Note 12 - Commitments and Contingencies

12 Months Ended

Dec. 31, 2023

Notes to Financial Statements

Commitments Contingencies and Guarantees [Text Block]

12. Commitments and Contingencies

Purchase Commitments

The Company has outstanding unconditional purchase commitments to procure licenses to use IT software from suppliers. These agreements are negotiated in consideration of the volume of transactions with select suppliers and the associated required transaction volumes are expected to be met through the normal course of business.

In July 2022, the Company signed an unconditional purchase commitment related to the use of Microsoft Office 365 in the amount of $6.1 million payable in three installments during 2022, 2023, and 2024. During the year ended December 31, 2022, the Company paid $1.9 million related to the July 2022 agreement. During the year ended December 31, 2023, the Company paid $2.0 million related to the July 2022 agreement.

In December 2022, the Company signed an unconditional purchase commitment in the amount of $96.0 million to purchase IT solutions over a three-year term. Under this agreement, payments are made upon access to the service and any remaining obligations due at the end of the three-year term in December 2025. Given the Company’s history of procuring similar products, it is expected that cash payments to the supplier will occur in 2023 through 2025 with any remaining amounts coming due in 2025. During the year ended December 31, 2023, the Company paid $21.7 million related to the December 2022 agreement.

The Company is obligated to make the following future minimum payments under the non-cancelable terms of these contracts as of  December 31, 2023:

Years ending December 31,
	(in thousands)
2024	$	2,213
2025		74,263
2026		—
2027		—
2028		—
Thereafter		—
	$	76,476

Legal Proceedings

In the normal course of its business, the Company may be involved in various claims, negotiations and legal actions. Except for such claims that arise in the normal course of business, as of December 31, 2023, the Company was not a party to any other litigation for which a material claim is reasonably possible, probable or estimable.

AvePoint, Inc. and Subsidiaries

Notes to Consolidated Financial Statements (continued)

Guarantees

In the normal course of business, customers in certain geographies or in highly regulated sectors occasionally require contingency agreements, which are secured by certificates of deposit. As of December 31, 2023, letters of credit have been issued in the amount of $3.4 million, as security for the agreements. These agreements have not had a material effect on our results of operations, financial position or cash flow.