IVS Intelligent Vehicle Systems Inc. (the "Company")
Suite 102, 8838 Heather Street
Vancouver, BC
V6P 3S8
Shareholder Letter
January, 1999
Dear Shareholders:
On behalf of the Board of Directors, I would like to thank you for your ongoing support of the Company's
Directors and management during the Company's recent stock halt by the Vancouver Stock Exchange (VSE).
The Board of Directors however would like to take this opportunity to advise the Shareholders that the recent
stock halt in no way impeded the progress of the Company in its business initiatives. As previously announced,
Mack Trucks, Inc. was to conduct a "factory test trial" of our specially designed "mobile failure detection and
vehicle location system" for Mack Trucks, Inc. which is called "Trucklink". We are all pleased to announce that
the trial was successfully completed during the week of January 18, 1999. The Trucklink performed flawlessly
which now allows the Company to move forward to the next phase of the business initiatives.
The Company has received a number of calls in regards to what can be best described as a slowness by the
Company in moving the business and product sales forward. Up until now the Company was unable to
disclose the reasons for the apparent slowness, however now we can.
As you all know in developing the Trucklink our Company, utilized a number of manufacturing resources.
During the early part of the manufacturing phases one of the contractor's legal councils had determined that the
Trucklink might be in part infringing on another company's patented technology. That concern all but shut down
the forward progress of the Company's project up until now. After exhaustive study and much confusion it was
determined this week that there is no patent infringement. This now allows the Company to get on with its
business opportunities.
Let me clearly state that from the initial disclosure regarding the potential patent infringement, the Company
and its business associates knew that there was no infringement. However, we still had to go through the
prolonged legal process for it to become legally factual that we were no longer in a patent infringement
situation.
During the next two weeks the Company will be submitting to the VSE the response to its letter dated October
30, 1998. The reason for the prolonged delay in submitting the response is because the information that was
requested covered only a limited period of time. The Company was not prepared to go through a potential
second inquiry due to lack of coverage and as such took the position that all of the business activities and the
supporting documentation beginning with the Company's founding would be therefore submitted. Starting from
the beginning, (1992) meant much more work but we were convinced this was the correct way to proceed.
The Company has also received a number of inquiries questioning the legality of me being on the boards of
directors for both McCarney Technologies Inc. and IVS Intelligent Vehicle Systems Inc. In other words, they
were suggesting that there existed a conflict of interest situation. This same issue was raised in 1991 when
IVS was founded. A prominent legal firm in Vancouver was requested to respond to the question, as were
other legal firms involved at the time. Their response was that there is no conflict of interest as long as there is
full and plain disclosure including also my abstention in conflicting votes situations. These conditions have
always been met. Documentation on file at both the VSE and BC Securities Commission attest to that fact.
Since January 1998, as a director, my responsibility has been strictly advisory and as such not managing the
Company's day to day business. Any other tasks given to me on behalf of IVS has been initiated by the
Chairman of the Board.
James N. McCarney
Director
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