Quarterly report pursuant to Section 13 or 15(d)

Debt

v3.19.1
Debt
3 Months Ended
Mar. 31, 2019
Debt Disclosure [Abstract]  
Debt Disclosure [Text Block]
Note 6 — Debt
 
As of March 31, 2019 and December 31, 2018, debt consisted of the following:
 
 
 
March 31,
 
 
December 31,
 
 
 
2019
 
 
2018
 
Line of credit:
 
 
 
 
 
 
 
 
Asset backed line of credit
 
$
547,914
 
 
$
561,804
 
Debt issuance costs
 
 
(27,252
)
 
 
(30,000
)
Total line of credit
 
 
520,662
 
 
 
531,804
 
 
 
 
 
 
 
 
 
 
Long-term senior convertible debt:
 
 
 
 
 
 
 
 
Senior convertible notes payable
 
 
1,428,161
 
 
 
1,428,161
 
Debt issuance costs
 
 
(441,667
)
 
 
(466,667
)
Total long-term senior convertible debt
 
 
986,494
 
 
 
961,494
 
 
 
 
 
 
 
 
 
 
Long-term debt:
 
 
 
 
 
 
 
 
Notes payable
 
 
926,924
 
 
 
370,250
 
Debt issuance costs
 
 
(129,471
)
 
 
-
 
Total long-term debt
 
 
797,453
 
 
 
370,250
 
Less: current portion of long-term debt
 
 
(744,255
)
 
 
(313,572
)
Noncurrent portion of long-term debt
 
 
53,198
 
 
 
56,688
 
 
 
 
 
 
 
 
 
 
Long-term debt – related parties:
 
 
 
 
 
 
 
 
Notes payable
 
 
3,436,928
 
 
 
3,464,191
 
Less: current portion of long-term debt – related parties
 
 
(967,576
)
 
 
(932,701
)
Noncurrent portion of long-term debt – related parties
 
$
2,469,352
 
 
$
2,531,490
 
 
Notes Payable in 2019
 
On March 6, 2019, Edison Nation, Inc. (the “Company”) entered into a securities purchase agreement (the “SPA”) with an accredited investor (the “Investor”) pursuant to which the Investor purchased a 2% unsecured, senior convertible promissory note (the “Note”) from the Company. The Note was in the amount of $560,000 with an original issue discount of $60,000. The Company issued 15,000 shares of its common stock (“Common Stock”) valued at $74,100 based on the share price on the date of issuance to the Investor as additional consideration for the purchase of the Note. The Under the terms of the SPA, the Investor will have piggyback registration rights in the event the Company files a Form S-1 or Form S-3 within six months from March 6, 2019, as well as a pro rata right of first refusal in respect of participation in any debt or equity financings undertaken by the Company during the 18 months following March 6, 2019. The Company is also subject to certain customary negative covenants under the SPA, including but not limited to, the requirement to maintain its corporate existence and assets subject to certain exceptions, and to not to make any offers or sales of any security under circumstances that would have the effect of establishing rights or otherwise benefitting other investors in a manner more favorable in any material respect than those rights and benefits established in favor of the Investor under the terms of the SPA and the Note. The maturity date of the Note is six months from March 6, 2019. All principal amounts and the interest thereon are convertible into shares Common Stock only in the event that an Event of Default occurs. 
 
The scheduled maturities of the debt for the next five years as of December 31, 2018, are as follows:
 
For the Years Ended December 31,
 
Amount
 
2019
 
$
1,778,077
 
2020
 
 
239,461
 
2021
 
 
254,230
 
2022
 
 
704,296
 
2023
 
 
1,420,190
 
Thereafter
 
 
1,428,162
 
 
 
 
5,824,416
 
Less: debt discount
 
 
(496,667
)
 
 
$
5,327,749
 
 
For the three months ended March 31, 2019, interest expense was $125,073 of which $80,262 was related party interest expense. For the three months ended March 31, 2018, interest expense was $87,535 
of which $59,380 was related party interest expense
.