Commitments and Contingencies
|9 Months Ended|
Sep. 30, 2022
|Commitments and Contingencies Disclosure [Abstract]|
|Commitments and Contingencies||
Note 14— Commitments and Contingencies
AI-Pros Licensing Agreements
On July 22, 2022, the Company entered into one of two anticipate software license agreements with its strategic partner, AI-Pros Inc. (“AI-Pros”). The license provides Vinco the right to use AI-Pros’ tools and technologies, which could allow Vinco to participate in a social media platform that it believes can significantly enhance its position in the digital advertising markets.
The Company is in the process of terminating the software licensing agreements with AI-Pros.
The Company has entered into non-cancellable operating leases for office, warehouse, and distribution facilities, with original lease periods expiring through 2024. In addition to minimum rent, certain leases require payment of real estate taxes, insurance, common area maintenance charges, and other executory costs. Differences between rent expense and rent paid are recognized as adjustments to operating lease right-of-use assets on the consolidated balance sheets.
Total rent expense for the three months ended September 30, 2022 and 2021 was $244,710 and $71,408. Total rent expense for the nine months ended September 30, 2022 and 2021 was $609,776 and $130,685, respectively. Rent expense is included in general and administrative expense on the consolidated statements of operations. As of September 30, 2022, the Company had operating lease liabilities of $585,132 and right of use assets for operating leases of $567,928. Excluded from the measurement of operating lease liabilities and operating lease right-of-use assets were certain office, warehouse and distribution contracts that qualify for the short-term lease recognition exception.
Supplemental balance sheet information related to leases are as follows:
Schedule of Operating Lease Liabilities
Future minimum lease payments under operating leases as of September 30, 2022, are as follows:
Schedule of Future Minimum Lease Payments
As of September 30, 2022, the weighted-average remaining lease term for operating leases is 44.26 months, or 3.69 years.
On August 5, 2022, Vinco Ventures, Inc. was subject to a Temporary Restraining Order (“TRO”) filed in the State of Nevada. The TRO outlined various management disputes between existing members of the Board of Directors and members of executive management. On September 28, 2022, the Company entered into a settlement agreement (the “Agreement”) with respect to the litigation entitled “Vinco Ventures, Inc. v. Theodore Farnsworth, Lisa King, Roderick Vanderbilt and Erik Noble” in the Eight Judicial District Court located in Clark County, Nevada. The Agreement set forth the following, among other things (a) Ross Miller is the interim sole CEO and shall run the Company under the oversight of the Company’s Board of Directors, with Lisa King and Rod Vanderbilt remaining as directors, (b) John Colucci, former Co-CEO and Phillip Jones, former CFO, both resigned effective immediately as officers and director (in the case of Colucci) of the Company, (c) Michael Distasio and Elliot Goldstein resigned effective immediately as Directors of the Company, (e) John Colucci received three month’s severance and Phillip Jones received four month’s severance, in addition to any accrued and unpaid payroll, (f) The Company shall pay six months’ worth of COBRA payments for Jones, (g) All directors are to be paid all director fees due to the date of severance, (h) Elliot Goldstein is to be paid $in lieu to any matters related to his stock options and RSUs, (i) All outgoing directors and officers entered into three year noncompete agreements with the Company, and (j) All parties entered into mutual releases with the Company.
The Company is involved in claims and litigation in the ordinary course of business, some of which seek monetary damages, including claims for punitive damages, which are not covered by insurance. For certain pending matters, accruals have not been established because such matters have not progressed sufficiently through discovery, and/or development of important factual information and legal information is insufficient to enable the Company to estimate a range of possible loss, if any. An adverse determination in one or more of these pending matters could have an adverse effect on the Company’s consolidated financial position, results of operations or cash flows.
The Company is, and may in the future become, subject to various legal proceedings and claims that arise in or outside the ordinary course of business.
No definition available.
The entire disclosure for commitments and contingencies.
Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef