Quarterly report pursuant to Section 13 or 15(d)

Subsequent Events

Subsequent Events
6 Months Ended
Jun. 30, 2018
Subsequent Events [Abstract]  
Subsequent Events [Text Block]
Note 12 — Subsequent Events
Edison Nation Transaction
On June 29, 2018, 
the Company entered into a Membership Interest Purchase Agreement (the “Purchase Agreement”) with Edison Nation Holdings, LLC (“EN”) and all of the members of Edison Nation, LLC, pursuant to which the Company intends to acquire all of the voting membership interests of EN. As reported in the Company’s offering statement on Form 1-A dated April 25, 2018, the Company had previously begun negotiations for the acquisition pursuant to that certain Strategic Partnership Agreement dated February 26, 2018 and entered into between the Company and Edison Nation, LLC (a wholly-owned subsidiary of EN).
Pursuant to the Purchase Agreement, the Company agreed to pay aggregate 
consisting of: (i) $700,000 in cash to EN ($550,000 of which will be used to purchase the membership interests of Access Innovation, LLC, which membership interests will then be subsequently distributed to the existing members of EN), (ii) $250,000 in cash to be used to pay off indebtedness of EN owed to holders of certain senior convertible debt and the assumption of the remaining balance of the senior convertible debt through the issuance to the holders of 4%, 5-year senior convertible notes (the “New Convertible Notes”), in the aggregate principal amount of the sum of $1,406,352 plus accrued but unpaid interest arising on the senior convertible debt through the closing date, which as of the date of the Purchase Agreement would be convertible into approximately 281,270 shares of the Company’s common stock, at the option of the holder of such New Convertible Notes (subject to certain adjustments as provided in the Purchase Agreement and the terms of the New Convertible Notes), (iii) the reservation of
990,000 shares of the Company’s common stock that may be issued in exchange for the redemption of certain non-voting membership interests of EN that will be created specifically in connection with the transaction contemplated by the Purchase Agreement (which exchange obligations may be instead satisfied in cash instead of shares of common stock, in the Company’s sole discretion), and (iv) the issuance of approximately 550,346 shares of the Company’s common stock in satisfaction of the indebtedness represented by promissory notes payable by EN to Venture Six, LLC and Wesley Jones with a total principal balance of $4,127,601.94 as of the date of the Purchase Agreement. In addition, the Company agreed to use its best efforts to cause Louis Foreman, a Member, manager, and principal of EN, to be nominated for election to the Company’s board of directors at the Company’s next annual meeting.
The terms of the Purchase Agreement are complex and only briefly summarized above. For further information, please refer to the descriptions of the Purchase Agreement and related agreements contained in the Company’s Current Report on Form 8-K filed with the SEC on July 6, 2018. The discussion herein is qualified in its entirety by reference to such filed documents.
The Company’s management expects the transaction contemplated by the Purchase Agreement to close during the third quarter of 2018.
Service Agreement
On August 1, 2018, the Company entered into a one-year letter agreement with Enventys Partners, LLC, a North Carolina limited liability company (“Enventys”), whereby Enventys agreed to provide services to the Company as an independent contractor in the areas of product development and crowdfunding campaign marketing. During the term of the Enventys Agreement, the Company shall pay Enventys a fixed fee of $15,000 per month for product development assistance, including design research, mechanical engineering and quality control planning. In addition, the Company agreed to pay a commitment fee of $250,000 for Enventys’ assistance in marketing ten rewards-based crowdfunding campaigns for the Company’s products. Depending on the success of each campaign, the Company may also pay Enventys a commission of up to ten percent of the total funds raised in the applicable campaign. One of the members of EN, Louis Foreman, is also the Chief Executive Officer and largest equity holder of Enventys.
Operating Lease
On August 8, 2018, SRM extended its lease for office space in Kowloon, Hong Kong that expires on August 7, 2020. Monthly lease payments are approximately $6,400 for a total of approximately $154,000 for the total term of the lease.
Common Stock
On July 3, 2018, the Company issued the 18,290 shares of common stock to investors in the IPO.
On July 11, 2018, the Company issued 700 shares of common stock to two employees for services performed.