Commitments and contingencies |
6 Months Ended | ||||||||||||||||||||||||||||||
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Jun. 30, 2022 | |||||||||||||||||||||||||||||||
| Commitments and Contingencies Disclosure [Abstract] | |||||||||||||||||||||||||||||||
| Commitments and contingencies | 9. Commitments and contingencies
The Company has had three judgments against it relating to overdue promissory notes and accrued interest, and a fourth creditor has demanded repayment of an overdue promissory note and accrued interest. To date, the Company has not repaid any of these promissory notes and related accrued interest and could be subject to further action. The legal liability, totaling $1,271,981, of these promissory notes and related accrued interest have been fully recognized and recorded by the Company. The Company has accrued interest of $291,457 related to one of these promissory notes.
On December 22, 2020, a default judgment was entered against the Company in regard to one of the above noted judgments totaling $551,576, consisting of the principal amount of $300,000 and accrued interest of $251,576, as of the date of the Civil Summons.
The Company has a consulting arrangement with Mr. Sidney Chan, Chief Executive Officer and Chairman of the Board of Directors of the Company. Under the terms of the contract, Mr. Chan will be paid $240,000 per annum for services as Chief Executive Officer. The contract can be terminated at any time with thirty days’ notice and the payment of two years’ annual salary. Should the contract be terminated, all debts owed to Mr. Chan and his spouse must be immediately repaid. The initial term of the contract is for one year and automatically renews for continuous one-year terms. Also, under the terms of the contract are the following:
Mr. Chan will be entitled to a 1% net sales commission from the sales of any of the Company’s products at any time during his life, regardless if Mr. Chan is still under contract with the Company.
If more than 50% of the Company’s stock or assets are sold, Mr. Chan will be compensated for entering into non-compete agreements based on the selling price of the Company or its assets as follows:
On August 4, 2022, ALR Singapore entered into an Employment Agreement with the Chairman and Chief Executive Officer (the “Employment Agreement”) with an effective date of July 1, 2022 (note 11(c)).
On June 28, 2022, ALR Singapore entered into a Manufacturing and Supply Agreement (the “Supply Agreement”) with Infinovo Medical Co., Ltd. (“Infinovo”). Pursuant to the Supply Agreement, Infinovo will manufacture and supply certain continuous glucose monitoring components necessary to the Company’s diabetes management platform for animal health, known as “GluCurve”. The term of the Supply Agreement continues for three years from August 1, 2022, unless earlier terminated in accordance with the terms of the Supply Agreement. The Supply Agreement, however, will not become effective unless (i) ALR Singapore enters into a binding distribution agreement for the sale and distribution of GluCurve by July 31, 2022, and (ii) ALR Singapore and Infinovo enter into a quality agreement by July 31, 2022. There can be no assurance that the two conditions to effectiveness of the Supply Agreement will be satisfied. If the conditions are met and the agreement becomes effective, the Supply Agreement will automatically renew for additional one year terms unless ALR Singapore or Infinovo provides written notice of its intent to terminate the Supply Agreement. The Supply Agreement provides for customary reasons to terminate the Supply Agreement for cause with immediate effect.
The closing conditions for the Supply Agreement between ALR Singapore and Infinovo were not met and the Supply Agreement has now terminated (note 11(d)).
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