SideChannel Inc (SDCH)

[TronCarter]

2021 CLOK Summary to date. No sales.

Recent Agreements (Source: https://www.otcmarkets.com/filing/html?id=14943098&guid=CP8nUp0bwVkF33h)

On February 15, 2019, we entered into a Software License Agreement with SoundFi Systems, LLC (“SoundFi”), pursuant to which we granted SoundFi a non-exclusive license to use our Shield/Edge product and Secured Watermark product. The agreement had an initial term of one year, automatically renewable therea fter for up to three additional one-year periods, if neither party terminates the agreement prior to thirty days before such renewal date. The agreement automatically renewed on February 15, 2020 and 2021, and is currently in effect until February 15, 2022. The agreement includes standard and customary indemnification obligations, warranty disclaimers and limitations of liability. Amounts are payable to us under the agreement based on the number of downloads per year of the licensed products (resetting each year), ranging from a fee of $0.012 per download for downloads 3,000,001 to 5,000,000 (no fee is due for the first 3 million downloads), to a fee of $0.00075 per download for downloads greater than 100,000,000. There are also base license fees payable of $50,000 per year for our Shield/Edge product and $25,000 per year for our Secured Watermark product. We recognized $50,000 of revenue from SoundFi during the first two quarters of fiscal 2020.

Effective on January 16, 2020, and effective the same date, we entered into an Authorized Reseller Agreement with Castle Shield Holdings, LLC (“Castle”), pursuant to which we agreed to grant Castle a non-exclusive license to use, store and reproduce, integrate, combine, incorporate and sell, our QuantaNova™ Polymorphic Encryption Core (PEC) product in the United States. We also appointed Castle our non-exclusive authorized reseller of the proprietary polymorphic encryption engine in the United States. The agreement provides Castle, subject to the terms of the agreement, the right to resell our proprietary polymorphic encryption engine to its customers. The agreement provides for Castle to be responsible for all technical support. The agreement contains customary confidentiality terms, indemnification terms, limitation of liability terms, non-solicitation terms (prohibiting Castle from providing services to a company known to Castle to compete with us for a period of one year following the termination of the agreement) and representations and warranties. The agreement has an initial term of one year, automatically renewable thereafter for additional one-year terms unless terminated by either party prior to such automatic renewal. The agreement automatically renewed on January 16, 2021, and is currently in effect until January 16, 2022. Fees due under the agreement are based on the number of authorized users licensed. We have not generated any reseller revenues pursuant to this agreement to date.

On March 6, 2020, and effective the same date, we entered into a Technology Partnership and Authorized Reseller Agreement with ECS Federal, LLC (“ECS”), pursuant to which we agreed to grant ECS a non-exclusive license to use, store and reproduce, integrate, combine, incorporate and sell, our QuantaNova™ Polymorphic Encryption Core (PEC) product in the United States. We also appointed ECS our non-exclusive authorized reseller of the proprietary polymorphic encryption engine in the United States. The agreement provides ECS, subject to the terms of the agreement, the right to resell our proprietary polymorphic encryption engine to its customers. The agreement provides for ECS to be responsible for all technical support. The agreement contains customary confidentiality terms, indemnification terms, limitation of liability terms and representations and warranties. The agreement has an initial term of one year, automatically renewable thereafter for additional one-year terms unless terminated by either party prior to such automatic renewal. Fees due under the agreement are based on the number of authorized users using our products, depending on the number of users and type of user (public sector versus private sector), which amounts are payable to us monthly in arrears, 45 days after delivery of confirmation of each month’s fees due. We have not generated any reseller revenues pursuant to this agreement to date.

Effective on August 13, 2020, and effective the same date, we entered into an Authorized Reseller /Developer Agreement with Arnouse Digital Devices (“ADDC”), pursuant to which we agreed to grant ADDC a non-exclusive license to use, store and reproduce, integrate, combine, incorporate and sell, our Sentinel Application in the United States. We also appointed ADDC our non-exclusive authorized reseller of the Sentinel Application in the United States. The agreement contains customary confidentiality terms, indemnification terms, limitation of liability terms, non-solicitation terms (prohibiting ADDC from providing services to a company known to ADDC to compete with us for a period of one year following the termination of the agreement) and representations and warranties. The agreement has an initial term of one year, automatically renewable thereafter for additional one-year terms unless terminated by either party prior to such automatic renewal. Fees due under the agreement are based on the number of authorized users licensed. We have not generated any reseller revenues pursuant to this agreement to date.