ITEM 4. INFORMATION ON THE COMPANY

4.A.   History and Development of the Company

Capital Pool 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.” and was classified as a Capital Pool Company (“CPC”) on the TSX Venture Exchange. Under the policies of the TSX Venture Exchange, the principal business of a CPC is to identify and evaluate opportunities for acquisition. The completion of such an acquisition is referred to as a Qualifying Transaction. A CPC does not carry on any business other than the identification and evaluation of assets or businesses in connection with potential Qualifying Transactions, does not have business operations or assets other than seed capital and has no written or oral agreements for the acquisition of an asset or business at the time of formation.

A “Qualifying Transaction”, pursuant to the policies of the TSX Venture Exchange, is a transaction whereby a capital pool company:

(a)   Issues or proposes to issue, in consideration for the acquisition of significant assets or businesses, common shares or securities convertible, exchangeable or exercisable into common shares, which, if fully converted, exchanged or exercised would represent more than 25 percent of its common shares issued and outstanding immediately prior to the issuance;

(b)   Enters into an arrangement, amalgamation, merger or reorganization with another issuer with significant assets, whereby the ratio of securities which are distributed to the security holders of the capital pool company and the other issuer results in the security holders of the other issuer acquiring control of the resulting entity; or

(c)  Otherwise acquires significant assets other than cash.

Qualifying Transaction

On November 13, 2003, the Company completed its Qualifying Transaction, which was the acquisition of the assets of API, a private company founded in 1996 and since renamed 513947 BC Ltd. (“513947”). The transaction was approved by the TSX Venture Exchange as a valid Qualifying Transaction.

The Company purchased the assets of API with 3,711,263 shares of the Company valued at 20 cents per share, for a total share value of $742,252.60, plus forgiveness of loans and accrued interest of  $57,747.40 advanced to API by the Company prior to completion of the Qualifying Transaction. The total transaction price of the Qualifying Transaction to the Company was therefore $800,000. The Company purchased only the assets and not the liabilities of API except for the trademark litigation undertaken by JohnsonDiversey Inc. against API. This litigation was subsequently settled and is discussed elsewhere. As a result of the asset purchase, API became the registered owner of the shares of the Company. The Company also acquired the intellectual property and $17,500 worth of inventory from API. The intellectual property consisted of the one patent application , #PCT/CA2002/001284, “A wide spectrum disinfectant”, filed on August 20, 2002 under the Patent Cooperation Treaty (PCT), described in more detail below . , two Drug Identification Numbers (“DIN’s ” , i.e., ) 02245056 for T ³ 6 ^® Disinfectant under its previous name, “Spritz” and 02231344 for the same product renamed, “Viralex” and subsequently renamed to “T ³ 6 ^® Disinfectant”),  provided to the Company by Health Canada and the pending trademarks for “Viralex”, “T ³ 6” and a logo displayed with the name, “ALDA Pharmaceuticals”. (described under “Trademarks” in Section “4.B. Business Overview”), customer lists and contacts, products under development (also described in “4.B. Business Overview”), marketing materials, technical bulletins, and instructions for customers and technical studies.

The terms of the asset purchase agreement s that still remain in effect as a result of the asset purchase are the appended Voting Agreement , the Escrow Agreement and the Non-Competition Agreement.

Voting Agreement (Exhibit 3.)

The parties to the Voting Agreement, dated November 13, 2003 and established as a condition of completing the Qualifying Transaction, are API, Allan Shapiro (“Shapiro”), Michael Wilby (“Wilby”), the Company, Terrance Owen (“Owen”), Peter Chen (“Chen”) and Bruce Schmidt (“Schmidt”).

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Under the terms of the agreement, API, Shapiro and Wilby will vote their shares of the Company in favour of  the number of directors of the Company not to exceed six directors with one director

being independent of API and the election of Owen, Chen and Schmidt as directors of the Company provided they have been nominated by the Company for election to the Board of the Company;

Until termination of this Agreement, the Company will nominate Owen, Chen and Schmidt for election to the Board at each Meeting provided each person consents to continuing as a director of The Company, is not then prohibited by law from serving as a director of The Company and that each nomination and election is acceptable to the TSX Venture Exchange and all other applicable securities regulatory authorities.

Subject to restrictions imposed under applicable securities legislation, API, Shapiro or Wilby may sell shares of the Company through a stock exchange. If any of them proposes to sell in excess of 200,000 shares of the Company in an “off-market” transaction they will require the purchaser to agree to be bound by the terms of the Voting Agreement.

If a take-over bid or other offer is made to shareholders of the Company by an arms-length third party for all or a portion of the shares of The Company, API, Shapiro and Wilby will be free to tender to such bid or offer any shares owned by them and will not be required to comply with the selling restrictions described above.

The Voting Agreement will terminate with respect to Wilby, at the earlier of:

·

such time as API, Shapiro and Wilby collectively cease to hold, directly

 or indirectly, less than 10% of the issued voting shares of The Company;

·

such time as Wilby ceases to hold directly or indirectly, or control at least 5% of the issued

 voting shares of The Company; and

·

5 years from the date of the execution and delivery of this Agreement.

The Voting Agreement will not terminate with respect to API and Shapiro, except with the consent of

the TSX Venture Exchange. As of June 30, 2007, the Voting Agreement is no longer in effect for Wilby since his personal shareholdings are below 5% of the issued voting shares of the Company.

On November 1, 2004, the Voting Agreement was amended. The parties to the Amendment are API, Shapiro, Wilby, the Company, Owen, Chen and Schmidt.

The Amendment was entered into because of the name changes undertaken by the Company and API after completion of the Qualifying Transaction and the resignation of Schmidt as a director of the Company. The Amendment also changed references to Owen, Chen and Schmidt to “Owen Nominee”, “Chen Nominee” and “Schmidt Nominee”, respectively, so that, if any one of Owen, Chen or Schmidt does not consent to being nominated as a director of APC, another person acceptable to the TSX Venture Exchange and to the other nominees would become a party to the Voting Agreement. On October 4, 2004, Eugene Hodgson was appointed as a director and became the “Schmidt nominee” on completion of the Amendment.

Escrow Agreement

Of the 3,711,263 shares issued to API, 90% or 3,340,137 were held in escrow. Under the terms of the Escrow Agreement, there has been a 15% release every 6 months on May 14, 2004, November 14, 2004, May 14, 2005, November 14, 2005 and May 14, 2006 and November 14, 2006. No shares remained in escrow on June 30, 2007. An Escrow Agreement, dated November 13, 2003, was automatically terminated on November 14, 2006 due to the release of all remaining escrowed securities on that date.

Non-Competition Agreement (Exhibit 4.i.)

The parties to the Non-Competition Agreement, dated November 13, 2003 and established as a condition of completing the Qualifying Transaction, are API, Shapiro and the Company.

Under the terms of the Agreement, API and Shapiro agree that neither Shapiro nor API will compete with the Company in any way. In the case of API, the Agreement expired after one year on November 13, 2004. In the case of Shapiro, the Agreement stays in place while Shapiro provides services for the Company in any capacity and for a period of one year after his services for the Company come to an end. Competition, as defined in the Agreement, includes, but is not limited to, the solicitation of customers or the sale of any products or services that are in any way similar to those offered by the Company or inducement of any employees of the Company to leave the Company. Shapiro agrees that any breach of the agreement by him could cause irreparable harm to the Company and that the Company can take any action that it deems necessary to end the breach and be compensated for the breach.

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Change of Business .

As a consequence of completing the Qualifying Transaction, The Company entered into the business of developing and marketing disinfectant products.

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

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 shares have been listed for trading on the TSX- TSX Venture Exchange since July, 2001.

4.B. Business Overview

The Company was established in order to develop and commercialize disinfectant products.  The Company has called the disinfectant technology “T ³ 6 ^® Disinfectant”.  T ³ 6 ^® Disinfectant is a mixture of ethanol, o-phenylphenol, benzalkonium chloride and other ingredients (including lemon fragrance and water).  All of these component chemicals are bio-degradable.

The Company is 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” and subsequently renamed T ³ 6 ^® 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. T ³ 6 ^® Disinfectant has been approved by Health Canada for use on any hard, inanimate non-porous surfaces.  This includes, but is not limited to, counter tops, cutting boards, sinks, tubs, walls, floors, windows, mirrors, scissors, nail clippers and other equipment used in beauty salons and spas, dental mirrors and other equipment in dental offices, and equipment used by firefighters, police and paramedics. T ³ 6 ^® Disinfectant is also approved by the Canadian Food Inspection Agency (“CFIA”) for use in restaurants and other facilities where food is prepared.

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Efficacy studies

Efficacy studies refer to proving a drug's effectiveness (in this case as a disinfectant) in producing a desired result (bactericide, virucide, fungicide or tuberculocide). In studies conducted by independent laboratories in Canada and the United States, T ³ 6 ^® Disinfectant has demonstrated efficacy against more than 50 different bacteria, fungi and viruses. The types of surfaces tested were hard, non-porous surfaces unless otherwise noted . These studies included the following:

1.

An e E fficacy study , dated February 10, 1997, was conducted by British Columbia Research Inc. (University of British Columbia, ( Vancouver, Canada) under the supervision of Dr. Ernie Lee , dated February 10, 1997 . The Study concluded that the T ³ 6 ^® Disinfectant successfully killed  organisms tested were four strains of bacteria ( Staphylococcus epidermis, Pseudomonas aeruginosa, Serratia marcescens, and Mycobacterium tuberculosis) one strain of yeast ( Candida albicans) , spores from one strain of fungus ( Aspergillus fumigatus) and two strains of viruses ( Herpes Simplex Virus-1 and Poliovirus-1) in compliance with test standards accepted by Health Canada’s Therapeutic Product Directorate . ; Twenty five replicates of each organism at low levels, ranging from 38 to 177 cfu’s/ml (colony forming units/ml) were dried on microscope cover slips and exposed to T ³ 6 ^® Disinfectant for varying times. The studies demonstrated that T ³ 6 ^® Disinfectant was 100% effective against all five organisms after 10 minutes or longer contact times. At shorter contact times, the kill rate for all 5 organisms ranged from 95.5% to 97.2% after a 1 minute exposure and 98.7 and 99.0% after a 5 minute exposure .

2.

An efficacy study, dated June 6, 1997, was 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 .   Twenty replicates of Mycobacterium tuberculosis at approximately 10 ⁷ cfu’s/ml were dried on microscope cover slips and exposed to T ³ 6 ^® Disinfectant for varying times. The studies demonstrated that the kill rate was 99.99997% (a reduction of log ₁₀ = 6.46) and 99.99998% (a reduction of log ₁₀ = 6.59)  after a 10-minute exposure. The requirement for a disinfectant to be designated as “Tuberculocidal” by Health Canada is a log ₁₀ reduction of 6.0 or greater .

3.

Study concluded that the T ³ 6 ^® Disinfectant was efficacious as against Mycobacterium tuberculosis ;

4.

Suspension tests for efficacy completed September 17, 1997 against HIV at the St. Paul’s Hospital’s John Ruedy Immunodeficiency Clinic (Vancouver, Canada) under the supervision of Dr. Brian Conway. Study concluded that the T ³ 6 ^® Disinfectant was 100% efficacious on the HIV virus on contact and still had 100% efficacy at dilution of 1:43 (one part T ³ 6 ^® to 43 parts water); and

5.

Efficacy studies were conducted by Viromed Biosafety Laboratories of Minneapolis, Minnesota, and completed on February 23, 200 0 . The Study concluded that the T ³ 6 ^® Disinfectant successfully killed the test organisms tested were 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 (“ EPA ”) of the United States.

·

For each of the bacteria, Staphylococcus aureus, Pseumomonas aeruginosa, Salmonella choleraesuis , 180 replicates at 6.1 x10 ⁶ cfu/ml (log ₁₀ = 6.79), 1.9 x 10 ⁶ cfu/ml (log ₁₀ = 6.28) and 1.7 x 10 ⁴ cfu/ml (log ₁₀ = 4.23), respectively, were dried on microscope slides and exposed to T ³ 6 ^® Disinfectant for 3 minutes. For both Staphylococcus aureus and Pseumomonas aeruginosa , growth was observed on only 1 replicate out of 180. For Salmonella choleraesuis , none of the 180 replicates showed any growth. These results met the requirement that no more than 1 replicate out of 60 can show growth and T ³ 6 ^® Disinfectant was deemed to demonstrate efficacy against all three bacteria.

·

For Human Immunodeficiency Virus Type I, six replicates at 1.77 x10 ⁵ cfu/ml (log ₁₀ = 5.25), were dried on the bottom of Petri dishes. After being exposed to T ³ 6 ^® Disinfectant for 3 minutes, none of the replicates showed any viral activity and T ³ 6 ^® Disinfectant was deemed to demonstrate efficacy against HIV.

·

For Herpes simplex Virus Type 1, six replicates at 5.6 x10 ⁶ cfu/ml (log ₁₀ = 6.25), were dried on the bottom of Petri dishes, After being exposed to T ³ 6 ^® Disinfectant for 3 minutes, none of the replicates showed any viral activity and T ³ 6 ^® Disinfectant was deemed to demonstrate efficacy against the Herpes virus.

·

For Poliovirus Type 1, six replicates at 5.6 x10 ⁵ cfu/ml (log ₁₀ = 5.75), were dried on the bottom of Petri dishes. After being exposed to T ³ 6 ^® Disinfectant for 3 minutes, none of the replicates showed any viral activity and T ³ 6 ^® Disinfectant was deemed to demonstrate efficacy against the Polio virus.

·

For the fungus, Trichophyton mentagrophytes, twenty replicates at 4.6 x10 ⁴ cfu/ml (log ₁₀ = 4.66), were dried on microscope slides. After being exposed to T ³ 6 ^® Disinfectant for 3 minutes, none of the replicates showed any viral activity and T ³ 6 ^® Disinfectant was deemed to demonstrate efficacy against Trichophyton mentagrophytes .

Efficacy studies refer to proving a drug's effectiveness (in this case as a disinfectant) in producing a desired result (bactericide, virucide, fungicide or tuberculocide). Toxicology is the study of the adverse effects of chemical, physical or biological agents on living organisms and the ecosystem, including the prevention and amelioration of such adverse effects. The types of surfaces tested were hard non-porous surfaces.

The above studies demonstrated that T ³ 6 ^® Disinfectant was effective in inactivating polio viruses within 3 minutes and tuberculosis mycobacteria within 5 minutes. Polio and tuberculosis are benchmark micro-organisms because they are among the most difficult to kill with disinfectant products. Efficacy against polio and tuberculosis demonstrates a high level of disinfection capability. In order to make a virucidal claim and a tuberculocidal claim, a disinfectant product must demonstrate its ability to destroy the poliomyelitis type 1 virus, and Mycobacterium bovis or tuberculosis mycobacteria within a specified time. This is mandated in Canada by the Canadian General

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Standards Board, “Assessment of Efficacy of Antimicrobial Agents for Use on Environmental Surfaces and Medical Devices”, CAN/CGSB -2.161-97, p.4, and the Therapeutic Products Programme Guidelines on Disinfectant Drugs, 1999 Edition, Appendix II on page 23.

The studies conducted at ViroMed Biosafety Laboratories in the U.S., and at British Columbia Research Incorporated (“BCRI”) in Canada used between 10 and 60 samples each, depending on the organism tested.   In all cases of the testing described above, a control was utilized  controls were used to validate the testing protocols. A positive test result required complete inactivation of the tested viruses and complete efficacy against the fungi and bacteria as required by the U.S. EPA for disinfectant label claims. The results from BCRI demonstrated efficacy in excess of Log ₁₀ 4.0 (i.e. 10,000 times reduction in micro-organisms) in compliance of the standards required in Canada. The tuberculocidal studies demonstrated results in excess of Log ₁₀ 6.0 (1,000,000 times reduction in micro-organisms).

Toxicology studies

Toxicology is the study of the adverse effects of chemical, physical or biological agents on living organisms and the ecosystem, including the prevention and amelioration of such adverse effects. Additional t The t oxicology studies listed below were conducted in the United States by Product Safety Labs in East Brunswick, New Jersey, USA and completed in November, 1999 that demonstrated that T ³ 6 ^® Disinfectant is safe to use, as well as non-corrosive and non-caustic .  These studies were conducted by Product Safety Labs in labs in East Brunswick, New Jersey, USA and completed in November, 1999 .

·

Acute Oral Toxicity Study in Rats - This test determines the amount of a substance that kills 50% of the test population of experimental animals when administered as a single dose. Five thousand milligrams of T ³ 6 ^® Disinfectant per kilogram of bodyweight was administered orally to ten healthy rats. The animals were observed for mortality, signs of gross toxicity, and behavioral changes at least once daily for 14 days. Bodyweights were recorded prior to administration and again on Days 7 and 14. Necropsies were performed on all animals at terminal sacrifice. All animals survived and gained weight during the study. Following administration, most animals exhibited piloerection (erection of the hair), hunched posture and/or were hypoactive. Apart from one female that exhibited reduced fecal volume between Days 0 and 5, all affected animals recovered from the above symptoms. Based on the results of this study, the single dose acute oral LD ₅₀ of T ³ 6 ^® Disinfectant is greater than 5,000 mg/kg of bodyweight

·

Primary Skin Irritation Study in Rabbits -  This test determines the potential for a substance to produce irritation after a single topical application. Five-tenths of a milliliter of T ³ 6 ^® Disinfectant was applied to the skin of three healthy rabbits for 4 hours. Following exposure, dermal irritation was evaluated and no dermal irritation was noted at any dose site during the study. Based on the results of this study, T ³ 6 ^® Disinfectant is classified as non-irritating to the skin.

·

Primary Eye Irritation Study in Rabbits - This test determines the potential for a substance to produce irritation from a single dose to the eye. One-tenth of a milliliter of T ³ 6 ^® Disinfectant was placed into the right eye of six healthy rabbits. The treated eyes of three rabbits were rinsed with physiological saline after instillation. The eyes of the remaining three rabbits were not rinsed. The left eye remained untreated and served as a control. Ocular irritation was evaluated and, based on the results of this study,T ³ 6 ^® Disinfectant is classified as moderately irritating to the unrinsed eye and severely irritating to the rinsed eye.

·

Acute Inhalation Toxicity Study in Rats - This test determines the potential for a substance to produce toxicity from a single exposure via the inhalation route. Ten healthy rats were exposed to T ³ 6 ^® Disinfectant vapours in a closed chamber at a concentration 2.02 mg/L for 4 hours. The animals were observed for mortality, signs of gross toxicity, and behavioral changes at least once daily for 14 days thereafter. Bodyweights were recorded prior to exposure and again on Days 7 and 14. All animals survived exposure to the test atmosphere and gained bodyweight over the 14-day observation period. During the exposure, the rats exhibited ocular and nasal discharge, shortness of breath, irregular respiration, shallow respiration, hunched posture and hypoactivity. With the exception of ocular and nasal discharge and shallow respiration, similar clinical signs persisted in all animals upon removal from the exposure chamber. Some animals also developed noisy breathing, reduced fecal volume and/or a prone posture, but all rats recovered from these symptoms by Day 11 and appeared active and healthy for the remainder of the study. Necropsy findings at terminal sacrifice were unremarkable. Based on the results of this study, the single exposure acute inhalation LC ₅₀ of T ³ 6 ^® Disinfectant is greater than 2.02 mg/L.

·

Acute Dermal Toxicity Study in Rats - This test determines the health hazards likely to arise from a short-term exposure to a substance from a single topical application to the skin. Two thousand milligrams per kilogram of bodyweight of T ³ 6 ^® Disinfectant was applied to the skin of ten healthy rats for 24 hours. The animals were observed for mortality, signs of gross toxicity, and behavioral changes at least once daily for 14 days. Bodyweights were recorded prior to application and again on Days 7 and 14. Necropsies were performed on all animals at terminal sacrifice. All animals survived, gained weight and appeared active and healthy. There were no signs of gross toxicity, adverse pharmacologic effects or abnormal behavior. Gross necropsy findings at terminal sacrifice were unremarkable. Based on the results of this study, the single dose acute dermal LD50 of T ³ 6 ^® Disinfectant is greater than 2,000 mg/kg of bodyweight.

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·

Dermal Sensitization Study in Guinea Pigs - This test determines the potential for a substance to produce sensitization after repeated topical applications. T ³ 6 ^® Disinfectant was topically applied to twenty healthy test guinea pigs, once each week for a three week induction period. Twenty-seven days after the first induction dose, a challenge dose of T ³ 6 ^® Disinfectant at its highest non-irritating concentration (100%) was applied to a new site on each guinea pig. Ten untreated animals were maintained under the same environmental conditions and treated with T ³ 6 ^® Disinfectant at challenge only. Approximately 24 and 48 hours after each induction and challenge dose, the animals were scored for erythema (redness of the skin). Based on the results of this study, T ³ 6 ^® Disinfectant is not considered to be a contact sensitize r .

There were no p-values nor statistical significance employed in the studies because such measurements are not required by Health Canada or the EPA and, therefore, are not part of the standard protocols. There were no further requirements for the Company to undertake further studies.  T ³ 6 ^® Disinfectant’s Heath Canada Drug Identification Number (DIN) is 02231344.

The Company is also in various stages of development of other products including:

1.

"Ready to Use" Disinfectant Cleaner: This product has been recognized by Health Canada as being able to kill bacteria, fungi and viruses on hard surfaces within 10 minutes (compared to the 3 to 5 minute time for T ³ 6 ^® Disinfectant).  It has also passed internal company efficacy testing.  This product is intended for use in hospitals, cruise lines, airlines and consumer applications that don’t require a disinfectant product that is as fast acting as T ³ 6 ^®   Disinfectant, but need a more economical  product. .  The Health Canada DIN for this product is 02272989 The Company has not determined when manufacturing will be started or when revenues will be realized from this product. At the present time, there are no plans to conduct further testing or to register the product in any jurisdiction outside of Canada .

2.

Disinfectant Cleaner CONCENTRATE : This product has completed testing and is registered with Health Canada (DIN 02278820). For US sales, EPA registration is required at an estimated cost of  $100,000. Completion of the required US registration is dependent on financing. The EPA registration is projected to be completed 2 years after financing is available. International sales are important to the Company and delays in US registration could have a significant effect on future sales and cash flow, as well as allow competition to penetrate this market. It is not known when manufacturing will be started or when revenues will be realized from this product. At the present time, the Company is considering conducting further testing to satisfy the requirements of the EPA for disinfectant cleaners and applying for registration of the product in the United States. It is not certain when this testing will begin and the decision may be made not to proceed at all if sales in Canada do not seem to warrant the expense of seeking EPA registration .

3.

Hand Sanitizer :  In February 2006, the Company started marketing of its hand sanitizer product (Health Canada DIN 02247771) through its current distributors to existing customers.  Up to June 30, 2007, there have been sales of approximately $50,000 of this product. No further testing or registrations are planned.

4.

T ³ 6 ^® Personal Disinfectant, T ³ 6 ^® Disinfectant Wipes and "Ready to Use" Disinfectant Cleaner Wipes : These products have been designed for use by general public for cleaning and disinfecting their hands or hard surfaces. Development has been completed and both products are registered with Health Canada (DIN’s  02231344 and  02272989, respectively). No further testing or registrations are planned and no final product has been manufactured or marketed up to June 2007. It is not known when manufacturing will be started or when revenues will be realized from these products. Delays may cause reductions in anticipated revenue generation.

5.

Anti-viral Soap : The Company has developed an anti-viral, anti-bacterial soap.  As at June 30 , 2007, no application has been filed for a Health Canada DIN and no product release date has been set. Testing for Health Canada or FDA approval to market in the U.S. is estimated to cost approximately $400,000 will not occur until further progress has been made on other projects or, possibly, not at all . Further, c C ompletion of product registration and initiation of marketing activities is dependent on financing , . with c C ompletion of these tasks anticipated is estimated to require at least within 3 years after financing.   However, t T his delay could allow competition to penetrate this market, which could reduce the revenue potential for this product.

6.

Microbicide Ge l: This product has been formulated and now requires testing for efficacy and toxicity. It was developed as a personal lubricant to prevent the transmission of sexually transmitted infections (“STI’s”). The testing required to attain FDA approval of this product would be beyond the financial capabilities of the Company. Therefore, the Company intends to undertake some initial testing on its own after a suitable delivery system has been identified and the rights to that delivery system acquired. If initial testing is successful, it is most likely that the Company will need to   identify a licensee or joint venture partner working in the area of STI prevention that can undertake the further testing and market development. It is no t known when the Company will start the initial testin g, how much time it would take to complete the required testing for STI prevention, what costs would be involved or even if there are companies that would be interested in conducting this testing. Delays may allow competition to develop comparable products, which will make market penetration more difficult which would lead to lower reduced revenues than anticipated from this product .

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7.

Topical infection treatment : The body normally hosts a variety of microorganisms, including bacteria and fungi. Some of these are useful to the body. Others may multiply rapidly and form infections. Approximately sixty percent of microbial infections are systemic meaning that the infections are spread throughout the body, leaving 40% of microbial infections that are topical, i.e., occur on the surface of the body. Topical fungal infections include mold-like fungi that cause athlete's foot, jock itch and ringworm, and yeast-like fungi that can cause diaper rash, oral thrush, cutaneous candidiasis and some cases of genital rashes. Bacterial infections, such as Staphylococcus can also infect the skin, particularly if a patient has a preceding skin condition, such as eczema. The Company’s T ³ 6 ^® formulation can be used to treat such topical infections and anecdotal evidence has shown that it can be used to treat such conditions as athlete’s foot and toenail infections. This application of the T ³ 6 ^® formulation must be tested against such conditions according to the requirements of the FDA, Health Canada and the European Medicines Agency and the Company intends to conduct such testing as soon as possible . Once the testing is completed, the results must be submitted to these regulatory agencies and be approved for marketing by the company. However, t T he testing required to attain the approval of this product are beyond the financial capabilities of the Company at this time it is not known when the Company may be able to start such testing . It is not known how much time it would take to complete the required testing for the topical infection treatment, what costs would be involved or how long it will take to conduct this testing. There are active competitors that are already well established in this market. Delays may allow even more competition to develop comparable products, which will make market penetration more difficult which would lead to lower reduced revenues than anticipated .

8.

Hand hygiene products : The Company is planning on providing the T ³ 6 ^® formulation in spray form and in gel form for hospital use as a hand sanitizer in nursing stations, patient rooms, hallways, washrooms, etc. and for sale to consumers through retail outlets. These applications of the T ³ 6 ^® formulation must be tested for their ability to kill microorganisms on the skin of humans according to the requirements of the FDA, Health Canada and the European Medicines Agency. Once the testing is completed, the results must be submitted to these regulatory agencies and be approved for marketing by the company. The testing required to attain the approval of this product are beyond the financial capabilities of the Company at this time it is not known when the Company may be able to start such testing . . It is not known how much time it would take to complete the required testing for the hand hygiene products, what costs would be involved or how long it will take to conduct this testing. There are active competitors that are already well established in this market. Delays may allow even more competition to develop comparable products, which will make market penetration more difficult which would lead to lower reduced revenues than anticipated .

9.

Skin antiseptic and first-aid ointment : The Company is planning on providing the T ³ 6 ^® formulation in liquid form with a biological dye in a suitable delivery system for use as pre-operative and pre-injection antiseptic in hospitals and clinics and in gel and spray form, without biological dye, as a first-aid ointment for use on cuts and scrapes to prevent infections. These applications of the T ³ 6 ^® formulations must be tested for their ability to kill microorganisms on the skin of humans and in cuts and scrapes according to the requirements of the FDA, Health Canada and the European Medicines Agency. Once the testing is completed, the results must be submitted to these regulatory agencies and be approved for marketing by the company. The testing required to attain the approval of this product are beyond the financial capabilities of the Company at this time it is not known when the Company may be able to start such testing . It is not known how much time it would take to complete the required testing for the topical infection treatment, what costs would be involved or how long it will take to conduct this testing. There are active competitors that are already well established in this market. Delays may allow even more competition to develop comparable products, which will make market penetration more difficult which would lead to lower reduced revenues than anticipated .

10.

Vulvovaginal infections (“VVI’s”) : The Company is planning on providing the T ³ 6 ^® formulation in a form suitable for the treatment of all vulvovaginal infections including fungi, bacteria and, possibly, parasites and combinations of all fungal and bacterial infections. This application of the T ³ 6 ^® formulation must be tested for its ability to resolve VVI’s according to the requirements of the FDA, Health Canada and the European Medicines Agency. Once the testing is completed, the results must be submitted to these regulatory agencies and be approved for marketing by the company. The testing required to attain the approval of this product are beyond the financial capabilities of the Company at this time it is not known when the Company may be able to start such testing . It is not known how much time it would take to complete the required testing for the topical infection treatment, what costs would be involved or how long it will take to conduct this testing. There are active competitors that are already well established in this market. Delays may allow even more competition to develop comparable products, which will make market penetration more difficult which would lead to lower reduced revenues than anticipated .

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The Company does not keep separate records of the cost of the development and registration for each product for a number of reasons. First, much of the development had already been done on the products before the Company acquired the assets of API in November, 2003 and API did not keep such records. Second, the Company’s expenditures after completing the acquisition of the assets of API have mostly involved registration, intellectual property protection and some testing. These expenses are recorded in separate categories from research and development in the financial statements. Third, the level of expenditures by the Company would be relatively small if they were allocated to individual products and would not be considered to be material if expenditures on each product were considered on their own. Finally, the cost of accounting for such a variety of expenditures on such a number of products is not considered to be financially justified.

Limited information has been provided on the estimated time of completion for individual products and for the estimated time of material net cash inflows for a number of reasons. Testing in the US for applications to the FDA or the EPA, in Canada for Health Canada and in Europe for the European Medicines Agency, is dependent on financing to support these tasks. The timing of financing and even the availability of financing is uncertain, which mean that completion dates and the time required to achieve material net cash flows are also uncertain. Even when the financing is available to complete testing and prepare the required submissions to the regulatory bodies, the time taken by the regulatory agencies to review the submissions is unpredictable. Further, the regulatory agencies may identify deficiencies in the submission and request more documentation or possibly even more testing before providing an approval for a product, if such approval is granted at all. Since the timing to secure product registration and market approval is uncertain and delays can lead to the entrenchment of competitors and make the penetration of markets more difficult, even more uncertainty is added to the estimates of time required to time to arrive at material net cash flows. For these reasons, the Company believes that it is more prudent to not project the times or costs of market approval for individual products.

Plan Of Operations

Source of Funds for Fiscal 2008 and for Fiscal 2009

The Company’s primary source of funds since incorporation has been and continues to be through the issuance of common shares since sales revenues are not yet rising.

As of June 30, 2007, the Company had a deficit of $2,603,791.

Use of Funds for Fiscal 2008/2009

For the 18 months ending December 31, 2008 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):

$     30,000

Sales and Marketing:

$   235,000

Patenting activities:

$     30,000

Regulatory activities (1):

$   150,000

New Product Sample Inventory / Production (2):

$     20,000

Total:

$1,265,000

Less Anticipated Revenue:

$   300,000

Additional Funds required:

$   965,000

Working Capital (as of June 30, 2007):

$   627,730

TOTAL ADDITIONAL FUNDS REQUIRED:

$   337,270

(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 for Canadian approvals for the Company’s new products.

(2)

New Product Sample Inventory / Production refers to the costs of producing samples for market and 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, including number of employees, in Fiscal 2008. 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 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 the Company most significantly.  However, the Company hopes to commence sales in the United States, China, Europe and other jurisdictions in the future and, as a result, we have summarized the government regulations in these markets that may affect the Company in the future. The Company’s products and future planned products can be categorized either as disinfectant products or therapeutic products, depending on the intended use. A summary is provided on the government regulations for both of these product categories.

1.

Canada: In order to market and sell a disinfectant, which is classified as a drug in Canada, the product must be approved by Health Canada, a federal government department responsible for the oversight of drugs and certain other medical products. The Therapeutics Product Directorate (TPD) is the department of Health Canada that issues the DIN (Drug Identification Number) for registered products.  A company can apply for a DIN by submitting the appropriate fee, a draft label and, in most cases, copies of completed efficacy and safety studies to support the claims made on the label. The descriptions of the tests required for Health Canada approval of a disinfectant are described above in the sections entitled “Efficacy studies” and “Toxicology studies” . The TPD generally takes 7- up to 12 months for review and completion prior to the issuance of a DIN. However, if further documentation or studies are required, the time taken to obtain approval for a new product can be longer.

T ³ 6 ^® Disinfectant has received approval from Health Canada as a disinfectant, disinfectant cleaner, sanitizer and deodorizer. The DIN for T36 Disinfectant is 02231344, which permits its sale in Canada for these applications.  T ³ 6 ^® 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.  

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Production facilities that manufacture an approved product must have an Establishment License that verifies its adherence to Good Manufacturing Practices (GMP) as set out by a division of Health Canada.  Norwood Packaging Ltd. (“Norwood”), which produces the Company’s products under contract (see Exhibit 4. B b . ), has an Establishment License. The Company’s agreement with Norwood, dated September 29, 2005 ( Exhibit 4.b.) , requires Norwood to manufacture and store T ³ 6 ^® Disinfectant for the Company in exchange for a percentage of sales made by the Company. The percentage paid to Norwood varies with the size of the order and for certain customers. Norwood also has a Right of First Refusal to manufacture other products for the Company under similar terms. The termination provisions of the agreement are standard commercial terms that include uncorrected breaches of the agreement, any form of insolvency on the part of Norwood or the Company, or 90 days written notice by either party. There is no specified expiry date for this agreement.

2.

United States : In order to market and sell a disinfectant in the US, the product must be approved by either the US Food & Drug Administration (FDA) or the US Environmental Protection Agency (EPA), depending on the intended use.  Disinfectant products, such as hard surface disinfectants, are regulated by the EPA . The descriptions of the tests required for EPA approval of a disinfectant are described above in the sections entitled “Efficacy studies” and “Toxicology studies ” . Any products with therapeutic claims or intended for use on humans are regulated by the FDA.  It is illegal to market and sell therapeutic products in the United States without an FDA or EPA registration. At some point in the future, the Company intends to undertake the processes in the United States to obtain FDA or EPA registration numbers. In the United States, T ³ 6 ^®   Disinfectant must be registered with the Environmental Protection Agency (“EPA”) as a disinfectant, disinfectant cleaner, sanitizer and deodorizer.

The Company entered into an agreement with Phigenics, LLC on July 21, 2005 (see Exhibit 4.A. for details of the Company’s contract with Phigenics). Phigenics will provide a contribution in kind of up to $33,000 at a mutually agreeable per diem rate to:

(a)   Assist the Company with the registration of T ³ 6 ^® Disinfectant with the US Environmental Protection Agency (“EPA”),

(b)  Work with the Company to develop new formulations of T ³ 6 ^®   Disinfectant, and

(c)  Develop sales and distribution channels in the US,

For these services, the Company will provide up to US$32,000 for EPA product registration fees, provide Phigenics with a royalty on Net Sales (gross sales less refunds and returns) of  T ³ 6 ^®   Disinfectant in the US starting 90 days after the Registration is achieved. The royalties will be 7% for the first year until 150% of Phigenic’s contribution in kind has been repaid and then 5% for the remainder of the first year, 5% for the second year, 4% for the third year, 3%  for the fourth year, 2% for the fifth year and 1% for the sixth and seventh years. In addition, Phigenics will receive a finder’s fee of 5% of sales to new clients for the first year after the first sale and 3% for the next year.

The agreement with Phigenics contains neither a term nor termination provisions. The Company cannot say when, or even if, the proposed 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.

FDA product registrations may require the following tests for each therapeutic a topical therapeutic test substance, such as T ³ 6 ^® Disinfectant . product:

·

  Time kill Evaluation – In these tests, dozens of different species of infectious micro-organisms are exposed to each of the active ingredients of a test substance and the complete test substance formula for periods of time ranging from 15 seconds to 30 minutes to determine the time required for each ingredient of a test substance and the complete test substance formulation to completely kill the selected species. The objectives of the testing are to determine the effective exposure times required for the test substance to be effective and if the individual ingredients have an additive, subtractive or synergistic effect .

·

, MIC (Minimum Inhibitory Concentration) Evaluation – Each ingredient of a test substance, the complete test substance formula and a known antiseptic product are tested against hundreds of micro-organisms. The objectives of the tests are to quantify the minimum concentration that is required for each of the test substances to have a measurable effect on the tested species, compare those results to the known antiseptic product and determine if the individual ingredients have an additive, subtractive or synergistic effect.

·

In-vitro dermal test – This testing involves in-vitro preparation and contamination of pig skin that has been harvested from carcasses with bacteria to evaluate the methods of application of a test substance and the time of exposure to achieve the best anti-microbial results. The objective of the testing is to determine the methods that would be proposed for subsequent human trials .

·

, Pilot Clinical Evaluation - This study evaluates the antimicrobial efficacy of a disinfectant in two different applications when used as patient preoperative skin preparation on 10 subjects.  A disinfectant must achieve a log ₁₀ microbial reduction of 3 or greater on skin of the groin and a log ₁₀ microbial reduction of 2 or greater on skin of the abdomen at ten minutes post-application. The objective of the testing is to obtain an preliminary evaluation of the efficacy of the test substance when used on humans .

·

, Full p P re-op erative clinical e E valuation - The study evaluates the immediate and persistent antimicrobial properties of a disinfectant when used as a preoperative skin preparation.  A known active control, e.g., 4% chlorhexidine, and a placebo, e.g., sterile saline, are also evaluated.  All treatments are assessed for their potential to cause skin irritation.  One-hundred  subjects are screened in order to obtain at least forty subjects having sufficient number of resident bacterial flora to permit evaluation of the efficacy of the test products. The objective of this test is to further evaluate the efficacy of a test substance when used on humans .

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·

Pharmacokinetics describes how the body affects a specific drug after administration and examines the extent and rate of Absorption, Distribution, Metabolism and Excretion, commonly referred to as the “ADME” scheme. Absorption is the process of a substance entering the body. Distribution is the dispersion or dissemination of substances throughout the fluids and tissues of the body. Metabolism is the irreversible transformation of parent compounds into daughter metabolites. Excretion is the elimination of the substances from the body. In rare cases, some drugs irreversibly accumulate in a tissue in the body. The pharmacokinetic properties of drugs may be affected by elements such as the site of administration and the concentration in which the drug is administered. These may affect the absorption rate. The objective of the ADME studies are to determine if the test substance or any of its components are absorbed and if any absorbed components are metabolized into harmful chemicals that may or may not accumulate in the body.

·

Insult patch test – The objective of this test is to evaluate the effect, if any, of prolonged and repeated exposure of the skin to the test substance. The “Induction Phase” of this study incorporates the test substance into a series of patches that are applied to the skin of 50 subjects repeatedly for periods of time and then removed. After a rest period, new patches are applied. This process is repeated over a period of time with a number of new patches and after completion of this phase, the reaction of the skin is evaluated. The “Challenge Phase” takes place some time after application of the final induction patch. Challenge patches are applied to previously untested sites, adjacent to the original induction patch sites. The reaction of the skin is evaluated 24 to 48 hours after application and the subjects are asked to report any delayed reactions which might occur after the final challenge patch reading .

·

, 21-day Cumulative i I rritation test – The objective of this test is similar to that of the insult patch test but assesses the irritation caused by topical products and chemicals over 21 days of continuous exposure of the skin. The test substance is incorporated into patches that remain on the skin for a period of time and are replaced from time to time to maintain continuous exposure to the skin .

,  In-vitro screening ,

 Ocular irritation and

In-vitro dermal irritation. These tests would typically require 12-18 months to complete and must be conducted by FDA certified labs. The FDA review and approval of this data can take up to 24 months. Once approved, then human clinical trials (if required) would need to be completed.  These trials are normally conducted in 3 phases, with a detailed protocol for each phase provided to the FDA for approval to proceed. At the end of each phase, the results are analyzed and submitted to the FDA and, if acceptable, the trial continues to the next phase:

Phase I Clinical Trials : This is the first stage of testing of a new therapeutic in human subjects, normally with a small group (20-60) of healthy volunteers. The objective is to assess the safety and tolerability of the product as a therapeutic, as well as to determine the effects of various doses of the product.  For externally administered agents, the testing is simpler than for injected or internally administered agents. However, Phase 1 trials can require up to 2 years to complete, including analysis of the collected data, preparation of the Phase I report for submission to the FDA and the time until a response is received. If these results of Phase I are accepted by the FDA, then the clinical trial can proceed to Phase II.

Phase II Clinical Trials : This second phase tests the therapeutic on a larger group and evaluates both the required dose (i.e. different quantities of the therapeutic) and efficacy (i.e. how well the therapeutic works for the specified indication). Phase II trials can take up to 3 years. However, some trials can combine Phase I and Phase II, which can reduce the total time required.

Phase III Clinical Trials : This third phase of clinical trial depends on the indications for which the therapeutic is being tested. For most agents Phase III trials are a randomized, controlled, multi-center trial with large patient groups (often more than 300), with the objective of  confirming that the therapeutic is as effective or more effective than the current “gold standard” for the same application. Phase III trials can take up to 5 years or more to complete.  If the results of the Phase III trial are approved by the FDA, then product is approved for marketing for the specific indications that were tested.

The three phases of clinical trials can require as long as 5-10 years to complete even for topical products. The total time required is dependant on the nature of the therapeutic, the condition being treated, the design of the protocols, the time to recruit patients and the review process conducted by the FDA. The registration time for products taken internally can take much longer than for topical agents. The costs of a complete clinical trial can be significant, depending on the intended application.  The Company may not conduct any clinical trials itself, but may enter into strategic alliances or licensing agreements with larger companies, which can support the costs of such trials,

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1.

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

·

Kill tests against Staphylococcus aureus, Escherichia coli and Pseudomonas aeruginosa – In a suspension test, the disinfectant must provide a log ₁₀ reduction in bacterial population of 5.0 or more within a test time designated by the supplier of the disinfectant. A suspension test involves adding the bacteria to the disinfectant, usually at a ratio of 0.1 to 2 parts bacterial suspension to 9.9 to 8 parts disinfectant, respectively.

·

Field disinfecting test on general hard surfaces – General bacterial counts are first determined on table surfaces and the window frame surfaces, maintained at 19 to21 ^o C, by taking sample swabs and culturing the bacteria. The same surfaces are then wiped with the disinfectant and sampled after a test time designated by the supplier of the disinfectant. The disinfectant must provide a average log ₁₀ reduction in bacterial population of 2.0 or more in this test.

·

Metal corrosion test - Metal plates made of  stainless steel, carbon steel, copper and aluminum are immersed continuously for 72 hors in the disinfectant. The corrosion rate, measured in millimeters per annum, is then determined for each metal.

·

Acute oral toxicity test - Four dosage groups receive 1,000, 2,150, 4,640, and 10,000 mg/kg of disinfectant administered orally with 10 animals in each group and comprised of half females and half males. After exposure to the disinfectant, the general conditions, symptoms of toxicity, and deaths of animals are observed over a period of 2 weeks.  After the tests are finished, all animals are dissected and gross pathological changes of animals are recorded.  Acute toxicities are measured in terms of the LD ₅₀ , the dose at which 50% of the animals die.

·

Bone marrow erythrocyte micronucleus test - Rats are given a dose of 500, 2,000, and 5,000 mg/kg of disinfectant by gastric lavage. Each group consists of 5 females and 5 males. Thirty hours later, the rats are given a second dose that is identical to the first. Six hours later, the rats are killed and dissected. Bone marrow from the sternum is removed, smeared on microscope slides, stained and examined for signs of chromosomal mutations.

·

Skin irritation test - Twenty-four hours before testing, a 3 cm x 3 cm area beside both sides of spinal cords on the backs of three New Zealand rabbits is shaved. On the next day, a testing area of 2.5 cm x 2.5 cm on the shaved skin on the left side is marked and 0.5 ml of disinfectant is smeared evenly on the test area, covered by 2 to 4 layers of gauze the same size as the test area and one layer of cellophane which is a little bigger than testing area for each animal. The test area is directly exposed to the disinfectant in this way for 4 hours. The shaved area on the right side is exposed to saline as a negative control using the same procedure. After the 4 hour exposure, the dressings are removed and shaved areas are washed using warm water to remove any residual saline or disinfectant.  After 1, 24, and 48 hrs the level of skin irritation is observed and recorded.

Upon completion of successful testing at the CDC, products can be registered for sale within China .

In On May 25, 2007, the an Agreement with Fuzhou Xinmei Biotech Co. Ltd. (“Fuzhou”), which allowed manufacturing and marketing in Fujian province in China (Exhibit 4.c.) , was transferred to He-Yi She Ye Limited (“He-Yi”) and expanded to cover marketing in all of China . ( Exhibit 4.g .). On August 31, 2006, He-Yi received its certificate of approval from the Fujian Centre of  Disease Control for T ³ 6 ^® Disinfectant after passing all of the required tests. This certificate allowed He-Yi to apply to the Chinese National Centre for Health Inspection and Supervision for approval to manufacture T ³ 6 ^® Disinfectant for sale in China and for export. The registration of T ³ 6 ^® Disinfectant in China was expanded beyond disinfection of inanimate objects, such as hospital equipment and instruments, to also allow external use on humans, including use as a first-aid antiseptic and hand sanitizer. Approval for the manufacturing of T ³ 6 ^® Disinfectant was obtained from the Ministry of Health in The People’s Republic of China. On April 19, 2007, a manufacturing certificate (Certificate of Approval (Health ID. No. 0109) was granted to He-Yi for a period of four years from April 19, 2007 to April 18, 2011 and is renewable by filing an application for renewal 6 months before the expiry date.

·

The agreement with He-Yi provides that ALDA will provide He-Yi with all information that ALDA has at its disposal to assist with the registration of ALDA’s products in China, He-Yi 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, quarterly reports on the progress of the approvals will be provided to ALDA by He-Yi, an extension may be requested by He-Yi to procure all necessary government approvals and may not be unreasonably refused by ALDA for recurring periods of 3 months if:

He-Yi is employing its best efforts in obtaining the registration of the ALDA products in China and is providing quarterly reports as required or more time is required by ALDA Pharmaceuticals Corp. to obtain information required by He-Yi,

ALDA Pharmaceuticals Corp. will provide He-Yi with the specifications required for He-Yi to provide a manufacturing facility suitable for the manufacturing of ALDA’s products,

·

He-Yi will provide a fully equipped manufacturing facility according to the specifications provided by ALDA, to produce the ALDA products subject to He-Yi employing its best efforts to obtain the space, materials and equipment specified by ALDA and He-Yi will have the right to distribute ALDA’s products in China subject to ALDA’s approval of each distributorship.

The Agreement is effective until April 18, 2011 (“the Initial Term”).  Upon expiration of the Initial Term, the Agreement may be renewed for additional periods, (“the Renewals”) provided that ALDA and He-Yi have each met all of their obligations under the Agreement and provided that He-Yi is able to obtain renewals of the Certificate of Approval (Health ID. No. 0109) that has been granted by the Ministry of Health of the People’s Republic of China and expires on April 18, 2011. Any Renewals will reflect current market conditions in the territory served by He-Yi at the time the Renewals are granted and the time periods of any Renewals will be the same as the corresponding time periods of the renewals of the Certificate.

For the first 3 years after production is started by He-Yi and within 6 months after production is started by He-Yi, ALDA and He-Yi will establish minimum sales levels and, thereafter, after each new distributorship is established.

He-Yi will pay ALDA a royalty, based on the gross revenues received by He-Yi for all of ALDA’s products sold in China as follows:

·

5% during the first and second year after production is started by He-Yi,

·

8% during the third year,

·

6% after a doubling of sales over the sales achieved in the second year has occurred.

·

He-Yi will pay ALDA a 10% royalty based on the gross revenues received by He-Yi for all of ALDA’s products sold by He-Yi outside of China.

·

All royalties will be paid monthly within 30 days after each month end.

ALDA, at ALDA’s discretion, will have the right to buy product from He-Yi.

At the request of ALDA and with the authorization of ALDA, He-Yi agrees to direct ship ALDA’s products for ALDA, at ALDA’s expense, to anywhere in the world.

The Company cannot guarantee that He-Yi will be able to construct a manufacturing facility, that products manufactured by He-Yi will pass the quality control standards established by the Company or the Chinese government, that He-Yi will be able to obtain approvals to market the Company’s products in other provinces of China or that He-Yi will be able to sell any of the Company’s products at all in China or elsewhere.

2.

Malaysia and Other Regions of Asia : The Company has a 5 year licensing and distribution agreement with Linns Corporation Sdn Bhd (“Linns”) (see Exhibit 4.F.) with an effective date of August 1, 2004.  “The Territory” is defined as Brunei, Cambodia, Indonesia, Japan, Laos, Malaysia, Myanmar, Philippines, Singapore, South Korea, Taiwan, Thailand and Vietnam, subject to Linns submitting the required applications required for regulatory approval of T ³ 6 ^® Disinfectant in each part of the Territory.

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Registration of T ³ 6 ^® Disinfectant in Malaysia is being left to the discretion of the Linns because the Company is not knowledgeable about the registration requirements of jurisdictions outside of North America. On the Company’s behalf, Linns submitted its T ³ 6 ^® Disinfectant to the National Pharmaceutical Control Bureau, Ministry of Health, Malaysia and received approval in January of 2005 to sell T ³ 6 ^® Disinfectant as a disinfectant, disinfectant cleaner sanitizer and deodorizer in Malaysia. However, because the T ³ 6 ^® Disinfectant could be flammable, the Company needs approval from Malaysia’s Department of Fire & Rescue before T ³ 6 ^® Disinfectant can be stored at Linn’s warehouse.  This approval has not yet been obtained.

Linns is obliged to meet minimum sales levels that are mutually agreed upon by Linns and the Company and to purchase T ³ 6 ^® Disinfectant from the Company. Linns has a Right of First Refusal to manufacture T ³ 6 ^® Disinfectant for the Territory. If Linns meets the minimum sales obligations, the agreement is renewable for an additional 5 years. The termination provisions of the agreement are standard commercial terms that include uncorrected breaches of the agreement and any form of insolvency on the part of Linns or the Company.

Seasonality

The only seasonality observed with respect to T ³ 6 ^® Disinfectant marketing is that sales slow down in the summer and during the Christmas period due to a general business slowdown as a result of customers being on holidays.

Dependency upon Patents/Licenses/Contracts/Processes

If the Company is able to further commercialize and increase sales of its T ³ 6 ^® products, the Company may be dependent on patent and trademark protection to protect future potential revenues and growth.

Patents

The Patent Cooperation Treaty (PCT) is an international patent law treaty established in 1970. It provides a unified procedure for filing patent applications to protect inventions in each of its Contracting States, which includes each jurisdiction specified below. A patent application filed under the PCT is called an “international application” or “PCT application”. A single filing of an international application is made with a Receiving Office (RO) in one language. It then results in a search being performed by an International Searching Authority (ISA), accompanied with a written opinion regarding the patentability of the invention which is the subject of the application. Optionally, this is followed by a preliminary examination, performed by an International Preliminary Examining Authority (IPEA). The PCT does not lead to the grant of an "international patent", which does not exist, but rather, national patent examinations that are handled by each relevant national or regional authority. For example, in Canada, the US, China, Australia and Singapore, there are national patent offices whereas, in Europe, the European Patent Office handles the national phase for its member states.

API filed patent application #PCT/CA2002/001284, “A wide spectrum disinfectant”, on August 20, 2002. All rights to the patent application were transferred from API to the Company on completion of the Qualifying Transaction on November 13, 2003. A summary of subsequent events is presented below.

Canada : On February 18, 2005 the Canadian Intellectual Property Office received the PCT patent application and assigned it Patent Application Number 2,495,938.

European Union : On March 30, 2005 the PCT application was accepted for national examination by the European Patent Office (“EPO”) and assigned it Patent Application Number 02754054.1-2113. The countries covered by the European patent application are Austria, Belgium, Bulgaria, Switzerland, Cyprus, the Czech Republic, Germany, Denmark, Estonia, Spain, Finland, France, Great Britain (the UK), Greece, Ireland, Italy, Liechtenstein, Luxembourg, Monaco, Netherlands, Portugal, Sweden, the Slovak Republic and Turkey. On May 18, 2005, the bibliographic data of the above-noted application was published in the European Patent Bulletin, under Publication No. 1530485. The resulting effect of such publication is that any possible infringer is deemed to have knowledge of the patent application without the Company having to formally inform them of this application’s existence. On October 18, 2006 the EPO provided the Company with an Office Action requesting further information on the patent application. The Company responded to the questions and received a second Office Action, dated September 5, 2007 from the EPO. This second Office Action requested that the Company provide certain additional information to support the claims that were made in the application.

China : On June 25, 2005 the Company was notified that the PCT application was accepted for national examination by the Patent Office of the People’s Republic or China (“Chinese Patent Office”) and assigned Patent Application Number 02829642.7. On August 11, 2005, the Chinese Patent Office accepted a Request for Substantive Examination from the Company. The application was published in the Chinese Patent Gazette on October 19, 2005, under Publication No. CN1684711A and entered into Substantive Examination. On February 5, 2006, the Company filed a Voluntary Amendment to the original patent application to correct certain minor errors in the original application. On June 2, 2006, the Chinese Patent Office provided an Office Action which requested certain additional amendments to the patent application. On December 18, 2006, the Company filed its response to the Office Action. The Company was notified by the Chinese Patent Office that the Chinese patent had been allowed, effective June 8, 2007.

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United States : On February 18, 2005, the US Patent and Trademark Office (“USPTO”) received the PCT patent application and assigned it Patent Application Number 10/525,110. The patent application was published by the USPTO on December 22, 2005, under Publication Number US 2005/0282727. On July 27, 2006, the Company received that first Office Action from the USPTO which required clarification or modification of certain claims made in the patent application. The Company was required to respond to the Office Action by October 27, 2006 and did so on October 26, 2006 with amendments to the claims that required clarification or modification. On February 7, 2007 the USPTO provided the Company with a Notice of Allowance for the US patent with all claims made by the Company accepted  by the USPTO. A Notice of Allowance is not a grant of a patent and is subject to withdrawal by the USPTO or on petition by the Company. The Company then filed certain minor, voluntary amendments to the patent application and a second Notice of Allowance, dated June 8, 2007 was provided by the USPTO.

Singapore : On February 18, 2005, the Singapore Patent Office accepted the PCT patent application and assigned it Patent Application Number 200500987-3.

Australia : On March 15, 2005 the PCT application was accepted for national examination by the Australian patent office on March 15, 2005 and assigned with Patent Application Number 2002322916. On October 24, 2006, the Australian patent office provided the Company with a Direction to Request Examination. Under Australian Patent law, such examination must be requested within five years of the filing date or within six months of receiving a direction from the Australian Patent Office, whichever is sooner.

The subject matter of all of these pending patents is the composition of T ³ 6 ^® Disinfectant which contains five active ingredients, four of which are in relatively low concentrations that act synergistically to disrupt the physical structure of all types of micro-organisms. The pending patents also provide for the method of manufacturing T ³ 6 ^® Disinfectant.

As of June 30, 2007 none of these patents has yet been finally granted.  The Company cannot estimate when, if at all, the patents will be granted.

Trademarks:

The Company successfully trademarked “T36” in Canada on April 22, 2004 and in the United States on November 2, 2004.  The trademark in the United States is a Principal Register mark. The Principal Register of the US Patent and Trademark Office (“USPTO”) conveys the important substantive rights that most people associate with federal registration and, as a result, it is the preferred method of federal trademark protection. Probably the most important benefit of placing a mark on the Principal Register is that anybody who later initiates use of the same or a confusingly similar trademark may be presumed by the courts to be a "willful infringer" and therefore liable for damages.

The Company also successfully trademarked the Company’s logo in Canada on July 16, 2004 and in the United States on January 18, 2005, also as a Principal Register mark.

Impairment of intellectual property

The Company purchased , at an estimated cost of $540,000, substantially all of the assets and undertakings of API, principally comprised of certain intellectual property rights of API related to T36 Disinfectant developed by API including certain drug identification numbers, trademark and patent applications, inventory, capital assets, the shares of ALDA Institute For Preventative Health Care Inc., a non-competition agreement, and certain contracts. The value placed on these assets was $540,000. In the financial statements, the intangible assets balance represents the carrying amount for the intellectual property and these assets were determined to have an indefinite life.

An impairment loss of $179,000 was charged against earnings for fiscal 2004 and an impairment loss of $245,000 was charged against earnings for fiscal 2005. This impairment loss was considered necessary due to sales of the T ³ 6 ^® Disinfectant being lower than the $540,000 valuation could support and also because the Company's progress towards securing legal protections for its proprietary product and development of a market for its product were significantly slower than had been anticipated at the time of the purchase of the business assets.  At June 30, 2005, the carrying cost of the intangible assets was written down to the estimated net recoverable amount of $116,000.  

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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

Balance at June 30, 2006

$116,000

Effective July 1, 2006, the Company changed its estimate of the useful life of the intangible assets from an infinite life to a finite of 20 years.  The impact of this change in estimate was to increase amortization by $5,800 for the year ended June 30, 2007.

Opening balance as at July 1, 2006

$116,000

Accumulated amortization

 (   5,800)

Balance as at June 30, 2007

$110,200

Sources/Availability of Raw Materials and Production

T ³ 6 ^® 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. However, they have a low value to weight ratio which means it is likely cheaper to source raw materials from local producers than shipping raw materials from other markets. As a result, the Company does not believe that it is vulnerable to raw materials shortages or to loss of access to supply from any one producer.

The Company has entered into a production contract with Norwood Packaging Ltd. (see Exhibit 4 . B b ) and anticipates entering into production contracts for each area in which the Company would market and sell the T ³ 6 ^® Disinfectant or other products.   

The Company does 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:

1.

“First Responder” organizations, including ambulance, fire fighters and police forces in Canada;

2.

Dental clinics; and

3.

Beauty and hair care salons and spas.  

There are no reliable market estimates of the size of the disinfectant or disinfectant cleaner market in these segments.

The Company hopes to expand its product sales to hospital and related consumers in the future. In addition, the Company 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. Also, no estimates are available for the US or overseas markets.  

“Disinfectant Products” are a very broad category of products and, where estimates are available of market size, the data appears to include many products dissimilar to those of the Company and often includes consumer products (e.g. 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 above), there are a number of private company producers of disinfectant products whose sales figures are not publicly available.  No industry trade organization exists which could provide estimates of disinfectant sales, in product categories, for Canada or the United States.

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Marketing, Distribution and Sales Channels

The Company does not directly market its products to end consumers.  The Company’s marketing, distribution and sales model is to market 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 into 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 that it targets both 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 have to make some additional effort to generate sales, as compared to the effort 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 (i.e. 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 one inside sales and marketing representative, trade shows, lectures to end users and product promotional materials and flyers.

The current key accounts are described below. With one exception, there are no contracts or oral agreements in place. Customers and distributors place orders for products from the Company, the shipper receives instructions from the Company and the shipper sends the products from its warehouse via carriers specified by the Company or the customer. All product shipments are made FOB from the Company’s shipper and title passes to the customer upon the Company’s or customer’s carrier taking delivery of the product from the shipper.  The Company may prepay all costs of transportation and insurance and the customer reimburses the Company for such expenses.  The payment terms for products delivered to the customer by the Company are net cash in Canadian currency within 30 days.

1.

Esthetics Plus, Inc . (“EP”) is a : A distributor to the beauty market  and is the only distributor with a formal agreement with the Company dated February 1, 2005 (Exhibit 4.h.). EP has exclusive distribution rights in the beauty industry across Canada, except that the agreement is not exclusive within the province of BC. The material terms of the agreement between the Company and EP are described below under “Item 10.C. Material Contracts” . with a contract that renews on an annual basis. Either party can terminate the contract on 60 days notice or with 30 days notice for any breach of the contract if the breach is not rectified within the 30 day notice period,

2.

Sinclair Dental Limited is a :  A distributor to the dental market and has been a customer of API and the Company for nearly 4 7 years.

3.

Product Distribution Centre (“PDC”) is a :  A Crown Corporation of the Province of British Columbia, Canada , and a distributor to the first responder market and has been a customer of the Company for nearly 4 years .

4.

The Stevens Company Limited is a : A distributor to the scientific and medical markets and a customer of API and the Company for nearly 4 7 years.

5.

VWR International is a : A distributor to the laboratory market and has been a customer of API. the Company  for nearly 4 years.

The Company currently sells its T ³ 6 ^® Disinfectant through these distributors and is also planning on introducing its new products, such as the T ³ 6 ^® "Ready to Use" Disinfectant Cleaner, T ³ 6 ^® Disinfectant Cleaner CONCENTRATE and the corresponding wipes, through these distributors. The current sales and plans to introduce the new products through these distributors would be disrupted if any of these distributors stopped representing the Company. The result would be a reduction in the Company’s revenues until new distributors could be found. It is possible that new distributors might not be found and the Company would have to try to sell its products directly to the end users, leading to a significant increase in marketing and sales costs, even if the sales levels could be regained.

4.C.  Organization structure

The Company is not part of a group and has only one wholly owned subsidiary, Sirona Therapeutics Corp. (“Sirona”), formerly the ALDA Institute for Preventative Health Care Inc., a Company incorporated in British Columbia.

On January 12, 2005 the Company entered into a license agreement with Sirona.  Under this agreement, the Company can choose to transfer the rights to certain therapeutic applications of its T ³ 6 ^® Disinfectant to Sirona if financing is directed into Sirona rather then into the Company. The Company will retain ownership of the technologies if Sirona undertakes any financing and completes the patenting and registration of any therapeutic products developed and based on the T ³ 6 ^® Disinfectant. At the present time, Sirona is an inactive company, but is in a position to become active if Sirona secures investment funding in the future. If such an investment is not made directly into Sirona, it will remain inactive or may undertake unrelated business activities.

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4.D. Property, Plant and Equipment

The Company has executive offices at 635 Columbia Street, New Westminster, British Columbia, V3M 1A7 which consist of 1,975 square feet. The Company leases its offices on a month-by-month basis at CDN$ 2,401.98 per month (see Exhibit 4. D d . for original lease agreement).

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