deferred acquisition costs		-			(45,555	)		(155,894	)
Purchase of property and equipment		(642	)		(26,617	)		(306	)
Advances of note receivable		-			(44,520	)		(31,227	)
Repayments of note receivable		-			35,012			-

		(642	)		(81,680	)		(187,427	)

Financing Activities
Share subscriptions received (refunded)		-			(39,295	)		39,295
Loan advances received (repaid)		-			(23,604	)		23,604
Issuance of share capital (net of issue costs)		250,870			1,086,854			12,750

		250,870			1,023,955			75,649

Increase (Decrease) In Cash And Equivalents		(154,488	)		186,815			(97,735	)

Cash And Equivalents, Beginning of Year		226,151			39,336			137,071

Cash And Equivalents, End of Year	$	71,663		$	226,151		$	39,336

See accompanying notes to the financial statements

	ALDA PHARMACEUTICALS CORP.	F-4.
	NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
	(EXPRESSED IN CANADIAN DOLLARS)
	FOR THE YEARS ENDED JUNE 30, 2005, 2004 AND 2003

1.	Basis of Presentation

	These consolidated financial statements include the accounts of ALDA Pharmaceuticals Corp. ("the Company") and its wholly-owned subsidiary, ALDA Institute For Preventative Health Care Inc., an inactive company the shares of which were acquired pursuant to the Asset Purchase Agreement described in Note 9.

	These financial statements have been prepared on a going concern basis, which assumes the realization of assets and settlement of liabilities in the normal course of business. The Company has yet to achieve a level of revenues adequate to achieve profitability. The Company has also not yet secured legal protections that it is seeking in respect to its proprietary product. The application of the going concern assumption is dependent on the ability of the Company to secure sufficient financing, and to develop profitable operations. Management of the Company believes that it will succeed in meeting those objectives, allowing the continued operation of the Company.

2.	Description of Operations

	The Company was incorporated under the Company Act of British Columbia on May 30, 2000 and was classified as a Capital Pool Company as defined by the policies of the TSX Venture Exchange ("the Exchange"). The Company completed its required Qualifying Transaction on November 13, 2003 (see Note 9). As a result of the Company completing the Qualifying Transaction, it ceased to be a Capital Pool Company, and its shares resumed trading on the Exchange effective November 19, 2003.

	The Company's main business activity is the development, production and marketing of infection control agent products, principally a product formerly marketed as "Viralex" (see Note 11(a)).

	Effective November 26, 2003, the name of the Company was changed from Duft Biotech Capital Ltd. to ALDA Pharmaceuticals Corp.

3.	Significant Accounting Policies

	a)	Cash and equivalents

		Cash and equivalents include cash and highly liquid market instruments with original terms to maturity of less than ninety days at the time of acquisition.

	b)	Inventory

		Inventory of the Company's finished goods and related raw materials is reported at the lesser of cost and estimated net realizable value, and is determined using the first in, first out cost flow assumption.

	ALDA PHARMACEUTICALS CORP.	F-5.
	NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
	(EXPRESSED IN CANADIAN DOLLARS)
	FOR THE YEARS ENDED JUNE 30, 2005, 2004 AND 2003

3.	Significant Accounting Policies (continued)

	c)	Property and equipment

		Property and equipment are recorded at cost and are amortized using the following annual rates:

Furniture and fixtures	20% Straight line
Computer equipment	30% Straight line

In the year of acquisition, amortization is calculated at one-half of the above-noted rates.

	d)	Impairment of long-lived assets

		The Company reviews for the impairment of long-lived assets, including property and equipment, held for use, whenever changes in circumstances indicate that the carrying amount of an asset may not be recoverable from expected future cash flows. The assessment of recoverability is made based on projected undiscounted future net cash flows that are directly associated with the asset's use and eventual disposition. The amount of the impairment, if any, is measured as the difference between the carrying value and the fair value of the impaired assets and is presented as an impairment loss in the current period.

	e)	Intangible assets

		Intangible assets which are determined to have an indefinite life are not amortized, but are tested for impairment on an annual basis, based on a comparison of the fair value of the intangible asset with its carrying amount. The carrying amount is adjusted for impairment as necessary and any excess of the carrying amount over the fair value of the intangible asset is charged to earnings in the current period.

		Intangible assets which are determined to have a finite useful life are amortized on a systematic basis over the estimated remaining useful life.

	f)	Revenue recognition

		The revenue of the Company is primarily derived from the sale of the Company's Viralex product. Revenue is recognized at the time of shipment, and invoicing, provided that collection of the amount billed to the customer is reasonably assured.

	g)	Product development and registration costs

		Product development costs include all expenditures attributable to efforts by the Company to develop, and bring to commercial production a new product. Such amounts are charged as an expense in the period incurred except in circumstances where the market and technical feasibility of the product have been established, and recovery of development costs can reasonably be regarded as assured, in which case such costs are capitalized.

		Product registration costs related to efforts by the Company to acquire legal protections for its proprietary products, such as trademarks and patents, are expensed when incurred.

	ALDA PHARMACEUTICALS CORP.	F-6.
	NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
	(EXPRESSED IN CANADIAN DOLLARS)
	FOR THE YEARS ENDED JUNE 30, 2005, 2004 AND 2003

3.	Significant Accounting Policies (continued)

	h)	Income taxes

		Future tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Future tax assets and liabilities are measured using enacted or substantively enacted tax rates expected to apply when the asset is realized or the liability settled. To the extent that the Company does not consider it more likely than not that a future tax asset or portion thereof will be recovered, it provides a valuation allowance.

	i)	Stock-based compensation

		The Company accounts for stock options issued to employees and directors before July 1, 2003 by the settlement method, which results in no compensation expense. Consideration paid by employees and directors on the exercise of stock options is recorded as share capital. The Company discloses, on a supplemental basis, the pro forma effect of accounting for such stock options as if the fair value based method had been applied, using the Black - Scholes model.

		For stock options granted on or after July 1, 2003, the fair value-based method is applied. Compensation cost is measured at fair value at the date of grant and is expensed on a systematic basis over the vesting period, taking into account expected forfeiture rates. The fair value of the option granted by the Company is initially reported as contributed surplus. If the option is exercised, the amount is transferred to share capital.

		The Company accounts for all stock-based payments to non-employees granted on or after July 1, 2001 using the fair value based method.

	j)	Earnings per share

		Earnings per share is calculated based on the weighted average number of common shares outstanding during the reporting period. Basic earnings per share is computed by dividing income available to common shareholders by the weighted average number of common shares outstanding in the year. The Company uses the treasury stock method for calculating diluted earnings per share. Diluted earnings per share is computed similarly to basic earnings per share, except that the weighted average number of common shares outstanding is increased to include additional shares that are potentially issued, where the effect on earnings per share is dilutive. The number of additional shares potentially issued, for example from stock options, is calculated by assuming that outstanding stock options were exercised and that the proceeds from such exercises were used to acquire shares of common stock at the average market price during the reported year.

	k)	Use of estimates

		The preparation of financial statements in conformity with Canadian generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and reported amounts of revenues and expenses during the reporting year. Actual results could differ from the estimates.

	ALDA PHARMACEUTICALS CORP.	F- 7.
	NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
	(EXPRESSED IN CANADIAN DOLLARS)
	FOR THE YEARS ENDED JUNE 30, 2005, 2004 AND 2003

4.	Adoption Of New Accounting Principles

	a)	Stock-based compensation

		Effective July 1, 2001, the Company adopted the new recommendations of the Canadian Institute of Chartered Accountants Accounting Handbook Section 3870, Stock-based Compensation and Other Stock-based Payments ("CICA 3870"). The new recommendations were applied prospectively to all stock-based payments to employees and non-employees granted on or after July 1, 2001.

		Under CICA 3870, prior to July 1, 2003, the Company was not required to record compensation expense for stock-based compensation awards granted to employees, except for employee awards that were direct awards of stock, called for settlement in cash or other assets, or were stock appreciation rights that called for settlement by the issuance of equity instruments. Consequently the adoption of the standard had no impact on the figures presented other than the pro forma disclosure contained in Note 8(d).

		During the year ended June 30, 2004, CICA 3870 was amended to require the use of the fair value-based method to account for stock options granted to employees. In accordance with the revised recommendations, the Company has prospectively applied the fair value-based method to all stock options granted to employees on or after July 1, 2003, whereby compensation cost is measured at fair value at the date of grant and is expensed over the vesting period.

	b)	Impairment of long-lived assets

		Effective July 1, 2003, the Company adopted the recommendations of the Canadian Institute of Chartered Accountants Handbook Section 3063, Impairment of long-lived assets. The new recommendations were applied prospectively to all long-lived assets held for use by the Company after July 1, 2003.

5.	Note Receivable

	At June 30, 2005, the Company maintained a loan to ALDA (see Note 9), which was originally due to be repaid by December 31, 2004, and is now in arrears. The loan bears interest at 8% per annum and is evidenced by a promissory note secured by 40,000 shares of the Company owned by ALDA. In the event of default on repayment of the loan, the ability of the Company to recover the investment may depend on the market value of the shares held as security, and is therefore uncertain. At June 30, 2005, the market value of the shares held as security was approximately $2,800. Subsequent to June 30, 2005, the Company commenced negotiations with ALDA of amended terms of repayment, and expects to receive repayment of the full balance plus accrued interest in the 2006 year.

	ALDA PHARMACEUTICALS CORP.	F-8.
	NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
	(EXPRESSED IN CANADIAN DOLLARS)
	FOR THE YEARS ENDED JUNE 30, 2005, 2004 AND 2003

6.	Property And Equipment

Property and equipment at June 30, 2005 consisted of the following:

				Accumulated
		Cost		Amortization		Net

Furniture and fixtures	$	7,683	$	3,476	$	4,207
Computer equipment		22,482		10,209		12,273

	$	30,165	$	13,685	$	16,480

Property and equipment at June 30, 2004 consisted of the following:

				Accumulated
		Cost		Amortization		Net

Furniture and fixtures	$	7,041	$	2,004	$	5,037
Computer equipment		22,482		3,464		19,018

	$	29,523	$	5,468	$	24,055

7.	Intangible Assets

	The intangible assets balance represents the carrying amount of certain intellectual property acquired as described in Note 9. These assets were determined to have an indefinite life. At June 30, 2005, the carrying cost of the intangible assets was written down to the estimated net recoverable amount, and an impairment loss of $245,000 was charged against earnings for the 2005 year. An impairment loss of $179,000 was charged against earnings for the 2004 year.

	The net recoverable amounts were estimated by management of the Company based on expected future cash flows that could be reasonably predicted. The Company's progress towards securing of legal protections for its proprietary product and development of a market for its product has been significantly slower than had been expected at the time of the purchase of the business assets described in Note 9. Consequently, management has revised its projections of cash flows based on these circumstances.

	The carrying amount of Intangible Assets was determined as follows:

Original purchase cost (Note 9)	$	540,000
Impairment loss in 2004		(179,000	)

Balance at June 30, 2004	$	361,000
Impairment loss in 2005		(245,000	)

Balance at June 30, 2005	$	116,000

	ALDA PHARMACEUTICALS CORP.	F-9.
	NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
	(EXPRESSED IN CANADIAN DOLLARS)
	FOR THE YEARS ENDED JUNE 30, 2005, 2004 AND 2003

8.	Share Capital

	a)	Authorized:

		100,000,000 Common shares without par value

	b)	Issued and outstanding:

		Issued:

	2005				2004				2003
	Number				Number				Number
	of Shares		Amount		of Shares		Amount		of Shares		Amount
Balance at beginning
of year	12,784,404 $		1,607,620		2,451,475	$	279,309		2,376,475	$	258,059
Exercise of warrants
during year (i)	-		-		-		-		75,000		12,750
Fair value of warrants
exercised	-		-		-		-		-		5,312
Fair value of warrants
expired	-		-		-		-		-		3,188
Private placement (ii)	-		-		346,666		52,000		-		-
Asset purchase (iii)	-		-		3,711,263		262,457		-		-
Shares issued to
sponsor (iii)	-		-		75,000		15,000		-		-
Public offering (iv)	-		-		6,000,000		1,200,000		-		-
Shares issued to
agent (iv)	-		-		200,000		40,000		-		-
Private placement (v)	3,000,000		300,000		-		-		-		-
Share issue costs	-		(51,335	)	-		(241,146	)	-		-

Balance at end of year	15,784,404	$	1,856,285		12,784,404	$	1,607,620		2,451,475	$	279,309

	i)	On July 31, 2001, the Company issued 1,200,000 common shares at a price of $0.17 per share. As part of the offering, the Company issued to the agent warrants to purchase up to 120,000 common shares at an exercise price of $0.17, expiring January 31, 2003. The fair value of the warrants was estimated to be approximately $0.07 per warrant, using the Black-Scholes option pricing model. On January 31, 2003, the Agent exercised warrants to purchase 75,000 common shares of the Company. The remaining warrants expired.

	ii)	During the 2004 year, the Company completed a private placement of 346,666 common shares of the Company at a price of $0.15 per share.

	ALDA PHARMACEUTICALS CORP.	F-10.
	NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
	(EXPRESSED IN CANADIAN DOLLARS)
	FOR THE YEARS ENDED JUNE 30, 2005, 2004 AND 2003

8.	Share Capital (continued)

	b)	Issued and outstanding (continued):

		iii)	Effective November 13, 2003, the Company completed a Qualifying Transaction as described in Note 9. As part of the consideration paid, the Company issued 3,711,263 common shares. The Company also issued 75,000 common shares at a deemed price of $0.20 per share in payment of fees to a sponsoring broker in connection with the Qualifying Transaction.

		iv)	Effective November 13, 2003, the Company completed a brokered public offering of 6,000,000 units at a price of $0.20 per unit for gross proceeds of $1,200,000. Each unit consisted of one common share of the Company and one non-transferable share purchase warrant. Each share purchase warrant entitled the holder to acquire one common share of the Company at a price of $0.30 per share, for a period of 18 months following the closing date.

			Under an agency agreement in respect to the offering, the Company paid to the agent a cash commission of $120,000 and an administration fee of $7,500, and granted agent warrants to purchase up to 900,000 common shares of the Company at an exercise price of $0.20 per share, for a period of 18 months following the closing date, which vested immediately. The agent was also issued 200,000 units consisting of one common share at a deemed price of $0.20 per share and one share purchase warrant. Each share purchase warrant entitled the agent to purchase one common share of the Company at a price of $0.30 per share for a period of 18 months following the closing date.

		v)	On March 15, 2005, the Company completed a private placement of 3,000,000 units of the Company at a price of $0.10 per unit for gross proceeds of $300,000. Of the units issued, 795,000 units were placed on a non-brokered basis, and 2,205,000 units were placed on a brokered basis.

			Each unit consists of one common share of the Company and one share purchase warrant, each warrant entitling the holder to purchase one common share at a price of $0.20 per share for a period of 18 months following the closing date. In connection with the brokered private placement, the Company paid a cash commission of 10% of the gross proceeds, a corporate finance fee of $10,000 and legal and other costs totaling $17,080. The Company also issued 220,500 agent warrants, each warrant entitling the agents to purchase one common share of the Company, at a price of $0.20 per share for a period of 18 months following the closing date.

	c)	Escrowed shares:

		Included in issued share capital at June 30, 2005 are 2,199,487 common shares held in escrow, which are released on a staged basis, with a release occuring every six months. During the 2005 year, 1,466,318 common shares were released from escrow.

	ALDA PHARMACEUTICALS CORP.	F-11.
	NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
	(EXPRESSED IN CANADIAN DOLLARS)
	FOR THE YEARS ENDED JUNE 30, 2005, 2004 AND 2003

8.	Share Capital (continued)

	d)	Stock options:

		A summary of the Company's stock options, and changes during each year is presented below:

	Year Ended			Year Ended			Year Ended
	June 30, 2005			June 30, 2004			June 30, 2003
			Weighted			Weighted			Weighted
			Average			Average			Average
	Number		Exercise	Number		Exercise	Number		Exercise
	Of Shares		Price	Of Shares		Price	Of Shares		Price

Outstanding, beginning of year	990,000	$	0.19	237,647	$	0.17	237,647	$	0.17
Granted during year
-consultants ((ii) / (iii))	-		-	390,000		0.20	-		-
-directors ((i) / (iv))	200,000		0.20	362,353		0.20	-		-
-employees (v)	100,000		0.20	-		-	-		-
Outstanding, end of year	1,290,000	$	0.19	990,000	$	0.19	237,647	$	0.17

The following table summarizes information about stock options outstanding at June 30, 2005:

Number		Exercise	Expiry	Number
of Shares		Price	Date	Exercisable
237,647	$	0.17	July 31, 2006	237,647
752,353	$	0.20	January 27, 2006	714,853
100,000	$	0.20	August 1, 2006	100,000
100,000	$	0.20	December 22, 2006	100,000
20,000	$	0.20	February 28, 2007	20,000
80,000	$	0.20	April 4, 2007	80,000
1,290,000				1,252,500

	(i)	During the 2004 year, the Company granted options to acquire 362,353 common shares to directors of the Company. The options have an exercise price of $0.20 per share, and are exercisable for a period of two years from the date of grant. The options vested immediately. The estimated fair value of the options of $14,494 ($ 0.04 per share) was recognized for the 2004 year.

	(ii)	During the 2004 year, the Company granted options to acquire 190,000 common shares to consultants of the Company. The options have an exercise price of $0.20 per share and are exercisable for a period of two years from the date of grant. Options to acquire 150,000 shares vested immediately, and options to acquire 40,000 shares vested over a one year period. Of the total expense related to the estimated fair value of the options ($0.04 per share), $925 has been recognized for the 2005 year ($6,675 for the 2004 year).

	ALDA PHARMACEUTICALS CORP.	F-12.
	NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
	(EXPRESSED IN CANADIAN DOLLARS)
	FOR THE YEARS ENDED JUNE 30, 2005, 2004 AND 2003

8.	Share Capital (continued)

	d)	Stock options (continued):

		(iii)	During the 2004 year, the Company granted options to acquire 200,000 common shares of the Company to consultants providing investor relations services to the Company. The options have an exercise price of $0.20 per share, and are exercisable for a period of two years from the date of grant. Options to acquire 100,000 shares vest over a two year period, and options to acquire another 100,000 shares vested over a one year period. The options have an estimated fair value of $0.04 per share ($8,000). The related expense is being charged to operations over the vesting periods ($4,312 for the 2005 year; $2,532 for the 2004 year).

		(iv)	During the 2005 year, the Company granted options to acquire 200,000 common shares of the Company to two directors. The options have an exercise price of $0.20 per share and are exercisable for a period of two years from the date of grant. The options vested immediately. The estimated fair value of the options of $6,000 ($0.03 per share) has been recognized for the 2005 year.

		(v)	During the 2005 year, the Company granted options to acquire 100,000 common shares of the Company to an employee. The options have an exercise price of $0.20 per share and are exercisable for a period of two years from the date of grant. The options vested immediately. The estimated fair value of the options of $5,000 ($0.05 per share) has been recognized for the 2005 year.

Stock-based compensation expense is presented in the Statement of Operations and Deficit as follows:

		2005		2004
Consulting	$	925	$	6,675
Investor relations		4,312		2,532
Wages and benefits		11,000		14,494
Total stock-based compensation	$	16,237	$	23,701

The fair value-based accounting method applies to all stock options granted during the 2005 and 2004 years.

The fair value of each option was estimated as at the date of grant using the Black-Scholes option-pricing model with the following weighted-average assumptions:

	2005	2004
Dividend yield	0%	0%
Expected volatility	81%	42%
Risk free interest rate	3.12%	2.25%
Expected average option term	2 years	2 years

Had compensation expense for the Company's stock-based employee compensation plan been determined for each year based on the fair value at the grant date, the Company's net loss and loss per share would have been as follows:

	ALDA PHARMACEUTICALS CORP.	F-13.
	NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
	(EXPRESSED IN CANADIAN DOLLARS)
	FOR THE YEARS ENDED JUNE 30, 2005, 2004 AND 2003

8.	Share Capital (continued)

Stock options (continued):

		2005		2004		2003
Loss for the period - as reported	$	796,301	$	731,479	$	53,479
Loss for the period - pro forma		796,301		731,479		53,479

Loss per share - as reported		0.06		0.08		0.02
Loss per share - pro forma		0.06		0.08		0.02

The Black-Scholes model, used by the Company to calculate option values was developed to estimate fair value of freely tradable, fully transferable options without vesting restrictions, which significantly differs from the Company's stock option awards. This model also requires highly subjective assumptions, including future stock price, volatility, and expected time until exercise, which greatly affect the calculated values.

	e)	Warrants:

		The Company has issued warrants entitling the holders to acquire common shares of the Company. A summary of changes in unexercised warrants is presented below.

						Agent					Agent
	Warrants		Warrants		Warrants	Warrants		Warrants		Warrants	Warrants
	@$0.17		@$0.30		@$0.235	@$0.20		@$0.30		@$0.20	@$0.20
	(1)		(2)		(3)	(4)		(5)		(6)	(7)	Total
Outstanding, June
30, 2002	120,000		-		-	-		-		-	-	120,000
Exercised during year	(75,000	)	-		-	-		-		-	-	(75,000	)
Expired during year	(45,000	)	-		-	-		-		-	-	(45,000	)

Outstanding, June
30, 2003	-		-		-	-		-		-	-	-
Granted during year	-		6,000,000		-	900,000		200,000		-	-	7,100,000

Outstanding, June
30, 2004	-		6,000,000		-	900,000		200,000		-	-	7,100,000
Granted during year	-		-		-	-		-		3,000,000	220,500	3,220,500
Cancelled on repricing	-		(6,000,000	)	-	-		-		-	-	(6,000,000	)
Granted on repricing	-		-		6,000,000	-		-		-	-	6,000,000
Expired during year	-		-		-	(900,000	)	(200,000	)	-	-	(1,100,000	)

Outstanding, June
30, 2005	-		-		6,000,000	-		-		3,000,000	220,500	9,220,500

	(1)	Exercisable until January 31, 2003, granted pursuant to public offering (Note 8(b)(i))
	(2)	Exercisable until May 14, 2005, granted pursuant to public offering (Note 8(b)(iv))
	(3)	The terms of the warrants in (2) were amended during the 2005 year to reduce the exercise price to $0.235 per share, exercisable until November 13, 2005.
	(4)	Exercisable until May 14, 2005, granted pursuant to public offering (Note 8(b)(iv))
	(5)	Exercisable until May 14, 2005, granted pursuant to public offering (Note 8(b)(iv))
	(6)	Exercisable until September 15, 2006, granted pursuant to public offering (Notes 8(b)(v))
	(7)	Exercisable until September 15, 2006, granted pursuant to public offering (Note 8(b)(v))

	ALDA PHARMACEUTICALS CORP.	F-14.
	NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
	(EXPRESSED IN CANADIAN DOLLARS)
	FOR THE YEARS ENDED JUNE 30, 2005, 2004 AND 2003

8.	Share Capital (continued)

	e)	Warrants (continued):

		The fair value of agent warrants to acquire 220,500 common shares of the Company at a price of $0.20 per share, as described in Note 8(b)(v), was estimated to be approximately $0.01 per warrant (totaling $2,205), using the Black-Scholes option pricing model.

		The fair value of agent warrants to acquire 900,000 common shares of the Company at a price of $0.20 per share, as described in Note 8(b)(iv), was estimated to be approximately $0.04 per warrant (totaling $36,000), using the Black-Scholes option pricing model.

	f)	Contributed surplus:

		Contributed surplus at June 30, 2005 and 2004, and activity during the 2005 and 2004 years, are summarized as follows:

		2005		2004
Balance, beginning of year	$	59,701	$	-
Warrants issued to agent (Note 8(e))		2,205		36,000
Options issued to employees (Note 8(d)(v))		5,000		-
Options issued to directors (Note 8(d)(i) and (iv))		6,000		14,494
Options issued to consultants (Note 8(d)(ii) and (iii))		5,237		9,207
Balance, end of year	$	78,143	$	59,701

9.	Asset Purchase Agreement

	Effective November 13, 2003 the Company completed a purchase of assets of ALDA Pharmaceutical Inc. (now 513947 B.C. Ltd.) ("ALDA"). This acquisition represented the Company's "Qualifying Transaction" pursuant to the policies of the TSX Venture Exchange (the "Exchange") as they relate to Capital Pool Companies. An Asset Purchase Agreement provided for the Company to purchase substantially all of the assets and undertaking of ALDA, principally comprised of certain intellectual property rights of ALDA related to an infection control agent product developed by it (including certain drug identification numbers, and trademark and patent applications), as well as inventory, capital assets, the shares of ALDA Institute For Preventative Health Care Inc., a non-competition agreement, and certain contracts, for a deemed purchase price of $800,000. The deemed purchase price was paid by the Company by the issuance of 3,711,263 common shares (the "Payment Shares") to ALDA at a deemed price of $0.20 per share, and the set off of a loan and accrued interest totaling $57,747 owing by ALDA to the Company. The Payment Shares are subject to an escrow agreement under which ten percent of the shares subject to escrow were released on November 14, 2003. An additional fifteen percent of the shares are to be released after every six month period commencing November 14, 2003, the first release occurring May 14, 2004.

	Under the Asset Purchase Agreement, the Company assumed responsibility for all obligations arising subsequent to November 13, 2003 pursuant to any leases, contracts and licenses of ALDA, which relate to the former business of ALDA.

	Cash expenditures were incurred by the Company in respect to the asset purchase transaction totaling $219,796.

	ALDA PHARMACEUTICALS CORP.	F-15.
	NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
	(EXPRESSED IN CANADIAN DOLLARS)
	FOR THE YEARS ENDED JUNE 30, 2005, 2004 AND 2003

9.	Asset Purchase Agreement (continued)

	The purchase cost was determined based on estimated fair value of assets acquired, allocated as follows:

Intangible assets (intellectual property)	$	540,000
Inventory		15,000
Total	$	555,000

The corresponding amounts assigned to consideration given by the Company for the assets purchased were as follows:

Cash (transaction costs)	$	219,796
Loan due from ALDA		57,747
Share capital - sponsor		15,000
Share capital - vendor		262,457
	$	555,000

10.	Loss On Legal Settlement

	During the 2004 year, the Company paid an amount of $10,000 to settle a legal claim made by a competitor relating to certain promotional disclosures made by the Company.

11.	Contingent Liabilities

	a)	A company opposing a trademark application made in Canada by ALDA (see Note 9) commenced legal proceedings during the 2003 year claiming damages in respect to alleged infringement of trademark. ALDA had filed a Statement of Defence. The Statement of Claim was subsequently amended to add the Company as a defendant in the action.

		On May 23, 2005, the Company entered into a settlement agreement with that company, whereby the Company agreed to terminate the use, and application for registration of, the trademark "Viralex". The Company must discontinue the use of that trademark in advertising and other promotional disclosures, liquidate its inventory of goods bearing the trademark "Viralex", and rename the Viralex product within twelve months from the date of the agreement, in consideration for payment of $30,000 (US). These funds were held in escrow by the Company's lawyer until the Company issued a press release regarding the settlement of the trademark dispute, and withdrew its application for the "Viralex" trademark, which occurred subsequent to June 30, 2005. The proceeds of the settlement, net of associated costs, as well as the costs associated with establishment of a new trademark, will be recognized for accounting purposes in the 2006 year, when the Company's obligations under the settlement agreement were fulfilled.

	b)	The Company has commenced legal action against the competitor described in Note 10, unrelated to the settlement, with respect to certain alleged defamatory statements made by the competitor after the settlement was completed. The outcome of the claim is not readily determinable and any gain or loss to the Company arising from this action will be reported at the time of any such future determination.

	ALDA PHARMACEUTICALS CORP.	F-16.
	NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
	(EXPRESSED IN CANADIAN DOLLARS)
	FOR THE YEARS ENDED JUNE 30, 2005, 2004 AND 2003

12.	Income Taxes

	a)	As at June 30, 2005, the Company had approximately $1,337,000 of unutilised non-capital losses for tax purposes, which expire commencing in the 2008 year.

		The potential future income tax benefit which may arise from claiming these losses has not been reflected in these financial statements, as the Company's ability to realize the benefit is uncertain.

	b)	Following is a reconciliation of the expected income tax benefit from the loss for each year based on the applicable statutory income tax rate, to the actual amount:

		2005				2004				2003

Tax asset at statutory rate 38.6 %	$	283,483		35.6 %	$	267,721		36.6 %	$	20,643

Net effect of non-deductible expenses		97,303				(9,904	)			(165	)

Expected increase (decrease) in tax asset
		380,786				257,817				20,478
Effect of tax rate reduction		(8,397	)			(2,706	)			(2,879	)

Increase in allowance for uncertain realization		(372,389	)			(255,111	)			(17,599	)

Increase in tax asset per financial statements	$	-			$	-			$	-

The income tax effects of losses carried forward and of cumulative temporary differences that give rise to a future tax asset are summarized as follows:

		2005			2004		2003

Tax losses carried forward	$	475,972		$	267,180		52,110
Temporary differences - intangible assets		140,851			55,138		-
Temporary differences - property and equipment		2,964			40		120
Temporary differences - financing costs		59,943			(15,017	)	-

Tax asset before allowance for uncertain realization		679,730			307,341		52,230
Allowance for uncertain realization		(679,730	)		(307,341	)	(52,230	)

Tax asset per financial statements	$	-		$	-		-

13.	Related Party Transactions

	a)	During the 2005 year, the Company incurred consulting fees of $134,000 (2004: $133,001; 2003: $12,000) to companies controlled by directors of the Company.

	b)	During the 2005 year, the Company incurred premises rent of $25,265 (2004: $21,562; 2003: $18,412) to a tenant of a company controlled by a director of the Company.

	ALDA PHARMACEUTICALS CORP.	F-17.
	NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
	(EXPRESSED IN CANADIAN DOLLARS)
	FOR THE YEARS ENDED JUNE 30, 2005, 2004 AND 2003

13.	Related Party Transactions (continued)

	c)	During the 2005 year, the Company incurred consulting fees of $70,000 (2004: $75,000; 2003: $nil) to a major shareholder of ALDA, the vendor in the asset purchase agreement described in Note 9.

	d)	During the 2004 year, the Company incurred interest expense of $836 to a company controlled by a director in respect to a loan advanced by that company.

	These transactions were measured at the exchange amount, which is the amount of consideration established and agreed to by the related parties.

14.	Statements of Cash Flows - Supplementary Information

	a)	Cash paid in respect to interest and income taxes was as follows:

		2005		2004		2003

Income taxes paid	$	-	$	-	$	-

Interest paid	$	-	$	836	$	-

b)	Significant non-cash transactions occurring during the 2005 year were as follows:

	(i)	The Company issued warrants with an estimated fair value of $2,205, as described in Note 8(e).

	(ii)	The Company issued options to directors and employees to acquire 300,000 common shares of the Company, as described in Notes 8(d)(iv) and (v). The estimated fair value of the options, totaling $11,000, was charged to operations for the 2005 year.

	(iii)	A portion of the estimated fair value of the options granted to consultants described in Notes 8(d)(ii) and (iii), totaling $5,237, was charged to operations for the 2005 year.

c)	Significant non-cash transactions occurring during the 2004 year were as follows:

	(i)	The Company issued 3,711,263 common shares at an assigned amount of $262,457, and set off a loan receivable from ALDA in the amount of $57,747, in exchange for certain inventory and intangible assets, pursuant to the Asset Purchase Agreement described in Note 9. The Company also issued 75,000 common shares to the sponsor at a deemed value of $15,000.

	(ii)	The Company issued 200,000 units at a deemed value of $40,000 to the agent in connection with the public offering described in Note 8(b)(iv).

	(iii)	The Company issued warrants with an estimated fair value of $36,000, as described in Note 8(e).

	(iv)	The Company issued options to directors and consultants to acquire 752,353 common shares of the Company, as described in Notes 8(d)(i), (ii), and (iii). A portion of the estimated fair value of the options, totaling $23,701, was charged to operations for the 2004 year.

	ALDA PHARMACEUTICALS CORP.	F-18.
	NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
	(EXPRESSED IN CANADIAN DOLLARS)
	FOR THE YEARS ENDED JUNE 30, 2005, 2004 AND 2003

15.	Financial Instruments

	The Company's financial instruments consist of cash and equivalents, receivables, note receivable, and accounts payable and accrued liabilities. The fair value of these instruments approximates carrying amounts except where otherwise noted.

	It is management's opinion that the Company is not exposed to significant interest, currency, or credit risk arising from these financial instruments except where otherwise noted.

16.	Economic Dependence

	The revenue of the Company for the 2005 year from each of five customers exceeded 10% of total revenue. Revenue from the five customers totaled $175,958.

17.	Comparative Figures

	Certain of the comparative figures for the 2004 and 2003 years have been reclassified to conform to the presentation adopted for the 2005 year.

18.	United States Generally Accepted Accounting Principles

	These financial statements have been prepared in accordance with generally accepted accounting principles in Canada ("Canadian GAAP") which are substantially the same as principles applicable in the United States ("US GAAP") and practices prescribed by the United States Securities and Exchange Commission ("SEC"), except for the following:

	a)	Stock-based compensation:

		Under Canadian GAAP, the Company accounts for stock options issued to employees and directors by the settlement method and discloses, on a supplemental basis, the pro forma effect of accounting for stock options awarded to employees as if the fair value based method had been applied, using the Black-Scholes model, for stock options granted before July 1, 2003. For stock options granted on or after July 1, 2003, the fair value-based method is applied. The Company accounts for all stock-based payments to non-employees granted on or after July 1, 2001 using the fair value method.

		Under US GAAP, Statement of Financial Accounting Standards No. 123, "Accounting for Stock-Based Compensation," ("SFAS 123") encourages, but does not require, companies to record compensation cost for stock-based employee compensation plans at fair value. The Company has chosen to account for stock-based payments to employees before July 1, 2003 using Accounting Principles Board Opinion No. 25, "Accounting for Stock Issued to Employees." ("APB 25"). Under APB 25, compensation cost for stock options is measured as the excess, if any, of the quoted market price of the Company's stock at the date of the grant over the amount an employee is required to pay for the stock. There is no such excess amount for stock options granted to employees of the Company prior to July 1, 2003. SFAS 123 requires pro-forma disclosure of the fair value of stock-based employee compensation in the financial statements where fair value is not recorded. For stock options granted to employees and directors on or after July 1, 2003, the fair value-based method is applied.

	ALDA PHARMACEUTICALS CORP.	F-19.
	NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
	(EXPRESSED IN CANADIAN DOLLARS)
	FOR THE YEARS ENDED JUNE 30, 2005, 2004 AND 2003

18.	United States Generally Accepted Accounting Principles (continued)

	b)	Comprehensive income:

		Statement of Financial Accounting Standards No. 130 requires the reporting of comprehensive income in addition to net earnings. Comprehensive income includes net income plus other comprehensive income; specifically, all changes in equity of a company during the period arising from non-owner sources. The Company has not had any other comprehensive income during the 2005, 2004 and 2003 years.

	c)	Product development costs:

		Under Canadian GAAP, product development costs are charged as an expense in the period incurred except in circumstances where the market and technical feasibility of the product have been established, and recovery of development costs can reasonably be regarded as assured, in which case such costs are capitalized. US GAAP requires that these expenditures be expensed in the year incurred. The Company has not capitalized any product development costs during the 2005, 2004 and 2003 years.

	d)	Reconciliation of Canadian GAAP and US GAAP:

		For the years ended June 30, 2005, 2004, and 2003 there would be no differences in assets, liabilities and shareholders' equity, loss for the period or cash provided by (used in) operating, investing and financing activities under US GAAP, with the amounts reported in these financial statements.

	e)	Recent United States Accounting Pronouncements:

		Recent pronouncements issued by the Financial Accounting Standards Board ("FASB") are summarized below. None of these changes are expected to have a material impact on the financial statements of the Company.

		(i)	In April of 2003, the FASB issued Statement of Financial Accounting Standards No. 149 (Amendment of Statement 133 on Derivative Instruments and Hedging Activities) ("SFAS 149"). SFAS 149 amends SFAS 133, in requiring that contracts with comparable characteristics be accounted for similarly, and clarifies when a derivative contains a financing component requiring special reporting. SFAS 149 is effective for contracts entered into or modified after June 30, 2003 and for hedging relationships designated after June 30, 2003, and must be applied prospectively.

		(ii)	In May of 2003, the FASB issued Statement of Financial Accounting Standards No. 150 (Accounting For Certain Financial Instruments with Characteristics of both Liabilities and Equity) ("SFAS 150"). SFAS 150 establishes standards for how an issuer classifies and measures in its statement of financial position certain financial instruments with characteristics of both liabilities and equity. SFAS 150 is effective for financial instruments entered into or modified after May 31, 2003, and otherwise is effective at the beginning of the first interim period beginning after June 15, 2003, and must be applied prospectively.

	ALDA PHARMACEUTICALS CORP.	F-20.
	NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
	(EXPRESSED IN CANADIAN DOLLARS)
	FOR THE YEARS ENDED JUNE 30, 2005, 2004 AND 2003

18.	United States Generally Accepted Accounting Principles (continued)

	e)	Recent United States Accounting Pronouncements (continued):

		(iii)	In January of 2003, the FASB issued Interpretation No. 46 ("FIN 46"), (Consolidation of Variable Interest Entities). FIN 46 requires all companies with variable interests in entities created after January 31, 2003 to apply its provisions to those entities immediately. In December of 2003, the FASB issued a revised Interpretation "FIN 46R". Under the revised Interpretation, an entity deemed to be a business, based on certain specified criteria, need not be evaluated to determine if it is a Variable Interest Entity. The Company must apply these provisions to interests held in all variable interest entities commencing for the year ended June 30, 2004.

		(iv)	In November of 2004, the FASB issued Statement of Financial Accounting Standards No. 151 (Inventory Costs - An Amendment of ARB No. 43, Chapter 4) ("SFAS 151"). SFAS 151 amends the guidance in Accounting Research Bulletin ("ARB") No. 43, Chapter 4 (Inventory Pricing) to clarify the accounting for abnormal amounts of idle facility expense, excessive spoilage, double freight, and rehandling costs to be recognized as current-period charges regardless of whether they meet the criterion of "so abnormal" as stated in ARB No. 43.

			Additionally, SFAS 151 requires that allocation of fixed production overheads to the costs of conversions be based on normal capacity of the production facilities. SFAS 151 is effective for fiscal years beginning after June 15, 2005 and is required to be adopted by the Company in the year ended June 30, 2006.

		(v)	In December of 2004, the FASB issued Statement of Financial Accounting Standards No. 123 (revised 2004) (Share-Based Payments) ("SFAS 123R"). SFAS 123R is a revision of SFAS 123 (Accounting for Stock-Based Compensation), and supersedes Accounting Principles Board Opinion No. 25 (Accounting for Stock Issued to Employees). SFAS 123R requires that the fair value of employees awards of share-based payments which are issued, modified, repurchased or cancelled after the implementation date, is to be measured as of the date the award is issued, modified, repurchased or cancelled and the resulting cost recognized in the statement of earnings over the service period. Management of the Company has adopted the fair value based method for options granted on or after July 1, 2003.

		(vi)	In December of 2004, the FASB issued Statement of Financial Accounting Standards No. 153 (Exchanges of Nonmonetary Assets - An Amendment of APB Opinion No. 29, Accounting for Nonmonetary Transactions) ("SFAS 153"). SFAS 153 eliminates the exception from fair value measurement for nonmonetary exchange of similar productive assets in paragraph 21(b) of Accounting Principles Board ("APB") Opinion No. 29 and replaces it with an exception for exchanges that do not have commercial substance. SFAS 153 specifies that a nonmonetary exchange has commercial substance if the future cash flows of the entity are expected to change significantly as a result of the exchange. SFAS 153 is effective for fiscal periods beginning after June 15, 2005, and must be applied prospectively.

Incorporation number: 607937

ALDA PHARMACEUTICALS CORP.

(the “Company”)

Business Corporations Act (British Columbia)

ARTICLES

1.	Interpretation
2.	Shares and Share Certificates
3.	Issue of Shares
4.	Share Registers
5.	Share Transfers
6.	Transmission of Shares
7.	Purchase of Shares
8.	Borrowing Powers
9.	Alterations
10.	Meetings of Shareholders
11.	Proceedings at Meetings of Shareholders
12.	Votes of Shareholders
13.	Directors
14.	Election and Removal of Directors
15.	Alternate Directors
16.	Powers and Duties of Directors
17.	Disclosure of Interest of Directors
18.	Proceedings of Directors
19.	Executive and Other Committees
20.	Officers
21.	Indemnification
22.	Dividends and Reserves
23.	Documents, Records and Reports
24.	Notices
25.	Seal
26.	Prohibitions

Article 1
Interpretation

1.1 Definitions

In these Articles, unless the context otherwise requires:

(1)	“board of directors”, “directors” and “board” mean the directors or sole director of the Company for the time being;

(2)	“Business Corporations Act” means the Business Corporations Act (British Columbia) from time to time in force and all amendments thereto and includes all regulations and amendments thereto made pursuant to that Act;

(3)	“legal personal representative” means the personal or other legal representative of the shareholder;

(4)	“registered address” of a shareholder means the shareholder’s address as recorded in the central securities register;

(5)	“seal” means the seal of the Company, if any.

1.2 Business Corporations Act and Interpretation Act Definitions Applicable

The definitions in the Business Corporations Act and the definitions and rules of construction in the Interpretation Act, with the necessary changes, so far as applicable, and unless the context requires otherwise, apply to these Articles as if they were an enactment. If there is a conflict between a definition in the Business Corporations Act and a definition or rule in the Interpretation Act relating to a term used in these Articles, the definition in the Business Corporations Act will prevail in relation to the use of the term in these Articles. If there is a conflict between these Articles and the Business Corporations Act, the Business Corporations Act will prevail.

Article 2
Shares and Share Certificates

2.1 Authorized Share Structure

The authorized share structure of the Company consists of shares of the class or classes and series, if any, described in the Notice of Articles of the Company.

2.2 Form of Share Certificate

Each share certificate issued by the Company must comply with, and be signed as required by, the Business Corporations Act.

2.3 Shareholder Entitled to Certificate or Acknowledgment

Each shareholder is entitled, without charge, to (a) one share certificate representing the shares of each class or series of shares registered in the shareholder’s name or (b) a non-transferable written acknowledgment of the shareholder’s right to obtain such a share certificate, provided that in respect of a share held jointly by several persons, the Company is not bound to issue more than one share certificate and delivery of a share certificate for a share to one of several joint shareholders or to one of the shareholders’ duly authorized agents will be sufficient delivery to all.

2.4 Delivery by Mail

Any share certificate or non-transferable written acknowledgment of a shareholder’s right to obtain a share certificate may be sent to the shareholder by mail at the shareholder’s registered address and neither the Company nor any director, officer or agent of the Company is liable for any loss to the shareholder because the share certificate or acknowledgement is lost in the mail or stolen.

2.5 Replacement of Worn Out or Defaced Certificate or Acknowledgement

If the directors are satisfied that a share certificate or a non-transferable written acknowledgment of the shareholder’s right to obtain a share certificate is worn out or defaced, they must, on production to them of the share certificate or acknowledgment, as the case may be, and on such other terms, if any, as they think fit:

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(1)	order the share certificate or acknowledgment, as the case may be, to be cancelled; and

(2)	issue a replacement share certificate or acknowledgment, as the case may be.

2.6 Replacement of Lost, Stolen or Destroyed Certificate or Acknowledgment

If a share certificate or a non-transferable written acknowledgment of a shareholder’s right to obtain a share certificate is lost, stolen or destroyed, a replacement share certificate or acknowledgment, as the case may be, must be issued to the person entitled to that share certificate or acknowledgment, as the case may be, if the directors receive:

(1)	proof satisfactory to them that the share certificate or acknowledgment is lost, stolen or destroyed; and

(2)	any indemnity the directors consider adequate.

2.7 Splitting Share Certificates

If a shareholder surrenders a share certificate to the Company with a written request that the Company issue in the shareholder’s name two or more share certificates, each representing a specified number of shares and in the aggregate representing the same number of shares as the share certificate so surrendered, the Company must cancel the surrendered share certificate and issue replacement share certificates in accordance with that request.

2.8 Certificate Fee

There must be paid to the Company, in relation to the issue of any share certificate under Articles 2.5, 2.6 or 2.7, the amount, if any and which must not exceed the amount prescribed under the Business Corporations Act, determined by the directors.

2.9 Recognition of Trusts

Except as required by law or statute or these Articles, no person will be recognized by the Company as holding any share upon any trust, and the Company is not bound by or compelled in any way to recognize (even when having notice thereof) any equitable, contingent, future or partial interest in any share or fraction of a share or (except as by law or statute or these Articles provided or as ordered by a court of competent jurisdiction) any other rights in respect of any share except an absolute right to the entirety thereof in the shareholder.

Article 3
Issue of Shares

3.1 Directors Authorized

Subject to the Business Corporations Act and the rights of the holders of issued shares of the Company, the Company may issue, allot, sell or otherwise dispose of the unissued shares, and issued shares held by the Company, at the times, to the persons, including directors, in the manner, on the terms and conditions and for the issue prices (including any premium at which shares with par value may be issued) that the directors may determine. The issue price for a share with par value must be equal to or greater than the par value of the share.

3.2 Commissions and Discounts

The Company may at any time pay a reasonable commission or allow a reasonable discount to any person in consideration of that person purchasing or agreeing to purchase shares of the Company from the Company or any other person or procuring or agreeing to procure purchasers for shares of the Company.

3.3 Brokerage

The Company may pay such brokerage fee or other consideration as may be lawful for or in connection with the sale or placement of its securities.

3.4 Conditions of Issue

Except as provided for by the Business Corporations Act, no share may be issued until it is fully paid. A share is fully paid when:

(1)	consideration is provided to the Company for the issue of the share by one or more of the following:

	(a)	past services performed for the Company;

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	(b)	property;

	(c)	money; and

(2)	the value of the consideration received by the Company equals or exceeds the issue price set for the share under Article 3.1.

3.5 Share Purchase Warrants and Rights

Subject to the Business Corporations Act, the Company may issue share purchase warrants, options and rights upon such terms and conditions as the directors determine, which share purchase warrants, options and rights may be issued alone or in conjunction with debentures, debenture stock, bonds, shares or any other securities issued or created by the Company from time to time.

Article 4
Share Registers

4.1 Central Securities Register

As required by and subject to the Business Corporations Act, the Company must maintain in British Columbia a central securities register. The directors may, subject to the Business Corporations Act, appoint an agent to maintain the central securities register. The directors may also appoint one or more agents, including the agent which keeps the central securities register, as transfer agent for its shares or any class or series of its shares, as the case may be, and the same or another agent as registrar for its shares or such class or series of its shares, as the case may be. The directors may terminate such appointment of any agent at any time and may appoint another agent in its place.

4.2 Closing Register

The Company must not at any time close its central securities register.

Article 5
Share Transfers

5.1 Registering Transfers

A transfer of a share of the Company must not be registered unless:

(1)	a duly signed instrument of transfer in respect of the share has been received by the Company;

(2)	if a share certificate has been issued by the Company in respect of the share to be transferred, that share certificate has been surrendered to the Company; and

(3)	if a non-transferable written acknowledgment of the shareholder’s right to obtain a share certificate has been issued by the Company in respect of the share to be transferred, that acknowledgment has been surrendered to the Company.

5.2 Form of Instrument of Transfer

The instrument of transfer in respect of any share of the Company must be either in the form, if any, on the back of the Company’s share certificates or in any other form that may be approved by the directors from time to time.

5.3 Transferor Remains Shareholder

Except to the extent that the Business Corporations Act otherwise provides, the transferor of shares is deemed to remain the holder of the shares until the name of the transferee is entered in a securities register of the Company in respect of the transfer.

5.4 Signing of Instrument of Transfer

If a shareholder, or his or her duly authorized attorney, signs an instrument of transfer in respect of shares registered in the name of the shareholder, the signed instrument of transfer constitutes a complete and sufficient authority to the Company and its directors, officers and agents to register the number of shares specified in the instrument of transfer or specified in any other manner, or, if no number is specified, all the shares represented by the share certificates or set out in the written acknowledgments deposited with the instrument of transfer:

(1)	in the name of the person named as transferee in that instrument of transfer; or

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(2)	if no person is named as transferee in that instrument of transfer, in the name of the person on whose behalf the instrument is deposited for the purpose of having the transfer registered.

5.5 Enquiry as to Title Not Required

Neither the Company nor any director, officer or agent of the Company is bound to inquire into the title of the person named in the instrument of transfer as transferee or, if no person is named as transferee in the instrument of transfer, of the person on whose behalf the instrument is deposited for the purpose of having the transfer registered or is liable for any claim related to registering the transfer by the shareholder or by any intermediate owner or holder of the shares, of any interest in the shares, of any share certificate representing such shares or of any written acknowledgment of a right to obtain a share certificate for such shares.

5.6 Transfer Fee

There must be paid to the Company, in relation to the registration of any transfer, the amount, if any, determined by the directors.

Article 6
Transmission of Shares

6.1 Legal Personal Representative Recognized on Death

In case of the death of a shareholder, the legal personal representative, or if the shareholder was a joint holder, the surviving joint holder, will be the only person recognized by the Company as having any title to the shareholder’s interest in the shares. Before recognizing a person as a legal personal representative, the directors may require proof of appointment by a court of competent jurisdiction, a grant of letters probate, letters of administration or such other evidence or documents as the directors consider appropriate.

6.2 Rights of Legal Personal Representative

The legal personal representative has the same rights, privileges and obligations that attach to the shares held by the shareholder, including the right to transfer the shares in accordance with these Articles, provided the documents required by the Business Corporations Act and the directors have been deposited with the Company.

Article 7
Purchase of Shares

7.1 Company Authorized to Purchase Shares

Subject to Article 7.2, the special rights and restrictions attached to the shares of any class or series and the Business Corporations Act, the Company may, if authorized by the directors, purchase or otherwise acquire any of its shares at the price and upon the terms specified in such resolution.

7.2 Purchase When Insolvent

The Company must not make a payment or provide any other consideration to purchase or otherwise acquire any of its shares if there are reasonable grounds for believing that:

(1)	the Company is insolvent; or

(2)	making the payment or providing the consideration would render the Company insolvent.

7.3 Sale and Voting of Purchased Shares

If the Company retains a share redeemed, purchased or otherwise acquired by it, the Company may sell, gift or otherwise dispose of the share, but, while such share is held by the Company, it:

Article 8
Borrowing Powers

8.1 Borrowing Powers

(1)	is not entitled to vote the share at a meeting of its shareholders; must

(2)	not pay a dividend in respect of the share; and must not make any

(3)	other distribution in respect of the share.

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The Company, if authorized by the directors, may:

(1)	borrow money in the manner and amount, on the security, from the sources and on the terms and conditions that they consider appropriate;

(2)	issue bonds, debentures and other debt obligations either outright or as security for any liability or obligation of the Company or any other person and at such discounts or premiums and on such other terms as they consider appropriate;

(3)	guarantee the repayment of money by any other person or the performance of any obligation of any other person; and

(4)	mortgage, charge, whether by way of specific or floating charge, grant a security interest in, or give other security on, the whole or any part of the present and future assets and undertaking of the Company.

Article 9
Alterations

9.1 Alteration of Authorized Share Structure

Subject to Article 9.3 and the Business Corporations Act, the Company may by special resolution:

(1)	create one or more classes or series of shares;

(2)	increase, reduce or eliminate the maximum number of shares that the Company is authorized to issue out of any class or series of shares or establish a maximum number of shares that the Company is authorized to issue out of any class or series of shares for which no maximum is established;

(3)	subdivide or consolidate all or any of its unissued, or fully paid issued, shares;

(4)	if the Company is authorized to issue shares of a class of shares with par value:

	(a)	decrease the par value of those shares; or

	(b)	if none of the shares of that class of shares are allotted or issued, increase the par value of those shares;

	any of its unissued shares without par value into shares with par value;

(5)	change

(6)	alter the identifying name of any of its shares; or

(7)	otherwise alter its shares or authorized share structure when required or permitted to do so by the Business Corporations Act.

9.2 Cancellation of Class or Series of Shares

Subject to the Business Corporations Act, the Company may by resolution of the directors eliminate a class or series of shares if none of the shares of the class or series of shares are allotted or issued.

9.3 Special Rights and Restrictions

Subject to the Business Corporations Act, the Company may by special resolution:

(1)	create special rights or restrictions for, and attach those special rights or restrictions to, the shares of any class or series of shares, whether or not any or all of those shares have been issued; or

(2)	vary or delete any special rights or restrictions attached to the shares of any class or series of shares, whether or not any or all of those shares have been issued.

9.4 Change of Name

The Company may by directors resolution authorize an alteration of its Notice of Articles in order to change its name or adopt or change any translation of that name.

9.5 Other Alterations

If the Business Corporations Act does not specify the type of resolution and these Articles do not specify another type of resolution, the Company may by special resolution alter these Articles.

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Article 10
Meetings of Shareholders

10.1 Annual General Meetings

Unless an annual general meeting is deferred or waived in accordance with the Business Corporations Act, the Company must hold its first annual general meeting within 18 months after the date on which it was incorporated or otherwise recognized, and after that must hold an annual general meeting at least once in each calendar year and not more than 15 months after the last annual reference date at such time and place as may be determined by the directors.

10.2 Resolution Instead of Annual General Meeting

If all the shareholders who are entitled to vote at an annual general meeting consent by a unanimous resolution under the Business Corporations Act to all of the business that is required to be transacted at that annual general meeting, the annual general meeting is deemed to have been held on the date of the unanimous resolution. The shareholders must, in any unanimous resolution passed under this Article 10.2, select as the Company’s annual reference date a date that would be appropriate for the holding of the applicable annual general meeting.

10.3 Calling of Meetings of Shareholders

The directors may, whenever they think fit, call a meeting of shareholders.

10.4 Location of Shareholder Meetings

The directors may, by directors’ resolution, approve a location outside of British Columbia for the holding of a meeting of shareholders.

10.5 Notice for Meetings of Shareholders

The Company must send notice of the date, time and location of any meeting of shareholders, in the manner provided in these Articles, or in such other manner, if any, as may be prescribed by ordinary resolution (whether previous notice of the resolution has been given or not), to each shareholder entitled to attend the meeting, to each director and to the auditor of the Company, unless these Articles otherwise provide, at least the following number of days before the meeting:

(1)	if and for so long as the Company is a public company, 21 days;

(2)	otherwise, 10 days.

10.6 Record Date for Notice

The directors may set a date as the record date for the purpose of determining shareholders entitled to notice of any meeting of shareholders. The record date must not precede the date on which the meeting is to be held by more than two months or, in the case of a general meeting requisitioned by shareholders under the Business Corporations Act, by more than four months. The record date must not precede the date on which the meeting is held by fewer than:

(1)	if and for so long as the Company is a public company, 21 days;

(2)	otherwise, 10 days.

If no record date is set, the record date is 5 p.m. on the day immediately preceding the first date on which the notice is sent or, if no notice is sent, the beginning of the meeting.

10.7 Record Date for Voting

The directors may set a date as the record date for the purpose of determining shareholders entitled to vote at any meeting of shareholders. The record date must not precede the date on which the meeting is to be held by more than two months or, in the case of a general meeting requisitioned by shareholders under the Business Corporations Act, by more than four months. If no record date is set, the record date is 5 p.m. on the day immediately preceding the first date on which the notice is sent or, if no notice is sent, the beginning of the meeting.

10.8 Failure to Give Notice and Waiver of Notice

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The accidental omission to send notice of any meeting to, or the non-receipt of any notice by, any of the persons entitled to notice does not invalidate any proceedings at that meeting. Any person entitled to notice of a meeting of shareholders may, in writing or otherwise, waive or reduce the period of notice of such meeting.

10.9 Notice of Special Business at Meetings of Shareholders

If a meeting of shareholders is to consider special business within the meaning of Article 1 1.1, the notice of meeting must:

(1)	state the general nature of the special business; and

(2)	if the special business includes considering, approving, ratifying, adopting or authorizing any document or the signing of or giving of effect to any document, have attached to it a copy of the document or state that a copy of the document will be available for inspection by shareholders:

	(a)	at the Company’s records office, or at such other reasonably accessible location in British Columbia as is specified in the notice; and

	(b)	during statutory business hours on any one or more specified days before the day set for the holding of the meeting.

Article 11
P roceedings at Meetings of Shareholders

11.1 Special Business

At a meeting of shareholders, the following business is special business:

(1)	at a meeting of shareholders that is not an annual general meeting, all business is business relating to the conduct of or voting at the meeting;

(2)	at an annual general meeting, all business is special business except for the following:

	(a)	business relating to the conduct of or voting at the meeting;

	(b)	consideration of any financial statements of the Company presented to the meeting;

	(c)	consideration of any reports of the directors or auditor;

	(d)	the setting or changing of the number of directors;

	(e)	the election or appointment of directors;

	(f)	the appointment of an auditor;

	(g)	the setting of the remuneration of an auditor;

	(h)	business arising out of a report of the directors not requiring the passing of a special resolution or an exceptional resolution;

	(i)	any other business which, under these Articles or the Business Corporations Act, may be transacted at a meeting of shareholders without prior notice of the business being given to the shareholders.

11.2 Special Majority

The majority of votes required for the Company to pass a special resolution at a meeting of shareholders is three quarters of the votes cast on the resolution.

11.3 Quorum

Subject to the special rights and restrictions attached to the shares of any class or series of shares, the quorum for the transaction of business at a meeting of shareholders is two persons who are, or who represent by proxy, shareholders who, in the aggregate, hold at least 5% of the issued shares entitled to be voted at the meeting.

11.4 Meetings by Telephone or Other Communications Medium

A shareholder or proxy holder who is entitled to participate in, including vote at, a meeting of shareholders may participate in person or by telephone or other communications medium if all shareholders and proxy holders participating in the meeting, whether in person or by telephone or other communications medium, are able to

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communicate with each other. A shareholder who participates in a meeting in a manner contemplated by this Article 11.4 is deemed for all purposes of the Business Corporations Act and these Articles to be present at the meeting and to have agreed to participate in that manner. Nothing in this Article 11.4 obligates a company to take any action or provide any facility to permit or facilitate the use of any communications medium at a meeting of shareholders.

11.5 One Shareholder May Constitute Quorum

If there is only one shareholder entitled to vote at a meeting of shareholders:

(1)	the quorum is one person who is, or who represents by proxy, that shareholder, and

(2)	that shareholder, present in person or by proxy, may constitute the meeting.

11.6 Other Persons May Attend

The directors, the president (if any), the secretary (if any), the assistant secretary (if any), any lawyer for the Company, the auditor of the Company and any other persons invited by the directors are entitled to attend any meeting of shareholders, but if any of those persons does attend a meeting of shareholders, that person is not to be counted in the quorum and is not entitled to vote at the meeting unless that person is a shareholder or proxy holder entitled to vote at the meeting.

11.7 Requirement of Quorum

No business, other than the election of a chair of the meeting and the adjournment of the meeting, may be transacted at any meeting of shareholders unless a quorum of shareholders entitled to vote is present at the commencement of the meeting, but such quorum need not be present throughout the meeting.

11.8 Lack of Quorum

If, within one-half hour from the time set for the holding of a meeting of shareholders, a quorum is not present:

(1)	in the case of a general meeting requisitioned by shareholders, the meeting is dissolved, and

(2)	in the case of any other meeting of shareholders, the meeting stands adjourned to the same day in the next week at the same time and place.

11.9 Lack of Quorum at Succeeding Meeting

If, at the meeting to which the meeting referred to in Article 11.8(2) was adjourned, a quorum is not present within one-half hour from the time set for the holding of the meeting, the person or persons present and being, or representing by proxy, one or more shareholders entitled to attend and vote at the meeting constitute a quorum.

11.10 Chair

The following individual is entitled to preside as chair at a meeting of shareholders:

(1)	the chair of the board, if any; or

(2)	if the chair of the board is absent or unwilling to act as chair of the meeting, the president, if any.

11.11 Selection of Alternate Chair

If, at any meeting of shareholders, there is no chair of the board or president present within 15 minutes after the time set for holding the meeting, or if the chair of the board and the president are unwilling to act as chair of the meeting, or if the chair of the board and the president have advised the secretary, if any, or any director present at the meeting, that they will not be present at the meeting, the directors present must choose one of their number to be chair of the meeting or if all of the directors present decline to take the chair or fail to so choose or if no director is present, the shareholders entitled to vote at the meeting who are present in person or by proxy may choose any person present at the meeting to chair the meeting.

11.12 Adjournments

The chair of a meeting of shareholders may, and if so directed by the meeting must, adjourn the meeting from time to time and from place to place, but no business may be transacted at any adjourned meeting other than the business left unfinished at the meeting from which the adjournment took place.

11.13 Notice of Adjourned Meeting

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It is not necessary to give any notice of an adjourned meeting or of the business to be transacted at an adjourned meeting of shareholders except that, when a meeting is adjourned for 30 days or more, notice of the adjourned meeting must be given as in the case of the original meeting.

11.14 Decisions by Show of Hands or Poll

Subject to the Business Corporations Act, every motion put to a vote at a meeting of shareholders will be decided on a show of hands unless a poll, before or on the declaration of the result of the vote by show of hands, is directed by the chair or demanded by at least one shareholder entitled to vote who is present in person or by proxy.

11.15 Declaration of Result

The chair of a meeting of shareholders must declare to the meeting the decision on every question in accordance with the result of the show of hands or the poll, as the case may be, and that decision must be entered in the minutes of the meeting. A declaration of the chair that a resolution is carried by the necessary majority or is defeated is, unless a poll is directed by the chair or demanded under Article 11.13, conclusive evidence without proof of the number or proportion of the votes recorded in favour of or against the resolution.

11.16 Motion Need Not be Seconded

No motion proposed at a meeting of shareholders need be seconded unless the chair of the meeting rules otherwise, and the chair of any meeting of shareholders is entitled to propose or second a motion.

11.17 Casting Vote

In case of an equality of votes, the chair of a meeting of shareholders does not, either on a show of hands or on a poll, have a second or casting vote in addition to the vote or votes to which the chair may be entitled as a shareholder.

11.18 Manner of Taking Poll

Subject to Article 11.18, if a poll is duly demanded at a meeting of shareholders:

(1)	the poll must be taken:

	(a)	at the meeting, or within seven days after the date of the meeting, as the chair of the meeting directs; and

	(b)	in the manner, at the time and at the place that the chair of the meeting directs;

(2)	the result of the poll is deemed to be the decision of the meeting at which the poll is demanded; and

(3)	the demand for the poll may be withdrawn by the person who demanded it.

11.19 Demand for Poll on Adjournment

A poll demanded at a meeting of shareholders on a question of adjournment must be taken immediately at the meeting.

11.20 Chair Must Resolve Dispute

In the case of any dispute as to the admission or rejection of a vote given on a poll, the chair of the meeting must determine the dispute, and his or her determination made in good faith is final and conclusive.

11.21 Casting of Votes

On a poll, a shareholder entitled to more than one vote need not cast all the votes in the same way.

11.22 Demand for Poll

No poll may be demanded in respect of the vote by which a chair of a meeting of shareholders is elected.

11.23 Demand for Poll Not to Prevent Continuance of Meeting

The demand for a poll at a meeting of shareholders does not, unless the chair of the meeting so rules, prevent the continuation of a meeting for the transaction of any business other than the question on which a poll has been demanded.

11.24 Retention of Ballots and Proxies

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The Company must, for at least three months after a meeting of shareholders, keep each ballot cast on a poll and each proxy voted at the meeting, and, during that period, make them available for inspection during normal business hours by any shareholder or proxyholder entitled to vote at the meeting. At the end of such three month period, the Company may destroy such ballots and proxies.

Article 12
Votes of Shareholders

12.1 Number of Votes by Shareholder or by Shares

Subject to any special rights or restrictions attached to any shares and to the restrictions imposed on joint shareholders under Article 12.3:

(1)	on a vote by show of hands, every person present who is a shareholder or proxy holder and entitled to vote on the matter has one vote; and

(2)	on a poll, every shareholder entitled to vote on the matter has one vote in respect of each share entitled to be voted on the matter and held by that shareholder and may exercise that vote either in person or by proxy.

12.2 Votes of Persons in Representative Capacity

A person who is not a shareholder may vote at a meeting of shareholders, whether on a show of hands or on a poll, and may appoint a proxy holder to act at the meeting, if, before doing so, the person satisfies the chair of the meeting, or the directors, that the person is a legal personal representative or a trustee in bankruptcy for a shareholder who is entitled to vote at the meeting.

12.3 Votes by Joint Holders

If there are joint shareholders registered in respect of any share:

(1)	any one of the joint shareholders may vote at any meeting, either personally or by proxy, in respect of the share as if that joint shareholder were solely entitled to it; or

(2)	if more than one of the joint shareholders is present at any meeting, personally or by proxy, and more than one of them votes in respect of that share, then only the vote of the joint shareholder present whose name stands first on the central securities register in respect of the share will be counted.

12.4 Legal Personal Representatives as Joint Shareholders

Two or more legal personal representatives of a shareholder in whose sole name any share is registered are, for the purposes of Article 12.3, deemed to be joint shareholders.

12.5 Representative of a Corporate Shareholder

If a corporation, that is not a subsidiary of the Company, is a shareholder, that corporation may appoint a person to act as its representative at any meeting of shareholders of the Company, and:

(1)	for that purpose, the instrument appointing a representative must:

	(a)	be received at the registered office of the Company or at any other place specified, in the notice calling the meeting, for the receipt of proxies, at least the number of business days specified in the notice for the receipt of proxies, or if no number of days is specified, two business days before the day set for the holding of the meeting; or

	(b)	be provided, at the meeting, to the chair of the meeting or to a person designated by the chair of the meeting;

(2)	if a representative is appointed under this Article 12.5:

	(a)	the representative is entitled to exercise in respect of and at that meeting the same rights on behalf of the corporation that the representative represents as that corporation could exercise if it were a shareholder who is an individual, including, without limitation, the right to appoint a proxy holder; and

	(b)	the representative, if present at the meeting, is to be counted for the purpose of forming a quorum and is deemed to be a shareholder present in person at the meeting.

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Evidence of the appointment of any such representative may be sent to the Company by written instrument, fax or any other method of transmitting legibly recorded messages.

12.6 Proxy Provisions Do Not Apply to All Companies

If and for so long as the Company is a public company or a pre-existing reporting company which has the Statutory Reporting Company Provisions as part of its Articles or to which the Statutory Reporting Company Provisions apply, Articles 12.7 to 12.15 apply only insofar as they are not inconsistent with any securities legislation in any province or territory of Canada or in the federal jurisdiction of the United States or in any states of the United States that is applicable to the Company and insofar as they are not inconsistent with the regulations and rules made and promulgated under that legislation and all administrative policy statements, blanket orders and rulings, notices and other administrative directions issued by securities commissions or similar authorities appointed under that legislation.

12.7 Appointment of Proxy Holders

Every shareholder of the Company, including a corporation that is a shareholder but not a subsidiary of the Company, entitled to vote at a meeting of shareholders of the Company may, by proxy, appoint one or more (but not more than five) proxy holders to attend and act at the meeting in the manner, to the extent and with the powers conferred by the proxy.

12.8 Alternate Proxy Holders

A shareholder may appoint one or more alternate proxy holders to act in the place of an absent proxy holder.

12.9 When Proxy Holder Need Not Be Shareholder

A person must not be appointed as a proxy holder unless the person is a shareholder, although a person who is not a shareholder may be appointed as a proxy holder if:

(1)	the person appointing the proxy holder is a corporation or a representative of a corporation appointed under Article 12.5;

(2)	the Company has at the time of the meeting for which the proxy holder is to be appointed only one shareholder entitled to vote at the meeting; or

(3)	the shareholders present in person or by proxy at and entitled to vote at the meeting for which the proxy holder is to be appointed, by a resolution on which the proxy holder is not entitled to vote but in respect of which the proxy holder is to be counted in the quorum, permit the proxy holder to attend and vote at the meeting.

12.10 Deposit of Proxy

A proxy for a meeting of shareholders must:

(1)	be received at the registered office of the Company or at any other place specified, in the notice calling the meeting, for the receipt of proxies, at least the number of business days specified in the notice, or if no number of days is specified, two business days before the day set for the holding of the meeting; or

(2)	unless the notice provides otherwise, be provided, at the meeting, to the chair of the meeting or to a person designated by the chair of the meeting.

A proxy may be sent to the Company by written instrument, fax or any other method of transmitting legibly recorded messages.

12.11 Validity of Proxy Vote

A vote given in accordance with the terms of a proxy is valid notwithstanding the death or incapacity of the shareholder giving the proxy and despite the revocation of the proxy or the revocation of the authority under which the proxy is given, unless notice in writing of that death, incapacity or revocation is received:

(1)	at the registered office of the Company, at any time up to and including the last business day before the day set for the holding of the meeting at which the proxy is to be used; or

(2)	by the chair of the meeting, before the vote is taken.

12.12 Form of Proxy

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A proxy, whether for a specified meeting or otherwise, must be either in the following form or in any other form approved by the directors or the chair of the meeting:

[name of company]
(the “Company”)

The undersigned, being a shareholder of the Company, hereby appoints [name] or, failing that person, [name], as proxy holder for the undersigned to attend, act and vote for and on behalf of the undersigned at the meeting of shareholders of the Company to be held on [month, day, year] and at any adjournment of that meeting.

Number of shares in respect of which this proxy is given (if no number is specified, then this proxy if given in respect of all shares registered in the name of the shareholder):

Signed [month, day, year]

[Signature of shareholder]

[Name of shareholder—printed]

12.13 Revocation of Proxy

Subject to Article 12.14, every proxy may be revoked by an instrument in writing that is:

(1)	received at the registered office of the Company at any time up to and including the last business day before the day set for the holding of the meeting at which the proxy is to be used; or

(2)	provided, at the meeting, to the chair of the meeting.

12.14 Revocation of Proxy Must Be Signed

An instrument referred to in Article 12.13 must be signed as follows:

(1)	if the shareholder for whom the proxy holder is appointed is an individual, the instrument must be signed by the shareholder or his or her legal personal representative or trustee in bankruptcy;

(2)	if the shareholder for whom the proxy holder is appointed is a corporation, the instrument must be signed by the corporation or by a representative appointed for the corporation under Article 12.5.

12.15 Production of Evidence of Authority to Vote

The chair of any meeting of shareholders may, but need not, inquire into the authority of any person to vote at the meeting and may, but need not, demand from that person production of evidence as to the existence of the authority to vote.

Article 13
Directors

13.1 First Directors; Number of Directors

The first directors are the persons designated as directors of the Company in the Notice of Articles that applies to the Company when it is recognized under the Business Corporations Act. The number of directors, excluding additional directors appointed under Article 14.8, is set at:

(1)	subject to paragraphs (2) and (3), the number of directors that is equal to the number of the Company’s first directors;

(2)	if the Company is a public company, the greater of three and the most recently set of:


	(a)	the number of directors set by ordinary resolution (whether or not previous notice of the resolution was given); and

	(b)	the number of directors set under Article 14.4;

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(3)	if the Company is not a public company, the most recently set of:

	(a)	the number of directors set by ordinary resolution (whether or not previous notice of the resolution was given); and


	(b)	the number of directors set under Article 14.4.

13.2 Change in Number of Directors

If the number of directors is set under Articles 13.1(2)(a) or 13.1(3)(a):

(1)	the shareholders may elect or appoint the directors needed to fill any vacancies in the board of directors up to that number;

(2)	if the shareholders do not elect or appoint the directors needed to fill any vacancies in the board of directors up to that number contemporaneously with the setting of that number, then the directors may appoint, or the shareholders may elect or appoint, directors to fill those vacancies.

13.3 Directors’ Acts Valid Despite Vacancy

An act or proceeding of the directors is not invalid merely because fewer than the number of directors set or otherwise required under these Articles is in office.

13.4 Qualifications of Directors

A director is not required to hold a share in the capital of the Company as qualification for his or her office but must be qualified as required by the Business Corporations Act to become, act or continue to act as a director.

13.5 Remuneration of Directors

The directors are entitled to the remuneration for acting as directors, if any, as the directors may from time to time determine. If the directors so decide, the remuneration of the directors, if any, will be determined by the shareholders. That remuneration may be in addition to any salary or other remuneration paid to any officer or employee of the Company as such, who is also a director.

13.6 Reimbursement of Expenses of Directors

The Company must reimburse each director for the reasonable expenses that he or she may incur in and about the business of the Company.

13.7 Special Remuneration for Directors

If any director performs any professional or other services for the Company that in the opinion of the directors are outside the ordinary duties of a director, or if any director is otherwise specially occupied in or about the Company’s business, he or she may be paid remuneration fixed by the directors, or, at the option of that director, fixed by ordinary resolution, and such remuneration may be either in addition to, or in substitution for, any other remuneration that he or she may be entitled to receive.

13.8 Gratuity, Pension or Allowance on Retirement of Director

Unless otherwise determined by ordinary resolution, the directors on behalf of the Company may pay a gratuity or pension or allowance on retirement to any director who has held any salaried office or place of profit with the Company or to his or her spouse or dependants and may make contributions to any fund and pay premiums for the purchase or provision of any such gratuity, pension or allowance.

Article 14
Election and Removal of Directors

14.1 Election at Annual General Meeting

At every annual general meeting and in every unanimous resolution contemplated by Article 10.2:

(1)	the shareholders entitled to vote at the annual general meeting for the election of directors must elect, or in the unanimous resolution appoint, a board of directors consisting of the number of directors for the time being set under these Articles; and

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(2)	all the directors cease to hold office immediately before the election or appointment of directors under paragraph (1), but are eligible for re-election or re-appointment.

14.2 Consent to be a Director

No election, appointment or designation of an individual as a director is valid unless:

(1)	that individual consents to be a director in the manner provided for in the Business Corporations Act;

(2)	that individual is elected or appointed at a meeting at which the individual is present and the individual does not refuse, at the meeting, to be a director; or

(3)	with respect to first directors, the designation is otherwise valid under the Business Corporations Act.

14.3 Failure to Elect or Appoint Directors If:

(1)	the Company fails to hold an annual general meeting, and all the shareholders who are entitled to vote at an annual general meeting fail to pass the unanimous resolution contemplated by Article 10.2, on or before the date by which the annual general meeting is required to be held under the Business Corporations Act; or



(2)	the shareholders fail, at the annual general meeting or in the unanimous resolution contemplated by Article 10.2, to elect or appoint any directors;
(2)

	then each director then in office continues to hold office until the earlier of:

(3)	the date on which his or her successor is elected or appointed; and

(4)	the date on which he or she otherwise ceases to hold office under the Business Corporations Act or these Articles.

14.4 Places of Retiring Directors Not Filled

If, at any meeting of shareholders at which there should be an election of directors, the places of any of the retiring directors are not filled by that election, those retiring directors who are not re-elected and who are asked by the newly elected directors to continue in office will, if willing to do so, continue in office to complete the number of directors for the time being set pursuant to these Articles until further new directors are elected at a meeting of shareholders convened for that purpose. If any such election or continuance of directors does not result in the election or continuance of the number of directors for the time being set pursuant to these Articles, the number of directors of the Company is deemed to be set at the number of directors actually elected or continued in office.

14.5 Directors May Fill Casual Vacancies

Any casual vacancy occurring in the board of directors may be filled by the directors.

14.6 Remaining Directors Power to Act

The directors may act notwithstanding any vacancy in the board of directors, but if the Company has fewer directors in office than the number set pursuant to these Articles as the quorum of directors, the directors may only act for the purpose of appointing directors up to that number or of summoning a meeting of shareholders for the purpose of filling any vacancies on the board of directors or, subject to the Business Corporations Act, for any other purpose.

14.7 Shareholders May Fill Vacancies

If the Company has no directors or fewer directors in office than the number set pursuant to these Articles as the quorum of directors, the shareholders may elect or appoint directors to fill any vacancies on the board of directors.

14.8 Additional Directors

Notwithstanding Articles 13.1 and 13.2, between annual general meetings or unanimous resolutions contemplated by Article 10.2, the directors may appoint one or more additional directors, but the number of additional directors appointed under this Article 14.8 must not at any time exceed:

(1)	one-third of the number of first directors, if, at the time of the appointments, one or more of the first directors have not yet completed their first term of office; or

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(2)	in any other case, one-third of the number of the current directors who were elected or appointed as directors other than under this Article 14.8.

Any director so appointed ceases to hold office immediately before the next election or appointment of directors under Article 14.1(1), but is eligible for re-election or re-appointment.

14.9 Ceasing to be a Director

A director ceases to be a director when:

(1)	the term of office of the director expires;

(2)	the director dies;

(3)	the director resigns as a director by notice in writing provided to the Company or a lawyer for the Company; or the

(4)	director is removed from office pursuant to Articles 14.10 or 14.11.

14.10 Removal of Director by Shareholders

The Company may remove any director before the expiration of his or her term of office by special resolution. In that event, the shareholders may elect, or appoint by special resolution, a director to fill the resulting vacancy. If the shareholders do not elect or appoint a director to fill the resulting vacancy contemporaneously with the removal, then the directors may appoint or the shareholders may elect, or appoint by ordinary resolution, a director to fill that vacancy.

14.11 Removal of Director by Directors

The directors may remove any director before the expiration of his or her term of office if the director is convicted of an indictable offence, or if the director ceases to be qualified to act as a director of a company and does not promptly resign, and the directors may appoint a director to fill the resulting vacancy.

Article 15
Alternate Directors

15.1 Appointment of Alternate Director

Any director (an “appointor”) may by notice in writing received by the Company appoint any person (an “appointee”) who is qualified to act as a director to be his or her alternate to act in his or her place at meetings of the directors or committees of the directors at which the appointor is not present unless (in the case of an appointee who is not a director) the directors have reasonably disapproved the appointment of such person as an alternate director and have given notice to that effect to his or her appointor within a reasonable time after the notice of appointment is received by the Company.

15.2 Notice of Meetings

Every alternate director so appointed is entitled to notice of meetings of the directors and of committees of the directors of which his or her appointor is a member and to attend and vote as a director at any such meetings at which his or her appointor is not present.

15.3 Alternate for More Than One Director Attending Meetings

A person may be appointed as an alternate director by more than one director, and an alternate director:

(1)	will be counted in determining the quorum for a meeting of directors once for each of his or her appointors and, in the case of an appointee who is also a director, once more in that capacity;

(2)	has a separate vote at a meeting of directors for each of his or her appointors and, in the case of an appointee who is also a director, an additional vote in that capacity;

(3)	will be counted in determining the quorum for a meeting of a committee of directors once for each of his or her appointors who is a member of that committee and, in the case of an appointee who is also a member of that committee as a director, once more in that capacity;

(4)	has a separate vote at a meeting of a committee of directors for each of his or her appointors who is a member of that committee and, in the case of an appointee who is also a member of that committee as a director, an additional vote in that capacity.

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15.4 Consent Resolutions

Every alternate director, if authorized by the notice appointing him or her, may sign in place of his or her appointor any resolutions to be consented to in writing.

15.5 Alternate Director Not an Agent

Every alternate director is deemed not to be the agent of his or her appointor.

15.6 Revocation of Appointment of Alternate Director

An appointor may at any time, by notice in writing received by the Company, revoke the appointment of an alternate director appointed by him or her.

15.7 Ceasing to be an Alternate Director

The appointment of an alternate director ceases when:

15.8 Remuneration and Expenses of Alternate Director

(1)	his or her appointor ceases to be a director and is not promptly re-elected or re-appointed; the

(2)	alternate director dies;

(3)	the alternate director resigns as an alternate director by notice in writing provided to the Company or a lawyer for the Company;

(4)	the alternate director ceases to be qualified to act as a director; or

(5)	his or her appointor revokes the appointment of the alternate director.

The Company may reimburse an alternate director for the reasonable expenses that would be properly reimbursed if he or she were a director, and the alternate director is entitled to receive from the Company such proportion, if any, of the remuneration otherwise payable to the appointor as the appointor may from time to time direct.

Article 16
Powers and Duties of Directors

16.1 Powers of Management

The directors must, subject to the Business Corporations Act and these Articles, manage or supervise the management of the business and affairs of the Company and have the authority to exercise all such powers of the Company as are not, by the Business Corporations Act or by these Articles, required to be exercised by the shareholders of the Company.

16.2 Appointment of Attorney of Company

The directors may from time to time, by power of attorney or other instrument, under seal if so required by law, appoint any person to be the attorney of the Company for such purposes, and with such powers, authorities and discretions (not exceeding those vested in or exercisable by the directors under these Articles and excepting the power to fill vacancies in the board of directors, to remove a director, to change the membership of, or fill vacancies in, any committee of the directors, to appoint or remove officers appointed by the directors and to declare dividends) and for such period, and with such remuneration and subject to such conditions as the directors may think fit. Any such power of attorney may contain such provisions for the protection or convenience of persons dealing with such attorney as the directors think fit. Any such attorney may be authorized by the directors to sub-delegate all or any of the powers, authorities and discretions for the time being vested in him or her.

Article 17
Disclosure of Interest of Directors

17.1 Obligation to Account for Profits

A director or senior officer who holds a disclosable interest (as that term is used in the Business Corporations Act) in a contract or transaction into which the Company has entered or proposes to enter is liable to account to the Company for any profit that accrues to the director or senior officer under or as a result of the contract or transaction only if and to the extent provided in the Business Corporations Act.

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17.2 Restrictions on Voting by Reason of Interest

A director who holds a disclosable interest in a contract or transaction into which the Company has entered or proposes to enter is not entitled to vote on any directors’ resolution to approve that contract or transaction, unless all the directors have a disclosable interest in that contract or transaction, in which case any or all of those directors may vote on such resolution.

17.3 Interested Director Counted in Quorum

A director who holds a disclosable interest in a contract or transaction into which the Company has entered or proposes to enter and who is present at the meeting of directors at which the contract or transaction is considered for approval may be counted in the quorum at the meeting whether or not the director votes on any or all of the resolutions considered at the meeting.

17.4 Disclosure of Conflict of Interest or Property

A director or senior officer who holds any office or possesses any property, right or interest that could result, directly or indirectly, in the creation of a duty or interest that materially conflicts with that individual’s duty or interest as a director or senior officer, must disclose the nature and extent of the conflict as required by the Business Corporations Act.

17.5 Director Holding Other Office in the Company

A director may hold any office or place of profit with the Company, other than the office of auditor of the Company, in addition to his or her office of director for the period and on the terms (as to remuneration or otherwise) that the directors may determine.

17.6 No Disqualification

No director or intended director is disqualified by his or her office from contracting with the Company either with regard to the holding of any office or place of profit the director holds with the Company or as vendor, purchaser or otherwise, and no contract or transaction entered into by or on behalf of the Company in which a director is in any way interested is liable to be voided for that reason.

17.7 Professional Services by Director or Officer

Subject to the Business Corporations Act, a director or officer, or any person in which a director or officer has an interest, may act in a professional capacity for the Company, except as auditor of the Company, and the director or officer or such person is entitled to remuneration for professional services as if that director or officer were not a director or officer.

17.8 Director or Officer in Other Corporations

A director or officer may be or become a director, officer or employee of, or otherwise interested in, any person in which the Company may be interested as a shareholder or otherwise, and, subject to the Business Corporations Act, the director or officer is not accountable to the Company for any remuneration or other benefits received by him or her as director, officer or employee of, or from his or her interest in, such other person.

Article 18
Proceedings of Directors

18.1 Meetings of Directors

The directors may meet together for the conduct of business, adjourn and otherwise regulate their meetings as they think fit, and meetings of the directors held at regular intervals may be held at the place, at the time and on the notice, if any, as the directors may from time to time determine.

18.2 Voting at Meetings

Questions arising at any meeting of directors are to be decided by a majority of votes and, in the case of an equality of votes, the chair of the meeting does not have a second or casting vote.

18.3 Chair of Meetings

The following individual is entitled to preside as chair at a meeting of directors:

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(1)	the chair of the board, if any;

(2)	in the absence of the chair of the board, the president, if any, if the president is a director; or

(3)	any other director chosen by the directors if:

	(a)	neither the chair of the board nor the president, if a director, is present at the meeting within 15 minutes after the time set for holding the meeting;

	(b)	neither the chair of the board nor the president, if a director, is willing to chair the meeting; or

	(c)	the chair of the board and the president, if a director, have advised the secretary, if any, or any other director, that they will not be present at the meeting.

18.4 Meetings by Telephone or Other Communications Medium

A director may participate in a meeting of the directors or of any committee of the directors in person or by telephone if all directors participating in the meeting, whether in person or by telephone or other communications medium, are able to communicate with each other. A director may participate in a meeting of the directors or of any committee of the directors by a communications medium other than telephone if all directors participating in the meeting, whether in person or by telephone or other communications medium, are able to communicate with each other and if all directors who wish to participate in the meeting agree to such participation. A director who participates in a meeting in a manner contemplated by this Article 18.4 is deemed for all purposes of the Business Corporations Act and these Articles to be present at the meeting and to have agreed to participate in that manner.

18.5 Calling of Meetings

A director may, and the secretary or an assistant secretary of the Company, if any, on the request of a director must, call a meeting of the directors at any time.

18.6 Notice of Meetings

Other than for meetings held at regular intervals as determined by the directors pursuant to Article 18.1, reasonable notice of each meeting of the directors, specifying the place, day and time of that meeting must be given to each of the directors and the alternate directors by any method set out in Article 24.1 or orally or by telephone.

18.7 When Notice Not Required

It is not necessary to give notice of a meeting of the directors to a director or an alternate director if:

(1)	the meeting is to be held immediately following a meeting of shareholders at which that director was elected or appointed, or is the meeting of the directors at which that director is appointed; or

(2)	the director or alternate director, as the case may be, has waived notice of the meeting.

18.8 Meeting Valid Despite Failure to Give Notice

The accidental omission to give notice of any meeting of directors to, or the non-receipt of any notice by, any director or alternate director, does not invalidate any proceedings at that meeting.

18.9 Waiver of Notice of Meetings

Any director or alternate director may send to the Company a document signed by him or her waiving notice of any past, present or future meeting or meetings of the directors and may at any time withdraw that waiver with respect to meetings held after that withdrawal. After sending a waiver with respect to all future meetings and until that waiver is withdrawn, no notice of any meeting of the directors need be given to that director and, unless the director otherwise requires by notice in writing to the Company, to his or her alternate director, and all meetings of the directors so held are deemed not to be improperly called or constituted by reason of notice not having been given to such director or alternate director.

18.10 Quorum

The quorum necessary for the transaction of the business of the directors may be set by the directors and, if not so set, is deemed to be set at two directors or, if the number of directors is set at one, is deemed to be set at one director, and that director may constitute a meeting.

18.11 Validity of Acts Where Appointment Defective

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Subject to the Business Corporations Act, an act of a director or officer is not invalid merely because of an irregularity in the election or appointment or a defect in the qualification of that director or officer.

18.12 Consent Resolutions in Writing

A resolution of the directors or of any committee of the directors may be passed without a meeting:

(1)	in all cases, if each of the directors entitled to vote on the resolution consents to it in writing; or

(2)	in the case of a resolution to approve a contract or transaction in respect of which a director has disclosed that he or she has or may have a disclosable interest, if each of the other directors who are entitled to vote on the resolution consents to it in writing.

A consent in writing under this Article may be by signed document, fax, email or any other method of transmitting legibly recorded messages. A consent in writing may be in two or more counterparts which together are deemed to constitute one consent in writing. A resolution of the directors or of any committee of the directors passed in accordance with this Article 18.12 is effective on the date stated in the consent in writing or on the latest date stated on any counterpart and is deemed to be a proceeding at a meeting of directors or of the committee of the directors and to be as valid and effective as if it had been passed at a meeting of the directors or of the committee of the directors that satisfies all the requirements of the Business Corporations Act and all the requirements of these Articles relating to meetings of the directors or of a committee of the directors.

Article 19
Executive and Other Committees

19.1 Appointment and Powers of Executive Committee

The directors may, by resolution, appoint an executive committee consisting of the director or directors that they consider appropriate, and this committee has, during the intervals between meetings of the board of directors, all of the directors’ powers, except:

(1)	the power to fill vacancies in the board of directors;

(2)	the power to remove a director;

(3)	the power to change the membership of, or fill vacancies in, any committee of the directors; and such

(4)	other powers, if any, as may be set out in the resolution or any subsequent directors’ resolution.

19.2 Appointment and Powers of Other Committees

The directors may, by resolution:

(1)	appoint one or more committees (other than the executive committee) consisting of the director or directors that they consider appropriate;

(2)	delegate to a committee appointed under paragraph (1) any of the directors’ powers, except:

	(a)	the power to fill vacancies in the board of directors;

	(b)	the power to remove a director;

	(c)	the power to change the membership of, or fill vacancies in, any committee of the directors; and

	(d)	the power to appoint or remove officers appointed by the directors; and

(3)	make any delegation referred to in paragraph (2) subject to the conditions set out in the resolution or any subsequent directors’ resolution.

19.3 Obligations of Committees

Any committee appointed under Articles 19.1 or 19.2, in the exercise of the powers delegated to it, must:

(1)	conform to any rules that may from time to time be imposed on it by the directors; and

(2)	report every act or thing done in exercise of those powers at such times as the directors may require.

19.4 Powers of Board

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The directors may, at any time, with respect to a committee appointed under Articles 19.1 or 19.2:

(1)	revoke or alter the authority given to the committee, or override a decision made by the committee, except as to acts done before such revocation, alteration or overriding; (2) terminate the appointment of, or change the membership of, the committee; and

(3)	fill vacancies in the committee.

19.5 Committee Meetings

Subject to Article 19.3(1) and unless the directors otherwise provide in the resolution appointing the committee or in any subsequent resolution, with respect to a committee appointed under Articles 19.1 or 19.2:

(1)	the committee may meet and adjourn as it thinks proper;

(2)	the committee may elect a chair of its meetings but, if no chair of a meeting is elected, or if at a meeting the chair of the meeting is not present within 15 minutes after the time set for holding the meeting, the directors present who are members of the committee may choose one of their number to chair the meeting;

(3)	a majority of the members of the committee constitutes a quorum of the committee; and

(4)	questions arising at any meeting of the committee are determined by a majority of votes of the members present, and in case of an equality of votes, the chair of the meeting does not have a second or casting vote.

Article 20
Officers

20.1 Directors May Appoint Officers

The directors may, from time to time, appoint such officers, if any, as the directors determine and the directors may, at any time, terminate any such appointment.

20.2 Functions, Duties and Powers of Officers

The directors may, for each officer:

(1)	determine the functions and duties of the officer;

(2)	entrust to and confer on the officer any of the powers exercisable by the directors on such terms and conditions and with such restrictions as the directors think fit; and

(3)	revoke, withdraw, alter or vary all or any of the functions, duties and powers of the officer.

20.3 Qualifications

No officer may be appointed unless that officer is qualified in accordance with the Business Corporations Act. One person may hold more than one position as an officer of the Company. Any person appointed as the chair of the board or as a managing director must be a director. Any other officer need not be a director.

20.4 Remuneration and Terms of Appointment

All appointments of officers are to be made on the terms and conditions and at the remuneration (whether by way of salary, fee, commission, participation in profits or otherwise) that the directors thinks fit and are subject to termination at the pleasure of the directors, and an officer may in addition to such remuneration be entitled to receive, after he or she ceases to hold such office or leaves the employment of the Company, a pension or gratuity.

Article 21
Indemnification

21.1 Definitions

In this Article 21:

(1)	“eligible penalty” means a judgment, penalty or fine awarded or imposed in, or an amount paid in settlement of, an eligible proceeding;

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(2)	“eligible proceeding” means a legal proceeding or investigative action, whether current, threatened, pending or completed, in which a director, former director or alternate director of the Company (an “eligible party”) or any of the heirs and legal personal representatives of the eligible party, by reason of the eligible party being or having been a director or alternate director of the Company:

	(a)	is or may be joined as a party; or

	(b)	is or may be liable for or in respect of a judgment, penalty or fine in, or expenses related to, the proceeding;

(3)	“expenses” has the meaning set out in the Business Corporations Act.

21.2 Mandatory Indemnification of Directors and Former Directors

Subject to the Business Corporations Act, the Company must indemnify a director, former director or alternate director of the Company and his or her heirs and legal personal representatives against all eligible penalties to which such person is or may be liable, and the Company must, after the final disposition of an eligible proceeding, pay the expenses actually and reasonably incurred by such person in respect of that proceeding. Each director and alternate director is deemed to have contracted with the Company on the terms of the indemnity contained in this Article 21.2.

21.3 Indemnification of Other Persons

Subject to any restrictions in the Business Corporations Act, the Company may indemnify any person.

21.4 Non-Compliance with Business Corporations Act

The failure of a director, alternate director or officer of the Company to comply with the Business Corporations Act or these Articles does not invalidate any indemnity to which he or she is entitled under this Part.

21.5 Company May Purchase Insurance

The Company may purchase and maintain insurance for the benefit of any person (or his or her heirs or legal personal representatives) who:

(1)
is or was a director, alternate director, officer, employee or agent of the Company;

(2)
is or was a director, alternate director, officer, employee or agent of a corporation at a time when the corporation is or was an affiliate of the Company;

(3)
at the request of the Company, is or was a director, alternate director, officer, employee or agent of a corporation or of a partnership, trust, joint venture or other unincorporated entity;

(4)
at the request of the Company, holds or held a position equivalent to that of a director, alternate director or officer of a partnership, trust, joint venture or other unincorporated entity;

against any liability incurred by him or her as such director, alternate director, officer, employee or agent or person who holds or held such equivalent position.

Article 22
Dividends

22.1 Payment of Dividends Subject to Special Rights

The provisions of this Article 22 are subject to the rights, if any, of shareholders holding shares with special rights as to dividends.

22.2 Declaration of Dividends

Subject to the Business Corporations Act, the directors may from time to time declare and authorize payment of such dividends as they may deem advisable.

22.3 No Notice Required

The directors need not give notice to any shareholder of any declaration under Article 22.2.

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22.4 Record Date

The directors may set a date as the record date for the purpose of determining shareholders entitled to receive payment of a dividend. The record date must not precede the date on which the dividend is to be paid by more than two months. If no record date is set, the record date is 5 p.m. on the date on which the directors pass the resolution declaring the dividend.

22.5 Manner of Paying Dividend

A resolution declaring a dividend may direct payment of the dividend wholly or partly by the distribution of specific assets or of fully paid shares or of bonds, debentures or other securities of the Company, or in any one or more of those ways.

22.6 Settlement of Difficulties

If any difficulty arises in regard to a distribution under Article 22.5, the directors may settle the difficulty as they deem advisable, and, in particular, may:

22.7 When Dividend Payable

Any dividend may be made payable on such date as is fixed by the directors.

(1)	set the value for distribution of specific assets;

(2)	determine that cash payments in substitution for all or any part of the specific assets to which any shareholders are entitled may be made to any shareholders on the basis of the value so fixed in order to adjust the rights of all parties; and

(3)	vest any such specific assets in trustees for the persons entitled to the dividend.

22.8 Dividends to be Paid in Accordance with Number of Shares

All dividends on shares of any class or series of shares must be declared and paid according to the number of such shares held.

22.9 Receipt by Joint Shareholders

If several persons are joint shareholders of any share, any one of them may give an effective receipt for any dividend, bonus or other money payable in respect of the share.

22.10 Dividend Bears No Interest

No dividend bears interest against the Company.

22.11 Fractional Dividends

If a dividend to which a shareholder is entitled includes a fraction of the smallest monetary unit of the currency of the dividend, that fraction may be disregarded in making payment of the dividend and that payment represents full payment of the dividend.

22.12 Payment of Dividends

Any dividend or other distribution payable in cash in respect of shares may be paid by cheque, made payable to the order of the person to whom it is sent, and mailed to the address of the shareholder, or in the case of joint shareholders, to the address of the joint shareholder who is first named on the central securities register, or to the person and to the address the shareholder or joint shareholders may direct in writing. The mailing of such cheque will, to the extent of the sum represented by the cheque (plus the amount of the tax required by law to be deducted), discharge all liability for the dividend unless such cheque is not paid on presentation or the amount of tax so deducted is not paid to the appropriate taxing authority.

22.13 Capitalization of Surplus

Notwithstanding anything contained in these Articles, the directors may from time to time capitalize any surplus of the Company and may from time to time issue, as fully paid, shares or any bonds, debentures or other securities of the Company as a dividend representing the surplus or any part of the surplus.

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Article 23
Accounting Records

23.1 Recording of Financial Affairs

The directors must cause adequate accounting records to be kept to record properly the financial affairs and condition of the Company and to comply with the Business Corporations Act.

23.2 Inspection of Accounting Records

Unless the directors determine otherwise, or unless otherwise determined by ordinary resolution, no shareholder of the Company is entitled to inspect or obtain a copy of any accounting records of the Company.

23.3 Remuneration of Auditors

The remuneration of the auditors, of any, shall be set by the directors regardless of whether the auditor is appointed by the shareholders, by the directors or otherwise. For greater certainty, the directors may delegate to the audit committee or other committee the power to set the remuneration of the auditors.

Article 24
Notices

24.1 Method of Giving Notice

Unless the Business Corporations Act or these Articles provides otherwise, a notice, statement, report or other record required or permitted by the Business Corporations Act or these Articles to be sent by or to a person may be sent by any one of the following methods:

(1)	mail addressed to the person at the applicable address for that person as follows:

	(a)	for a record mailed to a shareholder, the shareholder’s registered address;

	(b)	for a record mailed to a director or officer, the prescribed address for mailing shown for the director or officer in the records kept by the Company or the mailing address provided by the recipient for the sending of that record or records of that class;

	(c)	in any other case, the mailing address of the intended recipient;

(2)	delivery at the applicable address for that person as follows, addressed to the person:

	(a)	for a record delivered to a shareholder, the shareholder’s registered address;

	(b)	for a record delivered to a director or officer, the prescribed address for delivery shown for the director or officer in the records kept by the Company or the delivery address provided by the recipient for the sending of that record or records of that class;

	(c)	in any other case, the delivery address of the intended recipient;

(3)	sending the record by fax to the fax number provided by the intended recipient for the sending of that record or records of that class;

(4)	sending the record by email to the email address provided by the intended recipient for the sending of that record or records of that class;

(5)	physical delivery to the intended recipient.

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24.2 Deemed Receipt of Mailing

A record that is mailed to a person by ordinary mail to the applicable address for that person referred to in Article 24.1 is deemed to be received by the person to whom it was mailed on the day, Saturdays, Sundays and holidays excepted, following the date of mailing.

24.3 Certificate of Sending

A certificate signed by the secretary, if any, or other officer of the Company or of any other corporation acting in that behalf for the Company stating that a notice, statement, report or other record was addressed as required by Article 24.1, prepaid and mailed or otherwise sent as permitted by Article 24.1 is conclusive evidence of that fact.

24.4 Notice to Joint Shareholders

A notice, statement, report or other record may be provided by the Company to the joint shareholders of a share by providing the notice to the joint shareholder first named in the central securities register in respect of the share.

24.5 Notice to Trustees

A notice, statement, report or other record may be provided by the Company to the persons entitled to a share in consequence of the death, bankruptcy or incapacity of a shareholder by: mailing the record, addressed to them:

	(a)	by name, by the title of the legal personal representative of the deceased or incapacitated shareholder, by the titleof trustee of the bankrupt shareholder or by any similar description; and

	(b)	at the address, if any, supplied to the Company for that purpose by the persons claiming to be so entitled; or

(1)	if an address referred to in paragraph (1)(b) has not been supplied to the Company, by giving the notice in a

(2)	manner in which it might have been given if the death, bankruptcy or incapacity had not occurred.

Article 25
Seal

25.1 Who May Attest Seal

Except as provided in Articles 25.2 and 25.3, the Company’s seal, if any, must not be impressed on any record except when that impression is attested by the signatures of:

(1)	any two directors;

(2)	any officer, together with any director;

(3)	if the Company only has one director, that director; or

(4)	any one or more directors or officers or persons as may be determined by the directors.

25.2 Sealing Copies

For the purpose of certifying under seal a certificate of incumbency of the directors or officers of the Company or a true copy of any resolution or other document, despite Article 25.1, the impression of the seal may be attested by the signature of any director or officer.

25.3 Mechanical Reproduction of Seal

The directors may authorize the seal to be impressed by third parties on share certificates or bonds, debentures or other securities of the Company as they may determine appropriate from time to time. To enable the seal to be impressed on any share certificates or bonds, debentures or other securities of the Company, whether in definitive or interim form, on which facsimiles of any of the signatures of the directors or officers of the Company are, in accordance with the Business Corporations Act or these Articles, printed or otherwise mechanically reproduced, there may be delivered to the person employed to engrave, lithograph or print such definitive or interim share certificates or bonds, debentures or other securities one or more unmounted dies reproducing the seal and the chair of the board or any senior officer together with the secretary, treasurer, secretary-treasurer, an assistant secretary, an assistant treasurer or an assistant secretary-treasurer may in writing authorize such person to cause the seal to be impressed on such definitive or interim share certificates or bonds, debentures or other securities by the use of such

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dies. Share certificates or bonds, debentures or other securities to which the seal has been so impressed are for all purposes deemed to be under and to bear the seal impressed on them.

Article 26
Prohibitions

2 6.1 Definitions

In this Article 26:

(1)		“designated security” means:

	(a)	a voting security of the Company;

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	(b)	a security of the Company that is not a debt security and that carries a residual right to participate in the earnings of the Company or, on the liquidation or winding up of the Company, in its assets; or

	(c)	a security of the Company convertible, directly or indirectly, into a security described in paragraph (a) or (b); “security” has the meaning assigned in the Securities Act (British Columbia);

(2)	“voting security” means a security of the Company that:


	(a)	is not a debt security, and


	(b)	carries a voting right either under all circumstances or under some circumstances that have occurred and are continuing.

26.2 Application

Article 26.3 does not apply to the Company if and for so long as it is a public company or a pre-existing reporting company which has the Statutory Reporting Company Provisions as part of its Articles or to which the Statutory Reporting Company Provisions apply.

26.3 Consent Required for Transfer of Shares or Designated Securities

No share or designated security may be sold, transferred or otherwise disposed of without the consent of the directors and the directors are not required to give any reason for refusing to consent to any such sale, transfer or other disposition.

LETTER OF AGREEMENT

THIS AGREEMENT ("Agreement") is entered into and effective as of July 21, 2005,

BEWEEN:

ALDA PHARMACEUTICALS CORP ., 635 Columbia Street, New Westminster, British Columbia V3M 1A7 CANADA

(“ALDA”)

AND:

PHIGENICS, LLC , 735 Thornapple Dr., Naperville, IL, 60540 USA

(“PHIGENICS”)

WHEREAS ALDA has developed a disinfectant product known as T ³ 6 ^® Disinfectant (“T36D”, also currently known as Viralex) for broad spectrum surface disinfection and

WHEREAS PHIGENICS is interested in:

assisting ALDA with the registration of T36D with the US Environmental Protection Agency (“EPA”),
working with ALDA Pharmaceuticals Corp. to develop new formulations of T36D and
developing sales and distribution channels in the US,

IT IS AGREED THAT:

1.	PHIGENICS will act on behalf of ALDA to register ALDA’s T ³ 6 ^® Disinfectant (“T36D”, currently known as “Viralex”) with the EPA (“the Registration”).
2.	The estimated budget for the Registration is US$65,000 or less, comprised of no more than US$32,000 cash expenditures and a contribution in kind of US$33,000 by Dr. William F. McCoy (“WFM”) at an agreed upon rate per diem.
2.
3.	PHIGENICS will obtain advance approval from ALDA for any cash expenditures referred to in Paragraph 2.
4.	ALDA will provide all possible assistance that PHIGENICS requires for the Registration. within capabilities of ALDA.
5.	In return for assisting with the Registration, PHIGENICS will receive a royalty on Net Sales (gross sales less refunds and returns) of T36D in the US starting 90 days after the Registration is achieved, as follows:
	a.	7% for the first year up to 150% of WFM's contribution in kind has been repaid and then 5% for the remainder of the first year.
	b.	5% for the second year.
	c.	4% for the third year.
	d.	3% for the fourth year.
	e.	2% for the fifth year.

1% for the sixth and seventh years.

6.	It is understood that ALDA has its own personnel who are prepared to undertake sales and marketing activities in the US. However, if PHIGENICS introduces ALDA to prospects unknown to ALDA from which sales result, PHIGENICS will be paid a finder’s fee of 5% of sales to that client for the first year after the first sale and 3% for the next year.

7.	ALDA and PHIGENICS will jointly develop a research program at a later date.

The terms above are accepted by:

ALDA PHARMACEUTICALS CORP.
Per:

“Terrance G. Owen”
Terrance G. Owen, President & CEO

AND

PHIGENICS, LLC
Per:

“William F. McCoy”
William F. McCoy, Chief Technology Officer

AGREEMENT

This agreement (“Agreement”) is entered into as of the 4 ^th day of October, 2005,

BETWEEN:

NORWOOD PACKAGING LTD., 8519 – 132 ^nd Street, Surrey, BC, V3W 4N8 (“Norwood”)

AND:

ALDA Pharmaceuticals Corp. of 635 Columbia Street, New Westminster, BC V3M 1A7 (“ALDA”).

WHEREAS ALDA has developed a disinfectant product known as T ³ 6 ^® Disinfectant (“T36D”), formerly known as Viralex ^TM and

WHEREAS Norwood has the capabilities to manufacture T36D,

The Parties agree as follows:

1.	Norwood will manufacture T36D for ALDA according to specifications provided in Schedule “A”.
2.	ALDA will provide Norwood with the label designs.
3.	Norwood will assume all of the costs of manufacturing, except label design, and having T36D ready to ship from its warehouse in minimum quantities of one-half skid or 18 cases.
4.	Norwood will maintain 2 months inventory of T36D as specified by ALDA from time to time.
5.	ALDA will be responsible for the costs of marketing and sales support.
6.	ALDA will arrange for the shipping of products from Norwood’s warehouse to ALDA’s customers at no cost to Norwood. Norwood has the option to provide a quote to ALDA for shipping costs.
7.	Upon receipt of an order from ALDA, Norwood will prepare the required shipping documents except for shipments to Esthetics Plus for which ALDA Pharmaceuticals Corp. will prepare the waybills for each case of product and deliver the waybills to Norwood for attachment to the individual cases by Norwood.
8.	ALDA will set its prices according to the attached “Viralex ^TM with T ³ 6 ^® Distributor Price List” (“the Price List”).
9.	ALDA will advise Norwood of any changes to the Price List 45 days in advance.
10.	For each order received from ALDA, Norwood will calculate the value of the product being shipped from the Price List, as described in Paragraph 11, with the exceptions of:
	a.	sales to Esthetics Plus as described in Paragraph 12 and
	b.	free samples, as described in Paragraph 13.
11.	Norwood will invoice ALDA as follows:
	a.	For 480 ml. bottles, 40% of the value of the shipment calculated from the Price List plus GST and
	b.	For 4 litre jugs, 65% of the value of the shipment calculated from the Price List plus GST.
12.	For shipments to Esthetics Plus, ALDA will advise Norwood, at the time of the shipment, of the total value of the order plus GST and Norwood will invoice ALDA for 65% of value of the 4 litre jugs, 40% of the value of the 480 ml bottles plus GST.

13.	For free samples, Norwood will invoice ALDA for Norwood’s cost to manufacture the free samples plus GST. ALDA will provide Norwood with 30 days advance notice of any intended sales promotions in which free samples are to be given to customers at no cost by ALDA. Norwood will manufacture amounts of free samples if agreed to in advance by Norwood. It is estimated that the quantity of free samples provided by ALDA to its customers will not exceed 5% of the total manufacturing of 480 ml and 4 litre bottles of T36D undertaken in any given year by Norwood plus 10,000 of the 60 ml sample bottles per year.
14.	ALDA will pay Norwood within 35 days after the date of any invoice submitted to ALDA by Norwood.
15.	In the event that Norwood sells T36D to any of its customers, Norwood will provide ALDA with a monthly summary of Norwood’s invoices showing the amount of T36D sold in each individual sale and the amount owed to ALDA based on ALDA receiving 35% of the value of 4 litre jugs and 60% of the value of 480 ml bottles, both calculated from the Price List, plus GST. Norwood will pay ALDA within 35 days after the date of any invoice provided by Norwood to Norwood’s customers.
16.	If any T36D is returned due to manufacturing defects, Norwood will replace the defective product with new product at Norwood’s cost.
17.	Norwood will have the Right of First Refusal to manufacture other products for ALDA under similar, but not necessarily identical, terms.
18.	This Agreement may be terminated:
	a.	if either party provides the other party with 90 days written notice,
	b.	by either party if there has been a breach of any provision of this Agreement and thirty (30) days has elapsed from the date that written notice has been sent to the party in breach by the other party or
	c.	at the option of either party, if the other party becomes insolvent; violates the laws, regulations, rules, or statutes of any government; ceases doing business; makes an assignment for the benefit of creditors; or commits an act of bankruptcy. A failure by either party to exercise any right hereunder shall not operate as a waiver of such right and all remedies contained herein shall be cumulative.

The terms above are accepted by:

ALDA PHARMACEUTICALS CORP.
Per:

“Terrance G. Owen”
Terrance G. Owen, President & CEO

AND

NORWOOD PACKAGING LTD.
Per:


“Daryl Martini”
Daryl Martini, President

SCHEDULE “A”

Specifications

Cartons :
(a) 480-ml T ³ 6 ^® Disinfectant . 11.75” x 8.875” x 7.50”, Kraft at least 200, Style: RSC-TAB.
(b) Divider – interlocking for 12 bottles, Kraft Tst: 125.
(c) Information for labeling:

(i) Side panels:
The Best Available Technology
T ³ 6 ^® Disinfectant
Hospital Grade Disinfectant
Limited Quantity

ALDA Pharmaceuticals Corp.
635 Columbia Street, New Westminster, BC, V3M 1A7, Canada.
604-521-8300 www.aldacorp.com

(ii) End panels:
480 ml x 12

(d) 4-Litre T ³ 6 ^® Disinfectant . 12.25” x 12.25” x 12.0”, Kraft Tst. at least 200, Style: RSC-TAB.
(e) Information for labeling:

(i) Side panels:
The Best Available Technology
T ³ 6 ^® Disinfectant
Hospital Grade Disinfectant
Limited Quantity

ALDA Pharmaceuticals Corp.
635 Columbia Street, New Westminster, BC, V3M 1A7, Canada.
604-521-8300 www.aldacorp.com

(ii) End panels:
4-Litre x 4

ALDA Pharmaceuticals Corp.

Caps :
(f) 480-ml bottle, 28 mm, foil-lined cap, 28-400 white PP foil seal M1 Product Code 23-2105 (Richards).
(g) 4-litre bottle, 38 mm, foil-lined cap, 23-2949 product code (Richards).

Bottles:
(h) 480-ml, Richards Packaging Ltd. product number 51130164, (clear 31 gms, or white 36 gms) or equivalent.
(i) 4-litre bottle, Richards Packaging Ltd. product number 51180034, 125 gms or equivalent.

Pump : Heavy-duty pump, Richards Packaging Ltd product number 50-1706, or equivalent. (for the 4-liter package)
Sprayer: Richards Packaging Ltd. product number 5910-BA, or equivalent.

Letter of Agreement

October 26, 2004

BETWEEN:

Fuzhou Xinmei Biotech Co. Ltd (“FUZHOU”), 197 Hualin Road, Fuzhou, China 350002

AND:

ALDA Pharmaceuticals Corp. of 635 Columbia Street, New Westminster, BC V3M 1A7 CANADA (“ALDA”),

WHEREAS:

ALDA is the owner of proprietary infection control technology,
ALDA wants its products licensed and distributed in China,
FUZHOU wants the exclusive right to license and manufacture ALDA’S products in China and
FUZHOU wants to distribute ALDA’S products in the Chinese province of Fujian

The Parties agree as follows:

1.	FUZHOU hereby licenses the right from ALDA to manufacture ALDA’S products.
2.	ALDA will provide FUZHOU with all information that ALDA has at its disposal to assist with the registration of ALDA’S products in China.
3.	FUZHOU will be responsible for procuring all necessary government approvals for ALDA’S products within 6 months from the time all technical data to support the application is provided by ALDA.
4.	Monthly reports on the progress of the approvals will be provided to ALDA by FUZHOU.
5.	An extension may be requested by FUZHOU to procure all necessary government approvals and may not be unreasonably refused by ALDA for recurring periods of 60 days if:
	a.	FUZHOU is employing its best efforts in obtaining the registration of the ALDA products in China and is providing monthly reports as required under the terms of Paragraph 4 or
	b.	More time is required by ALDA Pharmaceuticals Corp. to obtain information required by FUZHOU under the terms of Paragraphs 2 and 3.
6.	ALDA Pharmaceuticals Corp. will provide FUZHOU with the specifications required for FUZHOU to provide a manufacturing facility suitable for the manufacturing of ALDA’S products.
7.	FUZHOU will provide a fully equipped manufacturing facility according to the specifications provided by ALDA, to produce the ALDA products subject to Fuzhou employing its best efforts to obtain the space, materials and equipment specified by ALDA.
8.	FUZHOU will have the right to distribute ALDA’S products in the province of Fujian in China.
9.	FUZHOU will sell a minimum of 30,000 liters of Viralex ^TM or equivalent ALDA product in the province of Fujian in the first year after the registration required under the terms of Paragraphs 3, 4 and 5 is obtained.
10.	FUZHOU will have the right to apply to ALDA for distribution rights for ALDA’S products in other provinces of China.
11.	FUZHOU will be responsible for provincial registration of ALDA’S products in China, as required.

635 Columbia Street – New Westminster, BC V3M 1A7 Canada - telephone [604] 521.8300 - facsimile [604] 521.8322
www.aldacorp.com

12.	If distribution rights are obtained in any new province by Fuzhou, the minimum sales levels in the first year after each new provincial registration is obtained will be 30,000 liters times the population of the province of Fujian divided by the population of the new province.
13.	ALDA, at ALDA’S discretion, will have the right to buy product from Fuzhou.
14.	At the request of ALDA and with the authorization of ALDA, FUZHOU agrees to direct ship ALDA’S products for ALDA, at ALDA’S expense, to anywhere in the world.
15.	FUZHOU will pay ALDA a 10% royalty, based on the gross revenues received by Fuzhou for all of ALDA’s products sold in China.
16.	During the first year that FUZHOU is distributing ALDA’S products in any province in China, FUZHOU and ALDA will determine the minimum sales to be made by FUZHOU for the next 5 years in that particular province, to take effect on the next occurring anniversary date of this agreement.
17.	In the event that there has been a breach of any provision of any agreement between ALDA and FUZHOU, either party reserves the right to terminate this Agreement at any time after thirty (30) days has elapsed from the date that written notice has been sent to the party in breach by the other party. The Agreement may also, at the option of either party, be terminated immediately if either party becomes insolvent; violates the laws, regulations, rules, or statutes of any government; ceases doing business; makes an assignment for the benefit of creditors; or commits an act of bankruptcy. A failure by either party to exercise any right hereunder shall not operate as a waiver of such right and all remedies contained herein shall be cumulative.
18.	Any part of this Agreement that is contrary to any federal, state, or local law shall not be applicable and shall not invalidate any other part of this Agreement. In the event of disputes or legal interpretation of the terms of this Agreement, the laws of British Columbia, Canada shall govern and be binding upon the parties hereto.
19.	This Agreement contains the entire understanding of the parties and there are no commitments, agreements, or understandings between the parties other than those expressly set forth herein. This Agreement shall not be altered, waived, modified, or amended except in writing signed by the parties hereto and notarized.
20.	All disputes arising out of or in connection with the present contract shall be finally settled under the Rules of Arbitration of the International Chamber of Commerce by one or more arbitrators appointed in accordance with the said Rules. The place of arbitration shall be a location as may be agreed to by both parties.
21.	FUZHOU agrees not to disclose or use, except as required in FUZHOU'S duties, at any time, any information disclosed to or acquired by FUZHOU during the term of this contract. FUZHOU agrees that all confidential information shall be deemed to be and shall be treated as a sole and exclusive property of ALDA.
22.	Any and all notices herein shall be in writing transmitted by Federal Express or other courier or facsimile.
23.	The Letter of Agreement may be signed by the authorized signatories of FUZHOU and ALDA by facsimile and in as many counterparts as may be necessary, each of which shall together constitute one and the same instrument, and notwithstanding the date of execution shall be deemed to bear the

635 Columbia Street – New Westminster, BC V3M 1A7 Canada - telephone [604] 521.8300 - facsimile [604] 521.8322
www.aldacorp.com

	date as set out above. Original copies in as many counterparts as may be necessary shall follow by mail.
24.	This Agreement and the rights, duties and obligations hereunder may not be assigned or delegated by either party without the prior written consent of the other party.

The terms above are accepted by:

ALDA PHARMACEUTICALS CORP.
Per:

“Terrance G. Owen”
Terrance G. Owen, President & CEO

AND

FUZHOU XINMEI BIOTECH CO. LTD.
Per:

“Sujian Ping”		October 26, 2004
Sujian Ping, Authorized Signatory		Date

635 Columbia Street – New Westminster, BC V3M 1A7 Canada - telephone [604] 521.8300 - facsimile [604] 521.8322
www.aldacorp.com

LEASE AGREEMENT
TABLE OF CONTENTS

			Page

1.0	SUMMARY OF TERMS		1
	1.1	TERMS	1
	1.2	DEFINITIONS	2

2.0	DEMISE AND TERM		3
	2.1	DEMISE, PREMISES	3
	2.2	TERM	3
	2.3	LICENSE TO USE COMMON AREAS	3

3.0	RENT AND OTHER PAYMENTS		3
	3.1	RENT	4
	3.2	ADDITIONAL RENT	4
	3.3	PAYMENT OF TAXES	4
	3.4	TENANT TAXES	4
	3.5	RIGHT OF APPEAL	4
	3.6	COMMON COSTS	4
	3.7	OTHER EXPENSES AND OUTLAYS	5
	3.8	BUSINESS TAX, ETC	5
	3.9	EVIDENCE OF PAYMENTS	5
	3.10	POSTDATED CHEQUES	5

4.0	TENANT'S OPERATING COVENANTS		5
	4.1	PAY RENT	5
	4.2	USE OF PREMISES	6
	4.3	NO NUISANCE ETC	6
	4.4	COMPLY WITH LAWS	6
	4.5	COMPLY WITH RULES	6
	4.6	SIGNS	6
	4.7	UTILITIES	6
	4.8	CARE OF PREMISES	7
	4.9	DAMAGING EQUIPMENT	7
	4.10	CARRYING ON BUSINESS	7
	4.11	DAMAGE TO PREMISES	7
	4.12	NOTICE OF DAMAGES OR DEFECTS	7

5.0	REPAIRS AND ALTERATIONS		7
	5.1	REPAIRS	7
	5.2	RIGHT TO INSPECT AND REPAIR	7
	5.3	LANDLORD'S CONSENT REQUIRED	7
	5.4	CARRYING OUT IMPROVEMENTS	8
	5.5	TENANT'S REMOVAL OF FIXTURES, ETC	8
	5.6	GOODS, CHATTELS NOT TO BE DISPOSED OF	8
	5.7	MANDATORY REMOVAL OF FIXTURES, ETC	8
	5.8	LIENS AND ENCUMBRANCES	8
	5.9	NO REPRESENTATIONS BY LANDLORD	8

6.0	INSURANCE AND INDEMNIFICATION		9

	6.1	TENANT INSURANCE	9
	6.2	ACTS CONFLICTING WITH INSURANCE	9
	6.3	INDEMNITY TO LANDLORD	10
	6.4	RESPONSIBILITY FOR INJURIES, LOSS, DAMAGE	10
	6.5	NO LIABILITY FOR INDIRECT DAMAGES	10

7.0	DISPOSITIONS		11
	7.1	ASSIGNING OR SUBLETTING	11
	7.2	SUBORDINATION	11
	7.3	SALE BY LANDLORD	11
	7.4	PEACEFUL SURRENDER	12

8.0	LANDLORD'S COVENANTS		12
	8.1	QUIET ENJOYMENT	12
	8.2	LANDLORD'S COVENANTS	12
	8.3	LANDLORD'S WORK	13
	8.4	LANDLORD'S RIGHT TO INSPECT, LANDLORD SIGNS	14

9.0	DEFAULT		14
	9.1	DEFAULT	14
	9.2	BANKRUPTCY, ETC	14
	9.3	CERTAIN CONSEQUENCES OF RE-ENTRY	14
	9.4	LANDLORD MAY PERFORM TENANT'S OBLIGATIONS	15
	9.5	INABILITY TO PERFORM	15
	9.6	DISTRESS	15
	9.7	LANDLORD'S COSTS IN ENFORCING LEASE	15
	9.8	RIGHTS CUMULATIVE	15
	9.9	WAIVER	15
	9.10	INTEREST	15

10.0	DAMAGE AND DESTRUCTION/EXPROPRIATION		16
	10.1	DAMAGE OR DESTRUCTION OF PREMISES	16
	10.2	EXPROPRIATION	16

11.0	MISCELLANEOUS		16
	11.1	LANDLORD-TENANT RELATIONSHIP	16
	11.2	ENUREMENT	16
	11.3	HOLDING OVER	17
	11.4	REGISTRATION	17
	11.5	NO CHANGES OR WAIVERS	17
	11.6	NOTICES	17
	11.7	CERTIFICATES	17
	11.8	BRITISH COLUMBIA LAW	17
	11.9	INTERPRETATION	17
	11.10	PROVISIONS SEVERABLE	18
	11.11	HEADINGS	18
	11.12	TIME OF ESSENCE	18
	11.13	COUNTERPARTS	18
	11.14	OPTION TO RENEW	18

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SCHEDULES

‘A’ - Plan of Premises

‘B’ - Rules and Regulations

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THIS LEASE dated for reference the 1 ^st day of January, 2006.

BETWEEN:

Duft Enterprises Corp.
c/o Hunter McLeod Realty Corp.
#202-1678 West Broadway
Vancouver, B.C. V6J 1X6

(the " Landlord ")

AND:

ALDA Pharmaceuticals Corp.
#200 – 627 Columbia Street
New Westminster, B.C. V3M 1A7

(the " Tenant ")

1.0 SUMMARY OF TERMS

1.1 TERMS. Subject to any inconsistency between these summary terms and the remainder of this lease, the following terms are a part of this lease:

(1)	Property Legal Description	Lot 21, Block 13, Plan 2620
(2)	Description of Tenant:	ALDA Pharmaceuticals Corp.
(3)	Address for Tenant:	#635 Columbia Street
		New Westminster, B.C. V3M 1A7
(4)	Operating Name:	ALDA Pharmaceuticals Corp.
(5)	Description of Covenantor:
(6)	Address of Covenantor:
(7)	Premises:	outlined in thick black or red line on Schedule "A"
(8)	Address of Premises:	#200 – 627 Columbia Street, New Westminster, B.C.
		V3M 1A7
(9)	Gross Area:	2,358 square feet
(10)	Term:	One (1) year from the date first written above
(11)	Termination Date:	One (1) year from the date first written above
(12)	Renewal Term:	Two (2) Year Option to Renew
(13)	Notice of Renewal:	3 full months written notice
(14)	Basic Rent: (Based on 2,358 sq. ft. x $6.40/sq.ft.)
	Year	Per Annum	Per Month
	1	$15,091.20	$1,257.60
(15)	Proportionate Share of CAM:	16.0% (Based on 2,358 sq. ft.)
	Estimated CAM @ $5.91/sq.ft.	$13,935.78	$1,161.32
	Other operating costs	$3,068.40	$240.00
	GST	$2,331.82	$186.12
	Total payment	$32,010.24	$2,845.04
(16)	Deposit Received:	Nil
(17)	Percentage Rent:	N/A

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(18)	Notice to Vacate:	N/A
(19)	Permitted Use of Premises:	Allowable commercial
(20)	Fixturing Period:	Two months
	Landlord to replace missing and stained ceiling tiles and burned out lighting
(21)	Base Rent Free:	None

In the event of any inconsistencies between this paragraph and the other provisions of this lease, the other provisions will prevail.

1.2 DEFINITIONS. In this lease, unless otherwise stated, the following terms shall have the following meanings:

	(1)	" Business Day " means every day except Sundays and statutory holidays;

	(2)	" Business Hours " means the hours on Business Days from 8:00 a.m. to 6:00 p.m. Monday to Friday and 8:00 a.m. to 1:00 p.m. on Saturday;

	(3)	" Common Areas " means all parts of the Property and Building from time to time designated as common areas by the Landlord, including hallways, common washrooms, roofs, parking areas, stairwells, sidewalks, common loading areas, administration offices, telephone, meter rooms, valve, mechanical, mail and janitor rooms and storage areas not occupied by tenants of the Building and landscaped areas;

	(4)	"Common Costs" means heating, ventilation, air conditioning costs and electricity:

	(5)	" Gross Area " means the area of the Premises plus:

area of the Common		area of the Premises
Areas on the floor	x	area of all premises set aside by the Landlord
on which the		for leasing to tenants on the floor on which the
Premises are located		Premises are located

		all as measured in square feet by the Landlord's British Columbia land surveyor in accordance with the measurement standards of the Building Owners and Managers Association International (BOMA);

	(6)	" Property " means the Building, surrounding lands and related improvements described in 1.1(1);

	(7)	" Proportionate Share " means the percentage in paragraph 1.1(15), calculated as that fraction which has as its numerator the area of the Premises and as its denominator the area of all leasable premises within the Building (excluding common, storage and parking areas), as calculated by the Landlord on the basis of the Building Owners and Managers Association (BOMA) International measurement standards.;

	(8)	" Taxes " means all taxes, school taxes, local improvement taxes, sewer, water and utilities taxes, and all other rates, charges, duties, levies and assessments whatsoever whether municipal, governmental, provincial, federal, school or otherwise, imposed, assessed or charged on or in respect of the Property, the Building and all improvements, or on the Landlord on account of same, capital taxes relating to the Property, including capital taxes imposed on the Landlord in respect of the Property or the capital of the Landlord relating to the Property, including all taxes in the future levied in lieu of or in replacement of the foregoing, but excluding any tax attracted by the Tenant's improvements and equipment and

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		otherwise payable by the Tenant under this lease and any taxes assessed on the income or profits of the Landlord;

	(9)	" Tenant Taxes " means all goods and services taxes, value added taxes and other taxes, [except Taxes as defined in subparagraph 1.2(8)] rates, and assessments levied against the Landlord, the Tenant, the Property or the Premises in respect of or as a result of this lease, the Basic Rent or Additional Rent, and/or any chattels, machinery, equipment, improvements or tenant's fixtures erected or placed on or affixed to the Premises, by or on behalf of the Tenant, including all such taxes in the future levied in lieu of or in replacement of the foregoing; and

	(10)	" Term " means the term of this lease described in paragraph 2.2 and any extensions and renewals.

2.0 DEMISE AND TERM

2.1 DEMISE, PREMISES. In consideration of the rents, covenants, conditions and agreements on the part of the Tenant to be paid, observed and performed, the Landlord demises and leases to the Tenant and the Tenant takes and rents on the terms of this lease, the premises (the " Premises ") located at the address in British Columbia given in paragraph 1.1(8), outlined in thick black or red line on Schedule "A" to this lease, consisting of a portion of a building (the " Building ") located on and forming part of the Property.

2.2 TERM. To have and to hold the Premises unto the Tenant for the term given in paragraph 1.1(10), subject to the payment of Basic Rent and Additional Rent as herein defined and the fulfillment by the Tenant of its obligations under this lease, unless earlier terminated as set out in this lease.

2.3 LICENSE TO USE COMMON AREAS. The Landlord grants to the Tenant for the Term as an appurtenant part of this lease, for use by the Tenant and its agents, invitees, servants, employees, licensees and customers, in common with the Landlord and other tenants and their respective agents, invitees, servants, employees, licensees and customers, the non-exclusive right and license to use the Common Areas for the purposes and subject to the covenants and conditions provided in this lease. Without limiting the generality of the foregoing, such license of use includes:

	(1)	the right to use the parking areas (excluding those portions thereof allocated to a tenant or Licensee) for the purposes of pedestrian and vehicular access to and from the Building and the parking of vehicles in parking spaces provided therein, and

	(2)	the right to use the public washrooms, corridors, entrances and exits to buildings and all other facilities provided for common use and enjoyment as part of the Common Areas.

3.0 RENT AND OTHER PAYMENTS

3.1 RENT. Yielding to the Landlord during the Term, rent for the Premises, without set off or deduction, in Canadian money as follows:

	(1)	Gross rent (the "Gross Rent "), payable plus GST in monthly payments in advance on the 1st day of every month, in the amounts given in paragraph 1.1(14); and

	(2)	additional rent (" Additional Rent "), being all other amounts due and payable by the Tenant pursuant to this lease plus GST. Unless otherwise specified in this lease, the Tenant shall pay Additional Rent to the Landlord within seven days after written notice of it is given by the Landlord to the Tenant.

The Tenant shall make all payments required to be made by it under this lease to the Landlord at its address set out on page one, or at any other address the Landlord from time to time designates by written notice to the Tenant.

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If the Term begins or ends or there is any alteration in Gross Rent on any day other than when Basic Rent is payable under subparagraph 3.1(1), rent for the applicable fractions of a month will be adjusted pro rata.

3.2 ADDITIONAL RENT. All money payable by the Tenant under this lease and money paid or costs incurred by the Landlord, which ought to have been paid or incurred by the Tenant to any party, or for which the Landlord is entitled to reimbursement from the Tenant:

	(1)	will unless otherwise stipulated herein be payable by the Tenant to the Landlord as Additional Rent seven days after the Tenant has received written notice of same and

	(2)	may be recovered by the Landlord as Additional Rent and by any and all remedies available to the Landlord for the recovery of rent.

3.3 PAYMENT OF TAXES. The Tenant shall pay to the Landlord within 10 days after demand by the Landlord the Tenant's Proportionate Share of all Taxes, proportioned for any partial calendar year in which the Tenant is in possession of the Premises, and such demand will be accompanied by a copy of the Tax bill or notice from the applicable government or written notice of the actual Taxes. At the election of the Landlord by written notice to the Tenant, the Landlord will be entitled to estimate the Tenant's Proportionate Share of Taxes for the current and/or following years and collect advance payments on account of Taxes from the Tenant. In such case, the Tenant shall pay to the Landlord in equal monthly instalments with the Base Rent, an amount designated by the Landlord so that the Tenant's Proportionate Share of Taxes will have been paid to the Landlord at least 21 days before the Taxes fall due. After the actual Taxes for each year are determined, the Landlord may at its election change any of such monthly payments to collect sufficient money from the Tenant to allow the Landlord to pay the Tenant's Proportionate Share of the Taxes at least 21 days before Taxes are due and payable. If the Landlord does not require the Tenant to make monthly payments on account of Taxes and the Term ends when the actual Taxes for that calendar year are unknown, the Tenant shall pay to the Landlord within 10 days after written request from the Landlord the Proportionate Share of the Taxes for the portion of the calendar year before the end of the Term, based on the Landlord's estimate of the Taxes. At the election of either party, an adjustment will be made between the Landlord and the Tenant, when the actual Taxes are known.

3.4 TENANT TAXES. The Tenant shall pay to the Landlord all Tenant Taxes, within 10 days after demand by the Landlord. If the Term of this lease ends when the actual amount of the Tenant Taxes for that year is unknown, the Tenant shall, on or before the end of the Term, pay to the Landlord the Landlord's estimate of Tenant Taxes for that year. A further adjustment, if necessary, will be made between the Landlord and the Tenant when the actual amount of the Tenant Taxes is known.

3.5 RIGHT OF APPEAL. The Tenant shall have the right at its own expense in the name of the Landlord to appeal any assessment, Taxes or Tenant Taxes imposed in respect of the Premises, but the Tenant shall indemnify the Landlord against all costs and charges arising from such appeals including all resulting increases in assessments or taxes.

3.6 COMMON COSTS. The Tenant shall pay to the Landlord its Proportionate Share of Common Costs as follows:

(1)

the Landlord shall estimate the Common Costs for each year of the Term or its fiscal period, as the Landlord elects, and notify the Tenant in writing of its share. The Tenant shall pay 1/12th of the Landlord's estimate of the Tenant's Proportionate Share of Common Costs in advance with each monthly installment of Basic Rent payable throughout that period, which will be adjusted if the Landlord later re-estimates the Common Costs for such period or the remaining portion,

- 5 -

	(2)	the Landlord shall advise the Tenant of the actual amount of Common Costs for such period and the Tenant's Proportionate Share after the end of such period in reasonable detail, which will be binding on the parties, unless the Tenant gives written notice of objection within 60 days after receiving same. Within 30 days after receipt of that advice from the Landlord, the Tenant shall pay to the Landlord any underpayment by the Tenant of its Proportionate Share of Common Costs for the period or the Landlord shall credit the Tenant in respect of any overpayment; and

	(3)	if the Landlord is required to prepay any Common Costs or pay any Common Costs more frequently than required at the beginning of the Term, the Tenant shall pay to the Landlord its Proportionate Share of those Common Costs, within seven days after the written request of the Landlord, to allow the Landlord to pay those Common Costs in a timely manner.

3.7 OTHER EXPENSES AND OUTLAYS. The Tenant shall pay for all other expenses, costs and outlays whatsoever in connection with the Premises and this tenancy not otherwise set out in this lease, with the intent that the Landlord shall have no expenses, costs, or outlays whatsoever in connection with the Premises or this tenancy except as specifically set out in this lease.

3.8 BUSINESS TAX, ETC. The Tenant shall pay when due all business taxes and other taxes, charges, levies, licenses and expenses levied on the Tenant or Landlord in respect of the Tenant's business, use or occupancy of the Premises including interest and penalties for late payment.

3.9 EVIDENCE OF PAYMENTS. The Tenant shall deliver to the Landlord from time to time evidence satisfactory to the Landlord of the payment by the Tenant of all payments required by the Tenant under this lease, within seven days after written request by the Landlord.

3.10 POSTDATED CHEQUES. Within seven days after receiving a written request from the Landlord, the Tenant shall deliver to the Landlord postdated cheques covering Basic Rent, Tenant Taxes, ~~Taxes, Common Costs or the Landlord's estimate of same under paragraphs 3.3 and 3.4, and all other money~~ ~~thereafter payable by the Tenant to the Landlord under this lease, for those periods from time to time requested~~ ~~by the Landlord, which will be drawn on a Canadian chartered bank, trust company or credit union.~~

3.11 DEPOSIT. A deposit in the amount set out in Section 1.1 (16) hereto payable to NAI Goddard & Smith is delivered herewith to be held by the Landlord without any liability whatsoever on the part of the Landlord for the payment of interest thereon, to be applied first towards the gross rent due for the first and last months of the Term (the "Deposit") for the faithful performance by the Tenant of the terms, covenants ~~and conditions of this Offer to Lease and of the Lease during the Term. The Tenant understands and agrees~~ ~~that any portion of this Deposit may, at the Landlord's option, be applied towards the payment of overdue or~~ ~~unpaid Rent or be applied as compensation to the Landlord for any loss or damage sustained with respect to the~~ ~~breach on the part of the Tenant of any terms, covenants and conditions of this Offer to Lease or the Lease,~~ ~~provided in all cases, however, that the Tenant's liability is not limited to the amount of this Deposit. The~~ ~~Tenant shall pay to the Landlord any amount necessary to reinstate the amount, if any, remaining of the~~ ~~Deposit to its initial total within five (5) days of receipt of written notice from the Landlord, failing which the~~ ~~Landlord shall have all rights and remedies as if such amount was rent in arrears.~~

4.0 TENANT’S OPERATING COVENANTS

4.1 PAY RENT. The Tenant shall pay to the Landlord, without notice or demand, the rent set out in this lease in the manner provided by this lease.

- 6 -

4.2 USE OF PREMISES. The Tenant shall not allow the Premises to be used for any purpose other than for the uses given in paragraph 1.1(19), nor by anyone other than the Tenant, its agents, employees and invitees. It is the Tenant's sole responsibility to ensure that the Premises can be used for those purposes and to obtain any necessary permits, licenses and government approvals, at the Tenant's cost.

4.3 NO NUISANCE ETC. The Tenant shall not permit to be carried on in the Premises any noisy, illegal, noxious, hazardous, immoral or offensive activity. The Tenant shall not permit anything to be done in or about the Premises which may cause or permit annoying noises or vibrations or offensive odors to issue from the Premises or which may cause nuisance, annoyance, damage or disturbance to the Landlord or the occupants or owners of the Property or other premises in the vicinity of the Property, so as in the opinion of the Landlord to render the Premises or the Property or any part thereof less desirable or injure the reputation thereof as a first-class building.

4.4 COMPLY WITH LAWS. The Tenant shall at its expense promptly comply with all laws, ordinances by-laws, regulations, requirements and recommendations of all government and other authorities or associations of insurance underwriters or agents applicable to the Tenant, its business or use of the Premises, and all related notices served on the Landlord or the Tenant.

4.5 COMPLY WITH RULES. The Tenant shall ensure that the rules and regulations set out in Schedule "B" with all variations and additions which the Landlord from time to time makes and of which the Landlord gives written notice to the Tenant, are strictly observed and performed by the Tenant, its agents, employees, invitees and customers. All such rules and regulations will be part of this lease. The Landlord is not obligated to enforce the foregoing rules, regulations, terms, covenants or conditions in any other lease against any other tenant and the Landlord shall not be liable to the Tenant for the violation of same by any other tenant, its employees, agents or licensees.

4.6 SIGNS. The Tenant shall not place or allow any sign, notice, awning or advertisement on or visible from the outside of the Premises, the Building or any Common Area, without the prior written approval of the Landlord. The cost of same will be paid by the Tenant, unless otherwise specified in this lease. The Landlord may prescribe a standard or pattern for the Tenant's identification signs on the outside of the Premises or the Building. At the request of the Landlord not later than 180 days after the end of the Term, the Tenant shall at its own expense remove any or all of its signs, awnings and advertisements located on or about the Premises as designated by the Landlord and restore all portions of the Premises affected thereby to their former condition.

4.7 UTILITIES. The Tenant shall promptly pay all telephone, electric, oil, gas, water, garbage, scavenging and other utility charges in connection with or consumed on the Premises. If there is not a separate ~~meter for measuring any utility used in the Premises, the Tenant shall pay to the Landlord in advance by~~ ~~monthly instalments the amount estimated by the Landlord from time to time as the Tenant's share of such~~ ~~utilities. The Tenant shall immediately advise the Landlord of any appliances or machines installed by the~~ ~~Tenant likely to consume large amounts of electricity. The Tenant shall at the request of the Landlord from~~ ~~time to time deliver to the Landlord a list of all appliances, equipment and machines used in the Premises. If~~ ~~the Landlord pays any of the Tenant's utilities, the Tenant shall immediately reimburse the Landlord.~~

4.8 CARE OF PREMISES. The Tenant shall take good care of the Premises, keep them in a clean, tidy and healthy condition in accordance with any governmental laws or regulations and in accordance with all directions, rules and regulations of the health officer, fire marshal, building inspector or other proper officers of the applicable municipality or other agencies having jurisdiction or the insurers of the Landlord, and not allow the Premises to become unsightly or hazardous.

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4.9 DAMAGING EQUIPMENT. The Tenant shall not use the Premises so as to impair the efficient and proper operation of any HVAC or sprinkler system or other equipment located in or about the Premises.

4.10 CARRYING ON BUSINESS. The Tenant shall operate its business in a reputable and businesslike manner. ~~, maintain reasonable hours of operation of its business, keep the Premises open during~~ ~~business hours and not close the Premises for more than 30 business days in any calendar year, without the~~ ~~prior written consent of the Landlord.~~

4.11 DAMAGE TO PREMISES. The Tenant shall reimburse the Landlord for all costs incurred by the Landlord in repairing damage caused to the Premises, its furnishings and amenities and the Property as a result of the negligence, willful act or omission of the Tenant, its invitees, licensees, agents, employees, customers, clients or other persons in or about the Premises.

4.12 NOTICE OF DAMAGES OR DEFECTS. The Tenant shall give the Landlord prompt written notice of: any damage to or defect in the heating and air conditioning system, water pipes, plumbing system, gas pipes, telephone lines, or electric light; any other casualty, including without limitation damage by fire or water to the Premises or Property; or the presence of rodents or pests in or about the Premises or the Property; of which the Tenant or its agents or employees may be aware.

5.0 REPAIRS AND ALTERATIONS

5.1 REPAIRS The Tenant shall maintain, repair and keep the Premises, with all appurtenances, equipment and fixtures including locks, glass doors and windows in good order and repair as a careful owner would do, in accordance with the standard of the specifications of the building and the approval of the Landlord. The Tenant is responsible for all damage to the Premises caused by its customers, clients, invitees or licensees.

5.2 RIGHT TO INSPECT AND REPAIR The Landlord and its agent shall have the right at all times on at least 12 hours notice to enter the Premises, examine its condition, and the Tenant shall within 14 days after receipt of written notice, make the repairs and replacements the Landlord requires to comply with paragraph 5.1. If the Tenant fails to do so within that time, the Landlord or its agents may on reasonable notice enter the Premises and at the Tenant's expense, perform and carry out those repairs and replacements, and the Landlord will not be liable to the Tenant for any inconvenience, annoyance, loss of business or any injury or damage suffered by the Tenant by reason of the Landlord effecting such repairs unless caused by the negligence of the Landlord, its agent or employees. The Landlord is entitled to enter the Premises without notice in the event of an emergency.

5.3 LANDLORD'S CONSENT REQUIRED. The Tenant shall not make any repairs, alterations, installations, additions, removals, or improvements (collectively " Improvements ") in or about the Premises or do anything which might affect the operation of the lighting, plumbing, water, HVAC, or structure of the Building without having submitted adequate plans and specifications to the Landlord and having obtained the Landlord's prior written consent. All work consented to by the Landlord will be done at the Tenant's expense and at the times and in the manner the Landlord requires by contractors or tradesman previously approved in writing by the Landlord.

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5.4 CARRYING OUT IMPROVEMENTS. The Tenant shall promptly pay for all authorized Improvements, obtain necessary approvals from all governmental authorities and carry them out in a good and workmanlike manner in accordance with high quality standards and all statutes, regulations, by-laws and directions of applicable governmental authorities. The Tenant shall also pay to the Landlord the amount of all increases of insurance premiums or Taxes resulting from any such transactions. All Improvements made by the Landlord or the Tenant on the Premises including but without restricting the foregoing, wall to wall carpeting, wall and floor coverings, light fixtures, electrical, plumbing and heating fixtures and supplies, partitions and built-in furniture, will be the property of the Landlord and considered as part of the Premises.

5.5 TENANT'S REMOVAL OF FIXTURES, ETC. Subject to paragraph 5.4, the Tenant may at the end of the Term, remove from the Premises all movable and unattached furniture, machinery, fittings, shelving, supplies, counters, chattels and equipment brought onto the Premises by the Tenant constituting trade fixtures, but in removing them the Tenant shall not damage the Premises, and shall promptly repair any damage caused.

5.6 GOODS, CHATTELS NOT TO BE DISPOSED OF. The Tenant shall not except in the ordinary course of business remove from the Premises or sell in bulk any goods, chattels or fixtures until all Basic Rent and Additional Rent owing during the Term has been fully paid. The Tenant shall not under any circumstances remove from the Premises any plumbing, electrical, or HVAC fixtures or equipment or other building services.

5.7 MANDATORY REMOVAL OF FIXTURES, ETC. The Landlord may, by written notice to the Tenant not later than 90 days after the end of this lease, require the Tenant to remove all or any part of the Tenant's property and any fixtures, Improvements, or fittings to the Premises installed by the Tenant or by the Landlord on behalf of the Tenant and to restore the Premises to their condition at the beginning of the Term, which will be done at the Tenant's expense. The Tenant shall at its expense repair all resulting damage to the Premises. If the Tenant does not remove them within 10 days after such written notice, the Landlord may do so and the Tenant shall immediately pay the cost of same to the Landlord. The Landlord shall not be responsible for any loss or damage to the Tenant's property caused by that removal. If the Tenant does not remove any of its property on the expiration of the Term or on the termination of this lease by the Landlord in the event of the Tenant's default, such property shall become the Landlord's property.

5.8 LIENS AND ENCUMBRANCES. The Tenant shall keep the Property free from and immediately discharge all liens, claims of lien and other encumbrances filed against the Premises, Property by or as a result of the actions or default of the Tenant or any contractor, subcontractor, supplier, consultant, worker or other person engaged by the Tenant or any contractor of the Tenant or for whom the Tenant is legally responsible or who has done work or provided labour, materials or services in respect of the Premises. If Tenant fails to do so, the Landlord may pay into Court or into a lawyer's trust account the amount required to obtain a discharge of such lien or encumbrance. The Tenant shall pay to the Landlord all amounts paid or incurred and all actual legal and other fees, costs and disbursements in respect of those proceedings, on a full-indemnity basis. The Tenant shall also indemnify and save harmless the Landlord from and against all damages suffered by the Landlord as a result of those liens and encumbrances. Prior to permitting any work to be done on the Premises, at the request of the Landlord, the Tenant shall post and during the work keep posted in prominent locations on the Premises at least two notices signed by the Landlord indicating that the Landlord will not be responsible for such work or improvements. If requested by the Landlord, the Tenant shall allow the Landlord to post such notices, and shall not remove same.

5.9 NO REPRESENTATIONS BY LANDLORD. There are no promises, representations or undertakings by or binding on the Landlord with respect to any alteration, remodeling or decorating, or installation of equipment or fixtures in the Premises or the possible use(s) of the Premises or with respect to any other matter, except as expressly set out in this lease.

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6.0 INSURANCE AND INDEMNIFICATION

6.1 TENANT INSURANCE The Tenant shall maintain in force:

	~~(1)~~	glass insurance, with the Landlord as a named insured and for the benefit of the Landlord and the Tenant, covering all glass and plate glass in or part of the Premises, including glass windows and doors, in an amount equal to its full insurable value;

	~~(2)~~	comprehensive general public liability insurance ~~, for the benefit of the Landlord and the Tenant, in amounts~~ (not less than $2,000,000.00 per incident). designated by the Landlord in respect of claims for injury, death or property damage; such comprehensive general liability insurance shall, for the Tenant's benefit only, include contractual liability insurance in the form and of a nature broad enough to insure the obligations imposed upon the Tenant under the terms of this lease,

	3)	insurance in respect of fire and other extended perils customarily contained in an extended coverage endorsement and insured against by a prudent owner covering leasehold improvements, fixtures, furniture, inventory, equipment and personal property of the Tenant to their full insurable value. Such insurance will include the Landlord as a named insured as its interest may appear with respect to insured leasehold improvements. The Tenant shall make such proceeds available toward the repair or replacement of the insured property if this lease is not terminated; and

	(4)	such other insurance as the Landlord requires as a prudent landlord agreed to by the Tenant.

The Tenant shall effect all insurance with insurers and brokers licensed to carry on business in British Columbia ~~who are acceptable to the Landlord and on terms satisfactory to the Landlord acting~~ ~~reasonably,~~ and shall at minimum contain insurance coverage against all perils and hazards normally covered by standard policies in British Columbia. ~~All insurance policies will contain a cross liability clause in favour~~ ~~of the Landlord as if the Landlord and Tenant were separately insured and a clause requiring the insurer not to~~ ~~cancel, alter or fail to renew the insurance without first giving the Landlord at least 30 days prior written~~ ~~notice.~~

~~The Tenant shall supply the Landlord with a certificate signed by an insurance agent or~~ ~~insurance company setting out in detail the particulars of its insurance coverage at the beginning of the Term~~ ~~and with respect to any new policies at least 30 days before the end of the existing policies.~~ In the event of any loss or damage to the Property or if requested by the Landlord, the Tenant shall provide a copy of the policies in force with respect to such insurance coverage. If the Tenant does not maintain in force any required insurance or provide proof of insurance, the Landlord may take out insurance it deems appropriate, pay the premiums, and the Tenant shall pay to the Landlord the amount of the premium on the next Basic Rent payment date. If both the Landlord and the Tenant have claims to be indemnified under any insurance, the insurance proceeds will be applied first to the settlement of the claim of the Landlord and the balance to the settlement of the claim of the Tenant.

6.2 ACTS CONFLICTING WITH INSURANCE. The Tenant shall not do or omit or permit anything to be done or omitted by its employees, agents, customers, licensees, subtenants, or assignees which may render void or voidable or conflict with the requirements of any insurance policy relating to the Property or regulations of fire insurance underwriters applicable to such policy, or which may increase the premiums payable in respect of any such policy. If any policy is cancelled or threatened to be cancelled because of:

	(1)	any act or omission,

	(2)	the actual or intended occupation of the Premises, or

	(3)	the nature of the business carried on

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by the Tenant, its employees, agents, customers, licensees, subtenants, or assignees the Landlord shall have the right at its option to terminate this lease immediately by giving notice of termination to the Tenant. If the premiums payable in respect of any such policy are increased for any of the reasons given above in this paragraph 6.2, the Tenant shall at the Landlord's request pay to the Landlord the amount by which those premiums are increased.

6.3 INDEMNITY TO LANDLORD. The Tenant shall indemnify and save harmless the Landlord from all liabilities, damages, costs, claims, suits and actions in connection with all:

	(1)	breaches, and defaults in respect of any covenant, term or agreement of this lease by the Tenant;

	(2)	negligent or willful acts or omissions of the Tenant;

	(3)	damage to property on or about the Premises, unless occurring solely as a result of the Landlord's negligence; and

	(4)	injuries to any licensee, invitee, agent or employee of the Tenant, and death resulting therefrom, occurring on or about the Premises as a result of a breach or default under this lease, or any negligence or willful act, of the Tenant, its employees, agents, customers, invitees or licensees,

including all costs and actual legal fees and disbursements of the Landlord on a full-indemnity basis. Notwithstanding any other provision of this lease, the indemnity in this paragraph 6.3 will under all circumstances survive the end of this lease.

6.4 RESPONSIBILITY FOR INJURIES, LOSS, DAMAGE. The Landlord is not responsible for any injury to any person or for any loss of or damage to property of the Tenant or other occupants of the Premises or their invitees, licensees, agents, employees or other persons in the Premises or while such person or property is in or about the Premises, the Property, or any related areaways, parking areas, lawns, sidewalks, steps, truck ways, platforms, corridors or stairways, including, without limiting the foregoing, that caused by theft or breakage, or by steam, water, rain or snow which may leak into or flow from the Building, the Property, any nearby lands or premises or any other place, or for any injury to any person or loss or damage attributable to wiring, smoke, anything done or omitted by any other tenant or for any other loss whatsoever with respect to the Premises and any business carried on therein, unless caused by the negligence of the Landlord.

6.5 NO LIABILITY FOR INDIRECT DAMAGES. The Landlord is not liable for indirect or consequential damages for personal discomfort or illness caused by or in respect of the heating of the Premises, or the operation of any air conditioning equipment, elevators, plumbing or other equipment in or about the Property.

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7.0 DISPOSITIONS

7.1 ASSIGNING OR SUBLETTING The Tenant shall not assign, sublet, transfer or enter into or a grant a license, concession, or right of occupancy (a " Disposition ") with respect to the Premises or any part without having previously requested in writing and obtained the written consent of the Landlord, which consent will not be unreasonably withheld. Without limiting the foregoing, the Landlord must be satisfied as to the respectability, reputation and financial responsibility of the person or other entity (an " Assignee ") to whom the Tenant wishes to make a Disposition. The Landlord may, as a condition of consenting, require an Assignee to agree in writing with the Landlord to fulfill all the obligations of the Tenant under this lease and all directors, officers and shareholders of the Assignee to guarantee those obligations, on terms prepared by the Landlord's solicitors. The Tenant shall promptly deliver to the Landlord all information the Landlord reasonably requires in respect of the proposed Assignee including its name, address, the nature of its business, proof of its financial responsibility and reputation and a copy of the form of assignment or other Disposition document proposed to be used.

Any Disposition to which the Landlord has consented will not release the Tenant from any of its obligations under this lease. The Landlord's acceptance of Rent from an Assignee who the Landlord has not consented to will not constitute a waiver of the requirement for consent. The Tenant shall pay promptly after request all the Landlord's actual legal and other costs incurred in connection with the Tenant's request for consent. No Disposition will be made to anyone carrying on a business the Landlord is obligated to restrict because of any other lease or agreement.

If the Tenant seeks the consent of the Landlord to a Disposition, the Landlord shall be entitled at its option, to require a surrender of this lease by the Tenant. The Landlord shall have 14 days after receiving written notice from the Tenant of its desire to make a Disposition, to notify the Tenant that it requires the Tenant to surrender the Premises. In such case the Tenant shall execute a surrender of this lease in form satisfactory to the Landlord, within 7 days after receiving same from the Landlord. The Tenant shall vacate the Premises within 60 days after receiving notice to surrender from the Landlord and shall pay rent and all other money due under this lease and fulfill its other obligations under this lease until the date it vacates the Premises, when this lease and all the rights and duties of the parties under this lease will cease to exist.

If the Tenant is a non-reporting body corporate, any direct or indirect change in the control or beneficial ownership of the Tenant to any person not presently a shareholder of the Tenant, by transfer or issuance of shares or otherwise, will be deemed a Disposition and subject to all the foregoing provisions of this paragraph 7.1.

7.2 SUBORDINATION. This lease is subject and subordinate to all debentures, mortgages or other financial encumbrances at anytime registered in the applicable Land Title Office or the Registrar of Companies against the Property, regardless of the dates of registration. The Tenant shall promptly from time to time execute and deliver to the Landlord all documents or assurances the Landlord requires to effect this subordination. Any documents signed by the Tenant to evidence the foregoing subordination will provide that if the Tenant fulfils its obligations under this lease, it will remain in full force notwithstanding any action taken by an encumbrance holder in respect of the Premises to enforce its encumbrance.

7.3 SALE BY LANDLORD. In the event of a sale, transfer or lease by the Landlord of the Premises or the Property or the assignment by the Landlord of this lease or any interest under this lease, the Landlord shall, without further agreement, to the extent that such purchaser, transferee or lessee has become bound by the covenants and obligations of the Landlord under this lease, be released and relieved of all liability and obligations under this lease.

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7.4 PEACEFUL SURRENDER. At the end of the Term, the Tenant shall immediately peaceably surrender and yield up to the Landlord the Premises, its appurtenances, and all fixtures, improvements, and modifications, in a state of cleanliness and good repair, order and condition, without notice from the Landlord and deliver to the Landlord all keys to the Premises in the possession of the Tenant.

8.0 LANDLORD'S COVENANTS

8.1 QUIET ENJOYMENT. Upon the Tenant paying the rent and performing its other obligations under this lease, the Tenant will be entitled to peaceably possess and enjoy the Premises for the Term without interruption or disturbance from the Landlord or any other persons lawfully claiming by, from or under the Landlord, except as specifically set out in this lease.

8.2 LANDLORD’S COVENANTS. The Landlord covenants with the Tenant:

(1)	to pay the Taxes except the Tenant's Taxes;

(2)	to insure and keep insured the Building to an amount not less than 80% of the replacement cost against all risk of loss or damage caused by or resulting from fire, lightning, explosion, malfunction or non-function of boilers, pipes or accessories in or upon the Building and all perils defined in the standard fire insurance peril supplementary contract customarily in use from time to time during the Term or any extensions thereof for similar structures;

(3)	to refund to the Tenant or, at the Landlord's option, to credit against any amount owing by the Tenant to the Landlord , any excess payments made by the Tenant on account of the its Proportionate Share of the Taxes or Common Costs;

(4)	to provide heat to the Premises to an extent sufficient to maintain a reasonable temperature during Business Hours on Business Days, except during the making of repairs;

(5)	to supply water if possible and permissible by statute for washing and sanitary requirements of the Tenant and, at the Tenant's request and expense, to make water available to the Premises for other reasonable uses of the Tenant;

(6)	to supply 110 volt electrical current to the premises sufficient for operating a normal business office;

(7)	to provide, maintain and operate during Business Hours on Business Days, except when repairs are being made, an air-conditioning system on an open floor basis, provided that the Landlord shall not be obliged to provide such air-conditioning:

	(1)	in those areas of the Premises having exterior windows exposed to the sun where and when the Tenant fails to keep all such windows closed and to keep the window shading thereon fully closed,

	(2)	in those areas of the Premises where the average amount of electric power supplied for illumination, business machines, office use and all purposes exceeds four watts per square foot of the Rentable Area,

	(3)	in those areas of the Premises where the human occupation exceeds one person per hundred square feet of the Rentable Area,

	(4)	in those areas of the Premises where the plans for extension of the air-conditioning system to service partitioned space has not been approved by the Landlord,

	(5)	in those areas of the Premises partitioned and used as a storage area;

(8)	to provide where already installed and except when repairs are being made, passenger elevator service and to permit the Tenant, its employees, agents and invitees to have free use of such elevator service in common with others, however the Tenant, its employees, agents and

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		invitees using the same shall do so at their sole risk and under no circumstances shall the Landlord be responsible for any damage or injury happening to any person while using the elevator or occasioned to any person by any elevator or any of its appurtenances, unless caused by the negligence of the Landlord;

	(9)	to permit the Tenant, its employees, agents, invitees and other persons lawfully requiring communication with the Tenant to have the use during Business Hours in common with others of the main entrance and stairways, corridors and elevators leading to the Premises. At times other than Business Hours the Tenant, its employees, agents, invitees and persons lawfully requiring communication with the Tenant shall have access to the Building and to the Premises and the use of the elevators only in accordance with the rules and regulations attached hereto or subsequently adopted by the Landlord;

	(10)	to permit the Tenant, its employees, agents and invitees in common with others entitled thereto to use the washrooms in the Building on the floor or floors in which the Premises are situate.

	(11)	to provide janitorial services to the Premises at the request and expense of the Tenant. Such services shall be provided on Business Days only, excluding Saturdays, and after Business Hours only (except window cleaning), and shall include sweeping and cleaning of the floors and internal windows of the Premises, dusting of the desks, tables and other furniture of the Tenant, and removal of refuse from the Premises. Such services shall be provided at the Landlord's direction without interference by the Tenant or its servants or employees, and the Landlord shall not be responsible for any act or omission on the part of the person or persons employed to perform such services;

	(12)	to clean and maintain, if requested and at the expense of the Tenant, the light fixtures provided by the Landlord to the Premises, it being agreed by the Tenant that such cleaning and maintenance shall be performed exclusively by the Landlord or its contractors;

	(13)	to show the Tenant's name upon the directory board, if any, in the Building, but the Landlord shall, in its sole discretion, design the style of such identification and allocate the space on the directory board at the Tenant's cost.

8.3 LANDLORD'S WORK The Landlord may but shall not be obligated to make additions, improvements, installations and repairs to the Property other than the Premises. In this regard the Landlord may cause any obstruction of or interference with the use or enjoyment of the Premises that may reasonably be necessary, and may interrupt or suspend the supply of electricity, water or other services when necessary. Until same is completed there will be no abatement in rent, nor shall the Landlord be liable as a result.

The Landlord and all persons authorized by the Landlord may but shall not be obligated to use, install, maintain or repair pipes, wires, ducts or other installations in, under or through the Premises for or in connection with the supply of any services deemed advisable by the Landlord or for any other purposes reasonably required by the Landlord in relation to the Premises or any other premises on the Property. Those services may include, without limitation gas, electricity, water, sanitation, HVAC, and fire protection.

The Landlord and all persons authorized by the Landlord may but shall not be obligated to enter the Premises and make all decorations, repairs, alterations, improvements or additions the Landlord considers advisable or as required to comply with governmental requirements and regulations. The Landlord and all persons authorized by the Landlord are allowed to take all necessary material into the Premises and the rent under this lease will not abate during that work.

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8.4 LANDLORD'S RIGHT TO INSPECT, LANDLORD SIGNS. Any persons may inspect the Premises at all reasonable times by delivering to the Tenant on at least 12 hours notice a written direction to that effect signed by the Landlord. The Landlord shall have the right during the last six months of the Term to place on the Premises and the Property, a sign or notice that the Premises are for rent and containing other related information, and the Tenant will not remove that notice or permit it to be removed. The Landlord shall also have the right at any time to place on the Property or Building a sign stating that the Property is for sale.

9.0 DEFAULT

9.1 DEFAULT. If at any time:

	(1)	the Tenant does not make any payment of Basic Rent or Additional Rent when it is due and payable,

	(2)	the Tenant or any other occupant of the Premises violates or fails to observe or perform any other covenant, agreement or obligation in this lease, which has not been cured 7 days after written notice of same has been given by the Landlord to the Tenant, or

	(3)	the Premises are unoccupied or unopened for at least 5 consecutive business days without prior written approval of the Landlord, or are vacated;

the Landlord, in addition to any other available remedies, may at its option immediately cancel and terminate this lease, re-enter and take possession of the Premises by force if necessary without previous notice, remove all persons and property and use such force and assistance as the Landlord deems advisable to recover possession of the Premises. In such case, all right, title and interest of the Tenant under this lease will immediately cease and expire and the Tenant shall pay to the Landlord all the Landlord's expenses of retaking possession, including legal fees and disbursements on a full-indemnity basis. The Landlord shall not be liable for any loss or damage to the Tenant's property or business caused by any reasonable acts of the Landlord in exercise of its rights and remedies under this lease.

9.2 BANKRUPTCY, ETC. If this lease or any of the goods or chattels of the Tenant are seized or taken in execution or in attachment by any creditor of the Tenant, or if the Tenant makes any assignment for the benefit of creditors, or if a receiver, receiver and manager or receiver-manager is appointed in respect of any of the assets of the Tenant on or about the Premises, or if the Tenant is wound up or takes the benefit of any Act for bankrupt or insolvent debtors, then at the election of the Landlord this lease shall immediately be forfeited and void and the Basic Rent and Additional Rent for the current month and the next 3 months will immediately become due and payable. In such case the Landlord shall at any time thereafter be entitled to re-enter and repossess the Premises in the same manner and with the same rights and protections as under paragraph 9.1 above.

9.3 CERTAIN CONSEQUENCES OF RE-ENTRY. If the Landlord re-enters the Premises, without limiting any other remedies available to the Landlord:

	(1)	the Tenant shall pay on the first day of every month the Basic Rent and Additional Rent for the balance of the intended term of this lease as if re-entry had not been made, less the actual amount received by the Landlord after re-entry from any subsequent leasing for the balance of the intended term;

	(2)	the Landlord will be entitled to re-let the Premises and the Tenant will be responsible to the Landlord for all damages suffered by the Landlord as a result of the Tenant's breach or default.

Re-entry will not operate as a waiver or satisfaction in whole or in part of any right, claim or demand of the Landlord in connection with any breach or failure by the Tenant in respect of any of its obligations under this lease.

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9.4 LANDLORD MAY PERFORM TENANT'S OBLIGATIONS. If the Tenant fails to perform any of its obligations under this lease, the Landlord may cause the same to be performed and do all things necessary or incidental thereto, including without limitation the right to make repairs, installations, modifications, and spend money. All related payments, expenses, charges, fees and disbursements thereby incurred or paid by or on behalf of the Landlord will be immediately payable by the Tenant to the Landlord.

9.5 INABILITY TO PERFORM. The Landlord does not warrant that any obligation, service or facility to be performed or provided by it under this lease or under any other agreement with the Tenant will be free from interruption or delay caused or required by maintenance, repairs, renewals, modifications, strikes, riots, insurrections, labour controversies, accidents, fuel shortages, government intervention, statute, law, force majeure, act of God or other causes beyond the Landlord's reasonable control. During the period of such interruption the Landlord shall be relieved from such obligations, which will not be an eviction or disturbance of the Tenant's enjoyment of the Premises, or render the Landlord liable in damages to the Tenant, or relieve the Tenant from its obligations under this lease.

9.6 DISTRESS. All the goods and personal property of the Tenant on the Premises or elsewhere will be liable to distress and sale by the Landlord for arrears of rent, including Basic Rent, Additional Rent and accelerated rent. None of the goods or personal property in the Premises will be exempt from distress or sale and the Tenant waives the benefit of all present and future statutes limiting or eliminating the Landlord's right of distress. The Landlord may use all force it deems necessary to enter the Premises without being liable to any action or resulting loss or damage and the Tenant releases the Landlord from all actions, claims and demands in respect of such distress. The Landlord may follow any goods or personal property removed from the Premises by the Tenant for 90 days after such removal.

9.7 LANDLORD'S COSTS IN ENFORCING LEASE. In the event of a breach or default by the Tenant, the Landlord shall be entitled to collect from the Tenant immediately on demand, its actual costs and expenditures relating to such breach or the exercise of any right or remedy available to the Landlord under this lease or otherwise, including without limitation its legal costs and disbursements on a full- indemnity basis.

9.8 RIGHTS CUMULATIVE. All rights and remedies of the Landlord under this lease are cumulative and not alternative and are in addition to and do not restrict any other rights and remedies available to the Landlord in the event of any breach or default by the Tenant, which shall remain in full force and effect.

9.9 WAIVER. The failure of the Landlord to insist on strict performance of any obligation of the Tenant in this lease or to exercise any right or option under this lease will not be a waiver or relinquishment of that obligation or any other default under this lease. The acceptance of any rent from or the performance of any obligation by anyone other than the Tenant will not be an admission by the Landlord of any right, title or interest of such person as a sub-tenant, assignee, transferee or otherwise in the place of the Tenant, nor shall it constitute a waiver of any breach of this lease. If the Landlord makes an error in calculating or billing any money payable by the Tenant under this lease, such will not be a waiver of the Landlord's right to collect the money payable by the Tenant.

9.10 INTEREST. The Tenant shall pay to the Landlord interest of 18% per year on all money payable by the Tenant pursuant to this lease or which the Landlord has paid on behalf of the Tenant, which has become overdue, as long as such payments remain unpaid by the Tenant, which interest will be recoverable as Additional Rent.

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10.0 DAMAGE AND DESTRUCTION/EXPROPRIATION

10.1 DAMAGE OR DESTRUCTION OF PREMISES.

	(1)	If the Premises are damaged or destroyed by perils covered by the Landlord's insurance policy with respect to the Premises and unless that damage is caused by the negligence or fault of the Tenant, its employees or agents, the Basic and Additional Rent will abate in the proportion that the area of the Premises rendered unfit for occupancy bears to the area of all of the Premises until the Premises are rebuilt, and the area of the Premises will be considered to be the Gross Area. Unless this lease is terminated as herein provided, the Landlord shall to the extent that insurance proceeds are available repair the Premises, except for alterations or improvements made by the Tenant. The Landlord shall not be liable to the Tenant for any loss or damage suffered by the Tenant as a result of delay arising because of adjustment of insurance by the Landlord, labour troubles or any other cause beyond the Landlord's reasonable control.

	(2)	If the Premises are damaged or destroyed by any cause, and in the opinion of the Landlord the Premises cannot be rebuilt or made fit for the purposes of the Tenant within 120 days after the date of such damage or destruction, instead of rebuilding or making the Premises fit for the Tenant, the Landlord may, at its option, terminate this lease by giving the Tenant notice of termination within 90 days of such damage or destruction.

	(3)	Whether or not the Premises are damaged, if at least 40% of the rentable area of the Building is damaged or destroyed, and in the opinion of the Landlord acting reasonably that area cannot be rebuilt or made fit for tenants within 120 days after the damage or destruction, the Landlord may by written notice to the Tenant within 90 days after such damage or destruction, terminate this lease.

	(4)	If the Landlord gives a notice under subparagraphs 10.1(2) or (3), rent and any other payments for which the Tenant is liable under this lease will be apportioned and paid to the date that the Tenant vacates the Premises. In such event, this lease will cease to exist on the effective date of the notice, not less than 60 days after the Landlord gives the Tenant such notice. As of that effective date, the parties will not be liable to fulfill their obligations under this lease and the Tenant shall surrender to the Landlord vacant possession of the Premises.

10.2 EXPROPRIATION. If during the Term, all of the Premises are expropriated, condemned or otherwise taken by an authority having such power, the Term shall cease from the date of entry of that authority. If more than 30% of the area of the Premises is so acquired or condemned, this lease will cease and terminate at either the Landlord's or the Tenant's option exercised by written notice to the other party not later than 10 days before the date (the " Expropriation Date ") on which possession is taken by that authority. If that option is not exercised, rent shall abate from the Expropriation Date in an amount mutually agreed on by the Landlord and the Tenant, or failing agreement, as determined by a sole arbitrator in accordance with the British Columbia Commercial Arbitration Act . In either event, the Landlord shall not be responsible for any loss, damage or expense suffered by the Tenant as a consequence of such acquisition, condemnation or taking, and either the Landlord or the Tenant or both shall be entitled to recover damages from that authority for the value of their interests and all other damages and expenses allowed by law.

11.0 MISCELLANEOUS

11.1 LANDLORD-TENANT RELATIONSHIP. The Landlord and Tenant declare their relationship is not a joint venture or partnership, or any other relationship than that of Landlord and Tenant. 11.2 ENUREMENT. This lease will enure to the benefit of and be binding on the parties and their executors, administrators, and permitted successors and assigns.

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11.3 HOLDING OVER. If the Tenant holds over after the end of the Term, and the Landlord accepts rent from the Tenant, the new tenancy will be a month to month tenancy, subject to the terms and covenants herein applicable to a month to month tenancy, except that:

	(1)	it will be subject to termination by the Landlord on one week's written notice to the Tenant;

	(2)	there will be no right of renewal; and

	(3)	the monthly Basic Rent payable will be increased by 50% above the monthly Basic Rent last payable under this lease.

11.4 REGISTRATION. The Landlord does not represent that this lease can be registered and the Tenant will not register it without the Landlord's approval. Any registration of this lease by the Tenant will be the sole responsibility of the Tenant, who will pay all costs incurred by the Landlord in attempting to put the lease in registrable form including without limiting the foregoing, surveyor's fees and disbursements, the cost of plans, and actual legal fees and disbursements on a full-indemnity basis. If this lease is registered by the Tenant, the Tenant must clear this lease from title at its own expense at the end of the Term.

11.5 NO CHANGES OR WAIVERS. This lease constitutes the entire agreement between the parties with respect to the Premises except as contained in any written agreement previously entered into by the parties, but in the event of conflict between such agreement and this lease, this lease shall prevail. No changes to or waiver of any of this lease will be binding or enforceable unless reduced to writing, attached to and executed by the Landlord and the Tenant. The Landlord's agents have no authority to amend this lease unless duly authorized in writing by the Landlord to do so.

11.6 NOTICES. Any notice, request, demand, direction, or statement required or permitted under this lease to the Tenant or the Landlord will be sufficiently given if delivered or mailed in British Columbia by double registered mail postage prepaid, to their addresses on page one, or if given to the Tenant, if delivered to the Premises. Any notice will be deemed to have been given on the date delivered or if mailed as aforesaid, on the sixth day after it was mailed. Either party may at any time give written notice to the other party of a change of address for notices, after which the altered address will be the address of the notifying party for notices.

11.7 CERTIFICATES. On the request of either party (the " Requesting Party "), the other party shall from time to time promptly provide to the Requesting Party, or to any other third party designated by the Requesting Party, certificates in writing as to the then current status of this lease, including whether it is in full force and effect, modified or unmodified, the rent payable under this lease, the state of the accounts between the Landlord and Tenant, the existence or non-existence of defaults, and any other matters pertaining to this lease as to which the Requesting Party shall request a certificate.

11.8 BRITISH COLUMBIA LAW. This lease will be construed in accordance with the laws of British Columbia.

11.9 INTERPRETATION. If there are two or more Tenants, Covenantors or persons bound by the Tenant's obligations under this lease, their obligations are joint and several. All the obligations of the Tenant under this lease are to be construed as covenants and agreements as though the words importing such covenants and agreements were used in each separate provision. All obligations of the Tenant are in force during the full Term, unless otherwise specified. The words "Tenant" or "Covenantor" (if applicable) and the personal pronoun "it" relating thereto and used therewith shall be read and construed as Tenants or Covenantors (if applicable) and "his", "her", or "its" or "their" respectively, as the number and gender of the party or parties referred to each require, and the number of the verb agreeing therewith will be construed and agreed with the said word or pronoun so substituted.

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11.10 PROVISIONS SEVERABLE. If any provisions of this lease are illegal or unenforceable, they will be considered separate and severable from this lease and the remaining provisions will remain in force and be binding on the parties as if the severed provisions had not been included.

11.11 HEADINGS. The headings and index in this lease do not form part of this lease and are inserted for convenience of reference only.

11.12 TIME OF ESSENCE. Time is of the essence of this lease.

11.13 COUNTERPARTS. This lease may be executed in any number of counterparts, or by facsimile, each of which when delivered will be deemed to be an original, for all purposes and will constitute one and the same instrument, binding on the parties, notwithstanding that all the parties are not signatories of the same counterpart or facsimile.

11.14 OPTION TO RENEW . Provided that the Tenant is not in breach and has punctually met and performed each and every one of the covenants, provisos and agreements herein contained on the part of the Tenant to be performed, the Landlord will, at the expiration of the Term and on the written request of the Tenant delivered or mailed to the Landlord not later than six months before the expiration of the Term, grant to the Tenant a renewal of this Lease of the Premises for a further term of three years from the end of the Term on the same terms and conditions as in this Lease, except as to Base Rent, any abatements of rent, any contributions by the Landlord to the cost of Leasehold Improvements, any other incentives provided by the Landlord, and this right of renewal. The Landlord and the Tenant will make all reasonable efforts to reach agreement as to the annual rent for such three year period not more than three months prior to the commencement of such three year period and not less than two months prior to the commencement of such three year period and failing such agreement such annual rent will be fixed under the provisions of the Commercial Arbitration Act , R.S.B.C. 1996, c. 55, and will be the fair market rent for the Premises, having regard to the rent then currently being charged for premises of a like kind, of a like age and condition, and in comparable locations in the City of Vancouver. Such annual rent will in any event be not less than the annual rent fixed in respect of the previous period for which annual rent has been fixed under this Lease.

WHEREFORE the parties to this lease have executed this lease as of the date first given above.

ALDA Pharmaceuticals Corp. (“Tenant”)
Per:

"Peter Chen"
Authorized Signatory

Duft Enterprises Corp. (“Landlord”)
Per:

"Terrance Owen"
Authorized Signatory

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- 20 -

1.1 SCHEDULE "B"

Rules and Regulations referred to in paragraph 4.5 of this lease.

1.	No animals will be allowed on the Premises at any time, and no birds or animals may be fed on the Property.

2.	The Premises will not be used as overnight sleeping accommodation, nor for manufacturing, nor for auction sales. The address of the Premises will not be given in an advertisement for laborers without the Landlord’s approval.

3.	Windows will not be left open so as to admit rain or snow. All doors and windows will be securely closed and locked and all water faucets and electric lights (except display lighting) turned off before the Tenant leaves the Premises.

4.	The Tenant shall not alter any existing locks nor attach any additional locks or similar devices to any door or window without the consent of the Landlord and the Landlord shall be permitted to retain one copy of all keys to the Premises.

5.	The Tenant shall not make any duplicate keys without the consent of the Landlord. All keys in respect of the Premises and the Building will be delivered to the Landlord immediately after the lease has terminated.

6.	The Tenant shall provide adequate receptacles for garbage and waste within the Premises and all of the Tenant's garbage and waste will be placed in such containers.

7.	The following conduct is prohibited in the Building and on the Property without the prior written consent of the Landlord: canvassing, soliciting or peddling; installation of vending machines; obstruction of any sidewalk, entrance, elevator, stairway, corridor, hall, window, door or any other area outside the Premises except for access to the Premises.

8.	The Tenant shall not bring on the Premises any heavy equipment, motors, explosives, or other articles or substances of a dangerous nature, or anything else which might damage the Building or anything on the Property, without the consent of the Landlord. If it consents, the Landlord may prescribe the weight, time, and manner of the transportation or location of any heavy object brought into the Building or onto the Property.

9.	Freight or bulky matter of any description shall only be received in or carried in the building during hours approved by the Landlord.

10.	The Tenant shall employ efficient janitors or cleaners to wash and otherwise clean in a reasonable manner the Premises, including windows.

11.	The Tenant shall keep properly painted the painted portions of the Premises, and will install in the Premises only such window shades, drapes and floor coverings, and to apply only such wall coverings and paints as are first approved in writing by the Landlord, such approval not to be unreasonably withheld, and to cause the same to be installed or applied by competent workmen.

12.	The Tenant shall maintain any washrooms in the Premises in a clean and sanitary condition.

13.	If the Premises are on the ground floor, the Tenant shall remove snow and ice from the Premises, Building, and Property attached thereto and deposit salt or a similar substance as may be reasonably required to make the Premises, Building, and Property safe.

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14.	Outside normal business hours, the Landlord may:

	(a	~~require all persons entering and leaving the Building to register in any book(s) kept at or near the night entrance,~~


	(b	~~prevent any person who does not have a pass in a form approved by the Landlord from entering or leaving the Building, or~~


	(c	~~hold any person found in the Building without such pass under surveillance.~~

	~~The Landlord shall have no responsibility for failure to enforce this rule.~~

15.	The Tenant shall not affix any broadloom, carpeting or vinyl type flooring to the Premises by means of an insoluble adhesive or similar product except as approved by the Landlord.


~~16.~~	~~Bicycles will not be brought inside or left outside the building on the Property, except secured to dedicated bicycle racks.~~


17.	The Tenant shall be liable to the Landlord for all injuries, damages, costs and expenses caused by the infraction of any of the foregoing rules and regulations by the Tenant or its employees, agents, invitees or licensee.

DUFT BIOTECH CAPITAL LTD.

Stock Option Incentive Plan

1. PURPOSE

The purpose of this Stock Option Incentive Plan is to provide an incentive to Eligible Persons to acquire a proprietary interest in the Company, to continue their participation in the affairs of the Company and to increase their efforts on behalf of the Company.

2. DEFINITIONS

In this Plan, the following words have the following meanings:

(a)	“Board” means the Board of Directors of the Company;

(b)	“Common Shares” means the Common Shares of the Company;

(c)	“Company” means Duft Biotech Capital Ltd.;

(d)	“Effective Date” means the day following the date upon which the Plan has been approved by the last to approve of the shareholders of the Company, the Board and the TSX Venture

(e)	“Eligible Person” means any director, senior officer, employee or consultant of the Company or any affiliate of the Company;

(f)	“Exchange” means the TSX Venture Exchange and any other stock exchange or stock quotation system on which the Common Shares trade;

(g)	“Fair Market Value” means, as of any date, the value of the Common Shares, determined as

	(i)	if the Common Shares are listed on the TSX Venture Exchange, the Fair Market Value shall be the last closing sales price for such shares as quoted on such Exchange for the market trading day immediately prior to the date of grant of the Option, less any discount permitted by the TSX Venture Exchange;

	(ii)	if the Common Shares are listed on an Exchange other than the TSX Venture Exchange, the fair market value shall be the closing sales price of such shares (or the closing bid, if no sales were reported) as quoted on such Exchange for the market trading day immediately prior to the time of determination less any discount permitted by such Exchange; and

	(iii)	if the Common Shares are not listed on an Exchange, the Fair Market Value shall be determined in good faith by the Board;

(h)	“Investor Relations Activities” has the meaning set out in the policies of the TSX Venture

(i)	“Option” means the option granted to an Optionee under this Plan and the Option Agreement;

(j)	“Option Agreement” means such option agreement or agreements as is approved from time to time by the Board and as is not inconsistent with the terms of this Plan;

(k)	“Option Date” means the date of grant of an Option to an Optionee;

(l)	“Optionee” means a person to whom an Option has been granted;

(m)	“Option Price” is the price at which the Optionee is entitled pursuant to the Plan and the Option Agreement to acquire Option Shares;

(n)	“Option Shares” means, subject to the provisions of Article 8 of this Plan, the Common Shares which the Optionee is entitled to acquire pursuant to this Plan and the applicable Option Agreement; and

(o)	“Plan” means this 2003 Stock Option Incentive Plan.

3. ADMINISTRATION

The Plan shall be administered by the Board, and subject to the rules of the Exchange from time to time and except as provided for herein, the Board shall have full authority to:

(a)	determine and designate from time to time those Eligible Persons to whom Options are to be granted and the number of Option Shares to be optioned to each such Eligible Person;

(b)	determine the time or times when, and the manner in which, each Option shall be exercisable and the duration of the exercise period;

(c)	determine from time to time the Option Price, provided such determination is not inconsistent with this Plan; and

(d)	interpret the Plan and to make such rules and regulations and establish such procedures as it deems appropriate for the administration of the Plan, taking into consideration the recommendations of management.

4. OPTIONEES

Optionees must be Eligible Persons who, by the nature of their jobs or their participation in the affairs of the Company, in the opinion of the Board, are in a position to contribute to the success of the Company.

5. EFFECTIVENESS AND TERMINATION OF PLAN

The Plan shall be effective as of the Effective Date and shall terminate on the earlier of:

(a)	the date which is ten years from the Effective Date; and

(b)	such earlier date as the Board may determine.

Any Option outstanding under the Plan at the time of termination of the Plan shall remain in effect in accordance with the terms and conditions of the Plan and the Option Agreement.

6. THE OPTION SHARES

The aggregate number of Option Shares reserved for issuance under the Plan and Common Shares reserved for issuance under any other share compensation arrangement granted or made available by the Company from time to time may not exceed in aggregate 10% of the Company’s Common Shares issued and outstanding at the time of grant.

7. GRANTS, TERMS AND CONDITIONS OF OPTIONS

Options may be granted by the Board at any time and from time to time prior to the termination of the Plan. Options granted pursuant to the Plan shall be contained in an Option Agreement and, except as hereinafter provided, shall be subject to the following terms and conditions:

(a)	Option Price

	The Option Price shall be determined by the Board, provided that such price shall not be lower than the Fair Market Value of the Option Shares on the date of grant of the Option.

(b)	Duration and Exercise of Options

	Except as otherwise provided elsewhere in this Plan, the Options shall be exercisable for a period to be determined in each instance by the Board, not exceeding ten years from the Option Date, provided that so long as the Company is classified as a “Tier 2” issuer by the TSX Venture Exchange, the Options shall be exercisable for a period not exceeding five years from the Option Date. The Options must be exercised in accordance with this Plan and the Option Agreement.

	Except as contemplated in (c) below, no Option may be exercised by an Optionee who was an Eligible Person at the time of grant of such Option unless the Optionee shall have been an Eligible Person continuously since the Option Date. Absence on leave, with the approval of the Company, shall not be considered an interruption of employment for the purpose of the Plan.

(c)	Termination

	All rights to exercise Options shall terminate upon the earliest of:

	(i)	the expiration date of the Option;

	(ii)	the 30 ^th day [if Tier 2, must be within 90 days] after the Optionee ceases to be an Eligible Person for any reason other than death, disability or cause;

	(iii)	the 30 ^th day after the Optionee who is engaged in Investor Relations Activities for the Company ceases to be employed to provide Investor Relations Activities;

	(iv)	the date on which the Optionee ceases to be an Eligible Person by reason or termination of the Optionee as an employee or consultant of the Company for

		cause (which, in the case of a consultant, includes any breach of an agreement between the Company and the consultant);

	(v)	the first anniversary of the date on which the Optionee ceases to be an Eligible Person by reason of termination of the Optionee as an employee or consultant on account of disability; or

	(vi)	the first anniversary of the date of death of the Optionee. (d)

Transferability of Option

Options are non-transferable and non-assignable. (e)

Other Terms and Conditions

The Option Agreement may contain such other provisions as the Board deems appropriate, provided such provisions are not inconsistent with the Plan and the requirements of the TSX Venture Exchange.

In addition, for as long as the Common Shares of the Company are listed on the TSX Venture Exchange, the Company shall comply with the following requirements:

	(i)	so long as the Company is classified as a “Tier 2” issuer by the TSX Venture Exchange, Options to acquire more than 5% of the issued and outstanding Common Shares of the Company may not be granted to any one individual in any 12 month period;

	(ii)	Options to acquire more than 2% of the issued and outstanding Common Shares of the Company may not be granted to any one consultant in any 12 month period;

	(iii)	Options to acquire more than an aggregate of 2% of the issued and outstanding Common Shares of the Company may not be granted to an employee conducting Investor Relations Activities in any 12 month period;

	(iv)	the approval of the disinterested shareholders of the Company shall be obtained for any amendment to or reduction in the exercise price of the Option if the Optionee is an insider of the Company at the time of the amendment. For the purposes of this subsection, the term “insider” has the meaning assigned in the Securities Act (British Columbia); and

	(v)	for Options granted to the employees, consultants or management company employees of the Company, the Company will represent that the Optionee is a bona fide employee, consultant or management company employee of the Company, as the case may be.

8. ADJUSTMENT OF AND CHANGES IN THE OPTION SHARES

(a)	If the Option Shares are at any time to be listed on any stock exchange or quoted on any stock exchange or stock quotation system other than the TSX Venture Exchange, to the extent that there are any Options which are outstanding and unexercised at the time of such application for listing, the Option Price, the aggregate number of Option Shares, the exercise period, and any other relevant terms of such Options, and the Option Agreements in relation thereto, shall be amended in accordance with the requirements of any applicable securities regulation or law or any applicable governmental or regulatory body (including the Exchange). Subject to the requirements of the Exchange, any such amendment shall be effective upon receipt of Board approval of it, and the approval of any of the shareholders of the Company or any of the Optionees is not required to give effect to such amendment.










(b)	If the Option Shares, as presently constituted, are changed into or exchanged for a different number or kind of shares or other securities of the Company or of another Company (whether by reason of merger, consolidation, amalgamation, recapitalization, reclassification, split, reverse split, combination of shares, or otherwise) or if the number of such Option Shares are increased through the payment of a stock dividend, then there shall be substituted for or added to each Option Share subject to or which may become subject to an Option under this Plan, the number and kind of shares or other securities into which each outstanding Option Share is so changed, or for which each such Option Share is exchanged, or to which each such Option Share is entitled, as the case may be. Outstanding Options under the Option Agreements shall also be appropriately amended as to price and other terms as may be necessary to reflect the foregoing events. In the event that there is any other change in the number or kind of the outstanding Option Shares or of any shares or other securities into which such Option Shares are changed, or for which they have been exchanged, then, if the Board shall, in its sole discretion, determine that such change equitably requires an adjustment in any Option theretofore granted or which may be granted under the Plan, such adjustment shall be made in accordance with such determination.
















(c)	Fractional shares resulting from any adjustment in Options pursuant to this Section 8 will be cancelled. Notice of any adjustment shall be given by the Company to each holder of an Option which has been so adjusted and such adjustment (whether or not such notice is given) shall be effective and binding for all purposes of the Plan.

9. PAYMENT

Subject as hereinafter provided, the full purchase price for each of the Option Shares shall be paid by certified cheque in favour of the Company upon exercise thereof. An Optionee shall have none of the rights of a shareholder in respect of the Option Shares until the shares are issued to such Optionee.

10. SECURITIES LAW REQUIREMENTS

No Option shall be exercisable in whole or in part, nor shall the Company be obligated to issue any Option Shares pursuant to the exercise of any such Option, if such exercise and issuance would, in the opinion of counsel for the Company, constitute a breach of any applicable laws from time to time, or the rules from time to time of the Exchange. Each Option shall be subject to the further requirement that if at any time the Board determines that the listing or qualification of the Option Shares under any securities legislation or other applicable law, or the consent or approval of any governmental or other regulatory body (including the Exchange), is necessary as a condition of, or in connection with, the issue of the Option Shares hereunder, such Option may not be exercised in whole or in part unless such listing, qualification, consent or approval has been effected or obtained free of any conditions not acceptable to the Board.

11. AMENDMENT OF THE PLAN

(a)	The Board may amend, suspend or terminate the Plan or any portion thereof at any time, but an amendment may not be made without shareholder approval if such approval is necessary to comply any applicable regulatory requirement.

(b)	The Board shall have the power, in the event of:

	(i)	any disposition of substantially all of the assets of the Company, dissolution or any merger, amalgamation or consolidation of the Company, with or into any other Company, or the merger, amalgamation or consolidation of any other Company with or into the Company; or

	(ii)	any acquisition pursuant to a public tender offer of a majority of the then issued and outstanding Common Shares;

	but subject to compliance with the rules of the Exchange, to amend any outstanding Options to permit the exercise of all such Options prior to the effectiveness of any such transaction, and to terminate such Options as of such effectiveness in the case of transactions referred to in subsection (i) above, and as of the effectiveness of such tender offer or such later date as the Board may determine in the case of any transaction described in subsection (ii) above. If the Board exercises such power, all Options then outstanding and subject to such requirements shall be deemed to have been amended to permit the exercise thereof in whole or in part by the Optionee at any time or from time to time as determined by the Board prior to the effectiveness of such transaction, and such Options shall also be deemed to have terminated as provided above.

12. SHAREHOLDER APPROVAL

This Plan is subject to the approval of the shareholders of the Company yearly at each annual general meeting of the Company. Any Options granted prior to such approval are conditional upon such approval being given, and no such Options may be exercised unless and until such approval is given.

Shareholder approval received at the meeting held June 20, 2003; TSX Venture Exchange approval received November 14, 2003.

DISTRIBUTORSHIP AGREEMENT

THIS AGREEMENT made as of the 28 ^th day of June, 2004, with effect from the 1st day of August, 2004 (the “Effective Date”).

BEWEEN:

ALDA PHARMACEUTICALS CORP. , a corporation existing under the laws of the Province of British Columbia, Canada and having its principal address at: 635 Columbia Street, New Westminster, BC V3M 1A7 CANADA

(the “Company”)

AND:

LINNS CORPORATION SHD BHD , a corporation existing under the laws of Malaysia and having its principal address at: 46, Jalan USJ 11/1B, 47620 UEP Subang Jaya, Selangor Darul Ehsan MALAYSIA

(the “Distributor”)

WHEREAS the Distributor desires to be appointed by the Company as Distributor of the Company's Viralex ^TM disinfectant and other products as may become available (“the Products”) in the territory hereinafter described and subject to the provisions set forth herein.

NOW THEREFORE in consideration of the premises and the mutual covenants herein set forth, it is agreed by and between the parties as follows:

1.	Appointment as Distributor

1.01	Subject to the terms and conditions set forth in this Agreement, the Company hereby appoints the Distributor as a distributor in the territories as set out in Schedule “B” hereto, subject to the required applications for approval and registration of the Products being submitted by the Distributor (the "Territory"), to purchase from the Company for resale in the Territory those particular products of the Company described in Schedule “A” hereto (the “Products”).

1.02	The Distributor accepts such appointment and agrees as follows:

	(a)	To use its best commercial efforts to develop the market for the Product in the Territory and to engage sufficient personnel in said territory to aggressively promote the sale of the Product throughout the Territory.

	(b)	To become familiar with the characteristics and purposes of the Products, and the markets for which they are intended to be used, and to diligently review all product

		information in connection with the Product which may be issued to the Distributor from time to time.

	(c)	To conform faithfully to the Company's sales plans and policies.

	(d)	To refrain from entering into or knowingly directly or indirectly facilitating the sale or resale of any Products outside of the Territory.

	(e)	To refrain from selling or offering for sale any items manufactured by others which are similar or functionally the same as the Products and which would reasonably be seen as being competitive to the Products.

	(f)	To comply with any and all laws, regulations and governmental orders of the Territory that may be applicable to the sale and distribution of the merchandise purchased by the Distributor from the Company.

	(g)	To indemnify the Company and hold it harmless from and against any and all claims, suits, proceedings, judgments, orders, fines or penalties arising in connection with the conduct of the Distributor’s business and the resale of Products by the Distributor except for such claims arising out of Company's sole negligent or intentional wrongful acts or omissions.

1.03	The appointment of the Distributor shall be exclusive for the sale of the Products during the Initial Term of this Agreement (as defined in Paragraph 6 below), and shall continue to be exclusive during any extension of this Agreement beyond the Initial Term PROVIDED that the Distributor meets the Minimum Purchase Obligations set out in Paragraph 3 below.

1.04	The Distributor expressly acknowledges and agrees that it is not an agent of Company and shall not at any time represent itself as such, nor shall the Distributor incur, assume or create any debt, obligation, contract or release of any kind in the name of or on behalf of Company.

1.05	All trademarks, copyrights, trade names and other proprietary rights in and with respect to the Company's products and services, are and will remain the exclusive property of Company. Nothing herein shall be deemed to constitute a license to the Distributor to use the Company's trademarks in connection with its business in the Territory.

2.	Prices

2.01	The Distributor shall purchase Product's from the Company, for the purpose of resale within the Territory. The company and the Distributor will work closely to create a pricing strategy that will ensure the competitiveness of the company’s products and enhance the opportunity for the success of the Distributor within the territory. The Distributor expressly acknowledges and agrees that the Company shall have the right at any time during the term of this Agreement to increase or decrease its selling prices

	to the Distributor subject only to providing the Distributor with not less than 45 days prior notice of any price increase.

2.02	All costs, including but not limited to shipping, collections, taxes, exchange, license fees, stamps, and all charges thereon are the Distributor's responsibility.

3.	Product Orders

3.01	Within 120 days after the Effective Date, the Distributor and the Company covenant to determine mutually agreeable minimum purchase obligations for the first 12 month period of this Agreement (the “Minimum Purchase Obligations”). Within 12 months after the Effective Date, the Distributor and the Company covenant to determine mutually agreeable minimum purchase obligations the Minimum Purchase Obligations for the ensuing 4 years of this Agreement.

3.02	While the Company will endeavor to accept all orders for reasonable quantities submitted by the Distributor hereunder, it is expressly agreed that all orders are subject to written acceptance by the Company, as in its sole discretion it shall determine, and no order shall be the commitment of the Company until written acceptance thereof has been delivered to the Distributor by the Company, and such acceptance shall be subject to all of the provisions of both this Agreement and the Company's acknowledgment.

4.	Payment Terms

4.01	Full payment in the form of cash, certified funds, or an irrevocable letter of credit must accompany all orders. In the event any order submitted by the Distributor is cancelled by the Distributor for any reason before shipment, the Distributor shall pay any loss or damage to the Company. The Company will not be liable for failure to perform under this Agreement, if such failure shall be due to fire or to labor, material or car shortage, or to strikes, lock-outs, public enemies, Acts of God, or causes beyond Company's control.

5.	Warranties and Limitation of Liability

5.01	The Company warrants that it has good and marketable title to the merchandise sold to the Distributor hereunder. NO OTHER EXPRESS OR IMPLIED WARRANTY IS

	MADE WITH RESPECT TO MERCHANDISE SOLD HEREUNDER, SUCH BEING SUBJECT TO WARRANTIES MADE BY THEIR RESPECTIVE MANUFACTURERS. THE COMPANY'S TOTAL LIABILITY TO THE DISTRIBUTOR RESULTING FROM THE SALE OF MERCHANDISE SHALL NOT EXCEED THE PRICE PAID BY THE DISTRIBUTOR FOR SUCH MERCHANDISE. The Distributor agrees not to return any merchandise to the Company except in compliance with the Company's standard return policy for defective merchandise (Schedule “C”).

6.	Term of Agreement

6.01	This Agreement shall be effective commencing on the Effective Date first above written, and shall continue for an initial term of five years (the “Initial Term”). Upon expiration of the Initial Term, and providing that the minimum sales levels have been met, this Agreement may be renewed for a further five-year period. The terms of such renewal will reflect current market conditions in the territory.

6.02	The Company reserves the right to terminate this Agreement at any time: (i) upon ten (10) days advance written notice in the event that any payment owing to Company for Product supplied to the Distributor is not received within thirty (30) days after the date on which such payment is due; or (ii) immediately upon written notice of termination by the Company in the event that the Distributor is in breach of any provision hereof, including without limitation any failure to meet a Minimum Purchase Obligation as set out in section 3.01, and fails to cure such breach following written notice of breach by the Company and a reasonable period to cure such breach, which need not exceed thirty (30) days from the date of notice. The Agreement may also, at the option of the Company, be terminated immediately if the Distributor becomes insolvent; violates the laws, regulations, rules, or statutes of any government; ceases doing business; makes an assignment for the benefit of creditors; or commits an act of bankruptcy. The Company's failure to exercise any right hereunder shall not operate as a waiver of such right and all remedies contained herein shall be cumulative.

7.	Right of First Refusal

7.01	For a period of 12 months after the date that the Distributor establishes the Minimum Purchase Obligations for the first year of this Agreement according the conditions of Paragraph 3.01 of this Agreement, the Company grants to the Distributor a Right of First Refusal to establish a joint venture agreement with the Company for the purpose of manufacturing Viralex ^TM .

8.	Conflict of Laws

8.01	Any part of this Agreement that is contrary to any federal, state, or local law shall not be applicable and shall not invalidate any other part of this Agreement. In the event of disputes or legal interpretation of the terms of this Agreement, the laws of British Columbia, Canada shall govern and be binding upon the parties hereto.

9.	Entire Agreement

9.01	This Agreement contains the entire understanding of the parties and there are no commitments, agreements, or understandings between the parties other than those expressly set forth herein. This Agreement shall not be altered, waived, modified, or amended except in writing signed by the parties hereto and notarized.

10.	Dispute Resolution

10.01	All disputes arising out of or in connection with the present contract shall be finally settled under the Rules of Arbitration of the International Chamber of Commerce by one or more arbitrators appointed in accordance with the said Rules. The place of arbitration shall be Vancouver, British Columbia or such other location as may be agreed to by both parties.

11.	Confidentiality

11.01	The Distributor agrees not to disclose or use, except as required in the Distributor's duties, at any time, any information disclosed to or acquired by the Distributor during the term of this contract. The Distributor agrees that all confidential information shall be deemed to be and shall be treated as a sole and exclusive property of the Company.

12.	Governing Law

12.01	This Agreement shall be governed by and be construed in accordance to the laws of the Province of British Columbia, Canada.

12.02	The parties agree that the provisions of the United Nations Convention on Contracts for the International Sale of Goods will not apply to the transactions contemplated by this Agreement.

13.	Notices

13.01	Any and all notices herein shall be in writing and may be transmitted by facsimile provided a copy shall be sent by certified mail, return receipt requested, to the addresses set forth at the head of this Agreement.

14.	Execution

14.01	This Agreement may be signed by the authorized signatories of the Distributor and the Company by facsimile and in as many counterparts as may be necessary, each of which shall together constitute one and the same instrument, and notwithstanding the date of execution shall be deemed to bear the date as set out above. Original copies in as many counterparts as may be necessary shall follow by mail.

15.	Assignment

15.01	This Agreement and the rights, duties and obligations hereunder may not be assigned or delegated by either party without the prior written consent of the other party.

IN WITNESS WHEREOF, the parties hereto have executed this Agreement the day and year first above written.

LINNS CORPORATION SHD BHD
By its duly authorized signatory:



“Shirley Sim Hong Siang”
Shirley Sim Hong Siang. Managing Director

ALDA PHARMACEUTICALS CORP.
By its duly authorized signatories:


“Terrance G. Owen”
Signature
Terrance G. Owen, President & CEO


“Peter Chen”
Signature
Peter Chen, CFO

SCHEDULE “A”

THE PRODUCTS

Viralex ^TM (Scented and unscented)

30 milliliter (Personal Protection Plus)
480 milliliter sprayer bottles
1 liter bottles
4 liter jugs
20 litre Sanipaks
200 litre drums

SCHEDULE “B”

THE TERRITORY

For the purposes hereof, the Territory shall consist of the following countries, in each case, as they are presently constituted:

Brunei
Cambodia
Indonesia
Japan
Laos
Malaysia
Myanmar
Philippines
Singapore
South Korea
Taiwan
Thailand
Vietnam

SCHEDULE “C”

STANDARD RETURN POLICY

1.	The parties agree that during the term of this Agreement ALDA shall:

	a.	Warrant that the Products shall comply in all respects with the specifications as defined in the technical data sheets, and in the event that Products are found to not comply with the technical data sheets, will replace the Products with Products that do so comply;

	b.	Replace any of the Products at no cost that are found by ALDA or the Distributor to have an inherent defect and bear all costs related to the replacement of those Products. However, in the event of such a claim all the relevant product and usage details, as specified by ALDA, must be made available to ALDA. An investigational report will be submitted to the Distributor. Products will not be replaced if deemed by ALDA to be defective due to incorrect handling or usage.

2.	Any of the Products which are to be returned to ALDA for replacement or credit, shall be shipped to ALDA at ALDA’s cost with fifteen days of receipt by the Distributor.

(1)	is or was a director, alternate director, officer, employee or agent of the Company;

(2)	is or was a director, alternate director, officer, employee or agent of a corporation at a time when the corporation is or was an affiliate of the Company;

(3)	at the request of the Company, is or was a director, alternate director, officer, employee or agent of a corporation or of a partnership, trust, joint venture or other unincorporated entity;
(3)

(4)	at the request of the Company, holds or held a position equivalent to that of a director, alternate director or officer of a partnership, trust, joint venture or other unincorporated entity;
(4)