v3.22.1
Commitments and contingencies
 3 Months Ended
Mar. 31, 2022
Commitments and Contingencies Disclosure [Abstract]  
Commitments and contingencies

9.       Commitments and contingencies

 

a)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 $1,262,582, of these promissory notes and related accrued interest have been fully recognized and recorded by the Company. The Company has accrued interest of $285,457 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.

 

b)Commitments

 

i.Management contract

 

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:

 

1)Incentive revenue bonus

 

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.

 

2)Sale of business

 

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:

 

i.2% of sales price up to $24,999,999 plus
ii.3% of sales price between $25,000,000 and $49,999,999 plus
iii.4% of sales price between $50,000,000 and $199,999,999 plus
iv.5% of sales price in excess of $200,000,000.

 

ii.Other commitment

 

The Company has a lease agreement for the Singapore office with a remaining obligation of $12,185.