The winger is out of contract at the end of the campaign and is wanted by both Dundee United and Hearts.
Livingston are keen to keep the 25-year-old who has five goals and three assists in the league this season but Martindale has conceded that is unlikely.
“It is no secret there are a couple of clubs in for him," he said, via STV Sport.
“I have given Alan my thoughts on that and obviously I would love to keep Alan at the football club but I am realistic enough to know when a big club comes calling.
“There are financial rewards but also playing at a fantastic stadium and great training facilities so I think you’ve got to go and shake the player’s hand and move him on.
“I don’t think he has made his mind up 100% but I am pretty sure he is not going to be at Livingston Football Club next year.”
Martindale has started putting plans in place for next season with three players already snapped up on pre-contract agreements.
Now he is looking to add up to a further four in attacking positions and is looking beyond just the UK market with many possible targets already “earmarked”.
“I want three or four bits of quality in attack – a 7, a 9 and an 11, plus maybe a 10," he said. “Someone who can play between the lines.
“We do have time to do that this year because last year it felt a little bit rushed at times.
“I have tweaked how I am going to do the recruitment this year. Last year I based it solely on the UK but this time I have looked further afield.
“We have 95% of the starting eleven who are going to be here next season.”
Martindale added: “So we have one eye on next year but we still have to complete our short-term objectives which is picking up three points on a Saturday and finishing as high up the league as possible.”