Related Party Transactions
|12 Months Ended|
Dec. 31, 2021
|Related Party Transactions [Abstract]|
|Related Party Transactions||
Note 17 — Related Party Transactions
ZASH Global Media and Entertainment Corporation
As of December 31, 2021, Lomotif owed ZASH $2,500,000 in original principal amount under two promissory notes. See Note 13 – Debt for further information. In addition, ZASH owed the Company $19,500,000 in original principal amounts under six promissory notes. ZASH also performed certain management functions on behalf of ZVV for which ZASH received $3,500,000 during the year ended December 31, 2021. Our Chairman, Roderick Vanderbilt, co-founded ZASH and served as the President of ZASH, and has a pre-existing personal and business relationship with the current controlling shareholder of ZASH and ZVV manager, Theodore Farnsworth.
Magnifi U, Inc.
On October 12, 2021, ZVV entered into a promissory note (the “Magnifi U Note”) with Magnifi U, Inc. (“Magnifi U”), pursuant to which ZVV loaned Magnifi U $1,500,000. The Magnifi U Note bears interest at 3% annually and Magnifi U is obligated to pay the full amount of principal and interest in one balloon payment on October 12, 2023. Our Chief Executive Officer, President and director and member of the board of managers of ZVV, Lisa King, is the founder of Magnifi U and serves as its chief executive officer. ZASH has a 15% ownership interest in Magnifi U resulting from its equity investment of $5,000,000 in Magnifi U. Founded in August 2020, Magnifi U is a personalized and immersive online education platform whose goal is to help its users develop life skills, nurture strengths and live with purpose.
Wattam Management Inc.
On October 12, 2021, Cryptyde, Inc. entered into a promissory note (the “Wattum Note”) with Wattam Management, Inc. (“Wattum”), pursuant to which Cryptyde loaned Wattum $4,000,000. The Wattum U Note bears interest at 5% annually. Wattum is a 49% owner of CW Machines, LLC.
Forever 8 Fund, LLC
On November 17, 2020, the Company, through its subsidiary, Edison Nation, LLC, entered into an Inventory Management Agreement with the Forever 8 Fund, LLC (“F8”), an entity which Christopher B. Ferguson, our former Chairman and Chief Executive Officer, holds a 45% ownership interest. Under the terms of the agreement, F8 desires to maintain inventory of and sell to Edison Nation certain products pursuant to the terms and conditions set forth in the agreement. As consideration for the inventory management services provided under this agreement, Edison Nation agrees to pay F8 a fee for each unit of each product sold on a platform determined in accordance with the fee schedule set forth in the applicable Product Schedule (the “Fee Schedule”) based on the Age of Inventory Sold set forth on the Fee Schedule (the “F8 Fees”). Prior to the signing of the agreement, F8 advanced the Edison Nation $239,283 that was utilized to pay for deposits with Edison Nation factories. The balance outstanding at December 31, 2021 is $0 and the agreement has been terminated as of December 31, 2021.
NL Penn Capital, LP and SRM Entertainment Group LLC
As of December 31, 2021 and 2020, due to related party consists of net amounts due to SRM Entertainment Group LLC (“SRM”) and NL Penn Capital, LP (“NL Penn”), the majority owner of both, which are owned by Chris Ferguson, our former Chairman and Chief Executive Officer. The amount due to NL Penn was assigned to TXC Services, LLC. The amount due to related parties is related to the acquisitions of Pirasta, LLC and Best Party Concepts, LLC offset by operating expenses that were paid by SRM and Edison Nation on behalf of SRM and NL Penn. As of December 31, 2021 and 2020, the net amount due to related parties was $15,401 and $32,452, respectively. Such amounts are due currently. NL Penn and affiliated entities may lend additional capital to Edison Nation pursuant to terms and conditions similar to the current working capital lenders to Edison Nation such as Franklin Capital. In addition, Edison Nation borrows working capital from Franklin Capital, and Mr. Ferguson is a personal guarantor on the working capital facility provided to Edison Nation by Franklin Capital.
Enventys Partners, LLC
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. 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. Louis Foreman, who is a former member of the Company’s board of directors, is also the Chief Executive Officer and the largest equity holder of Enventys. We did not incur fees related to any services performed by Enventys for the year ended December 31, 2021 and 2020, respectively. During 2019, the Company and Enventys agreed to the cancellation of the agreement. The balance outstanding at December 31, 2021 and 2020 is $ 93,490 and $105,424, respectively.
Compensation of Immediate Family Member
The Company has employed an immediate family member of Ms. Lisa King in a non-executive officer position since January 2022. Ms. King’s family member is paid an annual salary of $125,000.
The entire disclosure for related party transactions. Examples of related party transactions include transactions between (a) a parent company and its subsidiary; (b) subsidiaries of a common parent; (c) and entity and its principal owners; and (d) affiliates.
Reference 1: http://www.xbrl.org/2003/role/disclosureRef