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Note 12 - Commitments and Contingencies | 3 Months Ended
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Mar. 31, 2022
Notes to Financial Statements |
Commitments Disclosure [Text Block] |
12. | COMMITMENTS AND CONTINGENCIES
Sales Incentive Agreement with TTI On March 25, 2020, the Company entered into a sales incentive agreement with TTI. Terms of the agreement include the following:
| 1. | The term of the agreement is one year unless notice to terminate (as defined) is given. The agreement will be automatically extended for additional one-year terms unless terminated.
| 2. | For each $5,000,000 in revenue (up to a maximum of $20,000,000) the Company generates from contracts sourced by TTI during the first year that generates net income of at least 20% (as defined), the Company will pay TTI a sales incentive fee of $500,000 payable by the issuance of 62,500 shares of common stock.
| 3. | In the event that the Company generates from contracts sourced by TTI revenue in excess of $20,000,000, the Company will issue TTI a five-year warrant to purchase 12,500 shares of Common Stock at an exercise price of $12.00 per share for each $1,000,000 of revenue in excess of $20,000,000 (up to a maximum of $25,000,000).
In no event will the Company be obligated to issue more than 250,000 shares of common stock or warrants to purchase more than 62,500 shares of common stock pursuant to this agreement. There has been no revenue generated from this agreement. Distribution Agreement On October 23, 2020, Swivel Secure entered into a distribution agreement with Swivel Secure Limited (“SSL”). Terms of the agreement include the following:
| 1. | The term of the agreement is one year unless notice to terminate (as defined) is given. The agreement will be automatically extended for additional one-year terms unless terminated.
| 2. | SSL appoints Swivel Secure as a non-exclusive distributor of SSL’s products, to market, sell and distribute world-wide, for a defined discount.
| 3. | Swivel Secure is required to meet certain revenue targets with respect to the sale of products during certain quarterly periods, for the 12 month period commencing October 23, 2020. If for any reason, they fail to agree on revenue targets within 30 days of each commencement period, SSL shall be entitled to terminate the agreement by giving Swivel Secure not less than 14 days written notice.
The Company expects the revenue targets to continue to be agreed to, based on historical negotiations and increasing distribution by Swivel Secure. Litigation From time to time, we may be involved in litigation relating to claims arising out of our operations in the normal course of business. As of March 31, 2022, the Company was not a party to any pending lawsuits.

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- Definition The entire disclosure for significant arrangements with third parties, which includes operating lease arrangements and arrangements in which the entity has agreed to expend funds to procure goods or services, or has agreed to commit resources to supply goods or services, and operating lease arrangements. Descriptions may include identification of the specific goods and services, period of time covered, minimum quantities and amounts, and cancellation rights. + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 440 -URI https://asc.fasb.org/topic&trid=2144648 + Details
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