ALR Technologies SG Ltd. [ALRTF] Filings

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 20-F

Commission file number 000-56491

ALR Technologies SG Ltd.

(Exact name of registrant as specified in its charter)

9 Raffles Place
#26-01 Republic Plaza
Singapore

Singapore 048619
65 3129 2924

(Address of principal executive offices)

  U0

88-0225807

(I.R.S. Employer Identification No.)

Mr. Sidney Chan
President, Chief Executive Officer, Chairman
ALR Technologies SG Ltd.

9 Raffles Place
#26-01 Republic Plaza
Singapore 048619
65 3129 2924

sidney.chan@alrt.com

(Name, Telephone, E-mail and/or Facsimile number and Address of Company Contact Person)

Securities registered or to be registered pursuant to Section 12(b) of the Act: None.

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

Ordinary Shares
(Title of Class)

Securities for which there is a reporting obligation pursuant to Section 15(d) of the Act: None.

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: 632,466,844 ordinary 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 ☒

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Securities Exchange Act of 1934: YES ☐ NO ☒

Indicate by check mark whether the registrant (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 registrant 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 has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). YES ☒ NO ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or an emerging growth company. See the definition of “large accelerated filer,” “accelerated filer,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

If an emerging growth company that prepares its financial statements in accordance with U.S. GAAP, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant has filed a report on and attestation to its management’s assessment of the effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report. ☐

If securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the registrant included in the filing reflect the correction of an error to previously issued financial statements. ☐

Indicate by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive-based compensation received by any of the registrant’s executive officers during the relevant recovery period pursuant to §240.10D-1(b). ☐

Indicate by check mark which basis of accounting the registrant has used to prepare the financial statements included in this filing:

If “Other” has been checked in response to the previous question, indicate by check mark which financial statement item the registrant has elected to follow:

If this is an annual report, indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). YES ☐ NO ☒

TABLE OF CONTENTS

INTRODUCTION

References in this Annual Report on Form 20-F (“Annual Report”) to the “Company,” “we,” “us,” or “our,” unless the context otherwise requires, refer to ALR Technologies SG Ltd., a Singapore public company limited by shares, together with its consolidated subsidiaries. References in this Annual Report to “ALR Singapore” refer to ALR Technologies SG Ltd. References in this Annual Report to “ALR Nevada” refer to ALR Technologies Inc., a Nevada corporation. References in this Annual Report to “ALR Canada” refer to Canada Diabetes Solution Centre Inc., a Canadian corporation.

Unless otherwise noted herein, all references to “$,” “dollars” or “U.S. dollars” are to the currency of the United States (the “U.S.”).

Forward-looking Statements

This Annual Report and documents incorporated by reference herein contain forward-looking statements. Many of the forward-looking statements contained in this Annual Report can be identified by the use of words such as “anticipate,” “believe,” “could,” “expect,” “should,” “plan,” “intend,” “will,” “estimate” and “potential,” among others, or the negatives thereof.

Such forward-looking statements include, but are not limited to, statements regarding our intent, belief or current expectations. Forward-looking statements are based on our management’s beliefs and assumptions and on information currently available to our management. Such statements are subject to risks and uncertainties, and actual results may differ materially from those expressed or implied in the forward-looking statements due to various factors, including but not limited to, those identified under “Risk Factors” in this Annual Report. These risks and uncertainties include factors relating to:

Although we believe that the expectations reflected in such forward-looking statements are reasonable, we can give no assurance that such expectations will prove to be correct. Forward-looking statements speak only as of the date they are made, and we do not undertake any obligation to update them in light of new information or future developments or to release publicly any revisions to these statements in order to reflect later events or circumstances or to reflect the occurrence of unanticipated events.

PART I

Not Applicable.

Not Applicable.

A.       [Reserved]

B.       Capitalization and Indebtedness

Not Applicable.

C.       Reasons for the Offer and Use of Proceeds

Not Applicable.

D.       Risk Factors

Our business and future operating results may be affected by many risks, uncertainties and other factors, including those set forth below and those contained elsewhere in this Annual Report. If any of the following risks were to occur, our business, affairs, assets, financial condition, results of operations, cash flows and prospects could be materially and adversely affected. When we say that something could have a material adverse effect on us or on our business, we mean that it could have one or more of these effects.

You should carefully consider the risks and uncertainties described below and the other information in this Annual Report. Our business, financial condition or results of operations could be materially and adversely affected if any of these risks occurs, and as a result, the market price of our shares could decline and you could lose all or part of your investment. This Annual Report also contains forward-looking statements that involve risks and uncertainties. See “Forward-Looking Statements.” Our actual results could differ materially and adversely from those anticipated in these forward-looking statements as a result of certain factors.

Risks Related to Our Business and Operations

Although our consolidated financial statements (or “financial statements”) have been prepared on a going concern basis, our management believe that our recurring losses from operations and other factors have raised substantial doubt about our ability to continue as a going concern as of December 31, 2023.

Our audited financial statements for the fiscal year ended December 31, 2023 were prepared on a going concern basis in accordance with generally accepted accounting principles in the United States of America (“U.S. GAAP”). The going concern basis assumes that we will continue in operation for the next 12 months and will be able to realize our assets and discharge our liabilities and commitments in the normal course of business, thus our financial statements do not include any adjustments that might be necessary if we are unable to continue as a going concern. Our recurring losses, anticipated future losses, negative cash flow, need for additional capital and the uncertainties surrounding our ability to raise such funding, raises substantial doubt about our ability to continue as a going concern. In order for us to continue operations beyond the next 12 months and to be able to discharge our liabilities and commitments in the normal course of business, we must complete the development and deployment of our products, and sell our products directly to end-users, establish profitable operations through increased sales, decrease expenses, generate cash from operations or raise additional funds when needed. We intend to improve our financial condition and ultimately improve our financial results by increasing revenues through introduction of our product into new markets, continuing to expand and develop our field sales force and distributor relationships both domestically and internationally, forming strategic arrangements within the health & wellness and medical industries, educating medical professionals and patients as to the benefits of our diabetes management services, and reducing expenses. If we are unable to increase sales, reduce expenses or raise sufficient additional capital we may be unable to continue to fund our operations, develop our products, realize value from our assets, or discharge our liabilities in the normal course of business. If we become unable to continue as a going concern, we could be forced to liquidate our assets, and potentially realize significantly less than the values at which they are carried on our financial statements, and shareholders could lose all or part of their investment in our ordinary shares.

We have experienced net losses for each of the past three years, and we could experience additional losses and have difficulty achieving profitability in the future.

We had an accumulated deficit of $120,108,400, $112,633,886 and $102,015,077 at December 31, 2023 2022 and 2021, respectively. We recorded net losses of $7,474,514, $10,618,809 and $8,443,315 for the years ended December 31, 2023, 2022, and 2021, respectively. In order to achieve profitability, we must control our costs and increase net revenue through new sales. Failure to increase our net revenue and decrease our costs could cause our share price to decline and could have material adverse effect on our business, financial condition, and results of operations.

We could need to raise additional capital in the future, and if we are unable to secure adequate funds on terms acceptable to us, we could be unable to execute our business plan.

To remain competitive, we must continue to make significant investments in the development of our products, in obtaining regulatory clearances to introduce our product into new markets, in the expansion of our sales and marketing activities, and in the expansion of our operating and management infrastructure as we increase sales domestically and internationally. If cash generated from our operations is insufficient to fund such growth, we could be required to raise additional funds through the issuance of equity or debt securities in the public or private markets, or through a collaborative arrangement or sale of assets. Additional financing opportunities may not be available to us, or if available, may not be on favorable terms. The availability of financing opportunities will depend, in part, on market conditions, and the outlook for our business. Any future issuance of equity securities or securities convertible into equity securities could result in substantial dilution to our shareholders, and the securities issued in such a financing could have rights, preferences or privileges senior to those of our ordinary shares. In addition, if we raise additional funds through debt financing, we could be subject to debt covenants that place limitations on our operations. We could not be able to raise additional capital on reasonable terms, or at all, or we could use capital more rapidly than anticipated. If we cannot raise the required capital when needed, we may not be able to satisfy the demands of existing and prospective customers, we could lose revenue and market share and we may have to curtail our capital expenditures. The following factors, among others, could affect our ability to obtain additional financing on favorable terms, or at all:

If we are unable to obtain sufficient capital in the future, we could have to curtail our capital or development expenditures. Any curtailment of our capital or development expenditures could result in a reduction in net revenue, reduced quality of our products, increased manufacturing costs for our products, harm to our reputation, or reduced manufacturing efficiencies, and could have a material adverse effect on our business, financial condition, and results of operations.

Our success depends, in part, on securing and developing relationships with, and on the efforts of, third-party distributors to sell and distribute our Diabetes Solution and GluCurve products.

We will rely on a variety of third-party distributors, such as independent healthcare organizations, medical suppliers, group purchasing organizations, pharmaceutical companies, insulin providers, and other human and animal healthcare companies to introduce our Food and Drug Administration (“FDA”) cleared and Health Insurance Portability and Accountability Act of 1996 (“HIPAA”) compliant diabetes management system (the “Diabetes Solution”), and GluCurve, a modified version of the Diabetes Solution, for animal health (“GluCurve”), products to their networks. Our third-party distributor has generated limited sales for us to date. Such third parties have significant discretion in determining the efforts and resources they apply to the marketing, sale and implementation of our products, and we will face significant challenges and risks in expanding, training, and managing such third parties. Third parties may not commit the necessary resources to market and sell our products to the level of our expectations, and, regardless of the resources they commit, they may not be successful. In the future as we expand our distribution network, we may face competition or pricing pressure from one or more of our distributors in certain geographic areas if multiple distributors are selling inventory to the same customer base. Additionally, most distributor agreements may be terminated with limited notice, and we may not be able to replace any terminating distributor in a timely manner or on terms agreeable to us, if at all. If we are not able to secure and grow our distribution network we will not reach the revenues and profits needed to sustain our business. If we are not able to maintain our distribution network, if our distribution network is not successful in marketing and selling our products, or if we experience a significant reduction in, cancellation, or change in the size and timing of orders from our distributors, our revenues could decline significantly, and such factors could otherwise have material adverse effect on our business, financial condition, and results of operations.

Our inability to distinguish our Diabetes Solution and GluCurve products from other diabetes treatment compliance devices or solutions could limit the market acceptance of our products and our market share.

Our Diabetes Solution and GluCurve products represents a relatively new entry into the market for diabetes compliance solutions. Our future success will depend on our ability to increase demand for our products by demonstrating to a broad spectrum of healthcare providers the potential performance advantages and efficiencies of our Diabetes Solution and GluCurve products over traditional methods of treatment management and over competitive management solutions, and our inability to do so could have a material adverse effect on our business, financial condition, and results of operations. Historically, we have experienced long sales cycles as healthcare professionals (“HCPs”) have been, and could continue to be, slow to adopt new technologies on a widespread basis. As a result, we generally are required to invest a significant amount of time and resources to educate healthcare administrators and other purchasers about the benefits of our product in comparison to competing products and technologies before completing a sale, if any.

Factors that could inhibit adoption of our Diabetes Solution and GluCurve products by HCPs include concerns about the efficacy and reliability of our product. In order to invest in our products, a healthcare administrator generally needs to invest time to understand the technology, consider how physicians and veterinarian doctors may respond to the new technology, assess the financial impact the investment could have on medical practice, and become comfortable introducing and using our products. Absent an immediate competitive motivation, a healthcare administrator may not feel compelled to invest the time required to learn about the potential benefits of using our products. HCPs may not accept or adopt our products until they see additional clinical evidence supporting the safety and efficiency of our product, or recommendations supporting our product by influential healthcare providers or practitioners. In addition, economic pressure, caused, for example, by an economic slowdown, changes in healthcare reimbursement, or by competitive factors in a specific market, could make healthcare organizations reluctant to invest in new technologies or alternative products. Acceptance by healthcare providers will depend on the recommendations of specialists, as well as other factors, including the relative effectiveness, reliability and efficiency of our systems as compared to other methods for managing diabetes treatment.

Any failure in our efforts to train health practitioners could result in the misuse of our products, reduce the market acceptance of our products, and have a material adverse effect on our business, financial condition, and results of operations.

There is a learning process involved for HCPs to become proficient users of our Diabetes Solution and GluCurve products. It is critical to the success of our sales efforts to adequately train a sufficient number of practitioners. Following completion of training, we rely on HCPs and administrators to advocate the benefits of our products in the broader marketplace. Convincing practitioners to dedicate the time and energy necessary for adequate training and implementation is challenging, and we cannot provide assurance that we will be successful in these efforts. If HCPs are not properly trained, they could misuse or ineffectively use our Diabetes Solution and GluCurve products, or could be less likely to appreciate our Diabetes Solution and GluCurve products. This could also result in unsatisfactory patient outcomes, negative publicity, applicable FDA regulatory action, or lawsuits against us, any of which could negatively affect our reputation and sales of our Diabetes Solution and GluCurve products.

If future data proves to be inconsistent with our clinical results or if competitors’ products present more favorable results, our revenues could decline and our business, financial condition, and results of operations could be materially and adversely affected.

If new studies or comparative studies generate results that are not as favorable as our studies and results to date, our revenues could decline. Additionally, if future studies indicate that our competitors’ products are more effective or reliable than ours, our revenues could decline. Furthermore, HCPs could choose not to purchase our Diabetes Solution or GluCurve products until they receive additional published long-term clinical evidence and recommendations from prominent health professionals that indicate our Diabetes Solution and GluCurve products are effective for clinical applications.

We face competition from other companies, many of which have substantially greater resources than we do. If we do not successfully develop and commercialize current and future products that remain competitive with products or alternative technologies developed by others, we could lose revenue opportunities and customers, and our ability to grow our business would be impaired.

A number of competitors have substantially greater capital resources, larger customer bases, larger technical, sales and marketing forces, and stronger reputations with target customers than ours. We compete with a number of domestic and foreign companies in the human health and animal health segments that market diabetes treatment management products, including those that bundle hardware, software, and testing supplies, as well as companies that market integrated treatment solutions in the healthcare market. The marketplace is highly fragmented and very competitive. We expect that the rapid technological changes occurring in the healthcare industry could lead to the entry of new competitors, particularly if artificial intelligence driven software gains market acceptance in the field. If we do not compete successfully, our revenue and market share could decline and our business, financial condition, and results of operations could be adversely affected. Our long-term success depends upon our ability to (i) distinguish our products through improving our product performance and pricing, protecting our intellectual property, improving our customer support, accurately timing the introduction of new products, and developing sustainable distribution channels worldwide; and (ii) develop and successfully commercialize new products, new or improved technologies, and additional applications for our Diabetes Solution and GluCurve products. There is no assurance that we will be able to distinguish our Diabetes Solution and GluCurve products, commercialize any new products, new or improved technologies, or additional applications for our intellectual property.

If our human health customers cannot obtain third-party reimbursement for their use of the Diabetes Solution, they could be less inclined to purchase Diabetes Solution and our business, financial condition and results of operations could be adversely affected.

While our GluCurve product will be purchased by veterinarian clinics and sold to their customers, we anticipate our human health product will generally purchased by medical professionals who have various billing practices and patient mixes. Such practices range from primarily private pay to those who rely heavily on third-party payers, such as private insurance or government programs. In the U.S., third-party payers review and frequently challenge the prices charged for medical products and/or services. In many foreign countries, the prices for diabetes treatment services are predetermined through government regulation. Payers could deny coverage and reimbursement on various grounds, including if they determine that the procedure was not medically necessary or that the device used in the procedure was investigational. Accordingly, both coverage and reimbursement can vary significantly from payer to payer. For the portion of physicians who rely heavily on third-party reimbursement, the inability to obtain reimbursement for services using our products could deter them from purchasing or using our products. We cannot predict the effect that future healthcare reforms or changes in financing for health plans could have on our business. Any such changes could have an adverse effect on the ability of a physician or medical institution to generate a profit using our current or future products. In addition, such changes could act as disincentives for capital investments by medical professionals.

We could incur problems in manufacturing our products.

Any continuous glucose monitoring device (“CGM”) or blood glucose meters (“BGM”) sold as part of our Diabetes Solution or GluCurve products will be manufactured by third-party suppliers. In order to grow our business, we must expand our supply chain to meet any demand we may experience. We could encounter difficulties in securing additional supply of our products, including problems involving supplier production capacity and yields, quality control and assurance, component supply, and shortages of qualified personnel. We will be reliant on the performance of the third-party suppliers to manufacture the CGM and BGM in accordance with the specifications and schedules required. Failure of the third-party suppliers to provide CGM and BGM per our requirements could have an adverse impact on us and our distribution relationships.

In addition, before we can scale up commercial manufacture of our products, we must ensure that our third-party manufacturing facilities, processes, and quality systems, and the manufacture of the BGM or CGM bundled with our products, comply with any applicable regulations governing facility compliance, quality control, and documentation policies and procedures. While CGM or BGM purchased from third-party manufacturers will have higher regulatory compliance requirements if distributed for human health, as opposed to those products distributed for animal health, any deviation in the quality system for the BGM or CGM used in animal health could lead to an adverse impact of our business.

In addition, our supplier’s manufacturing facilities are subject to periodic inspections by the FDA, or comparable regulatory authorities from other jurisdictions, as well as various state agencies and foreign regulatory agencies. From time to time, we could experience significant supply delays while our suppliers ensure compliance with these requirements. Our success will depend in part upon securing supply of BGM or CGM that function according to our specifications and our customers’ expectations and our ability to supply our products in compliance with the FDA’s Quality System Regulation and other regulatory requirements. Our future success depends on our ability to supply products on a timely basis with acceptable purchase costs, while at the same time ensuring good quality control and complying with applicable regulatory requirements, and an inability to do so could have a material adverse effect on our business, financial condition, and results of operations.

Product liability claims against us could be costly and could harm our reputation.

The sale of medical devices involves the risk of product liability claims against us. In the future, claims could exceed our then current product liability insurance coverage limits. Our insurance policies will be subject to various standard coverage exclusions, including damage to the product itself, losses from recall of our product, and losses covered by other forms of insurance, such as workers’ compensation. We cannot be certain that we will be able to successfully defend any claims against us, nor can we be certain that our insurance will cover all liabilities resulting from such claims. In addition, we cannot provide assurance that we will be able to obtain such insurance in the future on terms acceptable to us, or at all. Regardless of merit or eventual outcome, any product liability claim brought against us could result in harm to our reputation, decreased demand for our products, costs related to litigation, product recalls, loss of revenue, an increase in our product liability insurance rates, or the inability to secure coverage in the future, and could have a material adverse effect on our business, financial condition, and results of operations.

Rapidly changing standards and competing technologies could harm demand for our products, result in significant additional costs, and have a material adverse effect on our business, financial condition, and results of operations.

The markets in which our products compete are subject to rapid technological change, evolving industry standards, changes in the regulatory environment, and frequent introductions of new devices and evolving techniques in diabetes treatment and patient management. Competing products could emerge that render our products uncompetitive or obsolete. The process of developing new medical devices is inherently complex and requires regulatory approvals or clearances that can be expensive, time-consuming, and uncertain. We cannot guarantee that we will successfully identify new product opportunities, identify new and innovative applications of our technology, or be financially or otherwise capable of completing the research and development required to bring new products to market in a timely manner. An inability to expand our product offerings or the application of our technology could limit our growth. In addition, we could incur higher manufacturing costs if manufacturing processes or standards change, and we could need to replace, modify, design, or build and install equipment, all of which would require additional capital expenditures.

We could be unable to effectively manage and implement our growth strategies, which could have a material adverse effect on our business, financial condition, and results of operations.

Our growth strategy includes expanding the market for our Diabetes Solution and GluCurve products, and developing new applications and enhancements for our products. Expansion of our existing market, product line and entry into new medical applications divert the use of our resources and systems, require additional resources that might not be available (or available on acceptable terms), require additional country-specific regulatory approvals, result in new or increasing competition, could require longer implementation times or greater start-up expenditures than anticipated, and could otherwise fail to achieve the desired results in a timely fashion, if at all. These efforts could also require that we successfully commercialize new technologies in a timely manner, price them competitively and cost-effectively, and manufacture and deliver sufficient volumes of new products of appropriate quality on time. We could be unable to increase our sales and earnings by expanding our product offerings in a cost-effective manner, and we could fail to accurately predict future customer needs and preferences or to produce viable technologies. In addition, we could invest heavily in research and development of products that do not lead to significant revenue. Even if we successfully innovate and develop new products and product enhancements, we could incur substantial costs in doing so. In addition, promising new products could fail to reach the market or realize only limited commercial success due to efficacy or safety concerns, failure to achieve positive clinical outcomes, or uncertainty over third-party reimbursement.

We could be subject to breaches of our information technology systems, which could damage our reputation and customer relationships. Such breaches could subject us to significant reputational, financial, legal, and operational consequences.

We rely on information systems (“IS”) in our business to obtain, process, analyze, and manage data to, among other things:

A cyber-attack that bypasses our IS security, or employee error, malfeasance or other disruptions that cause an IS security breach, could lead to a material disruption of our IS and/or the loss of business information. Such an attack could result in, among other things:

any of which could have a material adverse effect on our business, financial condition, and results of operations. In the event of an attack, we would be exposed to a risk of loss or litigation and possible liability, including under laws that protect the privacy of personal information.

Litigation against us could be costly and time-consuming to defend and could materially and adversely affect our business, financial condition, and results of operations.

We expect to be involved from time to time in various claims, litigation matters and regulatory proceedings incidental to our business, including claims for damages arising out of the use of our products or services and claims relating to intellectual property matters, employment matters, commercial disputes, competition, sales and trading practices, environmental matters, personal injury, and insurance coverage. Some of these lawsuits include claims for punitive as well as compensatory damages. The defense of these lawsuits could divert our management’s attention, and we could incur significant expenses in defending these lawsuits. In addition, we could be required to pay damage awards or settlements or become subject to unfavorable equitable remedies. Moreover, any insurance or indemnification rights that we could have may be insufficient or unavailable to protect us against potential loss exposures.

If we lose our key management personnel, or are unable to attract or retain qualified personnel, it could adversely affect our ability to execute our growth strategy.

Our success is dependent, in part, upon our ability to hire and retain management, engineers, marketing and sales personnel, technical, research, and other personnel who are in high demand and are often subject to competing employment opportunities. Our success will depend on our ability to retain our current management, engineers, marketing and sales, technical, research, and other personnel and to attract and retain qualified like personnel in the future. Competition for senior management, engineers, marketing and sales personnel, and other specialized technicians is intense and we may not be able to retain our personnel. If we lose the services of any executive officers, key contractors, or key employees, our ability to achieve our business objectives could be harmed and our business, financial condition, and results of operations could be materially and adversely affected. In general, our officers could terminate their employment at any time without notice for any reason.

If we fail to comply with the reporting obligations of the Exchange Act and Section 404 of the Sarbanes-Oxley Act, or if we fail to maintain adequate internal control over financial reporting, our business, financial condition, and results of operations, and investors’ confidence in us, could be materially and adversely affected.

As a public company, we are required to comply with applicable periodic reporting obligations of the Exchange Act. Our failure to prepare and disclose this information in a timely manner and meet our reporting obligations in their entirety could subject us to penalties under federal securities laws, expose us to lawsuits, and restrict our ability to access financing on favorable terms, or at all.

In addition, pursuant to Section 404 of the Sarbanes-Oxley Act, we are required to evaluate and provide a management report of our systems of internal control over financial reporting. During the course of the evaluation of our internal control over financial reporting, we could identify areas requiring improvement and could be required to design enhanced processes and controls to address issues identified through this review. This could result in significant delays and costs to us and require us to divert substantial resources, including management time, from other activities. In addition, if we fail to maintain the adequacy of our internal control over financial reporting, we may not be able to ensure that we can conclude on an ongoing basis that we have effective internal control over financial reporting in accordance with the Sarbanes-Oxley Act. Moreover, effective internal controls are necessary for us to produce reliable financial reports and are important to help prevent fraud. Any failure to maintain compliance with the requirements of Section 404 on a timely basis could result in the loss of investor confidence in the reliability of our financial statements, which in turn could, negatively impact the trading price of our stock, and adversely affect investors’ confidence in us and our ability to access capital markets for financing.

Risks Related To Our Intellectual Property

If the patents that we own or license, or our other intellectual property rights, do not adequately protect our technologies, we could lose market share to our competitors and be unable to operate our business profitably.

Our future success depends, in part, on our ability to obtain and maintain patent protection for our products and technology, to preserve our trade secrets and to operate without infringing the intellectual property of others. We rely on patents to establish and maintain proprietary rights in our technology and products. We currently possess patents and patent applications with respect to our products and technology. For any patent applications submitted we cannot ensure that any patents will be issued. Furthermore, we cannot ensure that the scope of any patent protection will be effective in helping us address our competition, or that any of our patents will be held valid if subsequently challenged. It is also possible that our competitors could independently develop similar or more desirable products, duplicate our products, or design products that circumvent our patents. The laws of foreign countries may not protect our products or intellectual property rights to the same extent as the laws of the U.S. In addition, there have been recent changes in the patent laws and rules of the U.S. Patent and Trademark Office, and there could be future proposed changes that, if enacted, have a significant impact on our ability to protect our technology and enforce our intellectual property rights. If we fail to protect our intellectual property rights adequately, our competitive position could be adversely affected, and there could be a material adverse effect on our business, financial condition, and results of operations.

If third parties claim that we infringe their intellectual property rights, we could incur liabilities and costs and have to redesign or discontinue selling certain products, which could have a material adverse effect on our business, financial condition, and results of operations.

We face substantial uncertainty regarding the impact that other parties’ intellectual property positions will have on systems for diabetes treatment monitoring. The medical technology industry has in the past been characterized by a substantial amount of litigation and related administrative proceedings regarding patents and intellectual property rights. From time to time, we expect to receive notices of claims of infringement, misappropriation, or misuse of other parties’ proprietary rights. Some of these claims could lead to litigation. We may not prevail in any future intellectual property infringement litigation given the complex technical issues and inherent uncertainties in litigation. Any claims, with or without merit, could be time-consuming and distracting to management, result in costly litigation, or cause product shipment delays. Adverse determinations in litigation could subject us to significant liability and could result in the loss of proprietary rights. A successful lawsuit against us could also force us to cease selling or redesign products that incorporate the infringed intellectual property. Additionally, we could be required to seek a license from the holder of the intellectual property to use the infringed technology, and it is possible that we may not be able to obtain a license on acceptable terms, or at all.

Risks Related To Our Regulatory Environment

Changes in government regulation or the inability to obtain or maintain necessary government approvals could have a material adverse effect on our business, financial condition, and results of operations.

The regulatory environment for human health differs significantly from the regulatory environment for animal health. In general, the regulatory environment for human health is significantly more extensive, resulting in longer lead times to be granted clearance to market products for sale. In many instances the regulatory market for animal health products does not require the formal grant of clearance to market products for sale for animal health. Commercializing our GluCurve product for animal health would not provide an indication that we will be successful in obtaining clearance to market our Diabetes Solution product for human health. If we are able to secure clearance to market the Diabetes Solution, there is no certainty how long it will take to secure such clearance and it may take significantly longer than we can reasonably expect or forecast. Conversely, bringing our GluCurve product to market without going through the same level of rigor as our Diabetes Solution product could result in increased risk of quality system issues, product liability, and overall business risk.

Our Diabetes Solution products for human health will be subject to extensive government regulation, both in the U.S. and in other countries. To clinically test, manufacture, and market products for human use, we must comply with regulations and safety standards set by the FDA and comparable state and foreign agencies. Regulations adopted by the FDA and comparable foreign agencies are wide-ranging and govern, among other things, product design, development, manufacture and control testing, labeling control, storage, advertising, and sales. Generally, products must meet regulatory standards as safe and effective for their intended use before being marketed for human applications. The clearance process is expensive, time-consuming, and uncertain. Failure to comply with applicable regulatory requirements of the FDA and applicable foreign agencies can result in an enforcement action that could include a variety of sanctions, including fines, injunctions, civil penalties, recall or seizure of our products, operating restrictions, partial suspension, or total shutdown of production and criminal prosecution. The failure to receive or maintain requisite approvals for the use of our products or processes, or significant delays in obtaining such approvals, could prevent us from developing, manufacturing, and marketing products and services necessary for us to remain competitive.

If we develop new products and applications or make any significant modifications to our existing products or labeling, we will need to obtain additional regulatory clearances or approvals. Any modification that could significantly affect a product’s safety or effectiveness, or that would constitute a change in its intended use, will require a new regulatory clearance, or could require a premarket approval (“PMA”) application. The FDA and comparable foreign agencies require each manufacturer to make this determination initially, but the FDA and comparable foreign agencies can review any such decision and can disagree with a manufacturer’s determination. If the FDA or comparable foreign agencies disagrees with a manufacturer’s determination, the FDA and comparable foreign agencies can require the manufacturer to cease marketing and/or recall the modified device until clearance or PMA is obtained. If clearance, or the foreign equivalent, is denied and a PMA application is required, we could be required to submit substantially more data and conduct human clinical testing and would very likely be subject to a significantly longer review period.

In the U.S., the clearance to market a medical device for human health is 510(k) clearance. Products sold in international markets for human use are also subject to the regulatory requirements of each respective country or region. The regulations of the European Union require that a device have a CE Mark, indicating conformance with European Union laws and regulations before it can be sold in the European Union. The regulatory international review process varies from country to country. We expect to rely on our compliance consultants in any country in which we may market our products to comply with the regulatory laws of such countries. Failure to comply with the laws of such countries could prevent us from selling products in such countries. In addition, unanticipated changes in existing regulatory requirements or the adoption of new requirements could impose significant costs and burdens on us, which could increase our operating expenses.

Changes in healthcare regulations in the U.S. and elsewhere could adversely affect the demand for our products, as well as the way in which we conduct our business. For example, in 2010, President Obama signed the Affordable Care Act into law, which included various reforms impacting Medicare coverage and reimbursement, including revision to prospective payment systems, any of which could adversely impact any Medicare reimbursements received by our end-user customers. New legislation may be enacted as President Biden and Congress consider further reform. In addition, as a result of the focus on healthcare reform, there is risk that Congress could implement changes in laws and regulations governing healthcare service providers, including measures to control costs, and reductions in reimbursement levels. We cannot be sure that government or private third-party payers will cover and reimburse the treatments using our products, in whole or in part, in the future, or that payment rates will be adequate. If healthcare providers cannot obtain adequate coverage and reimbursement for our products, or the procedures in which they are used, our business, results of operations, and financial condition could suffer.

We could be subject to or otherwise affected by federal, provincial and state healthcare laws, including fraud and abuse and health information privacy and security laws, and we could face substantial penalties if we are unable to fully comply with such regulations.

We are directly or indirectly, through our customers, subject to extensive regulation by federal governments, state governments and the governments of foreign countries in which we conduct our business. The laws in the U.S. that directly or indirectly affect our ability to operate our business include, but are not limited to, the following:

Each country in which we operate will have their own set of unique laws, which may include comparable laws to those listed above, and further laws for which there are not comparable laws in the U.S.

If our past, present, or future operations are found to be in violation of any of the laws described above or the other governmental laws or regulations to which we or our customers are subject, we could be subject to the applicable penalty associated with the violation, which could include civil and criminal penalties, damages, fines, exclusion from FHCPs, and the curtailment or restructuring of our operations. If we are required to obtain permits or license under these laws that we do not already possess, we could become subject to substantial additional regulation or incur significant expense. Any penalties, damages, fines, or curtailment or restructuring of our operations could be significant. The risk of potential noncompliance is increased by the fact that many of these laws have not been fully interpreted by applicable regulatory authorities or the courts, and their provisions are open to a variety of interpretations and additional legal or regulatory change. Any action against us for violation of these laws, even if we successfully defend against it, could cause us to incur significant legal expenses, divert our management’s attention from the operation of our business, damage our reputation, and cause a material adverse effect on our business, financial condition, and results of operations.

Product sales or introductions could be delayed or canceled as a result of the regulatory requirements applicable to diabetes testing products, diabetes management systems, or both, for human use, which could delay the launch of the Diabetes Solution product, cause our sales or profitability to decline and have a material adverse effect on our business, financial condition, and results of operations.

Medical devices for animal use such as the GluCurve product generally do not require regulatory approvals like those medical devices used for human health.

The process of obtaining and maintaining regulatory approvals and clearances to market a medical device for human use from the FDA and similar regulatory authorities in other countries or regions can be costly and time-consuming, and we cannot provide assurance that such approvals and clearances will be granted. Pursuant to FDA regulations, unless exempt, the FDA permits commercial distribution of a new medical device only after the device has received 510(k) clearance or is the subject of a PMA. The FDA will clear marketing of medical device through the 510(k) clearance process if it is demonstrated that the new product is substantially equivalent to other 510(k)-cleared products. The PMA process is more costly, lengthy, and uncertain than the 510(k) clearance process, and must be supported by extensive data, including data from preclinical studies, and human clinical trials.

As we cannot provide assurance that any new products, or any product enhancements, that we develop for human use will be subject to the shorter 510(k) clearance process, significant delays in the introduction of any new products or product enhancement could occur. We cannot provide assurance that the FDA will not require a new product or product enhancement to go through the lengthy and expensive PMA process. Delays in obtaining regulatory clearances and approvals could:

Although we have obtained 510(k) clearance from the FDA to market our Diabetes Solution product, we cannot provide assurance that the clearance of these systems will not be withdrawn or that we will not be required to obtain new clearances or approvals for modifications or improvements to our products. We will require 510(k) clearance from the FDA for the CGM units we wish to bundle as part of our Diabetes Solution product. We cannot provide assurance that we will receive such clearance once we apply. Furthermore, we may expect to require clearance of similar regulatory authorities abroad to market our Diabetes Solution products with CGM or BGM for human use.

Our products for human health are subject to recalls and other regulatory actions after receiving FDA clearance or approval. Our products for animal health may require to be recalled or may require stop use orders to be issued.

The FDA and similar governmental bodies in other countries have the authority to require the recall of our products for human health in the event of material deficiencies or defects in design or manufacture. A government mandated or voluntary recall by us could occur as a result of component failures, manufacturing errors, or design defects, including defects in labeling. In addition to a regulatory body requiring a recall, we or its suppliers may determine a recall or stop use order is warranted based on defects in our products, for either the human health or animal health market. Any recall or similar stop use order would divert management’s attention and financial resources and harm our reputation with customers. Any recall or similar stop use order involving our Diabetes Solution or GluCurve products would be particularly harmful to us. However, any recall could have a material adverse effect on our business, financial condition, and results of operations.

Risks Related To Our Ordinary Shares

We may be unable to maintain compliance with the OTCQB Standards for Continued Eligibility, which could cause our ordinary shares to be demoted from the OTCQB. This could result in the lack of a market for our ordinary shares, cause a decrease in the value of an investment in us, and adversely affect our business, financial condition, and results of operations.

Our ordinary shares are currently quoted on the OTCQB tier of the electronic quotation service operated by OTC Markets Group. To maintain the listing of our ordinary shares on the OTCQB, we are required to meet certain listing requirements, including, among others (i) having audited annual financials by a Public Company Accounting Oversight Board auditor; (ii) meeting minimum bid price test of $0.01; (iii) maintaining Securities and Exchange Commission (“SEC”) reporting standards or equivalent alternative reporting standards; and (iv) not being in bankruptcy. If we fail to meet the OTCQB Standards for Continued Eligibility, the trading of our ordinary shares will most likely take place on a lower tier of the over-the-counter market, such as those established for financially distressed companies or those in bankruptcy. There is no assurance that we will meet the minimum Standards for Continued Eligibility. An investor is likely to find it less convenient to sell, or to obtain accurate quotations in seeking to buy, our ordinary shares on the OTC Pink, and many investors may not buy or sell our ordinary shares due to difficulty in accessing OTC Pink, or over-the-counter markets, generally, due to policies preventing them from trading in securities not listed on a national exchange, not maintaining SEC reporting requirements, or other reasons.

As the SEC imposes additional sales practice requirements on brokers who deal in shares of penny stocks, some brokers may be unwilling to trade our securities. This means that you may have difficulty reselling your shares, which may cause the value of your investment to decline.

Our shares are classified as penny stocks and are covered by Section 15(g) of the Securities Exchange Act of 1934 (the “Exchange Act”), which imposes additional sales practice requirements on broker-dealers who sell our securities in this offering or in the aftermarket. For sales of our securities, broker-dealers must make a special suitability determination and receive a written agreement from you prior to making a sale on your behalf. Due to the imposition of the foregoing additional sales practices, it is possible that broker-dealers will not want to make a market in our common stock. This could prevent you from reselling your shares and may cause the value of your investment to decline.

The liquidity and trading volume of our ordinary shares could be low, and our ownership is concentrated.

The liquidity and trading volume of our ordinary shares has at times been low in the past and could again be low in the future. If the liquidity and trading volume of our ordinary shares is low, this could adversely impact the trading price of our shares, our ability to issue shares and our shareholders’ ability to obtain liquidity in their shares. In addition, our Chairman and Chief Executive Officer (or “CEO”), Sidney Chan, and his affiliates own in excess of 60% of our outstanding ordinary shares as at the date of this Annual Report.

As a result, Mr. Chan and his affiliates will be able to affect the outcome of, or exert significant influence over, all matters requiring shareholder approval, including the election and removal of directors and any change in control. In particular, this concentration of ownership of our ordinary shares could have the effect of delaying or preventing our change in control or otherwise discouraging or preventing a potential acquirer from attempting to obtain control of us. This, in turn, could have a negative effect on the market price of our ordinary shares. It could also prevent our shareholders from realizing a premium over the market prices for their ordinary shares. Moreover, the interests of this concentration of ownership may not always coincide with our interests or the interests of other shareholders. The concentration of ownership also contributes to the low trading volume and volatility of our ordinary shares.

Our share price has been, and could continue to be, volatile.

There has been significant volatility in the market price and trading volume of equity securities, which is often unrelated to the financial performance of the companies issuing the securities. These broad market fluctuations could negatively affect the market price of our shares. The market price and volume of our ordinary shares could fluctuate, and in the past has fluctuated, more dramatically than the stock market in general. You may not be able to resell your shares at or above the price you paid for them due to fluctuations in the market price of our shares caused by changes in our operating performance or prospects or other factors. Some factors, in addition to the other risk factors identified above, which could have a significant effect on our stock market price include, but are not limited to, the following:

You could experience substantial dilution of your investment as a result of subsequent exercises of our outstanding options, outstanding warrants, future sales of our equity, or the future grant of equity by us.

You could experience substantial dilution of your investment as a result of subsequent exercises of outstanding warrants issued as compensation for lending arrangements and outstanding options issued as compensation for services performed by employees, directors, consultants, and others, future sales of our equity, or the grant of future equity-based awards. As of December 31, 2023, an aggregate 5,600,471,500 ordinary shares were authorized for issuance pursuant to the exercise of outstanding options and warrants having a weighted average exercise price of $0.007 per share. To the extent that such options and warrants are exercised, our existing shareholders will experience dilution. We rely heavily on equity awards to motivate current contractors and employees and to attract new employees. The grant of future equity awards by us to our contractors, employees and other service providers could further dilute our shareholders’ interests in us.

As we do not intend to pay dividends, our shareholders will benefit from an investment in our ordinary shares only if the shares appreciate in value.

We intend to retain our future earnings, if any, to finance the expansion of our business and do not expect to pay any cash dividends in the foreseeable future. As a result, the success of an investment in our ordinary shares will depend entirely upon any future appreciation. There is no guarantee that our ordinary shares will appreciate in value or even maintain the price at which our shareholders purchased their shares.

We are organized under the laws of the Republic of Singapore and our shareholders may have more difficulty in protecting their interest than they would as shareholders of a corporation incorporated in the U.S., and we may have more difficulty attracting and retaining qualified Board members and executives.

Our corporate affairs are governed by our Constitution and by the Companies Act 1967 of Singapore (the “Companies Act”). The rights of our shareholders and the responsibilities of the members of the Board under Singapore law are different from those applicable to a corporation incorporated in the U.S. Therefore, our shareholders may have more difficulty in protecting their interest in connection with actions taken by our management or members of the Board than they would as shareholders of a corporation incorporated in the U.S.

In addition, being a public company organized in Singapore may make it more expensive for us to obtain director and officer liability insurance, and we may be required to accept reduced coverage or incur substantially higher costs to obtain coverage. These factors could also make it more difficult for us to attract and retain qualified members of the Board, particularly to serve on committees of the Board, and qualified executive officers.

As a foreign private issuer, we are exempt from a number of U.S. securities laws and rules promulgated thereunder and are permitted to publicly disclose less information than U.S. public companies must. This may limit the information available to holders of our ordinary shares.

We qualify as a “foreign private issuer,” as defined in the SEC’s rules and regulations. Consequently, we are not subject to all of the disclosure requirements applicable to public companies organized within the U.S. For example, we are exempt from certain rules under the Exchange Act that regulate disclosure obligations and procedural requirements related to the solicitation of proxies, consents or authorizations applicable to a security registered under the Exchange Act. In addition, our officers and directors are exempt from the reporting and “short-swing” profit recovery provisions of Section 16 of the Exchange Act and related rules with respect to their purchases and sales of our securities. For example, some of our key executives may sell a significant amount of our ordinary shares and such sales are not required to be disclosed as promptly as public companies organized within the U.S. would have to disclose. Accordingly, once such sales are eventually disclosed, the price of our ordinary shares may decline significantly. Moreover, we will not be required to file periodic reports and financial statements with the SEC as frequently or as promptly as U.S. public companies. Also, we are not subject to Regulation FD under the Exchange Act, which regulation generally prohibits U.S. public companies from selectively disclosing material nonpublic information to certain persons without concurrently making a widespread public disclosure of such information. Accordingly, there may be less publicly available information concerning us than there is for U.S. public companies.

As a foreign private issuer, we will file an annual report on Form 20-F within four months of the close of each fiscal year ended December 31 and furnish reports on Form 6-K relating to certain material events promptly after we publicly announce these events. However, due to the above exemptions for foreign private issuers, upon which we rely, our shareholders will not be afforded the same information generally available to investors holding shares in public companies that are not “foreign private issuers,” as defined in the SEC’s rules and regulations.

We may lose our foreign private issuer status in the future, which could result in significant additional costs and expenses.

As a foreign private issuer, we are not required to comply with all of the periodic disclosure and current reporting requirements of the Exchange Act and related rules and regulations. Under those rules, the determination of foreign private issuer status is made annually on the last business day of an issuer’s most recently completed second fiscal quarter, and accordingly, our next determination of foreign private issuer status will be made on June 30, 2024.

Notwithstanding the foregoing, in the future, we could lose our foreign private issuer status if a majority of our ordinary shares are held by residents in the U.S. and if we fail to meet any one of the additional “business contacts” requirements. Although we intend to follow certain practices that are consistent with U.S. regulatory provisions applicable to U.S. companies, the loss of our foreign private issuer status would make such provisions mandatory. Our regulatory and compliance costs under U.S. securities laws if we are deemed a U.S. domestic issuer may be significantly higher. If we are not a foreign private issuer, we will be required to file periodic reports and prospectuses on U.S. domestic issuer forms with the SEC, which are more detailed and extensive than the forms available to a foreign private issuer. For example, we would become subject to Regulation FD, aimed at preventing issuers from making selective disclosures of material information. We also may be required to modify certain of our policies to comply with good governance practices associated with U.S. domestic issuers. Such conversion and modifications will involve additional costs.

Singapore law may impede our takeover by a third-party.

The Singapore Code on Take-overs and Mergers contains provisions that may delay, deter or prevent our future takeover or change in control by a third-party for so long as we remain a public company with more than 50 shareholders. Any person acquiring an interest, whether by a series of transactions over a period of time or not, either on their own or together with parties acting in concert with such person, in 30% or more of our voting shares, or, if such person holds, either on their own or together with parties acting in concert with such person, between 30% and 50% (both inclusive) of our voting shares, and such person (or parties acting in concert with such person) acquires additional voting shares representing more than 1% of our voting shares in any six-month period, must, except with the consent of the Securities Industry Council in Singapore, extend a mandatory takeover offer for the remaining voting shares in accordance with the provisions of the Singapore Code on Take-overs and Mergers. While the Singapore Code on Take-overs and Mergers seeks to ensure equality of treatment among shareholders, its provisions may discourage or prevent certain types of transactions involving our actual or threatened change of control. These legal requirements may impede or delay our takeover by a third-party.

We may still be treated as a U.S. corporation and taxed on our worldwide income.

Certain transactions, whereby a U.S. corporation migrates to a foreign jurisdiction, can be considered an abuse of the U.S. tax rules as thereafter, the foreign entity is not subject to U.S. tax on its worldwide income. Section 7874(b) of the Internal Revenue Code of 1986, as amended (the “Code”), was enacted in 2004 to address this potential abuse. Section 7874(b) of the Code provides generally that certain corporations that migrate from the U.S. will nonetheless remain subject to U.S. tax on their worldwide income unless the migrating entity has substantial business activities in the foreign country to which it is migrating when compared to its total business activities.

Under Section 7874 of the Code, a corporation created or organized outside of the U.S. (i.e., a foreign corporation) will be treated as a U.S. corporation for U.S. federal income tax purposes (and, therefore, a U.S. tax resident and subject to U.S. federal income tax on its worldwide income) when (i) the foreign corporation acquires, directly or indirectly, substantially all of the assets held, directly or indirectly, by a U.S. corporation; (ii) after the acquisition, the stockholders of the acquired U.S. corporation hold at least 80% (by vote or value) of the shares of the foreign corporation by reason of holding shares of the U.S. acquired corporation; and (iii) after the acquisition, the foreign corporation’s expanded affiliated group does not have substantial business activities in the foreign corporation’s country of organization or incorporation when compared to the expanded affiliated group’s total business activities. For this purpose, “expanded affiliated group” means the foreign corporation and all subsidiaries in which the foreign corporation owns, directly or indirectly, more than 50% of the stock (by vote or value). Therefore, unless our expanded affiliated group continues to have substantial business in Singapore, we will be treated as a U.S. corporation for U.S. federal income tax purposes pursuant to Code Section 7874.

U.S. Treasury regulation section 1.7874-3 provides that an expanded affiliated group will be treated as having substantial business activities in the relevant foreign country when compared to its total business activities if, in general, at least 25% of the expanded affiliated group’s employees (by number and compensation), tangible asset value, and gross income are based, located and derived, respectively, in the relevant foreign country (the “25% Test”).

So long as more than 25% of the employees, asset value, and gross income of our expanded affiliated group are located in Singapore, it is expected that we will continue to be treated as a foreign corporation under Section 7874. However, if for some reason we do not meet the 25% Test, we would likely be treated as a U.S. corporation under Section 7874 for U.S. federal income tax purposes.

We may be classified as a Passive Foreign Investment Company, which could result in adverse U.S. federal income tax consequences to U.S. Holders of our ordinary shares.

Sections 1291 to 1298 of the Code contain the Passive Foreign Investment Company (“PFIC”) rules. These rules generally provide for punitive treatment to “U.S. Holders” (as defined below in “Item 10.E. – U.S. Federal Income Tax Considerations”) of PFICs. A foreign corporation is classified as a PFIC if more than 75% of its gross income is passive income or more than 50% of its assets produce passive income or are held for the production of passive income. These rules would not apply if the Section 7874(b) rules, as noted above, deem us to be considered a U.S. corporation for U.S. federal income tax purposes.

For purposes of the PFIC asset test, cash is treated as a passive asset. For purposes of the PFIC asset test, the active business assets held by our wholly owned subsidiaries (e.g., ALR Nevada and ALR Canada) will be deemed to be held by us. Moreover, the value of assets for purposes of the PFIC determination may be determined by reference to the public price of ordinary shares, which could fluctuate significantly. Therefore, there can be no assurance that we will not be classified as a PFIC for the 2023 taxable year or in the future. Certain adverse U.S. federal income tax consequences could apply to a U.S. Holder if we are treated as a PFIC for any taxable year during which such U.S. Holdings holds our ordinary shares.

A.       History and Development of the Company

The legal and commercial name of ALR Singapore is “ALR Technologies SG Ltd.” ALR Singapore was originally incorporated under the laws of Singapore on May 16, 2020. ALR Singapore’s head office and principal address is 9 Raffles Place #26-01 Republic Plaza, Singapore 048619, and its telephone number is +65 3129 2924. Tricor Singapore Pte. Ltd. is ALR Singapore’s agent for service in Singapore, and its address is 9 Raffles Place #26-01 Republic Plaza, Singapore 048619.

ALR Singapore was originally incorporated as a wholly owned subsidiary of ALR Nevada. ALR Nevada was incorporated under the laws of the state of Nevada on March 24, 1987 as Mo Betta Corp. In December 1998, ALR Nevada’s common stock began trading on the Bulletin Board operated by the National Association of Securities Dealers Inc. under the symbol “MBET.” On December 28, 1998, it changed its name from Mo Betta Corp. to ALR Technologies Inc., and its trading symbol was changed to “ALRT.”

Pursuant to an Agreement and Plan of Merger and Reorganization, dated May 17, 2022, by and among ALR Singapore, ALR Nevada, and ALRT Delaware, Inc., a Delaware corporation (“ALR Delaware”), ALR Delaware, a wholly owned subsidiary of ALR Singapore, merged with and into ALR Nevada, with ALR Nevada continuing as the surviving entity and a wholly owned subsidiary of ALR Singapore (the “Redomicile Merger”).

Upon the effectiveness of the Redomicile Merger, and pursuant to ALR Singapore’s registration statement on Form F-4 (File No. 333-265166) filed with the SEC and declared effective on September 23, 2022, ALR Singapore’s ordinary shares were approved for quotation on the OTCQB tier of the OTC Markets Group under the trading symbol “ALRTF.”

As a result of the Redomicile Merger, ALR Singapore currently has two subsidiaries: ALR Nevada and ALR Canada.

The SEC maintains an internet site that contains reports, proxy and information statements, and other information regarding issuers that file electronically with the SEC on www.sec.gov. You can also find information on our website, https://www.alrt.com. The information contained on our website or other information contained on the SEC website is not a part of this Annual Report.

B.       Business Overview

We are a data management company that developed a comprehensive approach to diabetes care that includes: (i) an FDA-cleared and HIPAA-compliant Diabetes Solution product that collects data directly from BGM (and which was subsequently modified to integrate with CGM devices); (ii) a patent pending Predictive A1C algorithm to track treatment success between lab reports; and (iii) an FDA-cleared Insulin Dosing Adjustment (as defined below) program. From this technology portfolio, we have developed the Diabetes Solution product for human health, and our GluCurve product, a modified version of the Diabetes Solution, for animal health.

During 2011, we received FDA clearance and achieved HIPAA compliance for an early version of our Diabetes Solution product. We subsequently completed a clinic trial and pilot programs, which led to the development of its “Insulin Dosage Adjustment” technology, for which we received FDA clearance in 2017, and our “Predictive A1C” technology, for which we submitted a worldwide patent application under the Patent Cooperation Treaty (the “PCT”) to the World Intellectual Property Organization. We have continued enhancing our Diabetes Solution technology by increasing functionality and capability to improve diabetes care for patients. We are actively seeking to commence revenue-generating activities for our Diabetes Solution product.

In 2020, we: (i) entered in an agreement with Bionime Corporation (“Bionime”) whereby we agreed to bundle our Diabetes Solution (or “app”) with Bionime BGM and diabetes test supplies and sell the bundle to diabetes patients of private medical clinics in Singapore; (ii) initiated a clinical pilot with Singapore General Hospital to validate the efficacy of the Diabetes Solution product in insulin-treated diabetes patients; (iii) entered into a memorandum of understanding (“MOU”) to form a collaboration with Diabetes Singapore, a non-profit Singapore-based organization serving the Singapore Minister for Health and a member of the International Diabetes Federation, with the view of raising the diabetes management standard in Singapore; and (iv) further improved our Diabetes Solution product to integrate with CGM devices.

In 2021, we: (i) announced we had developed a version of our Diabetes Solution product for animal health purposes under the brand name “GluCurve;” and (ii) announced our intent to redomicile to Singapore.

While our Diabetes Solution product is offered both individually and bundled with BGMs, we are focused on offering our Diabetes Solution product with cost-effective CGM devices. We believe that the current trend in diabetes care is shifting from the use of traditional BGM to the use of CGM devised, which we believe will become the standard of diabetes care. We believe that we are uniquely positioned to bundle our Diabetes Solution [application] with CGM to improve health outcomes globally at a price point that is reasonable for wide scale adoption.

On November 23, 2022, we entered into a co-branded products distribution agreement with Covetrus, Inc. (“Covetrus”), a global leader in animal health technology and services, for our GluCurve Pet CGM product, pursuant to which Covetrus has the exclusive right to sell our GluCurve Pet CGM product as a co-branded product throughout the U.S., Brazil, United Kingdom, European Union, and various other countries globally.

On December 16, 2022, we entered into a long-term manufacturing and supply agreement with Infinovo Medical Co. Ltd. (“Infinovo”) for the CGM hardware used in our GluCurve Pet CGM product. The agreement gives us the exclusive rights to distribute the CGM hardware in the animal health market globally. The term of the agreement is for three years with consecutive one-year automatic renewals and contains termination rights for customary matters and termination rights at the discretion of the Company. The Company had originally entered into an agreement with Infinovo related to the supply of CGM hardware for the GluCurve Pet CGM on June 28, 2022, which subsequently terminated without obligation to either party as the conditions precedent to that agreement were not met.

We launched the GluCurve Pet CGM at the Veterinary Meeting and Expo and CES tech event, both occurring in January 2023.

In In January 2023, the Company collected proceeds of $160,000 in relation to the delivery of GluCurve Pet CGM units in December 2022. These GluCurve Pet CGM units utilized first generation CGM hardware provided by Infinovo. A portion of the CGM hardware supplied to us did not meet our GluCurve Pet CGM specifications for the end users. In December 2023, the Company agreed to refund or provide a credit to Covetrus towards the future purchase of the GluCurve Pet CGM units, aggregating $133,120. The balance of the proceeds received of $26,880 was recorded as revenues in 2023. The Company is working with Infinovo on a warranty claim for those CGM hardware units that did not meet specifications. To date, the Company has recovered $35,100 from Infinovo and have claims pending for a further $41,100. We are evaluating vendors to launch the second generation CGM Hardware for the GluCurve Pet CGM.

In 2023 the Company launched the website www.glucurve.ca as part of its future plans to provide a direct to veterinarian clinic sales model in Canada. The Company requires suitable CGM Hardware before it can commence sales transactions.

In September 2023 the Company ALRT announced the successful completion of its 24-week study led by Singapore General Hospital. A total of 25 insulin-treated patients with type 2 diabetes mellitus were enrolled into the ALRT Diabetes Solution platform. The patients performed twice daily capillary blood glucose checks and weekly glucometer uploads. The platform then provided insulin dose suggestions and alerts to the physicians. All patients experienced a mean drop of 1.2 percent in glycated hemoglobin (HbA1c). The findings from the study validated the value that ALRT Diabetes Solution may potentially bring to patients and health care providers. The results were presented at the recent International Diabetes Federation Western Pacific Congress 2023 in Kyoto, Japan.

Continuous Glucose Monitoring

A CGM device is worn on the body of a diabetic subject for up to 14 days and continually takes glucose (blood sugar) readings every 1-5 minutes. A CGM consists of three pieces:

CGM devices were developed to improve upon general limitations of BGM. A CGM can be factory calibrated thus eliminating the need for diabetics to prick their finger to test blood on a strip inserted into a BGM throughout the day. A CGM works by utilizing glucose oxidase-based enzymes that are coated onto an electrode that is inserted into the subcutaneous tissue when the sensor is applied to the skin. The transmitter then securely sends the data wirelessly to a receiver, such as a mobile device, where the data is organized and displayed for the user.

All subjects have a target blood glucose range. Time in range is the amount of time a subject spends in the target blood glucose range. The time in range method works with the data provided by the CGM’s data by looking at the amount of time the subject’s blood sugar has been in target range and the times the subject has had high blood sugar or low blood sugar. This data is helpful in finding out which types of foods and what activity level causes the subject’s blood sugar to rise and fall and assessing adherence to a care plan.

CGM for Animal Health

For a discussion of our CGM for Animal Health, see the discussion on our GluCurve Pet CGM product throughout this Item 4.B. Business Overview.

CGM for Human Health

We are evaluating CGM systems to bundle with our Diabetes Solution product for human health. We expect to secure CGM system supply during 2024, subsequent to which we can initiate a clinical trial and prepare for a subsequent clearance from regulatory authorities to sell in key target countries for roll out. Notwithstanding, we do not anticipate supply for human health will be secured until the Company has secured supply for and commercialized the Glucurve Pet CGM. We are targeting to offer our Diabetes Solution product bundled with CGM with pricing to compete with the standalone BGM offerings. No assurance can be given that we will secure CGM supply for human health, initiate a clinical trial, apply for regulatory clearance to market CGM for human health, or commercialize CGM for human health thereafter.

The Diabetes Pandemic

Diabetes is a leading cause of death, serious illness and disability globally. The International Diabetes Federation (the “IDF”) reports that globally, 1 in 10 adults (537 million people ages 20-79) are living with diabetes (diagnosed and undiagnosed instances). This is expected to increase to 643 million by 2030 and 783 million by 2045. The IDF further reports that globally, diabetes was responsible for 6.7 million deaths in 2021 and cost at least $966 billion annually in 2021. This was an increase in cost of 316% from 15 years prior.

Data from the American Diabetes Association (“ADA”) shows, as of 2019, 37 million Americans have diabetes and 96 million Americans have prediabetes. That is 1 in 3 Americans coping with the disease or serious threat of it. The ADA also reports that as of 2017, the total cost of diagnosed diabetes in the US $327 billion annually ($237 billion in direct medical costs and $90 billion in reduced productivity), putting serious drag on an already strained healthcare system. After adjusting for population age and sex differences, the ADA determined that people with diagnosed diabetes had average medical expenditures 2.3 times higher than what expenditures would be in the absence of diabetes.

Diabetes is a lifelong chronic disease with no cure. However, people with diabetes can take steps to control their disease and reduce the risk of developing the associated serious complications, thereby controlling healthcare costs. The Canadian Diabetes Association Clinical Practice Guidelines Expert Committee reports that, “Successful diabetes care depends on the daily commitment of persons with diabetes mellitus to self-manage through the balance of lifestyle and medication. Diabetes care should be organized around a multi- and interdisciplinary diabetes healthcare team that can establish and sustain a communication network between the person with diabetes and the necessary healthcare and community systems.” Diabetes incidence rates, economic costs and human costs are increasing even though we know how to control the disease. The Diabetes Control and Complication Trial conducted from 1983 to 1993 outlined management as follows:

Failure to Control Diabetes

We believe there are five causes for diabetes to not be controlled:

Patient Non-adherence

As noted in Patrick Connole, “UnitedHealthcare, Other Large Insurers Seek Better Adherence to Diabetes Care”, Health Plan Week, February 11, 2013 Volume 23 Issue 5, 80% of U.S. patients with diabetes do not follow their prescribed care plan. Central to conventional diabetes care is patient self-management.

Unreliable Data

As noted in Gonder-Frederick, L.A., et al, “Self-Measurement of Blood Glucose: Accuracy of Self-Reporting Data and Adherence to Recommended Regimen” Diabetes Care, Volume 11, no. 7, July 1988, 77% of patient data contain errors.

Data Overload

HCPs face a lack of timely and reliable blood glucose data, resulting in delays to advance therapy and sub-optimal insulin dosing. The amount of patient data for clinicians to analyze is too vast and significant during 15-minute clinical appointments and the information they have is unreliable.

Clinical Inertia

As noted in Khunti, K., et al, “Clinical Inertia in People with Type 2 Diabetes: A Retrospective Cohort Study of More than 80,000 People” Diabetes Care, Volume 36, no. 11, July 2013, across over 80,000 patients, when A1C goals were not met, therapy intensification was late across every measure. It was noted that clinical inertia means the failure to intensify therapy when the need is clinically indicated. It took on average 19 months to escalate patients with an average A1C of 8.7% from single medication to dual therapy and 82 months to escalate patients with an average A1C of 8.8% from dual medication to triple therapy. Furthermore, they found that it took approximately 20 years to advance patients with an average A1C of over 9% to insulin. At the end of the study, less than 50% of the patients had their treatment intensified.

Furthermore, in treatment intensification for patients with Type 2 diabetes and poor glycemic control by Fu and Sheenan, it was noted that out of 11,525 patients investigated with an A1C greater than 8% patients received intensification as follows:

Failure to respond to higher than targeted A1C with treatment intensification puts patients with escalated A1C at risk for complications and diabetes-associated co-morbidities.

Insulin Under Prescription

Insulin dosing is complex requiring review of large amounts of data, which takes significant amounts of time. We believe HCPs routinely under prescribe insulin to ensure they avoid insulin dosage adjustments, which could result in hypoglycemia for their patients.

Cleveland Clinic Study

A team at Cleveland Clinic examined historical electronic medical record data of more than 7,300 patients with Type 2 diabetes and concluded that there is a pervasiveness of clinical inertia for the management of Type 2 diabetes in real-world clinical practice settings.

The selected patients had an A1C value of ≥ 7% on a stable regimen of two oral anti-diabetic agents for at least six months (from 2005 to 2016). The median time to treatment intensification after A1C was above target was longer than one year. For patients with an A1C of ≥ 9%, therapy was not intensified in 44% of patients.

According to lead study author Dr. Kevin Pantalone of Cleveland Clinic’s Endocrinology & Metabolism Institute, “Short of a patient reporting non-adherence to their existing regimen of diabetes therapies, it is hard to imagine a reason why treatment intensification was not observed more frequently, when indicated, particularly in patients with an A1C ≥ 9%. In general, if intensification does not occur, the A1C can be expected to stay the same or get worse, it is not magically going to get better.” (emphasis added)

Company Products

Diabetes Solution

We developed our Diabetes Solution product to address the diabetes marketplace globally. Our Diabetes Solution product utilizes internet-based technologies to facilitate HCP’s ability to monitor their diabetes patients’ health and seek to ensure adherence to health maintenance activities.

Our Diabetes Solution product is a comprehensive approach to diabetes care that includes: an FDA-cleared and HIPAA-compliant diabetes management system that collects data directly from BGM and CGM devices; a patent pending Predictive A1C algorithm to track treatment success between lab reports and an FDA-cleared Insulin Dosing Adjustment program. Our Diabetes Solution product is designed to process and convert each data set to a Predictive A1C value and share it with the patient’s physician. Our Diabetes Solution product provides the physician with therapy advancement suggestions based on current clinical practice guidelines. Patients are expected to receive therapy assessments and adjustments in much shorter cycles, which we expect to keep A1Cs at target, mitigate diabetes complications and reduce costs of care.

In addition to Insulin Dosage Adjustment, our Diabetes Solution product also offers an algorithm intended to provide prescribers support for timely non-insulin medication advancements. The overall goal is to optimize diabetes drug therapies to drive improved patient outcomes. The program is designed to track performance of all clinical activities to ensure best practices are followed. Our Diabetes Solution product gives HCPs a platform for remote diabetes care, intended to minimize patient exposure to potential infections in clinical settings. Currently, we are focused on diabetes and intend to expand our services to cover other chronic diseases anchored on verifiable data.

Our Diabetes Solution product consists of hardware, software and, if applicable, diabetes test supplies. We designed our Diabetes Solution product to be focused on the HCP and is agnostic and proactive. Our software operates on iOS, Android, Windows, and MacOS systems. Our Diabetes Solution product with BGM consists of a branded glucose meter, diabetes test strips, lancets, and a carrying case. Our technology is designed to collect all the blood glucose data from the glucose meters, upload it to a secure account and ship diabetes test strips as required. The patient data is aggregated to a Predictive A1C value for a comprehensive view of the treatment plan and is intended to promote patient adherence to the plan, with the data available (and messaged) to authorized people.

Our Diabetes Solution product addresses the five causes for not controlling diabetes with:

Active Patient Monitoring

Industry data indicates that 50% or more of people on medications do not take them as prescribed, which noncompliance contributes to 10% of hospitalizations and billions of dollars spent annually in excessive and preventable healthcare costs. Reminding a person to take an action is the first step in our system; monitoring their actions and their data is the second, and intervention when needed is the important follow-up.

Our Diabetes Solution product monitors patient uploads and the underlying data providing more timely access to patient blood glucose data. It also initiates interventions by notifying the HCP of out-of-range results or failure to upload data in accordance with the requirements of the care plan. It does not rely upon the patient for uploading data. Our Diabetes Solution product provides the notifications and audit trail needed for achieving best practice results. Its performance tracking allows care teams to identify areas in treatment plans that require change or improvement.

Direct Meter Uploads

Data is uploaded via Bluetooth directly from the glucometer into our application. We expect this to increase the accuracy and reliability of the data based on the results of testing.

Machine Intelligent Data Processing

Our machine intelligence processes large amounts of data, notifies relevant stakeholders and flags patients for review making collaboration real time. Across segments and populations, this also provides significant data points on use of diabetes test strips and insulin, which may be significant for businesses in those industries.

Predicative A1C

Predictive A1C is a unique patented / patent-pending feature included in the Diabetes Solution product for monitoring the effectiveness of care plans. This technology utilizes data diagnostics to compare targeted A1C with indicated results. Weekly patient blood glucose data is evaluated, and HCPs are notified as needed for care plan review when blood glucose values exceed parameters set by the HCPs. Our platform provides HCPs with patient prioritization reports and alerts based on the Predictive A1C measures and other related diagnostics. Predictive A1C was designed to assist HCPs in addressing clinical inertia in diabetes care.

Insulin Dose Adjustment

Insulin Dose Adjustment is an FDA-cleared feature that makes optimal insulin adjustment suggestions to HCPs based on dosing guidelines from organizations like the ADA. This ensures that HCPs are making timely insulin dosage assessments based on the blood testing results uploaded. Our next phase of technology advancement will produce an algorithm for advancing non-insulin diabetes therapies according to clinical practice guidelines.

History Behind the Diabetes Solution

In August 2010, we received the results of a clinical trial conducted by Dr. Hugh Tildesley using the Health-e-Connect System (subsequently advanced and rebranded as the Diabetes Solution). The trial showed A1C dropping from 8.8% to 7.6% for the Intervention Group using our Health-e-Connect System as part of a diabetes management program. The A1C test is important in diabetes treatment management as a long-term measure of control over blood glucose for diabetes patients. According to the Center for Disease Control and Prevention, “In general, every percentage drop in A1C blood test results (e.g., from 8% to 7%), can reduce the risk of microvascular complications (eye, kidney and nerve diseases) by 40%.” The trial served as the basis for an article titled Effect of Internet Therapeutic Intervention on A1C Levels in Patients with Type 2 Diabetes Treated with Insulin, which was published in the August 2010 Diabetes Care publication.

In July 2011, the follow-up results of the Dr. Tildesley clinical trial were published in the Canadian Journal of Diabetes. Dr. Tildesley conducted a 12-month study using Health-e-Connect System as an Internet-based Glucose Management System (“IBGMS”) to provide intensive blood glucose control to determine the effects of internet-based blood glucose monitoring on A1C levels in patients with Type 2 diabetes treated with insulin. Dr. Tildesley concluded that, “While IBGMS intervention was not a substitute for the patient–physician interaction in a clinical setting, it significantly improved A1C and, over time, we observed better glycemic control and patient satisfaction.”

In October 2011, we received 510(k) clearance from the FDA for this iteration of the Health-e-Connect System. This system offered remote monitoring of patients in support of effective diabetes management programs. The 510(k) clearance enabled us to commence with the U.S. marketing and sales of its Health-e-Connect System.

In September 2014, we initiated our pilot program with one of the Kansas City Metropolitan Physician Association (“KCMPA”) clinics to deploy its Health-e-Connect System. Data from the KCMPA pilot program indicated that a number of patients had achieved reductions in their A1C levels. Furthermore, the data indicated that patients that left the pilot program had increases in A1C subsequent.

On February 18, 2015, we filed a 510(k) application with the FDA to add a remote insulin dosing recommendation feature to our Diabetes Solution product. We utilized the publicly available algorithm of the American Association of Clinical Endocrinologists (“AACE”) and ADA. This feature allows us to regularly run a patient’s blood glucose data (and other key data) through the AACE and ADA algorithm. When the algorithm indicated that the patient’s dose may not be optimal, our Diabetes Solution product would provide the HCP that a dose change may be warranted and what the change would be based on AACE and ADA guidelines. The decision about the dose change would rest entirely with the HCP. However, this new feature may make a significant contribution to improving the outcomes of diabetes patients if it allowed HCPs to keep their patients at the optimal dose for longer periods. On September 18, 2017, we received clearance from the FDA for its Insulin Dosage Adjustment feature within our Diabetes Solution.

On June 20, 2017, Sidney Chan, our CEO, filed a worldwide patent application under the PCT to the World Intellectual Property Office for the Predictive A1C feature. We hold the rights to use the Predictive A1C feature. During the 2019 year, we and the CEO entered into the National Phase for the applications by applying to target member countries.

During 2019, we added automated patient management to our Diabetes Solution product. We were previously seeking to have a private label glucometer, diabetes test strips, lancets, and carrying cases produced as part of our Diabetes Solution product globally. We are now focused on securing supply of CGM to bundle with our Diabetes Solution product for the global marketplace.

Also during 2019, we initiated support for CGM systems with our Diabetes Solution product. CGM has become the standard of care for patients with Type 1 diabetes and is quickly gaining favor with Type 2 diabetes patients who use insulin. During 2020, we advanced our Diabetes Solution product to integrate with CGM.

During 2021, we enrolled a small number of patients with diabetes in Singapore into our Diabetes Solution product, which provided for improved efficacy of our Diabetes Solution product.

We are evaluating CGM systems to bundle with our Diabetes Solution product for human health. We expect to secure CGM system supply during 2024, subsequent to which we can initiate a clinical trial and prepare for a subsequent clearance from regulatory authorities to sell in key target countries for roll out. We are targeting to offer our Diabetes Solution product bundled with CGM with pricing to compete with the standalone BGM offerings. No assurance can be given that we will secure CGM supply for human health, initiate a clinical trial, apply for regulatory clearance to market CGM for human health, or commercialize CGM for human health thereafter.

Prediabetes System

A prevention-based feature of our Diabetes Solution product, the Prediabetes System, has been designed in direct response to discussions with government healthcare authorities for a scalable solution to the growing problem of prediabetes. Our Prediabetes System provides patients with educational videos and supplemental content formatted for mobile devices and a private online community to discuss disease management (e.g., support, weight loss, diet, etc.). Most importantly, our Prediabetes System tracks patients and reminds them to test their A1C according to payer protocols.

GluCurve Pet CGM

We have developed our GluCurve Pet CGM product to address an unmet need in diabetes care for felines and canines by combining the hardware of a CGM with the software of an adapted version of our Diabetes Solution product for use by veterinarians in animal health.

Our GluCurve Pet CGM product allows the blood glucose readings from the medical device placed on the pet to be uploaded to our cloud storage system (the “Cloud”) where the data is processed and converted into daily glucose curve graphs and data sets that can be reviewed and compared by the veterinarian at any time. The system provides the veterinary doctor with insulin dose calculators and recommendations based on current clinical practice guidelines.

The current method to monitor glucose levels in diabetic felines and canines is to prepare an in-clinic glucose curve that consists of the following steps:

Our GluCurve Pet CGM product is designed to solve the multiple issues that arise from doing an in-clinic glucose curve:

Inaccurate Data

A CGM is placed on the pet by the veterinarian in minutes and the pet is sent home where the glucose readings will be automatically taken and uploaded for up to 14 days. This eliminates the stress on the animal from being housed in the clinic and from getting its blood drawn, which can elevate glucose levels. A CGM also provides readings every five minutes, which gives better insight to the veterinarian of the highs and lows of the pet’s glucose levels throughout the day. This is often missed when only checking every two hours during an in-clinic glucose curve.

Manual Process of Data Collection, Review and Analysis

A CGM automatically uploads 288 glucose readings per day to the Cloud, where the data is analyzed, organized, then displayed on the platform for the veterinarian to view. Our GluCurve product provides the pet owner and practitioner with the historical blood glucose data to allow for management and tracking of the pet’s health.

Burden on Clinic Staff and Pet Owner

A CGM is placed on the pet in minutes, after which they are sent home, greatly reducing the time spent by the staff during an in-clinic glucose curve of caring for the pet and manually drawing blood and recording readings every two hours. Our GluCurve product also greatly reduces the time needed by the doctor to review and make insulin dose adjustments by offering dosing calculators, guidelines, and decision flowcharts based on current clinical practice guidelines.

Business Development and Marketing Strategy

GluCurve Pet CGM

We are focusing our efforts on introducing and marketing our GluCurve products to veterinary clinics, animal health companies, distributors of animal health products and pharmaceutical companies with animal health products.

In December 2022 we entered into a distribution agreement with Covetrus for the distribution of the GluCurve Pet CGM product in Europe, United Kingdom, the United States, Brazil and other territories. In 2023 the Company announced it was launching a direct to veterinarian clinic sales platform for Canadian based veterinarian clinics. We are evaluating supplier alternatives for the CGM hardware for the GluCurve Pet CGM product.

Diabetes Solution for Human Health

We are focusing our efforts on introducing and marketing our Diabetes Solution product to medical clinics, hospitals, HCPs, and pharmaceutical companies. We believe healthcare and health benefit plans can achieve a significant return on investment from utilizing the product by keeping employees/plan members healthy.

We have achieved collaborations with entities in Singapore and are targeting organizations with global operations in order to work with their sales network to distribute our products. Once the Company has secured supply of CGM units for human health the Company will seek to advance its sales and marketing opportunities for the Diabetes Solution

Reimbursement for Health Professionals

We will work to obtain confirmation that our Diabetes Solution product will allow for services to be provided by physicians that will be reimbursed by health insurance companies. The reimbursement could be significant to the adoption of the Diabetes Solution, as physicians would be paid to provide these important services to their patients with chronic conditions.

Other Products

We do not have any products or product candidates outside of our Diabetes Solution and GluCurve product.

Manufacturers

●         We are evaluating options for the supply of CGM to be combined with the Diabetes Solution for the human health sector.

●         On December 16, 2022, we entered into a long-term manufacturing and supply agreement with Infinovo for the CGM hardware used in our GluCurve Pet CGM product. The agreement gives us the exclusive rights to distribute the Infinovo CGM hardware in the global animal health market. As of December 31, 2023, we had generated approximately $26,000 in sales, net of rebates, under this agreement. We are evaluating supplier alternatives for the CGM hardware for the GluCurve Pet CGM product.

Selling Activities

We are actively seeking alliances with healthcare organizations, pharmaceutical companies, insulin providers, and other healthcare companies that can act as catalysts to effect positive change for containing healthcare costs and improving health outcomes. We will work with these types of organizations to introduce our Diabetes Solution and GluCurve products to their network and seek to start significant pilot projects that will lead to revenue-generating arrangements. In December 2022 we entered into a distribution agreement with Covetrus for the distribution of our GluCurve Pet CGM product. A portion of the CGM hardware supplied to the Company did not meet the GluCurve Pet CGM specifications for the end users. In December 2023, the Company agreed to refund or provide a credit towards the future purchase of the GluCurve Pet CGM units, aggregating $133,120. The balance of proceeds received of $26,880 was recorded as revenues.

Patents and Trademarks

Our Chairman and CEO has the following patents and patent applications under the PCT: PCT/CA2017/050753 dated June 27, 2017. Title is “method and system for monitoring a diabetes treatment plan.”

We hold a trademark in the U.S. for GluCurve under the serial number 90830675.

Competition

We compete with other corporations that produce diabetes compliance devices, monitoring systems, and wellness applications, many of whom have greater financial, marketing, and other resources than we do.

Human Health

A few companies currently offer human compliance monitoring systems for diabetes, but either (i) at much higher prices; (ii) have fewer benefits than our system; or (iii) they do not have FDA clearance. Our competition includes, but is not limited to, Livongo, Glooko, WellDoc, Medtronic, iGlucose, and Microsoft HealthVault.

We feel none of these companies currently offer a comprehensive compliance system that offers the full spectrum of benefits and features that our Diabetes Solution product does with potential cost efficiencies. We believe that while some of the competitors address the issues of unreliable data and patient non-adherence, none of the competition address data overload, clinical inertia, or insulin under prescription from our perspective.

Animal Health

Diabetes care for animal health is predominately based utilizes BGM systems, for which we believe the largest and most established product is the AlphaTRAK. In addition, there are other off-label CGM systems for human health being used for the animal health market. We note that the BGM systems and off label CGM systems do not provide the same unique offering our GluCurve Pet CGM product can provide through our software/app component.

Employees and Independent Contractors

We currently have 7 personnel under employment agreements. We currently have 23 personnel under independent contractor or consulting arrangements. Our employees and independent contractors have contracts that outline their roles and responsibilities, as well as confidentiality requirements for all matters pertaining to us.

Revenue

We generated $25,536 in revenue during the year ended December 31, 2023, $2,367 in revenue during the year ended December 31, 2022, and $7,468 in revenue during the year ended December 31, 2021. For the past several years, we have been devoting our efforts to developing and commercializing our Diabetes Solution product, which is a diabetes management system that combines patient monitoring, patient adherence, care team communications, automated patient management, and insulin dosage suggestions.

Recent Developments

On January 25, 2023, we modified 20,500,000 options previously granted to a number of advisors and independent contractors by extending the expiry date from January 31, 2023 to December 31, 2025.

On February 21, 2023, we extended the commitment letters previously issued to two creditors who are relatives of the Chairman and Chief Executive Officer of the Company offering them an aggregate 20,000,000 ordinary shares in exchange for the extinguishment of $1,584,000 in promissory notes and interest payable from December 31, 2022 to December 31, 2023.

On February 21, 2023, we modified 80,000,000 options previously granted to a number of advisors and independent contractors by extending the vesting period under vesting terms, which have not been met, from December 31, 2022 and June 30, 2023 to December 31, 2023. The Company also modified 7,500,000 options previously granted to an independent contractor by amending the vesting wording.

Effective February 21, 2023, we cancelled 25,000,000 stock options exercisable at $0.05 related to the termination of certain contractors.

On February 21, 2023, the Company granted an independent contractor the option to acquire 3,000,000 ordinary shares of the Company at a price of $0.05 per share until April 12, 2024.

On March 9, 2023, we received warrant exercises to acquire an aggregate 12,000,000 ordinary shares at a price of $0.002 per share to be applied against interest payable to four individuals for an aggregate $24,000. As a result of the warrant exercises, the Company reclassified $1,440,063 from additional paid-in capital to share capital on exercise of warrants.

During March and April 2023, we entered into shares for debt agreements with two creditors to issue an aggregate 7,500,000 ordinary shares at a weighted average price of $0.031 per share for an aggregated purchase price of $235,000 in exchange for the retirement of $170,000 of accounts payable and the prepayment of service fees of $65,000.

On June 30, 2023, the Company:

On October 19, 2023, the Company granted incentive compensation to certain key personnel (the “KP”) whereby the Company will issue a cashless loan (the “KP Loans”) to KP in order for KP to exercise an aggregate 36,000,000 stock options to bring the aggregate holdings of the KP to 50,000,000 ordinary shares. Each of the KP Loans will have the following terms and conditions:

Related to the incentive compensation, the Company modified 32,500,000 stock options previously granted to KP by modifying the exercise prices to $0.03 per share. The vesting terms of 10,000,000 options were also modified to be fully vested at October 19, 2023.

On January 17, 2024, the Company:

On January 23, 2024, the Company modified 120,000,000 warrants previously issued to the CEO of the Company by extending the expiry date to December 31, 2026.

On February 22, 2024, the Company modified 4,913,001,500 warrants exercisable at a price of $0.002 per share previously issued to the CEO and the VP of the Company by extending the expiry date to December 31, 2024.

Additional Financing

On September 6, 2022, we entered into a loan agreement (the “KWC Loan Agreement”) with Kan Wan Chen Pte. Ltd., a Singapore private company limited by shares (“KWC”), memorializing KWC’s prior aggregate advances to us of SGD$2,500,000 and KWC’s agreement option to make additional advances to us from time to time for the purpose of commercializing our GluCurve Pet CGM product, clinical trials for the Diabetes Solution for human health, working capital and general corporate purposes. Under the terms of the KWC Loan Agreement, we may repay the principal owing thereunder at any time prior to the launch of our second generation GluCurve Pet CGM product, in whole or in part, at our option, with a payment equal to 120% of such principal amount owing. Any such principal amounts repaid prior to the launch of our second generation GluCurve Pet CGM product will not be subject to the royalty payment described herein. Subject to the foregoing, we are obligated to pay KWC $10 from the sale of each unit of GluCurve Pet CGM sensors sold to its distributor, which will be accounted for as follows: (i) $5 as a reduction in the principal balance owing to KWC; and (ii) $5 as a royalty payment to compensate KWC for the cost of the principal advances. The loan is scheduled to mature on March 31, 2024, at which time, an amount equal to 120% of the principal then outstanding will be due and payable to KWC. In connection with the loan, we are obligated to grant KWC: (i) a general security interest in our assets; and (ii) a first right to any proceeds received as liquidated damages, or similar, pursuant to our manufacturing and supply agreement with Infinovo, or an alternative similar arrangement, subject to such agreement or arrangement being finalized. Ms. Christine Kan is a director and significant shareholder of KWC. Ms. Kan is also our director and Vice President (“VP”) of Corporate Development, one of our insiders and the spouse of Sidney Chan.

On May 24, 2023, the Company collected subscriptions of SGD$1,000,000 for future issuance of 20,000,000 ordinary shares at a price of SGD$0.05 per share. On June 20, 2023, the Company issued 20,000,000 ordinary shares at a price of $0.037 per share for an aggregate $744,655 (SGD$1,000,000).

On June 13, 2023, the Company issued 5,000,000 ordinary shares to a contractor pursuant to the exercise of stock options at a price of $0.015 per share, which were applied against accounts payable for an aggregate $75,000.

On June 20, 2023, the Company and KWC agreed to amend the terms of the KWC Loan Agreement as follows:

On July 31, 2023, the Company and KWC agreed to further amend the terms of the KWC Loan Agreement as follows:

C.       Organizational Structure

Our legal and commercial name is “ALR Technologies SG Ltd.” We were originally incorporated under the laws of Singapore on May 16, 2020, as a wholly owned subsidiary of ALR Nevada. Upon completion of the Redomicile Merger, we became the parent of ALR Nevada. Currently, we have two wholly owned subsidiaries: ALR Nevada and ALR Canada.

D.       Property, Plant and Equipment

We lease an office space, with furniture, located at 146 Emerald Hill Road, #03-13, Singapore, 229430 for its corporate office in Singapore. The lease has a one-year term.

Not Applicable.

A.       Operating Results

General

Our business is focused on enhancement of adherence to disease and healthcare management programs through artificial intelligence, machine learning, patient monitoring, and improved communications. Our primary business markets are healthcare providers, the providers of health insurance, and the providers of disease and care management services, including the home care industry.

The largest potential for sustainable long-term growth and value generation lies with the market segments that have the most influence on the end-user and the most to gain from improved healthcare results. These market segments are the health insurance providers, and the medical clinics and physicians who provide the care for people with chronic disease, and veterinary clinics and veterinary doctors who provide care for felines and canines. Our focus is on penetrating the full cycle of healthcare services, including medical clinics, hospitals, and health plans, and veterinary clinics with diabetics being the initial patient targets.

Revenue

We generated $25,536 in revenue during the year ended December 31, 2023, $2,367 in revenue during the year ended December 31, 2022, and $7,468 in revenue during the year ended December 31, 2021. For the past several years, we have been devoting our efforts to developing our Diabetes Solution product and developing and commercializing our GluCurve Pet CGM product.

Product Development

During the fiscal year ended December 31, 2023, the majority of our product development efforts were expended to:

We are currently focusing our efforts on the commercial launch plans of our GluCurve Pet CGM product and undertaking development activities that will support the user experience in preparation for enrolling large populations of customers.

Product development and research costs were $1,404,000 in the fiscal year ended December 31, 2023, and $482,000 and $499,000 in the fiscal years ended December 31, 2022 and 2021, respectively. Included in product development costs were share-based compensation costs of $1,061,000 in fiscal 2023, $227,000 in fiscal 2022, and $222,000 in fiscal 2021.

Operating Capital and Recent Developments Related to Operating Capital

We generated $25,536 in revenue during the fiscal year ended December 31, 2023, $2,367 in revenue during the fiscal year ended December 31, 2022, and $7,468 in revenue during the year ended December 31, 2021. We are funding operations through (i) funds raised through the rights offering, which closed in 2021; (ii) the line of credit financing available; and (iii) the KWC Loan Agreement. We have used the funds raised through the rights offering that closed in January 2021 and the related subsequent placement of shares by management. The majority of our expenditures go towards product development, professional fees and administrative activities. We incur significant amounts of interest expense from our debts outstanding and, from time to time, the issuance of warrants exchanged for either (i) deferred repayment; (ii) agreements of note extensions; and (iii) increased borrowing limits provided. All warrants issued related to our debts have been recorded at their fair value using the Black-Scholes Option Pricing Model and are expensed over the agreed upon term of the debt instrument where applicable. Where our debt is a line of credit arrangement with no fixed terms of repayment, the option or warrant expense is fully recognized at the time of grant.

There is no certainty of the timing or amount of cash flows from sales, and there is no certainty that it will reach the level necessary to cover our operating costs and costs to service our debts. We have limited resources and are seeking to penetrate markets with entrenched competition with much greater resources. We are seeking to displace generally accepted processes for diabetes management, which means we are seeking to establish new benchmark practices for diabetes care. Management is evaluating alternatives to penetrate both existing and new marketplaces in order to generate cash flows. Management believes our business plan will give us the best opportunity to achieve commercial feasibility. There is substantial uncertainty over our ability to execute the plan, the level of success associated with the execution of its business plan or the actual timeline to execute the plan. If the actual timeline for the execution of the business plan is substantially longer than planned, it could jeopardize our long-term success.

We have operating lines of credit with a borrowing limit of $14,300,000. As at December 31, 2023, we had borrowing available of approximately $89,000 on our lines of credit. We do not have any other facilities readily available at this time. Management will seek to acquire additional financing to allow us to become a commercially viable enterprise, whereby we can generate sufficient cash flow from the sales of our Diabetes Solution and/or GluCurve Pet CGM to support our cost of operations, overhead, and repayment of our obligations.

There is no certainty that we will ever be able to achieve the level of sales necessary to cover operating costs or achieve the level of sales before the borrowing limits on the lines of credit financing are reached. We will require additional financing in the future, and there is no guarantee we will receive the same. Furthermore, even if we are able to achieve sufficient cash flows to support operations, we will need to service our debt obligations, which as of December 31, 2023 were $32,071,000. As of that date, a total of $23,237,000 was owed to the Chairman and CEO, and his family.

Operating Issues

We have expended significant efforts (i) introducing our Diabetes Solution product to specified retail chains, pharmaceutical manufacturers, contract research organizations, health management organizations, pharmacy benefits managers, and certain clinics treating specific disease conditions; and (ii) developing and commercializing our GluCurve Pet CGM product. We have not had significant sales for several years. During the 2023, 2022 and 2021 fiscal years, we have devoted 100% of our efforts to developing our Diabetes Solution products and preparing the GluCurve Pet CGM product for commercialization. Management plans for us to become a commercially viable enterprise through the sale of GluCurve Pet CGM products and the subsequent launch of the Diabetes Solution product.

If management is not successful in its plans, we may be required to raise additional funds from our existing and prospective shareholders or debtholders, which we may not be able to accomplish on satisfactory terms.

Management Compensation

Mr. Sidney Chan, Chief Executive Officer and Chairman of the Board of Directors

During the fiscal year ended December 31, 2023, Mr. Chan was paid salary of $20,000 per month. During the 2022 fiscal year, Mr. Chan earned $20,000 per month, which was recorded as an increase to the borrowings on the line of credit provided by Mr. Chan to us until Mr. Chan entered into a Letter of Employment which was effective July 1, 2022. Thereafter, Mr. Chan was paid salary of $20,000 per month. On September 1, 2022, Mr. Chan was paid a bonus of $150,000. On July 7, 2022, we entered into an Option Agreement with Mr. Chan, which granted Mr. Chan the option to acquire 115,500,000 options exercisable at $0.05 until December 31, 2026. Upon closing of the Redomicile Merger, these options were exchanged for warrants to purchase ordinary shares.

During the fiscal year ended December 31, 2021, Mr. Chan, earned $20,000 per month, which was recorded as an increase to the borrowings on the line of credit provided by Mr. Chan to us.

Ms. Christine Kan, VP Corporate Development and Member of the Board of Directors

During the fiscal year ended December 31, 2023, Ms. Kan, earned $44,671 in salary. Ms. Kan’s compensation during the 2022 fiscal year was $43,532, and during the 2021 fiscal year was $33,427. On December 10, 2021, the Company granted Ms. Kan, in her role as creditor to the Company, the option to acquire 40,000,000 ordinary shares of the Company at a price of $0.05 per share until December 31, 2026 in connection with receiving line of credit financing. These options were exchanged for warrants of the Company upon close of the Redomicile Merger.

Mr. Benjamin Szeto, General Counsel and Corporate Secretary

During the fiscal year ended December 31, 2023, our Chief Legal Counsel, Mr. Szeto, earned $8,934 in salary. Mr. Szeto’s compensation during the 2022 fiscal year was $8,706, and during the 2021 fiscal year was $4,435. On April 14, 2021, the Company granted Mr. Szeto, in his role as Chief Legal Counsel to the Company, the option to acquire 9,000,000 ordinary shares of the Company at a price of $0.05 per share until December 31, 2025. Mr. Szeto was not considered to be a related party until his appointment as Corporate Secretary on June 20, 2022.

Independent Directors of the Company

We issue incentive share options as compensation to our directors from time to time. None of our directors earn service fees for their service as a director. Those directors that hold a position as officer or consultant of the Company earn fees for the services provided.

Mr. Peter Stafford, Independent Director

During fiscal year 2021, we granted to Peter Stafford incentive options to acquire 5,000,000 of our ordinary shares at a price of $0.05 per share until June 30, 2026. The options granted to Mr. Stafford had no vesting conditions.

Mr. Ken Robulak, Dr. Alfonso Salas and Mr. Ronald Cheng, Independent Directors

Ken Robulak, Dr. Alfonso Salas and Ronald Cheng were not granted options during 2023, 2022 or 2021.

Capital Structure

As of the date of this Annual Report:

Ordinary Shares

Preferred Shares

Incentive Share Options

Warrants

Subscription Rights

Results of Operations

Year ended December 31, 2023 compared to Year ended December 31, 2022, and Year ended December 31, 2022 to the Year ended December 31, 2021

Year ended December 31, 2023 compared to Year ended December 31, 2022

Our net loss for the year ended December 31, 2023 was 30% ($3,144,000) lower than the net loss at December 31, 2022. The net loss for the year ended December 31, 2022 was 26% ($2,176,000) higher than the net loss at December 31, 2021.We highlight the following section “Loss before other items and share-based compensation”.

Loss before Other Items and Share-based Compensation

Loss before other items and share-based compensation was $557,000 (22%) lower during the year ended December 31, 2023, as compared to the year ended December 31, 2022. Loss before other items and stock-based compensation was $541,000 (28%) higher during the year ended December 31, 2022, as compared to the year ended December 31, 2021. We highlight that loss before other items and share-based compensation is a “non-GAAP financial measure”. This measure is calculated by removing those items from the net loss presented on our consolidated statements of operations and comprehensive loss. This measure does not have a standardized meaning under U.S. GAAP. Management uses this measure internally to evaluate its results of operations, as it removes the impact of share-based compensation, non-operational losses and interest accretion.

The loss before other items and share-based compensation for our year ended December 31, 2023 decreased by $557,000 and increased by $541,000 for our year ended December 31, 2022 due primarily to selling, general and administrative expenses, as a result of costs incurred in relation to ALR Singapore, preparing to commercialize the GluCurve Pet CGM and increased professional fees related to the Redomicile Merger which occurred in 2022.

Selling, general and administrative

Selling, general and administrative costs incurred consist of salaries and consulting fees of management personnel, share-based compensation for incentive options granted and vested to management personnel, travel and trade show costs, rent of our corporate office, website development costs, and general costs incurred through day-to-day operations.

During the fiscal year ended December 31, 2023, we had decreased selling, general and administrative expenses, as compared to the fiscal year ended December 31, 2022. The selling, general and administrative expenses, excluding share-based compensation, decreased by $172,000 during the fiscal year ended December 31, 2023, as compared to fiscal year 2022, primarily driven by change of personnel, decrease in mailing and printing of materials related to the rights offering and the Redomicile Merger in the comparative period of the prior year.

During the fiscal year ended December 31, 2022, we had increased selling, general and administrative expenses, as compared to the fiscal year ended December 31, 2021. The selling, general and administrative expenses, excluding share-based compensation, increased by $389,000 during the fiscal year ended December 31, 2022, as compared to fiscal year 2021, primarily driven by an increase in salaries, payroll expenses and consulting fees paid to personnel related to our GluCurve Pet CGM product, mailing and printing of materials related to the rights offering and the Redomicile Merger in the current period offset by fees paid to a market research firm related to commercialization plans for our GluCurve Pet CGM product in the comparative period of the prior year.

The components of selling, general and administrative expenses can be seen as follows:

Product development costs

Substantially all of the product development costs incurred related to (i) services provided by our contractors; and (ii) expenses incurred for product development and (iii) share-based compensation expense related to options granted to our development team. The Company incurred share-based compensation of $1,061,000, $227,000 and $222,000 for the fiscal years ended December 31, 2023, 2022 and 2021, respectively. Product development costs excluding share-based compensation were similar for the fiscal years ended December 31, 2023, 2022 and 2021.

Professional fees

Professional fees incurred consists of consulting and advisory fees of certain professionals retained, audit fees, tax consultant fees, recruiter fees, legal fees and share-based compensation for options granted to professionals. Excluding the difference in net loss attributed to the grant of stock options, professional fees:

The changes in professional fees were mainly due to accounting and legal fees incurred in the comparative period of the prior year (2022) related to:

By type of professional cost, the variance can be seen as follows:

Interest expense

Interest expense was from the following sources for the fiscal years ended December 31, 2023, 2022 and 2021:

Interest on Promissory Notes

We received an advance from two shareholders for an aggregate SGD$340,000 ($244,000), with a fixed interest amount of $10,000, during the year ended December 31, 2022 for short-term financing. We also received an advance from two related parties for an aggregate $50,000, with a fixed interest amount of $4,000 and SGD$500,000 ($355,350), with interest of $150 per day during the year ended December 31, 2022 for short-term financing. The principal portion of the promissory notes were all repaid by August 2022. Other than these transactions, there were no other significant changes in the amounts of promissory notes outstanding as at December 31, 2023, 2022 and 2021. The interest incurred on promissory notes was consistent during the years ended December 31, 2023, 2022 and 2021.

Interest on Lines of Credit

We have two line of credit facilities with balances as follows:

The principal balance of the lines of credit due to Mr. Sidney Chan and Ms. Christine Kan increased due to advances from Mr. Chan and Ms. Kan under the lines of credit to finance our operations.

We incurred interest expense on the lines of credit as follows:

Imputed Interest

During fiscal years 2023, 2022 and 2021, we had certain zero interest promissory notes and zero interest debts. Pursuant to our accounting policy, these zero interest amounts are considered to be financing items in nature and are assigned a deemed interest rate (1% per month). The interest incurred on these is expensed as imputed interest, and instead of increasing our liabilities, it is allocated to equity under the financial statement line item additional paid-in capital.

Imputed Interest and Borrowing Costs on Loan Payable

During the 2022 fiscal year, we entered into the KWC Loan Agreement as discussed in “Item 4.B. Business Overview” whereby we received proceeds of SGD$2,500,000. Under the terms of the KWC Loan Agreement, we may repay the principal owing thereunder at any time prior to the launch of our next generation GluCurve Pet CGM product, in whole or in part, at our option, with a payment equal to 120% of such principal amount owing. Any such principal amounts repaid prior to the launch of our second generation GluCurve Pet CGM product will not be subject to the royalty payment described herein. Subject to the foregoing, we are obligated to pay KWC $10 from the sale of each unit of our GluCurve Pet CGM sensors sold to our distributor, which will be accounted for as follows: (i) $5 as a reduction in the principal balance owing to KWC; and (ii) $5 as a royalty payment to compensate KWC for the cost of the principal advances. The loan was originally scheduled to mature on March 31, 2024, at which time, an amount equal to 120% of the principal then outstanding would have been due and payable to KWC.

The VP is a director and significant shareholder of KWC, therefore KWC is a related party to the Company. We recognized accreted interest and borrowing costs on the KWC Loan Agreement, as we determined the loan was issued at below market rates of interest.

The fair value measured upon recognition of the loan was determined by using a discounted cash flow analysis. To determine the discounted cash flow, we had to determine the discount rate to apply to record the loan at fair value at initial recognition. The discount rate selected at initial recognition has a significant impact on the amount recorded for the initial fair value of the loan. Since KWC is a related party, we considered the interest rates of similar long-term debt arrangements with similar terms to determine if the effective interest rate under the KWC Loan Agreement was not comparable to market interest rates. At the time the loan agreement was executed, we were in advanced negotiations for the distribution of our GluCurve Pet CGM product and the manufacturing of the CGM systems incorporated therein, but we had not entered into any definitive agreements prior to entering into the KWC Loan Agreement.

The effective interest of the loan with the 20% loan bonus was calculated as 13%. Since our GluCurve Pet CGM product had not launched upon recognition of the loan under the KWC Loan Agreement and no definitive agreements were in place, we excluded the sale of our GluCurve Pet CGM units from the cost of borrowing.

We determined that the market interest rate would be 18% based on market yield curves. Since the effective interest rate of the loan is below the market rates, we are deemed to have received a benefit under the KWC Loan Agreement. The difference between the legal liability of SGD$2,500,000 and the carrying value of SGD$2,340,000, totaling SGD$160,000 ($114,000) has been recorded to additional paid-in capital as a shareholder contribution made by KWC during the year ended December 31, 2022.

First Amendment

On June 20, 2023, the Company and KWC agreed to amend the terms of the KWC Loan Agreement as follows:

The change to the terms of the Loan Agreement was determined to be a modification of the debt; therefore, no gain or loss was recognized and instead a new effective interest rate (19%) was established based on the carrying value of the debt and the revised cash flows.

Second Amendment

On July 31, 2023, the Company and KWC agreed to further amend the terms of the KWC Loan Agreement as follows:

The change to the terms of the Loan Agreement was determined to be a modification of the debt; therefore, no gain or loss was recognized and instead a new effective interest rate (15%) was established based on the carrying value of the debt and the revised cash flows.

During the year ended December 31, 2023, we recognized accreted interest expenses by recording $48,000 (2022 - $23,000 and 2021 - $nil) and accrued interest of $112,000 (2022 - $nil and 2021 - $nil) to interest expense. During the year ended December 31, 2023, we also recognized borrowing costs by recording $150,000 (2022 – $73,000 and 2021 - $nil) to interest expense.

B.       Liquidity and Capital Resources

We have a severe working capital deficiency. We do not have the ability to service our current liabilities for the next 12 months and are reliant on our line of credit facilities to meet our ongoing operations. Until we have revenue-producing activities that exceed our operating requirements, we will be unable to service our current liabilities and the working capital deficit will continue to increase. As of the date of this Annual Report, we have commenced commercial revenue-generating activities, but have only recognized minimal revenue. We expect to generate revenues in 2024 through the sale of our GluCurve Pet CGM product. There is substantial doubt about our ability to repay our current liabilities in the near term or any time in the future, which could ultimately lead to business failure.

Current Assets

Our nominal current assets as at December 31, 2023 consist of cash, accounts receivable, inventory and prepaid expenses and as at December 31, 2022 consist of cash and prepaid expenses.

Current Liabilities

We have current liabilities of $32,071,000 at December 31, 2023, as compared to $27,089,000 at December 31, 2022. Current liabilities are as follows:

Accounts payable and accrued liabilities

Accounts payable and accrued liabilities consists of trade payables, accrued liabilities and deferred revenue. Accounts payable total approximately $1,180,000, accrued liabilities total approximately $318,000 and deferred revenue total approximately $3,000. Approximately $600,000 of accounts payable is more than one year old with the majority of these being more than ten years old.

The fluctuations in accounts payable occurred in the regular course of business.

Promissory notes to related parties and promissory notes payable to arm’s length parties

As at December 31, 2023, we had promissory notes with 24 individuals or corporations that related to historical amounts borrowed. With the exception of the SGD$840,000 advance received and $50,000 received from related parties during the year ended December 31, 2022, the principal of which was all repaid by August 2022, there has been no new activity for several years. All of the promissory notes are past due and continue to accrue interest at their respective legal rates of interest (mostly 1% per month).

During the year ended December 31, 2022, the Company received an advance from two shareholders for SGD$340,000 ($244,000), with a fixed interest amount of $10,000, due August 31, 2022. The principal amount of SGD$150,000 was repaid to one lender in July 2022 and the remaining balance of SGD$190,000 was repaid in August 2022. The Company also received advances from two related parties for $50,000, with a fixed interest amount of $4,000, due August 31, 2022. The principal amount of $50,000 was repaid in August 2022. In July 2022, the Company received an advance from a related party for SGD$500,000 ($355,350), with interest of $150 per day, due August 31, 2022. The principal amount of SGD$500,000 was repaid in July 2022.

Interest payable

Interest payable relates to the unpaid interest expense incurred on the promissory notes. The change from December 31, 2022 to December 31, 2023 relates to $531,000 of accrued interest incurred on promissory notes at their stated rates of interest and $24,000 relates to interest retired through the issuance of ordinary shares.

All of the underlying promissory notes, except for the promissory notes received during the most recent year, and related interest payable, are overdue.

Lines of credit

As of December 31, 2023, we have borrowed total principal of $14,211,000 (2022 - $13,416,000). During the December 31, 2023 year, we incurred interest expense of $1,644,000 (2022 - $1,597,000).

The increase in the lines of credit payable of $2,128,000 is attributable to borrowings of:

Line of Credit from Ms. Christine Kan

We obtained a line of credit of $1,000,000 from Ms. Christine Kan in March 2010. The loan was unsecured with interest payable on funds borrowed at 1% per month. These proceeds were used for working capital and the continued development of our technologies and product. On January 3, 2011, the creditor granted us an increase in the borrowing limit from $1,000,000 to $2,000,000 and further increased to $4,000,000 on December 10, 2021. As of December 31, 2023, we have borrowed $3,911,000 (2022 - $3,116,000) and have accrued interest outstanding of $447,000 (2022 - $275,000). During the 2023 fiscal year, we borrowed $795,000 (2022 - $648,000), incurred interest of $408,000 (2022 - $361,000), and extinguished accrued interest of $237,000 (2022 - $198,000) through cash payment.

Line of Credit from Mr. Sidney Chan

On March 6, 2011, we obtained a $2,500,000 line of credit from Mr. Sidney Chan. Under the terms of the arrangement, the amount we borrowed bears simple interest at a rate of 1% per month. The amount borrowed is secured by a general security agreement over our assets and is due on demand. Originally, the line of credit was for a comprehensive marketing program, but subsequently was amended to be for general corporate purposes. On April 1, 2014, Mr. Chan executed an amending agreement with us whereby Mr. Chan increased the borrowing limit of the line of credit he has provided to us from $4,000,000 to $5,500,000. On May 29, 2015, the borrowing limit was further increased to $7,000,000. On July 1, 2016, the borrowing limit was further increased to $8,500,000 and, on December 11, 2019, increased further to $10,300,000. As of December 31, 2023, we have borrowed $10,300,000 (2022 - $10,300,000) and have accrued interest outstanding of $3,299,000 (2022 - $2,136,000). During 2023, we borrowed $nil (2022 - $79,000), incurred interest of $1,236,000 (2022 - $1,235,000), and extinguished accrued interest of $74,000 (2022 - $298,000) through cash payment.

Cash Flows

Cash Balances and Working Capital

As of December 31, 2023, our cash balance was $59,000 compared to $149,000 as of December 31, 2022. We do not have sufficient cash on hand to fund our requirements for the 2024 fiscal year and will need to secure additional financing.

Cash Used in Operating Activities

Cash we used in operating activities was as follows:

Our expenditures used to fund operations were as follows (approximate amounts):

The expenditures incurred were to fund the operating activities of the business.

Cash Proceeds from Financing Activities

Cash sourced by us from financing activities

The funds were sourced as follows:

Short- and Long-term Liquidity

As of December 31, 2023, we do not have the current financial resources and committed financing to enable us to meet our administrative overhead, product development budgeted costs, and debt obligations over the next 12 months.

The majority of our debt financing is due on demand or overdue. We will seek to obtain creditors’ consents to delay repayment of these loans until we are able to replace these financings with funds generated by operations, replacement debt, or from equity financings through private placements or the exercise of options and warrants. While our creditors have agreed to extend repayment deadlines in the past, there is no assurance that they will continue to do so in the future. We have faced litigation from creditors in the past and have been issued consent judgments by more than one creditor. There is no assurance that additional creditors will not make claims against us in the future. Failure to obtain either replacement financing or creditor consent to delay the repayment of existing financing could result in us having to cease operations.

Tabular Disclosure of Contractual Obligations: