EDISON NATION, INC. (Form: S-1, Received: 02/12/2020 17:36:24)

As filed with the U.S. Securities and Exchange Commission on February 12, 2020.

Registration Statement No. 333-

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

FORM S-1
REGISTRATION STATEMENT UNDER THE

SECURITIES ACT OF 1933

EDISON NATION, INC.
(Exact name of registrant as specified in its charter)

Nevada		3944		82-2199200
(State or other jurisdiction of incorporation or organization)		(Primary Standard Industrial Classification Code Number)		(I.R.S. Employer Identification No.)

Edison Nation, Inc.
1 West Broad Street, Suite 1004

Bethlehem, Pennsylvania 18018

(484) 893-0060

(Address, including zip code, and telephone number, including area code, of registrant’s principal executive offices)

Christopher B. Ferguson

Chief Executive Officer

Edison Nation, Inc.
1 West Broad Street, Suite 1004

Bethlehem, Pennsylvania 18018

(484) 893-0060

(Name, address, including zip code, and telephone number, including area code, of agent for service)

Copies to:

Marc J. Adesso, Esq.

Waller Lansden Dortch & Davis, LLP
511 Union Street, Suite 2700
Nashville, Tennessee 37219
(615) 850-8063

Christopher J. Bellini, Esq.

Cozen O’Connor P.C.

33 South 6^th Street, Suite 3800

Minneapolis, Minnesota 55402

(612) 260-9029

Approximate date of commencement of proposed sale to the public: As soon as practicable after this registration statement becomes effective.

If any of the securities being registered on this Form are to be offered on a delayed or continuous basis pursuant to Rule 415 under the Securities Act of 1933, check the following box: x

If this Form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, please check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. ¨

If this Form is a post-effective amendment filed pursuant to Rule 462(c) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering.

If this Form is a post-effective amendment filed pursuant to Rule 462(d) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. ¨

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer ¨	Accelerated filer ¨

Non-accelerated filer x	Smaller reporting company x

	Emerging growth company x

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 7(a)(2)(B) of the Securities Act. x

CALCULATION OF REGISTRATION FEE

Title of Each Class of Securities To Be Registered	Amount to be Registered (1)		Proposed Maximum Offering Price Per Security (2)		Proposed Maximum Aggregate Offering Price (2)		Amount of Registration Fee (3)
Common Stock, $0.001 par value per share		1,207,813	$	2.61	$	3,152,392	$	409.18
Common Stock, $0.001 par value per share, underlying Selling Agent Warrants issued in connection with the Company’s Initial Public Offering		65,626		2.61		171,284		22.23
Common Stock, $0.001 par value per share, underlying Placement Agent Warrants issued in connection with the placement of the Company’s Senior Convertible Promissory Notes		24,366		2.61		63,595		8.25
Common Stock, $0.001 par value per share, underlying Placement Agent Warrants issued in connection with the PIPE Financing (defined below)		70,500		2.61		184,005		23.88
Common Stock, $0.001 par value per share, issued in connection with the Greentree Financing (defined below)		100,000		2.61		261,000		33.88
Common Stock, $0.001 par value per share, underlying the 10% Convertible Promissory Note issued in connection with the Greentree Financing (defined below)		550,000		2.61		1,435,500		186.33
Common Stock, $0.001 par value per share, underlying Warrants issued in connection with the Greentree Financing (defined below)		550,000		2.61		1,435,500		186.33
Total		2,568,305	$	2.61	$	6,703,276	$	870.08

(1)

Pursuant to Rule 416 under the Securities Act, the shares registered hereby also include an indeterminate number of additional shares as may from time to time become issuable by reason of stock splits, distributions, recapitalizations or other similar transactions.

(2)	Estimated solely for purposes of calculating the registration fee pursuant to Rule 457(c) under the Securities Act, on the basis of the average high and low sales price of the Registrant’s common stock as reported by The Nasdaq Capital Market on February 11, 2020.
(3)	The fee is calculated by multiplying the aggregate offering amount by 0.0001298, effective October 1, 2019, pursuant to Section 6(b) of the Securities Act.

The registrant hereby amends this registration statement on such date or dates as may be necessary to delay its effective date until the registrant shall file a further amendment which specifically states that this registration statement shall thereafter become effective in accordance with Section 8(a) of the Securities Act of 1933 or until the registration statement shall become effective on such date as the Securities and Exchange Commission, acting pursuant to said Section 8(a), may determine.

The information in this preliminary prospectus is not complete and may be changed. The Selling Shareholders may not sell these securities until the registration statement filed with the Securities and Exchange Commission is effective. This preliminary prospectus is not an offer to sell these securities and it is not soliciting an offer to buy these securities in any jurisdiction where the offer or sale is not permitted.

PRELIMINARY PROSPECTUS

SUBJECT TO COMPLETION, DATED FEBRUARY 12, 2020

Edison Nation, Inc.

2,568,305 Shares of Common Stock

Pursuant to this prospectus, the selling shareholders identified herein (each a “Selling Shareholder” and, collectively, the “Selling Shareholders”) are offering on a resale basis, up to 2,568,305 shares of common stock, par value $0.001 per share (the “common stock”) of Edison Nation, Inc. (the “Company,” “Edison Nation,” “we,” “our” or “us”). These shares include: (i) 160,492 shares of common stock underlying warrants (the “Warrants”) issued to employees of Alexander Capital, L.P. in relation to three separate financing transactions led by Alexander Capital, L.P. on behalf of the Company, and (ii) 550,000 shares of common stock underlying a warrant, 550,000 shares of common stock underlying a convertible note, and 100,000 shares of common stock, all issued to Greentree Financial Group, Inc. We are not selling any shares under this prospectus, and we will not receive any proceeds from the sales of shares by the Selling Shareholders. We will, however, receive the exercise price of the Warrants, if and when such Warrants are exercised for cash by the holders of such Warrants.

The shares included in this prospectus may be offered and sold directly by the Selling Shareholders in accordance with one or more of the methods described in the “Plan of Distribution,” which begins on page 32 of this prospectus. To the extent the Selling Shareholders decide to sell their shares, we will not control or determine the price at which the shares are sold.

Our common stock is listed on The Nasdaq Capital Market under the symbol “EDNT.” On February 11, 2020, the last reported sale price of our common stock was $2.74 per share.

This offering will terminate on the earlier of (i) the date when all of the shares have been sold pursuant to this prospectus or Rule 144 under the Securities Act of 1933, as amended (the “Securities Act”), and (ii) the date that all of the securities may be sold pursuant to Rule 144 without volume or manner-of-sale restrictions, unless we terminate it earlier.

We are an “emerging growth company” as defined under U.S. federal securities laws and, as such, we have elected to comply with certain reduced public company reporting requirements for this prospectus and future filings. See “Prospectus Summary — Implications of Being an Emerging Growth Company.”

Investing in our common stock involves a high degree of risk. See “Risk Factors” beginning on page 16 of this prospectus for a discussion of the risks that you should consider in connection with an investment in our securities.

Neither the Securities and Exchange Commission nor any state securities commission has approved or disapproved of these securities or determined if this prospectus is truthful or complete. Any representation to the contrary is a criminal offense.

The date of this prospectus is , 2020.

TABLE OF CONTENTS

		Page
Cautionary Note Regarding Forward-Looking Statements		4
Prospectus Summary		5
Summary of the Offering		14
Risk Factors		16
Use of Proceeds		28
Private Placement of Equity Securities		28
Dividend Policy		31
Determination of Offering Price		31
Market for Common Equity and Related Shareholder Matters		31
Plan of Distribution		32
Selling Shareholders for Whose Accounts We Are Registering Shares		33
Management’s Discussion and Analysis of Financial Condition and Results of Operations		35
Business		45
Management		52
Executive Compensation		58
Certain Relationships and Related Party Transactions		62
Principal Shareholders		63
Description of Capital Stock		65
Legal Matters		67
Experts		67
Where You Can Find Additional Information		67
Incorporation of Certain Information by Reference		67
Index to Consolidated Financial Statements		F-1

No dealer, salesperson or other person is authorized to give any information or to represent anything not contained in this prospectus. You must not rely on any unauthorized information or representations. This prospectus is an offer to sell only the shares of common stock offered hereby, but only under circumstances and in jurisdictions where it is lawful to do so. The information contained in this prospectus is current only as of its date.

ABOUT THIS PROSPECTUS

This prospectus is part of a registration statement that we filed on behalf of the Selling Shareholders with the United States Securities and Exchange Commission (the “SEC”) to permit the Selling Shareholders to sell the shares described in this prospectus in one or more transactions. The Selling Shareholders and the plan of distribution of the shares being offered by them are described in this prospectus under the headings “Selling Shareholders” and “Plan of Distribution.”

You should rely only on the information contained in this document and any free writing prospectus we provide to you. Neither we nor the Selling Shareholders have authorized anyone to provide any information or to make any representations other than those contained in this prospectus or in any free writing prospectuses we have prepared. We and the Selling Shareholders take no responsibility for, and can provide no assurance as to the reliability of, any other information that others may give you. This prospectus is an offer to sell only the common stock offered hereby, but only under circumstances and in jurisdictions where it is lawful to do so. The information contained in this prospectus is current only as of its date.

Use of Industry and Market Data

This prospectus includes market and industry data that we have obtained from third-party sources, including industry publications, as well as industry data prepared by our management on the basis of its knowledge of and experience in the industries in which we operate (including our management’s estimates and assumptions relating to such industries based on that knowledge). Management has developed its knowledge of such industries through its experience and participation in these industries. While our management believes the third-party sources referred to in this prospectus are reliable, neither we nor our management have independently verified any of the data from such sources referred to in this prospectus or ascertained the underlying economic assumptions relied upon by such sources. Furthermore, internally prepared and third-party market prospective information, in particular, are estimates only and there will usually be differences between the prospective and actual results, because events and circumstances frequently do not occur as expected, and those differences may be material. Also, references in this prospectus to any publications, reports, surveys or articles prepared by third parties should not be construed as depicting the complete findings of the entire publication, report, survey or article. The information in any such publication, report, survey or article is not incorporated by reference in this prospectus.

Trademarks, Trade Names and Service Marks

“Edison Nation” and other trademarks or service marks of Edison Nation, Inc. appearing in this prospectus are the property of Edison Nation, Inc. The other trademarks, trade names and service marks appearing in this prospectus are the property of their respective owners. Solely for convenience, the trademarks and trade names in this prospectus are referred to without the ^® and ™ symbols, but such references should not be construed as any indicator that their respective owners will not assert, to the fullest extent under applicable law, their rights thereto.

CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS

This prospectus contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). These statements relate to future events including, without limitation, the terms, timing and closing of our proposed acquisitions or our future financial performance. We have attempted to identify forward-looking statements by using terminology such as “anticipates,” “believes,” “expects,” “can,” “continue,” “could,” “estimates,” “expects,” “intends,” “may,” “plans,” “potential,” “predict,” “should,” “will,” or the negative of these terms or other comparable terminology. These statements are only predictions; uncertainties and other factors may cause our actual results, levels of activity, performance, or achievements to be materially different from any future results, levels or activity, performance, or achievements expressed or implied by these forward-looking statements. Although we believe that the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee future results, levels of activity, performance, or achievements. Our expectations are as of the date this prospectus is filed, and we do not intend to update any of the forward-looking statements after the date this prospectus is filed to confirm these statements to actual results, unless required by law.

You should not place undue reliance on forward looking statements. The cautionary statements set forth in this prospectus identify important factors which you should consider in evaluating our forward-looking statements. These factors include, among other things:

Our ability to effectively execute our business plan;

Our ability to manage our expansion, growth and operating expenses;

Our ability to protect our brands and reputation;

Our ability to repay our debts;

Our ability to rely on third-party suppliers outside of the United States;

Our ability to evaluate and measure our business, prospects and performance metrics;

Our ability to compete and succeed in a highly competitive and evolving industry;

Our ability to respond and adapt to changes in technology and customer behavior;

Risks in connection with completed or potential acquisitions, dispositions and other strategic growth opportunities and initiatives;

Risks related to the anticipated timing of the closing of any potential acquisitions; and

Risks related to the integration with regards to potential or completed acquisitions.

This prospectus also contains estimates and other statistical data made by independent parties and by us relating to market size and growth and other industry data. This data involves a number of assumptions and limitations, and you are cautioned not to give undue weight to such estimates. We have not independently verified the statistical and other industry data generated by independent parties and contained in this prospectus and, accordingly, we cannot guarantee their accuracy or completeness, though we do generally believe the data to be reliable. In addition, projections, assumptions, and estimates of our future performance and the future performance of the industries in which we operate are necessarily subject to a high degree of uncertainty and risk due to a variety of factors. Our actual results could differ materially from those anticipated in the forward-looking statements for many reasons, including, but not limited to, the possibility that we may fail to preserve our expertise in consumer product development; that existing and potential distribution partners may opt to work with, or favor the products of, competitors if our competitors offer more favorable products or pricing terms; that we may be unable to maintain or grow sources of revenue; that we may be unable maintain profitability; that we may be unable to attract and retain key personnel; or that we may not be able to effectively manage, or to increase, our relationships with customers; and that we may have unexpected increases in costs and expenses. These and other factors could cause results to differ materially from those expressed in the estimates made by the independent parties and by us.

PROSPECTUS SUMMARY

This summary highlights selected information contained elsewhere in this prospectus. This summary does not contain all of the information that you should consider before deciding to invest in our common stock. You should read the entire prospectus carefully, including the “Risk Factors,” “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” and our combined financial statements and the related notes thereto that are included elsewhere in this prospectus, before making an investment decision.

Unless the context requires otherwise, “Edison Nation,” the “Company,” “we,” “us,” and “our,” refer to Edison Nation, Inc. and its subsidiaries.

Overview

Formed in July 2017 under the laws of the State of Nevada, Edison Nation, Inc. seeks to be involved with every step of the consumer product life cycle- from ideation, to research and development, manufacturing, sales, packaging and fulfillment. The Company also seeks to raise awareness of the Edison Nation brand name as a diversified consumer products business through a number of media channels.

The first stage of development for any consumer product is the impetus to turn an idea into a salable commodity. Considered to be the “go-to” resource for independent innovators with great consumer product invention ideas, Edison Nation maintains a consumer-facing online presence whereby innovators can submit ideas for consideration by us. If an idea is successfully chosen, Edison Nation will apply its proprietary, web-enabled new product development (“NPD”) and commercialization platform that can take a product from idea through e-commerce final sale in a matter of months versus a year or more for capital intensive and inefficient new product development protocols traditionally used by legacy manufacturers serving “big box” retailers. Edison Nation presently engages with over 180,000 registered online innovators and entrepreneurs interested in accessing the Company’s NPD platform to bring innovative, new products to market focusing on high-interest, high-velocity consumer categories. The Company generates revenue from its web presence by charging a fee for each idea submission, and also through subscription-based plans for innovators that wish to submit high volumes of ideas.

Since its inception, Edison Nation has received over 200,000 idea submissions, with products selling in excess of $250 million at retail through the management of over 300 client product campaigns with distribution across diverse channels including e-commerce, mass merchandisers, specialty product chains, entertainment venues, national drug chains, and tele-shopping. These clients include many of the largest manufacturers and retailers in the world including Amazon, Bed Bath and Beyond, HSN, Rite Aid, P&G, and Black & Decker. The Company generates revenue from licensing agreements with such manufacturers and retailers, which such agreements are entered into when innovators submit their ideas through Edison Nation’s web portal. Occasionally, the Company also generates revenue from innovators that wish to use the Company’s product development resources, but license or distribute products themselves.

Edison Nation has a number of internally developed brands “EN Brands” which act as a launchpad for new innovative items that have matriculated through the innovation portal. These EN Brands include Cloud B, Pirasta, Uber Mom, Best Party Concepts, Lily and Grey, Sol and Salud, Trillion Trees, Eco Quest, Smarter Specs, Barkley Lane, and Ngenious Fun. Additionally the Company offers a partnership model for entrepreneurs and businesses that are seeking to elevate their existing brands. Recent partnerships for Edison Nation include 4Keeps Roses and Mother K. Within the partnership model, the Company seeks to identify new lines of distribution and provide innovation through development of new item that enhance the brands overall image and consumer adoption,

In addition to developing products for its EN Brands, the Company develops and manufactures products for well-known brands in the entertainment and theme park industry. For over 20 years, the Company has developed, manufactured and supplied the entertainment and amusement park industry with exclusive products that are often only available to consumers inside venues such as Disney Parks and Resorts, Disney Stores, Universal Resorts, Sea World, Sesame Place, Busch Gardens, Merlin Entertainment, and Madison Square Garden. For the customers listed above, the Company has developed products for core brands such as Harry Potter, Frozen, Marvel, and Star Wars.

Once most consumer products are ideated, developed, manufactured, and possibly even licensed, they must be packaged and distributed. Therefore, we lease a packaging and logistics center in Alpha, New Jersey. The Company generates revenue from the sale of custom packaging for many of the products that have run through our NPD or in-house product development process. The Company also sells packaging products to a number of other entities that are not related to the Company’s product development process, including pharmaceutical and e-commerce companies. When packaging of products is complete, we typically ship products using our own trucks rather than relying on a common carrier. For packaging products, the Company does not have long-term agreements with customers, and instead manufactures and sells its packaging products subject to purchase orders from its customers.

Once a product is ready for distribution, consumer awareness must be raised in order to the sell the product. Accordingly, the Company has begun to pursue a three-prong media strategy. First, the Company is seeking to re-release episodes of the ‘Everyday Edisons’ television program, while simultaneously seeking a distribution partner for forthcoming episodes. The Company intends to generate revenue from the Everyday Edisons brand by entering into a contract with a broadcast network or online streaming service. Second, the Company is developing a proprietary e-learning platform. The Company intends to generate revenue from the e-learning platform through the sale of subscription-based plans. Third, the Company is seeking to expand its web presence by acquiring or creating other innovator-facing internet media properties. The Company intends to generate revenue from such internet media through the display of paid advertisements on its properties.

Market Strategy

The process for developing and launching consumer products has changed significantly in recent years. Previously, Fortune 500 and other companies maintained multimillion-dollar research and development divisions to develop and launch products to be sold primarily on retail shelves and supported by large television and print advertising investment. The emergence of e-commerce giants, including Amazon.com, has caused retail shelf space to no longer be a requirement to launch a new product. Crowdfunding sites like Kickstarter enable solo entrepreneurs to inexpensively produce an advertising video and quickly introduce a new product to many millions of potential customers, and to quickly gain those customers for a low cost of acquisition relative to the cost and time required in prior years as expensive advertising investment is no longer required to gain market awareness. For example, according to Statista.com, crowdfunded sales of products will exceed $18.9 billion in 2021. The consumer shift away from brick and mortar retailers toward e-commerce has resulted in the bankruptcy or downsizing of many iconic retailers which sold toys, including Toys R Us, Sears, Kmart, and K-B Toys, with the resultant loss in shelf space and available locations helping to drive our market opportunity. By utilizing the opportunities to market products over the internet, rather than through traditional, commercial channels, we believe we can reach a much broader market for our brands and products.

Leveraging Evolving Market Opportunities for Growth

The Company believes that its anticipated growth will be driven by five macroeconomic factors:

The significant growth of ecommerce (14% compound annual growth rate, estimated to reach $4.9 trillion by 2021 (eMarketer 2018));

The increasing velocity of “brick and mortar” retail closures, now surpassing Great Recession levels (Cushman & Wakefield/Moody’s Analytics 2018);

Product innovation and immediate delivery gratification driving consumer desire for next-generation products with distinctive sets of features and benefits without a reliance on brand awareness and familiarity;

The marriage of media based entertainment and consumer goods;

The rapid adoption of crowdsourcing to expedite successful new product launches; and

The opportunity to market products over the internet and television, rather than through traditional, commercial channels, to reach a much broader, higher qualified target market for brands, and products.

In addition, we intend to acquire more small brands that have achieved approximately $1 million in retail sales over the trailing twelve-month period with a track record of generating free cash flow. By leveraging our expertise in helping companies launch thousands of new products and our ability to create unique, customized packaging, we will seek to elevate the value of these acquired brands by improving each part of their launch process, based on our own marketing methodologies.

We believe our acquisition strategy will allow us to acquire small brands using a combination of shares of our common stock, cash and other consideration, such as earn-outs. We intend to use our acquisition strategy in order to acquire up to ten or more small brands per year for the next three years. In situations where we deem that a brand is not a “fit” for acquisition or partnership, we may provide the brand with certain manufacturing or consulting services that will assist the brand to achieve its goals.

One example of a brand that we have recently acquired is Cloud B, Inc. (“Cloud B”), a leading manufacturer of products and accessories that help parents and children sleep better. Cloud B distributes its products nationally and in over 100 countries worldwide.

Founded in 2002 and acquired by Edison Nation in October 2018, Cloud B’s highly regarded, award-winning products are developed in consultation with an advisory board of pediatricians and specialists. Cloud B recently won the Toy of the Year award from The Toy Association. Cloud B’s best-known products are Twilight Turtle™ and Sleep Sheep™.

Cloud B’s products can be purchased online (through its own e-commerce site and other online retailers), in specialty boutiques, gift stores, and worldwide at major retailers including Barnes & Noble, Bloomingdale’s, Dillard’s, Nordstrom, Von Maur, Harrods, and Fnac in France.

Immediate synergies include expanding Edison Nation’s West Coast footprint by leveraging Cloud B’s sizable distribution, sales and fulfillment operations. The initial focus for Cloud B has been to optimize existing product performance while helping to develop new product lines leveraging the Edison Nation NPD platform. In addition, Cloud B is leveraging Edison Nation’s Hong Kong-based manufacturer sourcing and management capabilities, as well as the Company’s marketing and packaging resources.

Summary of Risk Factors

Our business is subject to numerous risks and uncertainties, including those in the section captioned “Risk Factors” beginning on page 16 and elsewhere in this prospectus. These risks include, but are not limited to, the following:

our limited operating history and may not be able to operate our business successfully or generate sufficient revenue to make or sustain distributions to our shareholders;

the loss of key personnel or the inability of replacements to quickly and successfully perform in their new roles could adversely affect our business;

our financial statements may be materially affected if our estimates prove to be inaccurate as a result of our limited experience in making critical accounting estimates;

we may require additional financing to sustain or grow our operations;

if we fail to manage our growth, our business and operating results could be harmed;

our growth strategy includes pursuing opportunistic acquisitions of additional brands, and we may not find suitable acquisition candidates or successfully operate or integrate any brands that we may acquire;

an inability to develop and introduce products in a timely and cost-effective manner may damage our business;

our success will depend on the reliability and performance of third-party distributors, manufacturers, and suppliers;

we have debt financing arrangements, which could have a material adverse effect on our financial health and our ability to obtain financing in the future and may impair our ability to react quickly to changes in our business; and

a significant portion of our business is conducted with customers and suppliers located outside of the United States. Currency, economic, political, and other risks associated with our international operations in China could adversely affect our operating results.

Recent Developments

Edison Nation Holdings, LLC Transaction

On September 4, 2018, the Company completed the acquisition of all of the voting membership interest of Edison Nation Holdings, LLC (“EN”) for a total purchase price of $11,776,696 comprised of (i) $700,000 in cash to Edison Nation ($550,000 of which was subsequently used to purchase the membership interests of Access Innovation, LLC, which membership interests were then distributed to the Members), and $250,000 in cash used to pay off a portion of the indebtedness owed by EN to holders of certain senior convertible debt), (ii) the assumption of the remaining balance of EN’s senior convertible debt through the issuance of new 4%, 5-year senior convertible notes (the “New Convertible Notes”), in the aggregate principal and interest amount of $1,428,161 (which amount was previously disclosed in the Company’s Current Report on Form 8-K filed with the SEC on September 6, 2018 as $1,436,159 due to final adjustments for principal and accrued interest), which are convertible into 285,632 shares of the Company’s common stock, at the option of the holder 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, and (iv) the issuance of 557,084 shares of the Company’s common stock in satisfaction of the indebtedness represented by promissory notes payable by EN with a total principal balance of $4,127,602.

Cloud B, Inc. Transaction

On October 29, 2018, the Company entered into a Stock Purchase Agreement with a majority of the shareholders (the “Cloud B Sellers”) of Cloud B, Inc., a California corporation (“Cloud B”). Pursuant to the terms of such Stock Purchase Agreement, the Company purchased 72.15% of the outstanding capital stock of Cloud B in exchange for 489,293 shares of restricted common stock of the Company. In addition, the Company entered into an Earn Out Agreement with the Cloud B Sellers, whereby, beginning in 2019, the Company will pay the Cloud B Sellers an annual amount equal to 8% multiplied by the incremental gross sales of Cloud B over its 2018 gross sales level. The Earn Out Agreement expires on December 31, 2021. CBAV1, LLC, a wholly-owned subsidiary of Edison Nation, Inc., owns the senior secured position on the promissory note to Cloud B, Inc. in the amount of $2,270,000. In February 2019, CBAV1, LLC, pursuant to an Article 9 foreclosure action, perfected its secured UCC interest in all the assets of Cloud B, Inc. to partially satisfy the outstanding balance on the note and thereby making any payments of such Cloud B trade payables and notes unlikely in the future.

Non-Employee Director Compensation

Accordingly, on November 15, 2019, in lieu of granting the Options, the Company granted the board of directors restricted stock units of 20,000 shares which vested immediately. In addition, on November 15, 2019, the Company granted each non-employee director restricted stock units of 30,000 shares, which vested on January 1, 2020.

Acquisition of Pirasta, LLC

On December 31, 2018, the Company completed the acquisition of all of the voting membership interest of Pirasta, LLC from NL Penn Capital, LP in exchange for the satisfaction of $470,000 due from related party. NL Penn Capital, LP is owned by Christopher B. Ferguson, our Chairman and Chief Executive Officer. Accordingly, the consolidated financial statements of the Company reflect the accounting of the combined acquired subsidiary at historical carrying values, except that equity reflects a distribution for the excess of consideration paid over the net carrying amount of assets.

Acquisition of Best Party Concepts, LLC

On December 31, 2018, the Company completed the acquisition of 50% of the voting membership interest of Best Party Concepts, LLC from NL Penn Capital, LP in exchange for the satisfaction of $500,000 due from related party. NL Penn Capital, LP is owned by Christopher B. Ferguson, our Chairman and Chief Executive Officer. Accordingly, the consolidated financial statements of the Company reflect the accounting of the combined acquired subsidiary at historical carrying values, except that equity reflects a distribution for the excess of consideration paid over the net carrying amount of assets.

FirstFire Securities Purchase Agreement

On March 6, 2019, the Company entered into a securities purchase agreement (the “FirstFire SPA”) with an accredited investor (the “Investor”) pursuant to which the Investor purchased a 2% unsecured, senior convertible promissory note (the “FirstFire Note”) from the Company. The Company issued 15,000 shares of its common stock to the Investor as additional consideration for the purchase of the FirstFire Note. Under the terms of the FirstFire SPA, the Investor had 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 was also subject to certain customary negative covenants under the FirstFire 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 FirstFire SPA and the FirstFire Note. The maturity date of the Note was six months from March 6, 2019. All principal amounts and the interest thereon were convertible into shares common stock only in the event that an Event of Default occurred (as such term was defined in the FirstFire Note).

On June 17, 2019, the Company entered into that certain Settlement and Release Agreement with the Investor (the “Settlement Agreement”) whereby the Company and the Investor agreed to terminate the FirstFire SPA, FirstFire Note, and all other documents entered into in connection therewith. Pursuant to the terms of the Settlement Agreement, the Company paid $566,000 and issued 15,000 shares of restricted common stock to the Investor (the “Settlement Amount”). Upon receipt of the Settlement Amount, the Investor and the Company have agreed to terminate the FirstFire SPA, FirstFire Note, and all other documents entered into in connection therewith, and to release, waive, and forever discharge the other party from, including, but not limited to, any claim, right, or legal action, whether past, current, or future, which may arise directly or indirectly out of such documents.

Receivables Financings

On March 31, 2019, the Company entered into a receivables financing arrangement for specific customer receivables. The agreement allowed for borrowing up to 80% of the outstanding receivable based on the credit quality of the customer. The Company’s Chairman and Chief Executive Officer personally guaranteed all amounts due under the agreement. The fee is between 1% and 2% of the total invoice financed. The proceeds were used for funding the purchase of products sold on HSN, but the Company is not currently utilizing this receivables financing arrangement, and therefore no amounts are outstanding under the agreement as of February 12, 2020.

On November 12, 2019, the Company entered into a Receivables Purchase Agreement with a financial institution (the “Receivables Purchase Agreement”), whereby the Company agreed to purchase $225,000 of receivables for $200,000. The Company’s Chairman and Chief Executive Officer as well as NL Penn Capital, LP personally guaranteed all amounts due under the agreement. NL Penn Capital, LP is owned by Christopher B. Ferguson, our Chairman and Chief Executive Officer. The proceeds were used for general working capital.

On November 18, 2019, the Company entered into a Future Receivables Purchase Agreement with a financial institution (the “Future Receivables Purchase Agreement”), whereby the Company agreed to purchase of $337,500 of receivables for $250,000. The proceeds were used to fund our orders with our factories for overseas distributors as such receivables were not eligible as collateral under our current working capital facility. Christopher B. Ferguson, our Chairman and Chief Executive Officer, personally guaranteed the prompt and complete performance of the Company’s obligations under the Future Receivables Purchase Agreement.

May 2019 Securities Purchase Agreement

On May 13, 2019, the Company entered into a securities purchase agreement (the “May 2019 SPA”) with certain accredited investors (the “Investors”) pursuant to which the Investors purchased Senior Convertible Promissory Notes (the “May 2019 Notes”) from the Company. The use of proceeds from the May 2019 Notes was used for general working capital and to fund new product launches. Unless there is a specific Event of Default (as such term is defined in the May 2019 Notes), the Investors shall not have the ability to convert the principal and interest under the May 2019 Notes into shares of common stock. Pursuant to the May 2019 SPA, the Company agreed to sell to the Investors the May 2019 Notes, in the aggregate principal amount of $1,111,111, which are convertible into shares of common stock. Additionally, the Company will issue an additional 20,000 shares of common stock to the Investors as additional consideration for the purchase of the May 2019 Notes. Under the terms of the May 2019 SPA, the Investors have piggyback registration rights in the event the Company files a Form S-1 or Form S-3 within six months of May 13, 2019. The Company is also subject to certain customary negative covenants under the May 2019 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 Investors under the terms of the May 2019 SPA and the May 2019 Notes.

As issued on May 13, 2019, the principal amount of the May 2019 Notes are $1,111,111, with an original issue discount in the amount of $111,111. The maturity date of the May 2019 Notes is November 13, 2019. The per share conversion price into which the principal amount and interest under the May 2019 Notes may be converted is equal to 80% multiplied by the lowest traded price of our common stock during the 20 consecutive trading days preceding the date of conversion. The conversion price may be adjusted in connection with certain material corporate events, and the Company is subject to cash penalties in the event that the Company fails to timely deliver certificates for shares of common stock issuable upon conversion of May 2019 Notes. The May 2019 Notes contain a cap, such that the total number of shares of Common Stock issuable under the May 2019 Notes are limited to 19.99% of the Company’s outstanding shares of common stock as of May 13, 2019.

So long as an Event of Default has not occurred under the terms of the May 2019 Notes, the Company may prepay the May 2019 Notes at any time, given not less than three trading days’ notice. If the Company exercises its right to prepay the May 2019 Notes at any time within the initial 180 days following May 13, 2019, the prepayment amount to be paid by the Company shall be an amount in cash equal to the sum of 115% multiplied by the principal on the May 2019 Notes then outstanding, plus all accrued and unpaid interest, including unpaid default interest, if any.

The May 2019 notes are no longer outstanding, and were converted into 560,185 shares of common stock in November 2019.

Tiburon Loan Agreement

On June 14, 2019, the Company entered into that certain Loan Agreement (the “Loan Agreement”) with Tiburon Opportunity Fund (the “Lender”), dated June 14, 2019 (the “Loan”). Pursuant to the terms of the Loan Agreement, the Lender agreed to loan the Company $250,000. The Loan bore interest at the rate of 1.5% per month through the term of the Loan. Additionally, the Loan Agreement provided that the Company would pay the Lender the entire unpaid principal and all accrued interest upon thirty days’ notice to the Company, but in any event, the notice shall not be sooner than August 11, 2019. The Loan proceeds were used to fund general working capital needs of the Company. If the Company defaulted on the performance of any obligation under the Loan Agreement, the Lender would have declared the principal amount of the Loan owing under the Loan Agreement at the time of default to be immediately due and payable. Furthermore, the Loan Agreement granted the Lender a collateral interest in certain accounts receivable of SRM Entertainment Ltd. (“SRM”), a subsidiary of the Company. The outstanding principal and interest on the note was repaid on December 27, 2019.

On January 2, 2020, the Company entered into that certain Loan Agreement (the “Second Loan Agreement”) with Tiburon Opportunity Fund (the “Lender”), dated January 2, 2020 (the “Second Loan”). Pursuant to the terms of the Second Loan Agreement, the Lender agreed to loan the Company $400,000. The Second Loan bears interest at the rate of 1.5% per month through the term of the Second Loan. Additionally, the Second Loan Agreement provides that the Company shall pay the Lender the entire unpaid principal and all accrued interest upon thirty days’ notice to the Company, but in any event, the notice shall not be sooner than June 1, 2020. The Second Loan proceeds are being used to fund general working capital needs of the Company. If the Company defaults on the performance of any obligation under the Second Loan Agreement, the Lender may declare the principal amount of the Second Loan owing under the Second Loan Agreement at the time of default to be immediately due and payable. Furthermore, the Second Loan Agreement grants the Lender a collateral interest in certain accounts receivable of SRM.

4Keeps Roses

On August 23, 2019, the Company formed Ed Roses, LLC, a 50% joint venture with 4Keeps Roses, Inc., to distribute preserved roses, flowers and associated gift products.

Labrys Securities Purchase Agreement

On August 26, 2019, the Company entered into a securities purchase agreement (the “Labrys SPA”) with Labrys Fund, LP (“Labrys”) pursuant to which Labrys purchased a 12% Convertible Promissory Note (the “Labrys Note”) from the Company. Unless there is a specific Event of Default (as such term is defined in the Labrys Note) or the Labrys Note remains unpaid by the Maturity Date, then Labrys shall not have the ability to convert the principal and interest under the Labrys Notes into shares of common stock. The per share conversion price into which the principal amount and interest under the Labrys Note may be converted is equal to the lesser of (i) 80% multiplied by the lowest Trade Price (as such term is defined in the Labrys Note) of our common stock during the 20 consecutive trading days ending on the latest complete trading day prior to the date of issuance of the Labrys Note, and (ii) 80% multiplied by the lowest Market Price (as such term is defined in the Labrys Note) of our common stock during the 20 trading day period ending on the latest complete trading day prior to the Conversion Date (as such term is defined in the Labrys Note).

Pursuant to the Labrys SPA, the Company agreed to issue and sell to Labrys the Note, in the principal amount of $560,000, with an original issue discount in the amount of $60,000. The Labrys Note is due and payable February 26, 2020 (the “Maturity Date”). Additionally, the Company issued 181,005 shares of common stock to Labrys as a commitment fee, of which 153,005 shares of common stock must be returned to the Company in the event the Labrys Note is fully paid and satisfied prior to the Maturity Date. The proceeds from the Labrys Note will be used for general working capital and to fund new product launches.

The Company is also subject to certain customary negative covenants under the Labrys 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 Labrys SPA and the Labrys Notes. The Company agreed at all times to have authorized and reserved two times the number of shares of common stock that are issuable upon full conversion of the Labrys Note. Initially, the Company instructed its transfer agent to reserve 700,000 shares of common stock in the name of Labrys for issuance upon conversion.

On January 24, 2020, the Company repaid the Labrys Note in full. Upon repayment of the Labrys Note, Labrys returned to the Company for cancellation the 153,005 shares of Common Stock that had been originally issued to as a portion of the commitment fee paid in connection with the Labrys Note, and allowed the Company to cancel the reservation of the 875,000 shares of Common Stock that had been reserved pursuant to the Labrys SPA and Labrys Note.

32E Financing

On December 4, 2019, the Company agreed to issue and sell to 32 Entertainment LLC (“32E”) a 10% Senior Secured Note (the “32E Note”), in the principal amount of $250,000. The maturity date of the 32E Note is December 4, 2020. In addition, the Company issued to 32E 10,000 shares of common stock as an inducement to 32E to purchase the 32E Note. The $250,000 of proceeds from the 32E Note was used for general working capital needs of the Company and the repayment of debt related to Horberg Enterprises.

Pursuant to the terms of the 32E Note, on December 4, 2019, the Company also issued 32E a Common Stock Purchase Warrant (the “32E Warrant”) to purchase 50,000 shares of common stock at an exercise price of $1.50 per share. The 32E Warrant expires on December 4, 2024. The 32E Warrant contains price protection provisions, as well as a provision allowing 32E to purchase the number of shares that 32E could have acquired if it held the number of shares of common stock acquirable upon complete exercise of the 32E Warrant, in the event that the Company grants, issues or sells common stock, common stock equivalents, rights to purchase common stock, warrants, securities or other property pro rate to holders of any class of the Company’s securities. If there is no effective registration statement registering the resale of the shares of common stock underlying the 32E Warrant, then the 32E Warrant may be exercised cashlessly, based on a cashless exercise formula. The 32E Warrant also contains a conversion limitation provision, which prohibits 32E from exercising the 32E Warrant in an amount that would result in the beneficial ownership of greater than 4.9% of the total issued and outstanding shares of common stock, provided that (i) such exercise limitation may be waived by 32E with 61 days prior notice, and (ii) 32E cannot waive the exercise limitation if conversion of the 32E Warrant would result in 32E having beneficial ownership of greater than 9.9% of the total issued and outstanding shares of common stock.

In connection with the sale of the 32E Note, also on December 4, 2019, the Company entered into a registration rights agreement whereby the Company agreed to register the 10,000 shares of common stock issued to 32E as an inducement on a registration statement on Form S-1 with the SEC. The Company was required to have such registration statement declared effective by the SEC within 90 calendar days (or 180 calendar days in the event of a “full review” by the SEC) following the earlier of 30 days from December 4, 2019 or the filing date of the registration statement on Form S-1, which such registration statement has not been filed or timely declared effective. If the registration statement is not filed or declared effective within the timeframe set forth in the registration rights agreement, the Company was supposed to be obligated to pay to 32E a monthly amount equal to 1% of the total subscription amount paid by 32E until such failure is cured. The Company has not made any such payment 32E. As of February 12, 2020, 32E has not taken adverse action against the Company as a result of this delay. The registration rights agreement also contains mutual indemnifications by the Company and each investor, which the Company believes are customary for transactions of this type.

PIPE Financing

On October 2, 2019, the Company entered into a Share Purchase Agreement (the “PIPE Purchase Agreement”) with certain accredited investors for the private placement of 1,050,000 shares of the Company’s common stock at a purchase price of $2.00 per share (the “PIPE Financing”). In a series of four closings, the Company sold a total of 1,175,000 shares of common stock at a purchase price of $2.00 per share (the “PIPE Shares”), for an aggregate amount sold in the PIPE Financing of $2,350,000. The PIPE Purchase Agreement contains certain closing conditions relating to the sale of securities, representations and warranties by the Company and the applicable investors, as well as covenants of the Company and the investors (including indemnifications from the Company in the event of breaches of its representations and warranties), all of which the Company believes are customary for transactions of this type of transaction. The PIPE Purchase Agreement contains a prohibition on equity sales by the Company, which prohibition was violated by the Greentree Financing (defined below). As of February 12, 2020, none of the investors in the PIPE Financing have taken adverse action as a result of such prohibition.

In connection with the sale, the Company entered into a registration rights agreement whereby the Company agreed to register all PIPE Shares and file this registration statement on a Form S-1 with the SEC. The Company was required to have such registration statement declared effective by the SEC within 90 calendar days (or 120 calendar days in the event of a “full review” by the SEC) following the applicable closing date of the PIPE Financing, which such registration statement has not been timely declared effective. If the registration statement is not filed or declared effective within the timeframe set forth in the registration rights agreement, the Company was supposed to be obligated to pay the investors in the PIPE Financing an amount equal to 1% of the total purchase price of the common stock per month (up to a maximum of 8% in the aggregate) until such failure is cured. The Company has not made any such payment to the investors in the PIPE Financing. As of February 12, 2020, non of the investors in the PIPE Financing, have taken adverse action as a result of this delay. The registration rights agreement also contains mutual indemnifications by the Company and each investor, which the Company believes are customary for transactions of this type.

Furthermore, the Company issued warrants to the placement agent in the PIPE Financing of a value equal to six percent (6%) of the aggregate number of PIPE Shares, whereby the exercise price is 125% of the price at which the shares were issued in such offering. For additional information regarding the PIPE Financing, see “Private Placement of Securities” on page 28.

Acquisition of Uber Mom, LLC Assets

On November 6, 2019, the Company issued $22,500 shares of our common stock and paid $52,352 in cash to acquire the assets of Uber Mom, LLC, which was the approximate value of Uber Mom, LLC’s inventory.

Other Financing Notes

On January 10, 2020, the Company issued Rawleigh Ralls (“Ralls”) a 5% Promissory Note in the principal amount of $267,000 (the “Ralls Note”), with an original issue discount of $17,000. The Ralls Note’s maturity date is June 10, 2020. As an incentive to purchase the Ralls Note, the Company issued Ralls 33,000 shares of common stock. In addition, on January 10, 2020, the Company issued Ralls a warrant (the “Ralls Warrant”) to purchase 75,000 shares of the common stock at an exercise price of $2.00 per share. The Ralls Warrant expires on December 31, 2021. The proceeds from the Ralls Note will be used for general working capital needs of the Company.

On January 15, 2020, the Company issued Paul J. Solit amd Julie B. Solit (the “Solits”) a 5% Promissory Note in the principal amount of $100,000 (the “Solits Note”), with an original issue discount of $7,000. The Solits Note’s maturity date is June 15, 2020. As an incentive to purchase the Solits Note, the Company issued the Solits 13,000 shares of common stock. In addition, on January 15, 2020, the Company issued the Solits a warrant (the “Solits Warrant”) to purchase 50,000 shares of the common stock at an exercise price of $2.00 per share. The Solits Warrant expires on December 31, 2020. In addition, on January 15, 2020, the Company issued Solit a warrant (the “Solit Warrant”) to purchase 50,000 shares of the common stock at an exercise price of $2.00 per share. The Solit Warrant expires on December 31, 2020. The proceeds from the Solits Note will be used for general working capital needs of the Company.

On January 17, 2020, the Company issued Richard O’Leary (“O’Leary”) a 5% Promissory Note in the principal amount of $53,500 (the “O’Leary Note”), with an original issue discount of $3,500. The O’Leary Note’s maturity date is June 17, 2020. As an incentive to purchase the O’Leary Note, the Company issued O’Leary 6,500 shares of common stock. In addition, on January 17, 2020, the Company issued O’Leary a warrant (the “O’Leary Warrant”) to purchase 25,000 shares of the common stock at an exercise price of $2.00 per share. The O’Leary Warrant expires on December 31, 2020. The proceeds from the O’Leary Note will be used for general working capital needs of the Company.

Greentree Financing

On January 23, 2020, the Company entered into a financing transaction (the “Greentree Financing”) by executing a loan agreement (the “Greentree Loan Agreement”) with Greentree Financial Group, Inc. (“Greentree”), pursuant to which Greentree purchased a $1,100,000 10% Convertible Promissory Note (the “Greentree Note”) from the Company, and the Company issued to Greentree a warrant (the “Greentree Warrant”) to purchase 550,000 shares of the Company’s common stock. The $1,100,000 in proceeds from the Greentree Note will be used for general working capital needs of the Company and for the repayment of debt. On January 24, 2020, the Company used $588,366 of the proceeds from the Greentree Note to pay off in full the Labrys Note.

On January 29, 2020, the Company and the Greentree entered into an Amendment Agreement, amending the Greentree Loan Agreement, the Greentree Note, and the Greentree Warrant to: (i) correct the effective date set forth in the Greentree Loan Agreement, Greentree Note, and Greentree Warrant to January 23, 2020, (ii) clarify the terms of the registration right provision in the Greentree Loan Agreement, and (iii) to ensure that the total number of shares of common stock issued pursuant to the Greentree Loan Agreement, the Greentree Note, and/or the Greentree Warrant, each as amended, does not exceed 17.99% of the Company’s issued and outstanding common stock as of January 23, 2020. The Amendment Agreement also contains a liquated damages provision which requires the Company to pay Greentree an amount in cash equal to $2.50 per share for any amount of shares that Greentree would have received pursuant to the Greentree Loan Agreement, the Greentree Note, and/or the Greentree Warrant, but does not so receive such shares as a result of the 17.99% cap described above.

Greentree Loan Agreement

Upon execution of the Greentree Loan Agreement, the Company issued to Greentree 100,000 shares of common stock (the “Greentree Origination Shares”) as an origination fee, plus an additional 60,000 shares of common stock as consideration for advisory services.

Pursuant to the Greentree Loan Agreement, the Company agreed to pay certain costs of Greentree, including $15,000 for Greentree’s legal fees and transfer agent fees resulting from conversion of the Note. The Greentree Loan Agreement also contains representations and warranties by the Company and Greentree, which the Company believes are customary for transactions of this type. Furthermore, the Company is subject to certain negative covenants under the Greentree Loan Agreement, which the Company also believes are also customary for transactions of this type.

The Greentree Loan Agreement, as amended, also contains a registration rights provision, pursuant to which the Company is required to prepare and file a registration statement with the SEC under the Securities Act of 1933, as amended, registering a total of 1,200,000 shares of common stock issued to Greentree pursuant to the Greentree Loan Agreement, Greentree Note and Greentree Warrant. The Company will be required to have such registration statement filed within 30 days of the effective date of the Greentree Loan Agreement (which, as amended, is January 23, 2020) and declared effective by the SEC within 105 calendar days following the effective date of the Greentree Loan Agreement. If the Company fails to file or have declared effective the registration statement within the timeframe set forth in the Greentree Loan Agreement, or certain other events occur as set forth in the Greentree Loan Agreement, the Company is obligated to pay Greentree an amount of liquidated damages equal to $35,000 per month until such failure is cured. In addition to the registration rights granted to Greentree, the Greentree Loan Agreement contains a “true up” provision, which requires the Company to issue Greentree additional shares of common stock during the period beginning on the effective date of the registration statement until the 90^th day after the effective date of the registration statement, if the average of the 15 lowest daily closing prices of the Company’s common stock is less than $2.00.

Greentree Note

Pursuant to the Greentree Loan Agreement, the Company agreed to issue and sell to Greentree the Greentree Note, in the principal amount of $1,100,000. The Greentree Note, as amended, is due and payable October 23, 2020, and is convertible at any time at a price of $2.00 per share, subject to certain adjustments to the conversion price set forth in the Greentree Note. The Greentree Note reiterates the registration rights set forth in the Greentree Loan Agreement and the Greentree Warrant. There is no prepayment penalty on the Greentree Note. If the Greentree Note is not prepaid by the 90th day after the effective date of the Registration Statement, the Greentree is required to convert the entire amount of principal and interest outstanding on the Greentree Note at that time, at a price of $2.00 per share, unless an event of default (as such events are described in the Greentree Note) under the Greentree Note has occurred, in which case the Greentree Note would be mandatorily converted at a price equal to 50% of the lowest trading price of the common stock for the last 10 trading days immediately prior to, but not including, the date that the Greentree Note mandatorily converts. The Greentree Note also contains a conversion limitation provision, which prohibits Greentree from converting the Greentree Note in an amount that would result in the beneficial ownership of greater than 4.9% of the total issued and outstanding shares of common stock, provided that (i) such conversion limitation may be waived by Greentree with 61 days prior notice, and (ii) Greentree cannot waive the conversion limitation if conversion of the Greentree Note would result in Greentree having beneficial ownership of greater than 9.9% of the total issued and outstanding shares of common stock.

Greentree Warrant

Pursuant to the Greentree Loan Agreement, the Company also issued Greentree a warrant to purchase 550,000 shares of common stock at an exercise price of $2.00 per share, subject to certain adjustments to the exercise price set forth in the Greentree Warrant. The Greentree Warrant, as amended, expires on January 23, 2023. If the closing price per share of the common stock reported on the day immediately preceding an exercise of the Greentree Warrant is greater than $2.00 per share, the Greentree Warrant may be exercised cashlessly, based on a cashless exercise formula. The Greentree Warrant reiterates the registration rights set forth in the Greentree Loan Agreement and the Greentree Note. The Greentree Warrant also contains a repurchase provision, which at any time after the Company’s registration statement is effective and the Company’s common stock has traded at a price over $3.00 share for 20 consecutive days, gives the Company a 30-day option to repurchase any unexercised portion of the Greentree Warrant at a price of $1.00 per share.

Corporate Information

Our principal executive offices are located at 1 West Broad Street, Suite 1004, Bethlehem, Pennsylvania 18018. Our telephone number is (484) 893-0060. The address of our website is www.edisonnation.com. The inclusion of our website address in this prospectus does not include or incorporate by reference the information on our website into this prospectus.

Implications of Being an Emerging Growth Company

We are an “emerging growth company” as defined in the Jumpstart Our Business Startups Act of 2012 (the “JOBS Act”). For as long as we are an emerging growth company, unlike public companies that are not emerging growth companies under the JOBS Act, we will not be required to:

	●	provide an auditor’s attestation report on management’s assessment of the effectiveness of our system of internal control over financial reporting pursuant to Section 404(b) of the Sarbanes-Oxley Act of 2002 (the “Sarbanes Oxley Act”);
	●	provide more than two years of audited financial statements and related management’s discussion and analysis of financial condition and results of operations;
	●	comply with any new requirements adopted by the Public Company Accounting Oversight Board (the “PCAOB”) requiring mandatory audit firm rotation or a supplement to the auditor’s report in which the auditor would be required to provide additional information about the audit and the financial statements of the issuer;
	●	provide certain disclosure regarding executive compensation required of larger public companies or hold shareholder advisory votes on the executive compensation required by the Dodd-Frank Wall Street Reform and Consumer Protection Act (the “Dodd-Frank Act”); or
	●	obtain shareholder approval of any golden parachute payments not previously approved.

We will cease to be an emerging growth company upon the earliest of the:

	●	last day of the fiscal year in which we have $1.07 billion or more in annual revenues;
	●	date on which we become a “large accelerated filer” (the fiscal year-end on which the total market value of our common equity securities held by non-affiliates is $700 million or more as of June 30);
	●	date on which we issue more than $1.0 billion of non-convertible debt over a three-year period; or
	●	last day of the fiscal year following the fifth anniversary of our initial public offering.

In addition, Section 107 of the JOBS Act provides that an emerging growth company can take advantage of the extended transition period provided in Section 7(a)(2)(B) of the Securities Act for complying with new or revised accounting standards. However, we have not elected to take advantage of such extended transition period for complying with new or revised accounting standards.

SUMMARY OF THE OFFERING

This offering involves a total of 2,568,305 shares of our common stock, which includes: (i) 160,492 shares of common stock underlying warrants (the “Warrants”) issued to employees of Alexander Capital, L.P. in relation to three separate financing transactions led by Alexander Capital, L.P. on behalf of the Company, and (ii) 550,000 shares of common stock underlying the Greentree Warrant, 550,000 shares of common stock underlying the Greentree Note, and 100,000 shares of common stock issued to Greentree in connection with the Greentree Financing.

Common stock offered by the Selling Shareholders		2,568,305 shares (1)

Selling Shareholders		See “Selling Shareholders for Whose Accounts We Are Registering Shares” beginning on page 33.

Offering prices		The shares offered by this prospectus may be offered and sold at prevailing market prices or such other prices as the Selling Shareholders may determine.

Common stock outstanding before this offering		6,609,020 shares (2)

Common stock outstanding after this offering		8,087,751 shares (2) (3)

Terms of Offering		The Selling Shareholders will determine when and how they sell the shares offered in this prospectus, as described in “Plan of Distribution” beginning on page 32.

Use of proceeds		We are not selling any of the shares of common stock being offered by this prospectus and will receive no proceeds from the sale of the shares by the Selling Shareholders. We will, however, receive the exercise price of the Warrants and the Greentree Warrant, if and when such warrants are exercised for cash by the holders of such warrants. All of the proceeds from the sale of common stock offered by this prospectus will go to the Selling Shareholders at the time they offer and sell such shares. We will bear all costs associated with registering the shares of common stock offered by this prospectus. See “Use of Proceeds.”

Risk factors		See “Risk Factors” and the other information included in this prospectus for a discussion of factors you should carefully consider before deciding to invest in our common stock.

Market and Trading Symbol		Our shares of common stock are traded on The Nasdaq Capital Market under the symbol “EDNT.”

Transfer agent and registrar		Nevada Agency & Transfer Company

(1) Includes the following shares of common stock issuable upon exercise of outstanding warrants and conversion of the Greentree Note:

70,500 shares of common stock issuable upon exercise of outstanding Placement Agent Warrants issued to employees of Alexander Capital, L.P. in connection with the PIPE Financing (defined below), at an exercise price of $2.50 per share;

24,366 shares of common stock issuable upon exercise of outstanding Placement Agent Warrants issued to employees of Alexander Capital, L.P. in connection with the placement of the Company’s Senior Convertible Promissory Notes, at an exercise price of $2.85 per share;

65,626 shares of common stock issuable upon exercise of outstanding Selling Agent Warrants issued to employees of Alexander Capital, L.P. in connection with the Company’s initial public offering, at an exercise price of $6.00 per share.

	·	550,000 shares of common stock issuable upon exercise of the Greentree Warrant; and
	·	550,000 shares of common stock issuable upon conversion of the Greentree Note.

(2) The change in the number of shares of common stock outstanding before this offering and after this offering was a result of the following issuances:

	·	1,175,000 shares of common stock issued in the PIPE Financing;
	·	32,813 shares of common stock issued to Philip Anderson;
	·	100,000 shares of common stock issued in the Greentree Financing;
	·	60,000 shares of common stock issued in connection with the Greentree Financing;
	·	198,923 shares of common stock issued under the Plan to vendors during the time from closing of the PIPE transaction to February 12, 2020;
	·	20,000 shares of common stock issued in connection with the issuance of debt during the time from closing of the PIPE transaction to February 12, 2020;
	·	45,000 shares of common stock issued to the sellers of the Uber Mom, LLC assets.
		In addition, the number of shares outstanding was reduced by 153,005 shares of common stock which was returned upon the repayment of the Labrys Note.

(3) Shares of our common stock that will be outstanding after this offering is based on 8,087,751 shares of common stock outstanding as of February 12, 2020, but excludes:

	·	876,459 shares of common stock reserved for future issuance under the Edison Nation, Inc. Omnibus Incentive Plan (the “Plan”);
	·	80,000 shares of common stock issuable upon the exercise of options outstanding as of February 12, 2020;
	·	285,632 shares of common stock issuable upon conversion of the 4%, 5 year senior convertible notes in connection with the Edison Nation Holdings, LLC acquisition;
	·	990,000 shares of reserved common stock issuable upon exercise of the put option of Edison Nation Holdings, LLC sellers ; and
	·	65,626 shares of common stock issuable upon exercise of the Selling Agent Warrants issued in connection with the company’s initial public offering;
	·	24,366 shares of common stock issuable upon exercise of the Placement Agent Warrants in connection with the May 2019 Notes;
	·	70,500 shares of common stock issuable upon exercise of the Placement Agent Warrants in connection with the PIPE Financing;
	·	550,000 shares of common stock issuable upon conversion of the Greentree Note; and
	·	550,000 shares of common stock issuable upon exercise of the Greentree Warrant.
	·	210,000 shares of common stock granted but not issued to our directors as restricted stock units
	·	50,000 shares of common stock issuable upon the exercise of the 32E Warrant;
	·	250,000 shares of common stock issuable upon exercise of the warrants in connection with other financings.

RISK FACTORS

An investment in our common stock involves a high degree of risk. Investing in shares of our common stock involves risks. Before making a decision to invest in shares of our common stock, you should carefully consider the risks that are described in this section, in our most recent Annual Report on Form 10-K and in the other information that we file from time to time with the SEC that is incorporated by reference in this prospectus. You should also read the sections entitled “Cautionary Note Regarding Forward-Looking Statements” on page 4 of this prospectus. The risks described in the documents incorporated by reference in this prospectus are not the only ones we face. Additional risks not presently known or that we currently deem immaterial could also materially and adversely affect us. You should consult your own financial and legal advisors as to the risks entailed by an investment in shares of our common stock and the suitability of investing in our shares in light of your particular circumstances. If any of the risks contained in or incorporated by reference in this prospectus develop into actual events, our assets, business, cash flows, condition (financial or otherwise), credit quality, financial performance, liquidity, long-term performance goals, prospects, and/or results of operations could be materially and adversely affected, the trading price of our common stock could decline and you may lose all or part of your investment. Some statements in this prospectus, including such statements in the following risk factors, constitute forward-looking statements. See the section entitled “Cautionary Note Regarding Forward-Looking Statements.”

Risks Related to Our Company

We have a limited operating history and may not be able to operate our business successfully or generate sufficient revenue to make or sustain distributions to our shareholders.

We were incorporated on July 18, 2017, and therefore, have a relatively limited operating history. Despite the experience and track record of our management team in the entertainment and packaging industries, historical results are not indicative of, and may be substantially different than, the results we achieve in the future. We cannot assure you that we will be able to operate our business successfully or implement our operating policies and strategies. The results of our operations depend on several factors, including the level and volatility of interest rates, our success in attracting and retaining motivated and qualified personnel, the availability of adequate short and long-term financing, conditions in the financial markets, and general economic conditions. In addition, our future operating results and financial data may vary materially from the historical operating results and financial data as well as the pro forma operating results and financial data because of a number of factors, including costs and expenses associated with being a public company.

The loss of key personnel or the inability of replacements to quickly and successfully perform in their new roles could adversely affect our business.

We depend on the leadership and experience of our relatively small number of key executive management personnel, particularly our Chairman and Chief Executive Officer, Christopher B. Ferguson, our President and Treasurer, Kevin J. Ferguson, and our Chief Financial Officer, Brett Vroman. The loss of the services of any of these key executives or any of our executive management members could have a material adverse effect on our business and prospects, as we may not be able to find suitable individuals to replace such personnel on a timely basis or without incurring increased costs, or at all. Furthermore, if we lose or terminate the services of one or more of our key employees or if one or more of our current or former executives or key employees joins a competitor or otherwise competes with us, it could impair our business and our ability to successfully implement our business plan. Additionally, if we are unable to hire qualified replacements for our executive and other key positions in a timely fashion, our ability to execute our business plan would be harmed. Even if we can quickly hire qualified replacements, we would expect to experience operational disruptions and inefficiencies during any transition. We believe that our future success will depend on our continued ability to attract and retain highly skilled and qualified personnel. There is a high level of competition for experienced, successful personnel in our industry. Our inability to meet our executive staffing requirements in the future could impair our growth and harm our business.

Our financial statements may be materially affected if our estimates prove to be inaccurate as a result of our limited experience in making critical accounting estimates.

Financial statements prepared in accordance with GAAP require the use of estimates, judgments, and assumptions that affect the reported amounts. Actual results may differ materially from these estimates under different assumptions or conditions. These estimates, judgments, and assumptions are inherently uncertain, and, if they prove to be wrong, then we face the risk that charges to income will be required. In addition, because we have limited to no operating history and limited experience in making these estimates, judgments, and assumptions, the risk of future charges to income may be greater than if we had more experience in these areas. Any such charges could significantly harm our business, financial condition, results of operations, and the price of our securities. See “Management’s Discussion and Analysis of Financial Condition and Results of Operations — Critical accounting policies — Use of estimates” for a discussion of the accounting estimates, judgments, and assumptions that we believe are the most critical to an understanding of our business, financial condition, and results of operations.

We may require additional financing to sustain or grow our operations.

Our growth will be dependent on our ability to access additional equity and debt capital. Moreover, part of our business strategy may involve the use of debt financing to increase potential revenues. Our inability in the future to obtain additional equity capital or a corporate credit facility on attractive terms, or at all, could adversely impact our ability to execute our business strategy, which could adversely affect our growth prospects and future shareholder returns.

If we fail to manage our growth, our business and operating results could be harmed.

As we seek to advance our product lines, we will need to expand our development, manufacturing, marketing, and sales capabilities or contract with third parties to provide these capabilities for us. We anticipate that a period of significant expansion will be required to address potential growth and to handle licensing of additional product categories, such as more arts and crafts focused items. This expansion will place a significant strain on our management, operational, and financial resources. To manage the expected growth of our operations and personnel, we must establish appropriate and scalable operational and financial systems, procedures, and controls and establish a qualified finance, administrative, and operations staff. As a public company, we will have to implement internal controls to comply with government-mandated regulations. Our management may be unable to hire, train, retain, motivate, and manage the necessary personnel or to identify, manage, and exploit potential strategic relationships and market opportunities. Our failure to manage growth effectively could have a material and adverse effect on our business, results of operations, and financial condition.

Our growth strategy includes pursuing opportunistic acquisitions of additional brands, and we may not find suitable acquisition candidates or successfully operate or integrate any brands that we may acquire.

As part of our strategy, we intend to opportunistically acquire new brands and product concepts, just as we acquired Cloud B in October 2018. Although we believe that opportunities for other, future acquisitions may be available from time to time, competition for acquisition candidates may exist or increase in the future. Consequently, there may be fewer acquisition opportunities available to us as well as higher acquisition prices. There can be no assurance that we will be able to identify, acquire, manage, or successfully integrate additional companies, brands, or product concepts without substantial costs, delays, or operational or financial problems. In the event we are able to acquire additional companies, brands, or other product concepts, the integration and operation of such acquisitions in addition to the on-going integration and operation of the Company may place significant demands on our management, which could adversely affect our ability to manage our business. We may be required to obtain additional financing to fund future acquisitions. There can be no assurance that we will be able to obtain additional financing on acceptable terms or at all.

We may fail to realize all of the anticipated benefits of the acquisition of Cloud B, such benefits may take longer to realize than expected or we may encounter significant difficulties integrating Cloud B’s business into our operations. If the acquisition does not achieve its intended benefits, our business, financial condition, and results of operations could be materially and adversely affected.

We believe that the acquisition of Cloud B will result in certain benefits, including certain cost synergies and operational efficiencies; however, to realize these anticipated benefits, the business of Cloud B must be successfully combined with our business. The combination of two independent businesses is a complex, costly, and time-consuming process that will require significant management attention and resources. The integration process may disrupt the businesses and, if implemented ineffectively, would limit the expected benefits of this acquisition to us. The failure to meet the challenges involved in integrating the two businesses and to realize the anticipated benefits could cause an interruption of, or a loss of momentum in, our activities and could adversely affect our results of operations.

The overall integration of the businesses may result in material unanticipated problems, expenses, liabilities, competitive responses, loss of customer and other business relationships, and diversion of management’s attention. The difficulties of combining the operations of the companies include, among others:

	●	the diversion of management’s attention to integration matters;
	●	difficulties in achieving anticipated cost savings, synergies, business opportunities, and growth prospects from the combination;
	●	difficulties in the integration of operations and systems; and
	●	conforming standards, controls, procedures, accounting and other policies, business cultures, and compensation structures between the two companies.

Many of these factors are outside of our control and any one of these factors could result in increased costs, decreases in the amount of expected revenues, and additional diversion of management’s time and energy, which could materially adversely impact our business, financial condition, and results of operations. In addition, even if the operations are integrated successfully, the full benefits, including the synergies, cost savings, revenue growth, or other benefits that are expected, may not be achieved within the anticipated time frame, or at all. Further, additional unanticipated costs may be incurred in the integration of our businesses. All of these factors could decrease or delay the expected accretive effect of the acquisition, and negatively impact our business, operating results, and financial condition.

As a result, we cannot provide any assurance that the acquisition of Cloud B will result in the realization of the full benefits that we anticipate.

An inability to develop and introduce products in a timely and cost-effective manner may damage our business.

Our sales and profitability depend on our ability to bring products to market and meet customer demands before they begin to lose interest in a given product. There is no guarantee that we will be able to manufacture, source, and ship new or continuing products in a timely manner and on a cost-effective basis to meet constantly changing consumer demands. This risk is heightened by our customers’ increasingly compressed shipping schedules and the seasonality of our business. Moreover, unforeseen delays or difficulties in the development process, significant increases in the planned cost of development, and manufacturing delays or changes in anticipated consumer demand for our products and new brands may cause the introduction date for products to be later than anticipated. They may also reduce or eliminate the profitability of such products or, in some situations, may cause a product or new brand introduction to be discontinued.

We have debt financing arrangements, which could have a material adverse effect on our financial health and our ability to obtain financing in the future and may impair our ability to react quickly to changes in our business.

Our exposure to debt financing could limit our ability to satisfy our obligations, limit our ability to operate our business, and impair our competitive position. For example, it could:

increase our vulnerability to adverse economic and industry conditions, including interest rate fluctuations, because a portion of our borrowings are at variable rates of interest;

require us to dedicate future cash flows to the repayment of debt, thereby reducing the availability of cash to fund working capital, capital expenditures or other general corporate purposes;

limit our flexibility in planning for, or reacting to, changes in our business and industry; and

limit our ability to obtain additional debt or equity financing due to applicable financial and restrictive covenants contained in our debt agreements.

We may also incur additional indebtedness in the future, which could materially increase the impact of these risks on our financial condition and results of operations.

In times of tough economic conditions, the Company has experienced significant distributor inventory corrections reflecting de-stocking of the supply chain associated with difficult credit markets. Such distributor de-stocking exacerbated sales volume declines pertaining to weak end user demand and the broader economic recession. The Company’s results may be adversely impacted in future periods by such customer inventory adjustments. Further, the inability to continue to penetrate new channels of distribution may have a negative impact on the Company’s future results.

Our ability to repay our debt depends on many factors beyond our control. If we elect to raise equity capital in the future, our current shareholders could be subjected to significant dilution. If we are unable to raise capital in the future, we may seek other avenues to fund the business, including sale/leaseback arrangements or seeking to sell assets of all, or a portion of, our operations.

Payments on our debt will depend on our ability to generate cash or secure additional financing in the future. This ability, to an extent, is subject to general economic, financial, competitive, legislative, regulatory, and other factors beyond our control. If our business does not generate sufficient cash flow from operations and sufficient future financing is not available to us, we may not be able to repay our debt, operate our business or fund our other liquidity needs. If we cannot meet or refinance our obligations when they become due, we may be required to attempt to raise capital, reduce expenditures, or take other actions which we may be unable to successfully complete or, even if successful, could have a material adverse effect on us. If such sources of capital are not available or not available on sufficiently favorable terms, we may seek other avenues to fund the business, including sale/leaseback arrangements or seeking to sell assets of all or a portion of our operations. If we decide to raise capital in the equity markets or take other actions, our shareholders could incur significant dilution or diminished valuations, or if we are unable to raise capital, our ability to effectively operate our business could be impaired. In addition, if we are successful in raising capital in the equity markets to repay our indebtedness or for any other purpose in the future, our shareholders could incur significant dilution.

We have violated the terms of the PIPE Purchase Agreement and registration rights agreement, which such violation could have a material adverse effect on our financial health and our ability to obtain financing in the future.

On October 2, 2019, the Company entered into the PIPE Purchase Agreement, which contains a prohibition on equity sales by the Company, which such prohibition was violated by the Greentree Financing (defined below). The Company also entered into registration rights agreement in connection with the PIPE Financing, which required the Company to file a resale registration statement within a prescribed time period. The Company did not file such a registration statement within the time period required by the registration rights agreement. As of February 12, 2020, neither of the investors in the PIPE Financing nor 32E has taken adverse action as a result of such violations by the Company. If those investors were to take action as a result of the Company’s violations, the Company’s results could be adversely impacted in future periods, and would likely harm the Company’s ability to obtain financing in the future at all.

Our success will depend on the reliability and performance of third-party distributors, manufacturers, and suppliers.

We compete with other companies for the production capacity of third-party suppliers for components. Certain of these competing companies have substantially greater financial and other resources than we have, and we may be at a competitive disadvantage in seeking to procure production capacity. Our inability to contract with third-party manufacturers and suppliers to provide a sufficient supply of our products on acceptable terms and on a timely basis could negatively impact our relationships with existing customers and cause us to lose revenue-generating opportunities with potential customers. We also rely on operators and distributors to market and distribute our products. If our operators or distributors are unsuccessful, we may miss revenue-generating opportunities that might otherwise have been recognized.

We are dependent on a small number of key suppliers and customers. Changes in our relationships with these parties or changes in the economic environments in which they operate could have a material adverse effect on our business, financial condition, results of operations, and cash flows.

Our revenues are concentrated with a small number of customers. We do not have long-term agreements with our customers, and instead develop our products on an item-by-item basis subject to purchase orders from customers. No assurances can be given that our customers will continue to submit purchase orders for new products.

To manufacture our products, we purchase components from independent manufacturers, many of whom are located in Asia. An extended interruption in the supply of these products or suitable substitute inventory would disrupt our operations, which could have a material adverse effect on our business, financial condition, and results of operations.

For a number of our key inventory components, we rely on two China-based suppliers, Pokar Industrial Ltd., and MJR Corporation. These suppliers have discussed the possibility of entering into a joint venture at an undetermined time in the future, whereby they would consolidate their operations and conduct such operations from a single location. As we are currently transitioning the manufacturing of more of our components to these suppliers, our increased dependence on them could have an adverse effect on our business, financial condition, and operations if the consolidation of their operations results in a diminished capacity to timely produce our components. We cannot estimate with any certainty the length of time that would be required to establish alternative supply relationships, or whether the quantity or quality of materials that could be so obtained would be sufficient. Furthermore, we may incur additional costs in sourcing materials from alternative producers. The disruption of our inventory supply, even in the short term, could have a material adverse effect on our business, financial condition, and results of operations.

Changes in customer preferences, the inability to maintain mutually beneficial relationships with large customers, inventory reductions by customers, and the inability to penetrate new channels of distribution could adversely affect the Company’s business.

The Company has certain significant customers. For the period ended September 30, 2019, the Company’s largest customer comprised approximately 22% of net sales. The loss or material reduction of business, the lack of success of sales initiatives, or changes in customer preferences or loyalties for the Company’s products, related to any such significant customer could have a material adverse impact on the Company’s results of operations and cash flows. In addition, the Company’s major customers are volume purchasers, a few of which are much larger than the Company and have strong bargaining power with suppliers. This limits the ability to recover cost increases through higher selling prices. Furthermore, unanticipated inventory adjustments by these customers can have a negative impact on net sales.

If customers are dissatisfied with services and switch to competitive services, or disconnect for other reasons such as preference for digital technology products or other technology enhancements not then offered, the Company’s attrition rates may increase. In periods of increasing attrition rates, recurring revenue and results of operations may be materially adversely affected. The risk is more pronounced in times of economic uncertainty, as customers may reduce amounts spent on the products and services the Company provides.

A significant portion of our business is conducted with customers and suppliers located outside of the United States. Currency, economic, political, and other risks associated with our international operations in China and Japan could adversely affect our operating results.

Our international customers and suppliers are concentrated in China and Japan. Our revenues from international customers, and our inventory costs from international suppliers are exposed to the potentially adverse effects of currency exchange rates, local economic conditions, political instability, and other risks associated with doing business in foreign countries. To the extent that our revenues and purchases from international business partners increase in the future, our exposure to changes in foreign economic conditions and currency fluctuations will increase.

For example, the imposition of trade sanctions or other regulations upon China by the United States or the European Union, or the loss of “normal trade relations” status with China, could significantly increase our cost of products imported into the United States or Europe and harm our business. Additionally, the suspension of manufacturing operations by government inspectors in China could result in delays to us in obtaining product and may have a material adverse effect on our ability to import products from China. Furthermore, Japanese economic policies are subject to rapid change and the government of Japan may adopt policies which have the effect of hindering private economic activity and greater economic decentralization. There is no assurance that the government of Japan will not significantly alter its policies from time to time without notice in a manner which reduces or eliminates any benefits from its present policies of economic reform.

Besides the risks discussed above, our dependence on foreign customers and suppliers also means that we may be affected by changes in the relative value of the U.S. Dollar to foreign currencies, including the Chinese Renminbi and Japanese Yen. Although our receipts from foreign customers and our purchases of foreign products are principally negotiated and paid for in U.S. Dollars, a portion of our business is denominated in other currencies and changes in the applicable currency exchange rates might negatively affect the profitability and business prospects of our customers and vendors. This, in turn, might cause such vendors to demand higher prices, delay shipments, or discontinue selling to us. This also might cause such customers to demand lower prices, delay, or discontinue purchases of our products or demand other changes to the terms of our relationships. These situations could in turn ultimately reduce our revenues or increase our costs, which could have a material adverse effect on our business, financial condition, and results of operations.

Our business is closely tied to theme park patronage, and factors that negatively impact theme parks may also negatively affect our ability to generate revenues.

Theme parks represent a significant portion of our customers. Therefore, factors that may negatively impact the theme park industry may also negatively impact our future revenues. If theme parks experience reduced patronage, revenues may be reduced as sales of our products correspondingly decline, or theme parks may stop selling our products altogether. The levels of theme park patronage, and therefore our revenues, are affected by a number of factors beyond our control, including:

general economic conditions;

levels of disposable income of theme park patrons;

downturn or loss in popularity of the theme park industry in general;

the relative popularity of entertainment alternatives to theme parks;

local conditions in key markets, including seasonal and weather-related factors;

increased transportation costs;

natural disasters, acts of terrorism and anti-terrorism efforts;

changes or proposed changes to tax laws;

legal and regulatory issues affecting the development, operation and licensing of theme parks;

the availability and cost of capital to construct, expand or renovate new and existing theme parks;

the level of new theme park construction and renovation schedules of existing them parks; and

competitive conditions in the theme park industry, including the effect of such conditions on the pricing of our products.

These factors significantly impact the demand for our products.

Our operating results may fluctuate significantly as a result of a variety of factors, many of which are outside of our control, which could cause fluctuations in the price of our securities.

We are subject to the following factors that may negatively affect our operating results:

the announcement or introduction of new products by our competitors;

our ability to upgrade and develop our systems and infrastructure to accommodate growth;

our ability to attract and retain key personnel in a timely and cost-effective manner;

technical difficulties;

the amount and timing of operating costs and capital expenditures relating to the expansion of our business, operations, and infrastructure;

our ability to identify and enter into relationships with appropriate and qualified third-party providers for necessary development and manufacturing services;

regulation by federal, state, or local governments; and

general economic conditions, as well as economic conditions specific to the entertainment, theme park, party items, arts and crafts, and packaging industries.

As a result of our lack of any operating history and the nature of the markets in which we compete, it is difficult for us to forecast our revenues or earnings accurately. As a strategic response to changes in the competitive environment, we may from time to time make certain decisions concerning expenditures, pricing, service, or marketing that could have a material and adverse effect on our business, results of operations, and financial condition. Due to the foregoing factors, our quarterly revenues and operating results are difficult to forecast.

The Company’s results of operations could be negatively impacted by inflationary or deflationary economic conditions, which could affect the ability to obtain raw materials, component parts, freight, energy, labor, and sourced finished goods in a timely and cost-effective manner.

The Company’s products are manufactured using both ferrous and non-ferrous metals including, but not limited to, steel, zinc, copper, brass, aluminum, and nickel. Additionally, the Company uses other commodity-based materials for components and packaging including, but not limited to, plastics, resins, wood, and corrugated products. The Company’s cost base also reflects significant elements for freight, energy, and labor. The Company also sources certain finished goods directly from vendors. If the Company is unable to mitigate any inflationary increases through various customer pricing actions and cost reduction initiatives, its profitability may be adversely affected.

Conversely, in the event there is deflation, the Company may experience pressure from its customers to reduce prices, and there can be no assurance that the Company would be able to reduce its cost base (through negotiations with suppliers or other measures) to offset any such price concessions which could adversely impact results of operations and cash flows.

Further, as a result of inflationary or deflationary economic conditions, the Company believes it is possible that a limited number of suppliers may either cease operations or require additional financial assistance from the Company in order to fulfill their obligations. In a limited number of circumstances, the magnitude of the Company’s purchases of certain items is of such significance that a change in established supply relationships with suppliers or increase in the costs of purchased raw materials, component parts, or finished goods could result in manufacturing interruptions, delays, inefficiencies, or an inability to market products. Changes in value-added tax rebates, currently available to the Company or to its suppliers, could also increase the costs of the Company’s manufactured products, as well as purchased products and components, and could adversely affect the Company’s results.

In addition, many of the Company’s products incorporate battery technology. As other industries begin to adopt similar battery technology for use in their products, the increased demand could place capacity constraints on the Company’s supply chain. In addition, increased demand for battery technology may also increase the costs to the Company for both the battery cells as well as the underlying raw materials. If the Company is unable to mitigate any possible supply constraints or related increased costs, its profitably and financial results could be negatively impacted.

Low demand for new products and the inability to develop and introduce new products at favorable margins could adversely impact the Company’s performance and prospects for future growth.

The Company’s competitive advantage is due in part to its ability to develop and introduce new products in a timely manner at favorable margins. The uncertainties associated with developing and introducing new products, such as market demand and costs of development and production, may impede the successful development and introduction of new products on a consistent basis. Introduction of new technology may result in higher costs to the Company than that of the technology replaced. That increase in costs, which may continue indefinitely or until increased demand and greater availability in the sources of the new technology drive down its cost, could adversely affect the Company’s results of operations. Market acceptance of the new products introduced in recent years and scheduled for introduction in future years may not meet sales expectations due to various factors, such as the failure to accurately predict market demand, end-user preferences, evolving industry standards, or the emergence of new or disruptive technologies. Moreover, the ultimate success and profitability of the new products may depend on the Company’s ability to resolve technical and technological challenges in a timely and cost-effective manner, and to achieve manufacturing efficiencies. The Company’s investments in productive capacity and commitments to fund advertising and product promotions in connection with these new products could erode profits if those expectations are not met.

We are increasingly dependent on information technology, and potential cyberattacks, security problems, or other disruption and expanding social media vehicles present new risks.

We rely on information technology networks and systems, including the internet, to process, transmit, and store electronic information, and to manage or support a variety of business processes, including financial transactions and records, billing, and operating data. We may purchase some of our information technology from vendors, on whom our systems will depend, and we rely on commercially available systems, software, tools, and monitoring to provide security for processing, transmission, and storage of confidential operator and other customer information. We depend upon the secure transmission of this information over public networks. Our networks and storage applications could be subject to unauthorized access by hackers or others through cyberattacks, which are rapidly evolving and becoming increasingly sophisticated, or by other means, or may be breached due to operator error, malfeasance or other system disruptions. In some cases, it will be difficult to anticipate or immediately detect such incidents and the damage they cause. Any significant breakdown, invasion, destruction, interruption, or leakage of information from our systems could harm our reputation and business.

In addition, the use of social media could cause us to suffer brand damage or information leakage. Negative posts or comments about us on any social networking website could damage our or our brands’ reputations. Employees or others might disclose non-public sensitive information relating to our business through external media channels, including through the use of social media. The continuing evolution of social media will present us with new challenges and risks.

Changes in laws or regulations governing our operations, changes in the interpretation thereof or newly enacted laws or regulations and any failure by us to comply with these laws or regulations, could require changes to certain of our business practices, negatively impact our operations, cash flow, or financial condition, impose additional costs on us, or otherwise adversely affect our business.

We are subject to regulation by laws and regulations at the local, state, and federal levels. These laws and regulations, as well as their interpretation, may change from time to time, and new laws and regulations may be enacted. Accordingly, any change in these laws or regulations, changes in their interpretation, or newly enacted laws or regulations and any failure by us to comply with these laws or regulations, could require changes to certain of our business practices, negatively impact our operations, cash flow or financial condition, impose additional costs on us, or otherwise adversely affect our business.

Article XIII of our Amended and Restated Articles of Incorporation designates the courts of the State of Nevada as the sole and exclusive forum for certain types of actions and proceedings that may be initiated by our shareholders, and therefore may limit our shareholders’ ability to choose a forum for disputes with us or our directors, officers, employees, or agents.

Article XIII of our Amended and Restated Articles of Incorporation provide that, to the fullest extent permitted by law, and unless we consent to the selection of an alternative forum, the courts of the State of Nevada shall be the sole and exclusive forum for (a) any derivative action or proceeding brought on behalf of the Company, (b) any action or proceeding asserting a claim of breach of a fiduciary duty owed by any director or officer of the Company to the Company or the Company’s shareholders, (c) any action or proceeding asserting a claim against the Company arising pursuant to any provision of the Nevada Revised Statutes or the Company’s amended and restated articles of incorporation or Second Amended and Restated Bylaws (as either might be amended from time to time), or (d) any action or proceeding asserting a claim against the Company governed by the internal affairs doctrine.

We believe the choice-of-forum provision in our Amended and Restated Articles of Incorporation provide will help provide for the orderly, efficient, and cost-effective resolution of Nevada-law issues affecting us by designating courts located in the State of Nevada (our state of incorporation) as the exclusive forum for cases involving such issues. However, this provision may limit a shareholder’s ability to bring a claim in a judicial forum that it believes to be favorable for disputes with us or our directors, officers, employees, or agents, which may discourage such actions against us and our directors, officers, employees, and agents. While there is no Nevada case law addressing the enforceability of this type of provision, Nevada courts have on prior occasion found persuasive authority in Delaware case law in the absence of Nevada statutory or case law specifically addressing an issue of corporate law. The Court of Chancery of the State of Delaware ruled in June 2013 that choice-of-forum provisions of a type similar to those included in our Amended and Restated Articles of Incorporation provide are not facially invalid under corporate law and constitute valid and enforceable contractual forum selection clauses. However, if a court were to find the choice-of-forum provision in our Amended and Restated Articles of Incorporation provide inapplicable to, or unenforceable in respect of, one or more of the specified types of actions or proceedings, we may incur additional costs associated with resolving such matters in other jurisdictions, which could adversely affect our business, financial condition, or results of operations.

We could face substantial competition, which could reduce our market share and negatively impact our net revenue.

There are a number of companies that manufacture and distribute products similar to ours. Many of our anticipated competitors are significantly larger than we are and have considerably greater financial, technical, marketing, and other resources than we do. Some competitors may have a lower cost of funds and access to funding sources that are not available to us. We cannot assure you that the competitive pressures we face will not have a material adverse effect on our business, financial condition, and results of operations.

If we fail to protect our intellectual property rights, competitors may be able to use our technology, which could weaken our competitive position, reduce our net revenue, and increase our costs.

Our long-term success will depend to some degree on our ability to protect the proprietary technology that we have developed or may develop or acquire in the future. Patent applications can take many years to issue, and we can provide no assurance that any such patents would be issued. If we are denied any or all of these patents, we may not be able to successfully prevent our competitors from imitating our products or using some or all of the processes that are the subject of such patent applications. Such imitation may lead to increased competition within the finite market for products such as ours. Even if our pending patents were to be issued, our intellectual property rights may not be sufficiently comprehensive to prevent our competitors from developing similar competitive products. Although we may aggressively pursue anyone whom we reasonably believe is infringing upon our intellectual property rights, initiating and maintaining suits against third parties that may infringe upon our intellectual property rights will require substantial financial resources, especially given our lack of patent registrations and applications. We may not have the financial resources to bring such suits, and if we do bring such suits, we may not prevail. Regardless of our success in any such actions, we could incur significant expenses in connection with such suits.

Third-party claims of infringement against us could adversely affect our ability to market our products and require us to redesign our products or seek licenses from third parties.

Especially given that we produce products for licensed properties, we are susceptible to intellectual property lawsuits that could cause us to incur substantial costs, pay substantial damages, or prohibit us from distributing our products. Whether a product infringes a patent involves complex legal and factual issues, the determination of which is often uncertain. In addition, because patent applications can take many years to issue, there may be applications now pending of which we are unaware, which later may result in issued patents that our products may infringe. If any of our products infringe a valid patent, we could be prevented from distributing that product unless and until we can obtain a license or redesign it to avoid infringement. A license may not be available or may require us to pay substantial royalties. We also may not be successful in any attempt to redesign the product to avoid any infringement. Infringement and other intellectual property claims, with or without merit, can be expensive and time-consuming to litigate, and we may not have the financial and human resources to defend ourselves against any infringement suits that may be brought against us.

Our brands are important assets of our businesses and violation of our trademark rights by imitators, or the failure of our licensees or vendors to comply with our product quality, manufacturing requirements, marketing standards, and other requirements could negatively impact revenues and brand reputation.

Our trademarks have a reputation for quality and value and are important to our success and competitive position. Unauthorized use of our trademark rights may not only erode sales of our products, but may also cause significant damage to our brand name and reputation, interfere with our ability to effectively represent ourselves to our customers, contractors, suppliers, and/or licensees, and increase litigation costs. Similarly, failure by licensees or vendors to adhere to our standards of quality and other contractual requirements could result in loss of revenue, increased litigation, and/or damage to our reputation and business. There can be no assurance that our ongoing efforts to protect our brand and trademark rights and ensure compliance with our licensing and vendor agreements will prevent all violations.

Defects in our products could reduce our revenue, increase our costs, burden our engineering, and marketing resources, involve us in litigation and adversely affect us.

Our success will depend on our ability to avoid, detect, and correct defects in our products. We may not be able to maintain products that are free from defects. Although we have taken steps to prevent defects, our products could suffer such defects. The occurrence of such defects or malfunctions could result in physical harm to the patrons of our customers and the subsequent termination of agreements, cancellation of orders, product returns, and diversion of our resources. Even if our customers do not suffer financial losses, customers may replace our products if they do not perform according to expectations. Any of these occurrences could also result in the loss of or delay in market acceptance of our products and/or loss of sales. In addition, the occurrence of defects in our products may give rise to claims for lost revenues and related litigation by our customers and may subject us to investigation or other disciplinary action by regulatory authorities that could include suspension or revocation of our ability to do business in certain jurisdictions.

Low demand for new products and the inability to develop and introduce new products at favorable margins could adversely impact our performance and prospects for future growth.

Our competitive advantage is due in part to our ability to develop and introduce new products in a timely manner at favorable margins. The uncertainties associated with developing and introducing new products, such as market demand and costs of development and production, may impede the successful development and introduction of new products on a consistent basis. Introduction of new technology may result in higher costs to us than that of the technology replaced. That increase in costs, which may continue indefinitely or until increased demand and greater availability in the sources of the new technology drive down its cost, could adversely affect our results of operations. Market acceptance of the new products introduced in recent years and scheduled for introduction in future years may not meet sales expectations due to various factors, such as the failure to accurately predict market demand, end-user preferences, evolving industry standards, or the emergence of new or disruptive technologies. Moreover, the ultimate success and profitability of the new products may depend on our ability to resolve technical and technological challenges in a timely and cost-effective manner, and to achieve manufacturing efficiencies. Our investments in productive capacity and commitments to fund advertising and product promotions in connection with these new products could erode profits if those expectations are not met.

Our products could be recalled.

The Consumer Product Safety Commission or other applicable regulatory bodies may require the recall, repair or replacement of our products if those products are found not to be in compliance with applicable standards or regulations. A recall could increase costs and adversely impact our reputation.

Risks Associated with an Investment in our Common Stock

Our executive officers, directors, and principal shareholders maintain the ability to control substantially all matters submitted to shareholders for approval.

As of February 12, 2020, our executive officers, directors, and shareholders who owned more than 5% of our outstanding common stock, in the aggregate, beneficially own 4,226,038 shares of common stock representing approximately 52.3% of our outstanding capital stock. As a result, if these shareholders were to choose to act together, they would be able to control substantially all matters submitted to our shareholders for approval, as well as our management and affairs. For example, these persons, if they choose to act together, would control the election of directors and approval of any merger, consolidation or sale of all or substantially all of our assets. This concentration of voting power could delay or prevent an acquisition of us on terms that other shareholders may desire.

The market price of our shares may fluctuate significantly.

The capital and credit markets have recently experienced a period of extreme volatility and disruption. The market price and liquidity of the market for shares may be significantly affected by numerous factors, some of which are beyond our control and may not be directly related to our operating performance. Some of the factors that could negatively affect the market price of our shares include:

our actual or projected operating results, financial condition, cash flows, and liquidity, or changes in business strategy or prospects;

equity issuances by us, or share resales by our shareholders, or the perception that such issuances or resales may occur;

loss of a major funding source;

actual or anticipated accounting problems;

publication of research reports about us, or the industries in which we operate;

changes in market valuations of similar companies;

adverse market reaction to any indebtedness we incur in the future;

speculation in the press or investment community;

price and volume fluctuations in the overall stock market from time to time;

general market and economic conditions, trends including inflationary concerns, and the current state of the credit and capital markets;

significant volatility in the market price and trading volume of securities of companies in our sector, which are not necessarily related to the operating performance of these companies;

changes in law, regulatory policies or tax guidelines, or interpretations thereof;

any shortfall in revenue or net income or any increase in losses from levels expected by investors or securities analysts;

operating performance of companies comparable to us;

short-selling pressure with respect to shares of our shares generally;

uncertainty surrounding the strength of the United States economic recovery; and

concerns regarding the United Kingdom’s exit from the European Union.

As noted above, market factors unrelated to our performance could also negatively impact the market price of our shares. One of the factors that investors may consider in deciding whether to buy or sell our shares is our distribution rate as a percentage of our share price relative to market interest rates. If market interest rates increase, prospective investors may demand a higher distribution rate or seek alternative investments paying higher dividends or interest. As a result, interest rate fluctuations and conditions in the capital markets can affect the market value of our shares. For instance, if interest rates rise, it is likely that the market price of our shares will decrease as market rates on interest-bearing securities increase.

Shares eligible for future sale may have adverse effects on our share price.

Sales of substantial amounts of shares or the perception that such sales could occur may adversely affect the prevailing market price for our shares. We may issue additional shares in subsequent public offerings or private placements to make new investments or for other purposes. We are not required to offer any such shares to existing shareholders on a preemptive basis. Therefore, it may not be possible for existing shareholders to participate in such future share issuances, which may dilute the existing shareholders’ interests in us.

If we take advantage of specified reduced disclosure requirements applicable to an “emerging growth company” under the JOBS Act, the information that we provide to shareholders may be different than they might receive from other public companies.

As a company with less than $1.07 billion in revenue during our last fiscal year, we qualify as an “emerging growth company” under the JOBS Act. As an emerging growth company, we may take advantage of specified reduced disclosure and other requirements that are otherwise applicable generally to public companies. These provisions include:

only two years of audited financial statements in addition to any required unaudited interim financial statements with correspondingly reduced “Management’s Discussion and Analysis of Financial Condition and Results of Operations” disclosure;

reduced disclosure about our executive compensation arrangements;

no non-binding advisory votes on executive compensation or golden parachute arrangements; and

exemption from the auditor attestation requirement in the assessment of our internal control over financial reporting.

We may take advantage of these exemptions for up to five years or such earlier time that we are no longer an emerging growth company. We would cease to be an emerging growth company if we have more than $1.07 billion in annual revenues, we have more than $700 million in market value of our stock held by non-affiliates, or we issue more than $1 billion of non-convertible debt over a three-year period. We may choose to take advantage of some but not all of these reduced burdens. We may elect to take advantage of other reduced reporting requirements in future filings. As a result, the information that we provide to our shareholders may be different than you might receive from other public reporting companies in which you hold equity interests.

If we fail to comply with the rules and regulations under the Sarbanes-Oxley Act, our operating results, our ability to operate our business and investors’ views of us may be harmed.

Section 404 of the Sarbanes-Oxley Act requires public companies to conduct an annual review and evaluation of their internal controls and attestations of the effectiveness of internal controls by independent auditors. Ensuring that we have adequate internal financial and accounting controls and procedures in place so that we can produce accurate financial statements on a timely basis is a costly and time-consuming effort that will need to be evaluated frequently. As of December 31, 2018, the Company’s Principal Executive Officer and Principal Financial and Accounting Officer have concluded that, as of the end of such period, the Company’s disclosure controls and procedures were not effective to provide reasonable assurance that information that it is required to disclose in reports that the Company files with the SEC is recorded, processed, summarized, and reported within the time periods specified by the Exchange Act rules and regulations. Our failure to maintain the effectiveness of our internal controls in accordance with the requirements of the Sarbanes-Oxley Act could have a material adverse effect on our business. We could lose investor confidence in the accuracy and completeness of our financial reports, which could have an adverse effect on the price of our common stock. In addition, our efforts to comply with the rules and regulations under the Sarbanes-Oxley or new or changed laws, regulations, and standards may differ from the activities intended by regulatory or governing bodies due to ambiguities related to practice. Regulatory authorities may investigate transactions disclosed in our “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” and if legal proceedings are initiated against us, it may harm our business.

We do not anticipate paying any cash dividends on our capital stock in the foreseeable future.

We currently intend to retain all of our future earnings to finance the growth and development of our business, and therefore, we do not anticipate paying any cash dividends on our capital stock in the foreseeable future. We believe it is likely that our board of directors will continue to conclude, that it is in the best interests of the Company and its shareholders to retain all earnings (if any) for the development of our business. In addition, the terms of any future debt agreements may preclude us from paying dividends. As a result, capital appreciation, if any, of our common stock will be your sole source of gain for the foreseeable future.

The rights of the holders of common stock may be impaired by the potential issuance of preferred stock.

Although we have no present intention to issue any shares of preferred stock or to create any series of preferred stock, we may issue such shares in the future. If we were to issue shares of preferred stock, the rights of the holders of common stock could be impaired by such issuance of preferred stock. Pursuant to the Articles of Merger, filed with the Nevada Secretary of State on September 7, 2019, our board of directors has the right, without shareholder approval, to issue preferred stock with voting, dividend, conversion, liquidation, or other rights which could adversely affect the voting power and equity interest of the holders of common stock, which could be issued with the right to more than one vote per share, and could be utilized as a method of discouraging, delaying, or preventing a change of control. The possible negative impact on takeover attempts as a result of the issuance of such preferred stock could also adversely affect the price of our common stock.

If securities or industry analysts do not publish research or publish inaccurate or unfavorable research about our business, our stock price, and trading volume could decline.

The trading market for our common stock will depend in part on the research and reports that securities or industry analysts publish about us or our business. Securities and industry analysts do not currently, and may never, publish research on us. If no or too few securities or industry analysts commence coverage of us, the trading price for our stock would likely be negatively impacted. In the event securities or industry analysts initiate coverage, if one or more of the analysts who cover us downgrade our stock or publish inaccurate or unfavorable research about our business, our stock price would likely decline. If one or more of these analysts cease coverage of us or fail to publish reports on us regularly, demand for our stock could decrease, which might cause our stock price and trading volume to decline.

Risk Related to this Offering

Future sales of additional shares of our common stock or securities convertible into shares of our common stock may dilute our shareholders’ ownership in us and may adversely affect us or the trading price of our common stock.

We are generally not restricted from issuing additional shares of our common stock up to the authorized number of shares set forth in our charter. We may issue additional shares of our common stock or securities convertible into our common stock in the future pursuant to current or future employee stock incentive plans, employee stock grants, or in connection with future acquisitions or financings. We cannot predict the size of any such future issuances or the effect, if any, that any such future issuances will have on the trading price of our common stock. Any such future issuances of shares of our common stock or securities convertible into common stock may have a dilutive effect on the holders of our common stock and could have a material negative effect on the trading price of our common stock.

Future sales of shares of our common stock could lower the trading price of our common stock, and any additional capital raised by us through the sale of additional equity or convertible debt securities may dilute our shareholders’ ownership in us and may adversely affect us or the trading price of our common stock.

We may issue additional shares of common stock or other securities in primary offerings and the Selling Shareholders may resell shares of our common stock in subsequent secondary offerings. We cannot predict the size of additional issuances or future resales of shares of our common stock or convertible securities, the offering price in any such issuance or resale or the effect, if any, that additional issuances or future resales will have on the trading price of our common stock. Additional issuances and resales of substantial amounts of our common stock or convertible securities, or the perception that such additional issuances or resales could occur, may adversely affect prevailing trading prices for our common stock.

The trading price of our common stock could be volatile.

The trading price of our common stock may be volatile and could be subject to wide fluctuations in price in response to various factors, some of which are beyond our control. In addition, if the market for stocks in our industry, or the stock market in general, experiences a loss of investor confidence, the trading price of our common stock could decline for reasons unrelated to our business and operations. If the foregoing occurs, it could cause our stock price to fall and may expose us to lawsuits that, even if unsuccessful, could be costly to defend and a distraction to management, which could materially adversely affect our assets, business, cash flows, condition (financial or otherwise), credit quality, financial performance, liquidity, long-term performance goals, prospects, and results of operations.

Because the risk factors referred to above, as well as other risks not mentioned above, could cause actual results or outcomes to differ materially from those expressed in any forward-looking statements made by us, you should not place undue reliance on any such forward-looking statements. Further, any forward-looking statement speaks only as of the date on which it is made. We undertake no obligation to update any forward-looking statement to reflect events or circumstances after the date on which such statement is made or reflect the occurrence of unanticipated events. New factors emerge from time to time, and it is not possible for us to predict which ones will arise. In addition, we cannot assess the impact of each factor on our business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking statements.

USE OF PROCEEDS

We are not selling any of the shares of common stock being offered by this prospectus and will receive no proceeds from the sale of the shares by the Selling Shareholders. We will, however, receive the exercise price of the Warrants, if and when such warrants are exercised for cash by the holders of such warrants. All of the proceeds from the sale of common stock offered by this prospectus will go to the Selling Shareholders at the time they offer and sell such shares.

We will pay the expenses of registration of the shares of our common stock covered by this prospectus, including legal and accounting fees.

PRIVATE PLACEMENT OF EQUITY SECURITIES

PIPE Financing

In October 2019, the Company sold a total of 1,175,000 shares of common stock at a purchase price of $2.00 per share (the “PIPE Shares”) to accredited investors in a series of four closings. The aggregate amount sold in the private placement (the “PIPE Financing”) was $2,350,000.

As discussed further below, the Company issued warrants to the placement agent of a value equal to six percent (6%) of the aggregate number of shares of common stock sold to purchasers in the PIPE Financing. The warrants are exercisable at $2.50 per share (125% of the offering price).

Registration Rights Agreement

In connection with the above-referenced private placement, we and the investors in the PIPE Financing entered into a Registration Rights Agreement on October 2, 2019 (the “PIPE Registration Rights Agreement”) providing for the registration for resale of the common stock pursuant to a registration statement to be filed with the Commission, which this registration statement is intended to fulfill. We agreed to use our best efforts to cause this registration statement to be declared effective as soon as possible, but in no event later than 90 days of the closing of the PIPE Financing (or 120 days in the event of a full review of the registration statement by the SEC Commission), and to keep this registration statement continuously effective for a period that extends from the first date on which the SEC Commission issues an order of effectiveness in relation to this registration statement until such date that all registrable securities covered by this registration statement have been sold thereunder or pursuant to Rule 144 or may be sold without volume or manner-of-sale restrictions pursuant to Rule 144 and without the requirement for the Company to be in compliance with the current public information under Rule 144 and, as determined by our counsel pursuant to a written opinion letter to such effect we did not meet the deadline for filing and effectiveness of the PIPE Registration Rights Agreement. If we do not meet our obligations with respect to the effectiveness of this registration statement, we must pay, on a monthly basis, to each investor party to the PIPE Registration Rights Agreement an amount in cash, as partial liquidated damages, equal to 1% of the aggregate amount invested by each of them in the PIPE Financing (increasing to 1.5% following the 2^nd month anniversary), up to a maximum of 8% of the aggregate investment amount for each of them. The PIPE Registration Rights Agreement prohibits us from filing any other registration statements until all the securities registrable under the PIPE Registration Rights Agreement are registered pursuant to a registration statement that is declared effective by the SEC. The 90-day period has elapsed and the Company is subject to the foregoing penalties. As of February 12, 2020, none of the investors in the PIPE Financing have taken adverse action as a result of such violations.

Placement Agent Agreement

Pursuant to an engagement letter dated May 2, 2019, as amended on August 6, 2019, between us and Alexander Capital, L.P. (“Alexander”), for a period of 120 days from the date of the agreement, we engaged Alexander to serve as our exclusive placement agent with respect to private placements of the Company’s equity securities. The engagement entitled Alexander to a cash fee of 9% of the gross proceeds received by us from the sale of our equity securities, a non-accountable expense allowance of 1% of the gross proceeds received by us from the sale of our equity securities, reimbursement of Alexander’s legal expenses in an amount equal to $15,000, as well as reimbursement for Alexander’s reasonable out of pocket expenses. We have paid Alexander from the proceeds of the PIPE Financing. We also issued to Alexander 70,500 Warrants to purchase up to a total of 6% of the shares of common stock sold in the PIPE Financing. The Warrants are exercisable at $2.50 per share (125% of the offering price). The Company notes that the number of Warrants issued in the PIPE Financing was erroneously reported as 126,000 Warrants in the Company’s Current Report on Form 8-K filed with the SEC on October 4, 2019 (and amended on October 8, 2019). The placement agent agreement contains customary representations, warranties and covenants of the parties and indemnification provisions under which we have agreed to indemnify Alexander against certain liabilities.

DIVIDEND POLICY

We have not historically declared dividends on our common stock and we do not currently intend to pay dividends on our common stock. The declaration, amount, and payment of any future dividends on shares of our common stock, if any, will be at the sole discretion of our board of directors, out of funds legally available for dividends. As a Nevada corporation, we are not permitted to pay dividends if, after giving effect to such payment, we would not be able to pay our debts as they become due in the usual course of business or our total assets would be less than the sum of our total liabilities plus any amounts needed to satisfy any preferential rights if we were dissolving.

Our ability to pay dividends to our shareholders in the future will depend upon our liquidity and capital requirements, as well as our earnings and financial condition, the general economic climate, contractual restrictions, our ability to service any equity or debt obligations senior to our common stock, and other factors deemed relevant by our board of directors.

DETERMINATION OF OFFERING PRICE

The prices at which the shares of common stock are covered by this prospectus may actually be sold will be determined by the prevailing public market price for shares of our common stock, by negotiations between the Selling Shareholders and buyers of our common stock in private transactions or as otherwise described in “Plan of Distribution.”

MARKET FOR COMMON EQUITY AND RELATED SHAREHOLDER MATTERS

Market Information

On May 3, 2018, our common stock began trading on The Nasdaq Capital Market under the symbol of “XSPL”, which was subsequently changed to “EDNT” on September 13, 2018.

Holders of Record

The Company had approximately 762 holders of record of our common stock as of February 12, 2020.

Securities Authorized for Issuance under Equity Compensation Plans

Plan Category	Number of securities to be issued upon exercise of outstanding options, warrants and rights		Weighted-average exercise price of outstanding options, warrants and rights		Number of securities remaining available for future issuance under equity compensation plans (excluding securities reflected in column (a))
	(a)		(b)		(c)
Equity compensation plans approved by shareholders ⁽¹⁾⁽²⁾		290,000	$	3.22		876,459
Equity compensation plans not approved by shareholders ⁽¹⁾		-	$	-		-
Total		290,000	$	3.22		876,459

(1)	The information presented in this table is as of February 12, 2020.

(2)

We originally adopted the Edison Nation, Inc. Omnibus Incentive Plan (the “Plan”) in December 2017, which was amended on February 9, 2018, provides for up to 1,764,705 (876,459 remaining as of February 12, 2020) shares of common stock to be issued as stock-based incentives. Stock incentive awards under the Plan can be in the form of stock options, restricted stock units, performance awards, and restricted stock that are made to employees, directors, and service providers. Awards are subject to forfeiture until vesting conditions have been satisfied under the terms of the award. We believe awards to our executive officers help align the interests of management and our shareholders and reward our executive officers for improved Company performance.

PLAN OF DISTRIBUTION

Each Selling Shareholder and any of their pledgees, assignees and successors-in-interest may, from time to time, sell any or all of their securities covered hereby on The Nasdaq Capital Market or any other stock exchange, market or trading facility on which the securities are traded or in private transactions. These sales may be at fixed or negotiated prices. The Company will not receive any of the proceeds from the sale by the Selling Shareholders. A Selling Shareholder may use any one or more of the following methods when selling securities:

ordinary brokerage transactions and transactions in which the broker-dealer solicits purchasers;

block trades in which the broker-dealer will attempt to sell the securities as agent but may position and resell a portion of the block as principal to facilitate the transaction;

purchases by a broker-dealer as principal and resale by the broker-dealer for its account;

an exchange distribution in accordance with the rules of the applicable exchange;

privately negotiated transactions;

settlement of short sales;

in transactions through broker-dealers that agree with the Selling Shareholders to sell a specified number of such securities at a stipulated price per security;

through the writing or settlement of options or other hedging transactions, whether through an options exchange or otherwise;

a combination of any such methods of sale; or

any other method permitted pursuant to applicable law.

The Selling Shareholders may also sell securities under Rule 144 or any other exemption from registration under the Securities Act, if available, rather than under this prospectus.

Broker-dealers engaged by the Selling Shareholders may arrange for other brokers-dealers to participate in sales. Broker-dealers may receive commissions or discounts from the Selling Shareholders (or, if any broker-dealer acts as agent for the purchaser of securities, from the purchaser) in amounts to be negotiated, but, except as set forth in a supplement to this Prospectus, in the case of an agency transaction not in excess of a customary brokerage commission in compliance with FINRA Rule 2440; and in the case of a principal transaction a markup or markdown in compliance with FINRA IM-2440.

In connection with the sale of the securities or interests therein, the Selling Shareholders may enter into hedging transactions with broker-dealers or other financial institutions, which may in turn engage in short sales of the securities in the course of hedging the positions they assume. The Selling Shareholders may also sell securities short and deliver these securities to close out their short positions, or loan or pledge the securities to broker-dealers that in turn may sell these securities. The Selling Shareholders may also enter into option or other transactions with broker-dealers or other financial institutions or create one or more derivative securities which require the delivery to such broker-dealer or other financial institution of securities offered by this prospectus, which securities such broker-dealer or other financial institution may resell pursuant to this prospectus (as supplemented or amended to reflect such transaction).

The Selling Shareholders and any broker-dealers or agents that are involved in selling the securities may be deemed to be “underwriters” within the meaning of the Securities Act in connection with such sales. In such event, any commissions received by such broker-dealers or agents and any profit on the resale of the securities purchased by them may be deemed to be underwriting commissions or discounts under the Securities Act. Each Selling Shareholder has informed the Company that it does not have any written or oral agreement or understanding, directly or indirectly, with any person to distribute the securities.

The Company is required to pay certain fees and expenses incurred by the Company incident to the registration of the securities. The Company has agreed to indemnify the Selling Shareholders against certain losses, claims, damages and liabilities, including liabilities under the Securities Act.

We agreed to keep this prospectus effective until the earlier of (i) the date on which the securities may be freely resold by the Selling Shareholders without registration and without regard to any volume or manner-of-sale limitations by reason of Rule 144, without the requirement for the Company to be in compliance with the current public information under Rule 144 under the Securities Act or any other rule of similar effect, or (ii) all of the securities have been sold pursuant to this prospectus or Rule 144 under the Securities Act or any other rule of similar effect, under circumstances in which any legend borne by such securities relating to restrictions on transferability thereof, under the Securities Act or otherwise, is removed. The resale securities will be sold only through registered or licensed brokers or dealers if required under applicable state securities laws. In addition, in certain states, the resale securities covered hereby may not be sold unless they have been registered or qualified for sale in the applicable state or an exemption from the registration or qualification requirement is available and is complied with.

Under applicable rules and regulations under the Exchange Act, any person engaged in the distribution of the resale securities may not simultaneously engage in market making activities with respect to the securities for the applicable restricted period, as defined in Regulation M, prior to the commencement of the distribution. In addition, the Selling Shareholders will be subject to applicable provisions of the Exchange Act and the rules and regulations thereunder, including Regulation M, which may limit the timing of purchases and sales of the securities by the Selling Shareholders or any other person. We will make copies of this prospectus available to the Selling Shareholders and have informed them of the need to deliver a copy of this prospectus to each purchaser of the securities at or prior to the time of the sale (including by compliance with Rule 172 under the Securities Act).

SELLING SHAREHOLDERS FOR WHOSE ACCOUNTS WE ARE REGISTERING SHARES

The shares to be offered by the Selling Shareholders named in this prospectus are “restricted” securities under applicable federal and state securities laws and are being registered under the Securities Act to give those Selling Shareholders the opportunity to publicly sell these shares, if they elect to do so. The registration of these shares does not require that any of the shares be offered or sold by the Selling Shareholders. We are registering the shares in order to permit the Selling Shareholders to offer the shares for resale from time to time. For additional information regarding these shares, see “Private Placement of Securities” above.

The table below lists the Selling Shareholders and other information regarding the beneficial ownership of shares of common stock by each of the Selling Shareholders. The first column in the table below lists the name of each Selling Shareholder. The second column lists the number of common stock beneficially owned by each Selling Shareholder, based on its ownership of the shares of common stock, as of February 12, 2020.

The third column lists the shares of common stock being offered by this prospectus by the Selling Shareholders.

In accordance with the terms of a registration rights agreement between the Company and the Selling Shareholders, this prospectus generally covers the resale of all shares of common stock held by the Selling Shareholders. The fourth column assumes the sale of all of the shares offered by the Selling Shareholders pursuant to this prospectus.

The Selling Shareholders may sell all, some or none of their shares in this offering. See “Plan of Distribution.”

Name of Selling Shareholder	Number of Shares of Common Stock Owned Prior to Offering		Maximum Number of Shares of Common Stock to be Sold Pursuant to this Prospectus		Number of Shares of Common Stock Owned After Offering		Percentage of Class of Common Stock Owned After Offering (1)
Joseph Amato (2)		11,545		20,358		0		*
Philip Anderson (3)		135,813		32,813		103,000		1.3	%
Christopher Carlin (4)		37,781		67,744		0		*
Columbus Capital Partners, L.P. (5)		0		252,000		0		*
Columbus Capital QP Partners, L.P. (6)		0		105,000		0		*
Jonathan Gazdak (7)		28,216		51,127		0		*
Douglas George		95,000		100,000		195,000		2.4	%
Greentree Financial Group, Inc. (8)		0		1,200,000		60,000		0.7	%
Rocco Guidicipietro (9)		11,545		20,358		0		*
Bari Latterman (10)		905		905		0		*
Patrick Lin		0		25,000		0		*
Tiburon Opportunity Fund LP (11)		300,000		300,000		0		*
Rovida West Coast Investment Limited (12)		0		393,000		0		*

* Represents beneficial ownership of less than one percent (1%).

(1) Based on 8,087,751 shares of common stock outstanding as of February 12, 2020, but excluding 1,764,705 (876,459 remaining as of February 12, 2020) shares of our common stock reserved for future issuance under our equity compensation plans; 80,000 shares of our common stock issuable upon the exercise of options outstanding as of February 12, 2020; 285,632 shares of common stock issuable upon conversion of the 4%, 5 year senior convertible notes in connection with the EN acquisition; 990,000 shares of reserved common stock issuable upon exercise of the put option of EN sellers; 160,492 shares of our common stock issuable upon the exercise of the Warrants, which are all outstanding as of February 12, 2020; 550,000 shares of common stock issuable upon conversion of the Greentree Note; 550,000 shares of our common stock issuable upon exercise of the Greentree Warrant, which are all outstanding as of February 12, 2020; 210,000 shares of common stock granted but not issued to our directors as restricted stock units; 50,000 shares of common stock issuable upon the exercise of the 32E Warrant; and 250,000 shares of common stock issuable upon exercise of the warrants in connection with other financings.

(2) The “Number of Shares of Common Stock Owned Prior to Offering” includes 8,500 shares of common stock underlying a warrant issued on April 29, 2018, with an exercise price of $6.00 per share, and 3,045 shares of common stock underlying a warrant issued on May 13, 2019, with an exercise price of $2.85 per share. The "Maximum Number of Shares of Common Stock to be Sold Pursuant to this Prospectus" includes 8,812 shares of common stock underlying a warrant issued on November 25, 2019, with an exercise price of $2.50 per share.

(3) Mr. Anderson served as the Chief Financial Officer of the Company until June 7, 2019 and as Chief Strategy Officer of the Company until December 2, 2019. Mr. Anderson previously held 210,000 options pursuant to his original employment agreement with the Company, which were surrendered to the Company on January 7, 2020 in exchange for the issuance of 100,000 shares of our restricted common stock, pursuant to Mr. Anderson’s Separation and Release Agreement, dated June 7, 2019, which was further amended by that certain Amendment and Release Agreement between the Company and Mr. Anderson, dated December 2, 2019. Pursuant to the Amendment and Release Agreement, Mr. Anderson was issued an additional 32,813 shares of our common stock, which such shares the Company is allowing Mr. Anderson to sell pursuant to this prospectus.

(4) The “Number of Shares of Common Stock Owned Prior to Offering” includes 27,676 shares of common stock underlying a warrant issued on April 29, 2018, with an exercise price of $6.00 per share, and 10,105 shares of common stock underlying a warrant issued on May 13, 2019, with an exercise price of $2.85 per share. The "Maximum Number of Shares of Common Stock to be Sold Pursuant to this Prospectus" includes 29,963 shares of common stock underlying a warrant issued on November 25, 2019, with an exercise price of $2.50 per share.

(5) Columbus Capital Management, LLC is the general partner of Columbus Capital Partners, L.P. and the investment adviser of Columbus Capital QP Partners, L.P. Matthew D. Ockner is the sole manager of Columbus Capital Management, LLC. Columbus Capital Management, LLC and Mr. Ockner disclaim beneficial ownership of the reported securities in reliance on Rule 16a-1(a)(1)(v) and (vii), and disclaim any obligation to file reports under Section 16 other than as directors by deputization. Columbus Capital Management, LLC and Mr. Ockner have no pecuniary interest in the reported securities held in Columbus Capital Partners, L.P.’s account and disclaim: (a) beneficial ownership thereof for purposes of Rule 16a-1(a)(2), and (b) beneficial ownership of securities held by of Columbus Capital Partners, L.P., for purposes of Rule 16a-1(a)(2), except to the extent of their pecuniary interest therein.

(6) Columbus Capital Management, LLC is the general partner of Columbus Capital QP Partners, L.P. and the investment adviser of Columbus Capital QP Partners, L.P. Matthew D. Ockner is the sole manager of Columbus Capital Management, LLC. Columbus Capital Management, LLC and Mr. Ockner disclaim beneficial ownership of the reported securities in reliance on Rule 16a-1(a)(1)(v) and (vii), and disclaim any obligation to file reports under Section 16 other than as directors by deputization. Columbus Capital Management, LLC and Mr. Ockner have no pecuniary interest in the reported securities held in Columbus Capital QP Partners, L.P.’s account and disclaim: (a) beneficial ownership thereof for purposes of Rule 16a-1(a)(2), and (b) beneficial ownership of securities held by of Columbus Capital QP Partners, L.P., for purposes of Rule 16a-1(a)(2), except to the extent of their pecuniary interest therein.

(7) The “Number of Shares of Common Stock Owned Prior to Offering” includes 20,548 shares of common stock underlying a warrant issued on April 29, 2018, with an exercise price of $6.00 per share, and 7,668 shares of common stock underlying a warrant issued on May 13, 2019, with an exercise price of $2.85 per share. The "Maximum Number of Shares of Common Stock to be Sold Pursuant to this Prospectus" includes 22,913 shares of common stock underlying a warrant issued on November 25, 2019, with an exercise price of $2.50 per share.

(8) The Maximum Number of Shares of Common Stock to be sold pursuant to this Prospectus includes 550,000 shares issuable upon conversion of the Greentree Note, and 550,000 shares issuable upon exercise of the Greentree Warrant, and 100,000 shares issued in connection with the Greentree Financing. The foregoing does not include the 60,000 shares issued to Greentree for advisory services.

(9) The Maximum Number of Shares of Common Stock to be sold pursuant to this Prospectus includes 8,500 shares of common stock underlying a warrant issued on April 29, 2018, with an exercise price of $6.00 per share, and 3,045 shares of common stock underlying a warrant issued on May 13, 2019, with an exercise price of $2.85 per share. The "Maximum Number of Shares of Common Stock to be Sold Pursuant to this Prospectus" includes 8,812 shares of common stock underlying a warrant issued on November 25, 2019, with an exercise price of $2.50 per share.

(10) The “Number of Shares of Common Stock Owned Prior to Offering” includes 402 shares of common stock underlying a warrant issued on April 29, 2018, with an exercise price of $6.00 per share, and 503 shares of common stock underlying a warrant issued on May 13, 2019, with an exercise price of $2.85 per share.

(11) Bortel Investment Management, LLC is the general partner of Tiburon Opportunity Fund LP and the investment adviser of Tiburon Opportunity Fund LP. Peter Bortel is the sole manager of Bortel Investment Management, LLC. Bortel Investment Management, LLC and Mr. Bortel disclaim beneficial ownership of the reported securities in reliance on Rule 16a-1(a)(1)(v) and (vii), and disclaim any obligation to file reports under Section 16 other than as directors by deputization. Bortel Investment Management, LLC and Mr. Bortel have no pecuniary interest in the reported securities held in Tiburon Opportunity Fund LP’s account and disclaim: (a) beneficial ownership thereof for purposes of Rule 16a-1(a)(2), and (b) beneficial ownership securities held by of Tiburon Opportunity Fund LP, for purposes of Rule 16a-1(a)(2), except to the extent of their pecuniary interest therein.

(12) Columbus Capital Management, LLC is the investment manager of Rovida West Coast Investment Limited and the investment adviser of Columbus Capital Management, LLC. Matthew D. Ockner is the sole manager of Columbus Capital Management, LLC. Columbus Capital Management, LLC and Mr. Ockner disclaim beneficial ownership of the reported securities in reliance on Rule 16a-1(a)(1)(v) and (vii), and disclaim any obligation to file reports under Section 16 other than as directors by deputization. Columbus Capital Management, LLC and Mr. Ockner have no pecuniary interest in the reported securities held in Rovida West Coast Investment Limited’s account and disclaim: (a) beneficial ownership thereof for purposes of Rule 16a-1(a)(2), and (b) beneficial ownership of securities held by of Rovida West Coast Investment Limited, for purposes of Rule 16a-1(a)(2), except to the extent of their pecuniary interest therein.

Relationship with Selling Shareholders

Except as disclosed in the table above, to our knowledge, none of the Selling Shareholders had any position, office, or other material relationship with us or any of our affiliates within the past three years.

MANAGEMENT’S DISCUSSION AND ANALYSIS OF

FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following discussion and analysis of our financial condition and results of operations for the years ended December 31, 2018 and 2017 should be read in conjunction with the information included under “Business,” “Selected Consolidated Financial Data” and our consolidated financial statements and the accompanying notes included elsewhere in this registration statement. The discussion and analysis below are based on comparisons between our historical financial data for different periods and include certain forward-looking statements about our business, operations and financial performance. These forward-looking statements are subject to risks, uncertainties, assumptions and other factors described in “Risk Factors.” Our actual results may differ materially from those expressed in, or implied by, those forward-looking statements. See “Special Note Regarding Forward-Looking Statements.”

Overview

Critical Accounting Policies and Significant Judgments and Estimates

Our management’s discussion and analysis of our financial condition and results of operations are based on our consolidated financial statements, which have been prepared in accordance with accounting principles generally accepted in the United States of America, or GAAP. The preparation of these consolidated financial statements requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities as of the date of the consolidated financial statements as well as the reported expenses during the reporting periods. The accounting estimates that require our most significant, difficult and subjective judgments have an impact on revenue recognition, the determination of share-based compensation and financial instruments. We evaluate our estimates and judgments on an ongoing basis. Actual results may differ materially from these estimates under different assumptions or conditions.

Our significant accounting policies are more fully described in Note 2 to our consolidated financial statements included elsewhere in this prospectus

Components of our Results of Operations

Revenues

We sell consumer products across a variety of categories, including toys, plush, homewares and electronics, to retailers, distributors and manufacturers. We also sell consumer products directly to consumers through e-commerce channels.

Cost of Revenues

Our cost of revenues includes inventory costs, materials and supplies costs, internal labor costs and related benefits, subcontractor costs, depreciation, overhead and shipping and handling costs.

Selling, General and Administrative Expenses

Selling, general and administrative expenses consist of selling, marketing, advertising, payroll, administrative, finance and professional expenses.

Rental Income

We earn rental income from a month-to-month lease on a portion of the building located in Washington, New Jersey that we own.

Interest Expense, Net

Interest expense includes the cost of our borrowings under our debt arrangements.

Nine Months Ended September 30, 2019 versus Nine Months Ended September 30, 2018

The following table sets forth information comparing the components of net loss for the nine months ended September 30, 2019 and 2018:

	Nine Months Ended September 30,						Period over Period Change
	2019			2018			$			%
Revenues, net	$	15,239,434		$	12,758,715		$	2,480,719			19.4	%
Cost of revenues		10,413,868			9,090,215			1,323,653			14.6	%
Gross profit		4,825,566			3,668,500			1,157,066			31.5	%

Operating expenses:
Selling, general and administrative		9,738,107			6,276,830			3,461,277			55.1	%
Operating loss		(4,912,541	)		(2,608,330	)		(2,304,211	)		88.3	%

Other (expense) income:
Rental income		77,111			77,111			-			na	%
Change in fair value of put option contract		-			(732,600	)		732,600			-100.0	%
Interest expense		(875,036	)		(407,267	)		(467,769	)		114.9	%
Total other expense		(797,925	)		(1,062,756	)		264,831			-24.9	%
Loss before income taxes		(5,710,466	)		(3,671,086	)		(2,039,380	)		55.6	%
Income tax expense		74,200			312,186			(237,986	)		-76.2	%
Net loss		(5,784,666	)		(3,983,272	)		(1,801,394	)		45.2	%
Net income attributable to noncontrolling interests		(31,858	)		-			(31,858	)		na
Net loss attributable to Edison Nation, Inc.	$	(5,752,808	)	$	(3,983,272	)	$	(1,769,536	)		44.4	%

Revenue

For the nine months ended September 30, 2019, revenues increased by $2,480,719 or 19.4%, as compared to the nine months ended September 30, 2018. The increase was primarily attributable to new business in connection with our acquisitions in 2018. The increase includes licensing related revenues related to our acquisition of EN and product revenues related to our acquisition of Cloud B.

Cost of Revenues

For the nine months ended September 30, 2019, cost of revenues increased by $1,323,653 or 14.6%, as compared to the nine months ended September 30, 2018. The increase was primarily attributable to the increase in total consolidated revenues.

Gross Profit

For the nine months ended September 30, 2019, gross profit increased by $1,157,066, or 31.5%, as compared to the nine months ended September 30, 2018. The increase was primarily a result of the increase in revenues. For the nine months ended September 30, 2019, gross profit percentage increased to 31.7%, as compared to 28.8% for the nine months ended September 30, 2018. The increase in gross margin was due mostly to favorable product mix of goods sold to customers related to our Cloud B acquisition.

Operating Expenses

Selling, general and administrative expenses were $9,738,107 and $6,276,830 for the nine months ended September 30, 2019 and 2018, respectively, representing an increase of $3,461,277, or 55.1%. The increase was primarily the result of operating expense incurred related to Edison Nation Holdings, LLC and Cloud B, Inc. The largest increases included wages and benefits of approximately $1,528,000, depreciation and amortization of approximately $839,000, professional fees of approximately $1,617,000, travel of approximately $186,000, rent of approximately $195,000 offset by a decrease of stock-based compensation of approximately $2,515,000.

Rental Income

Rental income was $77,111 for both the nine months ended September 30, 2019 and 2018.

Interest expense

Interest expense was $875,036, an increase of 114.9%, for the nine months ended September 30, 2019 versus $407,267 in the previous nine months ended September 30, 2018. The increase in interest expense was related to increased borrowings of debt during 2019.

Income tax expense

Income tax expense was $74,200 for the nine months ended September 30, 2019, a decrease of $237,986 or 76.2%, compared to $312,186 for the nine months ended September 30, 2018. The decrease was primarily due to the decrease in income from our foreign operations related to management fees as well as net operating losses for our domestic operations.

Non-GAAP Measures

In addition to the required GAAP presentations, we use certain non-GAAP performance measures as we believe these measures improve the understanding of our operational results. We continually evaluate the usefulness, relevance, limitations, and calculation of our reported non-GAAP performance measures to determine how best to provide relevant information to the public and thus such reported measures could change.

EBITDA and Adjusted EBITDA

The Company defines EBITDA as net loss before interest, taxes and depreciation and amortization. The Company defines Adjusted EBITDA as EBITDA, further adjusted to eliminate the impact of certain non-recurring items and other items that we do not consider in our evaluation of our ongoing operating performance from period to period. These items will include stock-based compensation, restructuring and severance costs, transaction costs, acquisition costs, certain other non-recurring charges and gains that the Company does not believe reflects the underlying business performance.

For the nine months ended September 30, 2019 and 2018, EBITDA and Adjusted EBITDA consisted of the following:

	Nine Months Ended September 30,
	2019			2018
Net loss	$	(5,784,666	)	$	(3,983,272	)

Interest expense, net		875,036			407,267
Income tax expense		74,200			312,186
Depreciation and amortization		952,019			120,003
EBITDA		(3,883,411	)		(3,143,816	)
Stock-based compensation		876,585			2,666,576
Change in fair value of put option contract					732,600
Restructuring and severance costs		324,164			27,000
Transaction and acquisition costs		447,908			239,682
Other non-recurring costs		724,137			42,686
Adjusted EBITDA	$	(1,510,617	)	$	564,728

EBITDA and Adjusted EBITDA is a financial measure that is not calculated in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”). Management believes that because Adjusted EBITDA excludes (a) certain non-cash expenses (such as depreciation, amortization and stock-based compensation) and (b) expenses that are not reflective of the Company’s core operating results over time (such as restructuring costs, litigation or dispute settlement charges or gains, and transaction-related costs), this measure provides investors with additional useful information to measure the Company’s financial performance, particularly with respect to changes in performance from period to period. The Company’s management uses EBITDA and Adjusted EBITDA (a) as a measure of operating performance, (b) for planning and forecasting in future periods, and (c) in communications with the Company’s board of directors concerning the Company’s financial performance. The Company’s presentation of EBITDA and Adjusted EBITDA are not necessarily comparable to other similarly titled captions of other companies due to different methods of calculation and should not be used by investors as a substitute or alternative to net income or any measure of financial performance calculated and presented in accordance with U.S. GAAP. Instead, management believes EBITDA and Adjusted EBITDA should be used to supplement the Company’s financial measures derived in accordance with U.S. GAAP to provide a more complete understanding of the trends affecting the business.

Although Adjusted EBITDA is frequently used by investors and securities analysts in their evaluations of companies, Adjusted EBITDA has limitations as an analytical tool, and investors should not consider it in isolation or as a substitute for, or more meaningful than, amounts determined in accordance with U.S. GAAP. Some of the limitations to using non-GAAP measures as an analytical tool are (a) they do not reflect the Company’s interest income and expense, or the requirements necessary to service interest or principal payments on the Company’s debt, (b) they do not reflect future requirements for capital expenditures or contractual commitments, and (c) although depreciation and amortization charges are non-cash charges, the assets being depreciated and amortized will often have to be replaced in the future, and non-GAAP measures do not reflect any cash requirements for such replacements.

Liquidity and Capital Resources

For the nine months ended September 30, 2019, our operations lost $4,912,541. At September 30, 2019, we had total current assets of approximately $5,200,000 and current liabilities of approximately $12,000,000 resulting in negative working capital of approximately $6,800,000. At September 30, 2019, we had total assets of approximately $28,600,000 and total liabilities of approximately $17,600,000 resulting in shareholders’ equity of approximately $11,000,000.

The foregoing factors raised initial concerns about the Company’s ability to continue as a going concern. The ability to continue as a going concern is dependent upon the Company’s ability to attract significant new sources of capital, attain a reasonable threshold of operating efficiencies and achieve profitable operations from the sale of its products. The consolidated financial statements do not include any adjustments that might be necessary if the Company is unable to continue as a going concern. The following is additional information on our operating losses and working capital:

The Company’s operating loss included $486,546 and $1,828,604 related to depreciation, amortization and stock-based compensation. In addition, approximately $100,000 and $1,200,000, respectively, was related to transaction costs, restructuring charges and other non-recurring and redundant costs which are being removed or reduced. The negative working capital includes approximately $3,800,000 related to unsecured trade payables in our Cloud B acquisition. In addition, our outstanding balances under notes payable includes $0.9 million related to Cloud B. CB1 owns the senior secured position on the promissory note to Cloud B, Inc. in the amount of $2,270,000. In February 2019, CB1 pursuant to an Article 9 foreclosure action, perfected its secured UCC interest in all the assets of Cloud B, Inc. to partially satisfy the outstanding balance on the note and thereby making any payments of such Cloud B trade payables and notes unlikely in the future. In addition, SRM was an unsecured creditor in the amount of approximately $1,700,000 which is not included in the $3,800,000 but at this time remains unpaid. The total liabilities of approximately $6,400,000, of which $1,700,000, or net of $4,700,000, has been eliminated in consolidation, are not expected to be satisfied due to the foreclosure.

On October 2, 2019, the Company entered into a Share Purchase Agreement (the “Purchase Agreement”) with certain accredited investors (collectively, the “Investors”) for the private placement of 1,175,000 shares of the Company’s common stock, $0.001 par value per share, at a purchase price of $2.00 per share (the “PIPE Transaction”). In a series of four closings conducted in October 2019, the Company received net proceeds of $2,039,303 which consisted of $2,350,000 of gross proceeds offset by $310,697 of fees to placement agent and their lawyers. Alexander Capital, LP (“Alexander”), a FINRA registered broker dealer, acted as placement agent with respect to the PIPE Transaction. In connection with the PIPE Transaction, Alexander received a commission of $141,000, a debt restructuring fee of $64,208, a debt conversion fee of 15,889, a placement fee of $33,600 and Warrants to purchase 70,500 shares of the Company’s common stock, at an exercise price of $2.50 per share. In connection with the PIPE transaction, the convertible notes entered into on May 13, 2019 were also converted at $2.00 per share into 560,185 shares of the Company's common stock.

Management has considered possible mitigating factors within our management plan on our ability to continue for at least a year from the date these financial statements are filed. The following items are management plans to alleviate any going concern issues:

Cloud B liabilities are unlikely to be paid due to CB1 holding the senior secured position and its rights under the foreclosure to the remaining assets of the entity to satisfy the outstanding obligation.

Raise further capital through the sale of additional equity;

Borrow money under debt securities;

The deferral of payments to related party debt holders for both principal of approximately $1,000,000 and related interest expense;

Cost saving initiatives related to synergies and the elimination of redundant costs of approximately $500,000, of which approximately $153,000 impacted the three months ended September 30, 2019; and

Possible sale of certain brands to other manufacturers.

Our operating needs include the planned costs to operate our business, including amounts required to fund working capital and capital expenditures. Our future capital requirements and the adequacy of our available funds will depend on many factors, including our ability to successfully commercialize our products and services, competing technological and market developments, and the need to enter into collaborations with other companies or acquire other companies or technologies to enhance or complement our product and service offerings.

Cash Flows

During the nine months ended September 30, 2019 and 2018, our sources and uses of cash were as follows:

Cash Flows from Operating Activities

Net cash used in operating activities for the nine months ended September 30, 2019 was $2,298,186, which included a net loss of $5,784,666. That net loss included $782,561 of cash provided by changes in operating assets and liabilities, which were offset by stock-based compensation of $876,585, depreciation and amortization of $952,019, amortization of debt issuance costs of $658,126 and amortization of right of use assets of $217,189. Net cash used in operating activities for the nine months ended September 30, 2018 was $2,207,631, which included a net loss of $3,983,272. That net loss included $2,010,483 of cash used by changes in operating assets and liabilities which was offset by stock-based compensation of $2,666,576 and amortization of debt issuance costs of $266,944.

Cash Flows from Investing Activities

Cash used in investing activities for the nine months ended September 30, 2019 was $113,612 which related to the purchase of property and equipment. Cash used in investing activities for the nine months ended September 30, 2018 was $1,502,504 which related to the purchase of a loan held for investment of $500,000, the acquisition of EN and its subsidiaries and the purchase of property and equipment of $121,186.

Cash Flows from Financing Activities

Cash provided by financing activities for the nine months ended September 30, 2019 was $1,573,370 which related mostly to net cash received borrowings under new debt instruments offset by repayments. Cash provided by financing activities for the nine months ended September 30, 2018 was $5,213,906 which related to borrowings under two notes payable.

Liquidity and Capital Resources

For the year ended December 31, 2018, our operations lost approximately $4,600,000 of which approximately $3,700,000 was non-cash and approximately $900,000 related to transaction costs and non-recurring items.

At December 31, 2018, we had total current assets of $5,465,484 and current liabilities of $8,878,936 resulting in negative working capital of $3,413,452, of which approximately $3,800,000 related to unsecured trade payables assumed in our Cloud B acquisition. In February 2019, our consolidating subsidiary, CBAV1, LLC, foreclosed on its promissory note it held that was secured by Cloud B, Inc.’s assets making any payments of the Cloud B trade payables unlikely. At December 31, 2018, we had total assets of $28,888,588 and total liabilities of $12,948,949 resulting in shareholders’ equity of $15,939,639.

At December 31, 2018, we had $4,425,685 of outstanding notes payable due to our related parties of which $932,701 was the current portion. These notes arose as part of the consideration paid in our acquisition of SRM, Ferguson Containers, Inc. (“Fergco”) and Edison Nation.

On May 2, 2018, we completed our initial public offering (“IPO”) raising $6,562,600 in gross proceeds. The Company received approximately $5,315,176 in net proceeds after deducting discounts and commissions and other offering expenses. At December 31, 2018, we had a cash and cash equivalents balance of $2,052,731. The Company believes that the funds available to it are adequate to meet its working capital needs, debt service and capital requirements for the next 12 months from the date of this filing.

Raise further capital through the sale of addition equity;

Borrow money under debt securities;

The deferral of payments to related party debt holders for both principal of $932,701 and related interest expense ($239,885 in 2018);

Cost saving initiatives related to synergies and the elimination of redundant costs of approximately $500,000; and

Possible sale of certain brands to other manufacturers.

Cash Flows

During the years ended December 31, 2018 and 2017, our sources and uses of cash were as follows:

Cash Flows from Operating Activities

Net cash used in operating activities for the year ended December 31, 2018 was $2,776,003 which included a net loss of $5,344,017 that included $1,512,050 of cash used by changes in operating assets and liabilities which was offset by stock-based compensation of $3,386,494, depreciation and amortization of $455,799 and amortization of debt issuance costs of $300,277 Net cash provided by operating activities for the year ended December 31, 2017 was $1,086,601, which included cash provided by net income of $1,428,381, which was partially offset by $499,545 of cash used in changes in operating assets and liabilities.

Cash Flows from Investing Activities

Net cash used in investing activities was $1,414,021 and $39,151 for the years ended December 31, 2018 and 2017, respectively. Cash used in investing activities was mostly attributable to the acquisition of Edison Nation Holdings, LLC net of cash acquired from all acquisition completed in 2018 and the purchase of a loan held for investment for $500,000 and the purchase of property and equipment of $141,440.

Cash Flows from Financing Activities

Cash provided by financing activities for the years ended December 31, 2018 totaled $5,685,487 which related mostly to cash received of $5,315,176 from net proceeds from the Company’s initial public offering and net borrowings of $469,755 under our debt instruments. Cash used in financing activities for the years ended December 31, 2017 was $3,029,720, which related to the payment of dividends.

Year Ended December 31, 2018 versus Year Ended December 31, 2017

The following table sets forth information comparing the components of net (loss) income for the years ended December 31, 2018 and 2017:

	Years Ended December 31,					Period over Period Change
	2018			2017		$			%

Revenues, net	$	16,502,209		$	14,960,450	$	1,541,759			10.3	%
Cost of revenues		11,425,619			11,017,625		407,994			3.7	%
Gross profit		5,076,590			3,942,825		1,133,765			28.8	%

Operating expenses:
Selling, general and administrative		9,718,286			2,379,104		7,339,182			308.5	%
Operating (loss) income		(4,641,696	)		1,563,721		(6,205,417	)		-396.8	%

Other (expense) income:
Rental income		102,815			102,815		-			0.0	%
Interest expense		(501,221	)		-		(501,221	)		na
Total other (expense) income		(398,406	)		102,815		(501,221	)		-487.5	%
(Loss) income before income taxes		(5,040,102	)		1,666,536		(6,706,638	)		-402.4	%
Income tax expense		303,915			133,105		170,810			128.3	%
Net (loss) income		(5,344,017	)		1,533,431		(6,877,448	)		-448.5	%
Net (loss) income attributable to noncontrolling interests		(13,891	)		-		(13,891	)		na
Net (loss) income attributable to Edison Nation, Inc.	$	(5,330,126	)	$	1,533,431	$	(6,863,557	)		-447.6	%

Revenue

For the year ended December 31, 2018, revenues increased by $1,541,759 or 10.3%, as compared to the year ended December 31, 2017. The increase was primarily attributable to new business in connection with our acquisitions in 2018, including licensing related revenues of $267,920 from our acquisition of EN and product revenues of $1,512,328 related to our acquisition of Cloud B, Inc.

Cost of Revenues

For the year ended December 31, 2018, cost of revenues increased by $407,994 or 3.7%, as compared to the year ended December 31, 2017. The increase was primarily attributable to the increase in total consolidated revenues. The percentage increase of cost of revenues as compared to the revenue increase was lower due to increases in licensing related revenues of $267,920 and service related revenue of $197,068 due to our acquisitions in 2018.

Gross Profit

For the year ended December 31, 2018, gross profit increased by $1,133,765, or 28.8%, as compared to the year ended December 31, 2018. The increase was primarily a result of the increase in revenues. For the year ended December 31, 2018, gross margin increased to 30.8%, as compared to 26.4% for the year ended December 31, 2017. The increase is primarily a result of the increase in licensing and service revenues.

Operating Expenses

Selling, general and administrative expenses were $9,718,065 and $2,383,104 for the year ended December 31, 2018 and 2017, respectively, representing an increase of $7,334,961, or 307.8%. The increase was primarily attributable to stock-based compensation expense of $3,248,166 ($3,386,494 reported in additional paid in capital includes $251,000 for issuance of stock for prepaid investor relations offset by $112,672 for the change in fair value of liability classified awards) of which $1,721,250, related to the assumption of certain consulting agreements which were satisfied by the principal shareholder of SRM transferring 344,250 shares to the consultants, stock-based compensation expense of $304,745 related to the issuance of 290,000 options granted to employees, other non-cash stock charges of $559,499 and $550,000 related to the issuance of common stock to employees and consultants for services performed, respectively, and $112,673 of stock-compensation related to liability classified awards. Other costs include new operating expenses in connection with the acquisitions in 2018 of $1,069,323, payroll related costs of $1,037,690 due to increased headcount, professional fees of $1,022,614, investor relations costs of $326,500, travel costs of $225,542, and other indirect costs incurred related to the Company’s IPO. The Company expects operating expenses to continue to increase as a public company and due to the Company’s expected future growth.

Rental Income

Rental income was $102,815 for both the years ended December 31, 2018 and 2017.

Interest expense

Interest expense was $501,221 for the year ended December 31, 2018 versus none in the previous year ended December 31, 2017. The increase in interest expense was related to increased borrowings of debt during 2018.

Income tax expense

Income tax expense was $303,915 for the year ended December 31, 2018, an increase of $170,810 or 128.3%, compared to $133,105 for the year ended December 31, 2017. The increase was primarily due to the increase in income from our foreign operations with no offset for income in the United States.

Non-GAAP Measures

EBITDA and Adjusted EBITDA

The Company defines EBITDA as net income (loss) before interest, taxes and depreciation and amortization. The Company defines Adjusted EBITDA as EBITDA, further adjusted to eliminate the impact of certain non-recurring items and other items that we do not consider in our evaluation of our ongoing operating performance from period to period. These items will include stock-based compensation, restructuring and severance costs, transaction costs, acquisition costs, certain other non-recurring charges and gains that the Company does not believe reflects the underlying business performance.

For the years ended December 31, 2018 and 2017, EBITDA and Adjusted EBITDA consisted of the following:

	For the Years Ended December 31,
	2018			2017
Net (loss) income	$	(5,330,126	)	$	1,428,381

Interest expense (income), net		501,221			(3,671	)
Income tax expense		303,915			64,655
Depreciation and amortization		487,878			152,990
EBITDA		(4,037,112	)		1,642,355
Stock-based compensation		2,025,994			-
Other noncash stock-based charges		1,222,172			-
Restructuring and severance costs		148,167			-
Transaction and acquisition costs		689,103			-
Other non-recurring costs		62,686			-
Adjusted EBITDA	$	110,010		$	1,642,355

Off-Balance Sheet Arrangements

We did not have, during the periods presented, and we do not currently have, any relationships with any organizations or financial partnerships, such as structured finance or special purpose entities, that would have been established for the purpose of facilitating off-balance sheet arrangements or other contractually narrow or limited purposes.

Critical Accounting Policies and Significant Judgments and Estimates

Our management’s discussion and analysis of our financial condition and results of operations are based on our financial statements, which have been prepared in accordance with accounting principles generally accepted in the United States, or GAAP. The preparation of these financial statements requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities as of the date of the financial statements as well as the reported expenses during the reporting periods. The accounting estimates that require our most significant, difficult, and subjective judgments have an impact on revenue recognition, the determination of share-based compensation, and financial instruments. We evaluate our estimates and judgments on an ongoing basis. Actual results may differ materially from these estimates under different assumptions or conditions.

Our significant accounting policies are more fully described in Note 3 to our annual financial statements included elsewhere in this registration statement.

Changes in and Disagreements with Accountants on Accounting and Financial Disclosure

None.

BUSINESS

Overview

In addition to developing products for its EN Brands, the Company develops and manufactures products for well-known brands in the entertainment and them park industry. For over 20 years, the Company has developed, manufactured and supplied the entertainment and amusement park industry with exclusive products that are often only available to consumers inside venues such as Disney Parks and Resorts, Disney Stores, Universal Resorts, Sea World, Sesame Place, Busch Gardens, Merlin Entertainment and Madison Square Garden. For the customers listed above, The Company has developed products for core brands such as Harry Potter, Frozen, Marvel, and Star Wars.

Market Strategy

Leveraging Evolving Market Opportunities for Growth

The Company believes that its anticipated growth will be driven by five macroeconomic factors:

The significant growth of ecommerce (14% compound annual growth rate, estimated to reach $4.9 trillion by 2021 (eMarketer 2018));

The increasing velocity of “brick and mortar” retail closures, now surpassing Great Recession levels (Cushman & Wakefield/Moody’s Analytics 2018);

The marriage of media based entertainment and consumer goods

The rapid adoption of crowdsourcing to expedite successful new product launches; and

Business

One Company Initiative

During the first quarter of 2019, the Company began the process of consolidating all of its operating companies into distinct business units, which allows the Company to focus on growing sales and leveraging operations. The units consist of:

• Innovate. The Edison Nation New Product Development (“NPD”) platform helps inventors go from idea to reality. This is accomplished by optimizing the Company’s new product election process through deeper analytics to predict success on platforms like crowdfunding and web market places like Amazon. The Company drives brand awareness of the platform by producing content for inventors and innovators on media platforms including our own Everyday Edison’s television show.

• Build and Launch. Distributed by geography, industry skillset and expertise in the development process to ensure efficient product build and launch our teams of product designers and developers take the product from the concept to the consumers hand. The bulk of the Company’s operations are part of this business unit, and the Company will continue to develop this unit to meet the needs of our product launch schedule.

• Sell. Our omni-channel sales effort is divided into three groups: (1) business-to-business revenue opportunities including traditional brick and mortar retailers, (2) online market places and direct-to-consumer revenue opportunities, and (3) our NiTRO Team (Near Term Revenue Opportunities). NiTRO, identifies brands and products lines that would benefit from being part of Edison Nation.

Innovate: The Edison Nation New Product Development & Commercialization Platform

New product ideas have little value without the ability and skill required to commercialize them. The considerable investment and executional “know how” needed to initiate a process - from idea to product distribution - has always been a challenge for the individual innovator. Edison Nation’s web presence is designed to take advantage of online marketplace and crowdfunding momentum for our future growth mitigating new product development risk while allowing for optimized product monetization based on a product’s likelihood to succeed. To that end, Edison Nation empowers and enables innovators and entrepreneurs to develop and launch products, gain consumer adoption and achieve commercial scale efficiently at little to no cost.

The cornerstone of Edison Nation’s competitive advantage is its NPD platform, which is designed to optimize product licensing and commercialization through best-in-class digital technologies, sourcing / manufacturing expertise and one of the largest sets of go-to-market solutions. The NPD platform can take a product from idea through ecommerce final sale in a matter of months versus a year or more for capital intensive and inefficient new product development protocols traditionally used by legacy manufacturers serving “big box” retailers.

Product Submission Aggregation

Interested innovators enter the Edison Nation web site to register for a free account by providing one’s name and email address. The member then creates a username and password to use on the site. Once registered, the member is provided with their own unique, password protected dashboard by which they can begin submitting ideas and join online member forums to learn about industry trends, common questions, engage in member chats, and stay informed of the latest happenings at Edison Nation. They can also track the review progress of ideas they submit through their dashboard.

Edison Nation accepts ideas through a secure online submission process. Once a member explores the active searches in different product categories being run on the platform for potential licensees seeking new product ideas to be commercialized, the member can submit their new product ideas for processing. Edison Nation regularly works with different companies and retailers in various product categories to help them find new product ideas.

Registered members pay $25 to submit an idea. This submission fee covers a portion of the cost to review each idea submitted to the platform. There are no additional fees after the submission fee.

Although the platform might not have an active search that matches the innovator’s idea, the Edison Nation Licensing Team hosts an ongoing search for new consumer product ideas in all categories.

“Insider Membership” is Edison Nation’s premium level of membership. Insiders receive feedback on all their ideas submitted and gain access to online features that aren't available to registered members. In addition, Insiders pay $20 for each idea submitted (20% discount vs. a registered member), can opt-in ideas for free, as well as receive other benefits. An annual membership costs $99, or $9.25 / month automatically debited from a credit card each month. Also included online is feedback to the innovator on the status of each stage of the process and notification when ideas are not selected to move forward during any stage in the review process.

Insiders also have access to the Insider Licensing Program (the “ILP”). The primary benefit of the ILP is having the Edison Nation Licensing Team working directly on an innovator’s behalf to help secure a licensing agreement with one of the company’s manufacturing partners. If an idea is selected for commercialization by a retail partner, Edison Nation will invest in any necessary patent applications, filings and maintenance. The innovator’s name is included on any patent or patent application that Edison Nation files on the member’s behalf after the idea has been selected.

In addition to the above member programs, Edison Nation ASOTV (“As Seen on TV”) Team hosts a search for new products suitable for marketing via DRTV (“Direct Response TV”) and subsequent distribution in national retail chains including mass merchandisers, specialty retail, drug chains and department stores.

Product Submission Review

Led by the Company’s Licensing Team (which has over 150 years of combined experience in a variety of industries and product categories), all ideas submitted by innovators through the Company’s website are reviewed and assessed through an 8-stage process. Edison Nation’s product idea review process is confidential with non-disclosure agreements executed with every participating registered or “Insider” member.

The NPD platform’s database of over 85,000 product ideas helps determine which inventions have a substantial market opportunity quickly through proprietary algorithms that have been developed incorporating continuous learning from marketplace experience and changes in category requirements.

Selected ideas are assessed by the Licensing Team based on nine key factors: competing products, uniqueness, retail pricing, liability & safety, marketability, manufacturing cost, patentability, consumer relevant features and benefits, and commercial-ability.

The time required to review ideas depends upon different variables, such as: the number of searches concurrently running on Edison Nation platform, idea volume and complexity of the search, how many presentation dates to licensees are pending, the date an idea is submitted, etc.

Presentation dates to potential licensees are usually set a few weeks following the close of the search. After the presentation has been given to a licensing / retail partner, the partner has 45 days to 6 months to select ideas on which they will move forward.

The ILP incorporates a four-stage process:

Stage #1 — Preliminary Review: The Licensing Team performs a preliminary review to ensure an invention meets the program criteria. Factors that might stall an idea from moving forward include: an invention is cost-prohibitive, has engineering challenges, and/or major players in the marketplace have already launched products like it. If none of these apply, an idea will be approved and move on to the preparation phase.

Stage #2 — Preparation: The Licensing Team performs a best partner review. Edison Nation’s retail and manufacturing contacts are assessed, and the team begins to plan which licensors would be the best fit for an idea. A gap analysis and visits the store shelves are executed to gain greater understanding of marketplace potential.

Stage #3 — Pitching: At this phase, an idea can become a “Finalist.” The Licensing Team begins to proactively pitch an idea to potential licensees using a proprietary presentation system. When a company expresses interest, the team proceeds into term sheets and negotiations while staying in constant contact with the prospect until the best possible deal is struck for the innovator.

Stage #4 — Outcome: In the end, the market decides what products will be successful. There are no guarantees. If for some reason Edison Nation is not successful in finding a licensing partner, a complete debrief is given to the Insider.

Due to the public nature of licensing, Edison Nation only accepts ideas from Insiders that are patented or patent-pending. A valid provisional patent application is required. The cost of submitting an idea to the ILP is $100, and a member must be an “Insider” to be considered.

The Edison Nation ASOTV new product development process follows a six-stage protocol appropriate for the broadcast-based sales channel. For more information regarding the ASOTV process, the Edison Nation NPD platform, its features and member benefits, visit https://app.edisonnation.com/faq.

Acquisition of Intellectual Property

Once an innovator’s idea is judged to be a potentially viable, commercial product and selected for potential commercialization, the Company acquires intellectual property rights from the innovator.

Once an innovator’s intellectual property is secured, the innovator’s product idea can then either be licensed to a manufacturer or retailer, or developed and marketed directly by Edison Nation. In either case, Edison Nation serves as the point-of-contact with the innovator for term sheets, royalty negotiation and concluding licensing agreements. Edison Nation also maintains contact with the innovator to keep them engaged during product development.

In general, innovators are paid a percentage of the Company’s revenue from the commercialization of the innovator’s intellectual property. This percentage varies with the Company’s investment in the development of the intellectual property, including whether the Company decides to license the innovator’s idea for commercialization or instead, to directly develop and market the innovator’s idea.

Build and Launch: Product Design and Development

With product design, product prototyping and creation of marketing assets all resourced with expert Edison Nation in-house capabilities, we have made protracted, high-cost, high-risk research and development models obsolete.

Edison Nation custom designs most products in-house for specific customers and their needs. We utilize our existing tooling to produce samples and prototypes for customer reviews, refinement and approval, as well as our in-house packaging design and fabrication resources.

The Company’s design and product development professionals are dedicated to the commercialization and marketability of new product concepts advanced through the company’s NPD platform and for licensors / partners like Disney World and Universal Studios.

No matter the product, Edison Nation’s objective is to optimize its marketability, function, value and appearance for the benefit of the consumer end user. From concept and prototyping, through design-for-manufacture, special attention is paid to a product’s utility, ease of use, lowest cost bill of materials, and how it “communicates” its features and benefits through design.

The combined experience and expertise of the Company’s team spans many high-demand categories including household items, small appliances, kitchenware, and toys. The Company’s in-house capabilities are complimented by third-party engineering and prototyping contractors, and category-specific expert resources within select manufacturers.

Manufacturing, Materials, and Logistics

To provide greater flexibility in the manufacturing and delivery of products, and as part of a continuing effort to reduce manufacturing costs, Edison Nation has concentrated production of most of the Company’s products in third-party manufacturers located in China and Hong Kong. The Company maintains a fully staffed Hong Kong office for sourcing, overseeing manufacturing and quality assurance.

Edison Nation’s contracted manufacturing base continues to expand, from two manufacturing facilities as of October 31, 2018 to a total of five manufacturing facilities as of February 12, 2020. These include three manufacturers required to produce Cloud B children’s sleep products. Based on anticipated manufacturing requirements, this footprint may expand significantly by the end of 2019. The Company also continues to explore more efficient and expert manufacturing partners to gain greater economies of scale, potential consolidation, and cost savings on an on-going basis.

Products are also purchased from unrelated enterprises with specific expertise in the design, development, and manufacture those specialty products.

We base our production schedules on customer orders and forecasts, considering historical trends, results of market research, and current market information. Actual shipments of ordered products and order cancellation rates are affected by consumer acceptance of product lines, strength of competing products, marketing strategies of retailers, changes in buying patterns of both retailers and consumers, and overall economic conditions. Unexpected changes in these factors could result in a lack of product availability or excess inventory in a product line.

Most of our raw materials are available from numerous suppliers but may be subject to fluctuations in price.

Sell: Paths to Market

Edison Nation partners with many of the biggest and most well-known online entities, consumer products companies and retailers. They use the Company’s platform as a “think engine” to develop targeted products, significantly reduce research and development expense, and expedite time to market.

Each potential licensee of an innovator’s idea publishes an exclusive page on the Edison Nation web site with innovation goals and timeline for their search. Appropriate new product ideas are submitted in 100% confidence with all intellectual property safely guarded.

Once the search concludes, Edison Nation presents each with the best patent protected, or patentable ideas that can be selected for development.

Licensing partners and customers include Amazon, Bed, Bath & Beyond, Church & Dwight, Black & Decker, HSN, Worthington Industries, Pampered Chef, Boston America Corp., Walmart, Target, PetSmart, “As Seen on TV,” Sunbeam, Home Depot, and Apothecary Products.

Online Marketplace and Crowdfunding

Edison Nation has established a commercialization path to include the development and management of crowdfunding campaigns. This is evolving to be a engine for future growth. The benefits of crowdfunding include increased product testing efficiency, decreased financial risk, and the ability to get closer to the end consumer, simultaneously.

The ability for consumers to re-order product not only gauges marketplace demand, but it can also be leveraged as a quantitative “proof point” for potential sales to licensees. Most importantly, the money pledged for orders can be used to finance manufacturing and ecommerce launch marketing costs as negative working capital.

Sales, Marketing, and Advertising

Our Omni-channel sales effort is divided into three groups: (1) business-to-business revenue opportunities including traditional brick and mortar retailers, (2) online market places and direct-to-consumer revenue opportunities, and (3) our NiTRO Team (Near Term Revenue Opportunities). NiTRO, identifies brands and products lines that would benefit from being part of Edison Nation.

Edison Nation’s business to business team sells products through a diverse network of manufacturers, distributors and retailers. New customer prospects are gained through outbound sales calls, trade show participation, web searches, referrals from existing customers.

The online team for the company has expertise in selling products on platforms such as the Amazon marketplace as well as portals like Walmart.com and “crowd-funded”websites such as Kickstarter and Indiegogo.

The NiTRO team identifies small, unique brands that could benefit from becoming part of a larger consumer products organization with more resources. The team seeks to negotiate a mutually beneficial agreement whereby the respective branded products become part of Edison Nation’s portfolio of consumer products.

Media Strategy

In order to expand the Company’s universe of registered innovators and entrepreneurs submitting ideas on the Edison Nation NPD web platform, the Company has entered a global agreement for distribution of two existing 13-episode seasons of the Company’s Everyday Edison TV series with a leading digital media service company. The series will be available in its original English version as well as voiceover adaptations in German, French, and Spanish. Distribution is planned for Europe and the Middle East through digital content providers such as Amazon Prime Video.

Sources of Revenue

The Company pursues the following six sources of sales volume:

Our branded products sold through traditional retail channels of distribution and other channels of business to business distribution;

Our branded products sold through direct to consumer platforms such as the Amazon marketplace as well as portals like Walmart.com and “crowd-funded” websites such as Kickstarter and Indiegogo;

Custom products and packaging solutions that the Company develops and manufactures for partners such as Disney, Marvel, Madison Square Garden, and Universal Studios;

Member idea submission and ILP program fees: $25 per submission (registered members); $20 per submission (Insider members); $100 per submission (ILP members);

Licensing agents: We match an innovator’s intellectual property with vertical product category leaders in a licensing structure whereby the innovator can earn up to 50% of the contracted licensing fee. Product categories include kitchenware, small appliances, toys, pet care, baby products, health & beauty aids, entertainment venue merchandise, and housewares; and

Product principals: We work with innovators directly, providing such innovators direct access to all of Edison Nation’s resources. Depending on case-by-case factors, innovators may receive a range of up to 35% - 50% of profits.

Employees

As of February 12, 2020, we had 49 total employees, 48 of whom were full-time employees. None of our employees are represented by a union or parties to a collective bargaining agreement. We believe our employee relations to be in good standing.

Properties

The following table summarizes pertinent details of our properties as of February 12, 2020:

Location	Owned or Leased	Lease Expiration	Type of Property
1 West Broad Street, Suite 1004 Bethlehem, PA 18018	Leased	June 30, 2021	Principal Executive Office

909 New Brunswick Avenue Phillipsburg, NJ 08865	Leased	Month-to-Month	Office Space

20 Industrial Road Alpha, NJ 08865	Leased	Month-to-Month	Packaging and Logistics Center

520 Elliot Street, Charlotte, NC 28202	Leased	Month-to-Month	Office Space

660 West Fairbanks Avenue, Suite 1 Winter Park, FL 32789	Leased	September 30, 2020	Office Space

532 Durham Road, Suite 101A Newtown, PA 18940	Leased	May 31, 2020	Office Space

150 West Walnut Street Gardena, CA	Leased	October 31, 2021	Office Space and Warehouse

51 South Lincoln Avenue Washington, NJ 07882	Owned	N/A	Rental Property

Penninsula Centre 67 Mody Road, 11th Floor Room 1112 Tsimshatsui East, Kowloon, Hong Kong	Leased	August 7, 2020	Office Space

Legal Proceedings

From time to time, we may be subject to various legal proceedings and claims that are routine and incidental to our business. Although some of these legal proceedings may result in adverse decisions or settlements, management believes that the final disposition of such matters will not have a material adverse effect on our business, financial position, results of operations or cash flows.

MANAGEMENT

Directors and Executive Officers

The following table sets forth information about our directors and executive officers.

Name	Age	Position(s)
Executive Officers
Christopher B. Ferguson	50	Chief Executive Officer and Chairman
Kevin Ferguson	58	President and Treasurer
Brett Vroman	39	Chief Financial Officer and Corporate Secretary
Bruce Bennett	60	Executive Vice President and Chief Product Officer

Non-Employee Directors
Frank Jennings (1)(2)(3)	48	Director
Louis Foreman	51	Director
Kevin O’Donnell (1)(2)(3)	44	Director
Toper Taylor (1)(2)(3)	55	Director

(1) Member of the Audit Committee

(2) Member of the Compensation Committee

(3) Member of the Corporate Governance and Nominating Committee

Executive Officers

Christopher B. Ferguson has acted as our Chief Executive Officer, as well as Chairman of our board of directors since July 2017. From July 2013 until July 2017, Mr. Ferguson served as Chief Executive Officer of SRM and Fergco. In 2010, Mr. Ferguson co-founded a company in the fiber network industry, FTE Networks. Inc. (FTNW:NYSEAMERICAN), and served as CEO of the company until June 2013. In August 2001, Mr. Ferguson co-founded Mercer Staffing, and acted as its president until December 2007. In June 1995, Mr. Ferguson founded The Florio Group, a private equity investment company, with former New Jersey governor James J. Florio. From June 1995 to October 2001, Mr. Ferguson served as Managing Director of The Florio Group. From May 1995 until August 1999, Mr. Ferguson also acted as Chief Financial Officer for Cabot Marsh Corporation, a healthcare consulting firm. Mr. Ferguson holds a Bachelor of Arts degree from Villanova University and a Juris Doctor degree from Widener University School of Law. Mr. Ferguson offers executive decision-making and risk assessment skills as a result of his previous experiences and services as Chief Executive Officer of a public company. Our nominating and corporate governance committee and board of directors considered Mr. Ferguson’s 12 years of experience as a founder and senior executive officer of public and private corporations, and his current services as our Chief Executive Officer and determined that his vast experience in the role as a leader and executive and his direct involvement and understanding of both SRM and Fergco’s ongoing operations should facilitate the board of directors in its evaluation of strategic initiatives and operational performance.

Kevin J. Ferguson has acted as our President and Treasurer since July 2017, and acted as a member of our board of directors from July 2017 until April 2019. Mr. Ferguson acted as a member of the board of directors of Fergco from June 1995 until July 2017, and was employed as Fergco’s president from June 1999 to July 2017. Between June 1995 and May 1999, he worked as head of sales for Fergco. Mr. Ferguson holds a Bachelor of Science degree in business administration from Villanova University.

Brett Vroman has served as our Chief Financial Officer since June 2019 and previously served as our Controller from May 2018 through May 2019. Prior to joining the Company, from October 2014 to May 2018, Mr. Vroman was Director of Financial Reporting at Avantor, Inc., a global manufacturer and distributor of high-quality products, services and solutions to customers and suppliers in the life science, advanced technology and applied materials industries. From March 2011 to October 2014, Mr. Vroman was employed as an Assurance Senior Manager at BDO USA, LLP, a public accounting, tax, consulting and business advisory firm and from December 2005 to February 2011, Mr. Vroman last held the position of Audit Manager at Smart and Associates, LLP, a business advisory and consulting firm. Mr. Vroman is a certified public accountant and holds a Bachelor of Science in Accounting from York College of Pennsylvania.

Bruce R. Bennett has been our Executive Vice President and Chief Product Officer since July 2017. From January 1998 to June 2017, Mr. Bennett was employed as president of SRM, where he focused largely on the company’s product sourcing between China and the company’s various entertainment industry customers, such as Disney, Universal Studios, Six Flags, SeaWorld and Madison Square Garden. Mr. Bennett started at SRM in 1984, as assistant to the president, and worked his way up to the role of Vice President of Sales and Marketing prior to being named president of the company in January 1998.

Non-Employee Directors

Frank Jennings has been a member of our board of directors since June 2018 and brings over 26 years of experience in business development and management of sales professionals in a variety of technology-adjacent industries. From August 2014 to present, Mr. Jennings has been employed as the Vice President of Sales, North America by Doctor on Demand, Inc., a telemedicine provider. From August 2011 to August 2014, he was employed as Assistant Vice President of New Business Development by Castlight Health, a technology company focused on employee health benefits solutions. Mr. Jennings holds a Bachelor of Arts from Ohio State University. Mr. Jenning’s service in both operational and leadership roles provides a significant benefit to our audit, nominating and corporate governance, and compensation committees, as well as to our board of directors.

Louis Foreman has been a member of our board of directors since March 2019, and has served as the Preferred Designee and a member of the Board of Managers of Edison Nation Holdings, LLC, a wholly owned subsidiary of the Company, since September 2018. From May 2005 to the present, Mr. Foreman has worked as the Creator and Executive Producer of the television show Everyday Edisons. In addition to his role as a founder of the Edison Nation brand, from November 2001 to the present, Mr. Foreman has served as the Chief Executive Officer of Enventys Partners, an integrated product development firm. From May 2012 to the present, Mr. Foreman has also served as Chief Executive Officer of Edison Nation Medical, a healthcare innovation portal. From June 2010 to December 2017, Mr. Foreman served as President of the Intellectual Property Owners Education Foundation, a non-profit organization devoted to educational and charitable activities designed to promote the value of intellectual property rights. Mr. Foreman holds a Bachelor of Arts degree in Economics from the University of Illinois at Urbana-Champaign. His experience in prior leadership roles as well as his operational experience as founder of Edison Nation provide a significant benefit to our board of directors.

Kevin J. O’Donnell has been a member of our board of directors since March 2019, and founded PopTop Partners, LLC, a boutique investment firm specializing in small to mid-market companies with an emphasis on the retail and restaurant sector in April 2011, and continues to serve as the firm’s Managing Partner to the present day. Mr. O’Donnell brings close to 20 years of strategic corporate growth, financial structuring, and business development initiatives to emerging growth companies. From May 2007 to June 2010, Mr. O’Donnell served as the Founder/President of KOR Capital, LLC, a private equity and consulting firm specializing in turn around management of mid-market companies. From December 1999 to February 2007, Mr. O’Donnell was a Co-Founder and Principal of ALS, LLC, a human resources management organization. Mr. O’Donnell holds a Bachelor of Arts from the University of Central Florida. Mr. O’Donnell’s service in both operational and leadership roles provides a significant benefit to our audit, nominating and corporate governance, and compensation committees, as well as to our board of directors.

Toper Taylor has served as a member of our board of directors since July 2019. From 2012 through the present, Mr. Taylor has been employed as Chief Executive Officer of Media Disrupted, Inc., a strategic consulting firm specializing in corporate strategy, business development, scaling and restructuring, mergers and acquisition, and recapitalization, largely focused on the entertainment industry. In addition to his role as Chief Executive Officer of Media Disrupted, Inc., Mr. Taylor has been a member of the board of directors of Bardel Entertainment, Inc., Cepia LLC, Marine Biology Environmental Technologies, LLC and Orange Twist. From 2014 to 2017, Mr. Taylor served as President of RoundUp Media LLC d/b/a Network of One, a technology and data science company. From 2004 to 2012, Mr. Taylor was employed as Co-Founder, President and Chief Operating Officer of the Cookie Jar Group, a division of DHX Media Ltd. (Nasdaq:DHXM), a Canadian media production, distribution and broadcasting company. From 1990 to 2003, Mr. Taylor was employed as President of Nelvana, a division of Corus Entertainment, Inc. (OTCMKTS:CJREF) focused on animation for children’s entertainment. He began his career, working from 1985 to 1990 as a Television Packaging Agent at William Morris Agency, Inc., a talent agency. Mr. Taylor holds a Bachelor of Arts from the University of Southern California.

Family Relationships

Other than Messrs. Christopher B. Ferguson and Kevin J. Ferguson, who are brothers, there are no family relationships among any of our executive officers or directors.

Corporate Governance Overview

We are committed to having sound corporate governance principles, which are essential to running our business efficiently and maintaining our integrity in the marketplace. We understand that corporate governance practices change and evolve over time, and we seek to adopt and use practices that we believe will be of value to our shareholders and will positively aid in the governance of the Company. To that end, we regularly review our corporate governance policies and practices and compare them to the practices of other peer institutions and public companies. We will continue to monitor emerging developments in corporate governance and enhance our policies and procedures when required or when our Board determines that it would benefit our Company and our shareholders.

In this section, we describe the roles and responsibilities of our board of directors and its committees and describe our corporate governance policies, procedures and related-documents. The charters of the audit, nominating and corporate governance, and compensation committees of our board of directors, our Corporate Governance Guidelines and Code of Business Conduct and Ethics can be accessed electronically under the “Governance” link on the Investor Relations page of our website at https://www.edisonnation.com. (The inclusion of our website address in this section does not include or incorporate by reference the information on our website into this prospectus.) We will also provide a copy of the audit and compensation committee charters, our Corporate Governance Guidelines and our Code of Business Conduct and Ethics without charge upon written request sent to our Investor Relations department at Investor Relations, 1 West Broad Street, Suite 1004, Bethlehem, Pennsylvania 18018 or (484) 893-0060.

Board Composition and Leadership Structure

Five (5) directors comprise our board of directors: Christopher B. Ferguson, Louis Foreman, Frank Jennings, Kevin J. O’Donnell and Toper Taylor.

Christopher Ferguson serves as our Chief Executive Officer and our Chairman. Although the roles of our Chief Executive Officer and Chairman of our board of directors are currently performed by the same person, we do not have a policy regarding the separation of these roles, as our board of directors believes that it is in the best interests of the Company and our shareholders to make that determination from time to time based upon the position and direction of the Company and the membership of our board of directors.

Our board of directors has determined that our leadership structure is appropriate for the Company and our shareholders as it helps to ensure that the board of directors and management act with a common purpose and provides a single, clear chain of command to execute our strategic initiatives and business plans. In addition, our board of directors believes that a combined role of Chief Executive Officer and Chairman is better positioned to act as a bridge between management and our board of directors, facilitating the regular flow of information. Our board of directors also believes that it is advantageous to have a Chairman with an extensive knowledge of our industry.

Director Independence

Applicable Nasdaq rules require a majority of a listed company’s board of directors to be comprised of independent directors within one (1) year of listing. In addition, Nasdaq rules require that, subject to specified exceptions, each member of a listed company’s audit, compensation and nominating and corporate governance committees be independent, and that audit committee members also satisfy independence criteria set forth in Rule 10A-3 under the Exchange Act. The Nasdaq independence definition includes a series of objective tests, such as that the director is not, and has not been for at least three (3) years, one of our employees, that neither the director nor any of his family members has engaged in various types of business dealings with us and that the director is not associated with the holders of more than five percent (5%) of our common stock. In addition, under applicable Nasdaq rules, a director will only qualify as an “independent director” if, in the opinion of the listed company’s board of directors, that person does not have a relationship that would interfere with the exercise of independent judgment in carrying out the responsibilities of a director.

Our board of directors has undertaken a review of the independence of each director. Based on information provided by each director concerning his background, employment and affiliations, our board of directors has determined that Messrs. Frank Jennings, Kevin O’Donnell and Toper Taylor and independent do not have relationships that would interfere with the exercise of independent judgment in carrying out the responsibilities of a director and that each of these directors is “independent” as that term is defined under the listing standards of Nasdaq. In making such determination, our board of directors considered the relationships that each such non-employee director has with our Company and all other facts and circumstances that our board of directors deemed relevant in determining his independence, including the beneficial ownership of our capital stock by each non-employee director.

Board’s Role in Risk Oversight and Management

Our board of directors, as a whole and through its committees, is responsible for the oversight of risk management, while our management is responsible for the day-to-day management of risks faced by us. The board of directors receives regular reports from members of senior management on areas of material risk to the Company, including operational, financial, legal, regulatory, strategic and reputational risks as more fully discussed in the section titled “Risk Factors” appearing elsewhere in this prospectus. In its risk oversight role, our board of directors has the responsibility to satisfy itself that the risk management processes designed and implemented by management are adequate and functioning as designed.

Committees of Our Board of Directors

Our board of directors has established an audit committee, a compensation committee, and a nominating and corporate governance committee. The composition and responsibilities of each committee of our board of directors are described below. Members serve on these committees until their resignation or until otherwise determined by our board of directors. Our board of directors may establish other committees as it deems necessary or appropriate from time to time.

Although each committee is directly responsible for evaluating certain enumerated risks and overseeing the management of such risks, the entire board of directors is generally responsible for and is regularly informed through committee reports about such risks and any corresponding remediation efforts designed to mitigate such risks. In addition, appropriate committees of the board of directors receive reports from senior management within the organization in order to enable the board of directors to understand risk identification, risk management and risk mitigation strategies. When a committee receives such a report, the chairman of the relevant committee reports on the discussion to the full board of directors during the committee reports portion of the next board of directors meeting. This enables the board of directors and its committees to coordinate the risk oversight role.

Audit Committee

The members of our audit committee are Frank Jennings, Kevin J. O’Donnell and Toper Taylor. Mr. O’Donnell chairs the audit committee. The audit committee’s main function is to oversee our accounting and financial reporting processes, internal systems of control, independent registered public accounting firm relationships and the audits of our financial statements. The committee’s responsibilities include, among other things:

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appointing, approving the compensation of and assessing the independence of our registered public accounting firm;

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overseeing the work of our independent registered public accounting firm, including through the receipt and consideration of reports from such firm;

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reviewing and discussing with management and the independent registered public accounting firm our annual and quarterly financial statements and related disclosures;

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monitoring our internal control over financial reporting, disclosure controls and procedures and code of business conduct and ethics;

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overseeing our internal audit function;

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overseeing our risk assessment and risk management policies;

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establishing policies regarding hiring employees from the independent registered public accounting firm and procedures for the receipt and retention of accounting related complaints and concerns;

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meeting independently with our internal auditing staff, independent registered public accounting firm and management;

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reviewing and approving or ratifying any related person transactions; and

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preparing the audit committee report required by SEC rules.

All audit and non-audit services, other than de minimis non-audit services, to be provided to us by our independent registered public accounting firm must be approved in advance by our audit committee.

Nominating and Corporate Governance Committee

The members of our nominating and corporate governance committee are Frank Jennings, Kevin J. O’Donnell and Toper Taylor. Mr. Taylor chairs the nominating and corporate governance committee. This committee’s responsibilities include, among other things:

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identifying and evaluating candidates, including the nomination of incumbent directors for reelection and nominees recommended by shareholders, to serve on our board of directors;

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considering and making recommendations to our board of directors regarding the composition and chairmanship of the committees of our board of directors;

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developing and recommending to our board of directors corporate governance principles, codes of conduct and compliance mechanisms; and

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overseeing periodic evaluations of the board of directors’ performance, including committees of the board of directors.

When evaluating director candidates, the nominating and corporate governance committee may consider several factors, including relevant experience, independence, commitment, compatibility with the Chief Executive Officer and the board of directors culture, prominence and understanding of the Company’s business, as well as any other factors the corporate governance and nominating committee deems relevant at the time. The corporate governance and nominating committee makes a recommendation to the full board of directors as to any person it believes should be nominated by our board of directors, and our board of directors determines the nominees after considering the recommendation and report of the corporate governance and nominating committee.

Any director or executive officer of the Company may recommend a candidate to the nominating and corporate governance committee for its consideration. The nominating and corporate governance committee will also consider nominees to our board of directors recommended by shareholders if shareholders comply with the advance notice requirements in our Second Amended and Restated Bylaws. Our Second Amended and Restated Bylaws provide that a shareholder who wishes to nominate a person for election as a director at a meeting of shareholders must deliver timely written notice to our Corporate Secretary at the following address:

Board of Directors

c/o Corporate Secretary

Edison Nation, Inc.

1 West Broad Street, Suite 1004

Bethlehem, Pennsylvania 18018

This notice must contain, as to each nominee, all of the information relating to such person as would be required to be disclosed in a proxy statement meeting the requirements of Regulation 14A under the Exchange Act and certain other information, including: the name and address of the shareholder delivering the notice as it appears on our books; the class and number of shares owned beneficially and of record by such shareholder; information about derivative instruments beneficially owned by such shareholder and any opportunity to profit or share in any profit derived from any increase or decrease in the value of the shares of our stock; any proxy, contract, arrangement, understanding or relationship pursuant to which such shareholder has a right to vote any shares of our stock; any short interest in any of our securities held by such shareholder; any rights to dividends on shares of our stock owned beneficially or of record by such shareholder that are separated or separable from the underlying shares of stock; any proportionate interest in shares of our stock or derivative instruments held by a general or limited partnership in which such shareholder is, or owns a beneficial interest in, the general partner; any performance-related fees to which such shareholder is entitled based on the value of our securities; any arrangement or understanding between such shareholder and the proposed nominee; and whether such shareholder intends to deliver a solicitation notice, as more fully described in our Second Amended and Restated Bylaws. The foregoing summary does not include all requirements a shareholder must satisfy in order to nominate a candidate to our board of directors. Shareholders who wish to recommend a nominee to our board of directors should carefully read our Second Amended and Restated Bylaws, which are available at www.edisonnation.com. (The inclusion of our website address in this prospectus does not include or incorporate by reference the information on our website into this prospectus.)

Compensation Committee

The members of our compensation committee are Frank Jennings, Kevin J. O’Donnell and Toper Taylor. Mr. Jennings chairs the compensation committee. The primary purpose of our compensation committee is to discharge the responsibilities of our board of directors in overseeing our compensation policies, plans and programs and to review and determine the compensation to be paid to our executive officers, directors and other senior management, as appropriate. Specific responsibilities of our compensation committee include, among other things:

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reviewing and recommending corporate goals and objectives relevant to the compensation of our Chief Executive Officer and other executive officers;

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making recommendations to our board of directors with respect to, the compensation level of our executive officers;

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reviewing and recommending to our board of directors employment agreements and significant arrangements or transactions with executive officers;

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reviewing and recommending to our board of directors with respect to director compensation; and

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overseeing and administering our equity-based incentive plan or plans.

Each member of our compensation committee is a non-employee director, as defined in Rule 16b-3 promulgated under the Exchange Act and an outside director, as defined pursuant to Section 162(m) of the Internal Revenue Code of 1986, as amended, or the “Code.”

With respect to director compensation, our compensation committee is responsible for reviewing the compensation paid to members of the board of directors and recommending modifications to the compensation of members of the board of directors that the compensation committee determines are appropriate and advisable to the board of directors for its approval from time to time. In this regard, the compensation committee may request that management report to the compensation committee periodically on the status of the compensation of board of directors in relation to other similarly situated companies.

In determining compensation for our executive officers, the compensation committee typically considers, but is not required to accept, the recommendations of our Chief Executive Officer regarding the performance and proposed base salary and bonus and equity awards for the other executive officers, as well as himself. The compensation committee may also request the assistance of our Chief Financial Officer in evaluating the financial, accounting and tax implications of various compensation awards paid to the executive officers. However, our Chief Financial Officer does not determine the amounts or types of compensation paid to the executive officers. Our Chief Executive Officer and certain of our other executive officers may attend compensation committee meetings, as requested by the compensation committee. None of our executive officers, including our Chief Executive Officer, attend any portion of the compensation committee meetings during which the executive officer’s compensation is established and approved.

Compensation Committee Interlocks and Insider Participation

Not applicable to smaller reporting companies.

Compensation Committee Report

Not applicable to smaller reporting companies.

Board Diversity

Our nominating and corporate governance committee is responsible for reviewing with board of directors, on an annual basis, the appropriate characteristics, skills and experience required for the board of directors as a whole and its individual members. In evaluating the suitability of individual candidates (both new candidates and current members), the nominating and corporate governance committee, in recommending candidates for election, and the board of directors, in approving (and, in the case of vacancies, appointing) such candidates, will take into account many factors, including the following:

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personal and professional integrity, ethics and values;

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experience in corporate management, such as serving as an officer or former officer of a publicly-held company;

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development or commercialization experience in large consumer products companies;

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experience as a board member or executive officer of another publicly-held company;

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strong finance experience;

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diversity of expertise and experience in substantive matters pertaining to our business relative to other board members;

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diversity of background and perspective, including with respect to age, gender, race, place of residence and specialized experience;

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conflicts of interest; and

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practical and mature business judgment.

Currently, our board of directors evaluates each individual in the context of the board of directors as a whole, with the objective of assembling a group that can best maximize the success of the business and represent shareholder interests through the exercise of sound judgment using its diversity of experience in these various areas.

Director Nomination Process

Our board of directors believes that its directors should have the highest professional and personal ethics and values, consistent with the Company’s longstanding values and standards. They should have broad experience at the policy-making level in business, government or civic organizations. They should be committed to enhancing shareholder value and should have sufficient time to carry out their duties and to provide insight and practical wisdom based on their own unique experience. Each director must represent the interests of all shareholders. When considering potential director candidates, our board of directors also considers the candidate’s independence, character, judgment, diversity, age, skills, including financial literacy, and experience in the context of our needs and those of our board of directors. Our board of directors believe that diversity is an important attribute of the members who comprise our board of directors and that the members should represent an array of backgrounds and experiences and should be capable of articulating a variety of viewpoints. Our board of directors priority in selecting board members is the identification of persons who will further the interests of our shareholders through his or her record of professional and personal experiences and expertise relevant to our business.

Shareholder Nominations to the Board of Directors

Article II, Section 2.5 of our Second Amended and Restated Bylaws provides that our board of directors will accept for consideration submissions from shareholders of recommendations for the nomination of directors. Acceptance of a recommendation for consideration does not imply that the board of directors will nominate the recommended candidate. Director nominations by a shareholder or group of shareholders for consideration by our shareholders at our annual meeting of shareholders, or at a special meeting of our shareholders that includes on its agenda the election of one or more directors, may only be made pursuant to Article II, Section 2.5 of our Second Amended and Restated Bylaws or as otherwise provided by law. Nominations pursuant to our Second Amended and Restated Bylaws are made by delivering to our Corporate Secretary, within the time frame described in our Second Amended and Restated Bylaws, all of the materials and information that our bylaws require for director nominations by shareholders.

No person shall be eligible to serve as a director of the Company unless nominated in accordance with the procedures set forth in Article II, Section 2.5 of our Second Amended and Restated Bylaws and any nominee proposed by a shareholder not nominated in accordance with Article II, Section 2.5 shall not be considered or acted upon for execution at such meeting. Shareholders’ notice for any proposals requested to be included in our prospectus pursuant to Rule 14a-8 under the Exchange Act (including director nominations), must be made in accordance with that rule.

Role of Board in Risk Oversight Process

Our board of directors has responsibility for the oversight of the Company’s risk management processes and, either as a whole or through its committees, regularly discusses with management our major risk exposures, their potential impact on our business and the steps we take to manage them. The risk oversight process includes receiving regular reports from our committees and members of senior management to enable our board of directors to understand the company’s risk identification, risk management and risk mitigation strategies with respect to areas of potential material risk, including operations, finance, legal, regulatory, strategic and reputational risk.

The audit committee reviews information regarding liquidity and operations, and oversees our management of financial risks. Periodically, the audit committee reviews our policies with respect to risk assessment, risk management, loss prevention and regulatory compliance. Oversight by the audit committee includes direct communication with our external auditors, and discussions with management regarding significant risk exposures and the actions management has taken to limit, monitor or control such exposures. The compensation committee is responsible for assessing whether any of our compensation policies or programs has the potential to encourage excessive risk-taking. The nominating and corporate governance committee manages risks associated with the independence of the board, corporate disclosure practices, and potential conflicts of interest. While each committee is responsible for evaluating certain risks and overseeing the management of such risks, the entire board is regularly informed through committee reports about such risks. Matters of significant strategic risk are considered by our board of directors as a whole.

Code of Business Conduct and Ethics

We have adopted a written code of business conduct and ethics that applies to our directors, officers and employees, including our principal executive officer, principal financial officer, principal accounting officer or controller, or persons performing similar functions. A current copy of the code is posted on the Corporate Governance section of our website, www.edisonnation.com. In addition, we post on our website all disclosures that are required by law or the listing standards of the Nasdaq Capital Market concerning any amendments to, or waivers from, any provision of the code. (Reference to our website address does not constitute incorporation by reference of the information contained at or available through our website, and you should not consider it to be a part of this prospectus.)

EXECUTIVE COMPENSATION

As an emerging growth company under the JOBS Act, we have opted to comply with the executive compensation disclosure rules applicable to “smaller reporting companies” as such term is defined in the rules promulgated under the Securities Act, which permit us to limit reporting of executive compensation to our principal executive officer and our two (2) other most highly compensated named executive officers.

Summary Compensation Table

The following table provides information regarding the compensation awarded to or earned during 2018 and 2017, as applicable, by our named executive officers.

Name and Principal Position	Year		Salary ($)			Bonus ($)		Stock Awards ($)(1)		Options Awards ($)(2)		All Other Compensation ($)			Total ($)
Christopher B. Ferguson		2019		175,000	(4)		—		—		—		—			175,000
Chief Executive Officer		2018		120,000			—		—		—		—			120,000

Philip Anderson (3)		2019		105,769			—		65,626		—		59,245	(6)		230,640
Chief Strategy Officer, former Chief Financial Officer		2018		141,346			—		15,000		340,606		59,245	(6)		556,197

Bruce Bennett		2019		170,019			—		—		—		8,844	(7)		178,863
EVP and Chief Product Officer		2018		170,019			1,000		15,000		—		8,844	(7)		194,863

Brett Vroman		2019		180,000	(5)		—		—		—		—			180,000
Chief Financial Officer and Corporate Secretary		2018		100,769			1,500		15,000		186,418		—			303,687

(1) The dollar amounts shown in this column represent the fair value of shares on their respective grant dates. The grant date fair value was computed in accordance with ASC 718. Refer to Note 14 to the consolidated audited financial statements in our Annual Report on Form 10-K for the fiscal year ended December 31, 2018 and contained herein for a discussion of the relevant assumption used to determine the grant date fair value of these awards.

(2) The dollar amounts shown in this column represent the fair value of shares on their respective grant dates. The grant date fair value was computed in accordance with ASC 718. Refer to Note 14 to the consolidated audited financial statements in our Annual Report on Form 10-K for the fiscal year ended December 31, 2018 and contained herein for a discussion of the relevant assumption used to determine the grant date fair value of these awards.

(3) Effective June 7, 2019, Mr. Anderson transitioned his role of Chief Financial Officer to Chief Strategy Officer.

(4) Mr. Ferguson was only paid $120,000 during 2019 and the remaining $55,000 has been voluntarily deferred until an undetermined future date.

(5) Mr. Vroman was only paid $160,000 during 2019 and the remaining $20,000 has been voluntarily deferred until an undetermined future date.

(6) Mr. Anderson received $59,254 and $52,254, respectively, for his services as a consultant before his employment by the Company. On June 7, 2019, Mr. Anderson changed roles from the Company’s Chief Financial Officer to its Chief Strategy Officer. On December 2, 2019, Mr. Anderson separated from any employment with the Company.

(7) Mr. Bennett received $8,844 for both 2019 and 2018, respectively, as an allowance for his automobile.

Narrative to Summary Compensation Table

General

During 2018 and 2017, we compensated our named executive officers through a combination of base salary, cash bonuses and other benefits including car allowances. Each of our named executive officers has substantial responsibilities in connection with the day-to-day operations of our Company. Since we were recently formed, the amounts indicated in the table above reflect compensation paid or accrued directly by our operating subsidiaries for these individuals prior to the formation of the Company.

Base Salary

The base salaries of our named executive officers were historically reviewed and set annually by the board of directors of SRM and Fergco; base salaries were also reviewed upon the promotion of an executive officer to a new position or another change in job responsibility. In establishing base salaries for our named executive officers for 2018, 2019 and into the future, our compensation committee relied and will continue to rely on external market data and peer data obtained from outside sources. In addition to considering the information obtained from such sources, our compensation committee will consider:

each named executive officer’s scope of responsibility;

each named executive officer’s years of experience and experience in our industry;

the types and amount of the elements of compensation to be paid to each named executive officer;

our financial performance and performance with respect to other aspects of our operations, such as our growth and profitability; and

each named executive officer’s individual performance and contributions to our performance, including leadership and team work.

Cash Bonuses

Our named executive officers are also eligible to receive an annual cash bonus as a percentage of base salary based on our achievement of various metrics. Annual incentive awards are intended to recognize and reward those named executive officers who contribute meaningfully to our performance for the year. These bonuses are subject to the discretion of the compensation committee each year as to whether and in what amounts they will be paid.

Stock Awards

Our stock incentive awards are issued under the Edison Nation, Inc. Omnibus Incentive Plan (the “Plan”) originally adopted by our board of directors in December 2017 and amended and restated on September 6, 2018. The Plan provides for up to 1,764,705 (876,459 remaining as of February 12 2020) shares of our common stock, or approximately 15% of our outstanding shares calculated on a fully diluted basis, to be issued as stock-based incentives. Stock incentive awards under the Plan can be in the form of stock options, restricted stock units, performance awards and restricted stock that are made to employees, directors and service providers. Awards are subject to forfeiture until vesting conditions have been satisfied under the terms of the award. We believe awards to our executive officers help align the interests of management and our shareholders and reward our executive officers for improved Company performance.

Section 162(m) of the Code

Section 162(m) of the Code generally limits the corporate tax deduction for compensation in excess of $1 million that is paid to our named executive officers. Section 162(m) of the Code was amended by the Tax Cut and Jobs Act of 2018 so that the exceptions for payment of “performance based compensation” or commissions have been eliminated. However, because we recently became a publicly-held corporation in connection with an initial public offering, the $1 million annual deduction limit does not apply during a limited “transition period” for compensation paid under our Plan. This relief applies to stock incentive awards of that are outstanding as well as future awards granted with respect to shares available under the Plan. The compensation committee intends to continue to rely on the transition relief until it expires at our annual meeting of shareholders in 2020 or, if sooner, when the shares currently available for awards at the time of the initial public offering have been depleted.

Employment Agreements

On September 26, 2018, the Company entered into written employment agreements with Christopher B. Ferguson, its Chief Executive Officer. The Company has generally employed its executive officers “at will” and did not previously have written employment agreements with Messrs. Ferguson.

Mr. Ferguson’s Employment Agreement provides for a term of 3 years terminable at will by either party, an annual base salary of $175,000 per year and an annual discretionary bonus of up to 100% of his base salary based on performance criteria determined by the Company’s board of directors. Mr. Ferguson will also receive the normal benefits available to the Company’s executives. If Mr. Ferguson’s employment is terminated by the Company without Cause (as defined in Mr. Ferguson’s Employment Agreement) or by Mr. Ferguson as a result of a material breach by the Company, Mr. Ferguson will be entitled to payment of an amount equal to 6 months of his base salary and continuation of benefits for 6 months following the termination. Mr. Ferguson’s Employment Agreement also contains certain restrictive covenants, including indefinite confidentiality, a one year restriction from directly or indirectly owning or participating in a Competing Business (as defined in Mr. Ferguson’s Employment Agreement), and an 18-month restriction on solicitation of employees, customers, and suppliers of the Company.

In Mr. Vroman’s capacity as the Company’s Controller, Brett Vroman had previously entered into an Employment Agreement with the Company on October 5, 2018 (the “Vroman Employment Agreement”). As a result of Mr. Vroman’s appointment as Chief Financial Officer, Mr. Vroman and the Company amended the Vroman Employment Agreement on June 6, 2019 (the “Vroman Amendment”).

The Vroman Employment Agreement provides for a term of 3 years terminable at will by either party, as well as an annual discretionary bonus of up to 50% of his base salary based on performance criteria determined by the Board. Mr. Vroman will also receive the normal benefits available to the Company’s executives. If Mr. Vroman’s employment is terminated by the Company without Cause (as defined in the Vroman Employment Agreement) or by Mr. Vroman as a result of a material breach by the Company, Mr. Vroman will be entitled to payment of an amount equal to 6 months of his base salary and continuation of benefits for 6 months following the termination. The Vroman Employment Agreement also contains certain restrictive covenants, including indefinite confidentiality, a one year restriction from directly or indirectly owning or participating in a Competing Business (as defined in the Vroman Employment Agreement), and an 18-month restriction on solicitation of employees, customers, and suppliers of the Company.

The Vroman Amendment provides that Mr. Vroman’s base salary shall be increased to $200,000 for the remainder of the term of the Vroman Employment Agreement. Additionally, Mr. Vroman has agreed to surrender certain Stock Options (defined under the Vroman Employment Agreement) previously awarded for 50,000 restricted stock units under the Plan. The restricted stock units will become vested upon Mr. Vroman’s completion of services specified in the Amendment or, if sooner, upon a change in control of the Company (as described in the Plan) or Mr. Vroman’s death. Mr. Vroman’s restricted stock units will be subject to the further terms of the Incentive Plan.

Outstanding Equity Awards at February 12, 2020

The following table provides information with respect to holdings of unvested options and stock awards held by our named executive officers, at February 12, 2020.

	Option Awards
Name	Number of securities underlying unexercised option exercisable (#)		Number of securities underlying unexercised option unexercisable (#)		Option exercise price ($)		Option expiration date
Christopher B. Ferguson		-		-	$	-		-

Philip Anderson (1)		-		-	$	-		-

Bruce Bennett		-		-	$	-		-

Brett Vroman		26,667		53,333	$	-		9/26/2023

(1) Mr. Anderson previously held 210,000 options pursuant to his original employment agreement with the Company, which were surrendered to the Company on January 7, 2020 in exchange for the issuance of 100,000 shares of our restricted common stock, pursuant to Mr. Anderson’s Separation and Release Agreement, dated June 7, 2019, which was further amended by that certain Amendment and Release Agreement between the Company and Mr. Anderson, dated December 2, 2019.

Non-Employee Director Compensation

We do not have a formal policy with respect to compensation payable to our non-employee directors for service as directors. The table below shows the equity and other compensation granted to our non-employee directors during fiscal 2019:

Name	Fees Earned or Paid in Cash ($)		Stock Awards ($)(1)(2)		Option Awards ($)(1)(2)		All Other Compensation ($)		Total ($)
Louis Foreman		-		100,000		-		-		100,000
Frank Jennings		20,000		100,000		-		-		120,000
Kevin O’Donnell		20,000		100,000		-		-		120,000
Toper Taylor		20,000		120,000		-		-		140,000

CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

Policies and Procedures for Related Person Transactions

Our board of directors has adopted written policies and procedures for the review of any transaction, arrangement or relationship in which we are a participant, the amount involved exceeds $120,000 and one of our executive officers, directors, director nominees or 5% shareholders, or their immediate family members, each of whom we refer to as a “related person,” has a direct or indirect material interest.

If a related person proposes to enter into such a transaction, arrangement or relationship, which we refer to as a “related person transaction,” the related person must report the proposed related person transaction to our Chief Financial Officer. The policy calls for the proposed related person transaction to be reviewed and, if deemed appropriate, approved by our audit committee. Whenever practicable, the reporting, review and approval will occur prior to entry into the transaction. If advance review and approval is not practicable, the committee will review, and, in its discretion, may ratify the related person transaction. The policy also permits the chairman of the committee to review and, if deemed appropriate, approve proposed related person transactions that arise between committee meetings, subject to ratification by the committee at its next meeting. Any related person transactions that are ongoing in nature will be reviewed annually.

A related person transaction reviewed under the policy will be considered approved or ratified if it is authorized by the committee after full disclosure of the related person’s interest in the transaction. As appropriate for the circumstances, the committee will review and consider:

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the related person’s interest in the related person transaction;

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the approximate dollar value of the amount involved in the related person transaction;

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the approximate dollar value of the amount of the related person’s interest in the transaction without regard to the amount of any profit or loss;

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whether the transaction was undertaken in the ordinary course of our business;

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whether the terms of the transaction are no less favorable to us than terms that could have been reached with an unrelated third party; and

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the purpose of, and the potential benefits to us of, the transaction.

The audit committee may approve or ratify the transaction only if the committee determines that, under all of the circumstances, the transaction is in our best interests. The committee may impose any conditions on the related person transaction that it deems appropriate.

In addition to the transactions that are excluded by the instructions to the SEC’s related person transaction disclosure rule, our board of directors has determined that the following transactions do not create a material direct or indirect interest on behalf of related persons and, therefore, are not related person transactions for purposes of this policy:

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interests arising solely from the related person’s position as an executive officer of another entity (whether or not the person is also a director of such entity) that is a participant in the transaction, where (i) the related person and all other related persons own in the aggregate less than a 10% equity interest in such entity, (ii) the related person and his or her immediate family members are not involved in the negotiation of the terms of the transaction and do not receive any special benefits as a result of the transaction, and (iii) the amount involved in the transaction is less than the greater of $200,000 or 5% of the annual gross revenues of the company receiving payment under the transaction; and

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a transaction that is specifically contemplated by provisions of our articles of incorporation, as amended and restated, or Second Amended and Restated Bylaws.

The policy provides that transactions involving compensation of executive officers shall be reviewed and approved by the compensation committee in the manner specified in its charter.

We have a written policy regarding the review and approval of related person transactions. With respect to such transactions, it is our policy for our board of directors to consider the nature of and business reason for such transactions, how the terms of such transactions compared to those which might be obtained from unaffiliated third parties and whether such transactions were otherwise fair to and in the best interests of, or not contrary to, our best interests. In addition, all related person transactions required prior approval, or later ratification, by our board of directors.

Related Party Transactions

NL Penn Capital, LP and SRM Entertainment Group LLC

On December 31, 2018, the Company completed the acquisition of all of the voting membership interest of Pirasta, LLC from NL Penn Capital, LP in exchange for the satisfaction of $470,000 due from related party. Accordingly, the consolidated financial statements of the Company reflect the accounting of the combined acquired subsidiary at historical carrying values, except that equity reflects a distribution for the excess of consideration paid over the net carrying amount of assets.

On December 31, 2018, the Company completed the acquisition of 50% of the voting membership interest of Best Party Concepts, LLC from NL Penn Capital, LP in exchange for the satisfaction of $500,000 due from related party. Accordingly, the consolidated financial statements of the Company reflect the accounting of the combined acquired subsidiary at historical carrying values, except that equity reflects a distribution for the excess of consideration paid over the net carrying amount of assets.

As of September 30, 2019 and December 31, 2018, due to related party consists of net amounts due to SRM Entertainment Group LLC (“SRM LLC”) and NL Penn Capital, LP , the majority owner of both, which are owned by Chris Ferguson, our Chairman and Chief Executive Officer. 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 LLC and NL Penn Capital, LP. As of September 30, 2019 and December 31, 2018, the net amount due to related parties was $22,896 and $140,682, respectively. Such amounts are due currently.

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. 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 member of the Company’s board of directors, is also the Chief Executive Officer and the largest equity holder of Enventys. We incurred fees of approximately $97,500 related to the services performed by Enventys for the nine months ended September 30, 2019, respectively. In April 2019, the Company and Enventys terminated the letter agreement, such that no further payments are due from the Company to Enventys.

Stock Option and Other Compensation Plans

On September 6, 2018, the Company’s board of directors approved an amendment and restatement of the Company’s omnibus incentive plan solely to reflect the Company’s name change to Edison Nation, Inc. Thus, the Edison Nation, Inc. Omnibus Incentive Plan (the “Plan”) which remains effective as of February 9, 2018, provides for the issuance of up to 1,764,705 (876,459 remaining as of February 12, 2020) shares of common stock to help align the interests of management and our shareholders and reward our executive officers for improved Company performance. Stock incentive awards under the Plan can be in the form of stock options, restricted stock units, performance awards and restricted stock that are made to employees, directors and service providers. Awards are subject to forfeiture until vesting conditions have been satisfied under the terms of the award. The exercise price of stock options are equal to the fair market value of the underlying Company common stock on the date of grant.

On September 26, 2018, the Compensation Committee of the board of directors approved the terms of compensation to be paid to non-employee directors for fiscal year 2018. Compensation for non-employee directors includes an annual retainer of $20,000, an annual committee meeting fee of $5,000, if such director chairs a committee of the board of directors, and an award of options to purchase 20,000 shares of the Company’s common stock (the “Options”). The restricted stock underlying such Options were to vest one year after the grant date. However, the Options were never granted. Accordingly, On November 15, 2019, in lieu of granting the Options, the Company granted each member of the board of directors restricted stock units of 20,000 shares which vested immediately, except for Toper Taylor who received 30,000 shares in November 2019, related to the share amounts due to him under the terms of his agreement with us. In addition the Company granted each non-employee director restricted stock units of 30,000 shares, which vested on January 1, 2020.

PRINCIPAL SHAREHOLDERS

Security Ownership of Management and Certain Beneficial Owners

The following table sets forth the beneficial ownership of our Common Stock as of February 12, 2020 by:

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each shareholder known by us to beneficially own more than 5% of our outstanding Common Stock;

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each of our directors;

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each of our named executive officers; and

•

all of our directors and executive officers as a group.

We have determined beneficial ownership in accordance with the rules of the SEC. These rules generally provide that a person is the beneficial owner of securities if such person has or shares the power to vote or direct the voting of securities, or to dispose or direct the disposition of securities. A security holder is also deemed to be, as of any date, the beneficial owner of all securities that such security holder has the right to acquire within 60 days after such date through (i) the exercise of any option or warrant, (ii) the conversion of a security, (iii) the power to revoke a trust, discretionary account or similar arrangement, or (iv) the automatic termination of a trust, discretionary account or similar arrangement. Except as disclosed in the footnotes to this table and subject to applicable community property laws, we believe that each person identified in the table has sole voting and investment power over all of the shares shown opposite such person’s name.

The percentage of beneficial ownership is based on 8,087,751 shares of our Common Stock outstanding as of February 12, 2020, which excludes:

	·	876,459 shares of common stock reserved for future issuance under the Edison Nation, Inc. Omnibus Incentive Plan (the “Plan”);
	·	80,000 shares of common stock issuable upon the exercise of options outstanding as of February 12, 2020;
	·	285,632 shares of common stock issuable upon conversion of the 4%, 5 year senior convertible notes in connection with the Edison Nation Holdings, LLC acquisition;
	·	990,000 shares of reserved common stock issuable upon exercise of the put option of Edison Nation Holdings, LLC sellers; and
	·	65,626 shares of common stock issuable upon exercise of the Selling Agent Warrants issued in connection with the company’s initial public offering;
	·	24,366 shares of common stock issuable upon exercise of the Placement Agent Warrants in connection with the May 2019 Notes;
	·	70,500 shares of common stock issuable upon exercise of the Placement Agent Warrants in connection with the PIPE Financing;
	·	550,000 shares of common stock issuable upon conversion of the Greentree Note; and
	·	550,000 shares of common stock issuable upon exercise of the Greentree Warrant.
	·	210,000 shares of common stock granted but not issued to our directors as restricted stock units
	·	50,000 shares of common stock issuable upon the exercise of the 32E Warrant;
	·	250,000 shares of common stock issuable upon exercise of the warrants in connection with various financings.

Name of Beneficial Owner	Number of Shares		Percentage
5% Shareholders (1)
Greentree Financial Group, Inc. (2)		1,200,000		14.8	%
Tiburon Opportunity Fund LP		600,000		7.4	%
Lelainya D. Ferguson (3)		1,455,750		18.0	%
Executive Officers and Directors
Christopher B. Ferguson (4)		1,779,950		22.0	%
Kevin Ferguson (5)		313,100		*	%
Brett Vroman		3,000		*	%
Bruce Bennett		3,500		*	%
Frank Jennings (6)		1,300		*	%
Louis Foreman (7)		322,288		*	%
Kevin O’Donnell (8)		900		*	%
Toper Taylor		2,000		*	%
Total		2,426,038		30.0	%

*Represents beneficial ownership of less than one percent (1%).

(1) The address for each shareholder listed in the table above is: c/o Edison Nation, Inc. 1 West Broad Street, Suite 1004, Bethlehem, Pennsylvania 18018.

(2) Includes 550,000 shares issuable upon conversion of the Greentree Note, and 550,000 shares issuable upon exercise of the Greentree Warrant.

(3) Includes 1,455,750 shares held jointly with Mrs. Ferguson’s spouse, Christopher B. Ferguson.

(4) Includes 1,455,750 shares held by Mr. Ferguson’s spouse, Lelainya D. Ferguson, and 13,000 shares held by FergcoBros, LLC. Mr. Freguson person disclaims beneficial ownership of these securities.

(5) Includes 13,000 shares held by FergcoBros, LLC. Mr. Ferguson person disclaims beneficial ownership of these securities.

(6) Includes 350 shares held by Mr. Jennings’ spouse, 200 shares held by Mr. Jennings’ son, and 100 shares held by Mr. Jennings’ children, respectively.

(7) The indicated ownership is based solely upon a Schedule 13G filed with the SEC by Mr. Foreman on September 21, 2019. This total includes 278,542 shares indirectly held by Mr. Foreman through Venture Six LLC (the “Venture Six Shares”). Mr. Foreman is the managing member of Venture Six LLC, and disclaims beneficial ownership of the Venture Six Shares reported.

(8) Includes 575 shares held by Mr. O’Donnell’s children.

DESCRIPTION OF CAPITAL STOCK

General

The following description of our capital stock and provisions of our amended and restated articles of incorporation and Second Amended and Restated Bylaws are summaries and are qualified by reference to such amended and restated articles of incorporation and bylaws that will be in effect upon the closing of this offering. By becoming a shareholder in our Company, you will be deemed to have notice of and consented to these provisions of our amended and restated articles of incorporation and Second Amended and Restated Bylaws.

We have two authorized classes of stock: common stock (250,000,000 million shares authorized) and preferred stock (no shares presently authorized).

Common Stock

Holders of our common stock are entitled to one vote for each share held on all matters submitted to a vote of shareholders and do not have cumulative voting rights. An election of directors by our shareholders shall be determined by a plurality of the votes cast by the shareholders entitled to vote on the election. Holders of common stock are entitled to receive proportionately any dividends as may be declared by our board of directors, subject to any preferential dividend rights of outstanding preferred stock.

In the event of our liquidation or dissolution, the holders of common stock are entitled to receive proportionately all assets available for distribution to shareholders after the payment of all debts and other liabilities and subject to the prior rights of any outstanding preferred stock. Holders of common stock have no preemptive, subscription, redemption or conversion rights. The rights, preferences and privileges of holders of common stock are subject to and may be adversely affected by the rights of the holders of shares of any series of preferred stock that we may designate and issue in the future.

As of February 12, 2020, there were 8,087,751 shares of common stock issued and outstanding, which does not include:

	·	876,459 shares of common stock reserved for future issuance under our equity compensation plans;
	·	80,000 shares of common stock issuable upon the exercise of options outstanding as of February 12, 2020;
	·	285,632 shares of common stock issuable upon conversion of the 4%, 5 year senior convertible notes in connection with the EN acquisition;
	·	990,000 shares of reserved common stock issuable upon exercise of the put option of EN sellers; and
	·	65,626 shares of common stock issuable upon exercise of the Selling Agent Warrants issued in connection with the company’s initial public offering;
	·	24,366 shares of common stock issuable upon exercise of the Placement Agent Warrants in connection with the May 2019 Notes;
	·	70,500 shares of common stock issuable upon exercise of the Placement Agent Warrants in connection with the PIPE Financing;
	·	550,000 shares of common stock issuable upon conversion of the Greentree Note;
	·	550,000 shares of common stock issuable upon the exercise of the Greentree Warrant;
	·	210,000 shares of common stock granted but not issued to our directors as restricted stock units
	·	50,000 shares of common stock issuable upon the exercise of the 32E Warrant;
	·	250,000 shares of common stock issuable upon exercise of the warrants in connection with various financings.

Preferred Stock

Under our amended and restated articles of incorporation, we have no shares of preferred stock authorized presently. However, our board of directors has the authority, without further action by the stockholders, to issue up to that number of shares of preferred stock in one or more series, to establish from time to time the number of shares to be included in each such series, to fix the rights, preferences and privileges of the shares of each wholly unissued series and any qualifications, limitations or restrictions thereon, and to increase or decrease the number of shares of any such series, but not below the number of shares of such series then outstanding. Our board of directors may authorize the issuance of preferred stock with voting or conversion rights that could adversely affect the voting power or other rights of the holders of the common stock. The issuance of preferred stock, while providing flexibility in connection with possible acquisitions and other corporate purposes, could, among other things, have the effect of delaying, deferring or preventing a change in control of the company and may adversely affect the market price of our common stock and the voting and other rights of the holders of our common stock.

Anti-Takeover Provisions

We are governed by the provisions of Nevada Revised Statutes 78.378 to 78.3793 because we are incorporated in Nevada, which prohibits a person who owns in excess of ten percent (10%) of our outstanding voting stock from merging, consolidating or combining with us for a period of three years after the date of the transaction in which the person acquired in excess of ten percent (10%) of our outstanding voting stock, unless the merger, consolidation or combination is approved in a prescribed manner. Any provision in our amended and restated articles of incorporation or our Second Amended and Restated Bylaws or Nevada law that has the effect of delaying or deterring a change in control could limit the opportunity for our Shareholders to receive a premium for their shares of our common stock, and could also affect the price that some investors are willing to pay for our common stock.

Removal of Directors

A director may be removed only for cause and only by the affirmative vote of the holders of at least 75% of the votes that all our shareholders would be entitled to cast in an annual election of directors. Any vacancy on our board of directors, including a vacancy resulting from an enlargement of our board of directors, may be filled only by vote of a majority of our directors then in office.

Authorized but Unissued Shares

The authorized but unissued shares of our common stock are available for future issuance without shareholder approval, subject to any limitations imposed by the listing standards of The Nasdaq Capital Market. These additional shares may be used for a variety of corporate finance transactions, acquisitions and employee benefit plans. The existence of authorized but unissued and unreserved common stock and preferred stock could make more difficult or discourage an attempt to obtain control of us by means of a proxy contest, tender offer, merger or otherwise.

Warrants

As of February 12, 2020, there were 960,492 shares of our common stock issuable upon exercise of outstanding Warrants, including the 550,000 shares of common stock underlying the Greentree Warrant, 50,00 shares of common stock underlying the 32E Warrant, and 160,492 shares of common stock underlying the Alexander Warrants.

Options

As of February 12, 2020, there were 80,000 shares of our common stock issuable upon exercise of outstanding stock options pursuant to our equity plans with a weighted average exercise price of $7.01 per share.

In addition, as of February 12, 2020, there were 990,000 shares of reserved common stock issuable upon exercise of the put option of EN sellers.

Restricted Stock Units

As of February 12, 2020, there were 210,000 shares of our common stock granted but not issued to our directors as Restricted Stock Units.

Registration Rights

On September 4, 2018, as part of the closing of our acquisition of all of the voting membership interests of Edison Nation Holdings, LLC, we entered into a registration rights agreement certain members of Edison Nation Holdings, LLC, which provided those members with demand and piggyback registration rights in respect of any registrable shares of the Company’s common stock received pursuant to the terms of that certain Membership Interest Purchase Agreement (the “Purchase Agreement”) by and among us, Edison Nation Holdings, LLC and its members dated June 29, 2018.

See the section entitled “Recent Developments—32 Entertainment, LLC Financing” relating to the registration rights granted to investors in the Greentree Financing.

See the section entitled “Private Placement of Securities--Registration Rights” relating to the registration rights granted to investors in the PIPE Financing.

See the section entitled “Recent Developments—Greentree Financing” relating to the registration rights granted to investors in the Greentree Financing.

Transfer Agent and Registrar

The transfer agent and registrar for our common stock is Nevada Agency & Transfer Company, which is located at 50 W. Liberty Street, #880, Reno, Nevada 89501 and the telephone number is (775) 322-0626.

The Nasdaq Capital Market

Our common stock trades on The Nasdaq Capital Market under the symbol “EDNT.”

LEGAL MATTERS

The validity of the shares of common stock offered hereby and certain other legal matters will be passed upon for us by Waller Lansden Dortch & Davis, LLP, Nashville, Tennessee.

EXPERTS

The financial statements of Edison Nation, Inc. as of December 31, 2018 and 2017 appearing in this prospectus and Registration Statement, have been audited by Marcum LLP, independent registered public accounting firm, as set forth in their report thereon appearing elsewhere herein, and are included in reliance upon such report, given on the authority of such firm as experts in accounting and auditing.

WHERE YOU CAN FIND MORE INFORMATION

We have filed with the SEC a Registration Statement on Form S-1 under the Securities Act, with respect to the shares of common stock being offered by this prospectus. This prospectus does not contain all of the information in the Registration Statement and its exhibits. For further information with respect to Edison Nation, Inc. and the common stock offered by this prospectus, we refer you to the Registration Statement and its exhibits. Statements contained in this prospectus as to the contents of any contract or any other document referred to are not necessarily complete, and in each instance, we refer you to the copy of the contract or other document filed as an exhibit to the Registration Statement. Each of these statements is qualified in all respects by this reference.

You can read our SEC filings, including the registration statement, over the Internet at the SEC’s website at http://www.sec.gov.

We are subject to the information reporting requirements of the Exchange Act, and we will file reports, proxy statements and other information with the SEC. These reports, proxy statements and other information will be available for inspection and copying at the public reference room and website of the SEC referred to above. We also maintain a website at www.edisonnation.com, at which you may access these materials free of charge as soon as reasonably practicable after they are electronically filed with, or furnished to, the SEC. The information contained in, or that can be accessed through, our website is not part of this prospectus.

INCORPORATION OF CERTAIN INFORMATION BY REFERENCE

Certain information about us is “incorporated by reference” to reports and exhibits that we file with the SEC that are not included in this prospectus. We disclose important information to you by referring you to those documents. Any statement contained in this prospectus or a document incorporated or deemed to be incorporated by reference into this prospectus will be deemed to be modified or superseded for purposes of this prospectus to the extent that a statement contained in this prospectus or any other subsequently filed document that is deemed to be incorporated by reference into this prospectus modifies or supersedes such statement. Any statement so modified or superseded will not be deemed, except as so modified or superseded, to constitute a part of this prospectus. We incorporate by reference the documents listed below that we have filed with the SEC:

	•	Annual Report on Form 10-K for the fiscal year ended December 31, 2018;
	•	Quarterly Reports on Form 10-Q for the quarters ended March 31, 2019, June 30, 2019, and September 30, 2019;
	•	Current Reports on Form 8-K, filed on March 13, 2019, March 29, 2019, May 10, 2019, May 17, 2019, June 11, 2019, June 19, 2019, June 20, 2019, July 29, 2019, August 29, 2019, October 4, 2019, October 8, 2019, and January 29, 2020, as well as the Current Report on Form 8-K/A filed on October 8, 2019; and
	•	Definitive Proxy Statement on Schedule 14A, filed on April 30, 2019.

All documents that we file with the SEC under Sections 13(a), 13(c), 14 or 15(d) of the Exchange Act, on or after the date of this prospectus and prior to the termination of this offering are also incorporated herein by reference and will automatically update and, to the extent described above, supersede information contained or incorporated by reference in this prospectus and previously filed documents that are incorporated by reference in this prospectus. However, anything herein to the contrary notwithstanding, no document, exhibit or information or portion thereof that we have “furnished” or may in the future “furnish” to (rather than “file” with) the SEC, including, without limitation, any document, exhibit or information filed pursuant to Item 2.02, Item 7.01 and certain exhibits furnished pursuant to Item 9.01 of our Current Reports on Form 8-K, shall be incorporated by reference into this prospectus.

You may request a copy of any of the reports or documents incorporated by reference into this prospectus, at no cost (other than exhibits and schedules to such filings, unless such exhibits or schedules are specifically incorporated by reference into this prospectus supplement and the accompanying prospectus), by writing or calling us at the following address: Investor Relations, 1 West Broad Street, Suite 1004, Bethlehem, Pennsylvania 18018 or (484) 893-0060.

INDEX TO CONSOLIDATED FINANCIAL STATEMENTS

PART I

INDEX TO FINANCIAL STATEMENTS

	Page
Unaudited Condensed Consolidated Financial Statements for the Nine Months Ended September, 2019 and 2018	F-2

Condensed Consolidated Balance Sheets as of September 30, 2019 and December 31, 2018	F-2

Condensed Consolidated Statements of Operations for the nine months ended September 30, 2019 and 2018	F-3

Condensed Consolidated Statements of Changes in Shareholders’ Equity for the nine months ended September 30, 2019 and 2018	F-4 - F-5

Condensed Consolidated Statements of Cash Flows for the nine months ended September 30, 2019 and 2018	F-6

Notes to Condensed Consolidated Financial Statements	F-7 - F-24

Audited Consolidated Financial Statements for the Years Ended December 31, 2017 and 2018	F-24

Report of Independent Registered Public Accounting Firm	F-25

Consolidated Balance Sheets as of December 31, 2018 and 2017	F-26

Consolidated Statements of Operations for the years ended December 31, 2018 and 2017	F-27

Consolidated Statement of Changes in Shareholders’ Equity (Deficit) for the years ended December 31, 2018 and 2017	F-28

Consolidated Statements of Cash Flows for the years ended December 31, 2018 and 2017	F-29

Notes to Consolidated Financial Statements	F-30 - F-47

F-1

Edison Nation, Inc. (formerly known as Xspand Products Lab, Inc.) and Subsidiaries

CONDENSED CONSOLIDATED BALANCE SHEETS

	September 30, 2019 (Unaudited)			December 31, 2018
Assets
Current assets:
Cash and cash equivalents	$	1,214,303		$	2,052,731
Accounts receivable, net		1,889,706			1,877,351
Inventory		1,106,077			923,707
Prepaid expenses and other current assets		996,968			611,695
Income tax receivable		31,563			-
Total current assets		5,238,617			5,465,484
Property and equipment, net		974,850			998,863
Right of use assets – operating leases, net		810,017			-
Intangible assets, net		11,873,337			12,687,731
Goodwill		9,736,510			9,736,510
Total assets	$	28,633,331		$	28,888,588

Liabilities and Shareholders’ equity
Current liabilities:
Accounts payable	$	6,932,584		$	5,519,159
Accrued expenses and other current liabilities		1,849,003			1,135,551
Deferred revenues		175,956			175,956
Current portion of operating lease liabilities		292,800			-
Income tax payable		-			129,511
Line of credit, net of debt issuance costs of $19,466 and $31,145, respectively		452,087			531,804
Current portion of notes payable, net of debt issuance costs of $153,793 and $0, respectively		1,270,243			313,572
Current portion of notes payable – related parties		1,039,330			932,701
Due to related party		22,896			140,682
Total current liabilities		12,034,900			8,878,936
Contingent consideration		520,000			520,000
Operating lease liabilities, net of current portion		534,817			-
Convertible notes payable – related parties, net of debt discount of $439,819 and $466,667 related to the conversion feature, respectively		2,099,455			961,494
Notes payable, net of current portion		46,101			56,688
Notes payable – related parties, net of current portion		2,342,249			2,531,490
Deferred tax liability		341			341
Total liabilities		17,577,863			12,948,949
Commitments and contingencies (Note 8)

Shareholders' equity
Common stock, $0.001 par value, 250,000,000 shares authorized; 6,033,835 and 5,654,830 shares issued and outstanding as of September 30, 2019 and December 31, 2018, respectively		6,034			5,655
Additional paid-in-capital		21,448,280			20,548,164
Accumulated deficit		(11,318,564	)		(5,565,756	)
Total shareholders’ equity attributable to Edison Nation, Inc.		10,135,750			14,988,063
Noncontrolling interests		919,718			951,576
Total shareholders’ equity		11,055,468			15,939,639
Total liabilities and shareholders’ equity	$	28,633,331		$	28,888,588

The accompanying notes are an integral part of these consolidated financial statements.

F-2

Edison Nation, Inc. (formerly known as Xspand Products Lab, Inc.) and Subsidiaries

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

	For the Nine Months Ended September 30,
	2019			2018
Revenues, net	$	15,239,434		$	12,758,715
Cost of revenues		10,413,868			9,090,215
Gross profit		4,825,566			3,668,500

Operating expenses:
Selling, general and administrative		9,738,107			6,276,830
Operating loss		(4,912,541	)		(2,608,330	)

Other (expense) income:
Rental income		77,111			77,111
Change in fair value of put option contract		-			(732,600	)
Interest expense		(875,036	)		(407,267	)
Total other (expense) income		(797,925	)		(1,062,756	)
Loss before income taxes		(5,710,466	)		(3,671,086	)
Income tax expense		74,200			312,186
Net loss	$	(5,784,666	)	$	(3,983,272	)
Net loss attributable to noncontrolling interests		(31,858	)		-
Net loss attributable to Edison Nation, Inc.	$	(5,752,808	)	$	(3,983,272	)
Net loss per share
- basic and diluted	$	(1.00	)	$	(1.11	)
Weighted average number of common shares outstanding – basic and diluted		5,733,379			3,577,942

The accompanying notes are an integral part of these consolidated financial statements.

F-3

Edison Nation, Inc. (formerly known as Xspand Products Lab, Inc.) and Subsidiaries

CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN SHAREHOLDERS’ EQUITY

	For the Three Months Ended September 30, 2019 and 2018
	Common Stock				Additional Paid-in			Accumulated			Noncontrolling			Total Shareholders’
	Shares		Amount		Capital			Deficit			Interest			Equity (Deficit)
Balance, July 1, 2019		5,737,830	$	5,738	$	21,136,912		$	(8,736,463	)	$	968,821		$	13,375,008
Issuance of common stock to note holders		201,005		201		136,279			-			-			136,480
Issuance of common stock to employees		3,000		3		8,847									8,850
Issuance of common stock to vendors for services		92,000		92		252,908			-			-			253,000
Stock-based compensation		-		-		(86,666	)		-			-			(86,666	)
Net loss		-		-		-			(2,582,101	)		(49,103	)		(2,631,204	)
Balance, September 30, 2019		6,033,835	$	6,034	$	21,448,280		$	(11,318,564	)	$	919,718		$	11,055,468

Balance, July 1, 2018		4,368,930	$	4,369	$	7,551,951		$	(2,539,596	)	$	-		$	5,016,724
Sale of common stock – investors in the IPO		18,290		18		(18	)		-			-			-
Issuance of common stock to employees		700		1		3,499			-			-			3,500
Issuance of common stock to note holders		20,000		20		(20	)		-			-			-
Issuance of common stock to vendors for services		75,000		75		374,925			-			-			375,000
Issuance of common stock to satisfy indebtedness related to acquisition of Edison Nation, Holdings, LLC		557,084		557		3,759,760			-			-			3,760,317
Beneficial conversion option on indebtedness related to acquisition of Edison Nation Holdings, LLC		-		-		500,000			-			-			500,000
Stock-based compensation		-		-		260,826			-			-			260,826
Net loss		-		-		-			(1,679,306	)		-			(1,679,306	)
Balance, September 30, 2018		5,040,004	$	5,040	$	12,450,923		$	(4,218,902	)		-		$	8,237,061

The accompanying notes are an integral part of these consolidated financial statements.

F-4

Edison Nation, Inc. (formerly known as Xspand Products Lab, Inc.) and Subsidiaries

CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN SHAREHOLDERS’ EQUITY

	For the Nine Months Ended September 30, 2019 and 2018
	Common Stock				Additional Paid-in		Accumulated			Noncontrolling			Total Shareholders’
	Shares		Amount		Capital		Deficit			Interest			Equity (Deficit)
Balance, January 1, 2019		5,654,830	$	5,655	$	20,548,164	$	(5,565,756	)	$	951,576		$	15,939,639
Issuance of common stock to note holders		251,004		251		309,529		-			-			309,780
Issuance of common stock to employees		3,000		3		8,847								8,850
Issuance of common stock to vendors for services		125,000		125		394,000		-			-			394,125
Stock-based compensation		-		-		187,740		-			-			187,740
Net loss		-		-		-		(5,752,808	)		(31,858	)		(5,784,666	)
Balance, September 30, 2019		6,033,835	$	6,034	$	21,448,280	$	(11,318,564	)	$	919,718		$	11,055,468

Balance, January 1, 2018		3,000,000	$	3,000	$	-	$	(235,630	)	$	-		$	(232,630	)
Sale of common stock – investors in the IPO		1,312,520		1,313		5,357,257		-			-			5,358,570
Issuance of common stock to employees		61,900		62		309,438		-			-			309,500
Issuance of common stock to note holders		33,500		33		167,467		-			-			167,500
Issuance of common stock to vendors for services		75,000		75		374,925		-			-			375,000
Issuance of common stock to satisfy indebtedness related to acquisition of Edison Nation, Holdings, LLC		557,084		557		3,759,760		-			-			3,760,317
Beneficial conversion option on indebtedness related to acquisition of Edison Nation Holdings, LLC		-		-		500,000		-			-			500,000
Stock-based compensation		-		-		1,982,076								1,982,076
Net loss		-		-		-		(3,983,272	)		-			(3,983,272	)
Balance, September 30, 2018		5,040,004	$	5,040	$	12,450,923	$	(4,218,902	)		-		$	8,237,061

The accompanying notes are an integral part of these consolidated financial statements.

F-5

Edison Nation, Inc. (formerly known as Xspand Products Lab, Inc.) and Subsidiaries

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

	Nine Months Ended September 30,
	2019			2018
Cash Flow from Operating Activities
Net loss attributable to Edison Nation, Inc.	$	(5,752,808	)	$	(3,983,272	)
Net loss attributable to noncontrolling interests		(31,858	)		-
Net loss		(5,784,666	)		(3,983,272	)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization		952,019			120,004
Amortization of financing costs		658,126			266,944
Stock-based compensation		876,585			2,666,576
Amortization of right of use asset		217,189			-
Change in fair value of put option contract		-			732,600
Changes in assets and liabilities:
Accounts receivable		(12,355	)		(1,402,277	)
Inventory		(182,370	)		39,974
Prepaid expenses and other current assets		(667,836	)		(1,011,586	)
Accounts payable		1,413,425			55,194
Accrued expenses and other current liabilities		549,072			780,564
Repayment of operating lease liabilities		(199,589	)		-
Due from related party		(117,786	)		(472,352	)
Net cash used in operating activities		(2,298,186	)		(2,207,631	)

Cash Flows from Investing Activities
Purchases of property and equipment		(113,612	)		(121,186	)
Acquisition of Edison Nation Holdings, LLC and Subsidiaries, net of cash received		-			(881,318	)
Purchase of loan held for investment		-			(500,000	)
Net cash used in investing activities		(113,612	)		(1,502,504	)

Cash Flows from Financing Activities
Borrowings under lines of credit		249,370			-
Borrowings under convertible notes payable		1,111,111			-
Borrowings under notes payable		1,670,000			718,559
Repayments under lines of credit		(340,766	)		-

Repayments under notes payable		(570,587	)		(645,000	)
Repayments under notes payable – related parties		(82,612	)		(118,779	)
Net proceeds from sale of common stock		-			5,358,570
Fees paid for financing costs		(463,146	)		(99,444	)
Net cash provided by financing activities		1,573,370			5,213,906
Net (decrease) increase in cash and cash equivalents		(838,428	)		1,503,771
Cash and cash equivalents - beginning of period		2,052,731			557,268
Cash and cash equivalents - end of period	$	1,214,303			2,061,039

Supplemental Disclosures of Cash Flow Information
Cash paid during the period for:
Interest	$	145,324		$	93,044
Income taxes	$	-		$	-
Noncash investing and financing activity:
Shares issued to note holders	$	309,780		$	167,500
Shares issued for the acquisition of Edison Nation Holdings, LLC		-			3,760,317
Shares reserved in exchange for the cancellation of certain non-voting membership interests related to acquisition of Edison Nation Holdings, LLC		-			6,682,500
Borrowings under note payable for the purchase of property and equipment		-			73,559
Issuance of 4%, 5 year senior convertible notes for the acquisition of Edison Nation Holdings, LLC		-			1,428,161

The accompanying notes are an integral part of these consolidated financial statements.

F-6

Edison Nation, Inc. (formerly known as Xspand Products Lab, Inc.) and Subsidiaries

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

Note 1 — Basis of Presentation and Nature of Operations

The condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) for interim financial statements and with Form 10-Q and Article 10 of Regulation S-X of the United States Securities and Exchange Commission (the “SEC”). Accordingly, they do not contain all information and footnotes required by GAAP for annual financial statements. The condensed consolidated financial statements include the accounts of the Company and its wholly-owned and majority-owned subsidiaries. All intercompany balances and transactions have been eliminated in consolidation. In the opinion of the Company’s management, the accompanying unaudited condensed consolidated financial statements contain all the adjustments necessary (consisting only of normal recurring accruals) to present the financial position of the Company as of September 30, 2019 and the results of operations, changes in shareholders’ equity, and cash flows for the periods presented. The results of operations for the nine months ended September 30, 2019 are not necessarily indicative of the operating results for the full fiscal year or any future period.

These condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and related notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2018. The Company’s accounting policies are described in the Notes to Consolidated Financial Statements in its Annual Report on Form 10-K for the year ended December 31, 2018, and updated, as necessary, in this Quarterly Report on Form 10-Q.

As used herein, the terms the “Company,” “Edison Nation” “we,” “us,” “our” and similar refer to Edison Nation, Inc., a Nevada corporation incorporated on July 18, 2017 under the laws of the State of Nevada as Idea Lab X Products, Inc. and also formerly known as Xspand Products Lab, Inc. prior to its name change on September 12, 2018, and/or its wholly-owned and majority-owned operating subsidiaries.

As of September 30, 2019, Edison Nation, Inc. had five wholly-owned subsidiaries: S.R.M. Entertainment Limited (“SRM”), Ferguson Containers, Inc. (“Fergco”), CBAV1, LLC (“CB1”), Pirasta, LLC and Edison Nation Holdings, LLC (“EN”). Edison Nation, Inc. owns 72.15% of Cloud B, Inc. (“Cloud B”), 50% of Best Party Concepts, LLC and 50% of Ed Roses, LLC. EN is the single member of Edison Nation, LLC and Everyday Edisons, LLC. Edison Nation, LLC is the single member of Safe TV Shop, LLC. Cloud B owns 100% of Cloud B Limited (UK) and Cloud B Pty (Australia).

On August 23, 2019, the Company formed Ed Roses, LLC, a 50% joint venture with 4Keeps Roses, Inc., to distribute preserved roses, flowers and associated gift products.

Liquidity

The Company’s operating loss for the nine months ended September 30, 2019 included $1,828,604 related to depreciation, amortization and stock-based compensation. In addition, approximately $100,000 and $1,200,000, respectively, was related to transaction costs, restructuring charges and other non-recurring and redundant costs which are being removed or reduced. The negative working capital includes approximately $3,800,000 related to unsecured trade payables in our Cloud B acquisition. In addition, our outstanding balances under notes payable includes $0.9 million related to Cloud B. CB1 owns the senior secured position on the promissory note to Cloud B. in the amount of $2,270,000. In February 2019, CB1, pursuant to an Article 9 foreclosure action, perfected its secured UCC interest in all the assets of Cloud B to partially satisfy the outstanding balance on the note and thereby making any payments of such Cloud B trade payables and notes unlikely in the future. In addition, SRM was an unsecured creditor in the amount of approximately $1,700,000 which is not included in the $3,800,000 but at this time remains unpaid. The total liabilities of approximately $6,400,000, of which $1,700,000, or net of $4,700,000, has been eliminated in consolidation, are not expected to be satisfied due to the foreclosure.

On October 2, 2019, the Company entered into a Share Purchase Agreement (the “PIPE Purchase Agreement”) with certain accredited investors (collectively, the “Investors”) for the private placement of 1,175,000 shares of the Company’s common stock, $0.001 par value per share, at a purchase price of $2.00 per share (the “PIPE Transaction”). In a series of four closings conducted in October 2019, the Company received net proceeds of $2,039,303 which consisted of $2,350,000 of gross proceeds offset by $310,697 of fees to placement agent and their lawyers. Alexander Capital, LP (“Alexander Capital”), a FINRA registered broker dealer, acted as placement agent with respect to the PIPE Transaction. In connection with the PIPE Transaction, Alexander Capital received a commission of $141,000, a debt restructuring fee of $64,208, a debt conversion fee of 15,889, a placement fee of $33,600 and Warrants to purchase 70,500 shares of the Company’s common stock, at an exercise price of $2.50 per share. In connection with the PIPE transaction, the convertible notes entered into on May 13, 2019 were also converted at $2.00 per share into 560,185 shares of the Company's common stock.

Raise further capital through the sale of additional equity;

Borrow money under debt securities;

The deferral of payments to related party debt holders for both principal of approximately $1,000,000 and related interest expense;

Cost saving initiatives related to synergies and the elimination of redundant costs of approximately $500,000, of which approximately $153,000 impacted the three months ended September 30, 2019; and

Possible sale of certain brands to other manufacturers.

F-7

Edison Nation, Inc. (formerly known as Xspand Products Lab, Inc.) and Subsidiaries

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

Note 2 — Summary of Significant Accounting Policies

Principles of Consolidation

The consolidated financial statements include the accounts of Edison Nation, Inc. and its wholly-owned and majority owned subsidiaries. All intercompany balances and transactions have been eliminated.

Use of Estimates

Preparation of financial statements in conformity with U.S. GAAP requires management to make estimates, judgments and assumptions that affect the reported amounts of assets, liabilities, revenues and expenses, together with amounts disclosed in the related notes to the financial statements.

The Company’s significant estimates used in these financial statements include, but are not limited to, accounts receivable reserves, the valuation allowance related to the Company’s deferred tax assets, the recoverability and useful lives of long-lived assets, debt conversion features, stock-based compensation, certain assumptions related to the valuation of the reserved shares and the assets acquired and liabilities assumed related to the Company’s acquisitions. Certain of the Company’s estimates could be affected by external conditions, including those unique to the Company and general economic conditions. It is reasonably possible that these external factors could have an effect on the Company’s estimates and could cause actual results to differ from those estimates.

Reclassifications

Certain reclassifications have been made to prior year amounts to conform to current year presentation.

Cash and Cash Equivalents

The Company has cash on deposit in several financial institutions which, at times, may be in excess of Federal Deposit Insurance Corporation (“FDIC”) insurance limits. The Company has not experienced losses in such accounts and periodically evaluates the creditworthiness of its financial institutions. The Company reduces its credit risk by placing its cash and cash equivalents with major financial institutions. The Company had approximately $627,000 uninsured cash at September 30, 2019 of which approximately $198,000 was held in foreign bank accounts not covered by FDIC insurance limits as of September 30, 2019.

Accounts Receivable

As of September 30, 2019, the following customers represented more than 10% of total accounts receivable:

	September 30,
	2019
Customer A		15	%

Inventory

Inventory is recorded at the lower of cost or net realizable value on a first-in, first-out basis. The Company reduces the carrying value of inventories for those items that are potentially excess, obsolete, or slow moving based on changes in customer demand, technology developments, or other economic factors.

Revenue Recognition

Generally, the Company considers all revenues as arising from contracts with customers. Revenue is recognized based on the five step process outlined in the Accounting Standards Codification (“ASC”) 606:

Step 1 – Identify the Contract with the Customer – A contract exists when (a) the parties to the contract have approved the contract and are committed to perform their respective obligations, (b) the entity can identify each party’s rights regarding the goods or services to be transferred, (c) the entity can identify the payment terms for the goods or services to be transferred, (d) the contract has commercial substance and it is probable that the entity will collect substantially all of the consideration to which it will be entitled in exchange for the goods or services that will be transferred to the customer.

F-8

Edison Nation, Inc. (formerly known as Xspand Products Lab, Inc.) and Subsidiaries

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

Note 2 — Summary of Significant Accounting Policies — (Continued)

Step 2 – Identify Performance Obligations in the Contract – Upon execution of a contract, the Company identifies as performance obligations each promise to transfer to the customer either (a) goods or services that are distinct, or (b) a series of distinct goods or services that are substantially the same and have the same pattern of transfer to the customer. To the extent a contract includes multiple promised goods or services, the Company must apply judgement to determine whether the goods or services are capable of being distinct within the context of the contract. If these criteria are not met, the goods or services are accounted for as a combined performance obligation.

Step 3 – Determine the Transaction Price – When (or as) a performance obligation is satisfied, the Company shall recognize as revenue the amount of the transaction price that is allocated to the performance obligation. The contract terms are used to determine the transaction price. Generally, all contracts include fixed consideration. If a contract did include variable consideration, the Company would determine the amount of variable consideration that should be included in the transaction price based on expected value method. Variable consideration would be included in the transaction price, if in the Company’s judgement, it is probable that a significant future reversal of cumulative revenue under the contract would not occur.

Step 4 – Allocate the Transaction Price – After the transaction price has been determined, the next step is to allocate the transaction price to each performance obligation in the contract. If the contract only has one performance obligation, the entire transaction price will be applied to that obligation. If the contract has multiple performance obligations, the transaction price is allocated to the performance obligations based on the relative standalone selling price (SSP) at contract inception.

Step 5 – Satisfaction of the Performance Obligations (and Recognize Revenue) – Revenue is recognized when (or as) goods or services are transferred to a customer. The Company satisfies each of its performance obligations by transferring control of the promised good or service underlying that performance obligation to the customer. Control is the ability to direct the use of, and obtain substantially all of the remaining benefits from an asset. It includes the ability to prevent other entities from directing the use of, and obtaining the benefits from an asset. Indicators that control has passed to the customer include: a present obligation to pay; physical possession of the asset; legal title; risks and rewards of ownership; and acceptance of the asset(s). Performance obligations can be satisfied at a point in time or over time.

Substantially all of the Company’s revenues continue to be recognized when control of the goods are transferred to the customer, which is upon shipment of the finished goods to the customer. All sales have fixed pricing and there are currently no material variable components included in the Company’s revenue. Additionally, the Company will issue credits for defective merchandise, historically these credits for defective merchandise have not been material. Based on the Company’s analysis of the new revenue standards, revenue recognition from the sale of finished goods to customers, which represents substantially all of the Company’s revenues, was not impacted by the adoption of the new revenue standards.

Disaggregation of Revenue

The Company’s primary revenue streams include the sale and/or licensing of consumer goods and packaging materials. The Company’s licensing business is not material and has not been separately disaggregated for segment purposes. The disaggregated Company’s revenues for the nine months ended September 30, 2019 and 2018 were as follows:

	For the Nine Months Ended September 30,
	2019		2018
Revenues:
Product sales	$	14,982,117	$	12,676,582
Service		67,753		-
Licensing		189,564		82,133
Total revenues, net	$	15,239,434	$	12,758,715

F-9

Edison Nation, Inc. (formerly known as Xspand Products Lab, Inc.) and Subsidiaries

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

Note 2 — Summary of Significant Accounting Policies — (Continued)

For the nine months ended September 30, 2019 and 2018, the following customer represented more than 10% of total net revenues:

	For the Nine Months Ended September 30,
	2019			2018
Customer:
Customer A		22	%		10	%
Customer B		*			17	%

* Customer did not represent greater than 10% of total net revenue.

For the nine months ended September 30, 2019 and 2018, the following geographical regions represented more than 10% of total net revenues:

	For the Nine Months Ended September 30,
	2019			2018
Region:
North America		78	%		81	%
Asia-Pacific		*			15	%
Europe		15	%		*

* Region did not represent greater than 10% of total net revenue.

Fair Value of Financial Instruments

The Company measures the fair value of financial assets and liabilities based on the guidance of ASC 820 “Fair Value Measurements and Disclosures” (“ASC 820”) which defines fair value, establishes a framework for measuring fair value, and expands disclosures about fair value measurements.

ASC 820 defines fair value as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. ASC 820 also establishes a fair value hierarchy, which requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. ASC 820 describes three levels of inputs that may be used to measure fair value:

Level 1 — quoted prices in active markets for identical assets or liabilities

Level 2 — quoted prices for similar assets and liabilities in active markets or inputs that are observable

Level 3 — inputs that are unobservable (for example, cash flow modeling inputs based on assumptions)

The carrying amounts of the Company’s financial instruments, such as cash, accounts receivable, accounts payable, accrued expenses and other current liabilities approximate fair values due to the short-term nature of these instruments. The carrying amount of the Company’s notes payable approximates fair value because the effective yields on these obligations, which include contractual interest rates, taken together with other features such as concurrent issuance of warrants, are comparable to rates of returns for instruments of similar credit risk. The loan held for investment was acquired at fair value, which resulted in a discount.

F-10

Edison Nation, Inc. (formerly known as Xspand Products Lab, Inc.) and Subsidiaries

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

Note 2 — Summary of Significant Accounting Policies — (Continued)

As of September 30, 2019, the book value and estimated fair value of the Company’s level 3 instruments was as follows:

	September 30, 2019
	Book Value			Estimated Fair Value
Contingent consideration	$	(520,000	)	$	(520,000	)

The following changes in level 3 instruments for the three months ended September 30, 2019 are presented below:

	Contingent Consideration – Earnout
Balance, July 1, 2019	$	(520,000	)
Change in fair value		-
Balance, September 30, 2019	$	(520,000	)

The following changes in level 3 instruments for the nine months ended September 30, 2019 are presented below:

	Contingent Consideration – Earnout
Balance, December 31, 2018	$	(520,000	)
Change in fair value		-
Balance, September 30, 2019	$	(520,000	)

There were no changes to the underlying assumptions used in determining the fair value of the contingent consideration liability for the nine months ended September 30, 2019. There was no contingent consideration as of September 30, 2018.

Foreign Currency Translation

The Company uses the United States dollar as its functional and reporting currency since the majority of the Company’s revenues, expenses, assets and liabilities are in the United States. Assets and liabilities in foreign currencies are translated using the exchange rate at the balance sheet date, while revenue and expense accounts are translated at the average exchange rates prevailing during the year. Equity accounts are translated at historical exchange rates. Gains and losses from foreign currency transactions and translation for the nine months ended September 30, 2019 and 2018 and the cumulative translation gains and losses as of September 30, 2019 and December 31, 2018 were not material.

F-11

Edison Nation, Inc. (formerly known as Xspand Products Lab, Inc.) and Subsidiaries

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

Note 2 — Summary of Significant Accounting Policies — (Continued)

Net Earnings or Loss per Share

Basic net loss per common share is computed by dividing net loss by the weighted average number of vested common shares outstanding during the period. Diluted net income per common share is computed by dividing net income by the weighted average number vested of common shares, plus the net impact of common shares (computed using the treasury stock method), if dilutive, resulting from the exercise of dilutive securities. In periods when losses are reported, the weighted-average number of common shares outstanding excludes common stock equivalents because their inclusion would be anti-dilutive. As of September 30, 2018, there were no common stock equivalents outstanding. As of September 30, 2019, the Company excluded the common stock equivalents summarized below, which entitle the holders thereof to ultimately acquire shares of common stock, from its calculation of earnings per share, as their effect would have been anti-dilutive.

	September 30,
	2019
Selling Agent Warrants		89,992
Shares reserved in exchange for the cancellation of certain non-voting membership interest in Edison Nation Holdings, LLC		990,000
Options		290,000
Convertible shares under notes payable		285,632


Total		1,655,624

F-12

Edison Nation, Inc. (formerly known as Xspand Products Lab, Inc.) and Subsidiaries

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

Note 2 — Summary of Significant Accounting Policies — (Continued)

Recent Accounting Pronouncements

In February 2016, the FASB issued Accounting Standards Update No. 2016-02 (ASU 2016-02) which amends the existing accounting standards for lease accounting, including requiring lessees to recognize most leases on their balance sheets and making targeted changes to lessor accounting. This accounting guidance is effective for fiscal years, and interim periods within those years, beginning after December 15, 2018, with early adoption permitted. Additionally, this accounting guidance requires a modified retrospective transition approach for all leases existing at, or entered into after the date of initial application, with an option to use certain transition relief. In July 2018, the FASB issued a practical expedient that would allow entities the option to apply the provisions of the new lease guidance at the effective date of adoption without adjusting the comparative periods presented.

The Company has elected the “package of practical expedients” and as a result is not required to reassess its prior accounting conclusions about lease identification, lease classification and initial direct costs for lease contracts that exist as of the transition date. However, the Company has not elected the use of hindsight for determining the reasonably certain lease term.

The new lease standard also provides practical expedients and policy elections for an entity’s ongoing accounting. The Company has elected the practical expedient to not separate lease and non-lease components for all of its leases. The Company has elected the short-term lease recognition exemption, which results in no recognition of right-of-use assets and lease liabilities for existing short-term leases at transition.

Upon adoption on January 1, 2019, the Company recognized right of use assets for operating leases and operating lease liabilities that have not previously been recorded. The lease liability for operating leases is based on the net present value of future minimum lease payments. The right of use asset for operating leases is based on the lease liability. The Company did not have any deferred rent or material prepaid rent.

The cumulative effect of initially applying the new lease accounting standard as of January 1, 2019 is as follows:

	January 1, 2019		Cumulative Effect Adjustment		January 1, 2019, as adjusted
Assets:
Right of use assets – operating leases	$	-	$	943,997	$	943,997

Liabilities:
Current portion of operating lease liabilities	$	-	$	261,866	$	261,866
Operating lease liabilities, net of current portion	$	-	$	682,131	$	682,131

The adoption of the standard did not result in any material changes to the recognition of operating lease expenses in the Company’s consolidated statements of operations.

In June 2018, the FASB issued an amendment to the accounting guidance related to accounting for employee share-based payments which clarifies that an entity should recognize excess tax benefits in the period in which the amount of the deduction is determined. This amendment is effective for annual periods beginning after December 15, 2018. We have adopted this accounting guidance effective January 1, 2019, with no impact on our financial statements as there were no excess tax benefits to be recognized due to our net operating losses.

In August 2018, the FASB issued new accounting guidance that addresses the accounting for implementation costs associated with a hosted service. The guidance provides that implementation costs be evaluated for capitalization using the same criteria as that used for internal-use software development costs, with amortization expense being recorded in the same income statement expense line as the hosted service costs and over the expected term of the hosting arrangement. This guidance is effective for public business entities for fiscal years beginning after December 15, 2019, and interim periods within those fiscal years, with early adoption permitted. The guidance will be applied either retrospectively or prospectively to all implementation costs incurred after the date of adoption. We have not yet adopted this accounting guidance and are currently evaluating the effect this accounting guidance will have on our financial statements.

In August 2018, the FASB issued new accounting guidance that eliminates, adds and modifies certain disclosure requirements for fair value measurements. Among the changes, an entity will no longer be required to disclose the amount of and reasons for transfers between Level 1 and Level 2 of the fair value hierarchy, but will be required to disclose the range and weighted average used to develop significant unobservable inputs for Level 3 fair value measurements. ASU 2018-13 is effective for interim and annual reporting periods beginning after December 15, 2019; early adoption is permitted. Since this accounting guidance only revises disclosure requirements, it will not have a material impact on the Company’s consolidated financial statements.

In October 2018, the FASB issued new accounting guidance for Variable Interest Entities, which requires indirect interests held through related parties in common control arrangements be considered on a proportional basis for determining whether fees paid to decision makers and service providers are variable interests. The guidance is effective for the Company’s interim and annual reporting periods during the year ending December 31, 2020. Early adoption is permitted. The Company currently does not believe that the adoption of this accounting guidance will have a material impact on its consolidated financial statements and related disclosures.

F-13

Edison Nation, Inc. (formerly known as Xspand Products Lab, Inc.) and Subsidiaries

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

Note 2 — Summary of Significant Accounting Policies — (Continued)

Subsequent Events

The Company has evaluated subsequent events through the date which the financial statements were issued. Based upon such evaluation, except for items described in Note 8 and Note 10, the Company did not identify any recognized or non-recognized subsequent events that would have required adjustment or disclosure in the financial statements.

Segment Reporting

The Company uses “the management approach” in determining reportable operating segments. The management approach considers the internal organization and reporting used by the Company’s chief operating decision maker for making operating decisions and assessing performance as the source for determining the Company’s reportable segments. The Company’s chief operating decision maker is the Chairman and Chief Executive Officer (“CEO”) of the Company, who reviews operating results to make decisions about allocating resources and assessing performance for the entire Company. The Company deploys resources on a consolidated level to all brands of the Company and therefore the Company only identifies one reportable operating segment with multiple product offerings.

F-14

Edison Nation, Inc. (formerly known as Xspand Products Lab, Inc.) and Subsidiaries

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

Note 3 — Acquisition

On September 4, 2018, the Company completed the acquisition of all of the voting membership interest of Edison Nation Holdings, LLC (“EN”) for a total purchase price of $12,820,978 comprising of (i) $950,000 cash, (ii) 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 and interest amount of the sum of $1,428,161, less debt discount of $500,000 for the approximate fair value of the conversion feature, which are convertible into approximately 285,632 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 Membership Interest Purchase Agreement (the “Purchase Agreement”) among the Company and EN and EN’s members dated June 29, 2018 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 557,084 shares or $3,760,317 of the Company’s common stock in full satisfaction of the indebtedness represented by promissory notes payable by EN to Venture Six, LLC and Wesley Jones.

On October 29, 2018, the Company completed the acquisition of 72.15% of the outstanding capital stock of Cloud B in exchange for 489,293 shares of restricted common stock of the Company. In addition, the Company entered into an Earn Out Agreement with a majority of the shareholders of Cloud B (the “Cloud B Sellers”), whereby, beginning in 2019, the Company will pay the Cloud B Sellers an annual amount equal to 8% multiplied by the annual gross sales of Cloud B, as reduced by the total gross sales generated by Cloud B in 2018. The Earn Out Agreement expires on December 31, 2021.

On December 31, 2018, the Company completed the acquisition of all of the voting membership interest of Pirasta, LLC from NL Penn Capital, LP in exchange for the satisfaction of $470,000 due from related party. Accordingly, the consolidated financial statements of the Company reflect the accounting of the combined acquired subsidiary at historical carrying values, except that equity reflects a distribution for the excess of consideration paid over the net carrying amount of assets.

On December 31, 2018, the Company completed the acquisition of 50% of the voting membership interest of Best Party Concepts, LLC from NL Penn Capital, LP in exchange for the satisfaction of $500,000 due from related party. Accordingly, the consolidated financial statements of the Company reflect the accounting of the combined acquired subsidiary at historical carrying values, except that equity reflects a distribution for the excess of consideration paid over the net carrying amount of assets.

NL Penn Capital, LP is owned by Christopher B. Ferguson, our Chairman and Chief Executive Officer.

F-15

Edison Nation, Inc. (formerly known as Xspand Products Lab, Inc.) and Subsidiaries

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

Note 3 — Acquisition — (Continued)

The following represents the pro forma consolidated income statement as if the acquisitions had been included in the consolidated results of the Company for the nine months ended September 30, 2018:

	Nine Months Ended September 30, 2018
Revenues, net	$	16,740,554
Cost of revenues		10,989,040
Gross profit		5,741,514

Operating expenses:
Selling, general and administrative		10,227,429
Operating loss		(4,475,915	)

Other (expense) income:
Other (expense) income		(330,162	)
Loss before income taxes		(4,806,077	)
Income tax expense		327,042
Net loss	$	(5,133,119	)
Net loss attributable to noncontrolling interests		(370,417	)
Net loss attributable to Edison Nation, Inc.	$	(4,762,701	)
Net loss per share - basic and diluted	$	(0.98	)
Weighted average number of common shares outstanding – basic and diluted		4,835,681

Note 4 — Inventory

As of September 30, 2019 and December 31, 2018, inventory consisted of the following:

	September 30,		December 31,
	2019		2018
Raw materials	$	46,884	$	48,576
Finished goods		1,059,193		875,131
Total inventory	$	1,106,077	$	923,707

F-16

Edison Nation, Inc. (formerly known as Xspand Products Lab, Inc.) and Subsidiaries

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

Note 5 — Intangible assets, net

As of September 30, 2019, intangible assets consisted of the following:

			Gross Carrying Amount		Accumulated Amortization		Net Carrying Amount
Finite lived intangible assets:
Customer relationships	15 years	14.8 years	$	4,270,000	$	268,389	$	4,001,611
Developed technology	7 years	6.7 years	$	3,800,000		561,905		3,238,095
Membership network	7 years	6.7 years	$	1,740,000		269,286		1,470,714
Non-compete agreements	2 years	1.7 years	$	50,000		27,083		22,917
Total finite lived intangible assets			$	9,860,000	$	1,126,663	$	8,733,337

Indefinite lived intangible assets:
Trademarks and tradenames	Indefinite		$	3,140,000	$	-	$	3,140,000
Total indefinite lived intangible assets			$	3,140,000	$	-	$	3,140,000
Total intangible assets				13,000,000	$	1,126,663	$	11,873,337

As of December 31, 2018, intangible assets consisted of the following:

			Gross Carrying Amount		Accumulated Amortization		Net Carrying Amount
Finite lived intangible assets:
Customer relationships	15 years	14.8 years	$	4,270,000	$	61,555	$	4,208,445
Developed technology	7 years	6.7 years	$	3,800,000		159,524		3,640,476
Membership network	7 years	6.7 years	$	1,740,000		82,857		1,657,143
Non-compete agreements	2 years	1.7 years	$	50,000		8,333		41,667
Total finite lived intangible assets			$	9,860,000	$	312,269	$	9,547,731

Indefinite lived intangible assets:
Trademarks and tradenames	Indefinite		$	3,140,000	$	-	$	3,140,000
Total indefinite lived intangible assets			$	3,140,000	$	-	$	3,140,000
Total intangible assets				13,000,000	$	312,269	$	12,687,731

The estimated future amortization of intangibles subject to amortization at September 30, 2019 was as follows:

For the Years Ended December 31,	Amount
2019 (excluding the nine months ended September 30, 2019)	$	275,274
2020		1,092,762
2021		1,076,095
2022		1,076,095
2023		1,076,095
Thereafter		4,137,016
	$	8,733,337

Amortization expense for the three months ended September 30, 2019 and 2018 was $275,274 and $0, respectively. Amortization expense for the nine months ended September 30, 2019 and 2018 was $814,394 and $0, respectively.

F-17

Edison Nation, Inc. (formerly known as Xspand Products Lab, Inc.) and Subsidiaries

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

Note 6 — Debt

As of September 30, 2019 and December 31, 2018, debt consisted of the following:

	September 30,			December 31,
	2019			2018
Line of credit:
Asset backed line of credit	$	471,553		$	561,804
Debt issuance costs		(19,466	)		(30,000	)
Total line of credit		452,087			531,804

Senior convertible notes payable:
Senior convertible notes payable		2,539,273			1,428,161
Debt issuance costs		(439,818	)		(466,667	)
Total long-term senior convertible notes payable		2,099,455			961,494
Less: current portion of long-term notes payable		-			-
Noncurrent portion of long-term convertible notes payable		2,099,455			961,494

Notes payable:
Notes payable		1,470,137			370,250
Debt issuance costs		(153,793	)		-
Total long-term debt		1,316,344			370,250
Less: current portion of long-term debt		(1,270,243	)		(313,572	)
Noncurrent portion of long-term debt		46,101			56,678

Notes payable – related parties:
Notes payable		3,381,579			3,464,191
Less: current portion of long-term debt – related parties		(1,039,330	)		(932,701	)
Noncurrent portion of long-term debt – related parties	$	2,342,249		$	2,531,490

Convertible Notes

On March 6, 2019, Edison Nation entered into a securities purchase agreement (the “FirstFire SPA”) with an accredited investor (the “Investor”) pursuant to which the Investor purchased a 2% unsecured, senior convertible promissory note (the “FirstFire Note”) from the Company. The FirstFire 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 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 FirstFire Note. The Under the terms of the FirstFire 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 FirstFire 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 FirstFire SPA and the FirstFire Note. The maturity date of the FirstFire Note is six months from March 6, 2019. All principal amounts and the interest thereon are convertible into shares of the Company’s common stock only in the event that an event of default occurs. The FirstFire note was paid in full in May 2019.

On May 13, 2019, the Company entered into a series of 2% senior secured, senior convertible promissory notes of $1,111,111 with an original issue discount of $111,111. The Company issued 20,000 shares of its common stock to the note holders as additional consideration for the purchase of the notes in July 2019. The Company accrued $78,800 as a debt discount as of September 30, 2019 related to the value of the shares to be issued. The notes are convertible upon default and mature on November 13, 2019. Under the terms of the notes, the note holders will have “piggyback” registration rights. Alexander Capital placed the notes and received warrants to purchase 24,366 shares of the Company's common stock, at an exercise price of $2.85 per share. The notes were converted into 560,185 shares of common stock in October 2019 at $2.00 per share.

Receivables Financing

In April 2019, we entered into a receivables financing arrangement for certain receivables of the Company. The agreement allows for borrowings up to 80% of the outstanding receivable based on the credit quality of the customer. The fee is between 1% and 2% of the total invoices financed.

Notes Payable

On May 16, 2019, the Company entered into a non-interest bearing promissory note of $300,000, with an original issue discount of $50,000. The Company issued 20,000 shares of its common stock to the note holder as additional consideration for the purchase of the note. The Company recorded $62,000 as a debt discount as of September 30, 2019 related to the value of the shares issued. The note matures on November 16, 2019.

On June 11, 2019, the Company entered into 1.5% promissory note of $250,000. The interest and principal is due upon 30 days’ notice from the Lender, which cannot be issued before August 11, 2019. The Lender has not exercised their option for repayment yet.

On August 26, 2019, the Company entered into a securities purchase agreement with Labrys Fund, LP (the “Investor”) pursuant to which the Investor purchased a 12% Convertible Promissory Note (the “Note”) from the Company. Unless there is a specific Event of Default (as such term is defined in the Note) or the Note remains unpaid by the Maturity Date, then the Investor shall not have the ability to convert the principal and interest under the Notes into shares of the Company’s common stock. The Company agreed to issue and sell to the Investor the Note, in the principal amount of $560,000, with an original issue discount in the amount of $60,000. The Note is due and payable February 26, 2020 (the “Maturity Date”). Additionally, the Company issued 181,005 shares of Common Stock to the Investor as a commitment fee, of which 153,005 shares of Common Stock must be returned to the Company in the event the Note is fully paid and satisfied prior to the Maturity Date.

F-18

Edison Nation, Inc. (formerly known as Xspand Products Lab, Inc.) and Subsidiaries

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

Note 6 — Debt — (Continued)

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	$	2,175,092
2020		828,426
2021		871,916
2022		218,266
2023		1,229,569
Thereafter		2,539,273
		7,862,542
Less: debt discount		(613,077	)
	$	7,249,465

For the nine months ended September 30, 2019, interest expense was $875,036, of which $238,111 was related party interest expense. For the nine months ended September 30, 2018, interest expense was $407,267, of which $145,656 was related party interest expense, respectively.

F-19

Edison Nation, Inc. (formerly known as Xspand Products Lab, Inc.) and Subsidiaries

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

Note 7 — Related Party Transactions

NL Penn Capital, LP and SRM Entertainment Group LLC

On December 31, 2018, the Company completed the acquisition of all of the voting membership interest of Pirasta, LLC from NL Penn Capital, LP in exchange for the satisfaction of $470,000 due from related party. Accordingly, the consolidated financial statements of the Company reflect the accounting of the combined acquired subsidiary at historical carrying values, except that equity reflects a distribution for the excess of consideration paid over the net carrying amount of assets.

On December 31, 2018, the Company completed the acquisition of 50% of the voting membership interest of Best Party Concepts, LLC from NL Penn Capital, LP in exchange for the satisfaction of $500,000 due from related party. Accordingly, the consolidated financial statements of the Company reflect the accounting of the combined acquired subsidiary at historical carrying values, except that equity reflects a distribution for the excess of consideration paid over the net carrying amount of assets.

As of September 30, 2019 and December 31, 2018, the net amounts due to related parties consists of net amounts due to SRM Entertainment Group LLC (“SRM LLC”) and NL Penn Capital, LP , which are both majority owned by Chris Ferguson, our Chairman and Chief Executive Officer. 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 LLC and NL Penn Capital, LP. As of September 30, 2019 and December 31, 2018, the net amount due to related parties was $22,896 and $140,682, respectively. Such amounts are due currently.

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. 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 member of the Company’s board of directors, is also the Chief Executive Officer and the largest equity holder of Enventys. We incurred fees of approximately $22,000 and $97,500 related to the services performed by Enventys for the three and months ended September 30, 2019, respectively. During 2019, the Company and Enventys agreed to the cancellation of the agreement.

F-20

Edison Nation, Inc. (formerly known as Xspand Products Lab, Inc.) and Subsidiaries

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

Note 8 — Commitments and Contingencies

Operating Leases

The Company has entered into non-cancellable operating leases for office, warehouse, and distribution facilities, with original lease periods expiring through 2021. In addition to minimum rent, certain of the 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.

As of September 30, 2019, the Company has operating lease liabilities of $827,617 and right of use assets for operating leases of $810,017. During the three and nine months ended September 30, 2019, operating cash outflows relating to operating lease liabilities was $78,303 and $225,249, respectively, and the expense for right of use assets for operating leases was $75,414 and $217,189, respectively. As of September 30, 2019, the Company's operating leases had a weighted-average remaining term of 3.3 years and weighted-average discount rate of 4.5%. Excluded from the measurement of operating lease liabilities and operating lease right-of-use assets were certain office, warehouse and distribution contracts that either qualify for the short-term lease recognition exception.

On August 8, 2016, SRM entered into a lease for office space in Kowloon, Hong Kong. On August 8, 2018, SRM extended its lease for office space in Kowloon, Hong Kong so that the lease will now expire 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.

On July 1, 2019, the Company entered into a lease for office space in Bethlehem, Pennsylvania. Monthly lease payments are $2,415 for a total of approximately $89,000 for the total term of the lease.

Total rent expense for the nine months ended September 30, 2019 was $128,256 and $410,759, respectively. Total rent expense for the nine months ended September 30, 2018 was $65,244 and $211,780, respectively. Rent expense is included in general and administrative expense on the Company’s condensed consolidated statements of operations.

The following is a reconciliation of future undiscounted cash flows to the operating liabilities, and the related right of use assets, included in our Condensed Consolidated Balance Sheets as of September 30, 2019:

	September 30, 2019
2019 (excluding the nine months ended September 30, 2019)		82,230
2020		315,660
2021		267,249
2022		96,288
2023		78,648
2024 and thereafter		52,430
Total future lease payments		892,505
Less: imputed interest		(64,888	)
Present value of future operating lease payments		827,617
Less: current portion of operating lease liabilities		(292,800	)
Operating lease liabilities, net of current portion		534,817
Right of use assets – operating leases, net		810,017

Rental Income

Fergco leases a portion of the building located in Washington, New Jersey that it owns under a month to month lease. Rental income related to the leased space for both the nine months ended September 30, 2019 and 2018 was $77,111, respectively. Rental income is included in other income on the consolidated statements of operations.

Legal Contingencies

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.

We are, and may in the future become, subject to various legal proceedings and claims that arise in or outside the ordinary course of business.

On July 15, 2019, the Company received correspondence from the staff of the Arkansas Securities Commissioner in connection with the state’s notice filing requirements for offerings exempt under Tier 2 of Regulation A, Section 18(b)(3) of the Security Act, such as the Company’s Form 1-A. The Company has resolved the matter with the Arkansas Securities Department for $1,100.

F-21

Edison Nation, Inc. (formerly known as Xspand Products Lab, Inc.) and Subsidiaries

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

Note 9 — Shareholders’ Equity

Stock-Based Compensation

On September 6, 2018, the Company’s board of directors approved an amendment and restatement of the Company’s omnibus incentive plan solely to reflect the Company’s name change to Edison Nation, Inc. Thus, the Edison Nation, Inc. Omnibus Incentive Plan (the “Plan”) which remains effective as of February 9, 2018, provides for the issuance of up to 1,764,705 shares of common stock to help align the interests of management and our shareholders and reward our executive officers for improved Company performance. Stock incentive awards under the Plan can be in the form of stock options, restricted stock units, performance awards and restricted stock that are made to employees, directors and service providers. Awards are subject to forfeiture until vesting conditions have been satisfied under the terms of the award. The exercise price of stock options are equal to the fair market value of the underlying Company common stock on the date of grant.

The following table represents total stock compensation expense by award type related to stock performance awards, restricted stock units, stock options and awards made to non-employees, for the nine months ended September 30, 2019 and 2018:

	For the Nine Months Ended September 30,
	2019		2018
Stock option awards	$	160,140	$	260,826
Non-employee awards		615,050		2,096,250
Restricted stock unit awards		8,850		309,500
Phantom stock awards		92,545		-
	$	876,585	$	2,666,576

The stock-based compensation is included in selling, general and administrative expense for the nine months ended September 30, 2019 and 2018.

Stock option awards

The following table summarizes stock option award activity for the nine months ended September 30, 2019:

	Shares		Weighted Average Exercise Price		Remaining Contractual Life in Years		Aggregate Intrinsic Value
Balance, January 1, 2019		290,000	$	5.55		4.2		-
Granted		-		-		-		-
Forfeited		-		-
Balance, September 30, 2019		290,000	$	5.55		3.5		-
Exercisable, September 30, 2019		263,333	$	5.41		3.5		-

As of September 30, 2019, there were 26,667 unvested options to purchase shares of the Company’s common stock or $62,139 of total unrecognized equity-based compensation expense that the Company expected to recognize over a remaining weighted-average period of 1 year.

Non-employee awards

From time to time, the Company grants shares of common stock to consultants and non-employee vendors for services performed. The awards are valued at the market value of the underlying common stock at the date of grant and vest based on the terms of the contract which is usually upon grant.

F-22

Edison Nation, Inc. (formerly known as Xspand Products Lab, Inc.) and Subsidiaries

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

Note 10 — Subsequent Events

On October 2, 2019, Edison Nation, Inc. (the “Company”) entered into a Share Purchase Agreement (the “PIPE Purchase Agreement”) with certain accredited investors (collectively, the “Investors”) for the private placement of 1,175,000 shares of the Company’s common stock, $0.001 par value per share, at a purchase price of $2.00 per share (the “PIPE Transaction”). The PIPE Purchase Agreement contains certain closing conditions relating to the sale of securities, representations and warranties by the Company and the Investors, as well as covenants of the Company and the Investors (including indemnification from the Company in the event of breaches of its representations and warranties), all of which the Company believes are customary for transactions of this type.

In a series of four closings conducted in October 2019, the Company received net proceeds of $2,039,303 which consisted of $2,350,000 of gross proceeds offset by $310,697 of fees to placement agent and their lawyers. Alexander Capital, LP ("Alexander Capital"), a FINRA registered broker dealer, acted as placement agent with respect to the PIPE Transaction. In connection with the PIPE Transaction, Alexander Capital received a commission of $141,000, a debt restructuring fee of $64,208, a debt conversion fee of 15,889, a placement fee of $33,600 and Warrants to purchase 70,500 shares of the Company's common stock, at an exercise price of $2.50 per share.

In connection with the PIPE Purchase Agreement, the Company entered into Registration Rights Agreements with each of the Investors (the “Registration Rights Agreement”), pursuant to which the Company is required to prepare and file a registration statement (the “Registration Statement”) with the SEC under the Securities Act of 1933, as amended, covering the resale of the shares of common stock issued to the Investors under the PIPE Purchase Agreement, as well as the 70,500 Warrants issued in connection with the PIPE Financing. The Company will be required to have such Registration Statement declared effective by the SEC within 90 calendar days (or 120 calendar days in the event of a “full review” by the SEC) following the applicable closing date of the PIPE Transaction. If the registration statement is not filed or declared effective within the timeframe set forth in the Registration Rights Agreements, the Company is obligated to pay the Investors an amount equal to 1% of the total purchase price of the common stock per month (up to a maximum of 8% in the aggregate) until such failure is cured. The Registration Rights Agreement also contains mutual indemnifications by the Company and each Investor, which the Company believes are customary for transactions of this type.

In connection with the PIPE transaction, the convertible notes entered into on May 13, 2019 were also converted at $2.00 per share into 560,185 shares of the Company's common stock.

On November 6, 2019, the Company acquired the assets of Uber Mom, LLC for $52,352, which was the approximate value of Uber Mom, LLC inventory, and 22,500 shares of our common stock.

In November 2019, the Company entered into a Receivables Purchase Agreement with a financial institution (the “Receivables Purchase Agreement”), for the purchase of $225,000 of receivables with a purchase price of $200,000. The proceeds were used to fund the purchase of products for sale on our Amazon.com sellers page.

In November 2019, the Company entered into a Future Receivables Purchase Agreement with a financial institution (the “Future Receivables Purchase Agreement”), for the purchase of $337,500 of receivables with a purchase price of $225,000. The proceeds were used to fund our receivables for overseas distributors as such receivables were not eligible as collateral under our current working capital facility. Christopher B. Ferguson, our Chairman and Chief Executive Officer, personally guaranteed the prompt and complete performance of the Company’s obligations under the Future Receivables Purchase Agreement.

On December 27, 2019, the Company paid $274,625 of the outstanding principal and interest on the Tiburon Note executed on June 14, 2019.

F-23

On January 10, 2020, the Company entered into a 5% Promissory Note Agreement with Rawleigh Ralls (“Ralls”) for an aggregate principal amount of $267,000 (the “Ralls Note”), pursuant to which Ralls purchased the Ralls Note from the Company for $250,000, and the Company issued to Ralls a warrant (the “Ralls Warrant”) to purchase 125,000 shares of the Company’s common stock. The proceeds from the Ralls Note will be used for general working capital needs of the Company. The Company will also issue 33,000 incentive shares to O’Leary. The maturity date of the Ralls Note is July 10, 2020.

On January 15, 2020, the Company entered into a 5% Promissory Note Agreement with Paul J. Solit & Julie B. Solit (“Solits”) for an aggregate principal amount of $107,000 (the “Solit Note”), pursuant to which the Solits purchased the Solit Note from the Company for $100,000, and the Company issued to the Solits a warrant (the “Solit Warrant”) to purchase 50,000 shares of the Company’s common stock. The proceeds from the Solit Note will be used for general working capital needs of the Company. The Company will also issue 13,000 incentive shares to O’Leary. The maturity date of the Solit Note is July 15, 2020.

On January 17, 2020, the Company entered into a 5% Promissory Note Agreement with Richard O’Leary (“O’Leary”) for an aggregate principal amount of $53,500 (the “O’Leary Note”), pursuant to which O’Leary purchased the O’Leary Note from the Company for $50,000, and the Company issued to O’Leary a warrant (the “O’Leary Warrant”) to purchase 25,000 shares of the Company’s common stock. The proceeds from the O’Leary Note will be used for general working capital needs of the Company. The Company will also issue 6,500 incentive shares to O’Leary. The maturity date of the O’Leary Note is July 17, 2020.

On January 23, 2020, Edison Nation, Inc. (the “Company”) entered into a $1,100,000 loan agreement the (“Loan Agreement”) with Greentree Financial Group, Inc. (the “Investor”), pursuant to which the Investor purchased a 10% Convertible Promissory Note (the “Note”) from the Company, and the Company issued to the Investor a warrant (the “Warrant”) to purchase 550,000 shares of the Company’s common stock, $0.001 per share (“Common Stock”). The $1,100,000 of proceeds from the Note will be used for general working capital purposes and for the repayment of debt. On January 24, 2020, the Company used $588,366.44 of the proceeds from the Note to pay off in full the 12% Convertible Promissory Note held by Labrys Fund, LP.

On January 29, 2020, the Company and the Investor entered into an Amendment Agreement, amending the Loan Agreement, the Note, and the Warrant to: (i) correct the effective date set forth in the Loan Agreement, Note and Warrant to January 23, 2020, (ii) clarify the terms of the registration right provision in the Loan Agreement, and (iii) to ensure that the total number of shares of Common Stock issued pursuant to the Loan Agreement, the Note, and/or the Warrant, each as amended, does not exceed 17.99% of the Company’s issued and outstanding Common Stock as of January 23, 2020.

Upon execution of the Loan Agreement, the Company issued to the Investor 100,000 shares of Common Stock (the “Origination Shares”) as an origination fee, plus an additional 60,000 shares of Common Stock as consideration for advisory services.

Pursuant to the Loan Agreement, the Company agreed to pay certain costs of the Investor, including $15,000 for the Investor’s legal fees and transfer agent fees resulting from conversion of the Note. The Loan Agreement also contains representations and warranties by the Company and the Investor, which the Company believes are customary for transactions of this type. Furthermore, the Company is subject to certain negative covenants under the Loan Agreement, which the Company also believes are also customary for transactions of this type.

Pursuant to the Loan Agreement, the Company agreed to issue and sell to the Investor the Note, in the principal amount of $1,100,000. The Note, as amended, is due and payable October 23, 2020 (the “Maturity Date”), and is convertible at any time at a price of $2.00 per share, subject to certain adjustments to the conversion price set forth in the Note. The Note reiterates the registration rights set forth in the Loan Agreement and the Warrant. There is no prepayment penalty on the Note. If the Note is not prepaid by the 90th day after the effective date of the Registration Statement, the Investor is required to convert the entire amount of principal and interest outstanding on the Note at that time, at a price of $2.00 per share, unless an event of default (as such events are described in the Note) under the Note has occurred, in which case the Note would be mandatorily converted at a price equal to 50% of the lowest trading price of the Common Stock for the last 10 trading days immediately prior to, but not including, the date that the Note mandatorily converts. The Note also contains a conversion limitation provision, which prohibits the Investor from converting the Note in an amount that would result in the beneficial ownership of greater than 4.9% of the total issued and outstanding shares of Common Stock, provided that (i) such conversion limitation may be waived by the Investor with 61 days prior notice, and (ii) the Investor cannot waive the conversion limitation if conversion of the Note would result in the Investor having beneficial ownership of greater than 9.9% of the total issued and outstanding shares of Common Stock.

Pursuant to the Loan Agreement, the Company also issued the Investor a warrant to purchase 550,000 shares of Common Stock at an exercise price of $2.00 per share, subject to certain adjustments to the exercise price set forth in the Warrant. The Warrant, as amended, expires on January 23, 2023. If the closing price per share of the Common Stock reported on the day immediately preceding an exercise of the Warrant is greater than $2.00 per share, the Warrant may be exercised cashlessly, based on a cashless exercise formula. The Warrant reiterates the registration rights set forth in the Loan Agreement and the Note. The Warrant also contains a repurchase provision, which at any time after the Registration Statement is effective and the Common Stock has traded at a price over $3.00 share for 20 consecutive days, gives the Company a 30-day option to repurchase any unexercised portion of the Warrant at a price of $1.00 per share.

On December 4, 2019, the Company entered into a Senior Secured Note Agreement (the “32E Loan Agreement”) with 32 Entertainment LLC (“32E”), pursuant to which 32E agreed to loan the Company $250,000 (the “Loan”). The Loan is interest bearing at the rate of 10.0% per annum through the term of the Loan. The Company issued 10,000 shares of common stock to 32E in connection with the 32E Loan Agreement. In addition, the Company issued a warrant (the “32E Warrant”) to purchase 50,000 shares of the Company’s common stock. Under the terms of the 32E Loan Agreement, the Company entered into a registration rights agreement whereby the Company agreed to register the shares and file this registration statement on a Form S-1 with the SEC. The Company was required to have such registrations statement declared effective by the SEC within 90 calendar days. The Loan proceeds are being used to fund general working capital needs of the Company. If the Company defaults on the performance of any obligation under the Loan Agreement, 32E may declare the principal amount of the Loan owing under the 32E Loan Agreement at the time of default to be immediately due and payable. Interest is due in March, June and September. The outstanding principal and interest on the note is due on December 4, 2020.

On January 2, 2020, the Company entered into that certain Loan Agreement with Tiburon Opportunity Fund (the “Lender”), dated January 2, 2020 (the “Loan Agreement”). Pursuant to the terms of the Loan Agreement, the Lender agreed to loan the Company $400,000. The Loan is interest bearing at the rate of 1.5% per month through the term of the Loan. Additionally, the Loan Agreement provides that the Company shall pay the Lender the entire unpaid principal and all accrued interest upon thirty days’ notice to the Company, but in any event, the notice shall not be sooner than June 1, 2020. The Loan proceeds are being used to fund general working capital needs of the Company. If the Company defaults on the performance of any obligation under the Loan Agreement, the Lender may declare the principal amount of the Loan owing under the Loan Agreement at the time of default to be immediately due and payable. Furthermore, the Loan Agreement grants the Lender a collateral interest in certain accounts receivable of SRM Entertainment Ltd., a subsidiary of the Company.

On January 24, 2020, the Company repaid the Labrys Note in full. Upon repayment of the Labrys Note, Labrys Fund, LP returned to the Company for cancellation the 153,005 shares of Common Stock that had been originally issued to as a portion of the commitment fee paid in connection with the Labrys Note, and allowed the Company to cancel the reservation of the 875,000 shares of Common Stock that had been reserved pursuant to the Labrys SPA and Labrys Note.

F-24

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Stockholders and Board of Directors of

Edison Nation, Inc.

Opinion on the Financial Statements

We have audited the accompanying consolidated balance sheets of Edison Nation, Inc. (formerly known as Xspand Products Lab, Inc.) (the “Company”) as of December 31, 2018 and 2017 , the related consolidated statements of operations , stockholders’ equity (deficit) and cash flows for each of the two years in the period ended December 31, 2018, and the related notes (collectively referred to as the “financial statements”). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2018 and 2017, and the results of its operations and its cash flows for each of the two years in the period ended December 31, 2018, in conformity with accounting principles generally accepted in the United States of America.

Basis for Opinion

These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on the Company's financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) ("PCAOB") and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company's internal control over financial reporting. Accordingly, we express no such opinion.

Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.

/s/ Marcum LLP

Marcum llp

We have served as the Company’s auditor since 2017.

New York, NY
April 16, 2019

F-25

Edison Nation, Inc. (formerly known as Xspand Products Lab, Inc.) and Subsidiaries

CONSOLIDATED BALANCE SHEETS

	December 31, 2018			December 31, 2017
Assets
Current assets:
Cash and cash equivalents	$	2,052,731		$	557,268
Accounts receivable, net		1,877,351			1,430,236
Inventory		923,707			240,061
Prepaid expenses and other current assets		611,695			41,461
Due from related party		-			834,897
Total current assets		5,465,484			3,103,923
Property and equipment, net		998,863			966,904
Intangible assets, net		12,687,731			-
Goodwill		9,736,510			-
Total assets	$	28,888,588		$	4,070,827

Liabilities and Shareholders' equity (deficit)
Current liabilities:
Accounts payable	$	5,519,159		$	1,135,039
Accrued expenses and other current liabilities		1,135,551			80,964
Deferred revenues		175,956			-
Income tax payable		129,511			56,745
Line of credit, net of debt issuance costs of $30,000		531,804			-
Current portion of long-term debt		313,572			-
Current portion of long-term debt – related parties		932,701			225,553
Due to related party		140,682			-
Total current liabilities		8,878,936			1,498,301
Contingent consideration		520,000			-
Long-term senior convertible debt – related parties, net of debt discount of $466,667 related to the conversion feature		961,494			-
Long-term debt, net of current portion		56,688			2,770,947
Long-term debt – related parties, net of current portion		2,531,490			-
Deferred tax liability		341			34,209
Total liabilities	$	12,948,949		$	4,303,457
Commitments and contingencies (Note 10)

Shareholders' equity (deficit)
Common stock, $0.001 par value, 250,000,000 shares authorized; 5,654,830 and 3,000,000 shares issued and outstanding as of December 31, 2018 and 2017, respectively	$	5,655		$	3,000
Additional paid-in-capital		20,548,164			-
Accumulated deficit		(5,565,756	)		(235,630	)
Total shareholders’ equity (deficit) attributable to Edison Nation, Inc.		14,988,063			(232,630	)
Noncontrolling interests		951,576			-
Total shareholders’ equity		15,939,639			(232,630	)
Total liabilities and shareholders’ equity (deficit)	$	28,888,588		$	4,070,827

The accompanying notes are an integral part of these consolidated financial statements.

F-26

Edison Nation, Inc. (formerly known as Xspand Products Lab, Inc.) and Subsidiaries

CONSOLIDATED STATEMENTS OF OPERATIONS

	Years Ended December 31,
	2018			2017
Revenues, net	$	16,502,209		$	14,960,450
Cost of revenues		11,425,619			11,017,625
Gross profit		5,076,590			3,942,825

Operating expenses:
Selling, general and administrative		9,718,286			2,379,104
Operating (loss) income		(4,641,696	)		1,563,721

Other (expense) income:
Rental income		102,815			102,815
Interest expense		(501,221	)		-
Total other (expense) income		(398,406	)		106,815
(Loss) income before income taxes		(5,040,102	)		1,666,536
Income tax expense		303,915			133,105
Net (loss) income	$	(5,344,017	)	$	1,533,431
Net (loss) income attributable to noncontrolling interests		(13,891	)		-
Net (loss) income attributable to Edison Nation, Inc.		(5,330,126	)		1,533,431
Net (loss) income per share - basic and diluted	$	(1.28	)	$	0.51
Weighted average number of common shares outstanding – basic and diluted		4,157,054			3,000,000

The accompanying notes are an integral part of these consolidated financial statements.

F-27

Edison Nation, Inc. (formerly known as Xspand Products Lab, Inc.) and Subsidiaries

CONSOLIDATED STATEMENT OF CHANGES IN SHAREHOLDERS’ EQUITY (DEFICIT)

	Common Stock				Additional Paid-in			Accumulated			Noncontrolling			Total Shareholders’
	Shares		Amount		Capital			Deficit			Interest			Equity
Balance, December 31, 2016		3,000,000	$	3,000	$	746,526		$	514,133		$	-		$	1,263,659

Dividends		-		-		(746,526	)		(2,283,194	)		-			(3,029,720	)
Net income		-		-		-			1,533,431			-			1,533,431
Balance, December 31, 2017		3,000,000		3,000		-			(235,630	)		-			(232,630	)
Sale of common stock – investors in the IPO, net of offering costs of $1,247,424		1,312,520		1,313		5,313,863			-			-			5,315,176
Issuance of common stock to employees		103,636		104		559,395			-			-			559,499
Issuance of common stock to note holders		33,500		33		167,467			-			-			167,500
Issuance of common stock to vendors for services		158,797		159		800,841			-			-			801,000
Acquisition of Edison Nation Holdings, LLC – issuance of common stock to satisfy indebtedness		557,084		557		3,383,728			-			-			3,384,285
Acquisition of Cloud B, Inc. – issuance of common stock		489,293		489		2,663,711			-			-			2,664,200
Acquisition of Cloud B, Inc. – noncontrolling interest		-		-		-			-			1,158,000			1,158,000
Acquisition of Best Party Concepts, LLC – deemed distribution and noncontrolling interest		-		-		(692,533	)		-			(192,533	)		(885,066	)
Acquisition of Pirasta, LLC – deemed distribution		-		-		(188,552	)		-			-			(188,552	)
Beneficial conversion option on indebtedness related to acquisition of Edison Nation Holdings, LLC		-		-		500,000			-			-			500,000
Shares reserved for future issuance of common stock to sellers of Edison Nation Holdings, LLC		-		-		6,014,250			-			-			6,014,250
Stock-based compensation		-		-		2,025,994			-			-			2,025,994
Net loss		-		-		-			(5,330,126	)		(13,891	)		(5,344,017	)
Balance, December 31, 2018		5,654,830	$	5,655	$	20,548,164		$	(5,565,756	)	$	951,576		$	15,939,639

The accompanying notes are an integral part of these consolidated financial statements.

F-28

Edison Nation, Inc. (formerly known as Xspand Products Lab, Inc.) and Subsidiaries

CONSOLIDATED STATEMENTS OF CASH FLOWS

	Years Ended December 31,
	2018			2017
Cash Flow from Operating Activities
Net (loss) income attributable to Edison Nation, Inc.	$	(5,330,126	)	$	1,533,431
Net loss attributable to noncontrolling interests		(13,891	)		-
Net (loss) income		(5,344,017	)		1,533,431
Adjustments to reconcile net (loss) income to net cash (used in) provided by operating activities:
Depreciation and amortization		487,878			188,283
Amortization of financing costs		300,277			-
Stock-based compensation		3,386,493			-
Deferred taxes		(33,868	)		28,399
Changes in assets and liabilities:
Accounts receivable		590			68,469
Inventory		59,309			(75,550	)
Prepaid expenses and other current assets		(353,440	)		693
Accounts payable		(1,408,184	)		291,615
Accrued expenses and other current liabilities		636,881			23,347
Due from related party		(507,922	)		(967,301	)
Net cash (used in) provided by operating activities		(2,776,003	)		1,091,386

Cash Flows from Investing Activities
Purchases of property and equipment		(141,440	)		(39,151	)
Acquisitions, net of cash		(772,581	)
Purchase of loan held for investment		(500,000	)		-
Net cash used in investing activities		(1,414,021	)		(39,151	)

Cash Flows from Financing Activities
Borrowings under line of credit		531,804			-
Borrowings under long-term debt		718,559
Repayments under long-term debt		(648,299	)		-
Repayments under long-term debt – related parties		(132,309	)		-
Net proceeds from sale of common stock		5,315,176			-
Fees paid for financing costs		(99,444	)		-
Dividends paid		-			(3,029,720	)
Net cash provided by (used in) financing activities		5,685,487			(3,029,720	)
Net increase (decrease) in cash and cash equivalents		1,495,463			(1,977,485	)
Cash and cash equivalents - beginning of year		557,268			2,534,753
Cash and cash equivalents - end of year	$	2,052,731		$	557,268

Supplemental Disclosures of Cash Flow Information
Cash paid during the period for:
Interest	$	103,865		$	-
Income taxes	$	265,015		$	64,465
Shares issued to note holders	$	167,500		$	-
Shares issued for the acquisition of Edison Nation Holdings, LLC	$	3,384,285		$	-
Shares issued for the acquisition of Cloud B, Inc.	$	2,664,200		$	-
Shares reserved in exchange for the cancellation of certain non-voting membership interests related to acquisition of Edison Nation Holdings, LLC	$	6,014,250		$	-
Borrowings under note payable for the purchase of property and equipment	$	73,559		$	-
Issuance of 4%, 5 year senior convertible notes for the acquisition of Edison Nation Holdings, LLC, net of debt discount for conversion feature	$	1,428,161		$	-
Earnout for acquisition of Cloud B, Inc.	$	520,000		$	-
Satisfaction of due from related party for acquisition of Best Party Concepts, LLC	$	500,000		$	-
Deemed distribution to shareholder for acquisition of Best Party Concepts, LLC	$	692,533		$	-
Satisfaction of due from related party for acquisition of Pirasta, LLC	$	470,000		$	-
Deemed distribution to shareholder for acquisitions of Pirasta, LLC	$	188,552		$	-

The accompanying notes are an integral part of these consolidated financial statements.

F-29

Edison Nation, Inc. (formerly known as Xspand Products Lab, Inc.) and Subsidiaries

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

Note 1 — Basis of Presentation and Nature of Operations

Edison Nation is a vertically-integrated, end-to-end, consumer product research & development, manufacturing, sales and fulfillment company. The Company’s proprietary web-enabled platform provides a low risk, high reward platform and process to connect innovators of new product ideas with potential licensees.

As of December 31, 2018, Edison Nation, Inc. had five wholly-owned subsidiaries: S.R.M. Entertainment Limited (“SRM”), Ferguson Containers, Inc. (“Fergco”), CBAV1, LLC (“CB1”), Pirasta, LLC and Edison Nation Holdings, LLC. Edison Nation, Inc. owns 72.15% of Cloud B, Inc. and 50% of Best Party Concepts, LLC. Edison Nation Holdings, LLC is the single member of Edison Nation, LLC and Everyday Edisons, LLC. Edison Nation, LLC is the single member of Safe TV Shop, LLC. Cloud B, Inc. owns 100% of Cloud B UK and Cloud B Australia.

On February 14, 2018, the Company effected a one-for-3.333333 reverse stock split of its issued and outstanding shares of common stock. All share information has been retroactively restated to reflect the aforementioned reverse stock split.

Liquidity

The foregoing factors raised substantial doubt about the Company’s ability to continue as a going concern. The ability to continue as a going concern is dependent upon the Company’s ability to attract significant new sources of capital, attain a reasonable threshold of operating efficiencies and achieve profitable operations from the sale of its products. The consolidated financial statements do not include any adjustments that might be necessary if the Company is unable to continue as a going concern.

Raise further capital through the sale of addition equity

Borrow money under debt securities.

The deferral of payments to related party debt holders for both principal of $932,701 and related interest expense ($239,885 in 2018).

Cost saving initiatives related to synergies and the elimination of redundant costs of approximately $500,000

Possible sale of certain brands to other manufacturers.

Note 2 — Summary of Significant Accounting Policies

Principles of Consolidation

The consolidated financial statements include the accounts of Edison Nation, Inc. and its wholly-owned and majority owned subsidiaries. The accompanying consolidated financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America (“U.S. GAAP”) and are presented in US dollars. All intercompany balances and transactions have been eliminated.

F-30

Reclassifications

Certain amounts previously presented in the consolidated financial statements have been reclassified to conform to the current year presentation. Such reclassifications had no effect on the previously reported net loss, shareholders’ equity or cash flows.

Use of Estimates

Note 2 — Summary of Significant Accounting Policies — (Continued)

Cash and Cash Equivalents

The Company considers all highly liquid investments with an original maturity of three months or less when purchased to be cash equivalents in the consolidated financial statements.

The Company has cash on deposits in several financial institutions which, at times, may be in excess of Federal Deposit Insurance Corporation (“FDIC”) insurance limits. The Company has not experienced losses in such accounts and periodically evaluates the creditworthiness of its financial institutions. The Company reduces its credit risk by placing its cash and cash equivalents with major financial institutions. The Company had approximately $1,450,000 uninsured at December 31, 2018 of which approximately $583,000 was held in foreign bank accounts not covered by FDIC insurance limits as of December 31, 2018.

Accounts Receivable

Accounts receivable are carried at their contractual amounts, less an estimate for uncollectible amounts. As of December 31, 2018 and 2017, the allowance for uncollectable amounts was not material. Management estimates the allowance for bad debts based on existing economic conditions, historical experience, the financial conditions of the customers, and the amount and age of past due accounts. Receivables are considered past due if full payment is not received by the contractual due date. Past due accounts are generally written off against the allowance for bad debts only after all collection attempts have been exhausted.

As of December 31, 2018, the following customers represented more than 10% of total accounts receivable:

	December 31,
	2018
Customer A		12	%
Customer B		11	%

Inventory

Loan Held for Investment

Loan held for investment is reported on the balance sheet at the acquired cost which approximates the fair value, which resulted in a discount. The acquired loan had evidence of deterioration of credit quality and for which it was probable, at the time of our acquisition, that the Company would be unable to collect all contractually required payments. For these loans, the excess of the undiscounted contractual cash flows over the undiscounted cash flows estimated by us at the time of acquisition was not accreted into income (nonaccretable discount). The amount representing the excess of cash flows estimated by us at acquisition over the purchase price was accreted into purchase discount earned over the life of the applicable loans (accretable discount). The nonaccretable discount was not accreted into income. If cash flows could not be reasonably estimated for any loan, and collection was not probable, the cost recovery method of accounting was used. Under the cost recovery method, any amounts received were applied against the recorded amount of such loans.

F-31

Subsequent to acquisition, if cash flow projections improved, and it was determined that the amount and timing of the cash flows related to the nonaccretable discount was reasonably estimable and collection was probable, the corresponding decrease in the nonaccretable discount was transferred to the accretable discount and was accreted into interest income over the remaining life of any such loan on the interest method. If cash flow projections deteriorated subsequent to acquisition, the decline was accounted for through the allowance for loan losses. Depending on the timing of an acquisition, the initial allocation of discount generally is made primarily to nonaccretable discount until the Company is able to assess any cash flows expected to be collected over the purchase price which are then transferred to accretable discount.

On June 4, 2018, the Company purchased a promissory note for $500,000 from a bank at a discount of $1,700,000 from the face value of $2,270,000 of a company in financial difficulty. On October 29, 2018, the Company purchased 72.15% of the outstanding capital stock of the Company as described Note 3. The loan held for investment has been eliminated in consolidation as of December 31, 2018.

Property and Equipment, Net

Property and equipment are stated at cost, net of accumulated depreciation and amortization, which is recorded commencing at the in-service date using the straight-line method over the estimated useful lives of the assets, as follows: 3 to 5 years for office equipment, 5 to 7 years for furniture and fixtures, 6 to 10 years for machinery and equipment, 10 to 15 years for building improvements, 5 years for software, 5 years for molds, 5 to 7 years for vehicles and 40 years for buildings.

When fixed assets are retired or otherwise disposed of, the cost and accumulated depreciation are removed from the accounts and any resulting gain or loss is included in the statements of operations for the respective period. Minor additions and repairs are expensed in the period incurred. Major additions and repairs which extend the useful life of existing assets are capitalized and depreciated using the straight-line method over their remaining estimated useful lives.

Long-Lived Assets

The Company reviews long-lived assets for impairment whenever events or changes in circumstances indicate that the carrying amount of the asset may not be recoverable. The Company assesses the recoverability of its long-lived assets using undiscounted cash flows. If an asset is found to be impaired, the amount recognized for impairment is equal to the difference between the carrying value and the asset’s fair value. The Company did not record any impairment charges related to long-lived assets during the years ended December 31, 2018 and 2017.

Goodwill and Intangible Assets

We record intangible assets based on their fair value on the date of acquisition. Goodwill is recorded for the difference between the fair value of the purchase consideration over the fair value of the net identifiable tangible and intangible assets acquired. We perform an impairment assessment of goodwill on an annual basis, or whenever impairment indicators exist. In the absence of any impairment indicators, goodwill is assessed for impairment during the fourth quarter of each fiscal year. Judgments regarding the existence of impairment indicators are based on market conditions and operational performance of the business.

We may assess our goodwill for impairment initially using a qualitative approach to determine whether it is more likely than not that the fair value of these assets is greater than their carrying value. When performing a qualitative test, we assess various factors including industry and market conditions, macroeconomic conditions and performance of our businesses. If the results of the qualitative assessment indicate that it is more likely than not that our goodwill and other indefinite-lived intangible assets are impaired, a quantitative impairment analysis would be performed to determine if impairment is required. We may also elect to perform a quantitative analysis of goodwill initially rather than using a qualitative approach.

The impairment testing for goodwill is performed at the reporting unit level. The valuation methods used in the quantitative fair value assessment, discounted cash flow and market multiples method, require our management to make certain assumptions and estimates regarding certain industry trends and future profitability of our reporting units. If the fair value of a reporting unit exceeds the related carrying value, the reporting unit's goodwill is considered not to be impaired and no further testing is performed. If the carrying value of a reporting unit exceeds its fair value, an impairment loss is recorded for the difference. The valuation of goodwill is affected by, among other things, our business plan for the future and estimated results of future operations. Future events could cause us to conclude that impairment indicators exist, and, therefore, that goodwill may be impaired.

F-32

Intangible assets include the cost of patents or patent rights (hereinafter, collectively “patents”) and trademarks. Patent and trademark costs are amortized utilizing the straight-line method over their remaining economic useful lives. Costs incurred related to patents prior to issuance are included in prepaid patent expense until the time the patent is issued and amortization begins or until management determines it is no longer likely the patent will be issued and amounts are expensed. Edison Nation reviews long-lived assets and intangible assets for potential impairment annually and when events or changes in circumstances indicate the carrying amount of an asset may not be recoverable. In the event the expected undiscounted future cash flows resulting from the use of the asset is less than the carrying amount of the asset, an impairment loss is recorded equal to the excess of the asset’s carrying value over its fair value. If an asset is determined to be impaired, the loss is measured based on quoted market prices in active markets, if available. If quoted market prices are not available, the estimate of fair value is based on various valuation techniques, including a discounted value of estimated future cash flows. In the event that management decides to no longer allocate resources to a patent portfolio, an impairment loss equal to the remaining carrying value of the asset is recorded.

Revenue Recognition

Step 1 – Identify the Contract with the Customer – A contract exists when (a) the parties to the contract have approved the contract and are committed to perform their respective obligations, (b) the entity can identify each party’s rights regarding the goods or services to be transferred, (c) the entity can identify the payment terms for the goods or services to be transferred, (d) the contract has commercial substance and it is probably that the entity will collect substantially all of the consideration to which it will be entitled in exchange for the goods or services that will be transferred to the customer.

F-33

Disaggregation of Revenue

The Company’s primary revenue streams include the sale and/or licensing of consumer goods and packaging materials for innovative products. The Company’s licensing business is not material and has not been separately disaggregated for segment purposes. The disaggregated Company’s revenues for the years ended December 31, 2018 and 2017 was as follows:

	For the Years Ended December 31,
	2018		2017
Revenues:
Product sales	$	16,037,221	$	14,960,450
Service revenues		197,068
Licensing revenues		267,920		-
Total revenues, net	$	16,502,209	$	14,960,450

For the years ended December 31, 2018 and 2017, the following customers represented more than 10% of total net revenues:

	For the years ended December 31,
		2018		2017
Customer A		21	%	31	%

* Customer did not represent greater than 10% of total net revenue.

For the years ended December 31, 2018 and 2017, the following geographical regions represented more than 10% of total net revenues:

	For the Years Ended December 31,
		2018		2017
North America		80	%	83	%
Asia-Pacific		13	%	13	%

Cost of Revenues

Cost of revenues includes freight charges, purchasing and receiving costs, depreciation and inspection costs.

Shipping and Handling Costs

Shipping and handling costs include inbound freight costs and the cost to ship product to the customer and are included in cost of sales.

Fair Value of Financial Instruments

Level 1 — quoted prices in active markets for identical assets or liabilities

Level 2 — quoted prices for similar assets and liabilities in active markets or inputs that are observable

Level 3 — inputs that are unobservable (for example, cash flow modeling inputs based on assumptions)

F-34

As of December 31, 2018, the book value and estimated fair value of the Company’s level 3 instruments was as follows:

	December 31, 2018
	Book Value			Estimated Fair Value
Loan held for investment	$	-		$	-
Contingent consideration	$	(520,000	)	$	(520,000	)

The following changes in level 3 instruments for the year ended December 31, 2018 are presented below:

	Loan Held For Investment			Contingent Consideration – Earnout
Balance, January 1, 2018	$	-		$	-
Purchases		500,000			-
Earnout incurred related to acquisition of Cloud B, Inc.		-			520,000
Acquisition of Cloud B, Inc. – eliminated in consolidation		(500,000	)		-
Balance, December 31, 2018	$	-		$	(520,000	)

Foreign Currency Translation

The Company uses the United States dollar as its functional and reporting currency since the majority of the Company’s revenues, expenses, assets and liabilities are in the United States. Assets and liabilities in foreign currencies are translated using the exchange rate at the balance sheet date, while revenue and expense accounts are translated at the average exchange rates prevailing during the year. Equity accounts are translated at historical exchange rates. Gains and losses from foreign currency transactions and translation for the years ended December 31, 2018 and 2017 and the cumulative translation gains and losses as of December 31, 2018 and 2017 were not material.

Income Taxes

The Company accounts for income taxes under the provisions of the Financial Accounting Standards Board (“FASB”) ASC Topic 740 “Income Taxes” (“ASC Topic 740”).

The Company recognizes deferred tax assets and liabilities for the expected future tax consequences of items that have been included or excluded in the financial statements or tax returns. Deferred tax assets and liabilities are determined on the basis of the difference between the tax basis of assets and liabilities and their respective financial reporting amounts (“temporary differences”) at enacted tax rates in effect for the years in which the temporary differences are expected to reverse.

The Company utilizes a recognition threshold and measurement process for financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return.

Management has evaluated and concluded that there were no material uncertain tax positions requiring recognition in the Company’s consolidated financial statements as of December 31, 2018 and 2017. The Company does not expect any significant changes in its unrecognized tax benefits within twelve months of the reporting date.

The Company’s policy is to classify assessments, if any, for tax related interest as interest expense and penalties as general and administrative expenses in the statements of operations.

On December 22, 2017, the Tax Cuts and Jobs Act (the “TCJA”) was signed into law. This legislation significantly changes U.S. tax law by, among other things, lowering corporate income tax rates, implementing a territorial tax system and imposing a repatriation tax on deemed repatriated earnings of foreign subsidiaries. The TCJA permanently reduced the U.S. corporate income tax rate from 34% to 21%, effective January 1, 2018.

F-35

Net Earnings or Loss per Share

Basic net (loss) income per common share is computed by dividing net (loss) income by the weighted average number of vested common shares outstanding during the period. Diluted net income per common share is computed by dividing net income by the weighted average number vested of common shares, plus the net impact of common shares (computed using the treasury stock method), if dilutive, resulting from the exercise of dilutive securities. In periods when losses are reported, the weighted-average number of common shares outstanding excludes common stock equivalents because their inclusion would be anti-dilutive. As of December 31, 2017, there were no common stock equivalents outstanding. As of December 31, 2018, the Company excluded the common stock equivalents summarized below, which entitle the holders thereof to ultimately acquire shares of common stock, from its calculation of earnings per share, as their effect would have been anti-dilutive.

	December 31,
	2018
Selling Agent Warrants		65,626
Shares reserved in exchange for the cancellation of certain non-voting membership interest in Edison Nation Holdings, LLC		990,000
Options		290,000
Convertible shares under notes payable		285,632
Shares to be issued to innovator		12,500
Total		1,643,758

Deferred Financing Costs

Deferred financing costs include debt discounts and debt issuance costs related to a recognized debt liability and are presented in the balance sheet as a direct deduction from the carrying value of the debt liability. Amortization of deferred financing costs are included as a component of interest expense. Deferred financing costs are amortized using the straight-line method over the term of the recognized debt liability which approximates the effective interest method.

Recent Accounting Pronouncements

In January 2018, the FASB issued Accounting Standards Update No. 2017-01(“ASU 2017-01”), Business Combinations (Topic 805): Clarifying the Definition of a Business. The standard clarifies the definition of a business with the objective of providing guidance when evaluating whether transactions should be accounted for as acquisitions (or disposals) of assets or businesses. For public companies, this standard was effective for annual reporting periods beginning after December 15, 2017. The Company adopted this standard in the first quarter of 2018 and the adoption did not have an impact on the Company’s results or consolidated financial statements.

In February 2018, the FASB issued Accounting Standards Update No. 2018-02 (“ASU 2018-02”), Income Statement -Reporting Comprehensive Income (Topic 220): Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income. The standard provides for a reclassification from accumulated other comprehensive earnings (“AOCE”) to retained earnings, of disproportionate income tax effects arising from the impact of the Tax Cuts and Jobs Act of 2017. For public companies, this standard is effective for annual reporting periods beginning after December 15, 2018. Early adoption is permitted. The Company adopted ASU 2018-02 in the first quarter of 2018 and the adoption of this standard did not have an impact on the Company’s results or consolidated financial statements.

In August 2016, the FASB issued ASU 2016-15, Statement of Cash Flows (ASC 230) – Classification of Certain Cash Receipts and Cash Payments. The new guidance is intended to reduce diversity in practice across all industries, in how certain transactions are classified in the statement of cash flows. ASU 2016-15 was effective for public companies for fiscal years beginning after December 15, 2017. The Company adopted this standard in 2018 and the adoption of this standard did not have an impact on the Company’s statement of cash flows for the years ended December 31, 2018 and 2017.

In October 2016, the FASB issued Accounting Standards Update No. 2016-16 (ASU 2016-16), Accounting for Income Taxes: Intra-Entity Transfers of Assets Other Than Inventory. For public companies, this standard was effective for annual reporting periods beginning after December 15, 2017, and early adoption is permitted. The standard requires that the income tax impact of intra-entity sales and transfers of property, except for inventory, be recognized when the transfer occurs requiring any deferred taxes not yet recognized on intra-entity transfers to be recorded to retained earnings. The Company adopted this standard in the first quarter of 2018 and the adoption did not have an impact on the Company’s results or consolidated financial statements.

F-36

In January 2017, the FASB issued Accounting Standards Update No. 2017-04 (ASU 2017-04), “Simplifying the Test for Goodwill Impairment”, which removes Step 2 from the goodwill impairment test. ASU 2017-04 requires that if a reporting unit’s carrying value exceeds its fair value, an impairment charge would be recognized for the excess amount, not to exceed the carrying amount of goodwill. ASU 2017-04 will be effective for interim and annual reporting periods beginning after December 15, 2019. Early application is permitted after January 1, 2017. The Company early adopted ASU 2017-04 in the third quarter of 2018 with no impact on our financial statements.

In May 2017, the FASB issued accounting guidance on determining which changes to the terms or conditions of share-based payment awards require an entity to apply modification accounting. This pronouncement is effective for fiscal years, and for interim periods within those fiscal years, beginning after December 15, 2017, with early adoption permitted, and is applied prospectively to changes in terms or conditions of awards occurring on or after the adoption date. We have adopted this accounting guidance effective January 1, 2018, with no impact on our financial statements as there were no changes to the terms or conditions of share-based payment awards.

In June 2018, the FASB issued an amendment to the accounting guidance related to accounting for employee share-based payments which clarifies that an entity should recognize excess tax benefits in the period in which the amount of the deduction is determined. This amendment is effective for annual periods beginning after December 15, 2018. We have not yet adopted this accounting guidance and are currently evaluating the effect this accounting guidance will have on our financial statements.

Subsequent Events

The Company has evaluated subsequent events through the date which the financial statements were issued. Based upon the evaluation, except for items described in Note 13, the Company did not identify any recognized or non-recognized subsequent events that would have required adjustment or disclosure in the financial statements.

Segment Reporting

F-37

Note 3 — Acquisition

On September 30, 2017, the Company completed the acquisitions of SRM and Fergco in exchange for an aggregate of 3,000,000 shares of the Company common stock and notes payable aggregating $2,996,500. This transaction between entities under common control resulted in a change in reporting entity and required retrospective combination of the entities for all periods presented, as if the combination had been in effect since the inception of common control. Accordingly, the consolidated financial statements of the Company reflect the accounting of the combined acquired subsidiaries at historical carrying values, except that equity reflects the equity of the Company.

On September 4, 2018, the Company completed the acquisition of all of the voting membership interest of Edison Nation Holdings, LLC for a total purchase price of $12,820,978 comprising of (i) $950,000 cash (ii) 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 and interest amount of the sum of $1,428,161, less debt discount of $500,000 for the approximate fair value of the conversion feature, which are convertible into approximately 285,632 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 Membership Interest Purchase Agreement (the “Purchase Agreement”) among the Company and Edison Nation Holdings, LLC and Edison Nation Holdings, LLC members dated June 29, 2018 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 557,084 shares or $3,760,317 of the Company’s common stock in full satisfaction of the indebtedness represented by promissory notes payable by EN to Venture Six, LLC and Wesley Jones.

The activity of Edison Nation Holdings, LLC included in the Company’s consolidated statements of operations from the acquisition date to December 31, 2018 was net sales of $267,920 and net loss of $197,485.

On October 29, 2018, the Company completed the acquisition of 72.15% of the outstanding capital stock of Cloud B, Inc. in exchange for 489,293 shares of restricted common stock of the Company. In addition, the Company entered into an Earn Out Agreement with the Cloud B Sellers, whereby, beginning in 2019, the Company will pay the Cloud B Sellers an annual amount equal to 8% multiplied by the annual gross sales of Cloud B, as reduced by the total gross sales generated by Cloud B in 2018. The Earn Out Agreement expires on December 31, 2021.

The activity of Cloud B, Inc. included in the Company’s consolidated statements of operations from the acquisition date to December 31, 2018 was net sales of $1,512,328 and net loss of $44,408.

On December 31, 2018, the Company completed the acquisition of all of the voting membership interest of Pirasta, LLC from NL Penn Capital, LP in exchange for the satisfaction of $470,000 due from related party. Accordingly, the consolidated financial statements of the Company reflect the accounting of the combined acquired subsidiary at historical carrying values, except that equity reflects a distribution for the excess of consideration paid over the net carrying amount of assets.

The activity of Pirasta, LLC included in the Company’s consolidated statements of operations from the acquisition date to December 31, 2018 was not material.

On December 31, 2018, the Company completed the acquisition of 50% of the voting membership interest of Best Party Concepts, LLC from NL Penn Capital, LP in exchange for the satisfaction of $500,000 due from related party. Accordingly, the consolidated financial statements of the Company reflect the accounting of the combined acquired subsidiary at historical carrying values, except that equity reflects a distribution for the excess of consideration paid over the net carrying amount of assets.

The activity of Best Party Concepts, LLC included in the Company’s consolidated statements of operations from the acquisition date to December 31, 2018 was not material

The following table summarizes the aggregate purchase price consideration paid:

	Edison Nation						Best Party
	Holdings, LLC		Cloud B, Inc.		Pirasta, LLC		Concepts, LLC
Cash paid		950,000		-	$	-	$	-
Fair value of issued shares		3,384,285		2,664,200		-		-
Fair value of reserved shares		6,014,250		-		-		-
Issuance of debt		1,428,161		-		-		-
Settlement of due from related party		-		-		470,000		500,000
Fair value of contingent consideration		-		520,000		-		-
Purchase consideration		11,776,696		3,184,200		470,000		500,000

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The Company believes that this combination will further strengthen its future growth opportunities while also increasing product diversification. The Company accounted for this acquisition as a business combination under the acquisition method of accounting. The following table summarizes the preliminary purchase price allocation of fair values of the assets acquired and liabilities assumed at the date of acquisition:

	Edison Nation							Best Party
	Holdings, LLC		Cloud B, Inc.		Pirasta, LLC			Concepts, LLC
Cash and cash equivalents	$	68,681	$	104,744	$	3,629		$	365
Accounts receivable		15,958		636,755		7,696			6,906
Inventory		-		566,500		36,537			139,918
Other assets		39,691		172,747		-			4.356
Property and equipment		1,852		53,345		-			10,931
Goodwill		5,497,242		3,884,432		354,836			-
Intangible assets		6,400,000		6,600,000		-			-
Total assets acquired		12,023,424		12,018,523		402,698			162,476
Debt		-		1,400,000		-			-
Accounts payable		227,025		5,748,797		2,052			34,041
Accrued expenses and other liabilities		19,703		527,526		119,198			513,502
Total liabilities assumed		246,728		7,676,323		121,250			547,543
Noncontrolling interest		-		1,158,000		-			(192,534	)
Distribution to shareholder		-		-		(188,552	)		(692,533	)
		11,776,696		3,184,200		470,000			500,000

The noncontrolling interest was valued based on the fair value of consideration paid to the Cloud B Sellers.

The following represents the pro forma consolidated income statement as if the acquisitions had been included in the consolidated results of the Company for the entire years ending December 31, 2018 and 2017:

	Years Ended December 31,
	2018			2017
Revenues, net	$	20,988,594		$	24,402,376
Cost of revenues		13,566,605			16,289,352
Gross profit		7,421,989			8,113,024

Operating expenses:
Selling, general and administrative		13,144,691			8,890,638
Operating (loss) income		(5,722,702	)		(777,614	)

Other (expense) income:
Other (expense) income		(398,406	)		(325,017	)
(Loss) income before income taxes		(6,249,968	)		(452,597	)
Income tax expense		304,298			135,570
Net loss	$	(6,554,266	)	$	(588,167	)
Net loss attributable to noncontrolling interests		(415,466	)		(506,616	)
Net loss attributable to Edison Nation, Inc.		(6,138,801	)		(81,551	)
Net loss per share - basic and diluted	$	(1.09	)	$	(0.02	)
Weighted average number of common shares outstanding – basic and diluted		5,654,930			4,046,377

In connection with the acquisitions the Company will no longer present multiple segments for packaging materials and consumer goods segment as resources will be deployed on a consolidated level and all entities will operate cross functionally as one team to bring products to market.

F-39

Note 4 — Accounts Receivable

As of December 31, 2018 and 2017, accounts receivable consisted of the following:

	December 31,			December 31,
	2018			2017
Accounts receivable	$	1,889,112		$	1,441,997
Less: Allowance for doubtful accounts		(11,761	)		(11,761	)
Total accounts receivable, net	$	1,877,351		$	1,430,236

Note 5 — Inventory

As of December 31, 2018 and 2017, inventory consisted of the following:

	December 31,		December 31,
	2018		2017
Raw materials	$	48,576	$	30,410
Finished goods		875,131		209,651
Total inventory	$	923,707	$	240,061

Note 6 — Property and equipment, net

As of December 31, 2018 and 2017, property and equipment consisted of the following:

	December 31,			December 31,
	2018			2017
Land	$	79,100		$	79,100
Buildings – rental property		427,704			427,704
Building improvements		760,017			745,685
Equipment and machinery		3,929,332			3,899,040
Furniture and fixtures		322,157			280,124
Computer software		23,518			23,518
Molds		4,589,153			4,552,374
Vehicles		502,960			404,759
		10,633,941			10,412,304
Less: accumulated depreciation		(9,635,078	)		(9,445,400	)
Total property and equipment, net	$	998,863		$	966,904

Depreciation expense for the years ended December 31, 2018 and 2017 was $175,609 and $188,283, respectively.

Note 7 — Goodwill

The changes in the carrying amount of goodwill for the year ended December 31, 2018 consisted of the following:

	Total
Balance, January 1, 2018	$	-
Acquisitions		9,736,510
Balance, December 31, 2018		9,736,510

The Company had no goodwill until which time it closed on its 2018 acquisitions.

F-40

Note 8 — Intangible assets, net

As of December 31, 2018, intangible assets consisted of the following:

					For the Years Ended December 31,
	Useful Life	Weighted Average Remaining Life	Gross Carrying Amount		Accumulated Amortization		Net Amount
Definite lived intangible assets:
Customer relationships	15 years	14.8 years	$	4,270,000	$	61,556	$	4,208,444
Developed technology	7 years	6.7 years	$	3,800,000		159,524		3,640,476
Membership network	7 years	6.7 years	$	1,740,000		82,857		1,657,143
Non-compete agreements	2 years	1.7 years	$	50,000		8,333		41,667
Total definite lived intangible assets			$	9,860,000	$	312,270	$	9,547,730

Indefinite lived intangible assets:
Trademarks and tradenames	Indefinite		$	3,140,000	$	-	$	3,140,000
Total indefinite lived intangible assets			$	3,140,000	$	-	$	3,140,000
Total intangible assets				13,000,000	$	312,270	$	12,687,730

Amortization expense for the years ended December 31, 2018 and 2017 was $312,270 and $0, respectively.

The estimated future amortization of intangibles subject to amortization at December 31, 2018 was as follows:

For the Years Ended December 31,	Amount
2019	$	1,101,095
2020		1,092,762
2021		1,076,095
2022		1,076,095
2023		1,076,095
Thereafter		4,125,588
		9,547,730

Note 9 — Accrued expenses and other current liabilities

As of December 31, 2018 and 2017, accrued expenses and other current liabilities consisted of the following:

	December 31,		December 31,
	2018		2017
Accrued other taxes	$	259,559	$	55,413
Accrued payroll and benefits		175,336		8,703
Accrued professional fees		133,261		16,848
Customer deposits		35,094		-
Accrued interest		269,782		-
Other		262,519		-
Total accrued expenses and other current liabilities	$	1,135,551	$	80,964

Note 10 — Debt

As of December 31, 2018 and 2017, debt consisted of the following:

	December 31,			December 31,
	2018			2017
Line of credit:
Asset backed line of credit	$	561,804		$	-
Debt issuance costs		(30,000	)		-
Total line of credit		531,804			-

Long-term senior convertible debt:
Senior convertible notes payable		1,428,161			-
Debt issuance costs		(466,667	)		-
Total long-term senior convertible debt		961,494			-

Long-term debt:
Notes payable		370,250			-
Less: current portion of long-term debt		(313,572	)		-
Noncurrent portion of long-term debt		56,688			-

Long-term debt – related parties:
Notes payable		3,464,191			2,996,500
Less: current portion of long-term debt – related parties		(932,701	)		(225,553	)
Noncurrent portion of long-term debt – related parties	$	2,531,490		$	2,770,947

F-41

Line of Credit

On December 27, 2018, the Company entered into credit agreement providing for an asset backed line of credit of $1,000,000. The credit agreement contains a revolving maturity date which is subject to an annual review by the lender, The credit agreement is collateralized by substantially all of the assets of Ferguson Containers, Inc. The interest rate was 8.5% as of December 31, 2018. The agreement contains certain covenants and definition. The Company was in compliance with all covenants as of December 31, 2018.

Long-term Convertible Notes Payable – Related Parties

On September 4, 2018, in connection with the acquisition of EN, the Company issued five senior convertible notes payable aggregating $1,428,161. The notes have an effective interest rate of four percent (4%) per annum. The Company is required to make semi-annual interest payments on June 30th and December 31st of each year. The notes have an option to convert at a conversion price of $5.00. Prepayments are not allowed under the notes without the prior written consent of applicable holders of a note until the second anniversary of the effective date of the note, after which time the notes may be prepaid without penalty at any time upon sixty (60) days’ written notice to the holders. The holders have piggyback registration rights. If the conversion option is not elected by the holder, all outstanding principal and interest is due on September 4, 2023. The Company recorded a debt discount of $500,000 related to the beneficial conversion feature that will be amortized over five (5) years to interest expense.

Notes Payable

The Company borrowed funds under two separate notes, aggregating $645,000, in February 2018 and March 2018. As of December 31, 2018, both holders of the notes were paid in full. In addition, the Company issued the 20,000 and 13,500 shares to the holders of the notes payable, respectively. The fair value of the shares issued was $167,500 which was recorded as a debt discount and fully amortized through interest expense.

On September 7, 2018, the Company borrowed $73,559 related to the purchase of a commercial delivery vehicle. The note bears interest at a rate of 4.5% per annum. The monthly payments under the note are $1,371 commencing on October 6, 2018 and maturing on September 6, 2023. The loan is collaterized by the commercial delivery vehicle having the approximate value of $75,000.

On December 1, 2016, Cloud B, Inc. entered into a Loan Agreement with an outside associate of CEO Linda Suh. The loan was in the amount of $300,000. This loan was for a period of six (6) months and bears no interest and therefore no monthly interest payments. A Loan Amendment and Extension Agreement was entered into on June 1, 2017, extending the maturity of the loan until December 31, 2017. This loan remains outstanding. No collateral was provided by the Company for any of the above-referenced loans.

Notes Payable – Related Parties

On September 30, 2018, in connection with the acquisition of SRM and Fergco, the Company issued two notes payable aggregating $2,996,500. One note was issued to NL Penn Capital, L.P, in relation to the acquisition of SRM in the amount of $2,120,000 and the other note was issued to the shareholders of Fergco in the amount of $876,500. The notes bear interest at a rate of six percent (6%) per annum and have an effective interest rate of six percent (6%) per annum. The Company is required to make monthly payments comprised of principal and interest beginning in January 2018 that are amortized over ten (10) years, with a balloon payment of all outstanding principal and interest due at the respective maturity dates ($677,698 due on December 1, 2020 and $1,249,043 due on December 1, 2022).

On April 24, 2014, Cloud B, Inc. entered into two shareholder Loan Agreements. One shareholder loan was from former shareholder, Board Member, and CEO of Cloud B, Inc. prior to the acquisition on October 29, 2018, Linda Suh in the amount of $100,000. This loan bears interest at a rate of 7.0% per annum for the first twelve (12) months and 8.0% per annum thereafter. The Company is required to make monthly interest only payments. Interest payments on this loan have been paid through November 2018. The other shareholder loan was from former shareholder and Board Member of Cloud B, Inc. prior to the acquisition on October 29, 2018, John Royan in the amount of $500,000. This loan bears interest at a rate of 7.0% per annum for the first six (6) months and 8.0% per annum for the next six (6) months. The Company was required to make monthly interest only payments through May 2015, with the loan becoming due and payable on May 28, 2015. This loan remains outstanding with the last interest payment made in July 2015.

F-42

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
2018	$	1,778,077
2019		239,461
2020		254,230
2021		704,296
2022		1,420,190
Thereafter		1,428,162
		5,824,416
Less: debt discount		(496,667	)
	$	5,327,749

For the year ended December 31, 2018, interest expense was $501,221 of which $239,885 was related party interest expense. For the year ended December 31, 2017 interest income was $4,000.

Note 11 — Income Taxes

Edison Nation, Inc. is taxed as a corporation and pays corporate federal, state and local taxes on income allocated to it from Fergco, Edison Nation Holdings, LLC, Edison Nation, LLC, Safe TV Shop, LLC, Everyday Edisons, LLC and Pirasta, LLC based upon Edison Nation, Inc.’s economic interest in those entities. Cloud B, Inc. is taxed as a corporation and pays corporate federal, state and local taxes on its income. The Company has three foreign entities of which only SRM has operations, SRM is an entity subject to the Hong Kong, China tax regime. The Hong Kong tax returns remain subject to examination by local taxing authorities beginning with the tax year ended December 31, 2011.

Cloud B, Inc. was a Subchapter S pass-through entity for income tax purposes prior to its acquisition by the Company on October 29, 2018. Accordingly, Cloud B, Inc. was not subject to income taxes prior to the acquisition and therefore the tax provision related to the United States income is only for the period from October 29, 2018 to December 31, 2018.

Edison Nation Holdings, LLC and its subsidiaries are disregarded limited liability corporation entities for income tax purposes. Accordingly, EN was not subject to income taxes prior to the acquisition on September 4, 2018 and the results of operations were not material therefore the tax provision related to the United States income is only for the period from September 4, 2018 to December 31, 2018.

Fergco was a Subchapter S pass-through entity for income tax purposes prior to its acquisition by the Company on September 30, 2017. Accordingly, Fergco was not subject to income taxes prior to the acquisition and therefore the tax provision related to the United States income is only for the period from October 1, 2017 to December 31, 2017.

United States and foreign components of income before income taxes were as follows:

	For the Years Ended December 31,
	2018			2017
United States		(5,828,261	)		49,097
Foreign		788,159			1,617,439
Income before income taxes	$	(5,040,102	)	$	1,666,536

The tax effects of temporary differences that give rise to deferred tax assets or liabilities are presented below:

	For the Years Ended December 31,
	2018			2017
Deferred tax assets:
Stock-based compensation	$	682,115		$	-
Goodwill and intangible assets		19,410			-
Net operating loss carryforwards		493,063			50,524
Less: valuation allowance		(1,194,587	)		(50,524	)
Net deferred tax assets	$	-		$	-

Deferred tax liabilities:
Property and equipment	$	341		$	34,209
Net deferred tax liabilities	$	341		$	34,209
Net deferred tax liabilities	$	341		$	34,209

F-43

As of December 31, 2018 and 2017, the Company had $1,820,685 and $240,591 of federal and state net operating loss carryforwards for income tax purposes. In connection with the IPO the Company does not believe the ownership change resulted in the loss of past net operating loss carryforwards. The above net operating loss carryforwards may be subject to an annual limitation under Section 382 and 383 of the Internal Revenue Code of 1986, and similar state provisions if the Company experiences one or more ownership changes. The Company believes the goodwill acquired in the Edison Nation Holdings acquisition is deductible for tax purposes. The Company evaluates its ability to realize deferred tax assets on a quarterly basis and establishes a valuation allowance when it is more likely than not that all or a portion of a deferred tax asset may not be realized. As of December 31, 2018 and 2017, the Company recognized a deferred tax asset of $1,194,587 and $50,524, respectively. However, these deferred tax assets will be utilized upon the Company generating taxable income. As of December 31, 2018 and 2017, the Company established a full valuation allowance in the amount of $1,194,587 and $50,524, respectively, against the deferred tax asset.

The income tax provision (benefit) consists of the following:

	For the Years Ended December 31,
	2018			2017
Current:
Federal	$	10,185		$	27,513
Foreign		292,491			71,125
State and local		35,107			6,069
Total current	$	337,783		$	104,707

Deferred:
Federal	$	(21,450	)	$	23,249
Foreign		(2,316	)		(3,153	)
State and local		(10,102	)		8,302
Total deferred	$	(33,868	)	$	28,398
Income tax provision (benefit)	$	303,915		$	133,105

A reconciliation of the statutory federal income tax rate to the Company’s effective tax rate is as follows:

	For the Years Ended December 31,
	2018			2017
Tax at federal statutory rate		21.0	%		34.0	%
Effect of U.S. tax law change		0.0	%		-0.9	%
U.S. income attributable to pass-through entity		0.0	%		-4.4	%
U.S. income subject to valuation allowance		-20.5	%		4.9	%
State and local income taxes		0.0	%		0.9	%
Foreign income not subject to U.S. federal tax		0.0	%		-33.0	%
Foreign tax		-6.3	%		4.1	%
Other		-0.2	%		2.4	%
Effective income tax rate		-6.0	%		8.0	%

The statutory federal income tax rate differs from the Company’s effective tax rate due to the valuation allowance related to deferred tax assets and net operating losses and foreign income taxes in Hong Kong.

Note 12 — Related Party Transactions

NL Penn Capital, LP and SRM Entertainment Group LLC

As of December 31, 2018 and 2017, due to related party consists of net amounts due to SRM Entertainment Group LLC (“SRM LLC”) and NL Penn Capital, LP (“NL Penn”), the majority owner of SRM Entertainment Group LLC, which are owned by Chris Ferguson, Chief Executive Officer. The amount due to related parties is related to the acquisition of Pirasta, LLC and Best Party Concepts, LLC offset by operating expenses that were paid by SRM on behalf of SRM LLC and NL Penn. As of December 31, 2018 and 2017, the net amount due to related parties was $140,682 and due from related parties was $834,897, respectively. Such amounts are due currently.

F-44

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. 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 has been nominated to be voted upon as a board member of the Company at the Company’s next annual meeting, is also the Chief Executive Officer and the largest equity holder of Enventys. We incurred fees of approximately $130,000 related to the services performed by Enventys for the year ended December 31, 2018.

Note 13 — Commitments and Contingencies

Operating Lease

The Company leases certain office space from an entity affiliated through common ownership under operating lease agreement. The operating lease requires base monthly payments of $3,333 plus the Company’s share of the facilities operating expenses as defined in the lease agreement through May 2017. The lease agreement contains four successive five year renewal options with 5% base rent escalations at the end of each extension period.

On October 1, 2018, the Company entered into a lease for office space in Winter Park, Florida which expires on September 30, 2020. Monthly lease payments are approximately $1,887 for a total of approximately $45,288 for the total term of the lease.

Minimum annual rental commitments for operating leases of continuing operations having initial or remaining noncancellable lease terms in excess of one year are as follows:

Total rent expense for the years ended December 31, 2018 and 2017 was $343,253 and $191,405, respectively. Rent expense is included in general and administrative expense on the consolidated statements of operations.

Rental Income

Fergco leases a portion of the building located in Washington, New Jersey that it owns under a month to month lease. Total rental income related to the leased space for both the years ended December 31, 2018 and 2017 was $102,815, respectively, and is included in other income on the consolidated statements of operations.

Legal Contingencies

We are, and may in the future become, subject to various legal proceedings and claims that arise in or outside the ordinary course of business.

Note 14 — Shareholders’ Equity

Common Stock

The Company issued 1,312,520 shares of common stock related to the IPO, at a public offering price of $5.00 per share in August 2018. The Company received gross proceeds of $6,562,600 and net proceeds of $5,315,176 after deducting underwriter commissions and expenses of $714,802, legal fees of $157,358, escrow closing fees of $4,000 and other direct offering expenses which together aggregate $1,204,030.

F-45

Stock-Based Compensation

On September 6, 2018, the Company’s board of directors approved an amendment and restatement of the Company’s omnibus incentive plan solely to reflect the Company’s name change to Edison Nation, Inc. Thus, the Edison Nation, Inc. Omnibus Incentive Plan (the “Plan”) which remains effective as of February 9, 2018, provides for the issuance of up to 1,764,705 shares of common stock to help align the interests of management and our shareholders and reward our executive officers for improved Company performance. Stock incentive awards under the Plan can be in the form of stock options, restricted stock units, performance awards and restricted stock that are made to employees, directors and service providers. Awards are subject to forfeiture until vesting conditions have been satisfied under the terms of the award. The exercise price of stock options are equal to the fair market value of the underlying Company common stock on the date of grant.

The fair value of the option grants was estimated on the date of grant using the Black-Scholes option pricing model that uses the assumptions noted in the following table.

	2018
Weighted average fair value of option granted	$	1.82
Risk-free interest rate		2.2	%
Expected term in years		2.5
Volatility		50.0	%
Dividend rate		0.0	%

The following table summarizes stock option award activity during 2018:

	Shares		Weighted Average Exercise Price		Remaining Contractual Life in Years		Aggregate Intrinsic Value
Balance, January 1, 2018		-	$	-		-		-
Granted		290,000		5.55		4.2		-
Balance, December 31, 2018		290,000	$	5.55		4.2		-
Exercisable, December 31, 2018		166,667	$	5.32		4.1		-

As of December 31, 2018, there was 123,333 unvested options to purchase common units of Edison Nation, Inc. or $222,279 of total unrecognized equity-based compensation expense that the Company expected to recognize over a remaining weighted-average period of 1.4 years. The Company recorded stock-based compensation expense of $2,025,994, of which 1,721,250, related to the assumption of certain consulting agreements which were satisfied by the principal shareholder of SRM transferring 344,250 shares to the consultants, for the year ended December 31, 2018. No compensation expense was recorded for the year ended December 31, 2017.

Selling Agent Agreement

In connection with the IPO, the Company agreed to issue to the selling agent in the IPO, warrants to purchase a number of shares of the common stock equal to 5.0% of the total shares of common stock sold in any closing of the IPO, excluding shares purchased by investors sourced via alternative funding platforms (the “Selling Agent Warrants”). The Selling Agent Warrants are exercisable commencing on the qualification date of the IPO and have a term of 5 years. The Selling Agent Warrants are not redeemable by the Company. The exercise price for the Selling Agent Warrants is 20% greater than the IPO offering price, or $6.00 per share. On August 16, 2018, the Company issued 65,626 of Selling Agent Warrants that are exercisable for 65,626 shares of the Company’s common stock.

Note 15 — Subsequent Events

Foreclosure of Cloud B, Inc.

In February 2019, CBAV1, LLC foreclosed on the Promissory Note it held that was secured by Cloud B, Inc.’s assets. After the foreclosure, there likely will be no assets to distribute to other creditors.

Issuance of Common Shares

In March 2019, the Company issued 10,500 shares of common stock to consultants for services performed.

F-46

First Fire Note Payable

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 Company issued 15,000 shares of its common stock, par value $0.001 per share (“Common Stock”) to the Investor as additional consideration for the purchase of the Note. 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.

As issued on March 6, 2019, the principal amount of the Note is $560,000, with an original issue discount in the amount of $60,000. The maturity date of the Note is six months from March 6, 2019. As stated above, all principal amounts and the interest thereon are convertible into shares Common Stock only in the event that an Event of Default occurs.

F-47

2,568,305 Shares

PROSPECTUS

, 2020

Through and including , 2020 (the 25^th day after the date of this offering), all dealers effecting transactions in these securities, whether or not participating in this offering, may be required to deliver a prospectus. This is in addition to a dealer’s obligation to deliver a prospectus when acting as an underwriter and with respect to an unsold allotment or subscription.

PART II

INFORMATION NOT REQUIRED IN PROSPECTUS

Item 13. Other Expenses of Issuance and Distribution

The following table sets forth the costs and expenses payable in connection with the sale and distribution of the securities being registered. All amounts are estimated except the SEC registration fees. Except as otherwise noted, all the expenses below will be paid by us.

SEC Registration Fees	$	870.08
Legal Fees and Expenses		100,000
Accounting Fees and Expenses		20,000.00
Printing and Related Expenses		10,000.00
Miscellaneous		5,000.00
Total	$	135,870.08

* Estimated expenses not presently known.

Item 14. Indemnification of Directors and Officers

Our Second Amended and Restated Bylaws, subject to the provisions of Nevada Law, contain provisions which allow the corporation to indemnify any person against liabilities and other expenses incurred as the result of defending or administering any pending or anticipated legal issue in connection with service to us if it is determined that person acted in good faith and in a manner which he reasonably believed was in the best interest of the corporation. Insofar as indemnification for liabilities arising under the Securities Act may be permitted to our directors, officers and controlling persons, we have been advised that in the opinion of the SEC, such indemnification is against public policy as expressed in the Securities Act and is, therefore, unenforceable.

The indemnification rights set forth above shall not be exclusive of any other right which an indemnified person may have or hereafter acquire under any statute, provision of our amended and restated articles of incorporation, our Second Amended and Restated Bylaws, agreement, vote of shareholders or disinterested directors or otherwise.

We maintain standard policies of insurance that provide coverage (1) to our directors and officers against loss rising from claims made by reason of breach of duty or other wrongful act, and (2) to us with respect to indemnification payments that we may make to such directors and officers.

The proposed form of underwriting agreement filed as Exhibit 1.1 to this Registration Statement will provide for indemnification of our directors and officers by the underwriter party thereto against certain liabilities. See “Undertakings” below for a description of the SEC’s position regarding such indemnification provisions.

Item 15. Recent Sales of Unregistered Securities

We claimed exemption from registration under the Securities Act for the sales and issuances of securities in the following transactions under Section 4(a)(2) of the Securities Act and/or Regulation D promulgated thereunder, in that such sales and issuances did not involve a public offering, or under Rule 701 promulgated under the Securities Act, in that they were offered and sold either pursuant to written compensatory plans or pursuant to a written contract relating to compensation, as provided by Rule 701. All of the purchasers of unregistered securities for which we relied on Section 4(a)(2) and/or Regulation D represented that they were accredited investors as defined under the Securities Act. We claimed such exemption on the basis that (a) the purchasers in each case represented that they intended to acquire the securities for investment only and not with a view to the distribution thereof and that they either received adequate information about the registrant or had access, through employment or other relationships, to such information and (b) appropriate legends were affixed to the stock certificates issued in such transactions.

On May 4, 2018, we issued 13,500 shares of our common stock valued at $67,500 related to the borrowing of funds under a note payable.

On August 23, 2018, we issued 20,000 shares of our common stock valued at $100,000 related to the borrowing of funds under a note payable.

On September 4, 2018, we issued 557,084 shares of our common stock valued at $3,384,285 related to the acquisition of Edison Nation Holdings, LLC.

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On December 27, 2018, we issued 489,293 shares of our common stock valued at $2,664,200 related to the acquisition of Cloud B, Inc.

On March 6, 2019, we issued 15,000 shares of our common stock valued at $74,100 related to the borrowing of funds under a note payable.

On May 24, 2019, we issued 20,000 shares of our common stock valued at $62,000 to a note holder related to the borrowing of funds.

On June 18, 2019, we issued 15,000 shares of our common stock valued at $37,200 to a note holder to satisfy a portion of the payoff of one of our notes.

On July 16, 2019, we issued 20,000 shares of our common stock valued at $70,920 to note holders related to the borrowing of funds.

On August 26, 2019, we issued 181,005 shares of our common stock, of which 153,005 shares were reserved shares which were returnable upon repayment, valued at $713,159.70 to a note holder related to the borrowing of funds. These shares have been returned and are no longer outstanding.

On November 4, 2019, we issued 15,000 shares of our common stock valued at $29,880 to one of our note holders related to our borrowing of funds.

On November 21, 2019, we issued 1,175,000 shares of our common stock to investors at a purchase price of $2.00 per share in connection with the PIPE Transaction.

On December 5, 2019, we issued 45,000 shares of our common stock valued at $90,000 related to the acquisition of the assets of Uber Mom, LLC.

On December 19, 2019, we issued 10,000 shares of our common stock valued at $20,000 to 32 Entertainment, LLC, related to the borrowing of funds.

On December 31, 2019, we issued 10,000 shares of our common stock valued at $20,000 to Joseph Tropea, a note holder, related to the borrowing of funds.

On January 23, 2020, we issued 160,000 shares of our common stock to Greentree valued at $374,400 in connection with the Greentree Financing.

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The following shares of common stock were issued in connection with the Company’s equity compensation plans as of February 12, 2020:

On May 8, 2018, we issued 61,900 shares of our common stock valued at $306,000 to various employees.

On August 17, 2018, we issued 50,000 shares of our common stock valued at $250,000 to a consultant for services provided.

On September 10, 2018, we issued 20,000 shares of our common stock valued at $100,000 to a consultant for services performed.

On September 20, 2018, we issued 5,000 shares of our common stock valued at $25,000 to a consultant for services performed.

On October 23, 2018, we issued 10,000 shares of our common stock valued at $50,000 to a consultant for services performed.

On November 6, 2018, we issued 2,000 shares of our common stock valued at $10,000 to a consultant for services performed.

On December 21, 2018, we issued 50,000 shares of our common stock valued at $251,000 to a consultant for services performed.

On December 27, 2018, we issued 18,797 shares of our common stock valued at $100,000 to a consultant for services performed.

On December 27, 2018, we issued 41,736 shares of our common stock valued at $250,000 to 2 employees.

On December 28, 2018, we issued 3,000 shares of our common stock valued at $15,000 to a consultant for services performed.

On March 13, 2019, we issued 10,500 shares of our common stock valued at $52,500 to two consultants for services performed.

On May 6, 2019, we issued 12,500 shares of our common stock valued at $47,625 to an innovator for the licensing of their product.

On May 24, 2019, we issued 10,000 shares of our common stock valued at $30,000 to a consultant for strategic consulting services.

On July 16, 2019, we issued 25,000 shares of our common stock valued at $98,500 to a consultant for strategic consulting services.

On July 16, 2019, we issued 50,000 shares of our common stock valued at $197,000 to a consultant for investor relations services.

On September 4, 2019, we issued 17,000 shares of our common stock under our plan valued at $54,250 to consultants for strategic consulting services.

On September 4, 2019, we issued 3,000 shares of our common stock under our plan valued at $8,850 to an employee.

On December 17, 2019, we issued 10,000 shares of our common stock valued at $20,000 to a consultant for strategic consulting services for our Amazon.com business.

On January 7, 2020, we issued 100,000 shares of our common stock valued at $200,000 to Phil Anderson, former Chief Strategic Officer, for satisfaction of surrendering his outstanding options.

On January 7, 2020, we issued 32,813 shares of our common stock valued at $65,626 to Phil Anderson, our former Chief Financial Officer and Chief Strategic Officer, for satisfaction of his remaining payments under his strategic consulting contract.

On December 31, 2019, we issued 23,923 shares of our common stock valued at $47,846 to 4 Keeps Roses, Inc, related to the joint venture of Ed Roses, LLC.

On January 13, 2020, we issued 50,000 shares of our common stock valued at $100,000 to Ridgewood LLC, a consultant for strategic consulting services for assistance with sales on Amazon.com.

On February 7, 2020, we issued 15,000 shares of our common stock to MZHCI, LLC valued at $40,350 in connection with the satisfaction of outstanding amounts due under a settlement agreement.

Item 16. Exhibits and Financial Statement Schedules

(a)

Exhibits.

Number	Description	Form	Exhibit	Filing Date	Filed/Furnished Herewith
3.1	Certificate of Amended and Restated Articles of Incorporation of Xspand Products Lab, Inc. dated December 20, 2017	1-A	2.3	December 22, 2017
3.2	Articles of Merger, filed with the Secretary of State of Nevada, effective September 7, 2019	8-K	3.1	September 12, 2018
3.3	Second Amended and Restated Bylaws of Edison Nation, Inc.	8-K	3.2	September 12, 2018
5.1	Opinion of Waller Lansden Dortch & Davis, LLP				**
10.1	Form of Senior Convertible Promissory Note with Edison Nation Holdings, LLC, dated June 29, 2018	8-K	2.1	July 6, 2018
10.1	Membership Interest Purchase Agreement with Edison Nation Holdings, LLC dated June 29, 2018	8-K	10.1	July 6, 2018
10.2	Fifth Amended and Restated Operating Agreement of Edison Nation Holdings, LLC, dated September 4, 2018	8-K	10.2	September 6, 2018
10.3	Registration Rights Agreement dated September 4, 2018	8-K	10.3	September 6, 2018
10.4+	Amended and Restated Edison Nation, Inc. Omnibus Incentive Plan	8-K	3.3	September 12, 2018
10.5+	Employment Agreement with Christopher Ferguson, dated September 26, 2018	8-K	10.1	October 5, 2018	+
10.6+	Employment Agreement with Philip Anderson, dated September 26, 2018	8-K	10.2	October 5, 2018	+
10.7+	Employment Agreement with Brett Vroman, dated October 5, 2018	8-K	10.1	June 11, 2019	+
10.8+	Amendment to Employment Agreement with Brett Vroman, dated June 7, 2019	8-K	10.2	June 11, 2019	+
10.9+	Separation Agreement and Release with Philip Anderson, dated June 6, 2019	8-K	10.3	June 11, 2019	+
10.10	Stock Purchase Agreement, dated October 24, 2018	8-K	10.1	October 30, 2018
10.11	Form of Securities Purchase Agreement with FirstFire Global Opportunities Fund LLC, dated March 6, 2019	8-K	10.1	March 13, 2019
10.12	Form of 2% Senior Convertible Promissory Note with FirstFire Global Opportunities Fund LLC, dated March 6, 2019	8-K	10.2	March 13, 2019
10.13	Pledge Agreement, dated March 12, 2019	8-K	10.3	March 13, 2019
10.14	Form of Securities Purchase Agreement dated May 13, 2019	8-K	10.1	May 17, 2019
10.15	Form of Senior Convertible Promissory Note dated May 13, 2019	8-K	10.2	May 17, 2019

II-3

10.16	Settlement and Release Agreement dated June 17, 2019 with FirstFire Global Opportunities Fund, LLC	8-K	10.1	June 19, 2019
10.17	Loan Agreement with Tiburon Opportunity Fund, dated June 14, 2019	8-K	10.1	June 20, 2019
10.18	Operating Agreement of Ed Roses, LLC, dated August 23, 2019				*
10.19	Securities Purchase Agreement with Labrys Fund, LP, dated August 26, 2019	8-K	10.1	August 29, 2019
10.20	12% Convertible Promissory Note, dated August 26, 2019	8-K	10.2	August 29, 2019
10.21	Form of Share Purchase Agreement, dated October 2, 2019	8-K	10.1	October 4, 2019
10.22	Form of Registration Rights Agreement, dated October 2, 2019	8-K	10.2	October 4, 2019
10.23	Uber Mom Asset Purchase Agreement, dated November 6, 2019
10.24	Purchase of Inventory and Repurchase Agreement with Claudia McFillin and Joseph Tropea, dated November 12, 2019				*
10.25	Future Receivables Sale and Purchase Agreement with Velocity Group USA Inc., dated November 18, 2019				*
10.26	10% Senior Secured Note with 32 Entertainment LLC, dated December 4, 2019				*
10.27	Common Stock Purchase Warrant with 32 Entertainment LLC, dated December 4, 2019				*
10.28	Registration Rights Agreement with 32 Entertainment LLC, dated December 4, 2019				*
10.29	Loan Agreement with Tiburon Opportunity Fund, dated January 2, 2020				*
10.30	5% Note Agreement with Equity Trust Company, Custodian FBO: Rawleigh H. Ralls, dated January 10, 2020				*
10.31	Common Stock Purchase Warrant with Equity Trust Company, Custodian FBO: Rawleigh H. Ralls, dated January 10, 2020				*
10.32	5% Note Agreement with Paul J. Solit and Julie B. Solit, dated January 15, 2020				*
10.33	Common Stock Purchase Warrant with Paul J. Solit and Julie B. Solit, dated January 15, 2020				*
10.34	5% Note Agreement with Richard O’Leary, dated January 17, 2020				*
10.35	Common Stock Purchase Warrant with Richard O’Leary, dated January 15, 2020				*
10.36	Loan Agreement with Greentree Financial Group, Inc., dated January 23, 2020	8-K	10.1	January 29, 2020
10.37	10% Convertible Promissory Note with Greentree Financial Group, Inc., dated January 23, 2020	8-K	10.2	January 29, 2020
10.38	Common Stock Purchase Warrant with Greentree Financial Group, Inc., dated January 23, 2020	8-K	10.3	January 29, 2020
10.39	Amendment Agreement with Greentree Financial Group, Inc., dated January 29, 2020	8-K	10.4	January 29, 2020
15.1	Letter from Marcum LLP (included in Exhibit 23.1)				*
21.1	List of Significant Subsidiaries				*
23.1	Consent of Marcum LLP, Independent Registered Accounting Firm				*
23.2	Consent of Waller Lansden Dortch & Davis, LLP (included in Exhibit 5.1)				**
24.1	Power of Attorney (included on the signature page to this registration statement)				*
101.INS	XBRL Instance Document				*
101.SCH	XBRL Taxonomy Extension Schema Document				*
101.CAL	XBRL Taxonomy Extension Calculation Linkbase Document				*
101.DEF	XBRL Taxonomy Extension Definition Linkbase Document				*
101.LAB	XBRL Taxonomy Extension Label Linkbase Document				*
101.PRE	XBRL Taxonomy Extension Presentation Linkbase Document				*

*		Filed herewith.
**		To be filed by amendment.
+		Denotes a management compensatory plan, contract or arrangement

(b)	Financial statement schedules.

No financial statement schedules are provided because the information called for is not required or is shown in the consolidated financial statements or related notes.

Item 17. Undertakings

(a) The undersigned registrant hereby undertakes:

(1) To file, during any period in which offers or sales are being made, a post-effective amendment to this registration statement:

(i) To include any prospectus required by Section 10(a)(3) of the Securities Act of 1933;

(ii) To reflect in the prospectus any facts or events arising after the effective date of the registration statement (or the most recent post-effective amendment thereof) which, individually or in the aggregate, represent a fundamental change in the information set forth in the registration statement. Notwithstanding the foregoing, any increase or decrease in volume of securities offered (if the total dollar value of securities offered would not exceed that which was registered) and any deviation from the low or high end of the estimated maximum offering range may be reflected in the form of prospectus filed with the Commission pursuant to Rule 424(b) if, in the aggregate, the changes in volume and price represent no more than 20 percent change in the maximum aggregate offering price set forth in the “Calculation of Registration Fee” table in the effective registration statement.

(iii) To include any material information with respect to the plan of distribution not previously disclosed in the registration statement or any material change to such information in the registration statement;

(2) That, for the purpose of determining any liability under the Securities Act of 1933, each such post-effective amendment shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof.

II-4

(3) To remove from registration by means of a post-effective amendment any of the securities being registered which remain unsold at the termination of the offering.

(4) That, for the purpose of determining liability under the Securities Act to any purchaser, each prospectus filed pursuant to Rule 424(b) as part of a registration statement relating to an offering, other than registration statements relying on Rule 430B or other than prospectuses filed in reliance on Rule 430A, shall be deemed to be part of and included in the registration statement as of the date it is first used after effectiveness. Provided, however, that no statement made in a registration statement or prospectus that is part of the registration statement or made in a document incorporated or deemed incorporated by reference into the registration statement or prospectus that is part of the registration statement will, as to a purchaser with a time of contract of sale prior to such first use, supersede or modify any statement that was made in the registration statement or prospectus that was part of the registration statement or made in any such document immediately prior to such date of first use.

Insofar as indemnification for liabilities arising under the Securities Act may be permitted to directors, officers and controlling persons of the registrant pursuant to the foregoing provisions, or otherwise, the registrant has been advised that in the opinion of the SEC such indemnification is against public policy as expressed in the Securities Act and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by the registrant of expenses incurred or paid by a director, officer or controlling person of the registrant in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, the registrant will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Securities Act and will be governed by the final adjudication of such issue.

II-5

SIGNATURES

Pursuant to the requirements of the Securities Act of 1933, we have duly caused this Registration Statement on Form S-1 to be signed on its behalf by the undersigned, thereunto duly authorized, in Bethlehem, Pennsylvania, on February 12, 2020.

	EDISON NATION , INC.

	By:	/s/ Christopher B. Ferguson
		Christopher B. Ferguson
		Chief Executive Officer

POWER OF ATTORNEY

KNOW ALL PERSONS BY THESE PRESENTS, that each person whose individual signature appears below hereby authorizes and appoints Christopher B. Ferguson and Brett Vroman, and each of them, with full power of substitution and resubstitution and full power to act without the other, as his true and lawful attorney-in-fact and agent to act in his name, place and stead and to execute in the name and on behalf of each person, individually and in each capacity stated below, and to file any and all amendments to this Registration Statement on Form S-1, and to file the same, with all exhibits thereto, and other documents in connection therewith, with the SEC, granting unto said attorneys-in-fact and agents, and each of them, full power and authority to do and perform each and every act and thing, ratifying and confirming all that said attorneys-in-fact and agents or any of them or their or his substitute or substitutes may lawfully do or cause to be done by virtue thereof.

Pursuant to the requirements of the Securities Act, this Registration Statement has been signed by the following persons in the capacities and on the dates indicated.

Signature	Title	Date

/s/ Christopher B. Ferguson	Chief Executive Officer and Chairman of the Board of Directors	February 12, 2020
Christopher B. Ferguson	(Principal Executive Officer)

/s/ Brett Vroman	Chief Financial Officer	February 12, 2020
Brett Vroman	(Principal Financial Officer and Principal Accounting Officer)

/s/ Louis Foreman	Director	February 12, 2020
Louis Foreman

/s/ Frank Jennings	Director	February 12, 2020
Frank Jennings

/s/ Toper Taylor	Director	February 12, 2020
Toper Taylor

/s/ Kevin J. O’Donnell	Director	February 12, 2020
Kevin J. O’Donnell

II-6

Exhibit 10.18

OPERATING AGREEMENT

ED ROSES, LLC

(To Be Formed Limited Liability Company)

EIN:

THIS OPERATING AGREEMENT, is dated as of the effective date of August 12, 2019 by and among the members of ED ROSES, LLC (“the Company”), listed on Schedule A hereto (hereinafter collectively referred to as the “Members”).

WHEREAS, the original Members entered into an Operating Agreement of the Company dated August 12, 2019 (“the Original Operating Agreement”)

WHEREAS, the Company will operate jointly to develop, manufacture and sell products as agreed and set forth by the Members.

WHEREAS, ED ROSES, LLC wishes to set forth the agreement as to how the business and affairs of the Company shall be managed;

NOW, THEREFORE, the Member(s) hereby agree(s) as follows:

Article 1

FORMATION AND BUSINESS OF THE COMPANY

1.1 Formation. The Company was organized on August 12, 2019, in accordance with and pursuant to the Act.

1.2 Name. The name of the Company is ED ROSES, LLC; The Company may do business under that name and under any other name determined from time to time by the Managing Members (as hereinafter defined).

1.3 Purpose of the Company. The Company’s business and purpose shall be to conduct any lawful business or activities determined by the Managing Member, consistent with this Agreement, and to exercise all powers enumerated in the Act necessary or convenient to the conduct, promotion, or attainment of the business or purposes otherwise set forth herein.

1.4 Principal Office. The Company’s principal place of business shall be located at 150 West Walnut St, Gardena, CA. The Company may have such other business offices within or without the State of California as determined by the Managing Member.

1.5 Term. The term of the Company shall commence on the date hereof and continue in perpetuity unless and until the Company is dissolved in accordance herewith and with the Act.

Article 2

DEFINITIONS

In addition to the terms defined elsewhere in this Agreement, the following terms shall have the following meanings:

2.1 “Affiliate” of a Person shall mean any Person that controls, is controlled by or is under common control with such Person, an officer, director, partner, managing member, or trustee of such Person, or a relative of such Person, where “control” means the power, by contract, ownership of securities or other interests in a Person, or otherwise, to elect the majority of the directors of a corporation or otherwise direct the management of a Person, and “relative” of an individual means any other individual to whom the individual in question is related by blood, marriage, or adoption, not more remotely than as a first cousin. The Company and its subsidiaries shall not be deemed an Affiliate of a Member or of any of a Member’s Affiliates.

2.2 “Capital Account” of a Member, as of any date, shall mean the account maintained for such Member pursuant to Section 3.3, as adjusted through such date.

2.3 “Capital Amount Per Percentage Interest” of a Member means the quotient equal to the Capital Account of such Member divided by the Percentage Interest held by such Member;

2.4 “Capital Contribution” of, or attributed to, a Member shall mean the total contributions to the capital of the Company, whether in cash, property (net of liabilities), or services, made, performed, or to be performed by, or attributed to, such Member, valued on the date of contribution or commitment to contribute as set forth in the Company’s books and records.

2.5 “Certificate” shall mean the Certificate of Formation of the Company, as filed with the California Secretary of State, as amended from time to time.

2.6 “Code” shall mean the Internal Revenue Code of 1986, as amended, in effect as of the date hereof and as amended from time to time hereafter.

2.7 “Event of Expiry” shall mean at 5:00 p.m. (PST) on March 1, 2021, if the Managing Member has not by then given to the Members a written “Notice of Business Continuation”, the ongoing operations of the Company shall be immediately discontinued and the Managing Member shall promptly cease operations and “wind-up” the affairs of the Company pursuant to the provisons of Section 9.2 hereinbelow. An “Event of Expiry” may be automatically extended once, for a five (5) year period, by any of the following occurrences: (A) Member Edison Nation has by that time secured for the Company recurring sales to at least 5 of the 10 listed “Ed Nation Target Accounts” set forth on Schedule D, hereinbelow; or (B) prior to the expiry date (above) the Company has distributed Net Profits to Member 4 Keeps a sum, in the aggregate over that term, equal to no less than One Million Dollars (USD $1,000,000.00) – at its sole discretion, Member Edison Nation could choose to unilaterally affect this exception to expiry and trigger the automatic extension provision by delivering directly to Member 4 Keeps a payment equal to the difference between the aggregate total sum actually distributed to Member 4 Keeps by the Company during the period and One Million Dollars (USD $1,000,000.00).

2.8 “Fiscal Year” shall mean the Company’s accounting, tax, and fiscal year, which shall be the calendar year.

2.9 “Force Majeure” event means any circumstance not within a party's reasonable control including, without limitation:

(a) acts of God, flood, storm, drought, earthquake or other natural disaster;

(b) epidemic or pandemic;

(c) terrorist attack, civil war, civil commotion or riots, war, threat of or preparation for war, armed conflict, imposition of sanctions, embargo, or breaking off of diplomatic relations;

(d) nuclear, chemical or biological contamination or sonic boom;

(e) any law or any action taken by a government or public authority, including without limitation imposing an export or import restriction, quota, or prohibition, extraordinary increase import or export “duty” fees or failing to grant a necessary license, permit or consent;

(f) collapse of buildings, breakdown of plant or machinery, fire, explosion or accident;

(g) any labour or trade dispute, difficulty or increased expense in obtaining workers, materials or transport, strikes, industrial action or lockouts (other than in each case where actions by the party seeking to rely on this clause, or companies in the same Group as that party are involved);

(h) reasonably unforeseeable incomplete or non-performance by suppliers or subcontractors (other than by companies in the same Group as the party seeking to rely on this clause); and

(i) reasonably unforeseeable interruption or failure of a utility or similar public service.

2,10 “Initial Capital Contribution” of a Member shall mean its initial contribution to the capital of the Company pursuant to this Agreement.

2.11 “Interest” shall mean a Member’s entire interest in the Company, including its right to share in the allocation of one or more of the Company’s allocable items, including, without limitation, Net Profits and Net Losses, or in distributions of the Company’s assets, and its interest, if any, in management.

2,12 “Managing Member” shall mean the Managing Member appointed in accordance with Article V.

2.13 “Member” shall mean each of the Members set forth in Exhibit A, upon the making of his or its Initial Capital Contribution, and each Person who is admitted as a Member after the date hereof in accordance herewith.

2.14 “Net Profits” and “Net Losses” shall mean, for each Fiscal Year (or other period for which they are determined), the income and gain, and the losses, deductions, and credits, of the Company, as appropriate, determined in accordance with generally accepted accounting principles consistently applied.

2.15 “Officer” shall mean any individual designated as an officer of the Company in accordance with Article V.

2.16 “Percentage Interest” of a Member as of any date shall mean the Member’s percentage share of the Net Profits, Net Losses, and other regularly allocable items and distributions of the Company, as set forth on Exhibit A attached hereto.

2.17 “Person” shall mean any individual, partnership, limited liability company, corporation, joint venture, trust, association, or any other entity, domestic or foreign, and its respective heirs, executors, administrators, legal representatives, successors, and assigns where the context of this Agreement so permits.

2.18 “Transfer” shall mean any sale, assignment, transfer, gift, exchange, bequest, or other disposition of an Interest, or any part thereof, in any manner, voluntary or involuntary, by operation of law, or otherwise, including a pledge, hypothecation, or other contingent transfer of rights.

2.19 “Transferor” shall mean any Member which Transfers, or proposes to Transfer, an Interest or any part thereof.

2.20 “Treasury Regulations” or “Treas. Reg.” shall mean regulations promulgated under the Code in effect as of the date hereof or hereafter amended or adopted.

Article 3

CAPITAL CONTRIBUTIONS AND CAPITAL ACCOUNTS

3.1 Current Interests; Capital Contributions. On the date of this Agreement, (i) the Managing Member has previously made certain Capital Contributions to the Company as reflected in the Company’s books and records, and (ii) each of the other Members is making an Initial Capital Contribution in the amount set forth opposite such Member’s name on Exhibit A, in cash or immediately available funds. Upon the making of and in exchange for their Initial Capital Contributions, the Company is issuing to the Managing Member and the other Members the Interests set forth opposite their respective names on Exhibit A.

3.2 Additional Contributions/Working Capital. (a) The Company shall develop a two year budget that shall include the anticipated working capital needs of the Company. Edison Nation, Inc, as a Member, shall fund the initial working capital for the Company in the form of a secured loan to the Company and such loan shall not be a capital contribution and shall not be in exchange for additional member interests. At such time as the budget requires, the Company may secure a line of credit from a lending institution such as a commercial bank or other lender to fund the working capital needs of the Company. Any and all loans made to the Company by Member Edison Nation, Inc. for working capital needs of the Company shall not be considered an Advance to the Company subject to recoupment as described in Schedule B, paragraph 3 hereinbelow; rather such loans shall be repaid, according to the terms by which the loan(s) were made, as Company debt service prior to any quarterly calculation of Net Profits for distribution to Members.

(b) No Member shall have any preemptive, preferential, or other right with respect to (i) making additional Capital Contributions, (ii) the issuance or sale of Interests by the Company, (iii) the issuance of any obligations, evidences of indebtedness, or securities of the Company convertible into, exchangeable for, or accompanied by any rights to receive, purchase, or subscribe to, any Interests, (iv) the issuance of any right of, subscription to, or right to receive, or any warrant or option for the purchase of, any of the foregoing, or (v) the issuance or sale of any other interests or securities by the Company.

(c) The Managing Member may authorize the Company to issue Interests from time to time in one or more classes, or one or more series of such classes, which classes or series shall have, subject to the provisions of applicable law, such designations, preferences, and relative, participating, optional, or other special rights as shall be fixed by the Managing Member. The Managing Member shall reflect the creation of any new class or series in an amendment to this Agreement indicating such designations, preferences and relative, participating, optional, or other special rights, and such amendment need be approved only by the Managing Member.

(d) No Member shall be obligated to make any additional Capital Contribution unless agreed by such Member and the Managing Member.

3.3 Capital Accounts. The Company shall establish and maintain a Capital Account for each Member. The initial Capital Accounts shall be in amounts equal to the Members’ Initial Capital Contributions. A Member’s Capital Account shall be increased by the amount of any additional Capital Contributions made by, and the income and gain allocated to, such Member, and shall be decreased by any losses and deductions allocated, or distributions made, to such Member pursuant to the terms of this Agreement. It is the intention of the Members that Capital Accounts be maintained strictly in accordance with Treas. Reg. Section 1.704-1(b)(2)(iv).

3.4 Return of Capital Contributions. Except as otherwise provided in this Agreement, no Member shall have any right to demand or receive (a) any cash or property of the Company in return of its Capital Contribution or in respect of its Interest until the dissolution of the Company or (b) any distribution from the Company in any form other than cash.

3.5 Transfer of Interest. If an Interest is Transferred as permitted by this Agreement, the transferee shall succeed to the Capital Account of the Transferor to the extent the Capital Account relates to the Transferred Interest in accordance with Treas. Reg. Section 1.704-1(b)(2)(iv)(l).

3.6 Adjustment of Asset Values to Fair Market Value. (a) Upon the occurrence of any of the following events, the value of each of the Company’s assets shall be adjusted to their respective fair market values for book purposes:

(i) contribution of money or other property to the Company by a new or existing Member as consideration for an interest in the Company;

(ii) a distribution of money or other property by the Company to a retiring or continuing Member as consideration for an interest in the Company; or

(iii) the termination of the Company for Federal income tax purposes pursuant to Section 708(b)(1)(B) of the Code.

(b) When an adjustment is made to fair market value pursuant to this Section 3.6:

(i) the Capital Accounts of all Members shall be adjusted as if the Company recognized gain or loss equal to the amount of such aggregate net adjustment;

(ii) the Members’ Capital Accounts shall be adjusted for allocations to them of depreciation, amortization, and gain or loss on such book value of the property; and

(iii) the Members’ distributive shares, as computed for tax purposes, with respect to such property shall be determined so as to take into account the variation between the adjusted tax basis and book value of such property in the same manner as under Section 704(c) of the Code and the Treasury Regulations issued thereunder.

Article 4

DISTRIBUTIONS AND ALLOCATIONS

4.1 Tax Distributions. (a) Not later than ten business days prior to March 15, June 15, September 15, and December 15 of each Fiscal Year, the Managing Member shall estimate the taxable income of the Company to be allocated to the Members in the aggregate for the period from the beginning of such Fiscal Year to the end of the Fiscal Quarter ending immediately after such date, all in accordance with the Code and the Treasury Regulations (the “Estimated Company Taxable Income”). Promptly thereafter, to the extent of cash available therefor, the Company shall distribute to Members, as provided in Section 4.1(b), an amount which, when added to all amounts previously distributed in such Fiscal Year pursuant to this Section 4.1, will equal [40%] of the Estimated Company Taxable Income (a “Tax Distribution”).

(b) Any Tax Distribution to be made on any date shall be distributed to the Members in accordance with the allocation of Net Profits and Net Losses set forth in this Article IV or, if such allocation has not been determined at the time of a Tax Distribution, the Managing Member’s reasonable estimate thereof. Such Tax Distributions shall be deemed advances against the distributions to which the Members are entitled pursuant to Section 4.2.

4.2 Other Distributions. In addition to and at the same time as the Tax Distribution estimations are calculated, subject to the limitations described by paragraph 4.3, below, and further subject to the Tax Distribution payments described by paragraph 4.1, above, the Managing Member shall make a good faith effort, in the exercise of its best business judgment, to cause a quarterly distribution of no less than Forty Percent (40%) of the reasonably available Net Profits of the Company to its Members. The Company may make other distributions of cash or property at such times, and in such amounts, as shall be determined by the Managing Member, subject to the provisions of this Agreement and the Act. Distributions shall be allocated among the Members in accordance with their respective Percentage Interests and subject to recoupment as describe by Schedule B, paragraph 3 hereinbelow.

4.3 Limitation on Distributions. No distribution shall be declared and paid unless, after giving effect thereto, the assets of the Company exceed the Company’s liabilities.

4.4 Allocations of Net Profits and Net Losses. Except as otherwise provided in this Agreement or required by the Code or Treasury Regulations, the Net Profits and Net Losses for each Fiscal Year or portion thereof shall be determined in accordance with the accounting methods followed by the Company for Federal income tax purposes and shall be allocated to the Members as follows:

(a) Net Losses shall be allocated:

(i) first, until the cumulative Net Losses allocated pursuant to this Section 4.4(a)(i) equals the cumulative Net Profits, if any, previously allocated among the Members pursuant to Section 4.4(b) hereof, such Net Losses shall be allocated to the Members in the reverse chronological order and in the proportions in which such Net Profits were previously allocated to such Members;

(ii) second, Net Losses shall be allocated among the Members in accordance with the positive balances in their respective Capital Accounts until all of their Capital Accounts have been reduced to zero; and

(iii) thereafter, Net Losses shall be allocated among the Members in proportion to their Percentage Interests.

(b) Net Profits shall be allocated:

(i) until the cumulative Net Profits allocated pursuant to this Section 4.4(b)(i) equals the cumulative Net Losses, if any, previously allocated among the Members pursuant to Section 4.4(a) hereof, such Net Profits shall be allocated to the Members in the reverse chronological order and in the proportions in which such Net Losses were previously allocated to such Members; and

(ii) the balance, to all of the Members pro rata in proportion to their Percentage Interests.

4.5 Special Allocations. (a) The requirements of Treas. Reg. §1.704-2, relating to allocations of losses attributable to nonrecourse debt, the provisions for a “minimum gain charge back,” as that term is defined in Treas. Reg. §1.704-(2)(f), and the provisions for a “qualified income offset,” as that term is defined in Treas. Reg. §1-704-1(b)(2)(ii)(d), are incorporated herein and made a part of this Agreement by reference.

(b) Notwithstanding any other provision of this Agreement to the contrary, for Federal income tax purposes only, any item of income, deduction, gain, or loss realized by the Company with respect to property contributed to the Company shall be allocated to the Members as required by Code Section 704(c) and such tax allocations shall not be reflected in the Capital Accounts.

(c) The provisions of this Article IV (and other related provisions in this Agreement) pertaining to the allocation of items of Company income, gain, loss, deductions, and credit shall be interpreted consistently with the Treasury Regulations issued under Code Section 704 and, to the extent inconsistent with such Treasury Regulations, shall be deemed to be modified to the extent necessary to make such provisions consistent with the Treasury Regulations.

4.6 Distributions In Kind. All distributions of Company property in kind shall be valued at their fair market value as of the date of distribution (or at such other date reasonably close to the date of such distribution as the Managing Member shall determine), and the Net Profits or Net Losses, if any, which would have been realized by the Company if it had sold such property at such fair market value shall be allocated to the Members in accordance with this Article IV. The fair market value of any such assets shall be determined by the Managing Member.

4.7 Tax Returns and Other Elections. The Managing Member shall cause the preparation and timely filing of all tax returns required to be filed by the Company pursuant to the Code and all applicable laws of each jurisdiction in which the Company does business. Copies of all such returns, or summaries thereof, shall be furnished to the Members within a reasonable time after the end of each Fiscal Year. All elections permitted to be made by the Company under Federal or state laws shall be made by the Managing Member in its sole discretion. The Managing Member is hereby designated the “tax matters” partner of the Company.

4.8 Mid-Year Transfers. If an Interest is Transferred during the Fiscal Year as permitted by this Agreement, unless otherwise agreed by the Transferor and transferee with the consent of the Managing Member:

(a) all Net Profits and Net Losses allocable to such Interest shall be allocated between the Transferor and the transferee in the ratio of the number of days in the Fiscal Year before and after the effective date of the Transfer, without reference to the dates during the Fiscal Year on which income was earned, losses were incurred, or distributions were made, and distributions shall be made to the Members as determined on the date such distribution is declared; and

(b) tax credits, if any, shall be allocated among the Members as determined at the time the property with respect to which the credit is claimed is placed in service.

Article 5

MANAGEMENT

5.1 Managing Member. (a) The property, business, and affairs of the Company shall be managed by the Managing Member. Except where the Members’ approval is expressly required by this Agreement or by the Act, the Managing Member shall have full authority, power, and discretion to make all decisions with respect to the Company’s business, including, without limitation, to (i) enter into any contracts or agreements with respect to the operations of the Company, (ii) invest any funds of the Company in any manner, (iii) issue Interests to any Person or admit any Person as a Member, (iv) cause the Company to merge or consolidate with or into another Person or sell all or substantially all of its assets, on such terms as the Managing Member shall approve, and (v) amend the Certificate, in each case to the fullest extent permitted by the Act.

(b) Except as otherwise expressly provided in this Agreement or the Act, the Members shall have no right to control or manage, nor shall they take any part in the control or management of, the property, business, or affairs of the Company, but they may exercise the rights and powers of Members under this Agreement.

(c) The Managing Member shall be one representative from Edison Nation, Inc. and one representative from 4 Keeps Roses, Inc., acting unanimously.

(d) The Managing Member may resign at any time by notice to the Company. Such resignation shall be made in writing and shall take effect at the time specified therein, or if no time is specified, at the time of its receipt by the Company. The acceptance of a resignation shall not be necessary to make it effective, unless expressly so provided in the resignation. The Members shall have the right to remove the Managing Member , at any time, with or without cause, upon the vote of Members holding 85% of the Percentage Interests, and upon the resignation, removal, death or incapacity of the Managing Member, the Members shall appoint a successor Managing Member pursuant to Section 5.1(c). In the event a specific representative of each, or any one, Member is not presently designated or lacks the legal capacity to serve as the Managing Member or is unavailable in the event of an emergency, then the most senior executive officer of that Member shall be deemed to be the appointed or acting representative until otherwise replaced by that Member.

5.2 Officers; Documents and Instruments. (a) The Managing Member may, but need not, designate one or more Officers of the Company as the Managing Member may determine. Any Person may hold two or more offices. Officers may (but need not) be Members. Officers may be removed at any time, with or without cause, by the Managing Member.

(b) Officers shall have such duties and authorities as may be delegated to them by the Managing Member. In the absence of specific delegations of authority, Officers shall have such duties and authorities for the day-to-day operations of the Company as are commonly within the scope of the duties and authorities of persons holding similar offices of a corporation.

(c) Every Officer shall be an agent of the Company for its business purposes and may bind the Company in the ordinary course, within the scope of his normal authorities and duties, or as approved by the Managing Member. Unless otherwise expressly authorized by this Agreement or the Managing Member as set forth herein, the act of an Officer that is not apparently for carrying on the Company’s business in the ordinary course shall not bind the Company.

(d) Except as otherwise determined by the Managing Member or as set forth herein or in the Act, any document or instrument may be executed and delivered on behalf of the Company by the Managing Member or any Officer, including, without limitation, any deed, mortgage, note, or other evidence of indebtedness, lease, security agreement, financing statement, contract of sale, or other instrument purporting to convey or encumber, in whole or in part, any or all of the assets of the Company at any time held in its name, or any compromise or settlement with respect to accounts receivable or claims of the Company; and, subject to the authorization requirements set forth herein or in the Act, no other signature shall be required for any such instrument to bind the Company.

(e) Any third Person dealing with the Company, the Managing Member, its Officers, or its Members may rely upon a certificate signed by the Managing Member or an Officer as to (i) the identity of the Members, the Managing Member, or Officers, (ii) acts by the Members, the Managing Member, or Officers, (iii) any act or failure to act by the Company, or (iv) any other matter involving the Company or any Member.

5.3 Limitation of Liability. Notwithstanding anything contained herein to the contrary, to the fullest extent permitted by applicable law from time to time, neither the Managing Member nor any Officer shall have any liability to the Company or any Member by reason of being or having been Managing Member or an Officer, provided that this Section 5.3 shall not affect such Person’s liability if an adverse judgment or other final adjudication establishes that his acts or omissions were in bad faith or involved recklessness or willful misconduct, or he gained financial or other advantages to which he was not entitled. In performing his duties, each Managing Member and Officer shall be entitled to rely on information, opinions, reports, or statements, including financial statements, in each case prepared or presented by one or more other Managing Member or Officers or agents or employees of the Company, or counsel, public accountants, or other Persons, as to matters that the Managing Member or Officer believes to be within their respective professional or expert competence. A Managing Member or Officer shall not be liable for omitting to do any act which the Managing Member or Officer is not specifically required to do under this Agreement, and shall have no obligation or liability, express or implied, to the Company, the Members, or any other Person, except as specifically set forth in this Agreement. Any action taken or omitted to be taken by the Managing Member or Officer shall be deemed for all purposes hereof and otherwise to have been in the best interest of the Company, taken or omitted to be taken in good faith, and to constitute neither recklessness nor willful misconduct unless proven by clear and convincing evidence to have been otherwise. To the fullest extent permitted by law, no obligation to act in good faith hereunder shall restrict the Managing Member’s and Officers’ complete discretion with respect to the operations and transactions of the Company and, if an obligation to act in good faith is imposed by law as to any action, each of the actions of the Managing Member or Officer shall be deemed to be in good faith in the absence of clear and convincing evidence to the contrary.

5.4 Dealings With Members and Affiliates. (a) Any Member or Affiliate of any Member may lend money to, borrow money from, act as a surety, guarantor, or endorser for, guarantee or assume one or more obligations of, provide collateral for, and transact other business with (including contracting or otherwise dealing for the provision of goods or services and otherwise), the Company, and no approval of the Members, or of any of them, shall be required to approve any of the foregoing. The Members acknowledge that the Company may advance any or all of its capital contributions and revenues to any of its Affiliates and the Members agree that, unless otherwise agreed by such Affiliate, no interest shall be payable on any such advances.

(b) This Agreement shall not prevent any Member, Managing Member, or Officer from entering into any agreement or arrangement with any other Person not otherwise specifically prohibited by this Agreement. The Company shall have no interest or expectancy in any opportunity of any Member, Managing Member, or Officer, and each Member, Managing Member, or Officer may treat any opportunity as his, her, or its own and may pursue such opportunity without regard to the Company.

5.5 No Exclusive Duty. Subject to any contractual obligations between or among the Members and Managing Member and/or Affiliate thereof, the Members and Managing Member may have other business interests and may engage in other activities in addition to those relating to the Company. Neither the Company nor any Member shall have any right, by virtue of this Agreement, to share or participate in such other investments or activities of a Member or Managing Member or in any income or revenues derived therefrom.

5.6 Compensation. Neither the Managing Member nor any Officers shall be entitled to compensation for service as such, provided that they shall be reimbursed by the Company for reasonable expenses incurred in connection with such service.

5.7 Books and Records. At the expense of the Company, the Managing Member shall maintain records and accounts of all operations and expenditures of the Company. Upon reasonable advance notice, during normal business hours, any Member may, at its expense, inspect such records for any purpose reasonably related to such Member’s Interest, except that the Managing Member shall have the right to keep confidential, and not to disclose to the Members, such records which it reasonably believes (a) are in the nature of trade secrets, (b) the disclosure of which the Managing Member in good faith believes would not be in the best interests of the Company or could damage the Company or its business, or (c) are required by law or by agreement with a third person to be kept confidential.

Article 6

RIGHTS AND OBLIGATIONS OF MEMBERS; MEETINGS

6.1 Liability for Company Debt. No Member shall be personally liable for any debts, losses, or obligations of the Company by reason of being a Member.

6.2 Liability for Wrongful Distributions. A Member who receives a distribution from the Company which the Member knows to be in violation of this Agreement or the Act shall be liable to the Company for the amount of such distribution for a period of three years after it was made.

6.3 Meetings of Members. (a) The Company shall not be required to hold annual meetings of the Members and shall hold special meetings at such time and place as shall be determined by the Managing Member.

(b) Notice of the time, place, and purpose or purposes of each meeting of the Members shall be delivered to each Member entitled to vote at the meeting either personally (including by courier) or by telephone, telegraph, facsimile, e-mail, or first class mail, postage prepaid, addressed to it at its address set forth in the records of the Company, at least three but not more than 60 days before the date of the meeting. An affidavit of the Managing Member, an Officer, or other Person giving such notice shall, absent fraud, be prima facie evidence that notice of a meeting has been given. Notice of a meeting need not be given to any Member who, either before or after the meeting, executes a waiver of notice, or who attends such meeting without objecting, at its beginning, to the transaction of any business because the meeting is not lawfully called or convened.

(c) All acts of the Members shall require approval of Members holding a majority of the Percentage Interests of all Members entitled to vote on such matter, either at a meeting or by written consent.

(d) At all meetings of Members, a Member may vote in person or by proxy executed in writing by the Member or by a duly authorized attorney-in-fact. The proxy shall be filed with the Company before or at the time of the meeting.

(e) Members may participate in a meeting by conference telephone or similar communications equipment, by means of which all persons participating in the meeting can hear each other, and such participation shall constitute presence in person at such meeting.

(f) For the purpose of determining (i) Members entitled to notice of, or to vote at, any meeting of Members, (ii) Members entitled to receive payment of any distribution, or (iii) the identity of Members for any other purpose, the date on which notice of the meeting is mailed, or on which the declaration of such distribution is adopted, as the case may be, shall be the record date for such determination. When a determination of Members entitled to vote at any meeting has been made as provided in this Section 6.3(f), the determination shall apply to any adjournment of the meeting.

Article 7

TRANSFERABILITY

7.1 General. Except as otherwise specifically provided in this Agreement, and subject in any event to Sections 7.3 and 7.4, no Member shall have the right to Transfer any Interest without the consent of the Managing Member, such consent not to be unreasonably withheld. Upon the Transfer of all of a Member’s Interest, the Transferor shall cease to be a Member.

7.2 Drag-Along and Tag-Along. (a) If a Member or Members (the “Selling Holders”) propose to Transfer to any Person or Persons (such potential purchaser, a “Purchaser”) an Interest (the “Subject Interest”) constituting an aggregate Percentage Interest in excess of 50%, Selling Holders may so Transfer such Interest, subject to this Section 7.2. Selling Holders shall give notice (the “Tag Along Notice”) to each other Member (“Minority Holders”) of any such proposed Transfer, identifying the Purchaser and stating the Subject Interest to be Transferred by Selling Holders, which Tag Along Notice shall be accompanied by a bona fide written offer (the “Tag-Along Offer”) from the Purchaser to purchase the Subject Interest, stating the price, terms, and conditions of such proposed purchase.

(b) Selling Holders, by so stating in the Tag Along Notice, may require each Minority Holder to Transfer to the Purchaser all of such Minority Holders’ Interest. In such event, each such Minority Holder shall be irrevocably committed to Transfer his Interest at the Price per Percentage Interest (as defined below), and on the same (or as nearly as practical the same) terms and conditions, as provided in the Tag Along Notice (provided that the Purchaser may pay all cash to Minority Holders and provided, further, that Minority Holders shall not be required to give the Purchaser any representations or warranties or indemnity other than with respect to Minority Holders’ title to and ownership of their respective Interests). The “Price per Percentage Interest” shall mean an amount equal to (i) the aggregate price to be paid by the Purchaser for the Subject Interest, divided by (ii) the Percentage Interest of such Subject Interest; provided, that, if the Tag-Along Offer provides for the purchase of any assets in addition to the Subject Interest, the “aggregate price to be paid by the Purchaser for the Subject Interest” shall mean the portion of the proposed purchase price allocated to the purchase of the Subject Interest, as such allocation is set forth in the Tag-Along Offer or, if the Tag-Along Offer does not so allocate such purchase price, as reasonably determined by the Managing Member.

(c) If Selling Holders does not require Minority Holders to Transfer their Interests pursuant to Section 7.2(b), Minority Holders shall each have the right, but not the obligation, by giving notice (a “Tag Along Acceptance”) to Selling Holders within 15 days of the Tag Along Notice, to require the Purchaser, if it acquires the Subject Interest, to also acquire all of such Minority Holder’s Interest. Selling Holders, following receipt of a Tag-Along Acceptance, shall have the right, but not the obligation, to reduce the Percentage Interest to be Transferred by Selling Holders so that the aggregate Percentage Interest to be Transferred to the Purchaser shall equal such Percentage Interest (not less than that originally intended to be Transferred by Selling Holders) as the Purchaser is willing to acquire.

(d) If a Minority Holder gives a Tag Along Acceptance, (i) such Minority Holders shall be irrevocably committed to Transfer his Interest at the Price per Percentage Interest, and on the same (or as nearly as practical the same) terms and conditions, as provided in the Tag Along Notice (provided that the Purchaser may pay all cash to such Minority Holder and provided, further, that such Minority Holders shall not be required to give the Purchaser any representations or warranties or indemnity other than with respect to such Minority Holder’s title to and ownership of his Interest) and (ii) the Purchaser may not acquire, and Selling Holders may not Transfer, the Subject Interest unless the Purchaser acquires such Minority Holder’s Interest, at such price and on such terms and conditions.

(e) If Minority Holders do not give a timely Tag Along Acceptance, Selling Holders may Transfer the Subject Interest described in the Tag-Along Offer to the Purchaser, on the terms and conditions set forth in the Tag Along Notice, at any time within the 60-day period following the expiration of the 15-day period referred to above. If not so Transferred, such Subject Interest shall not thereafter be Transferred, except in compliance with the terms and conditions of this Agreement.

(f) The closing of any purchase pursuant to this Section 7.2 shall take place at such time and place as may be set forth in or determined pursuant to the terms of the Tag Along Notice.

7.3 Conditions to Transfers. (a) As a condition to the effectiveness of any Transfer permitted under this Article VII, and (subject to Section 7.4) the admission of a transferee as a new Member, each Transferor and proposed transferee shall execute and deliver to the Company, at the Transferor’s (and/or the transferees’) expense, such instruments of transfer, assignment, and assumption and such other certificates, representations, and documents, and shall perform all other acts necessary or desirable, in the opinion of counsel to the Company, to:

(i) constitute each such transferee a Member, if applicable;

(ii) confirm that each Person desiring to acquire an Interest, or to be admitted as a Member, has accepted, assumed, and agreed to be bound by, all of the terms, obligations, and conditions of this Agreement, as in effect at the time of the Transfer;

(iii) preserve the Company after such Transfer under the laws of each jurisdiction in which the Company is qualified, organized, or does business;

(iv) maintain the status of the Company as a partnership for federal tax purposes;

(v) assure compliance with all applicable state and Federal laws, including, without limitation, securities laws; and

(vi) constitute the Company a third-party beneficiary of the obligations of the transferees under any arrangements or agreements to Transfer an Interest hereunder, with full power to enforce such obligations directly against the transferees.

(b) No Transfer of an Interest may be made if such Interest, when added to the total of all other Interests Transferred within the prior twelve-consecutive-month-period, would, in the opinion of counsel to the Company, result in the termination of the Company pursuant to Code Section 708 unless, in the opinion of such counsel, such termination would not have a material adverse effect upon the remaining Members, such Transfer is approved by the Managing Member, or such Transfer is of all the Interest in the Company.

7.4 Transferee Not A Member. A transferee of an Interest who is not already a Member shall not become a Member, and shall have no right to participate in the management of the business of the Company or to become a Member unless the Managing Member approves the admission of such transferee as a Member. A transferee not admitted as a Member hereunder shall be deemed to be an assignee for all purposes, and shall be entitled to receive any share of Net Profits and Net Losses, other allocable items, and distributions to which the Transferor would have been entitled, to the extent of the Interest transferred to such assignee. The Interest held by an assignee shall be subject to the same restrictions on Transfer as are Interests held by Members, as set forth in this Article VII. A transferee who becomes a Member shall be treated as a Member for all purposes under this Agreement.

7.5 Effective Date. (a) Any Transfer of an Interest or admission of a Member in accordance with this Agreement shall be effective as of the last day of the calendar month in which all of the conditions thereto were satisfied. No Transfer of an Interest shall be effective unless and until the Company has received notice of the name and address of the transferee and the date of such Transfer.

(b) No new Member shall be entitled to any retroactive allocation of Net Profits or Net Losses or other allocable items incurred by the Company. The Managing Member may, in its discretion, at the time a new Member obtains an Interest, close the Company books (as though the Fiscal Year had ended) or make pro rata allocations of such items to a new Member for that portion of the Fiscal Year in which it holds an Interest, in accordance with Code Section 706(d) and the Treasury Regulations promulgated thereunder.

7.6 Certain Transfers of No Effect. Any Transfer or attempted Transfer of an Interest in violation of the terms of this Agreement shall be null and void and have no effect. Each Transferor hereby indemnifies the Company and the remaining Members against any and all loss, liabilities, damages, and expenses, including, without limitation, tax liabilities or loss of tax benefits, arising directly or indirectly out of any Transfer or purported Transfer in violation of this Agreement.

Article 8

WITHDRAWAL OF MEMBERS

8.1 No Voluntary Withdrawal. Except in the case of an Event of Expiry or as specifically provided by Schedule B, paragraph 4 (Walk Away Risk), incorporated herein, a Member shall have no right or power to surrender its Interest voluntarily or otherwise take, or permit to be taken, any action that would cause the Member to be deemed or required, by operation of law or otherwise, to withdraw or resign as a Member. In the event of any event of bankruptcy which would cause a Member to cease to be a Member under the Act, the former Member or his estate or representative shall be an assignee of the Member’s Interest, but such former Member or his estate or representative shall not have the right to require any payment from the Company or any other Member.

Article 9

DISSOLUTION AND TERMINATION

9.1 Events Causing Dissolution and Winding-up. The Company shall be dissolved and wound up upon the first to occur of the following events:

(a) the determination of the Managing Member to dissolve the Company;

(b) the occurrence of an Event of Expiry;

(d) the entry of a decree of judicial dissolution under Section 802 of the Act.

The death, bankruptcy, insolvency, or dissolution of any Member shall not cause a dissolution of the Company.

9.2 Winding up of the Company. (a) If the Company is dissolved in accordance with Section 9.1, the Managing Member shall wind up the affairs of the Company, including by selling or otherwise liquidating the Company assets in a bona fide sale or sales to third Persons at such prices and upon such terms as he may determine. If the Managing Member determines that an immediate sale would be financially inadvisable, it may defer sale of the Company assets for a reasonable time, or distribute the assets in kind.

(b) The proceeds of any liquidation of the Company shall be distributed

(i) first, to creditors of the Company, as and to the extent provided in Section 804(a)(1) and 804(b) of the Act;

(ii) second, to the Members and former Members in satisfaction of any liabilities for distributions previously declared or required hereunder to have been declared and paid and which have not been paid; and

(iii) third, as provided in Article IV.

9.3 Certificate of Cancellation. Upon the dissolution and the completion of the winding up of the Company, a certificate of cancellation shall be prepared, executed and filed in accordance with the Act.

Article 10

INDEMNIFICATION

10.1 Indemnification. To the fullest extent permitted by applicable law from time to time in effect, the Company shall indemnify, defend, and hold harmless each Member, the Managing Member, and each Officer (each an “Indemnitee”), and may indemnify, defend, and hold harmless any other Person designated by the Managing Member, from and against all costs, liabilities, claims, expenses, including reasonable attorneys’ fees, and damages (collectively, “Losses”) arising from any demands, claims, or lawsuits against any Indemnitee in connection with or resulting from his acts or omissions in his capacity as a Member, Managing Member, or Officer, or in connection with, arising from, or relating to, business or activities undertaken on behalf of the Company, including, without limitation, any demands, claims, or lawsuits initiated by a Member, unless such acts or omissions are found by a court of competent jurisdiction upon entry of a final judgment to be in bad faith, or to constitute fraud, willful misconduct, or a knowing violation of law or to have violated such lesser standard of conduct as under applicable law affirmatively prevents indemnification hereunder. The termination of any action, suit, or proceeding by judgment, order, settlement, plea of nolo contendere or its equivalent, or conviction shall not, of itself, create a presumption that an Indemnitee shall not be entitled to indemnification hereunder or that the Indemnitee did not act in good faith and in a manner which it reasonably believed to be in or not opposed to the best interests of the Company.

10.2 Advancement of Expenses. An Indemnitee shall be entitled to receive, upon application therefor, advances from the Company to cover the costs of defending any pending, threatened, or completed claim, action, suit, or proceeding against it for Losses in connection with which it would be entitled to indemnification under this Article X, provided, that such advances shall be repaid to the Company if the Indemnitee receiving such advance is found by a court of competent jurisdiction upon entry of a final judgment to have violated any of the standards set forth in Section 10.1 which preclude indemnification hereunder.

10.3 Rights Not Exclusive; Survival. The rights of an Indemnitee set forth in this Article X shall not be exclusive of any other rights to which it may be entitled, whether by separate agreement or otherwise, nor shall such rights limit or affect any other such rights. All rights of an Indemnitee under this Article X shall survive the dissolution of the Company and shall inure to the benefit of his or its heirs, personal representatives, successors, and assigns.

10.4 Source of Payment. Any amount to which an Indemnitee may be entitled under this Article X shall be paid only out of the assets of the Company and any insurance proceeds available to the Company for such purposes. No Member shall be personally liable for any amount payable pursuant to this Article X, or to make any Capital Contribution, return any distribution made to it by the Company, or restore any negative Capital Account balance to enable the Company to make any such payment.

Article 11

REPRESENTATIONS AND WARRANTIES OF MEMBERS

11.1 Each Member hereby represents and warrants that:

(a) (i) such Member has the full legal right and power and all authority and approval required (A) to execute and deliver, or authorize execution and delivery of this Agreement and all other instruments executed and delivered by or on behalf of such Member in connection with the purchase of such Member’s Interest and (B) to purchase and hold such Member’s Interest; (ii) the signature of the party signing on behalf of such Member is binding upon such Member; and (iii) such Member has not been formed for the specific purpose of acquiring such Member’s Interest, unless each beneficial owner of such Member is qualified as an accredited investor within the meaning of Rule 501(a) of Regulation D and has submitted information substantiating such individual qualification.

(b) The Interest issued to such Member hereby is being or will be acquired by such Member for investment purposes only, for the account of such Member and not with the view to any resale or distribution thereof, and such Member is not participating, directly or indirectly, in a distribution of the Interest and will not take, or cause to be taken, any action that would cause such Member to be deemed an “underwriter” (as defined in Section 2(11) of the Securities Act of 1933, as amended (the “Act”)) of the Interest.

(c) Such Member is not subscribing for such Member’s Interest as a result of or subsequent to any advertisement, article, notice or other communication published in any newspaper, magazine or similar media or broadcast over television or radio or presented at any seminar or meeting.

(d) Such Member has had access to all materials, books, records, documents, and information relating to the Company.

(e) Such Member acknowledges and understands that investment in such Member’s Interest involves a high degree of risk.

(f) Such Member acknowledges that it has been offered an opportunity to ask questions of, and receive answers from, officers of the Company concerning all material aspects of the Company and its business, and that any request for such information has been fully complied with to the extent the Company possesses such information or can acquire it without unreasonable effort or expense.

(g) Such Member has such knowledge and experience in financial and business matters that it is capable of evaluating the merits and risks of an investment in the Company.

(h) Such Member can afford a complete loss of its investment in the Company.

(i) Such Member has never been notified by the Internal Revenue Service that it is subject to backup withholding.

(j) Such Member recognizes that no governmental agency has passed upon the issuance of such Member’s Interest or made any finding or determination as to the fairness of this investment.

(k) Such Member has not entered into any agreement to pay commissions to any persons with respect to the purchase or sale of such Member’s Interest, except commissions for which such Member will be responsible.

Article 12

MISCELLANEOUS PROVISIONS

12.1 Execution of Additional Instruments. At any time and from time to time, each Member agrees, at its expense, to take such actions and to execute and deliver such documents and instruments, including, without limitation, statements of their Interests and powers of attorney, as may be reasonably necessary to effectuate the purposes of this Agreement.

12.2 Amendments. No amendment of this Agreement shall be binding unless such amendment is in a writing approved by the Managing Member. [Except as provided in Section 3.2(d),] (a) no amendment to Article 4 which adversely affects any Member (including reducing the amount of any payment or distribution to any Member) and which affects such Member any differently than any other Member of the same class or series (which, except as may be specifically provided in the terms of any class or series of Interests, shall not include amendments relating to or resulting from the creation or amendment of the terms of any other class or series of Interests) shall be effective without the consent of such Member, (b) no amendment to Sections 3.2(e), 6.1, 6.2, or 10.4 which increases the liability of any Member shall be effective without the consent of such Member, (c) no amendment to Article 7 which limits the category of Persons to whom any Member may Transfer Interests or materially adversely affects the rights of any Member to purchase or sell Interests and which affects such Member any differently than any other Member of the same class or series, shall be effective without the consent of such Member, (d) no amendment to Article 7 which limits the category of Persons to whom any class or series of Members may Transfer Interests or materially adversely affects the rights of any class or series of Members to purchase or sell Interests and which affects such class or series of Members any differently than any other class or series of Members, shall be effective without the approval of the holders of 85% in Percentage Interests held by such class or series of Members, (e) no amendment to Section 10.1 which adversely affects any Member shall be effective without the consent of such Member, and (f) no amendment to Sections 5.4(b) or 5.5 shall be effective without the unanimous consent of all of the Members.

12.3 Entire Agreement. This Agreement, including its attached and herein incorporated Schedules (A) through (D), inclusive, and the Certificate together set forth the entire understanding of the Members with respect to the subject matter hereof and supersede all existing agreements between them concerning such subject matter. To the extent the Act addresses a matter not otherwise addressed by this Agreement, it is the intention of the Members that the provisions of the Act shall apply, but no such application shall otherwise affect any provision of this Agreement.

12.4 Notices. Any notice or other communication required or permitted to be given hereunder shall be in writing and shall be mailed by certified mail, return receipt requested (or by the most nearly comparable method if mailed from or to a location outside of the United States), or by Federal Express, Express Mail, or similar overnight delivery or courier service or delivered (in person or by telecopy or similar telecommunications equipment) against receipt to the party to whom it is to be given at the address of such party set forth in Exhibit A (or if not shown thereon, as shown in the records of the Company), or to such other address as the party shall have furnished in writing in accordance with the provisions of this Section 12.4. Any notice or other communication given by certified mail (or by such comparable method) shall be deemed given at the time of certification thereof (or comparable act), except for a notice changing a party’s address which shall be deemed given at the time of receipt thereof. Any notice given by other means permitted by this Section 12.4 shall be deemed given at the time of receipt thereof.

12.5 Waivers. Any waiver by any party of a breach of any provision of this Agreement shall not operate as or be construed to be a waiver of any other breach of such provision or of any breach of any other provision of this Agreement. The failure of a party to insist upon strict adherence to any term of this Agreement on one or more occasions shall not be considered a waiver or deprive that party of the right thereafter to insist upon strict adherence to that term or any other term of this Agreement. Any waiver must be in writing.

12.6 Successors and Assigns. The provisions of this Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective permitted successors, assigns, heirs, and personal representatives.

12.7 No Third Party Beneficiaries. The covenants, obligations, and rights set forth in this Agreement are not intended to benefit any creditor of the Company or of any Member, or any other third Person, except as provided in Section 12.6. Except for the foregoing or as permitted by applicable law, no creditor or other third Person shall have any right, under any circumstances, to compel any actions or payments by the Managing Member or the Members or, by reason of any provision contained herein, be entitled to make any claim in respect of any debt, liability, obligation, or otherwise against the Company or any Member.

12.8 Severability. If any provision of this Agreement is invalid, illegal, or unenforceable, the balance of this Agreement shall remain in effect, and if any provision is inapplicable to any person or circumstance, it shall nevertheless remain applicable to all other persons and circumstances.

12.9 Headings. The headings in this Agreement are solely for convenience of reference and shall be given no effect in the construction or interpretation of this Agreement.

12.10 Counterparts. This Agreement may be executed in any number of counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument.

12.11 Governing Law. This Agreement shall be governed by and construed in accordance with the laws of the State of California, without giving effect to conflict of laws.

12.12 Construction. Whenever the singular number is used in this Agreement and when required by the context, the same shall include the plural and vice versa, and the neuter gender shall include the feminine and masculine genders and vice versa.

12.13 No Right to Petition for Dissolution. The Members agree that irreparable harm would be done to the business and goodwill of the Company if any Member were to bring an action in Court under the Act for the judicial dissolution of the Company, except in the case of an Event of Expiry. Accordingly, except in the case of an Event of Expiry, each Member, in his capacity as such, hereby irrevocably waives any such right to petition for dissolution of the Company under the Act, and all similar rights under other applicable law, except to the extent such relief may be sought by the Company itself as authorized by the Members in accordance with this Agreement.

12.14 Managing Member and Officers as Attorney-in-Fact for Members. (a) Each Member hereby irrevocably constitutes and appoints, with full power of substitution, the Managing Member and each Officer its true and lawful attorney-in-fact, with full power and authority in its name, place, and stead, to execute, certify, acknowledge, deliver, file, and record at the appropriate public offices:

(i) all certificates and other instruments, and any amendment thereto, which the Managing Member or Officer deems appropriate to form, qualify, or continue the business of the Company as a limited liability company;

(ii) any other instrument or document which may be required to be filed by the Company under the laws of any state or which the Managing Member or Officer deems advisable to file; and

(iii) any instrument or document, including amendments to this Agreement, which may be required to continue the business of the Company, admit a Member, or dissolve and liquidate the Company (provided that such continuation, admission, or dissolution are in accordance with this Agreement), or to reflect any reductions in the amount of Members’ capital.

(b) Each Member’s appointment of the Managing Member and Officers as attorneys-in-fact shall be deemed to be a power coupled with an interest and shall survive the incompetency, bankruptcy, insolvency, or dissolution of the Member giving such power, except that this power of attorney shall survive a Transfer of a Member’s Interest in accordance with this Agreement only until such time, if any, as the transferee shall have been admitted to the Company as a Member and all required documents and instruments shall have been duly executed, filed, and recorded to effect such substitution.

IN WITNESS WHEREOF, the parties have duly executed this Agreement as of the date first written above.

MANAGING MEMBERS

Edison Nation, Inc		4 Keeps Roses, Inc.

/s/ Chris Ferguson		/s/ Sidney Richlin
By: Chris Ferguson, CEO		By: Sidney Richlin, President

Schedule A

The following sets forth the Percentage Interest of Interest to be held by each Member after the making of their Initial Capital Contributions on the date of this Agreement, all in accordance with Section 3.1.

I. On the Date of this Agreement

Member and Address	Percentage Interest
Edison Nation, Inc (Initial Capital Contribution: $500)		50	%

4 Keeps Roses, Inc. (Initial Capital Contribution: $500)		50	%

Schedule B – Additional Terms, Conditions or Agreements

As related to this overall Operating Agreement, the parties further specifically agree as follows:

1. Opportunity Fee. Member Edison Nation shall promptly, after execution of this Agreement, pay to 8^th Floor, LLC the equivalent value of USD $50,000.00 in restricted publicly tradeable common shares of Edison Nation, Inc pursuant to Rule 144. (valued as of the date of execution); which sum shall be deemed an “Opportunity Fee” fully earned upon payment and NOT be subject to recoupment by Member Edison Nation from any distribution of Net Profits to Member 4 Keeps by the Company.

2. Member Advanced Funds. Member Edison Nation shall promptly, after execution of this Agreement, pay an Advance sum of Eighty Thousand Dollars and monthly payments of $20,000 per month for six consecutive months following the execution of the Agreement for an aggregate total of Two Hundred Thousand Dollars(USD $200,000.00) to Member 4 Keeps; which sum shall be subject to recoupment by Member Edison Nation from the Company in accordance with paragraph 3, below.

3. Recoupment Adjustments. Upon calculating any available amounts for the minimum mandatory quarterly distribution of Net Profits to the Members pursuant to paragraph 4.2 of the Operating Agreement and prior to issuing any such distribution payment to Member 4 Keeps, any outstanding amounts previously Advanced to Member 4 Keeps and subject to recoupment (see: paragraph 2, above) shall be recouped by Member Edison Nation by means of a deduction from each fully calculated quarterly distribution amount payable to Member 4 Keeps until the total of all outstanding sums so Advanced are recouped in full. This process of recoupment shall be the sole and exclusive recourse remedy for Member Edison Nation to recover its Advance payment to Member 4 Keeps pursuant to paragraph 2, above, and in that regard is Advance is to be deemed “at risk, without recourse”. If, for any reason, the proviviosn of this paragraph 3 should prove over time to be inadequate to affect a full recoupment by Edison Nation of any of the sums so Advanced, neither Member 4 Keeps, nor any of its principals, members, shareholders, directors, officers or any other person or entity shall be liable in any manner or degree for repayment of any “unrecouped” amounts otherwise owing to Edison Nation.

For purposes of illustration by example only, if a 40% total Member distribution in Quarter 1 of $100,000.00 was calculated and approved by the Managing Member, then Member 4 Keeps share (50%) of that sum would be $50,000. However, before the distribution payment is made to 4 Keeps, Edison Nation is entitled to a recoupment deduction for the outstanding balance of such Advanced funds (see: paragraph 2, above) from any amounts owing to 4 Keeps by the Company. Accordingly, Edison Nation would be paid by the Company the $50,000.00 otherwise owing to 4 Keeps for Quarter 1; which sum shall then be credited against the Advance balance owing from 4 Keeps pursuant to paragraph 2, above, thus leaving a remaining unpaid Advance balance of $150,000.00 due to Edison Nation by 4 Keeps going into Quarter 2 - and continuing on in that way, unless interrupted in some manner as otherwise provided by this overall Operating Agreement, until such Advance is fully recouped.

4. Walk-Away Risk. At any time and in the unlikely event that Member Edison Nation fails or refuses to meet its financial (Advance and/or lending) commitments to either the Company or to Member 4 Keeps, or if any Member otherwise fails or refuses on a regular and recurring basis to perform its obligations under this overall Operating Agreement, then absent any circumstances or event of Force Majeure, upon a failure to promptly cure such default following a reasonable written demand for performance by any other Member (and notwithstanding any other provisions of the Operating Agreement to the contrary) any and all rights or privileges afforded to such “non-performing” Member by virtue of this overall Operating Agreement including, but not limited to, its Membership rights and any continuing profit, loss or managing interests therein granted shall be immediately forfeited and shall automatically revert, without recourse, to the remaining Member(s); being then divided and granted in proportion to the remaining Member(s) respective ownership interests. In such event, any liability rights against such non-performing Member shall be reserved to the Company or its Members, or in accordance with the Act.

5. Minimum Mandatory Budget Items. Any approved budget categories [see: Schedule C, below], at a minimum, shall always include specific allocations necessary and sufficient to accommodate the costs associated with: (a) all advisable insurance coverages, (b) any reasonable, implement any scheduled ‘social media’ marketing programs, and (c) all necessary or advisable Trade Shows - particularly including those series of shows regularly associated with certain multi-chain or franchise customers such as 7-11 (including its Nexxus affiliates) and other C-type store chains, or other retailers utilizing “Scan-based” sales programs.

6. General Division of Responsibilties. It is understood and agreed that, generally, Member 4 Keeps shall be responsible to manage all confidential product sourcing relationships; “social media” or “affiliate-based” marketing strategies and related “media buys”; all product sales by, or through, so-called “Social Media Affiliates” or similar social media-type platforms; and, all product sales to, or through, Amazon, 7-11 (and its affiliate Nexxus), other C-type store chains and all other “Scan-based” sales retailers. Member Edison Nation shall be responsible for managing all other areas of “day-to-day” business operations of the Company; financial matters of the Company; corporate and/or regulatory compliance matters; new or revised product packaging/sourcing and marketing materials; all product-related acquisition, assembly, storage, packaging and sales logistics, shipping and customer fulfillment requirements (regardless of sales source); and, product sales in all other categories of wholesale/retail sellers acquired by Edison (or its Affiliates) and not otherwise designated or reserved to (or subsequently acquired by) 4 Keeps.

7. Member Sales Commissions. Each Member, separate and apart from any other approved monetary compensation, salary/bonuses or Member profit/loss distribution(s), shall also be entitled to be paid by the Company directly, on a monthly basis, a commission on any product sales generated by that Member including, but not limited to, those sales generated through its areas of “general division of responsibilities” (see paragraph 6, above), as follows:

[INSERT SALES COMMISSION STRUCTURE FOR MEMBERS HERE]

8. Intellectual Property. Member 4 Keeps Roses, Inc. agrees that it shall license to ED ROSES, LLC, royalty-free and on a non-exclusive basis, all necessary rights and authorities required to utilize: (a) the (pending) registered trademark [“4 Keeps Roses”]; and, (b) 4Keeps Roses website and URL, affiliate landing pages, social media profiles, along with any libray of content and/or any associated copyright interests pertaining thereto, whether registered or not, owned or controlled by said Member with regard to the “4 Keeps Roses” product brand. Such license shall be irrevocable by 4 Keeps for as long as the Company is actively selling its “Rose” products, in any form; however, which shall automatically revoke on the occurrence of any Event of Dissolution by the Company according to Operating Agreement paragragh 9.1, hereinabove. The Company shall hold no other rights, of any kind, associated with such licensed trademarks or copyrights merely by virtue of such license.

Schedule C – Preliminary Approved Mandatory Minimum Budget Items

Trade Shows: TBD

1.ECRM

Convenience

https://ecrm.marketgate.com/Sessions/2020/01/Convenience

Front End Check Lane

https://ecrm.marketgate.com/Sessions/2020/01/ImpulseFrontEndChecklane

Valentines Day

https://ecrm.marketgate.com/Sessions/2020/04/ValentinesDayCandyBoutiqueEPPS

2. Gift Shows

Las Vegas: https://www.lasvegasmarket.com/

New York: https://www.nynow.com/

Chicago: http://www.silverliningshows.com/

Dallas: http://dallasmarketcenter.com/

Atlanta: https://www.americasmart.com/

3. 7-11 Shows

Already Exhibiting: National Coalition of Associations of 7-Eleven Franchisees: https://ncasef.com/

7-Eleven Experience (corporate run event/February 2019 Las Vegas)

Regional FOA shows (once a month)

4. ASI Promotional Industry (Advertising specialty Institute) shows TBD

Insurances:

Product Liability; Min. Limits: ______________;

Comprehensive General Liability (“CGL”); Min. Limits: _____________;

Workers Compensation;

Errors and Ommissions/Directors & Officers;

“Social Media”/”Affiliate Sales” programs: TBD

Los Angeles Office Expenses: TBD

Schedule D – Edison Nation Targeted Customers List

1. Walmart

2. Target

3. Meijer

4. Costo

5. Sam’s Club

6. Albertson’s

7. Riteaid

8. ???

9. ???

10. ???

Exhibit 10.23

ASSET PURCHASE AGREEMENT

This Asset Purchase Agreement (this "Agreement"), dated as of November 6, 2019, is entered into by and among Uber Mom, LLC, a Florida limited liability company ("Seller"), Lisa Anne Kleine, an individual and member of Seller, Amy Goff, an individual and member of Seller, (these individuals together are the “Owners”) and Edison Nation, Inc., a Nevada corporation ("Buyer").

RECITALS

A. Seller operates a consumer products company which develops, manufactures and sells a line of products in the infant and baby category.

B. Seller desires to sell, assign, transfer and deliver to Buyer, and Buyer desires to purchase from Seller, certain of the assets and lines of business of Seller (“Purchased Assets”) upon the terms and subject to the conditions set forth in this Agreement.

C. Seller intends to dissolve and wind up affairs following the Closing, and the parties intend and desire for certain surviving right and obligations under this agreement to accrue to the Owners.

NOW, THEREFORE, in consideration of the mutual covenants, promises, agreements, representations and warranties contained in this Agreement, the parties hereto do hereby covenant, promise and agree as follows:

Article I
Purchase and Sale

Section 1.01 Purchase and Sale of Assets. Subject to the terms and conditions set forth herein, Seller shall sell, assign, transfer, convey and deliver to Buyer, and Buyer shall purchase from Seller, all of Seller's right, title and interest in the assets set forth on Schedule 1.01, hereto (the "Purchased Assets"), free and clear of any mortgage, pledge, lien, charge, security interest, claim or other encumbrance ("Encumbrance").

Section 1.02 Excluded Assets. Other than the Purchased Assets, Buyer expressly understands and agrees that it is not purchasing or acquiring, and Seller is not selling or assigning, any other assets or properties of Seller, and all such other assets and properties shall be excluded from the Purchased Assets (the "Excluded Assets"). Excluded Assets include the following assets and properties of Seller: (a) all cash and cash equivalents, bank accounts and securities of Seller; (b) all Contracts that are not Assigned Contracts; (c) all Intellectual Property other than that included as Purchased Assets; (d) the corporate seals, organizational documents, minute books, Tax Returns, books of account or other records having to do with the corporate organization of Seller; (e) all insurance policies of Seller and all rights to applicable claims and proceeds thereunder; (f) all tax assets (including duty and tax refunds and prepayments); (g) the rights which accrue or will accrue to Seller under the Closing Deliverables; and (h) any other asset set forth in Schedule 1.02.

Section 1.03 Purchase Price. The aggregate purchase price for the Purchased Assets shall be as follows:

(a) Cash and Stock. At Closing, Buyer shall pay via wire transfer a cash amount of Fifty=-Two Thousand Three Hundred Fifty One and 76/100 Dollars ($52,351.76) to Seller. In addition, at Closing, Buyer shall issue to Amy Goff and Lisa Anne Kleine each the number of Twenty Two Thousand Five Hundred (22,500) shares of Buyer common stock (the “Common Stock”).

(b) Royalty Payments. Buyer shall pay the Owners each a royalty based on the financial performance of the Product Line set forth in Schedule 1.03(b) and all future products developed and sold under or branded with any of the trademarks identified as Purchased Assets (the “Royalty Generating Products”). The Royalty Payment shall be equal to Five Percent (5%) of the Net Revenue generated by the Royalty Generating Products (the “Royalty Payment”). The Royalty Payment shall be payable as Two and One Half Percent (2.5%) to Amy Goff and Two and One Half Percent (2.5%) to Lisa Anne Kleine, and shall be paid by Seller as such on a quarterly basis. For purposes of this Section 1.03(b), Net Revenue shall mean the gross revenue generated by the Royalty Generating Products minus the cost of goods sold for the Royalty Generating Products, applying generally accepted accounting practices and principles consistent with those applied to the Buyer’s most recent audited financial statements. Buyer shall provide quarterly reports to Seller, or Seller’s designee(s), that provide the detail related to computation of the Royalty Payment. The computed quarterly Royalty Payments shall be payable to Amy Goff and Lisa Anne Kleine within sixty (60) days after the end of each calendar quarter following the Closing for so long as any Revenue Generating Product generates revenue.

In the event Buyer (i) fails to make the Royalty Payments for two (2) or more consecutive calendar quarters, or (ii) fails to allow Seller, Owners, or their designees access to books and records for the Royalty Generating Products as set forth in Section 5.05, then Buyer acknowledges and agrees Seller or either Owner may demand that Buyer pay each Owner, as agreed upon liquidated damages in full settlement of any claims, a lump sum amount of one hundred thousand dollars ($100,000) each. In the event an Owner elects for Buyer to pay the liquidated damages, Buyer will make payment within thirty (30) days after its receipt of the written notice to pay the liquidated damages and upon such payment the Buyer shall be relieved of all surviving obligations under this Section 1.03(b) with respect to the Owner making such demand. Buyer acknowledges and agrees the liquidated damages are intended to represent estimated actual damages and are not intended as a penalty.

With respect to the Royalty Payments and/or the liquidated damages contemplated by this Section 1.03, the parties acknowledge and agree that: (i) Buyer shall have no right of offset against such payments as to any indemnification obligations or other payment obligation of Seller or Owners under this Agreement, and (ii) all such payments are to be treated as a payment of deferred purchase price for tax purposes.

The provisions of this Section 1.03 shall survive indefinitely.

(c) Assumption of Certain Liabilities Buyer shall assume only the liabilities as set forth in Schedule 1.03(c) (the “Assumed Liabilities”). Other than the Assumed Liabilities, Buyer shall not assume any liabilities or obligations of Seller of any kind, whether known or unknown, contingent, matured or otherwise, whether currently existing or hereinafter created.

Collectively, the items of consideration described in this Section 1.03(a), (b), and (c) are the “Purchase Price.”

Section 1.04 Review Period: Termination

(a) Review Period. After full execution of this Agreement, Buyer shall have up to twenty (20) business days (the "Review Period") to review the relevant financial statements, books and records of Seller, which Seller shall provide, certify and warrant as full, complete and accurate.

(b) Termination. On or prior to the last day of the Review Period, this Agreement may be terminated by:

(i) The mutual written consent of Buyer and Seller;

(ii) By Buyer with written notice to Seller, if Buyer is not then in material breach of any provision of this Agreement and there has been a material breach, inaccuracy in or failure to perform any representation, warranty, covenant or agreement made by Seller pursuant to this Agreement that would give rise to the failure of any of the conditions specified in this Agreement and such breach, inaccuracy or failure cannot be cured by Seller by the end of the Review Period; or

(iii) By Seller with written notice to Buyer, if Seller is not then in material breach of any provision of this Agreement and there has been a material breach, inaccuracy in or failure to perform any representation, warranty, covenant or agreement made by Buyer pursuant to this Agreement that would give rise to the failure of any of the conditions specified in this Agreement and such breach, inaccuracy or failure cannot be cured by Buyer by the end of the Review Period.

Section 1.05 Effect of Termination. In the event of a Termination of this Agreement for any reason, this Agreement shall be deemed null and void except for Buyer’s confidentiality obligations as set out in 4.05. In the event that this agreement is not terminated during the Review Period, with such changes as may have been previously agreed in writing by Buyer and Seller, then this Agreement shall be final and binding.

Article IISection 1.06 Allocation of Purchase Price. Seller and Buyer hereby agree to the allocation of the Purchase Price among the Acquired Assets being sold and purchased hereunder, as set forth on attached Schedule 1.06 - Purchase Price Allocation. Each party will use the Purchase Price Allocation in all reporting to, and Tax Returns filed with, the Internal Revenue Service and other State and Local taxing authorities.Closing

Section 2.01 Closing. The closing of the transactions contemplated by this Agreement (the "Closing") shall take place within 10 days after the expiration of the Review Period in the event that this Agreement was not terminated by Buyer (the "Closing Date"). The Closing shall be by escrow, or at such other place as the parties may determine and designate in writing.

Section 2.02 Closing Deliverables.

(a) At the Closing, Seller shall deliver to Buyer the following:

(i) a bill of sale in form and substance satisfactory to Buyer (the "Bill of Sale") and duly executed by Seller, transferring the Purchased Assets to Buyer;

(ii) an assignment and assumption agreement in form and substance satisfactory to Buyer (the "Assignment and Assumption Agreement") and duly executed by Seller, effecting the assignment to and assumption by Buyer of the Purchased Assets as well as completed Form PTO-1594 or comparable form as deemed appropriate;

(iii) copies of all consents, approvals, waivers and authorizations referred to the Seller’s disclosure schedules (the “Disclosure Schedules”); and,

(iv) such other customary instruments of transfer, assumption, filings or documents, in form and substance reasonably satisfactory to Buyer, as may be required to give effect to this Agreement.

(b) At the Closing, Buyer shall deliver to Seller the following:

(i) the Purchase Price as set forth in Section 1.03, including the wire transfer, the duly authorized and executed stock certificates for Lisa Anne Kleine and Amy Goff; and

(ii) the Assignment and Assumption Agreement duly executed by Buyer;

(iii) evidence, to the reasonable satisfaction of Seller, of Buyer’s corporate existence and good standing along with resolutions, duly adopted by the directors and/or shareholders of Seller, if required, authorizing the execution and delivery of this Agreement and the consummation of the transactions contemplated herein, including the issuance of stock to Lisa Anne Kleine and Amy Goff, and certified by an authorized representative of Buyer as of the Closing Date.

Section 2.03 Seller’s Closing Costs. At Closing, Seller shall pay the following costs and expenses incurred in connection with the Closing: (i) the filing of all terminations of any financing statements; (ii) the cost of recording or curing defects in the title of any of the Acquired Assets; (iii) Seller’s counsel fees; and (iv) any other expenses agreed in this Agreement to be paid by Seller.

Section 2.04 Buyer’s Closing Costs. At Closing, Buyer shall pay the following costs and expenses incurred in connection with the Closing: (i) the cost of obtaining, furnishing and/or delivering any other documents and instruments required to be obtained, furnished and/or delivered by Buyer hereunder; (ii) all costs related to any financing obtained by Buyer in connection with Buyer’s purchase of the Acquired Assets, including but not limited to documentary stamp taxes; (iii) all transfer, documentary, sales, use, stamp, registration, value added and other such taxes and fees incurred in connection with this Agreement and the other Closing Deliverables which taxes shall be borne and paid by Buyer when due, and Buyer shall, at its own expense, timely file any Tax Return or other document with respect to such taxes or fees (and Seller shall cooperate with respect thereto as necessary); (iv) the costs of recording or filing any transfer documents with the U.S. Patent and Trademark Office with respect to the Purchased Assets; (iv) all costs associated with storage and shipment of the inventory included in the Purchased Assets on or after the Closing Date; (v) Buyer’s counsel fees; and (vi) and other expenses agreed in this Agreement to be paid by Buyer.

Section 2.05 Prorations. With respect to certain expenses incurred in the operation of the Business, the following prorations shall be made:

(a) Operating Expenses. Seller shall continue to be responsible for all costs and expenses attributable to the operation of the Business or the ownership of the Acquired Assets up to the Closing Date, and Buyer shall become responsible for all costs and expenses attributable to the ownership of the Acquired Assets and conduct of the Business as conducted by Buyer on and after the Closing Date.

(b) Taxes. Tangible personal property taxes shall be apportioned as of the Closing Date, based on current tax bills if available; and if not available, based on the most recent tax bills available with appropriate subsequent adjustment among the parties when bills for the current year are received.

(c) Contracts. Payments made by Seller under any contracts in connection with assumed contracts shall be prorated to the Closing Date.

(d) Deposits. Any deposits or prepaid items which can be assigned to Buyer will be so assigned by Seller, and Buyer will pay Seller the full amount thereof, subject to claims by the particular utility or lessor for damages and other costs, expenses and charges accrued or resulting from actions occurring prior to the Closing Date.

Appropriate cash payments by Seller or Buyer, as the case may require, shall be made from time to time, as soon as practicable after the facts giving rise to the obligation for such payments are known, to give effect to the prorations required by this Section 2.05. The obligations imposed by this Section 2.05 shall survive until all prorations are finally determined to be acceptable to the parties, but in no event shall the obligations imposed by this Section 2.05 survive longer than one (1) year after Closing.

Article III
Representations and warranties of seller

Except as set forth in the correspondingly numbered Seller’s Disclosure Schedules, Seller represents and warrants to Buyer that the statements contained in this Article III are true and correct. For purposes of this Article III, "Seller's knowledge," "knowledge of Seller" and any similar phrases shall mean the actual or constructive knowledge of any director or officer of Seller, after due inquiry.

Section 3.01 Organization and Authority of Seller; Enforceability. Seller is a limited liability company duly organized, validly existing and in good standing under the laws of the state of Florida. Seller has full power and authority to enter into this Agreement and the documents to be delivered hereunder, to carry out its obligations hereunder and to consummate the transactions contemplated hereby. The execution, delivery and performance by Seller of this Agreement and the documents to be delivered hereunder and the consummation of the transactions contemplated hereby have been duly authorized by all requisite company action on the part of Seller. This Agreement and the documents to be delivered hereunder have been duly executed and delivered by Seller, and (assuming due authorization, execution and delivery by Seller) this Agreement and the documents to be delivered hereunder constitute legal, valid and binding obligations of Seller, enforceable against Seller in accordance with their respective terms.

Section 3.02 No Conflicts; Consents. The execution, delivery and performance by Seller of this Agreement and the documents to be delivered hereunder, and the consummation of the transactions contemplated hereby, do not and will not: (a) violate or conflict with the articles of organization, operating agreement, or other organizational documents of Seller; (b) violate or conflict with any judgment, order, decree, statute, law, ordinance, rule or regulation applicable to Seller or the Purchased Assets; (c) conflict with, or result in (with or without notice or lapse of time or both) any violation of, or default under, or give rise to a right of termination, acceleration or modification of any obligation or loss of any benefit under any contract or other instrument to which Seller is a party or to which any of the Purchased Assets are subject; or (d) result in the creation or imposition of any Encumbrance on the Purchased Assets. No consent, approval, waiver or authorization is required to be obtained by Seller from any person or entity (including any governmental authority) in connection with the execution, delivery and performance by Seller of this Agreement and the consummation of the transactions contemplated hereby.

Section 3.03 Title to Purchased Assets. Seller owns and has good title to the Purchased Assets, free and clear of Encumbrances, except as set forth in Section 3.03 of Seller’s Disclosure Schedules.

Section 3.04 Condition of Assets. The tangible personal property included in the Purchased Assets is in good condition and adequate for the uses to which they are being put, and none of such /tangible personal property is in need of maintenance or repairs except for ordinary, routine maintenance and repairs that are not material in nature or cost. The Purchased Assets will be delivered to Buyer at Closing in the “AS IS, WHERE IS” condition.

Section 3.05 Non-foreign Status. Seller is not a "foreign person" as that term is used in Treasury Regulations Section 1.1445-2.

Section 3.06 Compliance With Laws To the best of Seller’s belief, Seller has complied, and is now complying, with all applicable federal, state and local laws and regulations applicable to ownership and use of the Purchased Assets.

Section 3.07 Legal Proceedings. To Seller’s actual knowledge, there is no claim, action, suit, proceeding or governmental investigation ("Action") of any nature pending, expected or threatened against or by Seller (a) relating to or affecting the Purchased Assets or the Assumed Liabilities; or (b) that challenges or seeks to prevent, enjoin or otherwise delay the transactions contemplated by this Agreement. No event has occurred or circumstances exist that may give rise to, or serve as a basis for, any such Action, except as set forth in the Disclosure Schedules.

Section 3.08 Brokers. No broker, finder or investment banker is entitled to any brokerage, finder's or other fee or commission in connection with the transactions contemplated by this Agreement based upon arrangements made by or on behalf of Seller.

Section 3.09 Undisclosed Liabilities. Seller has no Liabilities with respect to the Business, except those which have been incurred in the ordinary course of business consistent with past practice and which are not, individually or in the aggregate, material in amount.

Section 3.10 Governmental Orders. Except as set forth in the Disclosure Schedules and to Seller’s actual knowledge, there are no outstanding Governmental Orders (as the term is defined herein) and no unsatisfied judgments, penalties or awards against, relating to or affecting the Business. Seller is in compliance with the terms of each Governmental Order set forth in the Disclosure Schedules. No event has occurred or circumstances exist that may constitute or result in (with or without notice or lapse of time) a violation of any such Governmental Order. "Governmental Order" means any order, writ, judgment, injunction, decree, stipulation, determination or award entered by or with any federal, state, local or foreign government or political subdivision thereof, or any agency or instrumentality of such government or political subdivision, or any self-regulated organization or other non-governmental regulatory authority or quasi-governmental authority (to the extent that the rules, regulations or orders of such organization or authority have the force of law), or any arbitrator, court or tribunal of competent jurisdiction.

Section 3.11 Insurance. Seller has insurance policies in full force and effect (i) for such amounts as are sufficient for all requirements of Law and all agreements to which it is a party or by which it is bound and (ii) that are in such amounts, with such deductibles and against such risks and losses, as are reasonable for the Business and its assets and properties, subject to reasonable deductibles, and the risks insured against are normal and customary for the industry.

Section 3.12 Full Disclosure. To the best of Seller’s actual knowledge, no representation or warranty by Seller in this Agreement and no statement contained in the Schedules, the Disclosure Schedules to this Agreement or any certificate or other document furnished or to be furnished to Buyer pursuant to this Agreement contains any untrue statement of a material fact, or omits to state a material fact necessary to make the statements contained therein, in light of the circumstances in which they are made, not misleading. Except for the representations and warranties contained in this Article III (including the related portions of the Disclosure Schedules), neither Seller nor any other person has made or makes any other express or implied representation or warranty, either written or oral, on behalf of Seller, including any representation or warranty as to the accuracy or completeness of any information regarding the Purchased Assets and any information, documents or material made available to Buyer prior to or during the Review Period or in any other form in expectation of the transactions contemplated hereby or as to the future revenue, profitability or success of the Product Lines, or any representation or warranty arising from statute or otherwise in law.

Article IV
Representations and warranties of buyer

Buyer represents and warrants to Seller that the statements contained in this Article IV are true and correct as of the date hereof. For purposes of this Article IV, "Buyer's knowledge," "knowledge of Buyer" and any similar phrases shall mean the actual or constructive knowledge of any director or officer of Buyer, after due inquiry.

Section 4.01 Organization and Authority of Buyer; Enforceability. Buyer is a corporation duly organized, validly existing and in good standing under the laws of the state of Nevada. Buyer has full corporate power and authority to enter into this Agreement and the documents to be delivered hereunder, to carry out its obligations hereunder and to consummate the transactions contemplated hereby. The execution, delivery and performance by Buyer of this Agreement and the documents to be delivered hereunder and the consummation of the transactions contemplated hereby have been duly authorized by all requisite corporate action on the part of Buyer. This Agreement and the documents to be delivered hereunder have been duly executed and delivered by Buyer, and (assuming due authorization, execution and delivery by Seller) this Agreement and the documents to be delivered hereunder constitute legal, valid and binding obligations of Buyer enforceable against Buyer in accordance with their respective terms.

Section 4.02 No Conflicts; Consents. The execution, delivery and performance by Buyer of this Agreement and the documents to be delivered hereunder, and the consummation of the transactions contemplated hereby, do not and will not: (a) violate or conflict with the certificate of incorporation, by-laws or other organizational documents of Buyer; or (b) violate or conflict with any judgment, order, decree, statute, law, ordinance, rule or regulation applicable to Buyer. No consent, approval, waiver or authorization is required to be obtained by Buyer from any person or entity (including any governmental authority) in connection with the execution, delivery and performance by Buyer of this Agreement and the consummation of the transactions contemplated hereby.

Section 4.03 Legal Proceedings. There is no Action of any nature pending or, to Buyer's knowledge, threatened against or by Buyer that challenges or seeks to prevent, enjoin or otherwise delay the transactions contemplated by this Agreement. No event has occurred or circumstances exist that may give rise to, or serve as a basis for, any such Action.

Section 4.04 Brokers. no broker, finder or investment banker is entitled to any brokerage, finder's or other fee or commission in connection with the transactions contemplated by this Agreement based upon arrangements made by or on behalf of Buyer.

Section 4.05 Confidentiality. In the event Buyer does not close on the purchase of the Acquired Assets and this Agreement is terminated, Buyer shall keep confidential all confidential, proprietary, or financial information or records obtained from Seller incident to the contemplated transactions hereunder and all such information and copies thereof shall be immediately returned to Seller. Buyer may disclose any such confidential information only to those agents, lenders, attorneys, accountants, or other professionals who have a bona fide need to review and analyze such information or as otherwise required by Law or a court of competent jurisdiction. The restrictions of this Section 4.05 shall be communicated by Buyer to all Persons who are given access to any confidential information or records of Seller. Confidential Information does not include, however, information which: (i) is or becomes generally available to the public other than as a result of a disclosure by Buyer or its representatives or agents; (ii) Buyer can show by written records was within its possession prior to its being furnished to Buyer by or on behalf of Seller, provided that the information was not provided to, or received by, Buyer in violation of a confidentiality agreement with or other contractual, legal or fiduciary obligation of confidentiality to Seller; (iii) was received by Buyer from a third party having the legal right to disclose the same to Buyer; or (iv) is independently developed by Buyer without the aid, application or use of the Confidential Information as evidenced by the written records of such party. This warranty of confidentiality shall survive the termination of this Agreement.

Section 4.06 Sufficiency of Funds. Buyer has sufficient cash on hand or other sources of immediately available funds to enable it to make payment of the Purchase Price and consummate the transactions contemplated herein.

Section 4.07 Independent Investigation. Buyer has conducted its own independent investigation, review and analysis of the Purchased Assets, and acknowledges that it has been provided adequate access to the personnel, properties, assets, premises, books and records, and other documents and data of Seller for such purpose. Buyer acknowledges and agrees that: (a) in making its decision to enter into this Agreement and to consummate the transactions contemplated hereby, Buyer has relied solely upon its own investigation and the express representations and warranties of Seller set forth in Article III of this Agreement (including related portions of the Disclosure Schedules); and (b) neither Seller nor any other person has made any representation or warranty as to Seller, the Product Lines, the Purchased Assets or this Agreement, except as expressly set forth in Article III of this Agreement (including the related portions of the Disclosure Schedules).

Section 4.08 Subordination of Royalty Payments. With respect to the Royalty Payments contemplated by Section 1.03 of this Agreement, Buyer represents and will continue to warrant that Buyer is not and will not become subject to any loan covenants or other obligations to third-parties that would prohibit or otherwise limit the Royalty Payments and will not permit the Royalty Payments to become subordinated to any lender’s rights. Notwithstanding anything herein to the contrary, Buyer’s representations and warranties contained in this Section 4.08 shall survive indefinitely.

Article V
Covenants

Section 5.01 Public Announcements. Unless otherwise required by applicable law, neither party shall make any public announcements regarding this Agreement or the transactions contemplated hereby without the prior written consent of the other party (which consent shall not be unreasonably withheld or delayed).

Section 5.02 Further Assurances.

(a) Following the Closing, each of the parties hereto shall execute and deliver such additional documents, instruments, conveyances and assurances and take such further actions as may be reasonably required to carry out the provisions hereof and give effect to the transactions contemplated by this Agreement and the documents to be delivered hereunder. The provisions of this Section 5.02(a) shall survive for one (1) year after Closing.

Section 5.03 Conduct of Business Prior to the Closing. From the date hereof until the Closing, except as otherwise provided in this Agreement or consented to in writing by Buyer (which consent shall not be unreasonably withheld or delayed), Seller shall (x) conduct the Business in the ordinary course of business consistent with past practice; and (y) use reasonable best efforts to maintain and preserve intact its current Business organization, operations and franchise and to preserve the rights, franchises, goodwill and relationships of its employees, customers, lenders, suppliers, regulators and others having relationships with the Business. Without limiting the foregoing, from the date hereof until the Closing Date, Seller shall:

(a) preserve and maintain all Permits required for the conduct of the Business as currently conducted or the ownership and use of the Purchased Assets;

(b) pay the debts, Taxes and other obligations of the Business when due;

(c) continue to collect accounts receivable in a manner consistent with past practice, without discounting such Accounts Receivable;

(d) maintain the properties and assets included in the Purchased Assets in the same condition as they were on the date of this Agreement, subject to reasonable wear and tear;

(e) continue in full force and effect without modification all insurance policies, except as required by applicable Law;

(f) defend and protect the properties and assets included in the Purchased Assets from infringement or usurpation;

(g) perform all of its obligations under all Assigned Contracts;

(h) maintain the Books and Records in accordance with past practice;

(i) comply in all material respects with all Laws applicable to the conduct of the Business or the ownership and use of the Purchased Assets; and

(j) not take or permit any action that would cause material adverse changes, events or conditions in the Purchased Assets.

Section 5.04 Access to Information. From the date hereof until the Closing, Seller shall (a) afford Buyer and its Representatives full and free access to and the right to inspect all of the Real Property, properties, assets, premises, books and records, Contracts and other documents and data related to the Business; (b) furnish Buyer and its Representatives with such financial, operating and other data and information related to the Business as Buyer or any of its Representatives may reasonably request; and (c) instruct the Representatives of Seller to cooperate with Buyer in its investigation of the Business. Any investigation pursuant to this Section 5.04 shall be conducted in such manner as not to interfere unreasonably with the conduct of the Business or any other businesses of Seller. No investigation by Buyer or other information received by Buyer shall operate as a waiver or otherwise affect any representation, warranty or agreement given or made by Seller in this Agreement.

Section 5.05 Royalty Payment Covenants. Buyer shall maintain complete, accurate, and separate books and records for the Royalty Generating Products and provide Seller or Owners access to such books and records upon reasonable advance written notice for inspection or audit by Seller, Owners, or either of their designees so that Seller or Owners can determine Buyer’s compliance with its surviving obligations under this Agreement. Buyer will use best efforts at all times to maximize the Royalty Payments. The provisions of this Section 5.05 shall survive indefinitely.

Section 5.06 Sale of Royalty Generating Products. If, at any point in time prior to the third (3rd) anniversary of the Closing Date, Buyer intends to sell, liquidate, or otherwise dispose of any of the Royalty Generating Products, then Buyer shall enter into exclusive good faith negotiations, at Seller or Owners’ request, for a period not to exceed fifteen (15) days, for the Seller, Owner, or either of them, to repurchase such assets. In the event that Buyer and Seller or Owners are unable to reach agreement on repurchase of the assets during such fifteen (15) day period, then Buyer shall be free to sell, liquidate or otherwise dispose of the Royalty Generating Products in its sole discretion. The provisions of this Section 5.06 shall survive indefinitely.

Article VI
Indemnification

Section 6.01 Survival. Unless otherwise provided in this Agreement, all representations, warranties, covenants and agreements contained herein and all related rights to indemnification shall survive the Closing for a period of twenty-four (24) months following the Closing Date. However, the duties of Seller to pay royalties as set out in 1.03(b) and to maintain confidentiality as set out in 4.05 shall survive indefinitely.

Section 6.02 Indemnification By Seller and Owners Seller and Owners shall defend, indemnify and hold harmless Buyer, its affiliates and their respective stockholders, directors, officers and employees (“Buyer Indemnitees”) from and against all claims, judgments, damages, liabilities, settlements, losses, costs and expenses, including attorneys' fees and disbursements (“Losses”) incurred by Buyer arising from or relating to:

(a) any inaccuracy in or breach of any of the representations or warranties of Seller contained in this Agreement or any document to be delivered hereunder;

(b) any breach or non-fulfillment of any covenant, agreement or obligation to be performed by Seller pursuant to this Agreement or any document to be delivered hereunder; or

Section 6.03 Right to Set-Off. If, from time to time and at any time, Buyer in good faith, which is based on documents, evidence and facts, which can be reasonably substantiated, believes it is entitled to indemnification by Seller or is entitled to be paid any amount under the provisions of Section 6.02, Buyer shall be entitled, if it so elects in its sole discretion, at any time without requirement of a judgment or adjudication of its right to indemnification, to set-off such amount against any obligation of Buyer pursuant to the Assumed Liabilities. Neither the exercise of nor failure to exercise such right of set-off will constitute an election of remedies or limit Buyer in any manner in the enforcement of any other remedies that may be available to it. Such right of set-off shall be in addition to and not in substitution of any other rights to which Buyer may be entitled to under the provisions of Section 6.02 or otherwise. If Buyer elects to exercise its right to set-off against an Assumed Liability(ies), then the Parties agree that it shall be construed as if Seller had never assumed such Assumed Liability(ies) pursuant to this Agreement.

Section 6.04 Indemnification By Buyer. Buyer shall defend, indemnify and hold harmless Seller, its affiliates and their respective members, managers, officers and employees (“Seller Indemnitees”) from and against all Losses incurred by Buyer arising from or relating to:

(a) any inaccuracy in or breach of any of the representations or warranties of Buyer contained in this Agreement or any document to be delivered hereunder;

(b) any breach or non-fulfillment of any covenant, agreement or obligation to be performed by Buyer pursuant to this Agreement or any document to be delivered hereunder; or

(c) any Purchased Asset (arising on or after the Closing Date) or any Assumed Liability (Except as otherwise provided and subject to Section 6.03).

Section 6.05 Cumulative Remedies. The rights and remedies provided in this Article VI are cumulative and are in addition to and not in substitution for any other rights and remedies available at law or in equity or otherwise.

ARTICLE VII

Conditions Precedent to Closing

7.01 Buyer’s Conditions Precedent. The obligations of Buyer to perform the Agreement at Closing are subject to the following conditions precedent which shall be fully satisfied at or before the Closing, unless waived in writing by Buyer:

(a) On the Closing Date, the Purchased Assets shall be in substantially the same operating condition, repair and working order as they are on the Effective Date, reasonable wear and tear excepted.

(b) Seller shall have transferred at Closing to Buyer the Acquired Assets and placed Buyer in possession of the Purchased Assets. Buyer shall acquire good and marketable title to all of the Purchased Assets, free and clear of all Encumbrances.

(c) Seller shall have executed, as appropriate, and delivered to Buyer closing documents and any other documents of transfer of title contemplated hereby and all other documents necessary or desirable by Buyer for the sale and transfer of the Purchased Assets, which documents shall warrant title to Buyer consistent with this Agreement.

7.02 Seller’s Conditions Precedent. The obligations of Seller to perform the Agreement at Closing are subject to the following conditions precedent which shall be fully satisfied at or before the Closing, unless waived in writing by Seller:

(a) Buyer shall have assumed the obligations under any assumed contract.

(b) Buyer and Amy Goff shall have entered into a mutually agreeable employment agreement or offer letter for at-will employment of Amy Goff by Buyer.

Article VIII

Miscellaneous

Section 8.01 Expenses. All costs and expenses incurred in connection with this Agreement and the transactions contemplated hereby shall be paid by the party incurring such costs and expenses.

Section 8.02 Notices. All notices, requests, consents, claims, demands, waivers and other communications hereunder shall be in writing and shall be deemed to have been given (a) when delivered by hand (with written confirmation of receipt); (b) when received by the addressee if sent by a nationally recognized overnight courier (receipt requested); (c) on the date sent by facsimile or e-mail of a PDF document (with confirmation of transmission) if sent during normal business hours of the recipient, and on the next business day if sent after normal business hours of the recipient; or (d) on the [third] day after the date mailed, by certified or registered mail, return receipt requested, postage prepaid. Such communications must be sent to the respective parties at the following addresses (or at such other address for a party as shall be specified in a notice given in accordance with this Section 8.02):

If to Seller:	Uber Mom, LLC
	899 SR 540 West
	Winter Haven, FL 33880
	la.fla@icloud.com

With Copy to:	Peterson & Myers, PA
	242 W. Central Ave.
	Winter Haven, FL 33880
	Attn: Kevin Ashley
	kashley@petersonmyers.com

If to Buyer:	Edison Nation, Inc.
	520 Elliot Street
	Charlotte, NC 28202

With copy to:

Section 8.03 Headings. The headings in this Agreement are for reference only and shall not affect the interpretation of this Agreement.

Section 8.04 Severability. If any term or provision of this Agreement is invalid, illegal or unenforceable in any jurisdiction, such invalidity, illegality or unenforceability shall not affect any other term or provision of this Agreement or invalidate or render unenforceable such term or provision in any other jurisdiction.

Section 8.05 Entire Agreement. This Agreement including all attachments and schedules and the documents to be delivered hereunder constitute the sole and entire agreement of the parties to this Agreement with respect to the subject matter contained herein, and supersede all prior and contemporaneous understandings and agreements, both written and oral, with respect to such subject matter. In the event of any inconsistency between the statements in the body of this Agreement and the documents to be delivered hereunder, the Exhibits and Disclosure Schedules (other than an exception expressly set forth as such in the Disclosure Schedules), the statements in the body of this Agreement will control.

Section 8.06 Successors and Assigns. This Agreement shall be binding upon and shall inure to the benefit of the parties hereto and their respective successors and permitted assigns. Neither party may assign its rights or obligations hereunder without the prior written consent of the other party, which consent shall not be unreasonably withheld or delayed. No assignment shall relieve the assigning party of any of its obligations hereunder.

Section 8.07 Third-party Beneficiaries. The parties acknowledge and agree that Lisa Anne Kleine and Amy Goff are intended third-party beneficiaries under this Agreement to the extent of their respective right to receive the Common Stock and the Royalty Payments as set forth in 1.03. Except as provided in except as provided in 1.03 and Article VI, this Agreement is for the sole benefit of the parties hereto and their respective successors and permitted assigns and nothing herein, express or implied, is intended to or shall confer upon any other person or entity any legal or equitable right, benefit or remedy of any nature whatsoever under or by reason of this Agreement.

Section 8.08 Amendment and Modification. This Agreement may only be amended, modified or supplemented by an agreement in writing signed by each party hereto.

Section 8.09 Waiver. No waiver by any party of any of the provisions hereof shall be effective unless explicitly set forth in writing and signed by the party so waiving. No waiver by any party shall operate or be construed as a waiver in respect of any failure, breach or default not expressly identified by such written waiver, whether of a similar or different character, and whether occurring before or after that waiver. No failure to exercise, or delay in exercising, any right, remedy, power or privilege arising from this Agreement shall operate or be construed as a waiver thereof; nor shall any single or partial exercise of any right, remedy, power or privilege hereunder preclude any other or further exercise thereof or the exercise of any other right, remedy, power or privilege.

Section 8.10 Governing Law. This Agreement shall be governed by and construed in accordance with the internal laws of the State of Florida without giving effect to any choice or conflict of law provision or rule (whether of the State of Florida or any other jurisdiction).

Section 8.11 Submission to Jurisdiction. Any legal suit, action or proceeding arising out of or based upon this Agreement or the transactions contemplated hereby may be instituted in one of the state courts of the State of Florida located within Polk County, Florida, and each party irrevocably submits to the exclusive jurisdiction of such courts in any such suit, action or proceeding.

Section 8.12 Time is of the Essence. Time is of the essence of this Agreement.

Section 8.13 Waiver of Jury Trial. EACH PARTY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN RESPECT TO ANY SUIT, CLAIM, OR PROCEEDING RELATING TO THIS AGREEMENT.

Section 8.14 Counterparts. This Agreement may be executed in counterparts, each of which shall be deemed an original, but all of which together shall be deemed to be one and the same agreement. A signed copy of this Agreement delivered by facsimile, e-mail or other means of electronic transmission shall be deemed to have the same legal effect as delivery of an original signed copy of this Agreement.

[SIGNATURE PAGE FOLLOWS]

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed as of the date first written above by their respective officers thereunto duly authorized.

	UBER MOM, LLC

	By	/s/ Amy Goff
	Name: Amy Goff
	Title: Founder, Uber Mom, LLC

	/s/ Amy Goff
	Amy Goff

	/s/ Lisa Anne Kleine
	Lisa Anne Kleine

	EDISON NATION, INC.


	By	/s/ Chris Ferguson
	Name: Chris Ferguson
	Title: Chief Executive Officer

Exhibit 10.24

PURCHASE OF INVENTORY AND REPURCHASE AGREEMENT

Purchase Price	Repurchase Price
$200,000	$225,000

This Purchase of Inventory and Repurchase Agreement (“Agreement”) is made by and between Edison Nation, Inc. (“Edison Nation”), and the undersigned and/or nominee (“Purchaser - Assignee"), subject to the following terms and conditions:

Section 1. Purchase and Assignment. For good and valuable consideration, including the payment of $200,000 to Edison Nation, Edison Nation, as Assignor, sells, assigns, and transfers to the Purchaser - Assignee all right, title, and interest in and to inventory relating to Amazon accounts (“Inventory”).

Section 2. The parties agree that Purchaser - Assignee shall have a security interest in and to the Inventory until such time as Edison Nation repurchases the Inventory from JNT.

Section 3. Repurchase of Inventory. Edison Nation has the right to repurchase the Inventory Purchaser - Assignor for $225,000 (the “Repurchase Price”) in whole or in periodic installments by March 31, 2020.

Section 4. Liquidation of Inventory. Purchaser – Assignor has the right to liquidate all Inventory in the event that Edison Nation does not repurchase the Inventory.

Section 5. Representations of the Assignor. Edison Nation warrants and represents that the following statements are true to the Edison Nation’s knowledge, information and belief:

a. This Agreement is exclusive and made solely to Purchaser - Assignee.

b. The accounts stated in this Agreement are valid and fully collectible from the purchasers.

c. The goods underlying the assigned accounts have not be previously sold, conveyed, or encumbered by the Edison Nation or its agents.

Section 6. Governing Law. The laws of the State of New Jersey shall govern this Agreement.

Section 7. Guaranties. Chris Ferguson and NL Penn Capital, LP hereby guarantee that Edison Nation or another party will repurchase the Inventory for $225,000 by March 31, 2020.

Section 8. Attorney's Fees. Should any action be commenced between the parties to this Agreement concerning the matters set forth in this Agreement or the rights and duties of either in relation thereto, the prevailing party in such action shall be entitled, in addition to such other relief as may be granted, to a reasonable sum as and for its Attorney's Fees and Cost.

Section 9. Amendment. Any modification, amendment or change of this Agreement will be effective only if it is in a writing signed by both Partners.

Section 10. Headings. The titles to the paragraphs of this Agreement are solely for the convenience of the Partners and shall not affect in any way the meaning or interpretation of this Agreement.

Executed as of November 12, 2019:

EDISON NATION, INC.

/s/ Chris Ferguson
By: Chris Ferguson, CEO

GUARANTOR		GUARANTOR

		NL Penn Capital, LP

/s/ Chris Ferguson		/s/ Chris Ferguson
Chris Ferguson		By: Chris Ferguson
		Title: Authorized Agent

Executed as of November 12, 2019:

PURCHASER - ASSIGNEE

/s/ Claudia N. McFillin
Claudia N. McFillin

Executed as of November 12, 2019:

PURCHASER - ASSIGNEE

/s/ Joseph N. Tropea
Joseph N. Tropea

Exhibit 10.25

group u:sa FUTURE RECEIVABLES SALE AND PURCHASE AGREEMENT This agreement (this "Agreement"), dated November 18, 2019, between Velocity Group USA Inc. and the seller(s) listed herein (collectively, the "Seller") (all capitalized terms shall have the meanings ascribed to them below): Business Legal Name: EDISON NATION, LLC --------------------------------------------------------D/B/A: EDISON NATION EIN #: 82-2199200 Form of Business Entity: lie ---------------------------------Physical Address: 520 Elliot Street, Charlotte, NC, 28202 Mailing Address: 1758 Red Hawk Way, Bethlehem, PA, 18015 PURCHASED AMOUNT: $337,500.00 SPECIFIED PERCENTAGE: 10% INITIALINSTALLMENT: PURCHASE PRICE: $250,000.00 Cf f-€ 1 FOR SELLER #1 FOR SELLER #2 rl By: ---------Name: Title: Owner/Agent/Manager Title: Owner/Agent/Manager Email: _ Email: cferguson@edisonnation.com Business Phone: --------Business Phone: (610) 829-1039 *Accurate contact information is required to provide the Seller with important information regarding the Agreement. Concurrently with the execution of this Agreement by Seller, and as condition to the effectiveness hereof, Seller has caused the Personal Guarantee of Performance in the form attached hereto as "Exhibit A" (the "Guaranty") to be signed and delivered to Velocity Group USA Inc. by the following Owner(s)/Guarantor(s) of Seller OWNER/GUARANTOR #2 OWNER/GUARANTOR #1 By: Name: _ SSN: _ SSN: 146-78-4110 PHONE: _ PHONE: (610) 829-1039 Address: Address: 1758 Red Hawk Way, Bethlehem, PA, 18015 Furthermore, in the event the Seller and/or Guarantor are comprised of more than one entity and/or individuals, then ALL such entities and/or individuals, respectively, shall sign the Addendum to this Agreement in the form attached hereto as Exhibit B (the "Addendum"). 1 Velocity Group USA Inc. (11182019176639)

WHEREAS, S l er is desirous to sell to Velocity Group USA Inc., and Velocity Group USA Inc., is desirous to purchase from Seller a Spec1f1ed Percentage of the Seller's Future Receipts, but only on the terms and conditions set forth in this Agreement. NOW, THEREFORE, for ood anvaluable consideration, the mutual receipts and sufficiency of which is hereby acknowledged by both part1es, Veloc1ty Group USA Inc. and Seller hereby agree to the foregoing and as follows: l.Basic Terms and Definitions. a. "Effective Date" shall mean the later of: (i) the date set forth in the preamble to this Agreement, and (ii) the date when Velocity Group USA Inc. paid the Purchase Price to Seller. b. "Specified Percentage" shall mean the percentage set forth in the preamble to this Agreement of each and every sum from sale made by Seller of Future Receipts. c. "Future Receipts" shall mean, collectively, all of Seller's receipts of monies for the sale of its goods and services that monies shall be paid and delivered to Seller by Seller's customers and/or other vendees after the Effective Date of this Agreement; which payments or deliveries of monies can be made in the form of cash, check, credit, charge, or debit card, ACH or other electronic transfer or any other form of monetary payment and/or pecuniary benefit received by Seller."Weekly Receipts" shall mean the amount of Future Receipts received by Seller on a Weekly basis. d. "Purchased Amount" shall mean the total amount of the Specified Percentage of the Future Receipts that Seller shall be under obligation to deliver and pay over to Velocity Group USA Inc. pursuant to this Agreement. The Purchased Amount shall be the amount set forth under "Purchased Amount" in the preamble to this Agreement. e. "Purchase Price shall mean the total amount that Velocity Group USA Inc.. agrees to pay for the Purchased Amount. Note that theamount that Seller will actually receive from Velocity Group USA Inc. pursuant to this Agreement will be less than the Purchase Price by the total sum of the Applicable Fees, Prior Balance and the Origination Fee, if any, as set forth in subparagraphs i., j. and k. below. The Purchase Price is set forth in the Preamble to this Agreement. f. "Initial Weekly Installment" shall mean the fixed amount that Seller and Velocity Group USA Inc. agree to be a good faith approximation of the Specified Percentage of Seller's Weekly Future Receipts. Seller and Velocity Group USA Inc. further agree that the Initial Weekly Installment set forth in the Preamble to this Agreement is based upon the information provided by Seller to Velocity Group USA Inc. concerning Seller's most recent accounts receivables, including representations by the Seller to Velocity Group USA Inc. regarding the Seller's estimated Future Receipts, and subject to Seller's right of adjustment/reconciliation set forth in this Agreement. g. "Workday" shall mean Monday through Friday except on days when banking institutions are closed for the holidays and do not process ACH payments. h. "Applicable Fees" shall mean, collectively, all initial costs and fees that Seller agrees to pay to Velocity Group USA Inc. as consideration for agreeing to enter into this Agreement and that are described in Sections 17-19 of this Agreement. The total sum of the Applicable Fees will be deducted from the Purchase Price prior to delivering it to Seller pursuant to Seller's authorization set forth in Rider 3 to this Agreement, provided nevertheless that such deduction shall not be deemed to reduce the agreed upon Purchase Price or Purchased Amount. i. "Prior Balance" shall mean the sum of all amounts that Seller may owe to Velocity Group USA Inc. and/or third party(s) as of the Effective Date of this Agreement. The Prior Balance, if any, is described in Section 18 of this Agreement and will be deducted from the Purchase Price prior to delivering it to Seller pursuant to Seller's authorization set forth in Rider 2 to this Agreement, provided nevertheless that such deduction shall not be deemed to reduce the agreed upon Purchase Price. j. "Origination Fee" shall mean the fee that Velocity Group USA Inc. charges Seller for the costs of underwriting and processing Seller's application for funding. The Origination Fee, if any, is described in Section 19 of this Agreement and will be deducted from the Purchase Price prior to delivering it to Seller pursuant to Seller's authorization set forth in Rider 3 to this Agreement, provided nevertheless that such deduction shall not be deemed to reduce the agreed upon PurchasedPrice or Purchased Amount. k. In the event "Seller" is comprised of more than one entity, then: i. ii. The term "Seller" shall mean, individually and collectively, all such entities; and Each Seller is an "Affiliate" of all other Seller(s). The term "Affiliate" shall mean an entity or an individual that (1) controls, (2) is under the "Control", or (3) is under common Control with the entity or individual in question. The term "Control" shall mean direct or indirect ownership of more than 50% of the outstanding Velocity Group USA Inc. (11182019176639) 2

voting stock of a corporation or other majority equity interest if not a corporation and the possession of power to direct or cause the direction of the management and policy of such corporation or other entity, whether through ownership of voting securities, by stature, or by contract; and The representations, warranties, covenants, obligations and liabilities of each Seller shall be joint and 111. several under this Agreement; and iv. The liability of each Seller under this Agreement shall be direct and immediate and shall not be c onditional or contingent upon the pursuance of any remedies against any other person or entity; and v. The terms "Specified Percentage", "Future Receipts", "Weekly Receipts", "Initial Weekly Installment" shall mean the Specified Percentage, the Future Receipts and the Weekly Receipts of each Seller individually; and v. The terms "Specified Percentage", "Future Receipts", "Weekly Receipts ", "Initial Weekly Installment" shall mean the Specified Percentage, the Future Receipts and the Weekly Receipts of each Seller individually; and vi. Velocity Group USA Inc. may pursue its rights and remedies under this Agreement against any one or any number of entities that constitute Seller without obligation to assert, prosecute or exhaust any remedy or claim against any other Seller or any Guarantor. In the event "Guarantor" is comprised of more than one individual. then: i. The term "Guarantor" shall mean, individually and collectively, all such individuals; and ii. Each Guarantor is an Affiliate of all other Guarantor(s); and 111. The representations, warranties, covenants, obligations and liabilities of each Guarantor shall be joint and several under this Agreement and the Guaranty; and iv. The liability of each Guarantor under this Agreement and the Guaranty shall be direct and immediate and shall not be conditional or contingent upon the pursuance of any remedies against any other person or entity; and v. Velocity Group USA Inc. may pursue its rights and remedies under this Agreement and/or Guaranty against any one or any number of individuals that constitute Guarantor without obligation to assert, prosecute or exhaust any remedy or claim against any other Guarantor or any Seller. 2. The Term. This Agreement for the purchase and sale of Future Receipts does not have a fixed duration or term, which is potentially infinite. Subject to the provisions of Sections 10-13 hereof, the term of this Agreement shall commence on the Effective Date and expire on the date (the "Expiration Date") when the Purchased Amount and all I. other sums due to Velocity Group USA Inc. pursuant to this Agreement are received by Velocity Group USA Inc. in full. 3. Sale of Purchased Future Receipts. Seller hereby sells, assigns, transfers and conveys (hereinafter, the "Sale") unto Velocity Group USA Inc. all of Seller' s right. title and interest in to the Specified Percentage of the Future Receipts until the Purchased Amount shall have been delivered by Seller to Velocity Group USA Inc. (hereinafter, the portion of the Future Receipts sold by Seller to Velocity Group USA Inc. pursuant to this Agreement, the "Purchased Future Receipts" ); to have and hold the same unto Velocity Group USA Inc., its successors and assigns, forever. This Sale of the Purchased Future Receipts is made without express or implied warranty to Velocity Group USA Inc. of collectability of the Purchased Future Receipts by Velocity Group USA Inc. and without recourse against Seller and/or Guarantor(s), except as specifically set forth in this Agreement. By virtue of this Agreement, Seller transfers to Velocity Group USA Inc. full and complete ownership of the Purchased Future Receipts and Seller retains no legal or equitable interest therein. 4. Pa ment of Purchase Price . In consideration of the sale by Seller to Velocity Group USA Inc. of the Purchased Future Receipts pursuant to this Agreement, Velocity Group USA Inc. agrees to pay to Seller the Purchase Price; the amount of the Purchase Price (reduced by the Applicable Fees, Prior Balance, and Origination Fee, if any) shall be delivered to Seller after execution of this Agreement. 5. Use of Purchase Price . Seller hereby acknowledges that it fully understands that: (i) Velocity Group USA Inc.'s ability to collect the Purchased Amount (or any portion thereof) is contingent upon Seller's continued operation of its business and successful generation of the Future Receipts until the Purchased Amount is delivered to Velocity Group USA Inc. in full; and (ii) that in the event of decreased efficiency or total failure of Seller's business Velocity Group USA Inc.'s receipt of the full or any portion of the Purchased Amount may be delayed indefinitely. Based upon the forgoing, Seller agrees to use the Purchase Price exclusively for the benefit and advancement of Seller's business operations and for no other purpose. 6. Initial Weekly Installments of Purchased Amount. The Purchased Amount shall be delivered by Seller to Velocity Group USA Inc. Weekly in the amount of the Initial Weekly Installment on each and every Workday commencing on the Effective Date and ending on the Expiration Date. 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7. A roved Bank Account and Credit Card Processor. During the term of this Agreement, Seller shall: (i) deposit all Future Receipts into one (and only one) bank account which bank account shall be acceptable and preapproved by Velocity Group USA Inc. (the "A roved Bank Account"). (ii) use one (and only one) credit card processor which processor shall be acceptable and preapproved by Velocity Group USA Inc. (the "A roved Processor") and (iii) deposit all credit card receipts into the Approved Bank Account. In the event the Approved Bank Account or Approved Processor shall become unavailable or shall cease providing services to Seller during the term of this Agreement, prior to the first date of such unavailability or cessation of services, Seller shall arrange for another Approved Bank Account or Approved Processor, as the case may be. 8. Authorization to Debit A roved Bank Account. Seller hereby authorizes Velocity Group USA Inc. to initiate electronic checks or ACH debits from the Approved Bank Account (which as of the Effective Date of this Agreement shall be the account listed below) in the amount of the Initial Weekly Installment on each Workday commencing on the Effective Date until Velocity Group USA Inc. receives the full Purchased Amount; *Seller shall provide Velocity Group USA Inc. with all access code(s) for the Approved Bank Account. The Initial Weekly Installment is to be drawn via ACH payment, from the following bank account: i. Account Number: 5205222695 -----------------------------------------ii. Routing Number: 042102267 -----------------------------------------iii.Account Name: Edison Nation, LLC iii.Bank Name: BB&T ---------------------------------------------*NOTE that this authorization is to remain in full force and effect until Velocity Group USA Inc . receives written notification from Seller of its termination in such time and in such manner to afford Velocity Group USA Inc. a reasonable opportunity to act on it; provided, however, that revocation of this authorization prior to remittance of the balance under the Agreement shall constitute a breach thereunder, subject to Sections 10-13 herein. 9. Fees Associated with Debiting Approved Bank Account It shall be Seller's exclusive responsibility to pay to its banking institution and/or Velocity Group USA Inc.'s banking institution directly (or to compensate Velocity Group USA Inc., in case it is charged) all fees, charges and expenses incurred by either Seller or Velocity Group USA Inc. due to rejected electronic checks or ACH debit attempts, overdrafts or rejections by Seller's banking institution of the transactions contemplated by this Agreement, including without limitation a $35.00 charge per bounced or rejected ACH debit. 10. Seller's Ri ht for Reconciliation. Seller and Velocity Group USA Inc. each acknowledges and agrees that: a. If at any time during the term of this Agreement Seller will experience unforeseen decrease or increase in its Weekly Receipts, Seller shall have the right, at its sole and absolute discretion, but subject to the provisions of Section 11 below, to request retroactive reconciliation of the Initial Weekly Installments for one (1) full calendar month immediately preceding the day when such request for reconciliation is received by Velocity Group USA Inc. (each such calendar month, a "Reconciliation Month"). b. Such reconciliation (the "Reconciliation") of the Seller's Initial Weekly Installment for a Reconciliation Month shall be performed by Velocity Group USA Inc. within five (5) Workdays following its receipt of the Seller's request for Reconciliation by either crediting or debiting the difference back to, or from, the Approved Bank Account so that the total amount debited by Velocity Group USA Inc. from the Approved Bank Account during the Reconciliation Month at issue is equal to the Specific Percentage of the Future Receipts that Seller collected during the Reconciliation Month at issue. c. One or more Reconciliation procedures performed by Velocity Group USA Inc. may reduce or increase the effective Initial Weekly Installment amount during the Reconciliation Month in comparison to the one set forth in Section 1 of this Agreement, and, asthe result of such reduction, the term of this Agreement during which Velocity Group USA Inc. will be debiting the Approved Bank Account may get shortened or extended indefinitely. 11. Reguest for Reconciliation Procedure. a. It shall be Seller's sole responsibility and the right hereunder to initiate Reconciliation of Seller's actual Initial Weekly Installments during any Reconciliation Month by sending a request for Reconciliation to Velocity Group USA Inc.. 4 Velocity Group USA Inc. (11182019176639)

b. Any such request for Reconciliation of the Seller's Initial Weekly Installments for a specific Reconciliation Month shall be in writing, shall include a copy of Seller 's bank statement, credit card processing statements, and pertinent aging report(s) for the Reconciliation Month at issue, and shall be received by Velocity Group USA Inc. via email cclark@velocitygroupusa.com with the subject line "REQUEST FOR RECONCILIATION," within five (5) Workdays after the last day of the Reconciliation Month at issue (time being of the essence as to the last day of the period during which such demand for Reconciliation shall be received by Velocity Group USA Inc.). c. Velocity Group USA Inc.'s receipt of Seller's request for Reconciliation after the expiration of the five (5) Workday period following the last day of the Reconciliation Month for which such Reconciliation is requested nullifies and makes obsolete Seller's request for Reconciliation for that specific Reconciliation Month. d. Seller shall have the right to request Reconciliation as many times during the term of this Agreement as it deems proper, and Velocity Group USA Inc. shall comply with each such request, provided that: i.Each such request is made in accordance with the terms of this Section 11; and ii. If a request for Reconciliation is made after the expiration of the term of this Agreement and, as the result of such Reconciliation, the total amount actually debited by Velocity Group USA Inc. from the Approved Bank Account will become less than the Purchased Amount, then and in such event the term of this Agreement shall automatically be extended until the time when the total amount actually debited from Approved Bank Account pursuant to this Agreement shall become equal to the Purchased Amount. Nothing set forth in Sections 10 or 11 of this Agreement shall be deemed to: (i) provide Seller with the e. right to interfere with Velocity Group USA Inc.'s right and ability to debit the Approved Bank Account while the request for Reconciliation of Seller's receipts is pending or until the Purchased Amount is collected by Velocity Group USA Inc. in full, or (ii) modify the amount of the Initial Weekly Installment for any calendar month during the term of this Agreement other than during the Reconciliation Month (s) as the result of the Reconciliation. 12. Ad'ustment of the Initial Weeki Installment . Seller and Velocity Group USA Inc. each acknowledge and agree that: a. If at any time during the term of this Agreement Seller experiences a steady decrease in its Weekly Receipts, Seller shall have the right, at its sole and absolute discretion, but subject to the provisions of Section 13 below, to request modification ("Adjustment") of the amount of the Initial Weekly Installment that Seller is obligated to deliver Weekly to Velocity Group USA Inc. in accordance with the provisions of Section 6 above. Such Adjustment shall become effective as of the date it is granted and the new adjusted amount of the Initial Weekly Installment (the "Adjusted Weekly Installment") shall replace and supersede the amount of the Initial Weekly Installment set forth in Section 1above. b. The Adjustment of the Initial Weekly Installment shall be performed by Velocity Group USA Inc. within five (5) Workdays following its receipt of the Seller 's request for Adjustment by modifying the amount of the Initial Weekly Installment that shall be debited from the Approved Bank Account until the Purchased Amount is paid in full. Notwithstanding anything to the contrary set forth in Sections 12 and 13 hereof, no Adjustment shall take place until and unless Reconciliation for at least one (1) Reconciliation Month takes place resulting in the reduction of the total amount debited from Seller's Approved Bank Account during the Reconciliation Month by at least fifteen percent (15%) in comparison to the amount that would have been debited during that month without Reconciliation. c. One or more Adjustments performed by Velocity Group USA Inc. may substantially extend the term of this Agreement. 13. a. It shall be Seller's sole responsibility and the right to initiate the Adjustment by sending a request for Adjustment to Velocity Group USA Inc. b. A request for Adjustment (an "Adjustment Request") shall be in writing, and shall include copies of: (i) Seller's lastthree (3) consecutive bank statements of the Approved Bank Account, credit card processing 5 Velocity Group USA Inc. (11182019176639)

statements and any aging reports immediately preceding the date of Velocity Group USA Inc.'s receipt of the Adjustment Request, and (ii) Seller's bank statements and credit card processing statements previously provided by Seller to Velocity Group USA Inc. based upon which statements the amount of the Initial Weekly Installment set forth in Section 1 above (or the then current Adjusted Weekly Installment, as the case may be) was determined, and shall be received by Velocity Group USA Inc. by email at cclark@velocjtygroupusa.com, with the subject line "REQUEST FOR ADJUSTMENT," within five (5) Workdays after the date that is the later of (i) the last day of the latest bank statement enclosed with the Adjustment Request and (ii) the last date of the latest credit card processing statement enclosed with the Adjustment Request (time being of the essence as to the last day of the period during which an Adjustment Request shall be received by Velocity Group USA Inc.). c. Velocity Group USA Inc.'s receipt of a Seller's Adjustment Request after the expiration of the above referenced five (5) Workday period nullifies and makes obsolete such Adjustment Request. d. Seller shall have the right to request Adjustment of the Initial Weekly Installment, or the Adjusted Weekly Installment (as the case may be), as many times during the term of this Agreement as it deems proper, and Velocity Group USA Inc. shall comply in good faith with such request, provided that: i. Each such request for Adjustment is made in accordance with the terms of this Section 13; and ii. A request for Adjustment shall not be made after the Expiration Date. e. Nothing set forth in Sections 12 or 13 of this Agreement shall be deemed to provide Seller with the right to (i) interfere with Velocity Group USA Inc.'s right and ability to debit the Approved Bank Account while the request for Adjustment is pending or until the Purchased Amount is collected by Velocity Group USA Inc. in full or (ii) request Adjustment retroactively for the portion of the term of this Agreement preceding the date of an Adjustment Request. a. Notwithstanding anything to the contrary set forth in this Agreement, Seller shall have the right, at any time after receipt from Velocity Group USA Inc. of the Purchase Price, and upon obtaining Velocity Group USA Inc .'s prior written consent, to accelerate delivery to Velocity Group USA Inc. of the then undelivered portion of the Purchased Amount of Future Receipts (such amount, the "Ou stand PAFR"). The delivery of the Outstanding PAFR shall be governed by the following subparagraphs b. The Outstanding PAFR can only be delivered in full and not partially. c. Seller shall request the right to accelerate the delivery of the Outstanding PAFR by notifying Velocity Group USA Inc. to that effect; provided that such notice shall be in writing (an email delivery shall be deemed acceptable) and shall contain the information on the source(s) of the funds to be used for delivery of the Outstanding PAFR and on the approximate date of such delivery. d. Velocity Group USA Inc. shall respond to Seller's request within three (3) Workdays from the date of its receipt by Velocity Group USA Inc.. In its response to Seller's request, Velocity Group USA Inc. shall indicate the exact amount of the Outstanding PAFR as of the date of its delivery by Seller.Velocity Group USA Inc. shall respond to Seller's request within three (3) Workdays from the date of its receipt by Velocity Group USA Inc.. As of the date agreed upon as between Velocity Group USA Inc. and Seller, Seller shall deliver to Velocity Group USA Inc. the full amount of the Outstanding PAFR (such date, the "Accelerated Delivery e. f. Date"). g. Under no circumstances shall Seller suspend or modify, or cause to be suspended or modified, the delivery to Velocity Group USA Inc. of the Initial Weekly Installments prior to the delivery of the Outstanding PAFR to Velocity Group USA Inc.. h. Upon delivery of the Outstanding PAFR to Velocity Group USA Inc. in compliance with the provisions of this Section 14, Seller's obligations to Velocity Group USA Inc. pursuant to this Agreement shall be deemed completed and fulfilled. 6 Velocity Group USA Inc. (11182019176639)

15. a. Velocity Group USA Inc. shall notify the Approved Bank Account and request from it to stop transferring Initial Weekly Installments to Velocity Group USA Inc.·s· bank account. b. If Velocity Group USA Inc. shall have received one or more Initial Weekly Installment (or Adjusted Weekly Installment, as the case may be) after the Accelerated Delivery Date (due to the Approved Bank's delay in processing Velocity Group USA Inc.'s request described in subparagraph (a) above or for any other reason). Velocity Group USA Inc. shall immediately do one of the two following things (but not both): i. Return to Seller the total sum of the Initial Weekly Installments (or the Adjusted Weekly Installments, as the case may be) received by Velocity Group USA Inc. after the date of delivery of the Outstanding PAFR to Velocity Group USA Inc.; or Apply the total sum of the Initial Weekly Installments (or the Adjusted Weekly Installments, as the case may be) received by Velocity Group USA Inc. after the Accelerated Delivery Date toward Seller's outstanding financial obligations to Velocity Group USA Inc. existing as of the Accelerated Delivery Date for reasons unrelated to this Agreement (if any). By way of example, if as of the Accelerated Delivery Date, Seller and Velocity Group USA Inc. would be parties to a another future receivables sale and purchase agreement in connection with a portion of Seller's Future Receipts that is not subject to this Agreement (such agreement, an "Unrelated Future A reement"). then and in such event Velocity Group USA Inc. may, in its sole and absolute discretion, apply the sum of the Initial Weekly Installments (or the Adjusted Weekly Installments, as the case may be) received by Velocity Group USA Inc. after the Accelerated Delivery Date pursuant to this Agreement toward fulfilling Seller's obligations to Velocity Group USA Inc. pursuant to the Unrelated Future Agreement. ii. A. c. Seller acknowledges and agrees that Velocity Group USA Inc. shall have the right to apply the total sum of the Initial Weekly Installments (or Adjusted Weekly Installments, as the case may be) received by Velocity Group USA Inc. after the Accelerated Delivery Date toward Seller's outstanding financial obligations to Velocity Group USA Inc. existing as of the Accelerated Delivery Date for reasons unrelated to this Agreement (if any) in exchange for, and as an adequate and sufficient consideration for, Velocity Group USA Inc. granting Seller the right to accelerate the payment of the Purchased Amount of Future Receipts. 16. Risk Sharing Acknowledgments and Arran ements. a. Seller and Velocity Group USA Inc. each hereby acknowledges and agrees that: i. ii. The Purchased Future Receipts represent a portion of Seller's Future Receipts. This Agreement consummates the sale of the Purchased Future Receipts at a discount, not the borrowing of funds by Seller from Velocity Group USA Inc. Velocity Group USA Inc. does not charge Seller and will not collect from Seller any interest on the monies used by Velocity Group USA Inc. for the purchase of the Purchased Future Receipts. The period of time that it will take Velocity Group USA Inc. to collect the Purchased Amount is not fixed, is unknown to both parties as of the Effective Date of this Agreement and will depend on how well or not well Seller's business will be performing following the Effective Date. As an extreme example, in the event Seller's business ceases to exist after Velocity Group USA Inc.'s purchase of the Purchased Future Receipts as a result of a drying up of revenues for reasons outside Seller's control, Velocity Group USA Inc. may never collect all or a substantial portion of the Purchased Future Receipts and will never recover the moneys it spent on such purchase. 7 Velocity Group USA Inc. (1118201917 6639)

iii. The amount of the Initial Weekly Installment set forth in Section 1of this Agreement is calculated based upon the information concerning an average amount of Weekly Receipts collected by Seller's business immediately prior to the Effective Date of this Agreement. as well as representations regarding the Seller's estimated Future Receipts, which information was provided by the Seller to Velocity Group USA Inc. The amounts of Seller's future Weekly Receipts may increase or decrease over time. If, based upon the Reconciliation and/or the Adjustment procedures described above, it will be determined that the actual Weekly amounts of the Specified Percentage of the Future Receipts get reduced in comparison to the amount of the Initial Weekly Installment as of the Effective Date set forth in Section 1 of this Agreement, and in comparison to the amount that both Seller and Velocity Group USA Inc. may have anticipated or projected because Seller's business has slowed down, or if the full Purchased Amount is not remitted because Seller's business went bankrupt or otherwise ceased operations in the ordinary course of business (but not due to Seller's willful or negligent mishandling of its business or due to Seller's failure to comply with its obligations under this Agreement). Seller would not be in breach of or in default under this Agreement. iv. v. b. Velocit Grou USA Inc.'s Risk Acknowled ments. Velocity Group USA Inc. agrees to purchase the Purchased Future Receipts knowing the risks that Seller's business may slow down or fail, and Velocity Group USA Inc. assumes this risk based exclusively upon the information provided to it by Seller and related to the business operations of Seller's business prior to the date hereof, and upon Seller's representations, warranties and covenants contained in this Agreement that are designed to give Veloc ity Group USA Inc. a reasonable and fair opportunity to receive the benefit of its bargain. Furthermore, Velocity Group USA Inc. hereby acknowledges and agrees that Seller shall be excused from performing its obligations under this Agreement in the event Seller's business ceases its operations exclusively due to the following reasons (collectively, the "Valid Excuses"): i. adverse business conditions that occurred for reasons outside Seller's control and not due to Seller's willful or negligent mishandling of its business; loss of the premises where the business operates (but not due to Seller's breach of its obligations to its landlord). provided however that Seller does not continue and/or resume business operations at another location; bankruptcy of Seller; and/or natural disasters or similar occurrences beyond Seller's control. plication of Amounts Received b Velocity Group USA Inc. Velocity Group USA Inc. reserves ii. iii. iv. c. A the right to apply amounts received by it under this Agreement to any fees or other charges due to Velocity Group USA Inc. from Seller prior to applying such amounts to reduce the outstanding amount of the Purchased Amount. Any ACH payments and/or payments which clear after the Effective Date of this Agreement shall be applied to the balance hereunder. d. Not a Loan. Seller and Velocity Group USA Inc. agree that the Purchase Price is paid to Seller in consideration for the acquisition of the Purchased Future Receipts and that payment of the Purchase Price by Velocity Group USA Inc. is not intended to be, nor shall it be construed as, a loan from Velocity Group USA Inc. to Seller that requires absolute and unconditional repayment on a maturity date. To the contrary, Velocity Group USA Inc.'s ability to receive the Purchased Amount pursuant to this Agreement, and the date when the Purchased Amount is delivered to Velocity Group USA Inc. in full (if ever) are subject to and conditioned upon performance of Seller's business. If, nevertheless, a court having jurisdiction over this Agreement and the parties hereto shall have determined that Velocity Group USA Inc. has charged or received interest hereunder in excess of the highest rate allowed by law, then the rate of such interest received by Velocity Group USA Inc. shall automatically be reduced to the maximum rate permitted by applicable law and Velocity Group USA Inc. shall promptly refund to Seller any interest received by Velocity Group USA Inc. in excess of the maximum lawful rate. 17. Applicable Fees. Seller acknowledges that the Applicable Fees were agreed upon between Seller and Velocity Group USA Inc. prior to Seller entering into this Agreement, were subject to arm-length negotiation between Velocity Group USA Inc. and Seller, and a list of any of the Applicable Fees is set forth in Rider 3 of this Agreement, which is attached hereto and made a part hereof. 8 Velocity Group USA Inc. (11182019176639)

18. Prior Balance. Seller represents and warrants that Rider 2, which is attached hereto and made a part hereof, contains true and correct information as to the name(s) of Seller's creditors and the amounts that Seller owes each of those creditors as of the Effective Date (and these amounts being a portion of the Prior Balance). and that as of the date hereof there are no creditors of Seller which may otherwise encumber the Purchased Future Receipts other than those listed in Rider 2. Seller indemnifies and holds harmless Velocity Group USA Inc. for any and all damages and losses (including without limitation legal fees and expenses) incurred by Velocity Group USA Inc. as the result of such representation being untrue, incorrect or incomplete. Origination Fee Seller hereby agrees for Velocity Group USA Inc. to withhold from the Purchase Pricethe Origination Fee contained in Rider 3, which is attached hereto and made a part hereof. No Reduction of Purchase Price. Seller hereby: (i) agrees to pay the Applicable Fee, the Prior Balance and the 19. 20. Origination Fee (the sum of those, hereinafter, the "Closing Costs") in full; (ii) hereby authorizes Velocity Group USA Inc. to apply a portion of the Purchase Price due to Seller pursuant to this Agreement toward satisfaction of Seller's obligation to pay the Closing Costs by deducting the amount of the Agreement Fees from the Purchase Price prior to delivering it to Seller; and (iii) agrees that deduction of the Closing Costs from the Purchase Price shall not be deemed to be a reduction of the Purchase Price. REPRESENTATIONS, WARRANTIES AND COVENANTS 21. Seller represents, warrants and covenants that as of this date and during the term of this Agreement: a. Financial Condition and Financial Information. Seller's bank and financial statements, copies of which have been furnished to Velocity Group USA Inc., and future statements which may be furnished hereafter pursuant to this Agreement or upon Velocity Group USA Inc. 's request, fairly represent the financial condition of Seller as of the dates such statements were issued, and prior to execution of the Agreement there has been no material adverse changes, financial or otherwise, in such condition, operation or ownership of Seller. Seller has a continuing, affirmative obligation to advise Velocity Group USA Inc. of any material adverse change in its financial condition, operation or ownership, and/or online banking log-in credentials. Velocity Group USA Inc. may request Seller's bank statements at any time during the term of this Agreement and Seller shall provide them to Velocity Group USA Inc. within two (2) Workdays. Seller's failure to do so, and/or cutting off Velocity Group USA Inc.'s online access to the Approved Bank Account, is a material breach of this Agreement. b. Governmental A rovals. Seller is in compliance and, during the term of this Agreement, shall be in compliance with all laws and has valid permits, authorizations and licenses to own, operate and lease its properties and to conduct the business in which it is presently engaged. c. Good Standing. Seller is a corporation/limited liability company/limited partnership/other type of entity that is in good standing and duly incorporated or otherwise organized and validly existing under the laws of its jurisdiction of incorporation or organization and has full power and authority necessary to carry its business as it is now being conducted. d. Authorization. Seller has all requisite power to execute, deliver and perform this Agreement and consummate the transactions contemplated hereunder; entering into this Agreement will not result in breach or violation of, or default under, any agreement or instrument by which Seller is bound or any statute, rule, regulation, order or other law to which Seller is subject, nor require the obtaining of any consent, approval, permit or license from any governmental authority having jurisdiction over Seller. All organizational and other proceedings required to be taken by Seller to authorize the execution, delivery and performance of this Agreement have been taken. The person signing this Agreement on behalf of Seller has full power and authority to bind Seller to perform its obligations under this Agreement. e. Accountin Records and Tax Returns. Seller will treat receipt of the Purchase Price and payment of the Purchased Amount in a manner evidencing sale of its future receipts in its accounting records and tax returns and further agrees that Velocity Group USA Inc. is entitled to audit Seller's accounting records upon reasonable notice in order to verify compliance. Seller hereby waives any rights of privacy, confidentiality or taxpayer privilege in any litigation or arbitration arising out of this Agreement in which Seller asserts that this transaction is anything other than a sale of future receipts. f. Taxes; Workers Compensation Insurance. Seller has paid and will promptly pay, when due, all taxes, including without limitation, income, employment, sales and use taxes, imposed upon Seller's business by law, and will maintain workers compensation insurance required by applicable governmental authorities. 9 Velocity Group USA Inc. (11182019176639)

g. Business Insurance. Seller maintains and will maintain general liability and business-interruption insurance naming Velocity Group USA Inc. as loss payee and additional insured in the amounts and against risks as are satisfactory to Velocity Group USA Inc. and shall provide Velocity Group USA Inc. proof of such insurance upon request. h. Electronic Check Processin A reement. Seller shall not change its Approved Processor, add terminals, change its Approved Bank Account(s) or take any other action that could have any adverse effect upon Seller's obligations or impede Velocity Group USA Inc.'s rights under this Agreement, without Velocity Group USA Inc.'s prior written consent. i. No Diversion of Future Recei ts. Seller shall not allow any event to occur that would cause a diversion of any portion of Seller's Future Receipts from the Approved Bank Account or Approved Processor without Velocity Group USA Inc.'s written permission. j. Chan e of Name or Location. Seller, any successor-in-interest of Seller, and Guarantor shall not conduct Seller's businesses under any name other than as disclosed to the Approved Processor and Velocity Group USA Inc., shall not change and/or transfer ownership in/of the Seller and will not change any of its places of business without first obtaining Velocity Group USA Inc.'s written consent. k. Prohibited Business Transactions. Seller shall not: (i) transfer or sell all or substantially all of its assets (including without limitation the Collateral (as such term is defined in Section 22) or any portion thereof) without first obtaining Velocity Group USA Inc.'s consent; or (ii) make or send notice of its intended bulk sale or transfer. I. No Closin of Business. Seller will not sell, dispose, transfer or otherwise convey all or substantially all of its business or assets without first: (i) obtaining the express written consent of Velocity Group USA Inc., and (ii) providing Velocity Group USA Inc. with a written agreement of a purchaser or transferee of Seller's business or assets to assume all of Seller's obligations under this Agreement pursuant to documentation satisfactory to Velocity Group USA Inc. Seller represents that it has no current plans to close its business either temporarily (for renovations, repairs or any other purpose). or permanently. Seller agrees that until Velocity Group USA Inc. shall have received the Purchased Amount in full, Seller will not voluntarily close its business on a permanent or temporarily basis for renovations, repairs, or any other purposes. Notwithstanding the foregoing, Seller shall have the right to close its business temporarily if such closing is necessitated by a requirement to conduct renovations or repairs imposed upon Seller's business by legal authorities having jurisdiction over Seller's business (such as from a health department or fire department). or if such closing is necessitated by circumstances outside Seller's reasonable control. Prior to any such temporary closure of its business, Seller shall provide Velocity Group USA Inc. ten (10) business days advance notice. m. No Pendin Bankru tc , As of the date of Seller's execution of this Agreement, Seller is not insolvent, has not filed,and does not contemplate filing, any petition for bankruptcy protection under Title 11 of the United States Code and there has been no involuntary bankruptcy petition brought or pending against Seller. Seller represents that it has not consulted with a bankruptcy attorney on the issue of filing bankruptcy or some other insolvency proceeding within six months immediately preceding the date of this Agreement n. Estoppel Certificate. Seller will at any time, and from time to time, upon at least one (1) day 's prior notice from Velocity Group USA Inc. to Seller, execute, acknowledge and deliver to Velocity Group USA Inc. and/or to any other person or entity specified by Velocity Group USA Inc., a statement certifying that this Agreement is unmodified and in full force and effect (or, if there have been modifications, that the same is in full force and effect as modified and stating the modification(s) and stating the date(s) on which the Purchased Amount or any portion thereof has been repaid. o. Unencumbered Future Recei ts. Seller has and will continue to have good, complete and marketable title to all Future Receipts, free and clear of any and all liabilities, liens, claims, changes, restrictions, conditions, options, rights, mortgages, security interests, equities, pledges and encumbrances of any kind or nature whatsoever or any other rights or interests other than by virtue or entering into this Agreement. Seller specifically warrants and represents that it is not currently bound by the terms of any future receivables and/or factoring agreement which may encumber in any way the Future Receipts. p. No Stackin Seller shall not further encumber the Future Receipts, without first obtaining written consent of Velocity Group USA Inc. 10 Velocity Group USA Inc. (11182019176639)

q. Business Pur ose. Seller is entering into this Agreement solely for business purposes and not as a consumer for personal. family or household purposes. r. No Default Under Contracts with Third Parties. Seller's execution of and/or performance of its obligations under this Agreement will not cause or create an event of default by Seller under any contract, which Seller is or may become a party to. s. Ri ht of Access. In order to ensure Seller's compliance with the terms of this Agreement, Seller hereby grants Velocity Group USA Inc. the right to enter, without notice, the premises of Seller's business for the purpose of inspecting and checking Seller's transaction processing terminals to ensure the terminals are properly programmed to submit and/or batch Seller's Weekly receipts to the Approved Processor and to ensure that Seller has not violated any other provision of this Agreement. Furthermore, Seller hereby grants Velocity Group USA Inc. and its employees and consultants access to Seller's employees and records and all other items of property located at the Seller's place of business during the term of this Agreement. Seller hereby agrees to provide Velocity Group USA Inc., upon request, all and any information concerning Seller's business operations, banking relationships, names and contact information of Seller's suppliers, vendors and landlord(s), to allow Velocity Group USA Inc. to interview any of those parties. t. Phone Recordin s and Contact. Seller agrees that any call between Seller and Velocity Group USA Inc. and its owners, managers, employees and agents may be recorded and/or monitored. Furthermore, Seller acknowledges and agrees that: (i) it has an established business relationship with Velocity Group USA Inc., its managers. employees and agents (collectively, the "Velocity Group USA Inc. Parties") and that Seller may be contacted by any of the Velocity Group USA Inc. Parties from time-to-time regarding Seller's performance of its obligations under this Agreement or regarding other business transactions; (ii) it will not claim that such communications and contacts are unsolicited or inconvenient; and (iii) any such contact may be made by any of the Velocity Group USA Inc. Parties in person or at any phone number (including mobile phone number). email addresses. or facsimile number belonging to Seller's office, or its owners, managers, officers. or employees. u. Knowled e and Ex erience of Decision Makers. . The persons authorized to make management and financial decisions on behalf Seller with respect to this Agreement have such knowledge, experience and skill in financial and business matters in general and with respect to transactions of a nature similar to the one contemplated by this Agreement so as to be capable of evaluating the merits and risks of, and making an informed business decision with regard to, Seller entering into this Agreement. v. Seller's Due Dili ence. The person authorized to sign this Agreement on behalf of Seller: (i) has received all information that such person deemed necessary to make an informed decision with respect to a transaction contemplated by this Agreement; and (ii) has had unrestricted opportunity to make such investigation as such person desired pertaining to the transaction contemplated by this Agreement and verify any such information furnished to him or her by Velocity Group USA Inc. w. Consultation with Counsel. The person(s) signing this Agreement of behalf of Seller: (a) has read and fully understands the content of this Agreement; (b) has consulted to the extent he/she wished with Seller's own counsel in connection with the entering into this Agreement; (c) has made sufficient investigation and inquiry to determine whether this Agreement is fair and reasonable to Seller, and whether this Agreement adequately reflects his or her understanding of its terms. x. Velocit Grou USA Inc.'s Consent. Seller agrees that in every instance Seller's rights under this Agreement are contingent upon first obtaining Velocity Group USA Inc.'s consent, such consent may be withheld, granted or conditioned at Velocity Group USA Inc.'s sole and absolute discretion. Y. No Reliance on Oral Re resentations. This Agreement contains the entire agreement between Seller and Velocity Group USA Inc. with respect to the subject matter of this Agreement and supersedes each course of conduct previously pursued or acquiesced in, and each oral agreement and representation previously made, by Velocity Group USA Inc. or any of the Velocity Group USA Inc. Parties with respect thereto (if any). whether or not relied or acted upon. No course of performance or other conduct subsequently pursued or acquiesced in, and no oral agreement or representation subsequently made, by the Velocity Group USA Inc. Parties, whether or not relied or acted upon, and no usage of trade, whether or not relied or acted upon, shall amend this Agreement or impair or otherwise affect Seller's obligations pursuant to this Agreement or any rights and remedies of the parties to this Agreement. 11 Velocity Group USA Inc. (11182019176639)

Z. No Additional Fees Char ed. Seller hereby acknowledges and agrees that: (i) other than the Closing Costs, if any, set forth in Sections 17-19 herein, Velocity Group USA Inc. is NOT CHARGING ANY ADDITIONAL FEES OR CLOSING COSTS to Seller; and (ii) if Seller is charged with any fee and/or cost not listed in Sections 17-19 hereof, such fee is not charged by Velocity Group USA Inc.. Moreover, as all working capital received under this Agreement is required to ensure Seller 's continued success, Seller warrants and covenants not to pay any fee and/or commission with regard to this transaction other than as provided for herein. PLEDGE OF SECURITY 22. Pled e. As security for the prompt and complete payment and performance of any and all liabilities, obligations, covenants or agreements of Seller under this Agreement (and any future amendments of this Agreement, if any) (hereinafter referred to collectively as the "Obligations"). Seller hereby pledges, assigns and hypothecates to Velocity Group USA Inc. (collectively, "Pledge") and grants to Velocity Group USA Inc. a continuing, perfected and first priority lien upon and security interest in, to and under all of Seller's right, title and interest in and to the following (collectively, the "Collateral"). whether now existing or hereafter from time to time acquired: a. all accounts, including without limitation, all deposit accounts, accounts-receivable, and other receivables, chattel paper, documents, equipment, general intangibles, instruments, and inventory, as those terms a r e defined by Article 9 of the Uniform Commercial Code (the "UCC"). now or hereafter owned or acquired by Seller; and b all Seller's proceeds, as such term is defined by Article 9 of the UCC. 23. Termination of Pled e.Upon the payment and performance by Seller in full of the Obligations, the security interest in the Collateral pursuant to this Pledge shall automatically terminate without any further act of either party being required, and all rights to the Collateral shall revert to Seller. Upon any such termination, Velocity Group USA Inc. will execute, acknowledge (where applicable) and deliver such satisfactions, releases and termination statements, as Seller shall reasonably request. Re resentations with Res ect to Collateral. Seller hereby represents and warrants to Velocity Group USA Inc. 24. that the execution, delivery and performance by Seller of this Pledge, and the remedies in respect of the Collateral under this Pledge (i) have been duly authorized; (ii) do not require the approval of any governmental authority or other third party or require any action of, or filing with, any governmental authority or other third party to authorize same (other than the filing of the UCC -1s); and (iii) do not and shall not (A) violate or result in the breach of any provision of law or regulation, any order or decree of any court or other governmental authority, and/or (B) violate, result in the breach of or constitute a default under or conflict with any indenture, mortgage, deed of trust, agreement or any other instrument to which Seller is a party or Further Assurances. Upon the request of Velocity Group USA Inc., Seller, at Seller's sole cost and expense, shall 25. execute and deliver all such further UCC-1s, continuation statements, assurances and assignments of the Collateral and consents with respect to the pledge of the Collateral and the execution of this Pledge, and shall execute and deliver such further instruments, agreements and other documents and do such further acts and things, as Velocity Group USA Inc. may request in order to more fully effectuate the purposes of this Pledge and the assignment of the Collateral and obtain the full benefits of this Pledge and the rights and powers herein created 26. Attorne -in-Fact. Seller hereby authorizes Velocity Group USA Inc. at any time to take any action and to execute any instrument, including without limitation to file one or more financing statements and/or continuation statements, to evidence and perfect the security interest created hereby and irrevocably appoints Velocity Group USA Inc. as its true and lawful attorney-in-fact, which power of attorney shall be coupled with an interest, with full authority in the place and stead of Seller and in the name of Seller or otherwise, from time to time, in Velocity Group USA Inc.'s sole and absolute discretion, including without limitation (a) for the purpose of executing such statements in the name of and on behalf of Seller, and thereafter filing any such financ ing and/or continuation statements, and (b) to receive, endorse and collect all instruments made payable to Seller. EVENTS OF DEFAULT AND REMEDIES 27. Events of Default. The occurrence of any of the following events shall constitute an "Event of Default" by Seller: a. Seller shall violate any term, condition or covenant in this Agreement governing Seller's obligations of timely delivery and in full of Initial Weekly Installments (or Adjusted Weekly Installments, as the case may be) to Velocity Group USA Inc., and timely and in full payment to Velocity Group USA Inc. of any other sums due for any reason whatsoever other than as the result of Seller's business ceasing its operations exclusively due to any of the Valid Excuses. 12 Velocity Group USA Inc. (11182019176639)

b. Any representation or warranty by Seller made in this Agreement shall prove to have been incorrect, false or misleading in any material respect when made. Seller shall default under any of the terms, covenants and conditions of any other agreement with Velocity Group USA lnc.(if any) which is related to the instant Agreement. · Seller uses multiple depository accounts without obtaining prior written consent of Velocity Group USA Inc. in each instance. Seller fails to deposit any portion of its Future Receipts into the Approved Bank Account; Seller changes the Approved Bank Account or Approved Processor without obtaining prior written consent of Velocity Group USA Inc. in each instance. Seller interferes with Velocity Group USA Inc. collection of Initial Weekly Installments (or Adjusted Weekly Installments, as the case maybe), or if there are two (2) or more ACH transactions attempted by Velocity Group USA Inc.that are rejected by Seller's bank for any reason. The Guaranty shall for any reason cease to be in full force and effect. c. d. e. f. g. h. 28. Default under the A reement. In case any Event of Default occurs and is not waived by Velocity Group USA Inc., in writing, Velocity Group USA Inc. may declare Seller in default under this Agreemen ho ot l'lt1tlte. .i_..., W ( .f+... WC" c '11'\. t>C)I - • c.F 29. Seller's Obligations Upon Default. Upon occurrence of an Event of Default due to Seller's breach of its obligations under this Agreement, Seller shall immediately deliver to Velocity Group USA Inc. the entire unpaid portion of the Purchased Amount. In addition, Seller shall also pay to Velocity Group USA Inc., as additional damages, any reasonable expenses incurred by Velocity Group USA Inc. in connection with recovering the monies due to Velocity Group USA Inc. from Seller pursuant to this Agreement, including without limitation the costs of retaining collection firms and reasonable attorneys' fees and disbursements (collectively,"Reasonable Damages"). The parties agree that Velocity Group USA Inc. shall not be required to itemize or prove its Reasonable Damages and that the fair value of the Reasonable Damages shall be calculated as thirty-three percent (33%) of the undelivered portion of the Purchased Amount of Future Receipts upon the occurrence of an event of default, or five thousand dollars ($5,000.00). whichever is greater. The entire sum due to Velocity Group USA Inc. pursuant to this Section 29 shall bear simple interest from the Default Payment Date until is paid in full, at the rate of 9.00% per annum (and such interest shall accrue Weekly). Remedies U on Default. Upon Seller's default, Velocity Group USA Inc. may immediately proceed to protect and enforce its rights under this Agreement and/or Guaranty by: 30. a. Enforcing its rights as a secured creditor under the Uniform Commercial Code including, without limitation, notifying any account debtor(s) of Seller as the term is defined below, of Velocity Group USA Inc.'s security interest; Enforcing the provisions of the Personal Guarantee of Performance against the Guarantor(s) without first seeking recourse from Seller; Filing the affidavit of confession of judgment (the "Affidavit"). if any, executed by the Guarantor(s). individually and on Seller's behalf, jointly and severally, in connection with this Agreement in the amount of the unpaid portion of the Purchased Amount, plus the Reasonable Damages, entering judgment with the Clerk of the Court, without notice, and executing thereon (NOTE THAT THIS CONFESSION OF JUDGMENT PROVISION CONSTITUTES A WAIVER OF IMPORTANT RIGHTS THAT SELLER AND/GUARANTOR MAY HAVE AS PARTIES IN DEFAULT UNDER THE TERMS OF THIS AGREEMENT AND/OR GUARANTY, AND ALLOWS Velocity Group USA Inc. TO OBTAIN A JUDGMENT AGAINST EITHER SELLER AND/OR GUARANTOR WITHOUT NOTICE); Notifying Seller's credit card processor of the sale of Future Purchase Receipts hereunder and to direct such credit card processor to make payment to Velocity Group USA Inc. of all or any portion of the amounts received by such credit card processor on behalf of Seller. Commencing a suit in law and/or equity, whether for the specific performance of any covenant, agreement or other provision contained herein, or to enforce the discharge of Seller's obligations hereunder (including the Personal Guarantee) or any other legal or equitable right or remedy including without limitation Velocity Group USA Inc.'s rights of a secured party under the UCC. b. c. d. e. cJ... C<.dl.() a.J ( joe.o) h -/4(\-v'/ f. ('< ·I v0\ Five. d c v(e. q IJil to<:-C¥-a d fo..sl.f , no ict { 13 Velocity Group USA Inc. (11182019176639)

31. Remedies are not Exclusive. All rights, powers and remedies of Velocity Group USA Inc. in connection with this Agreement set forth herein may be exercised at any time after the occurrence of any Event of Default, are cumulative and not exclusive and shall be in addition to any other rights, powers or remedies provided to Velocity Group USA Inc. by law or equity. 32. Power of Attorne . Seller irrevocably appoints Velocity Group USA Inc. and its representatives as its agents and attorneys-in-fact with full authority to take any action or execute any instrument or document to do the following: (A) to settle all obligations due to Velocity Group USA Inc. from any credit card processor and/or account debtor(s) of Seller; (B) upon occurrence of an Event of Default to perform any and all obligations of Seller under this Agreement, including without limitation (i) to protect the value of the Collateral by obtaining the required insurance; (ii) to collect monies due or to become due under or in respect of any of the Collateral; (iii) to receive, endorse and collect any checks, notes. drafts, instruments, documents or chattel paper in connection with clause (i) or clause (ii) above; (iv) to sign Seller's name on any invoice, bill of lading, or assignment directing customers or account debtors, as that term is defined by Article 9 of the Uniform Commercial Code ("Account Debtors"). to make payment directly to Velocity Group USA Inc. (including providing information necessary to identify Seller); and (v) to file any claims or take any action or institute any proceeding which Velocity Group USA Inc. may deem necessary for the collection of any of the unpaid Purchased Amount from the Collateral, or otherwise to enforce its rights with respect to collection of the Purchased Amount. ADDITIONAL TERMS 33. Seller De osit A reemenSeller shall execute an agreement with Velocity Group USA Inc. that shall authorize Velocity Group USA Inc. to arrange for electronic fund transfer services and/or "ACH" payments of Initial Weekly Installments (or Adjusted Weekly Installments, as the case may be) from the Approved Bank Account. Seller shall provide Velocity Group USA Inc. and/or its authorized agent with all information, authorizations and passwords necessary to verify Seller's receivables, receipts and deposits into the Approved Bank Account. Seller shall authorize (by executing written authorizations, if required) Velocity Group USA Inc. and/or it's agent to deduct Weekly the amounts of the Initial Weekly Installment (or the Adjusted Weekly Installment, as the case may be) to Velocity Group USA Inc. from settlement amounts which would otherwise be due to Seller from electronic check transactions and to pay such amounts to Velocity Group USA Inc. by permitting Velocity Group USA Inc. to withdraw the Initial Weekly Installments (or the Adjusted Weekly Installments, as the case may be) from such an account. The authorization shall be irrevocable until such time when Seller shall have performed its obligations under this Agreement in full. Financial Condition. Seller and its Guarantor(s) authorize Velocity Group USA Inc. and its agents to investigate 34. their financial status and history and will provide to Velocity Group USA Inc. any bank or financial statements, tax returns, etc., as Velocity Group USA Inc. deems necessary prior to or at any time after execution of this Agreement. A photocopy of this authorization will be deemed as acceptable for release of financial information. Velocity Group USA Inc. Seller hereby authorizes Velocity Group USA Inc. to receive from time to time updates on such information and financial status. Tran sactional Histor . Seller shall execute written authorization(s) to their bank(s) to provide Velocity Group 35. USA Inc. with Seller's banking and/or credit-card processing history. Indemnification. Seller and its Guarantor(s) jointly and severally, indemnify and hold harmless to the fullest extent permitted by law Approved Processor, any ACH processor, customer and/or Account Debtors of the Seller, its/their officers, directors and shareholders against all losses, damages, claims, liabilities and expenses (including reasonable attorney's fees) incurred by any ACH processor, customer and/or Account Debtors of the Seller resulting from (a) claims asserted by Velocity Group USA Inc. for monies owed to Velocity Group USA Inc. from Seller and (b) actions taken by any ACH processor, customer and/or Account Debtor of the Seller in reliance upon information or instructions provided by Velocity Group USA Inc. 36. 37. No Liability. In no event shall Velocity Group USA Inc. be liable for any claims asserted by Seller or its Guarantor under any legal theory for lost profits, lost revenues, lost business opportunities, exemplary, punitive, special, incidental, indirect or consequential damages, each of which is hereby knowingly and voluntarily waived by Seller and Guarantor(s). MISCELLANEOUS 38. Modifications; A reements. No modification, amendment, waiver or consent of any provision of this Agreement shall be effective unless the same shall be in writing and signed by both parties. 39. A ssignment. Velocity Group USA Inc. may assign, transfer or sell its rights or delegate its duties hereunder, either in whole or in part without prior notice to the Seller. Seller shall not assign its rights or obligations under this Agreement without first obtaining Velocity Group USA Inc.'s written consent. 14 Velocity Group USA Inc. (11182019176639)

40. Notices. Unless different means of delivering notices are set forth elsewhere in this Agreement, all notices, requests, consent, demands and other communications hereunder shall be delivered by certified mail. return receipt requested, to the respective parties to this Agreement at the addresses set forth in this Agreement and shall become effective as of the date of receipt or declined receipt. 41. Waiver Remedies. No failure on the part of Velocity Group USA Inc. to exercise, and no delay in exercising, any right under this Agreement, shall operate as a waiver thereof, nor shall any single or partial exercise of any right under this Agreement preclude any other or further exercise thereof or the exercise of any other right. The remedies provided hereunder are cumulative and not exclusive of any remedies provided by law or equity. Bindin Effect. This Agreement shall be binding upon and inure to the benefit of the parties and their respective 42. successors and permitted assigns. Governing Law, Venue and jurisdiction. This Agreement shall be governed by and construed exclusively in accordance with the laws of the State of New York, without regards to any applicable principles of conflicts of law. Any lawsuit, action or proceeding arising out of or in connection with this Agreement shall be instituted exclusively in any court sitting in New York State, (the "Acceptable Forums"). The parties agree that the Acceptable Forums 43. are convenient, and submit to the jurisdiction of the Acceptable Forums and waive any and all objections to inconvenience of the jurisdiction or venue. Should a proceeding be initiated in any other forum, each of the parties to this Agreement irrevocably waives any right to oppose any motion or application made by any other party to transfer such proceeding to an Acceptable Forum. Seller and its Guarantor(s) acknowledge and agree that the Purchase Price is being paid and received by Seller in New York, that the Specified Percentage of the Future Receipts are being delivered to Velocity Group USA Inc. in New York, and that the transaction contemplated in this Agreement was negotiated, and is being carried out, in New York. Seller and its Guarantor(s) acknowledge and agree that New York has a reasonable relationship to this transaction. Survival of Re resentation, etc. All representations, warranties and covenants herein shall survive the execution and delivery of this Agreement and shall continue in full force until all obligations under this Agreement shall have been satisfied in full and this Agreement shall have expired. 44. 45. everabilityIn case any of the provisions in this Agreement are found to be invalid, illegal or unenforceable in any respect, the validity, legality and enforceability of any other provision contained herein shall not in any way be affected or impaired. Any provision of this Agreement that may be found by a court having jurisdiction to be prohibited by law shall be ineffective only to the extent of such prohibition without invalidating the remaining provisions hereof. Entire Agreement. This Agreement embodies the entire agreement between Seller and Velocity Group USA Inc. and supersedes all prior agreements and understandings relating to the subject matter hereof. The Exhibit(s) and Riders to this Agreement are part of this Agreement. 46. 47. JURY TRIAL WAIVER. THE PARTIES HERETO WAIVE TRIAL BY JURY IN ANY COURT IN ANY SUIT, ACTION OR PROCEEDING ON ANY MATTER ARISING IN CONNECTION WITH OR IN ANY WAY RELATED TO THE TRANSACTIONS OF WHICH THIS AGREEMENT IS A PART OR THE ENFORCEMENT HEREOF. EACH PARTY HERETO ACKNOWLEDGES THAT IT MAKES THIS WAIVER KNOWINGLY, WILLINGLY AND VOLUNTARILY AND WITHOUT DURESS, AND ONLY AFTER EXTENSIVE CONSIDERATION AND DISCUSSIONS OF THE RAMIFICATIONS OF THIS WAIVER WITH ITS ATTORNEYS. This Agreement embodies the entire agreement between Seller and Velocity Group USA Inc. and supersedes all prior agreements and understandings relating to the subject matter hereof. The Exhibit(s) and Riders to this Agreement are part of this Agreement. 48. CLA SS ACTION WAIVER. . EACH PARTY HERETO WAIVES ANY RIGHT TO ASSERT ANY CLAIMS AGAINST THE OTHER PARTY, AS A REPRESENTATIVE OR MEMBER IN ANY CLASS OR REPRESENTATIVE ACTION, EXCEPT WHERE SUCH WAIVER IS PROHIBITED BY LAW OR IS AGAINST PUBLIC POLICY. TO THE EXTENT EITHER PARTY IS PERMITTED BY LAW OR COURT OF LAW TO PROCEED WITH A CLASS OR REPRESENTATIVE ACTION AGAINST THE OTHER, THE PARTIES HEREBY AGREE THAT: (1) THE PREVAILING PARTY SHALL NOT BE ENTITLED TO RECOVER ATTORNEYS' FEES OR COSTS ASSOCIATED WITH PURSUING THE CLASS OR REPRESENTATIVE ACTION (NOTWITHSTANDING ANY OTHER PROVISION IN THIS AGREEMENT TO THE CONTRARY); AND (2) THE PARTY WHO INITIATES OR PARTICIPATES AS A MEMBER OF THE CLASS WILL NOT SUBMIT A CLAIM OR OTHERWISE PARTICIPATE IN ANY RECOVERY SECUREDTHROUGH THE CLASS OR REPRESENTATIVE ACTION. 15 Velocity Group USA Inc. (11182019176639)

49. ARBITRATION.. THE PARTIES ACKNOWLEDGE AND AGREE THAT, PROVIDED THAT NO SUIT, ACTION OR PROCEEDING (INCLUDING WITHOUT LIMITATION FILING OF AN AFFIDAVIT OF CONFESSION OF JUDGMENT) HAS BEEN ALREADY COMMENCED IN CONNECTION WITH ANY MATTER ARISING OUT OF OR RELATED TO THE TRANSACTION CONTEMPLATED BY THIS AGREEMENT, EACH Velocity Group USA Inc., SELLER, AND ANY GUARANTOR OF SELLER SHALL HAVE THE RIGHT TO REQUEST THAT ALL DISPUTES AND CLAIMS ARISING OUT OF OR RELATING TO THE CONSTRUCTION AND INTERPRETATION OF THIS AGREEMENT, ARE SUBMITTED TO ARBITRATION. THE PARTY SEEKING ARBITRATION SHALL FIRST SEND A WRITTEN NOTICE OF INTENT TO ARBITRATE TO ALL OTHER PARTIES, BY CERTIFIED MAIL UPON SENDING OF SUCH NOTICE, A PARTY REQUESTING ARBITRATION MAY COMMENCE AN ARBITRATION PROCEEDING WITH THE AMERICAN ARBITRATION ASSOCIATION ("AAA") OR NATIONAL ARBITRATION FORUM ("NAF"). EACH SELLER, GUARANTOR AND Velocity Group USA Inc. SHALL PAY THEIR OWN ATTORNEYS' FEES INCURRED DURING THE ARBITRATION PROCEEDING. THE PARTY INITIATING THE ARBITRATION SHALL PAY ANY ARBITRATION FILING FEE, ADMINISTRATION FEE AND ARBITRATOR'S FEE. Counter arts and Facsimile Si natures•. This Agreement can be signed in one or more counterparts, each of 50. which shall constitute an original and all of which when taken together, shall constitute one and the same agreement. Signatures delivered via facsimile and/or via Portable Digital Format (PDF) shall be deemed acceptable for all purposes, including without limitation the evidentially purposes. [REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK] 16 Velocity Group USA Inc. (11182019176639)

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed as of the date first above written. FOR SELLER #1 FOR SELLER #2 By:-------Name: Title: Owner/Agent/Manager Title: Owner/Agent/Manager EIN: _ EIN: 82·2199200 AGREE TO BE BOUND BY THE PROVIONS OF THIS AGREEMENT APPLICABLE TO AND CONCERNING GUARANTOR. OWNER/GUARANTOR # 1 OWNER/GUARANTOR # 2 By:-------Name: By:/---/-- Na SSN: 146-78-4110 SSN: _ Velocity Group USA Inc. By: Name: _ Title: _ 17 Velocity Group USA Inc. (11182019176639)

EXHIBIT A PERSONAL GUARANTY OF PERFORMANCE This Personal Guaranty of Performance ( this " Guaranty ") is executed as of November 18, 2019, by the undersigned individual(s) whose name(s) and signature(s) appear in the signature box of this Guaranty (individually and collectively, jointly and severally, "Guarantor") for the benefit of Velocity Group USA Inc. ("Bu er"). WHEREAS: A. Pursuant to that Future Receivables Sale and Purchase Agreement (the "Agreement"). dated as of November 18, 2019, between Buyer and the Seller(s) listed below (collectively and individually, "Seller"). Buyer has purchased a portion of Future Receipts of Seller. SELLER# 1: SELLER# 2: Legal Business Name EDISON NATION, LLC Legal Business Name -------D/B/A: EDISON NATION D/B/A:------ B. Each Guarantor is an owner, officer, or manager of Seller and will directly benefit from Buyer and Seller entering into the Agreement. C. Buyer is not willing to enter into the Agreement unless Guarantor irrevocably, absolutely and unconditionally guarantees to Buyer prompt and complete performance of all of the obligations of Seller under the Agreement (each such obligation, individually, an "Obligation" and all such obligations, collectively, the "Obli ations"). NOW, THEREFORE , as an inducement for Buyer to enter into the Agreement, and for other good and valuable consideration, the receipt and legal sufficiency of which are hereby acknowledged, Guarantor does hereby agree as follows: 1. Defined Terms. All capitalized terms used and not otherwise defined herein shall have the meanings ascribed to them in the Agreement. 2. Guaranty of Obligations. Guarantor hereby irrevocably, absolutely and unconditionally guarantees to Buyer prompt. full, faithful and complete performance and observance of all of Seller 's Obligations; and Guarantor unconditionally covenants to Buyer that if default or breach shall at any time be made by Seller in the Obligations, Guarantor shall well and truly pay or perform (or cause to be paid or performed) the Obligations and pay all damages and other amounts stipulated in the Agreement with respect to the non-performance of the Obli gations, or any of them. 3. Guarantor's Additional Covenants. The liability of Guarantor hereunder shall not be impaired, abated, deferred, diminished, modified, released, terminated or discharged, in whole or in part, or otherwise affected, by any event, condition, occurrence, circumstance, proceeding, action or failure to act, with or without notice to, or the knowledge or consent of, Guarantor, including, without limitation: a. b. any amendment, modification or extension of the Agreement or any Obligation; any extension of time for performance, whether in whole or in part, of any Obligation given prior to or after default thereunder; any exchange, surrender or release, in whole or in part, of any security that may be held by Buyer at any time under the Agreement; any other guaranty now or hereafter executed by Guarantor or anyone else; c. d. e. any wa iver of or assertion or enforcement or failure or refusal to assert or enfor ce, in whole or in part, any Obligation, claim, cause of action, right or remedy which Buyer may, at any time, have under the Agreement or with respect to any guaranty or any security which may be held by Buyer at any time for or under the Agreement or with respect to the Seller; any act or omission or delay to do any act by Buyer which may in any manner or to any extent vary the risk of Guarantor or which would otherwise operate as a discharge of Guarantor as a matter of law; the release of any other guarantor from liability for the performance or observance of any Obligation, whether by operation of law or otherwise; the failure to give Guarantor any notice whatsoever; any right, power or privilege that Buyer may now or hereafter have against any person, entity or collateral. f. g. h. i. Velocity Group USA Inc. (11182019176639) 18

4. Guarantor's Other Agreements. Guarantor will not dispose, convey, sell or otherwise transfer, or cause Seller to dispose, convey, sell or otherwise transfer, any material business assets of Seller outside of the ordinary course of Seller's bus.iness without the prior written consent of Buyer, which consent may be withheld for any reason, until receipt of the ent1re Purchased Amount. Guarantor shall pay to Buyer upon demand all expenses (including, without limitation, reasonable attorneys' fees and disbursements) of, or incidental to, or relating to the enforcement or protection of Buyer's rights hereunder or Buyer's rights under the Agreeme.nt. This Guaranty is binding upon Guarantor and Guarantor's heirs, legal representatives, successors and assigns and shall inure to the benefit of and may be enforced by the successors and assigns of Buyer. If there is more than one Guarantor, the obligations of the Guarantors hereunder shall be joint and several. The obligation of Guarantor shall be unconditional and absolute, regardless of the unenforceability of any provision of any agreement between Seller and Buyer, or the existence of any defense, setoff or counterclaim, which Seller may assert. Buyer is hereby authorized, without notice or demand and without affecting the liability of Guarantor hereunder, to at any time renew or extend Seller's obligations under the Agreement or otherwise modify, amend or change the terms of the Agreement. Guarantor is hereby notified and consents that a negative credit report reflecting on his/her credit record may be submitted to a credit-reporting agency if the Guarantor does not honor the terms of this Guaranty. 5. Waiver; Remedies. No failure on the part of Buyer to exercise, and no delay in exercising, any right under this Guaranty shall operate as a waiver, nor shall any single or partial exercise of any right under this Guaranty preclude any other or further exercise of any other right. The remedies provided in this Guaranty are cumulative and not exclusive of any remedies provided by law or equity. In the event that Seller fails to perform any obligation under the Agreement, Buyer may enforce its rights under this Guaranty without first seeking to obtain performance for such default from Seller or any other guarantor. 6. Acknowledgment of Purchase. Guarantor acknowledges and agrees that the Purchase Price paid by Buyer to Seller in exchange for the Purchased Amount of Future Receipt is a payment for an adequate consideration and is not intended to be treated as a loan or financial accommodation from Buyer to Seller. Guarantor specifically acknowledges that Buyer is not a lender, bank or credit card processor, and that Buyer has not offered any loans to Seller, and Guarantor waives any claims or defenses of usury in any action arising out of this Guaranty. Guarantor acknowledges that the Purchase Price paid to Seller is good and valuable consideration for the sale. of the Purchased Amount. 7. Governing Law and jurisdiction. This Guaranty shall be governed by, and constructed in accordance with, the internal laws of the State of New York without regard to principles of. conflicts of law. Except as provided in Section 10 of this Guaranty, Guarantor submits to the nonexclusive jurisdiction and venue of any state or federal court sitting in New York State or otherwise having jurisdiction over this Guaranty and Guarantor, for resolution of any claim or action arising, directly or indirectly, out of or related to this Guaranty. The parties stipulate that the venues referenced in this Agreement are convenient. The parties further agree that the mailing by certified or registered mail, return receipt requested, of any process required by any such court will constitute valid and lawful service of process against them, without the necessity for service by any other means provided by statute or rule of court, but without invalidating service performed in accordance with such other provisions. Guarantor acknowledges and agrees that the Purchase Price is being paid and received by Seller in New York, that the Specified Percentage of the Future Receipts are being delivered to Buyer in New York, and that the transaction contemplated in this Guaranty was negotiated, and is being carried out, in New York. Guarantor acknowledges and agrees that it is guaranteeing a New York agreement and transaction. Guarantor acknowledges and agrees that New York has a reasonable relationship to this transaction. 8. JURY WAIVER. THE PARTIES WAIVE THE RIGHT TO A TRIAL BY JURY IN ANY COURT IN ANY SUIT, ACTION OR PROCEEDING ON ANY MATTER ARISING IN CONNECTION WITH OR IN ANY WAY RELATED TO THE TRANSACTIONS OF WHICH THIS GUARANTY IS A PART OR ITS ENFORCEMENT, EXCEPT WHERE SUCH WAIVER IS PROHIBITED BY LAW OR DEEMED BY A COURT OF LAW TO BE AGAINST PUBLIC POLICY. THE PARTIES ACKNOWLEDGE THAT EACH MAKES THIS WAIVER KNOWINGLY, WILLINGLY AND VOLUNTARILY AND WITHOUT DURESS, AND ONLY AFTER EXTENSIVE CONSIDERATION OF THE RAMIFICATIONS OF THIS WAIVER WITH THEIR ATTORNEYS. 9. CLASS ACTION WAIVER. THE PARTIES WAIVE ANY RIGHT TO ASSERT ANY CLAIMS AGAINST THE OTHER PARTY AS A REPRESENTATIVE OR MEMBER IN ANY CLASS OR REPRESENTATIVE ACTION,EXCEPT WHERE SUCH WAIVER IS PROHIBITED BY LAW OR DEEMED BY A COURT OF LAW TO BE AGAINST PUBLIC POLICY. TO THE EXTENT EITHER PARTY IS PERMITTED BY LAW OR COURT OF LAW TO PROCEED WITH A CLASS OR REPRESENTATIVE ACTION AGAINST THE OTHER, THE PARTIES AGREE THAT: (I) THE PREVAILING PARTY SHALL NOT BE ENTITLED TO RECOVER ATTORNEYS' FEES OR COSTS ASSOCIATED WITH PURSUING THE CLASS OR REPRESENTATIVE ACTION (NOT WITHSTANDING ANY OTHER PROVISION IN THIS AGREEMENT); AND (II) THE PARTY WHO INITIATES OR PARTICIPATES AS A MEMBER OF THE CLASS WILL NOT SUBMIT A CLAIM OR OTHERWISE PARTICIPATE IN ANY RECOVERY SECURED THROUGH THE CLASS OR REPRESENTATIVE ACTION. Velocity Group USA Inc. (11182019176639) 19

10. ARBITRATION. THE PARTIES ACKNOWLEDGE AND AGREE THAT, PROVIDED THAT NO SUIT, ACTION OR PROCEEDING (INCLUDING WITHOUT LIMITATION FILING OF AN AFFIDAVIT OF CONFESSION OF JUDGMENT) HAS BEEN ALREADY COMMENCED IN CONNECTION WITH ANY MATTER ARISING OUT OF OR RELATED TO THIS GUARANTY AND/OR THE TRANSACTION CONTEMPLATED BY THE AGREEMENT, EACH BUYER, SELLER AND GUARANTOR SHALL HAVE THE RIGHT TO REQUEST THAT ALL DISPUTES AND CLAIMS ARISING OUT OF OR RELATING TO THE CONSTRUCTION AND/OR INTERPRETATION OF THIS GUARANTY ARE SUBMITTED TO ARBITRATION. THE PARTY SEEKING ARBITRATION SHALL FIRST SEND A WRITTEN NOTICE OF INTENT TO ARBITRATE TO ALL OTHER PARTIES, BY CERTIFIED MAIL. UPON SENDING OF SUCH NOTICE, A PARTY REQUESTING ARBITRATION MAY COMMENCE AN ARBITRATION PROCEEDING WITH THE AMERICAN ARBITRATION ASSOCIATION ("AAA") OR NATIONAL ARBITRATION FORUM ("NAF''). EACH SELLER, GUARANTOR AND BUYER SHALL PAY THEIR OWN ATTORNEYS' FEES INCURRED DURING THE ARBITRATION PROCEEDING. THE PARTY INITIATING THE ARBITRATION SHALL PAY ANY ARBITRATION FILING FEE, ADMINISTRATION FEE AND ARBITRATOR'S FEE. 11. Severability.lf for any reason any court of competent jurisdiction finds any provisions of this Guaranty to be void or voidable, the parties agree that the court may reform such provision(s) to render the provision(s) enforceable ensuring that the restrictions and prohibitions contained in this Guaranty shall be effective to the fullest extent allowed under applicable law. 12 . Opportunity for Attorney Review. The Guarantor represents that he/she has carefully read this Guaranty and has had had a reasonable opportunity to, - and to the extent he or she wishes did, - consult with his or her attorney. Guarantor understands the contents of this Guaranty, and signs this Guaranty as his or her free act and deed. 13. Counterparts and Facsimile Signatures. This Guaranty may be signed in one or more counterparts, each of which shall constitute an original and all of which.when taken together shall constitute one and the same agreement. Facsimile or scanned documents shall have the same legal force and effect as an original and shall be treated as an original document for evidentiary purposes. AGREED AND ACCEPTED: t .• • OWNER/GUARANTOR #2 By: _ Name: SSN: _ SSN: 146-78-4110 Velocity Group USA Inc. By: _ Name: _ Title: ---------------20 Velocity Group USA Inc. (11182019176639)

RIDER 3 TO THE FUTURE RECEIVABLES SALE AND PURCHASE AGREEMENT ("Agreement") Between Velocity Group USA lnc.("BUYER") and CH Q_ !,iE !:_ R,GUS("Seller") APPLICABLE FEES 1. Possible Conflicts. If there is any conflict or inconsistency between any of the provisions of this Rider and any of the provisions of the Future Receivables Sale and Purchase Agreement (the "Agreement") to which this Rider is attached, all such conflicts and inconsistencies shall be resolved in favor of the provisions of this Rider. 2. Definitions.AII capitalized terms used in this Rider shall have the meaning set forth in the Agreement unless otherwise indicated here in. 3. Applicable Fees. The parties agree that the Applicable Fees which Seller shall pay to Velocity Group USA Inc., pursuant to Section 17 of the Agreement shall be as follows: A. ACH Program Fee: 15.00(to cover expense of ACH processing program). B. UCC Fee: 55.00(part of filing UCC financing statements and their terminations). C. Wire Fee 35.00(to cover cost of remitting the Purchase Price). D. NSF Fee: 10.00(to cover expense of an NSF). E. ACH Rejection Fee: 15.00 F. Bank Change Fee: 100.00 G. Blocked Account Fee: 500.00 H. Default Fee: 5,000.00 1. UCC Release Fee: 55.00 J. Underwriting Fee: 350.00 4. Authorization.Seller hereby authorizes Velocity Group USA Inc. to apply a portion of the Purchase Price due to Seller pursuant to the Agreement toward satisfaction of Seller's obligation to pay the Applicable Fees pursuant to Section 17 of the Agreement by deducting the amount of the Applicable Fees from the Purchase Price prior to delivering it to Seller. s. No Reduction of Purchase Price. Seller hereby agrees that deduction of the Applicable Fees from the Purchase Price shall not be deemed to reduce the Purchase Price. Seller and Velocity Group USA Inc. agree that this Rider shall be attached to the Agreement and shall be made a part thereof. FOR THE SELLER FOR THE SELLER By: Name: _ 21 Velocity Group USA Inc. (11182019176639)

RIDER 2 TO THE 11/18/2019 FUTURE RECEIVABLES §ALE AND PURCHASE AGREEMENT ("Agreement") Between Velocity Group USA Inc. and CHRISTOPHER ERGUSON ("Seller") PRIOR BALANCE 1. Possible Conflicts. If there is any conflict or inconsistency between any of the provisions of this Rider and any of the provisions of the Future Receivables Sale and Purchase Agreement (the "Agreement") to which this Rider is attached, all such conflicts and inconsistencies shall be resolved in favor of the provisions of this Rider. 2. Definitions. All capitalized terms used in this Rider shall have the meaning set forth in the Agreement unless otherwise indicated here in. 3. Prior Balance. Seller represents and warrants that the following list of its creditors and the amounts that Seller owes its creditors as of the Effective Date of the Agreement is true, correct and complete: TOTAL PRIOR BALANCE: $ ----------------------------------------------4. Authorization.Seller hereby authorizes Velocity Group USA Inc. to apply a portion of the Purchase Price due to Seller pursuant to the Agreement toward satisfaction of Seller 's obligation to pay the Prior Balance pursuant to Section 18 of the Agreement by deducting the amount of the Prior Balance from the Purchase Price prior to delivering it to Seller, and to forward the specific amounts owed by Seller to Velocity Group USA Inc. and/or the creditors listed in this Rider. 5. No Reduction of Purchase Price. Seller hereby agrees that deduction of the Prior Balance from the Purchase Price shall not be deemed to reduce the Purchase Price. 6. Indemnification. Seller hereby indemnifies and holds harmless Velocity Group USA Inc. for any and all damages and losses (including without limitation legal fees and expenses) incurred by Velocity Group USA Inc. as the result of the information set forth in this Rider being untrue or incorrect or incomplete. Seller and Velocity Group USA Inc. agree that this Rider shall be attached to the Agreement and shall be made a part thereof. AGREED AND ACCEPTED: OWNER/GUARANTOR #1 OWNER/GUARANTOR #2 By: ---------------Name: ---------------Velocity Group USA Inc. By: _ Name: Title:--------22 Velocity Group USA Inc. (11182019176639)

RIDER 1 TO THE 11/18/2019 FUTURE RECEIVABLES SALE AND PURCHASE AGREEMENT ( "Agreement") Between Velocity Group USA Inc. and CHRISTOPHER FERGUSON ("Seller") ORIGINATION FEE 1. Possible Conflicts.lf there is any conflict or inconsistency between any of the provisions of this Rider and any of the provisions of the Future Receivables Sale and Purchase Agreement (the "Agreement") to which this Rider is attached, all such conflicts and inconsistencies shall be resolved in favor of the provisions of this Rider. 2. Definitions. All capitalized terms used in this Rider shall have the meaning set forth in the Agreement unless otherwise 3. Ori ination Fees. The parties agree that the Origination Fee that Seller shall pay to Velocity Group USA Inc. pursuant to Section 19 of the Agreement shall be: $5,000.00 4. Authorization. Seller hereby authorizes Velocity Group USA Inc. to apply a portion of the Purchase Price due to Seller pursuant to the Agreement toward satisfaction of Seller's obligation to pay the Origination Fee pursuant to Section 19 of the Agreement by deducting the amount of the Origination Fee from the Purchase Price prior to delivering it to Seller. 5. No Reduction of Purchase Amount. Seller hereby agrees that deduction of the Origination Fee from the Purchase Price shall not be deemed to reduce the Purchase Amount. Seller and Velocity Group USA Inc. agree that this Rider shall be attached to the Agreement and shall be made a part thereof. AGREED AND ACCEPTED: OWNER/GUARANTOR #1 OWNER/GUARANTOR #2 By: Name: _ Velocity Group USA Inc. By: --------Name: Title: _ 23 Velocity Group USA Inc. (11182019176639)

VELOCITY group usa ADDENDUM Deferred Payment 'Plan Addendum to the Merchant Agreement and all Exhibits/Appendix relating thereto (the"Agreement") In the event of any conflict between any of the provisions of the Addendum and any of the provisions of the Agreement, the provisions of this Addendum shall control. I. Merchant Acknowledgment. Merchant acknowledges that the funding being provided pursuant to the Agreement is intended for a deferred paymen t in Section 7 and is being provided for weekly payments to assist Merchant with Merchant 's financial viability. It is further understood that Merchant shall only receive the entire Purchased Amount set forth on page I of the Agreement, if Merchant fully complies with the terms of the Agreement and this Addendum. 2. Stacking Prohibited. Merchant acknowledges that it has read and fully understood Sections 1.11 "Protections against Default," and Section 3.1 "Events of Default," of the Agreement, including Section 3.1 (i), which reads: ·' (i) Merchant shall perform an y act that reduces the value of any Collateral granted under this Agreement." Merchant further acknowledges that "Stacking," (defined to mean not only receiving, but the entering into of any arrangement, agreement or commitment that in any way relates to a merchant cash advance, a loan, or in vol ves its Total Gross Receipts) shall be considered an act that reduces the value of the Collateral under this Agreement and, regardless thereof, shall be an Event of Default. Thus, for the duration of this Agreement, Seller shall not enter into any arrangement, agreement or commitment that in any way relates to a merchant cash advance, a loan, or involves its Total Gross Receipts ("Receipts"), with any party other than VELOCITY GROUP USA INC., without the expressed written consent of VELOCITY GROUP USA INC.. Further, Merchant shall not enter into any agreement or commitment that in any W"aymay reduce the value of the Receipts, including by obtaining any new credit cards or lines of credit, without the expressed written consent of VELOCITY GROUP USA INC.. 3. Purchases of Merchant's Future Receipts: Purs uant to the Agreement, Merchant hereby sells, assign s and transfers to VELOCITY GROUP USA INC. (making VELOCITY GROUP USA INC. the absolute owner) the Specified Percentage of Merchant's future accounts, contract rights and other obligations arising from or relating to the payment of monies from Merchant's customers aud/or other third party payors (the "Receipts") for the payment ofMerchant's sale of goods or services, until the Purchased Amount specified on Page I of the Agreement has been remitted from the Merchant to VELOCITY GROUP USA INC.. 4. Assignment Eftective Immediately. It is the intention of the parties that the Purchased Amount of the Specified Percentage of the Receipts shall be assigned immediately, subject only to VELOCITY GROUP USA INC. providing the deferred pay me nt plan in Section 7 provide the remainder of the Purchased Amount specified on Page I of the Agreement in weekly payments as set forth below. This structure is done to ensure that in the Event of Default or other breach of the Agreement, VELOCITY GROUP USA INC. shall not be obligated to provide Merchant with any further disbursements, and Merchant shall still be obligated to remit to VELOCITY GROUP USA INC., the Weekly payment amount set forth on page I of the Agreement. 5. Right to Terminate. VELOCITY GROUP USA INC. reserves the right to terminate its obligation on the deferred payments schedule at its option at any time after VELOCITY GROUP USA INC. determines that there was: (i) Any Event of Default, as de tined in the Agreement and/or in this Addendum , has occurred; (ii) Merchant fails to provide to VELOCITY GROUP USA INC. a monthly Account statement, access codes to the Online Login Account, or a snap shot of the Merchant's bank statements, (iii) Merchant breaches the Stacking provision set forth in Section 2 hereunder, (iv) or an y other breach of the Agreement. Merchant shall also be entitled to terminate the deferred payments at any time, and then only be obligated to pay the weekly payments on page I of the agreement. up to until the Purchased Amount specified. Weekly Deposits.' The following ian outline of the exact weekly amount to be disllursed to Merchant prior to the deduction of fees, the Weekly Pur.:hased Amount and the Total Minimum Amount Purchased after the disbursement of such weekly installment, as agreed to by the parties, pursuant to this Addendum and the 6. Merchant Agree ent: ·

VELOCilY group usa SCHDULE PAYMENTS: Week 1-12 THE TERMS. OF THIS ADDENDUMT ARE HEREBY INCORPORATED IN AND MADE A PART OF THE MERCHANT AGREEMENT IDENTIFIED ABOVE. FOR THE MERCHANT #I .. ,J, /a: . .) ..-(!_ NAME: DJ)O tv'. ,Jk t/1JfV, I FOR THE MERCHANT #2 NAME: _ SIGN:,,----"-----FOR THE GUARANT}ef NAME: 6l?CJ.S Velocity Group USA Inc.: ----------Five (5) Day Cure Period Merchant shall fail to perform or comply with any covenant or agreement other than the covenants described or set forth in agreement(a) and (b) and such default shall continue for five (5) Business Days or more after the earlier of (i) the date on which such failure shall first become known to merchant and (ii) notice thereof is provided to merchant by the lender. D ERERED DEFERRED $4,464.25 Week 13-24 $8928.55 Week 25-36 $14,732.20

Exhibit 10.26

THIS NOTE AND THE SECURITIES ISSUABLE HEREOF HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933 (THE "ACT"), AS AMENDED, OR UNDER THE SECURITIES LAWS OF ANY STATE. THESE SECURITIES MAY NOT BE OFFERED, SOLD OR OTHERWISE TRANSFERRED, PLEDGED OR HYPOTHECATED EXCEPT AS PERMITTED UNDER THE ACT AND APPLICABLE STATE SECURITIES LAWS PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT OR AN EXEMPTION THEREFROM. THE ISSUER OF THESE SECURITIES MAY REQUIRE AN OPINION OF COUNSEL REASONABLY SATISFACTORY TO THE ISSUER THAT SUCH OFFER, SALE OR TRANSFER, PLEDGE OR HYPOTHECATION OTHERWISE COMPLIES WITH THE ACT AND ANY APPLICABLE STATE SECURITIES LAWS.

EDISON NATION INC. SENIOR SECURED NOTE

$250,000

December 4th, 2019

FOR VALUE RECEIVED, Edison Nation Inc., a Nevada corporation (the "Company"), promises to pay to 32 Entertainment LLC (the "Holder") in lawful money of the United States of America the Company the principal sum of $250,000, together with interest from the date of this issuance Senior Secured Note (this "Note") by lender on the unpaid principal balance at a rate equal to 10% per annum computed on the basis of 360 days a year, as simple interest. All unpaid principal, together with any then unpaid and accrued interest and other amounts payable hereunder, shall be due and payable on December 4th, 2020 (the "Maturity Date") or such earlier date as this Note is permitted to be repaid as provided hereunder.

The following is a statement of the rights of Holder and the conditions to which this Note is subject, and to which Holder, by the acceptance of this Note, agrees:

Payments

a. Interest. Holder shall be entitled to receive, and Company shall pay simple interest on the outstanding principal amount of this Note at an annual rate often percent (10%) from the Original Issuance Date through the Maturity Date. Interest shall be payable on March 4th, June\ September 4^th and on the Maturity Date when all amounts outstanding in connection with this Note shall be due and payable (each an "Interest Payment Date") in cash. If any Interest Payment Date is not a Trading Day, the applicable payment shall be due on the next succeeding Trading Day. Payment of principal and interest and shall be made in United States dollars.

The outstanding principal amount all accrued unpaid interest thereon and any other amounts owed under each Note, if not sooner paid, shall be due and payable on the Maturity Date.

b. Prepayment. The Company, at its sole discretion, reserves the right to prepay, prior to the Maturity Date, all or any part of the principal of the Notes without penalty. Upon a Prepayment, Holder will keep all common stock and warrants, as noted in this agreement.

All payments should be made to:

Account holder: 32 Entertainment LLC
Bank: JPMorgan Chase Bank, N.A.

270 Park Avenue
New York, NY 10017

ABA routing number: 021000021
Account number: 559668590

Ranking. The Company and Holder acknowledge and agree that this Note rank senior to all other securities of the Company. Payment of all or any portion of the outstanding principal amount of this Note and all interest hereon shall be senior in right of payment and in all other respects to the all other securities of the Company. Payment of all or any portion of the outstanding principal amount of this Note and all interest hereon shall be senior in right of payment and in all other respects to other indebtedness of the Company except for Edison Nation Inc. existing credit facility with Heritage Bank.

Security Interest. This Note is secured by all of the Company's unencumbered unsecured assets. In the event that any or all of the Company's assets are already subject to liens, this Note shall be junior to the rights of other lenders, creditors and other secured parties. During the term of this Note, the Company shall only be permitted to enter into loans junior to the Note, with the consent of Lender.

As collateral security for the Company's obligations pursuant to this Note, the Company hereby pledges, assigns and transfers to the Holder a first priority security interest in and collateral assignment of the Company's right, title and interest in and to all of the Company's tangible and intangible property, including the following, whether now owned or now due, or in which the Company has an interest, or hereafter, at any time in the future, acquired, arising or to become due, or in which the Company obtains an interest, and all products, proceeds, replacements, substitutions and accessions of or to any of the following (collectively, the "Collateral"):

1. all equipment and all warranties, express or implied, related thereto;

11. all accounts and accounts receivable;

m. all inventory;

1v. all contract rights;

v. all licenses, permits and approvals by any governmental authority;

vi. all general intangibles (including payment intangibles, software, trademarks, patents, copyrights or other intellectual property rights of the Company);

v11. all equipment (including all machinery, furniture, and fixtures);

v111. all goods;

ix. all chattel paper (whether tangible or electronic);

x. all fixtures;

xi. all investment property (including all financial assets, certificated and uncertificated securities, securities accounts and security entitlements);

x11. all letter-of-credit rights;

xm.  all rights under judgments and all commercial tort claims;

xiv. all books, records and information relating to the Collateral and/or to the operation of the Company's business and all rights of access to such books, records and information and all property in which such books, records and information are stored, recorded and maintained;

xv. all insurance proceeds, refunds and premium rebates, including proceeds of fire and credit insurance, whether any of such proceeds, refunds and premium rebates arise out of any of the foregoing or otherwise;

xv1. all liens, guaranties, rights, remedies and privileges pertaining to any of the foregoing; and

xvii. all proceeds and products of each of the foregoing and all accessions to, substitutions and replacements for, and rents, profits and products of, each of the foregoing, and any and all proceeds of any insurance, indemnity, warranty or guaranty payable to the Company from time to time with respect to any of the foregoing.

The Company authorizes the Holder to file or cause to be filed one or more financing statements, amendments to financing statements, continuations to financing statements, in lieu financing statements, and other similar filings with any filing or recording office for the purpose of perfecting or continuing the perfection of or otherwise establishing Holder's security interest in the Collateral.

So long as this Note remains outstanding, the Company agrees to (i) do, observe and perform or cause to be done, observed and performed all of its obligations and all matters and things necessary to be done, observed and performed for the purpose of maintaining the Collateral in good condition, including complying with and maintaining in effect all licenses, approvals and permits and all contracts and contract rights related to the Collateral and (ii) upon the reasonable request of Holder, execute and deliver such further instruments and do or cause to be done such further acts as may be necessary or advisable to carry out the intent and purposes of this Note with respect to the Collateral.

4.	Covenants. As long as any portion of this Note remains outstanding, unless the Holder shall have otherwise given prior written consent, the Company shall not, directly or indirectly:

other than Permitted Indebtedness, enter into, create, incur, assume, guarantee or suffer to exist any indebtedness for borrowed money of any kind, including, but not limited to, a guarantee, on or with respect to any of its property or assets now owned or hereafter acquired or any interest therein or any income or profits therefrom;

other than Permitted Liens, enter into, create, incur, assume or suffer to exist any Liens of any kind, on or with respect to any of its property or assets now owned or hereafter acquired or any interest therein or any income or profits therefrom;

Maturity Date means December 4, 2020.

Manner of Payment upon Maturity. On the Maturity Date, payment of principal and accrued and unpaid interest on this Note will be made by delivery of a check to Payee at Payee's address set out in the Note Agreement or by wire transfer pursuant to instructio ns from Payee. If the date upon which the payment of principal and interest is required to be made pursuant to this Note occurs other than on a Business Day, then such payment of principal and interest shall be made on the next occurring Business Day following said payment date and shall include interest through the next occurring Business Day.

Default. The occurrence of any of the following shall constitute an " Event of Default" under this Note:

Failure to Pay. The Company shall fail to pay (i) when due any principal payment on the due date hereunder or (ii) any interest payment or other payment required under the terms of this Note on the date due and such payment shall not have been made within five (5) Business Days of the Company' s receipt of written notice by the Required Holders of such failure to pay; or

Breaches of Covenants. The Company shall fail to observe or perform any other covenant, obligation, condition or agreement contained in this Note (other than those specified in Section 9 hereof) the failure of which would have a material adverse effect on the Company and such failure shall continue for thirty (30) days after the Company's receipt of written notice by the Holder to the Company of such failure; or

.£,. Voluntary Bankruptcy or Insolvency Proceedings. The Company shall (i) apply for or consent to the appointment of a receiver, trustee, liquidator or custodian of itself or of all or a substantial part of its property, (ii) admit in writing its inability to pay its debts generally as they mature, (iii) make a general assignment for the benefit ofits orany of its creditors, (iv) be dissolved or liquidated, (v) commence a voluntary case or other proceeding seeking liquidation, reorganization or other relief with respect to itself or its debts under any bankruptcy, insolvency or other similar law now or hereafter in effect or consent to any such relief or to the appointment of or taking possession of its property by any official in an involuntary case or other proceeding commenced against it, or (vi) take any action for the purpose of effecting any of the foregoing; or

	d.	Involuntary Bankruptcy or Insolvency Proceedings. Proceedings for the appointment of a receiver, trustee, liquidator or custodian of the Company, or of all or a substantial part of the property thereof, or an involuntary case or other proceedings seeking liquidation, reorganization or other relief with respect to the Company or any of its subsidiaries, if any, or the debts thereof under any bankruptcy, insolvency or other similar law now or hereafter in effect shall be commenced and an order for relief entered or such proceeding shall not be dismissed or discharged within forty-five (45) days of commencement.

		Rights of Holder upon Default. Upon the occurrence of any Event of Default, hereof and at any time thereafter during the continuance of such Event of Default, Holder may, by written notice to the Company, declare all outstanding obligations payable by the Company hereunder to be immediately due and payable, and take possession of and exercise control over, to the fullest extent permitted by law, any Collateral, without presentment, demand, protest or any other notice of any kind, all of which are hereby expressly waived. Upon the occurrence of any Event of Default without notice, all principal and accrued and unpaid interest hereunder shall automatically become immediately due and payable, and the Holder may take possession of and exercise control over, to the fullest extent permitted by law, any Collateral, without presentment, demand, protest or any other notice of any kind, all of which are hereby expressly waived. In addition to the foregoing remedies, upon the occurrence and during the continuance of any Event of Default, Holder may exercise any other right power or remedy permitted to it by law, either by suit in equity or by action at law, or both.

		Notwithstanding the immediately preceding sentence, if a Default is in respect of a bankruptcy or insolvency proceeding the principal of this Note, and all accrued and unpaid interest, shall automatically become immediately due and payable. In addition, Payee may institute judicial proceedings for the collection of the amounts due and may prosecute such proceeding to judgment or final decree, and may enforce the same against Company and collect the amount due (together with reasonable costs of collection, including reasonable attorney' s fees and expenses) adjudged or decreed to be payable in the manner provided by law out of the property of Company. Payee may also exercise the rights of a secured party under the Uniform Commercial Code then in effect in Nevada and under the terms of the other transaction documents and may exercise any and all other rights Payee may have at law or in equity The default rate of interest is 15% per annum.
	9.	Equity Consideration.

Origination Shares: 10,000 shares of restricted common stock as an incentive for Investor to provide the Loan ("Shares").

Price: The price will be $1.65, the effective closing price on December 3^rd, 2019.

Restriction: The restriction on the resale of the Stock shall be six (6) months from the date of issuance or as otherwise required pursuant to Rule 144 of SEC laws and regulations pertaining to restricted stock.

Warrants: 42,858 warrants with an exercise price of $1.75, with a five (5) year term as set forth in Common Stock Purchase Warrant Agreement.

Registration Rights: The Company will file a registration statement for the Shares and Warrants within 30 days of the closing date of the loan and effective within 90 days of the closing date of the loan.

Share Reservation: The Company will at all times reserve sufficient shares for its authorized capital for all shares underlying the Note and Warrants.

Other terms and conditions of this Note:

1. Maximum Rate: Regardless of any provision in this Note or the Note Agreement it is the intention of Company and Payee that Payee not (a) contract for, charge, take, reserve, receive or apply, as interest on all or any part of the principal amount of this Note any amount in excess of the Maximum Rate or the Maximum Amount or (b) receive any unearned interest in violation of any applicable law. If any acceleration of the maturity of this Note produces a rate in excess of the Maximum Rate or if the Payee shall for any reason receive any such unearned interest or if any transaction contemplated hereby would otherwise be usurious under applicable law, then (i) the aggregate of all interest under applicable usury laws that is contracted for, charged, taken, reserved, received or applied under this Note, or otherwise, shall under no circumstances exceed the Maximum Amount, (ii) neither Company nor any other Person shall be obligated to pay the amount of such interest to the extent that it is in excess of the Maximum Amount, (iii) any excess or unearned interest shall be deemed to be and shall be treated as a partial prepayment or repayment of principal and any remaining excess or unearned interest will be refunded to Company, and (iv) the provisions of this Note immediately shall be deemed reformed, without the necessity of the execution of any new document or instrument, so as to comply with all applicable usury laws.

2. Consent to Amendments: This Note may be amended, and Company may take any action prohibited by this Note or the Note Agreement, or omit to perform any act it is required to perform by this Note or the Note Agreement, if and only if Company obtains the written consent from 32 Entertainment LLC.

3. Successors and Assigns: All covenants and agreements in this Note by or on behalf of Maker and the Payee shall bind and inure to the benefit of the Maker's and Payee's respective successors and assigns.

4. Notices: All notices, requests, waivers and other communications made pursuant to this Agreement shall be in writing and shall be deemed delivered, given and received when delivered (by hand, by registered mail, by courier or express delivery service, by e-mail or by facsimile) to the address, e-mail address or facsimile telephone number set forth beneath the name of such party on its signature page to this Agreement (or to such other address, e-mail address or facsimile telephone number as such party will have specified in a written notice given to the other parties hereto).

5. Severability Clause: In case any prov1s10n in this Note shall be invalid, illegal or unenforceable in any jurisdiction, the validity, legality and enforceability of the remaining provisions in such jurisdiction shall not in any way be affected or impaired thereby; provided that such construction does not destroy the essence of the bargain provided for under this Note or the Note Agreement.

6. Governing Law: This Note and all actions arising out of or in connection with this Note shall be governed by and construed in accordance with the internal laws of the State of Nevada (without regard to principles of choice of law).

7. Waivers: Company and all sureties, endorsers and guarantors of this Note waive and right to notice of default or demand, presentment for payment, notice of non-payment, protest, notice of protest, notice of intent to accelerate, notice of acceleration, and any other notice not specifically required under this note. Failure to exercise any remedy under this Note does not constitute a waiver of such remedy.

8. Dispute Resolution: All claims, disputes, and controversies arising out of or in relation to the performance, interpretation, application, or enforcement of this Agreement, including but not limited to breach thereof, shall be referred to mediation before, and as a condition precedent to the initiation of any adjudicative action or proceeding, including arbitration. In the event the parties are unable to settle any dispute through mediation within thirty (30) days of one party notifying the other party of the dispute, such dispute shall be settled by arbitration before the American Arbitration Association under its then applicable rules. The arbitration proceeding will take place in New York, New York and such proceeding shall be before a single arbitrator who is mutually agreeable to the Company and the Payee. If the Company and the Payee are unable to agree on an arbitrator within thirty (30) days after either party first proposes an arbitrator to conduct the proceeding, then each party shall select an arbitrator and the two arbitrators shall select a third arbitrator, which third arbitrator shall conduct the proceeding. The decision of the arbitrator shall be final and binding upon the parties. The arbitrator shall render his award not later than thirty (30) days after the conclusion of the hearing. The decision and award shall be in writing, and counterpart copies shall be delivered to each of the parties. In rendering an award, the arbitrator shall have no power to modify any of the provisions of this Agreement, and the jurisdiction of the arbitrator is expressly limited accordingly. Judgment may be entered on the award of the arbitrator and may be enforced in any competent court having jurisdiction.

9. Transaction Documents: means this Note and other related documents executed in connection with the Note. The Company agrees to execute other agreements or documents to effectuate the terms and conditions of this Note.

10. Attorney Fees: The Company shall pay Holder' s attorneys' fees in connection with review of this Note and related documents in connection with the Note.

THIS NOTE AND OTHERRELATED DOCUMENTS REPRESENT THE FINAL AGREEMENT BETWEEN MAKER AND PAYEE AND MAY NOT BE CONSTRUED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS OR SUBSEQUENT ORAL AGREEMENTS BY THE PARTIES. THERE ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES.

[SIGNATURE PAGE TO FOLLOW]

BY SIGNING BELOW, THE PARTIES AGREE TO THE TERMS AND CONDITIONS OF THIS NOTE.



	THE COMPANY
	EDISON NATION, INC.
	/s/ Chris Ferguson
	By: Chris Ferguson, CEO

	Address:
	909 New Brunswick Ave Phillipsburg, NJ 08865
	E-Mail: cferguson@edisonnation.com

	LENDER
	32 ENTERTAINMENT, LLC
	/s/ Robert Wolf, Founder
	Address:
	9 Westerleigh Road Purchase, NY 10577
	E-Mails; Rwolf@32advisors.com

	Copy to: Nirel Levi nlevi@32advisors.com

Exhibit 10.27

NEITHER THIS SECURITY NOR THE SECURITIES FOR WHICH THIS SECURITIES EXERCISABLE HAVE BEEN REGISTERED WITH THE SECURITIES AND EXCHANGE COMMISSION OR THE SECURITIES COMMISSION OF ANY STATE IN RELIANCE UPON AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR PURSUANT TO AN AVAILABLE EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND IN ACCORDANCE WITH APPLICABLE STATE SECURITIES LAWS. THIS SECURITY AND THE SECURITIES ISSUABLE UPON EXERCISE OF THIS SECURITY MAY BE PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN ACCOUNT OR OTHER LOAN SECURED BY SUCH SECURITIES.

COMMON STOCK PURCHASE WARRANT EDISON NATION, INC.

Warrant Shares: 50,000

Issue Date: December 4, 2019

THIS COMMON STOCK PURCHASE WARRANT (the "Warrant") certifies that, for value received, 32 Entertainment LLC or its assigns (the " Holder") is entitled, at any time or from time to time from the date hereof (the "Commencement Date"), and at or before 5:00 p.m., Eastern time, December 4, 2024 (the "Termination Date") but not thereafter, to subscribe for and purchase from Edison Nation, Inc., a Nevada corporation (the "Company"), up to 50,000 shares (as subject to adjustment hereunder, the "Warrant Shares") of Common Stock. The purchase price of one share of Common Stock under this Warrant shall be equal to the Exercise Price, as defined in Section l(b).

Section 1. Exercise.

Exercise of Warrant. Exercise of the purchase rights represented by this Warrant may be made, in whole or in part, at any time or times on or after the Issue Date and on or before the Termination Date by delivery to the Company of a duly executed facsimile copy or PDF copy submitted by e-mail (or e-mail attachment) of the Notice of Exercise in the form annexed hereto ("Notice of Exercise"). Within the earlier of (i) two (2) Trading Days and (ii) the number of Trading Days comprising the Standard Settlement Period (as defined in Section l(d)(i) herein) following the date of exercise as aforesaid, the Holder shall deliver the aggregate Exercise Price for the shares specified in the applicable Notice of Exercise by wire transfer or cashier's check drawn on a United States bank unless the cashless exercise procedure specified in Section 1(c) below is specified in the applicable Notice of Exercise. No ink-original Notice of Exercise shall be required, nor shall any medallion guarantee (or other type of guarantee or notarization) of any Notice of Exercise be required. Notwithstanding anything herein to the contrary, the Holder shall not be required to physically surrender this Warrant to the Company until the Holder has purchased all of the Warrant Shares available hereunder and the Warrant has been exercised in full, in which case, the Holder shall surrender this Warrant to the Company for cancellation within two (2) Trading Days of the date on which the final Notice of Exercise is delivered to the Company. Partial exercises of this Warrant resulting in purchases of a portion of the total number of Warrant Shares available hereunder shall have the effect of lowering the outstanding number of Warrant Shares purchasable hereunder in an amount equal to the applicable number of Warrant Shares purchased. The Holder and the Company shall maintain records showing the number of Warrant Shares purchased and the date of such purchases. The Company shall deliver any objection to any Notice of Exercise within one (1) Business Day of receipt of such notice.

Exercise Price. The exercise price per share of the Common Stock under this Warrant shall be $1.50, subject to adjustment hereunder (the "Exercise Price").

Cashless Exercise. If at any time after the three-month anniversary of the Closing Date, there is no effective registration statement registering, or no current prospectus available for, the resale of the Warrant Shares by the Holder at a time when the Holder exercises all or any portion of this Warrant, then this Warrant may also be exercised, in whole or in part, at such time by means of a "cashless exercise" in which the Holder shall be entitled to receive a number of Warrant Shares equal to the quotient obtained by dividing [(A-B) (X)] by (A), where:

		(A) = as applicable: (i) the VWAP on the Trading Day immediately preceding the date of the applicable Notice of Exercise if such Notice of Exercise is (1) both executed and delivered pursuant to Section 2(a) hereof on a day that is not a Trading Day or (2) both executed and delivered pursuant to Section 2(a) hereof on a Trading Day prior to the opening of "regular trading hours" (as defined in Rule 600(b)(64) of Regulation NMS promulgated under the federal securities laws) on such Trading Day, (ii) at the option of the Holder, either (y) the VWAP on the Trading Day immediately preceding the date of the applicable Notice of Exercise or (z) the Bid Price of the Common Stock on the principal Trading Market as reported by Bloomberg L.P. as of the time of the Holder's execution of the applicable Notice of Exercise if such Notice of Exercise is executed during "regular trading hours" on a Trading Day and is delivered within two (2) hours thereafter (including until two (2) hours after the close of "regular trading hours" on a Trading Day) pursuant to Section 2(a) hereof or (iii) the VWAP on the date of the applicable Notice of Exercise if the date of such Notice of Exercise is a Trading Day and such Notice of Exercise is both executed and delivered pursuant to Section 2(a) hereof after the close of "regular trading hours" on such Trading Day;

		(B) = the Exercise Price of this Warrant, as adjusted hereunder; and

		(X) = the number of Warrant Shares that would be issuable upon exercise of this Warrant in accordance with the terms of this Warrant if such exercise were by means of a cash exercise rather than a cashless exercise.

		If Warrant Shares are issued in such a cashless exercise, the parties acknowledge and agree that in accordance with Section 3(a)(9) of the Securities Act, the Warrant Shares shall take on the characteristics of the Warrants being exercised, and the holding period of the Warrant Shares being issued may be tacked on to the holding period of this Warrant. The Company agrees not to take any position contrary to this Section l(c).

		"Bid Price" means, for any date, the price determined by the first of the following clauses that applies: (a) if the Common Stock is then listed or quoted on a Trading Market, the bid price of the Common Stock for the time in question (or the nearest preceding date) on the Trading Market on which the Common Stock is then listed or quoted as reported by Bloomberg L.P. (based on a Trading Day from 9:30 a.m. (New York City time) to 4:02 p.m. (New York City time)), (b) if OTCQB or OTCQX is not a Trading Market, the volume weighted average price of the Common Stock for such date (or the nearest preceding date) on OTCQB or OTCQX as applicable, (c) if the Common Stock is not then listed or quoted for trading on OTCQB or OTCQX and if prices for the Common Stock are then reported in the "Pink Sheets" published by OTC Markets Group, Inc. (or a similar organization or agency succeeding to its functions of reporting prices), the most recent bid price per share of the Common Stock so reported, or (d) in all other cases, the fair market value of a share of Common Stock as determined by an independent appraiser selected in good faith by the Purchasers of a majority in interest of the Securities then outstanding and reasonably acceptable to the Company, the fees and expenses of which shall be paid by the Company.

		"VWAP" means, for any date, the price determined by the first of the following clauses that applies: (a) if the Common Stock is then listed or quoted on a Trading Market, the daily volume weighted average price of the Common Stock for such date (or the nearest preceding date) on the Trading Market on which the Common Stock is then listed or quoted as reported by Bloomberg L.P. (based on a Trading Day from 9:30 a.m. (New York City time) to 4:02 p.m. (New York City time)), (b) if the Common Stock is quoted for trading on the OTCQB or OTCQX, as applicable, and if the OTCQB or OTCQX is not a Trading Market, the volume weighted average price of the Common Stock for such date (or the nearest preceding date) on OTCQB or OTCQX as applicable, (c) if the Common Stock is not then listed or quoted for trading on OTCQB or OTCQX and if prices for the Common Stock are then reported in the "Pink Sheets" published by OTC Markets Group, Inc. (or a similar organization or agency succeeding to its functions of reporting prices), the most recent bid price per share of the Common Stock so reported, or (d) in all other cases, the fair market value of a share of Common Stock as determined by an independent appraiser selected in good faith by the Purchasers of a majority in interest of the Securities then outstanding and reasonably acceptable to the Company, the fees and expenses of which shall be paid by the Company.

		Notwithstanding anything herein to the contrary, on the Termination Date, this Warrant shall be exercised via cashless exercise pursuant to this Section l(c), with the approval of the Holder. Warrant may be exercised, at the sole discretion of the warrant holder.

	d)	Mechanics of Exercise.

	i.	Delivery of Warrant Shares Upon Exercise. The Company shall cause the Warrant Shares purchased hereunder to be transmitted by the Transfer Agent to the Holder by crediting the account of the Holder's or its designee's balance account with The Depository Trust Company through its Deposit or Withdrawal at Custodian system ("DWAC") if the Company is then a participant in such system and either (A) there is an effective registration statement permitting the issuance of the Warrant Shares to or resale of the Warrant Shares by the Holder or (B) the Warrant Shares are eligible for resale by the Holder without volume or manner-of-sale limitations pursuant to Rule 144 (assuming cashless exercise of the Warrants), and otherwise by physical delivery of a certificate, registered in the Company's share register in the name of the Holder or its designee, for the number of Warrant Shares to which the Holder is entitled pursuant to such exercise to the address specified by the Holder in the Notice of Exercise by the date that is the earliest of (i) two (2) Trading Days after the delivery to the Company of the Notice of Exercise, (ii) one (1) Trading Day after delivery of the aggregate Exercise Price to the Company and (iii) the number of Trading Days comprising the Standard Settlement Period after the delivery to the Company of the Notice of Exercise (such date, the "Warrant Share Delivery Date"). Upon delivery of the Notice of Exercise, the Holder shall be deemed for all corporate purposes to have become the holder of record of the Warrant Shares with respect to which this Warrant has been exercised, irrespective of the date of delivery of the Warrant Shares, provided that payment of the aggregate Exercise Price (other than in the case of a cashless exercise) is received within the earlier of (i) two (2) Trading Days and (ii) the number of Trading Days comprising the Standard Settlement Period following delivery of the Notice of Exercise. If the Company fails for any reason to deliver to the Holder the Warrant Shares subject to a Notice of Exercise by the Warrant Share Delivery Date, the Company shall pay to the Holder, in cash, as liquidated damages and not as a penalty, for each $1,000 of Warrant Shares subject to such exercise (based on the VWAP of the Common Stock on the date of the applicable Notice of Exercise), $10 per Trading Day (increasing to $20 per Trading Day on the fifth Trading Day after such liquidated damages begin to accrue) for each Trading Day after such Warrant Share Delivery Date until such Warrant Shares are delivered or Holder rescinds such exercise. The Company agrees to maintain a transfer agent that is a participant in the FAST program so long as this Warrant remains outstanding and exercisable. As used herein, "Standard Settlement Period" means the standard settlement period, expressed in a number of Trading Days, on the Company's primary Trading Market with respect to the Common Stock as in effect on the date of delivery of the Notice of Exercise.

ii.

Delivery of New Warrants Upon Exercise. If this Warrant shall have been exercised in part, the Company shall, at the request of a Holder and upon surrender of this Warrant certificate, at the time of delivery of the Warrant Shares, deliver to the Holder a new Warrant evidencing the rights of the Holder to purchase the unpurchased Warrant Shares called for by this Warrant, which new Warrant shall in all other respects be identical with this Warrant.

iii.

Rescission Rights. If the Company fails to cause the Transfer Agent to transmit to the Holder the Warrant Shares pursuant to Section l(d)(i) by the Warrant Share Delivery Date, then the Holder will have the right to rescind such exercise.

iv.

Compensation for Buy-In on Failure to Timely Deliver Warrant Shares Upon Exercise. In addition to any other rights available to the Holder, if the Company fails to cause the Transfer Agent to transmit to the Holder the Warrant Shares in accordance with the provisions of Section 2(d)(i) above pursuant to an exercise on or before the Warrant Share Delivery Date, and if after such date the Holder is required by its broker to purchase (in an open market transaction or otherwise) or the Holder's brokerage firm otherwise purchases, shares of Common Stock to deliver in satisfaction of a sale by the Holder of the Warrant Shares which the Holder anticipated receiving upon such exercise (a "Buy-In"), then the Company shall (A) pay in cash to the Holder the amount, if any, by which (x) the Holder's total purchase price (including brokerage commissions, if any) for the shares of Common Stock so purchased exceeds (y) the amount obtained by multiplying (1) the number of Warrant Shares that the Company was required to deliver to the Holder in connection with the exercise at issue times (2) the price at which the sell order giving rise to such purchase obligation was executed, and (B) at the option of the Holder, either reinstate the portion of the Warrant and equivalent number of Warrant Shares for which such exercise was not honored (in which case such exercise shall be deemed rescinded) or deliver to the Holder the number of shares of Common Stock that would have been issued had the Company timely complied with its exercise and delivery obligations hereunder. For example, if the Holder purchases Common Stock having a total purchase price of $11,000 to cover a Buy-In with respect to an attempted exercise of shares of Common Stock with an aggregate sale price giving rise to such purchase obligation of $10,000, under clause (A) of the immediately preceding sentence the Company shall be required to pay the Holder $1,000. The Holder shall provide the Company written notice indicating the amounts payable to the Holder in respect of the Buy-In and, upon request of the Company, evidence of the amount of such loss. Nothing herein shall limit a Holder's right to pursue any other remedies available to it hereunder, at law or in equity including, without limitation, a decree of specific performance and/or injunctive relief with respect to the Company's failure to timely deliver shares of Common Stock upon exercise of the Warrant as required pursuant to the terms hereof.

No Fractional Shares or Scrip. No fractional shares or scrip representing fractional shares shall be issued upon the exercise of this Warrant. As to any fraction of a share which the Holder would otherwise be entitled to purchase upon such exercise, the Company shall, at its election, either pay a cash adjustment in respect of such final fraction in an amount equal to such fraction multiplied by the Exercise Price or round up to the next whole share.

vi.

Charges, Taxes and Expenses. Issuance of Warrant Shares shall be made without charge to the Holder for any issue or transfer tax or other incidental expense in respect of the issuance of such Warrant Shares, all of which taxes and expenses shall be paid by the Company, and such Warrant Shares shall be issued in the name of the Holder or in such name or names as may be directed by the Holder; provided, however, that in the event that Warrant Shares are to be issued in a name other than the name of the Holder, this Warrant when surrendered for exercise shall be accompanied by the Assignment Form attached hereto duly executed by the Holder and the Company may require, as a condition thereto, the payment of a sum sufficient to reimburse it for any transfer tax incidental thereto. The Company shall pay all Transfer Agent fees required for same-day processing of any Notice of Exercise and all fees to the Depository Trust Company (or another established clearing corporation performing similar functions) required for same-day electronic delivery of the Warrant Shares.

vii.	Closing of Books. The Company will not close its stockholder books or records in any manner which prevents the timely exercise of this Warrant, pursuant to the terms hereof.

Holder' s Exercise Limitations.

The Company shall not effect any exercise of this Warrant, and a Holder shall not have the right to exercise any portion of this Warrant, pursuant to Section 1 or otherwise, to the extent that after giving effect to such issuance after exercise as set forth on the applicable Notice of Exercise, the Holder (together with the Holder's Affiliates, and any other Persons acting as a group together with the Holder or any of the Holder's Affiliates (such Persons, "Attribution Parties")), would beneficially own in excess of the Beneficial Ownership Limitation (as defined below). For purposes of the foregoing sentence, the number of shares of Common Stock beneficially owned by the Holder and its Affiliates and Attribution Parties shall include the number of shares of Common Stock issuable upon exercise of this Warrant with respect to which such determination is being made, but shall exclude the number of shares of Common Stock which would be issuable upon (i) exercise of the remaining, nonexercised portion of this Warrant beneficially owned by the Holder or any of its Affiliates or Attribution Parties and (ii) exercise or conversion of the unexercised or nonconverted portion of any other securities of the Company (including, without limitation, any other Common Stock Equivalents) subject to a limitation on conversion or exercise analogous to the limitation contained herein beneficially owned by the Holder or any of its Affiliates or Attribution Parties. Except as set forth in the preceding sentence, for purposes of this Section 1(e), beneficial ownership shall be calculated in accordance with Section 13(d) of the Exchange Act and the rules and regulations promulgated thereunder, it being acknowledged by the Holder that the Company is not representing to the Holder that such calculation is in compliance with Section 13(d) of the Exchange Act and the Holder is solely responsible for any schedules required to be filed in accordance therewith. To the extent that the limitation contained in this Section l(e) applies, the determination of whether this Warrant is exercisable (in relation to other securities owned by the Holder together with any Affiliates and Attribution Parties) and of which portion of this Warrant is exercisable shall be in the sole discretion of the Holder, and the submission of a Notice of Exercise shall be deemed to be the Holder's determination of whether this Warrant is exercisable (in relation to other securities owned by the Holder together with any Affiliates and Attribution Parties) and of which portion of this Warrant is exercisable, in each case subject to the Beneficial Ownership Limitation, and the Company shall have no obligation to verify or confirm the accuracy of such determination. In addition, a determination as to any group status as contemplated above shall be determined in accordance with Section 13(d) of the Exchange Act and the rules and regulations promulgated thereunder. For purposes of this Section l(e), in determining the number of outstanding shares of Common Stock, a Holder may rely on the number of outstanding shares of Common Stock as reflected in (A) the Company's most recent periodic or annual report filed with the Commission, as the case may be, (B) a more recent public announcement by the Company or (C) a more recent written notice by the Company or the Transfer Agent setting forth the number of shares of Common Stock outstanding. Upon the written or oral request of a Holder, the Company shall within one (1) Trading Day confirm orally and in writing to the Holder the number of shares of Common Stock then outstanding.

In any case, the number of outstanding shares of Common Stock shall be determined after giving effect to the conversion or exercise of securities of the Company, including this Warrant, by the Holder or its Affiliates or Attribution Parties since the date as of which such number of outstanding shares of Common Stock was reported. The "Beneficial Ownership Limitation" shall be 4.99% of the number of shares of the Common Stock outstanding immediately after giving effect to the issuance of shares of Common Stock issuable upon exercise of this Warrant. The Holder, upon notice to the Company, may increase or decrease the Beneficial Ownership Limitation provisions of this Section 2(e), provided that the Beneficial Ownership Limitation in no event exceeds 9.99% of the number of shares of the Common Stock outstanding immediately after giving effect to the issuance of shares of Common Stock upon exercise of this Warrant held by the Holder and the provisions of this Section 2(e) shall continue to apply. Any increase in the Beneficial Ownership Limitation will not be effective until the 61st day after such notice is delivered to the Company. The provisions of this paragraph shall be construed and implemented in a manner otherwise than in strict conformity with the terms of this Section 2(e) to correct this paragraph (or any portion hereof) which may be defective or inconsistent with the intended Beneficial Ownership Limitation herein contained or to make changes or supplements necessary or desirable to properly give effect to such limitation. The limitations contained in this paragraph shall apply to a successor holder of this Warrant.

Section 2.

Certain Adjustments.x

a) Stock Dividends and Splits. If the Company, at any time while this Warrant is outstanding: (i) pays a stock dividend or otherwise makes a distribution or distributions on shares of its Common Stock or any other equity or equity equivalent securities payable in shares of Common Stock (which, for avoidance of doubt, shall not include any shares of Common Stock issued by the Company upon exercise of this Warrant), (ii) subdivides outstanding shares of Common Stock into a larger number of shares, (iii) combines (including by way of reverse stock split) outstanding shares of Common Stock into a smaller number of shares or (iv) issues by reclassification of shares of the Common Stock any shares of capital stock of the Company, then in each case the Exercise Price shall be multiplied by a fraction of which the numerator shall be the number of shares of Common Stock (excluding treasury shares, if any) outstanding immediately before such event and of which the denominator shall be the number of shares of Common Stock outstanding immediately after such event, and the number of shares issuable upon exercise of this Warrant shall be proportionately adjusted such that the aggregate Exercise Price of this Warrant shall remain unchanged. Any adjustment made pursuant to this Section 3(a) shall become effective immediately after the record date for the determination of stockholders entitled to receive such dividend or distribution and shall become effective immediately after the effective date in the case of a subdivision, combination or re-classification.

b) Subsequent Equity Sales. If the Company or any Subsidiary thereof, as applicable, at any time while this Warrant is outstanding, shall sell or grant any option to purchase, or sell or grant any right to reprice, or otherwise dispose of or issue (or announce any offer, sale, grant or any option to purchase or other disposition) any Common Stock or Common Stock Equivalents, at an effective price per share less than the Exercise Price then in effect (such lower price, the "Base Share Price" and such issuances collectively, a "Dilutive Issuance") (it being understood and agreed that if the holder of the Common Stock or Common Stock Equivalents so issued shall at any time, whether by operation of purchase price adjustments, reset provisions, floating conversion, exercise or exchange prices or otherwise, or due to warrants, options or rights per share which are issued in connection with such issuance, be entitled to receive shares of Common Stock at an effective price per share that is less than the Exercise Price, such issuance shall be deemed to have occurred for less than the Exercise Price on such date of the Dilutive Issuance at such effective price), then simultaneously with the consummation (or, if earlier, the announcement) of each Dilutive Issuance the Exercise Price shall be reduced and only reduced to equal the Base Share Price. Notwithstanding the foregoing, no adjustments shall be made, paid or issued under this Section 2(b) in respect of an Exempt Issuance. The Company shall notify the Holder, in writing, no later than the Trading Day following the issuance or deemed issuance of any Common Stock or Common Stock Equivalents subject to this Section 2(b), indicating therein the applicable issuance price, or applicable reset price, exchange price, conversion price and other pricing terms (such notice, the "Dilutive Issuance Notice"). For purposes of clarification, whether or not the Company provides a Dilutive Issuance Notice pursuant to this Section 2(b), upon the occurrence of any Dilutive Issuance, the Holder is entitled to receive a number of Warrant Shares based upon the Base Share Price regardless of whether the Holder accurately refers to the Base Share Price in the Notice of Exercise. If the Company enters into a Variable Rate Transaction, despite the prohibition thereon in the Purchase Agreement, the Company shall be deemed to have issued Common Stock or Common Stock Equivalents at the lowest possible conversion or exercise price at which such securities may be converted or exercised.

c) Subsequent Rights Offerings. In addition to any adjustments pursuant to Section 2(a) above, if at any time the Company grants, issues or sells any Common Stock Equivalents or rights to purchase stock, warrants, securities or other property pro rata to the record holders of any class of shares of Common Stock (the "Purchase Rights"), then the Holder will be entitled to acquire, upon the terms applicable to such Purchase Rights, the aggregate Purchase Rights which the Holder could have acquired if the Holder had held the number of shares of Common Stock acquirable upon complete exercise of this Warrant (without regard to any limitations on exercise hereof, including without limitation, the Beneficial Ownership Limitation) immediately before the date on which a record is taken for the grant, issuance or sale of such Purchase Rights, or, if no such record is taken, the date as of which the record holders of shares of Common Stock are to be determined for the grant, issue or sale of such Purchase Rights (provided, however, that, to the extent that the Holder's right to participate in any such Purchase Right would result in the Holder exceeding the Beneficial Ownership Limitation, then the Holder shall not be entitled to participate in such Purchase Right to such extent (or beneficial ownership of such shares of Common Stock as a result of such Purchase Right to such extent) and such Purchase Right to such extent shall be held in abeyance for the Holder until such time, if ever, as its right thereto would not result in the Holder exceeding the Beneficial Ownership Limitation).

d) Pro Rata Distributions. During such time as this Warrant is outstanding, if the Company shall declare or make any dividend or other distribution of its assets (or rights to acquire its assets) to holders of shares of Common Stock, by way of return of capital or otherwise (including, without limitation, any distribution of cash, stock or other securities, property or options by way of a dividend, spin off, reclassification, corporate rearrangement, scheme of arrangement or other similar transaction) (a "Distribution"), at any time after the issuance of this Warrant, then, in each such case, the Holder shall be entitled to participate in such Distribution to the same extent that the Holder would have participated therein if the Holder had held the number of shares of Common Stock acquirable upon complete exercise of this Warrant (without regard to any limitations on exercise hereof, including without limitation, the Beneficial Ownership Limitation) immediately before the date of which a record is taken for such Distribution, or, if no such record is taken, the date as of which the record holders of shares of Common Stock are to be determined for the participation in such Distribution (provided, however, that, to the extent that the Holder's right to participate in any such Distribution would result in the Holder exceeding the Beneficial Ownership Limitation, then the Holder shall not be entitled to participate in such Distribution to such extent (or in the beneficial ownership of any shares of Common Stock as a result of such Distribution to such extent) and the portion of such Distribution shall be held in abeyance for the benefit of the Holder until such time, if ever, as its right thereto would not result in the Holder exceeding the Beneficial Ownership Limitation).

e) Fundamental Transaction. If, at any time while this Warrant is outstanding, (i) the Company, directly or indirectly, in one or more related transactions effects any merger or consolidation of the Company with or into another Person, (ii) the Company, directly or indirectly, effects any sale, lease, license, assignment, transfer, conveyance or other disposition of all or substantially all of its assets in one or a series of related transactions, (iii) any, direct or indirect, purchase offer, tender offer or exchange offer (whether by the Company or another Person) is completed pursuant to which holders of Common Stock are permitted to sell, tender or exchange their shares for other securities, cash or property and has been accepted by the holders of 50% or more of the outstanding Common Stock, (iv) the Company, directly or indirectly, in one or more related transactions effects any reclassification, reorganization or recapitalization of the Common Stock or any compulsory share exchange pursuant to which the Common Stock is effectively converted into or exchanged for other securities, cash or property, or (v) the Company, directly or indirectly, in one or more related transactions consummates a stock or share purchase agreement or other business combination (including, without limitation, a reorganization, recapitalization, spin-off or scheme of arrangement) with another Person or group of Persons whereby such other Person or group acquires more than 50% of the outstanding shares of Common Stock (not including any shares of Common Stock held by the other Person or other Persons making or party to, or associated or affiliated with the other Persons making or party to, such stock or share purchase agreement or other business combination) (each a "Fundamental Transaction"), then, upon any subsequent exercise of this Warrant, the Holder shall have the right to receive, for each Warrant Share that would have been issuable upon such exercise immediately prior to the occurrence of such Fundamental Transaction, at the option of the Holder (without regard to any limitation in Section 2(e) on the exercise of this Warrant), the number of shares of Common Stock of the successor or acquiring corporation or of the Company, if it is the surviving corporation, and any additional consideration (the "Alternate Consideration") receivable as a result of such Fundamental Transaction by a holder of the number of shares of Common Stock for which this Warrant is exercisable immediately prior to such Fundamental Transaction (without regard to any limitation in Section l(e) on the exercise of this Warrant). For purposes of any such exercise, the determination of the Exercise Price shall be appropriately adjusted to apply to such Alternate Consideration based on the amount of Alternate Consideration issuable in respect of one share of Common Stock in such Fundamental Transaction, and the Company shall apportion the Exercise Price among the Alternate Consideration in a reasonable manner reflecting the relative value of any different components of the Alternate Consideration. If holders of Common Stock are given any choice as to the securities, cash or property to be received in a Fundamental Transaction, then the Holder shall be given the same choice as to the Alternate Consideration it receives upon any exercise of this Warrant following such Fundamental Transaction. Notwithstanding anything to the contrary, in the event of a Fundamental Transaction, the Company or any Successor Entity (as defined below) shall, at the Holder's option, exercisable at any time concurrently with, or within 30 days after, the consummation of the Fundamental Transaction (or, if later, the date of the public announcement of the applicable Fundamental Transaction), purchase this Warrant from the Holder by paying to the Holder an amount of cash equal to the Black Scholes Value of the remaining unexercised portion of this Warrant on the date of the consummation of such Fundamental Transaction. "Black Scholes Value" means the value of this Warrant based on the Black and Scholes Option Pricing Model obtained from the "OV" function on Bloomberg, L.P. ("Bloomberg") determined as of the day of consummation of the applicable Fundamental Transaction for pricing purposes and reflecting (A) a risk-free interest rate corresponding to the U.S. Treasury rate for a period equal to the time between the date of the public announcement of the applicable Fundamental Transaction and the Termination Date, (B) an expected volatility equal to the greater of 100% and the 100 day volatility obtained from the HVT function on Bloomberg as of the Trading Day immediately following the public announcement of the applicable Fundamental Transaction, (C) the underlying price per share used in such calculation shall be the greater of (i) the sum of the price per share being offered in cash, if any, plus the value of any non-cash consideration, if any, being offered in such Fundamental Transaction and (ii) the greater of (x) the last VWAP immediately prior to the public announcement of such Fundamental Transaction and (y) the last VWAP immediately prior to the consummation of such Fundamental Transaction and (D) a remaining option time equal to the time between the date of the public announcement of the applicable Fundamental Transaction and the Termination Date. The payment of the Black Scholes Value will be made by wire transfer of immediately available funds within five Business Days of the Holder's election (or, if later, on the effective date of the Fundamental Transaction). The Company shall cause any successor entity in a Fundamental Transaction in which the Company is not the survivor (the "Successor Entity") to assume in writing all of the obligations of the Company under this Warrant and the other Transaction Documents in accordance with the provisions of this Section 2(e) pursuant to written agreements in form and substance reasonably satisfactory to the Holder and approved by the Holder (without unreasonable delay) prior to such Fundamental Transaction and shall, at the option of the Holder, deliver to the Holder in exchange for this Warrant a security of the Successor Entity evidenced by a written instrument substantially similar in form and substance to this Warrant which is exercisable for a corresponding number of shares of capital stock of such Successor Entity (or its parent entity) equivalent to the shares of Common Stock acquirable and receivable upon exercise of this Warrant (without regard to any limitations on the exercise of this Warrant) prior to such Fundamental Transaction, and with an exercise price which applies the exercise price hereunder to such shares of capital stock (but taking into account the relative value of the shares of Common Stock pursuant to such Fundamental Transaction and the value of such shares of capital stock, such number of shares of capital stock and such exercise price being for the purpose of protecting the economic value of this Warrant immediately prior to the consummation of such Fundamental Transaction), and which is reasonably satisfactory in form and substance to the Holder. Upon the occurrence of any such Fundamental Transaction, the Successor Entity shall succeed to, and be substituted for (so that from and after the date of such Fundamental Transaction, the provisions of this Warrant and the other Transaction Documents referring to the "Company" shall refer instead to the Successor Entity), and may exercise every right and power of the Company and shall assume all of the obligations of the Company under this Warrant and the other Transaction Documents with the same effect as if such Successor Entity had been named as the Company herein.

Calculations. All calculations under this Section 2 shall be made to the nearest cent or the nearest l /100th of a share, as the case may be. For purposes of this Section 2, the number of shares of Common Stock deemed to be issued and outstanding as of a given date shall be the sum of the number of shares of Common Stock (excluding treasury shares, if any) issued and outstanding.

g) Notice to Holder.

i. Adjustment to Exercise Price. Whenever the Exercise Price is adjusted pursuant to any provision of this Section 2, the Company shall promptly deliver to the Holder by facsimile or email a notice setting forth the Exercise Price after such adjustment and any resulting adjustment to the number of Warrant Shares and setting forth a brief statement of the facts requiring such adjustment.

ii. Notice to Allow Exercise by Holder. If (A) the Company shall declare a dividend (or any other distribution in whatever form) on the Common Stock, (B) the Company shall declare a special nonrecurring cash dividend on or a redemption of the Common Stock, (C) the Company shall authorize the granting to all holders of the Common Stock rights or warrants to subscribe for or purchase any shares of capital stock of any class or of any rights, (D) the approval of any stockholders of the Company shall be required in connection with any reclassification of the Common Stock, any consolidation or merger to which the Company is a party, any sale or transfer of all or substantially all of the assets of the Company, or any compulsory share exchange whereby the Common Stock is converted into other securities, cash or property, or (E) the Company shall authorize the voluntary or involuntary dissolution, liquidation or winding up of the affairs of the Company, then, in each case, the Company shall cause to be delivered by facsimile or email to the Holder at its last facsimile number or email address as it shall appear upon the Warrant Register of the Company, at least 20 calendar days prior to the applicable record or effective date hereinafter specified, a notice stating (x) the date on which a record is to be taken for the purpose of such dividend, distribution, redemption, rights or warrants, or if a record is not to be taken, the date as of which the holders of the Common Stock of record to be entitled to such dividend, distributions, redemption, rights or warrants are to be determined or (y) the date on which such reclassification, consolidation, merger, sale, transfer or share exchange is expected to become effective or close, and the date as of which it is expected that holders of the Common Stock of record shall be entitled to exchange their shares of the Common Stock for securities, cash or other property deliverable upon such reclassification, consolidation, merger, sale, transfer or share exchange; provided that the failure to deliver such notice or any defect therein or in the delivery thereof shall not affect the validity of the corporate action required to be specified in such notice. To the extent that any notice provided in this Warrant constitutes, or contains, material, non-public information regarding the Company or any of the Subsidiaries, the Company shall simultaneously file such notice with the Commission pursuant to a Current Report on Form 8-K. The Holder shall remain entitled to exercise this Warrant during the period commencing on the date of such notice to the effective date of the event triggering such notice except as may otherwise be expressly set forth herein.

Section 3. Transfer of Warrant.

Transferability. Subject to compliance with any applicable securities laws and the conditions set forth in Section 2(d) hereof and to the provisions of Section 1.1 of the Purchase Agreement, this Warrant and all rights hereunder (including, without limitation, any registration rights) are transferable, in whole or in part, upon surrender of this Warrant at the principal office of the Company or its designated agent, together with a written assignment of this Warrant substantially in the form attached hereto duly executed by the Holder or its agent or attorney and funds sufficient to pay any transfer taxes payable upon the making of such transfer. Upon such surrender and, if required, such payment, the Company shall execute and deliver a new Warrant or Warrants in the name of the assignee or assignees, as applicable, and in the denomination or denominations specified in such instrument of assignment, and shall issue to the assignor a new Warrant evidencing the portion of this Warrant not so assigned, and this Warrant shall promptly be cancelled. Notwithstanding anything herein to the contrary, the Holder shall not be required to physically surrender this Warrant to the Company unless the Holder has assigned this Warrant in full, in which case, the Holder shall surrender this Warrant to the Company within three (3) Trading Days of the date on which the Holder delivers an assignment form to the Company assigning this Warrant in full. The Warrant, if properly assigned in accordance herewith, may be exercised by a new holder for the purchase of Warrant Shares without having a new Warrant issued.

New Warrants. This Warrant may be divided or combined with other Warrants upon presentation hereof at the aforesaid office of the Company, together with a written notice specifying the names and denominations in which new Warrants are to be issued, signed by the Holder or its agent or attorney. Subject to compliance with Section 3(a), as to any transfer which may be involved in such division or combination, the Company shall execute and deliver a new Warrant or Warrants in exchange for the Warrant or Warrants to be divided or combined in accordance with such notice. All Warrants issued on transfers or exchanges shall be dated the Initial Exercise Date and shall be identical with this Warrant except as to the number of Warrant Shares issuable pursuant thereto.

Warrant Register. The Company shall register this Warrant, upon records to be maintained by the Company for that purpose (the "Warrant Register"), in the name of the record Holder hereof from time to time. The Company may deem and treat the registered Holder of this Warrant as the absolute owner hereof for the purpose of any exercise hereof or any distribution to the Holder, and for all other purposes, absent actual notice to the contrary.

Transfer Restrictions. If , at the time of the surrender of this Warrant in connection with any transfer of this Warrant, the transfer of this Warrant shall not be either (i) registered pursuant to an effective registration statement under the Securities Act and under applicable state securities or blue sky laws or (ii) eligible for resale without volume or manner-of-sale restrictions or current public information requirements pursuant to Rule 144, the Company may require, as a condition of allowing such transfer, that the Holder or transferee of this Warrant, as the case may be, comply with the provisions of this the Purchase Agreement.

Representation by the Holder. The Holder, by the acceptance hereof, represents and warrants that it is acquiring this Warrant and, upon any exercise hereof, will acquire the Warrant Shares issuable upon such exercise, for its own account and not with a view to or for distributing or reselling such Warrant Shares or any part thereof in violation of the Securities Act or any applicable state securities law, except pursuant to sales registered or exempted under the Securities Act.

Section 4. Miscellaneous.

No Rights as Stockholder Until Exercise. This Warrant does not entitle the Holder to any voting rights, dividends or other rights as a stockholder of the Company prior to the exercise.

Loss, Theft, Destruction or Mutilation of Warrant. The Company covenants that upon receipt by the Company of evidence reasonably satisfactory to it of the loss, theft, destruction or mutilation of this Warrant or any stock certificate relating to the Warrant Shares, and in case of loss, theft or destruction, of indemnity or security reasonably satisfactory to it (which, in the case of the Warrant, shall not include the posting of any bond), and upon surrender and cancellation of such Warrant or stock certificate, if mutilated, the Company will make and deliver a new Warrant or stock certificate of like tenor and dated as of such cancellation, in lieu of such Warrant or stock certificate.

Saturdays, Sundays, Holidavs, etc. If the last or appointed day for the taking of any action or the expiration of any right required or granted herein shall not be a Business Day, then, such action may be taken, or such right may be exercised on the next succeeding Business Day.

Authorized Shares.

The Company covenants that, during the period the Warrant is outstanding, it will reserve from its authorized and unissued Common Stock a sufficient number of shares to provide for the issuance of the Warrant Shares upon the exercise of any purchase rights under this Warrant. The Company further covenants that its issuance of this Warrant shall constitute full authority to its officers who are charged with the duty of issuing the necessary Warrant Shares upon the exercise of the purchase rights under this Warrant. The Company will take all such reasonable action as may be necessary to assure that such Warrant Shares may be issued as provided herein without violation of any applicable law or regulation, or of any requirements of the Trading Market upon which the Common Stock may be listed. The Company covenants that all Warrant Shares which may be issued upon the exercise of the purchase rights represented by this Warrant will, upon exercise of the purchase rights represented by this Warrant and payment for such Warrant Shares in accordance herewith, be duly authorized, validly issued, fully paid and nonassessable and free from all taxes, liens and charges created by the Company in respect of the issue thereof (other than taxes in respect of any transfer occurring contemporaneously with such issue).

Except and to the extent as waived or consented to by the Holder, the Company shall not by any action, including, without limitation, amending its certificate of incorporation or through any reorganization, transfer of assets, consolidation, merger, dissolution, issue or sale of securities or any other voluntary action, avoid or seek to avoid the observance or performance of any of the terms of this Warrant, but will at all times in good faith assist in the carrying out of all such terms and in the taking of all such actions as may be necessary or appropriate to protect the rights of Holder as set forth in this Warrant against impairment. Without limiting the generality of the foregoing, the Company will (i) not increase the par value of any Warrant Shares above the amount payable therefor upon such exercise immediately prior to such increase in par value, (ii) take all such action as may be necessary or appropriate in order that the Company may validly and legally issue fully paid and nonassessable Warrant Shares upon the exercise of this Warrant and (iii) use commercially reasonable efforts to obtain all such authorizations, exemptions or consents from any public regulatory body having jurisdiction thereof, as may be, necessary to enable the Company to perform its obligations under this Warrant.

Before taking any action which would result in an adjustment in the number of Warrant Shares for which this Warrant is exercisable or in the Exercise Price, the Company shall obtain all such authorizations or exemptions thereof, or consents thereto, as may be necessary from any public regulatory body or bodies having jurisdiction thereof.

Jurisdiction. All questions concerning the construction, validity, enforcement and interpretation of this Warrant shall be determined in accordance with the provisions of the Purchase Agreement.

Restrictions. The Holder acknowledges that the Warrant Shares acquired upon the exercise of this Warrant, if not registered and the Holder does not utilize cashless exercise, will have restrictions upon resale imposed by state and federal securities laws.

g) Non waiver and Expenses. No course of dealing or any delay or failure to exercise any right hereunder on the part of Holder shall operate as a waiver of such right or otherwise prejudice the Holder's rights, powers or remedies. Without limiting any other provision of this Warrant or the Purchase Agreement, if the Company willfully and knowingly fails to comply with any provision of this Warrant, which results in any material damages to the Holder, the Company shall pay to the Holder such amounts as shall be sufficient to cover any costs and expenses including, but not limited to, reasonable attorneys' fees, including those of appellate proceedings, incurred by the Holder in collecting any amounts due pursuant hereto or in otherwise enforcing any of its rights, powers or remedies hereunder.

h) Notices. Any notice, request or other document required or permitted to be given or delivered to the Holder by the Company shall be delivered in accordance with the notice provisions of the Purchase Agreement.

i) Limitation of Liability. No provision hereof, in the absence of any affirmative action by the Holder to exercise this Warrant to purchase Warrant Shares, and no enumeration herein of the rights or privileges of the Holder, shall give rise to any liability of the Holder for the purchase price of any Common Stock or as a stockholder of the Company, whether such liability is asserted by the Company or by creditors of the Company.

j) Remedies. The Holder, in addition to being entitled to exercise all rights granted by law, including recovery of damages, will be entitled to specific performance of its rights under this Warrant. The Company agrees that monetary damages would not be adequate compensation for any loss incurred by reason of a breach by it of the provisions of this Warrant and hereby agrees to waive and not to assert the defense in any action for specific performance that a remedy at law would be adequate.

k) Successors and Assigns. Subject to applicable securities laws, this Warrant and the rights and obligations evidenced hereby shall inure to the benefit of and be binding upon the successors and permitted assigns of the Company and the successors and permitted assigns of Holder. The provisions of this Warrant are intended to be for the benefit of any Holder from time to time of this Warrant and shall be enforceable by the Holder or holder of Warrant Shares.

1) Amendment. This Warrant may be modified or amended, or the provisions hereof waived with the written consent of the Company and the Holder.

m) Severability. Wherever possible, each provision of this Warrant shall be interpreted in such manner as to be effective and valid under applicable law, but if any provision of this Warrant shall be prohibited by or invalid under applicable law, such provision shall be ineffective to the extent of such prohibition or invalidity, without invalidating the remainder of such provisions or the remaining provisions of this Warrant.

n) Headings. The headings used in this Warrant are for the convenience of reference only and shall not, for any purpose, be deemed a part of this Warrant.

********************

(Signature Page Follows)

IN WITNESS WHEREOF, the Company has caused this Common Stock Purchase Warrant Agreement to be executed by its officer thereunto duly authorized as of the date first above indicated.

	EDISON NATION, INC.

	By:	/s/ Chris Ferguson
	Name:	Chris Ferguson
	Title:	Chief Executive Officer

[PURCHASER SIGNATURE PAGE TO EDISON NATION INC.]

IN WITNESS WHEREOF, the Company has caused this Common Stock Purchase Warrant Agreement to be executed by its officer thereunto duly authorized as of the date first above indicated.

Name of Purchaser : 32 Entertainment LLC

Signature of Authorized Signatory of Purchaser:	/s/ Robert Wolf

Name of Authorized Signatory: Robert Wolf

Title of Authorized Signatory: Founder

Email Address of Authorized Signatory: rwolf@32advisors.com

Facsimile Number of Authorized Signatory: N/A

Address for Notice to Purchaser: 9 Westerleigh Rd, Purchase, NY 10577

Warrant Shares: 50,000

EIN Number: 27-0936017

NOTICE OF EXERCISE

To: Edison Nation, Inc.

(1) The undersigned hereby elects to purchase Warrant Shares of the Company pursuant to the terms of the attached Warrant (only if exercised in full), and tenders herewith payment of the exercise price in full, together with all applicable transfer taxes, if any.

(2) Payment shall take the form of (check applicable box):

[] in lawful money of the United States; or

[ ] if permitted the cancellation of such number of Warrant Shares as is necessary, in accordance with the formula set forth in subsection l (c), to exercise this Warrant with respect to the maximum number of Warrant shares purchasable pursuant to the cashless exercise procedure set forth in subsection 1(c).

(3) Please issue said Warrant Shares in the name of the undersigned or in such other name as is specified below:

The Warrant Shares shall be delivered to the following DWAC Account Number:

(4) Accredited Investor. The undersigned is an "accredited investor" as defined in Regulation D promulgated under the Securities Act of 1933, as amended.

	[SIGNATURE OF HOLDER]

	Name of Investing Entity:

	Signature of Authorized Signatory of Investing Entity:

	Name of Authorized Signatory:

	Title of Authorized Signatory:

Date:

Exhibit 10.28

REGISTRATION RIGHTS AGREEMENT

This Registration Rights Agreement (this "Agreement") is made and entered into as of December 4^th 2019, between Edison Nation Inc., a Nevada corporation (the "Company"), and 32 Entertainment LLC signatory hereto (the "Purchaser").

This Agreement is made pursuant to the Securities Purchase Agreement, dated as of the date hereof, between the Company and Purchaser (the "Purchase Agreement").

The Company and each Purchaser hereby agrees as follows:

Definitions.

Capitalized terms used and not otherwise defined herein that are defined in the Purchase Agreement shall have the meanings given such terms in the Purchase Agreement. As used in this Agreement, the following terms shall have the following meanings:

"Advice" shall have the meaning set forth in Section 6(d).

"Effectiveness Date" means, with respect to the Initial Registration Statement required to be filed hereunder, the date that is 90 calendar days following the earlier of (i) the Filing Date and (ii) the date on which the Initial Registration Statement is filed with the Commission (and, in the event of a "full review" by the Commission, the date that is 180 calendar days following the earlier of (i) the Filing Date and (ii) the date on which the Initial Registration Statement is filed with the Commission) and with respect to any additional Registration Statements which may be required pursuant to Section 2(c) or Section 3(c), the 90th calendar day following the date on which an additional Registration Statement is required to be filed hereunder; provided, however, that, in the event the Company is notified by the Commission that one or more of the above Registration Statements will not be reviewed or is no longer subject to further review and comments, the Effectiveness Date as to such Registration Statement shall be the fifth Trading Day following the date on which the Company is so notified if such date precedes the dates otherwise required above, provided, further, if such Effectiveness Date falls on a day that is not a Trading Day, then the Effectiveness Date shall be the next succeeding Trading Day.

"Effectiveness Period" shall have the meaning set forth in Section 2(a).

"Event" shall have the meaning set forth in Section 2(d).

"Event Date" shall have the meaning set forth in Section 2(d).

"Filing Date" means, with respect to the Initial Registration Statement required hereunder, the 30th calendar day following the date hereof and, with respect to any additional Registration Statements which may be required pursuant to Section 2(c) or Section 3(c), the earliest practical date on which the Company is permitted by SEC Guidance to file such additional Registration Statement related to the Registrable Securities.

"Holder" or "Holders" means the holder or holders, as the case may be, from time to time of Registrable Securities.

"Indemnified Party" shall have the meaning set forth in Section 5(c).

"Indemnifying Party" shall have the meaning set forth in Section 5(c).

"Initial Registration Statement" means the initial Registration Statement filed pursuant to this Agreement.

"Losses" shall have the meaning set forth in Section 5(a).

"Plan of Distribution" shall have the meaning set forth in Section 2(a).

"Prospectus" means the prospectus included in a Registration Statement (including, without limitation, a prospectus that includes any information previously omitted from a prospectus filed as part of an effective registration statement in reliance upon Rule 430A promulgated by the Commission pursuant to the Securities Act), as amended or supplemented by any prospectus supplement, with respect to the terms of the offering of any portion of the Registrable Securities covered by a Registration Statement, and all other amendments and supplements to the Prospectus, including post-effective amendments, and all material incorporated by reference or deemed to be incorporated by reference in such Prospectus.

"Registrable Securities" means, as of any date of determination, (a) all shares of Common Stock then issued and issuable upon conversion in full of the Preferred Stock (assuming on such date that the Preferred Stock are converted in full without regard to any conversion limitations therein), (b) all Warrant Shares then issued and issuable upon exercise of the Warrants (assuming on such date the Warrants are exercised in full without regard to any exercise limitations therein), (c) any additional shares of Common Stock issued and issuable in connection with any anti-dilution provisions in the Preferred Stock or the Warrants (without giving effect to any limitations on conversion set forth in the Certificate of Designation or any limitations on exercise set forth in the Warrants) and (d) any securities issued or then issuable upon any stock split, dividend or other distribution, recapitalization or similar event with respect to the foregoing; provided, however, that any such Registrable Securities shall cease to be Registrable Securities (and the Company shall not be required to maintain the effectiveness of any, or file another, Registration Statement hereunder with respect thereto) for so long as (a) a Registration Statement with respect to the sale of such Registrable Securities is declared effective by the Commission under the Securities Act and such Registrable Securities have been disposed of by the Holder in accordance with such effective Registration Statement, (b) such Registrable Securities have been previously sold in accordance with Rule 144, or (c) such securities become eligible for resale without volume or manner-of-sale restrictions and without current public information pursuant to Rule 144 as set forth in a written opinion letter to such effect, addressed, delivered and acceptable to the Transfer Agent and the affected Holders (assuming that such securities and any securities issuable upon exercise, conversion or exchange of which, or as a dividend upon which, such securities were issued or are issuable, were at no time held by any Affiliate of the Company), as reasonably determined by the Company, upon the advice of counsel to the Company.

"Registration Statement" means any registration statement required to be filed hereunder pursuant to Section 2(a) and any additional registration statements contemplated by Section 2(c) or Section 3(c), including (in each case) the Prospectus, amendments and supplements to any such registration statement or Prospectus, including pre- and post-effective amendments, all exhibits thereto, and all material incorporated by reference or deemed to be incorporated by reference in any such registration statement.

"Rule 415" means Rule 415 promulgated by the Commission pursuant to the Securities Act, as such Rule may be amended or interpreted from time to time, or any similar rule or regulation hereafter adopted by the Commission having substantially the same purpose and effect as such Rule.

"Rule 424" means Rule 424 promulgated by the Commission pursuant to the Securities Act, as such Rule may be amended or interpreted from time to time, or any similar rule or regulation hereafter adopted by the Commission having substantially the same purpose and effect as such Rule.

"Selling Stockholder Questionnaire" shall have the meaning set forth in Section 3(a).

"SEC Guidance" means (i) any publicly-available written or oral guidance of the Commission staff, or any comments, requirements or requests of the Commission staff and (ii) the Securities Act.

Shelf Registration.

(a) On or prior to each Filing Date, the Company shall prepare and file with the Commission a Registration Statement covering the resale of all of the Registrable Securities that are not then registered on an effective Registration Statement for an offering to be made on a continuous basis pursuant to Rule 415. Each Registration Statement filed hereunder shall be on Form S-1 and shall contain substantially the "Plan of Distribution" attached hereto as Annex A provided, however, that no Holder shall be required to be named as an "underwriter" without such Holder's express prior written consent. Subject to the terms of this Agreement, the Company shall use its best efforts to cause a Registration Statement filed under this Agreement (including, without limitation, under Section 3(c)) to be declared effective under the Securities Act as promptly as possible after the filing thereof, but in any event no later than the applicable Effectiveness Date, and shall use its best efforts to keep such Registration Statement continuously effective under the Securities Act until the date that all Registrable Securities covered by such Registration Statement (i) have been sold, thereunder or pursuant to Rule 144, or (ii) may be sold without volume or manner-of-sale restrictions pursuant to Rule 144 and without the requirement for the Company to be in compliance with the current public information requirement under Rule 144, as determined by the counsel to the Company pursuant to a written opinion letter to such effect, addressed and acceptable to the Transfer Agent and the affected Holders (the "Effectiveness Period"). The Company shall telephonically request effectiveness of a Registration Statement as of 5:00 p.m. (New York City time) on a Trading Day. The Company shall immediately notify the Holders via facsimile or by e-mail of the effectiveness of a Registration Statement on the same Trading Day that the Company telephonically confirms effectiveness with the Commission, which shall be two days prior to the effectiveness of such Registration Statement. The Company shall, by 9:30 a.m. (New York City time) on the second Trading Day after the effective date of such Registration Statement, file a final Prospectus with the Commission as required by Rule 424. Failure to so notify the Holder within one (1) Trading Day of such notification of effectiveness or failure to file a final Prospectus as fore said shall be deemed an Event under Section 2(d).

(b) Notwithstanding the registration obligations set forth in Section 2(a), if the Commission informs the Company that all of the Registrable Securities cannot, as a result of the application of Rule 415, be registered for resale as a secondary offering on a single registration statement, the Company agrees to promptly inform each of the Holders thereof and use its commercially reasonable efforts to file amendments to the Initial Registration Statement as required by the Commission, covering the maximum number of Registrable Securities permitted to be registered by the Commission, on Form S-3 or such other form available to register for resale the Registrable Securities as a secondary offering, subject to the provisions of Section 2(e); with respect to filing on Form S-3 or other appropriate form, and subject to the provisions of Section 2(d) with respect to the payment of liquidated damages; provided, however, that, prior to filing such amendment, the Company shall be obligated to use diligent efforts to advocate with the Commission for the registration of all of the Registrable Securities in accordance with the SEC Guidance, including without limitation, Compliance and Disclosure Interpretation 612.09.

(c) Notwithstanding any other provision of this Agreement and subject to the payment of liquidated damages pursuant to Section 2(d), if the Commission or any SEC Guidance sets forth a limitation on the number of Registrable Securities permitted to be registered on a particular Registration Statement as a secondary offering (and notwithstanding that the Company used diligent efforts to advocate with the Commission for the registration of all or a greater portion of Registrable Securities), unless otherwise directed in writing by a Holder as to its Registrable Securities, the number of Registrable Securities to be registered on such Registration Statement will be reduced as follows:

	a.	First, the Company shall reduce Registrable Securities represented by Warrant Shares (applied, in the case that some Warrant Shares may be registered, to the Holders on a pro rata basis based on the total number of unregistered Warrant Shares held by such Holders); and

Second, the Company shall reduce Registrable Securities represented by Conversion Shares (applied, in the case that some Conversion Shares may be registered, to the Holders on a pro rata basis based on the total number of unregistered Conversion Shares held by such Holders).

In the event of a cutback hereunder, the Company shall give the Holder at least five (5) Trading Days prior written notice along with the calculations as to such Holder's allotment.

(d) If: (i) the Initial Registration Statement is not filed on or prior to its Filing Date (if the Company files the Initial Registration Statement without affording the Holders the opportunity to review and comment on the same as required by Section 3(a) herein, the Company shall be deemed to have not satisfied this clause (i)), or (ii) the Company fails to file with the Commission a request for acceleration of a Registration Statement in accordance with Rule 461 promulgated by the Commission pursuant to the Securities Act, within five Trading Days of the date that the Company is notified (orally or in writing, whichever is earlier) by the Commission that such Registration Statement will not be "reviewed" or will not be subject to further review, or (iii) prior to the effective date of a Registration Statement, the Company fails to file a pre-effective amendment and otherwise respond in writing to comments made by the Commission in respect of such Registration Statement within twenty (20) calendar days after the receipt of comments by or notice from the Commission that such amendment is required in order for such Registration Statement to be declared effective, or (iv) a Registration Statement registering for resale all of the Registrable Securities is not declared effective by the Commission by the Effectiveness Date of the Initial Registration Statement, or (v) after the effective date of a Registration Statement, such Registration Statement ceases for any reason to remain continuously effective as to all Registrable Securities included in such Registration Statement, or the Holders are otherwise not permitted to utilize the Prospectus therein to resell such Registrable Securities, for more than three (3) consecutive Trading Days or more than an aggregate of ten (10) calendar days (which need not be consecutive calendar days) during any 12-month period (any such failure or breach being referred to as an "Event", and for purposes of clauses (i) and (iv), the date on which such Event occurs, and for purpose of clause (ii) the date on which such five (5) Trading Day period is exceeded, and for purpose of clause (iii) the date which such twenty (20) calendar day period is exceeded, and for purpose of clause (v) the date on which such three (3) Trading Day or ten (10) calendar day period, as applicable, is exceeded being referred to as "Event Date"), then, in addition to any other rights the Holders may have hereunder or under applicable law, on each such Event Date and on each monthly anniversary of each such Event Date (if the applicable Event shall not have been cured by such date) until the applicable Event is cured, the Company shall pay to Holder an amount in cash, as partial liquidated damages and not as a penalty, equal to the product of 1.0% multiplied by the aggregate Subscription Amount paid by such Holder pursuant to the Purchase Agreement. If the Company fails to pay any partial liquidated damages pursuant to this Section in full within seven days after the date payable, the Company will pay interest thereon at a rate of 18% per annum (or such lesser maximum amount that is permitted to be paid by applicable law) to the Holder, accruing daily from the date such partial liquidated damages are due until such amounts, plus all such interest thereon, are paid in full. The partial liquidated damages pursuant to the terms hereof shall apply on a daily pro rata basis for any portion of a month prior to the cure of an Event.

(e) If Form S-1 is not available for the registration of the resale of Registrable Securities hereunder, the Company shall (i) register the resale of the Registrable Securities on another appropriate form and (ii) undertake to register the Registrable Securities on Form S-1 as soon as such form is available, provided that the Company shall maintain the effectiveness of the Registration Statement then in effect until such time as a Registration Statement on Form S-1 covering the Registrable Securities has been declared effective by the Commission.

(f) Notwithstanding anything to the contrary contained herein, in no event shall the Company be permitted to name any Holder or affiliate of a Holder as any Underwriter without the prior written consent of such Holder.

Registration Procedures.

In connection with the Company's registration obligations hereunder, the Company shall:

(a) Not less than five (5) Trading Days prior to the filing of each Registration Statement and not less than one (1) Trading Day prior to the filing of any related Prospectus or any amendment or supplement thereto (including any document that would be incorporated or deemed to be incorporated therein by reference), the Company shall (i) furnish to Holder copies of all such documents proposed to be filed, which documents (other than those incorporated or deemed to be incorporated by reference) will be subject to the review of such Holders, and (ii) cause its officers and directors, counsel and independent registered public accountants to respond to such inquiries as shall be necessary, in the reasonable opinion of respective counsel to Holder, to conduct a reasonable investigation within the meaning of the Securities Act. The Company shall not file a Registration Statement or any such Prospectus or any amendments or supplements thereto to which the Holders of a majority of the Registrable Securities shall reasonably object in good faith, provided that the Company is notified of such objection in writing no later than four (4) Trading Days after the Holders have been so furnished copies of a Registration Statement or one (1) Trading Day after the Holders have been so furnished copies of any related Prospectus or amendments or supplements thereto. Holder agrees to furnish to the Company a completed questionnaire in the form attached to this Agreement as Annex C (a "Selling Stockholder Questionnaire") on a date that is not less than two (2) Trading Days prior to the Filing Date or by the end of the fourth (4^th) Trading Day following the date on which such Holder receives draft materials in accordance with this Section.

(b) (i) Prepare and file with the Commission such amendments, including post-effective amendments, to a Registration Statement and the Prospectus used in connection therewith as may be necessary to keep a Registration Statement continuously effective as to the applicable Registrable Securities for the Effectiveness Period and prepare and file with the Commission such additional Registration Statements in order to register for resale under the Securities Act all of the Registrable Securities, (ii) cause the related Prospectus to be amended or supplemented by any required Prospectus supplement (subject to the terms of this Agreement), and, as so supplemented or amended, to be filed pursuant to Rule 424, (iii) respond as promptly as reasonably possible to any comments received from the Commission with respect to a Registration Statement or any amendment thereto and provide as promptly as reasonably possible to the Holders true and complete copies of all correspondence from and to the Commission relating to a Registration Statement (provided that, the Company shall excise any information contained therein which would constitute material non-public information regarding the Company or any of its Subsidiaries), and (iv) comply in all material respects with the applicable provisions of the Securities Act and the Exchange Act with respect to the disposition of all Registrable Securities covered by a Registration Statement during the applicable period in accordance (subject to the terms of this Agreement) with the intended methods of disposition by the Holders thereof set forth in such Registration Statement as so amended or in such Prospectus as so supplemented.

(c) If during the Effectiveness Period, the number of Registrable Securities at any time exceeds 100% of the number of shares of Common Stock then registered in a Registration Statement, then the Company shall file as soon as reasonably practicable, but in any case prior to the applicable Filing Date, an additional Registration Statement covering the resale by the Holders of not less than the number of such Registrable Securities.

(d) Notify the Holders of Registrable Securities to be sold (which notice shall, pursuant to clauses (iii) through (vi) hereof, be accompanied by an instruction to suspend the use of the Prospectus until the requisite changes have been made) as promptly as reasonably possible (and, in the case of (i)(A) below, not less than one (1) Trading Day prior to such filing) and (if requested by any such Person) confirm such notice in writing no later than one (1) Trading Day following the day (i)(A) when a Prospectus or any Prospectus supplement or post-effective amendment to a Registration Statement is proposed to be filed, (B) when the Commission notifies the Company whether there will be a "review" of such Registration Statement and whenever the Commission comments in writing on such Registration Statement, and (C) with respect to a Registration Statement or any post-effective amendment, when the same has become effective, (ii) of any request by the Commission or any other federal or state governmental authority for amendments or supplements to a Registration Statement or Prospectus or for additional information, (iii) of the issuance by the Commission or any other federal or state governmental authority of any stop order suspending the effectiveness of a Registration Statement covering any or all of the Registrable Securities or the initiation of any Proceedings for that purpose, (iv) of the receipt by the Company of any notification with respect to the suspension of the qualification or exemption from qualification of any of the Registrable Securities for sale in any jurisdiction, or the initiation or threatening of any Proceeding for such purpose, (v) of the occurrence of any event or passage of time that makes the financial statements included in a Registration Statement ineligible for inclusion therein or any statement made in a Registration Statement or Prospectus or any document incorporated or deemed to be incorporated therein by reference untrue in any material respect or that requires any revisions to a Registration Statement, Prospectus or other documents so that, in the case of a Registration Statement or the Prospectus, as the case may be, it will not contain any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances under which they were made, not misleading, and (vi) of the occurrence or existence of any pending corporate development with respect to the Company that the Company believes may be material and that, in the determination of the Company, makes it not in the best interest of the Company to allow continued availability of a Registration Statement or Prospectus; provided, however, that in no event shall any such notice contain any information which would constitute material, non-public information regarding the Company or any of its Subsidiaries.

(e) Use its best efforts to avoid the issuance of, or, if issued, obtain the withdrawal of (i) any order stopping or suspending the effectiveness of a Registration Statement, or (ii) any suspension of the qualification (or exemption from qualification) of any of the Registrable Securities for sale in any jurisdiction, at the earliest practicable moment.

(f) Furnish to Holder, without charge, at least one conformed copy of each such Registration Statement and each amendment thereto, including financial statements and schedules, all documents incorporated or deemed to be incorporated therein by reference to the extent requested by such Person, and all exhibits to the extent requested by such Person (including those previously furnished or incorporated by reference) promptly after the filing of such documents with the Commission; provided, that any such item which is available on the EDGAR system (or successor thereto) need not be furnished in physical form.

(g) Subject to the terms of this Agreement, the Company hereby consents to the use of such Prospectus and each amendment or supplement thereto by each of the selling Holders in connection with the offering and sale of the Registrable Securities covered by such Prospectus and any amendment or supplement thereto, except after the giving of any notice pursuant to Section 3(d).

(h) Prior to any resale of Registrable Securities by a Holder, use its commercially reasonable efforts to register or qualify or cooperate with the selling Holders in connection with the registration or qualification (or exemption from the Registration or qualification) of such Registrable Securities for the resale by the Holder under the securities or Blue Sky laws of such jurisdictions within the United States as any Holder reasonably requests in writing, to keep each registration or qualification (or exemption therefrom) effective during the Effectiveness Period and to do any and all other acts or things reasonably necessary to enable the disposition in such jurisdictions of the Registrable Securities covered by each Registration Statement; provided, that, the Company shall not be required to qualify generally to do business in any jurisdiction where it is not then so qualified, subject the Company to any material tax in any such jurisdiction where it is not then so subject or file a general consent to service of process in any such jurisdiction.

(i) If requested by a Holder, cooperate with such Holder to facilitate the timely preparation and delivery of certificates representing Registrable Securities to be delivered to a transferee pursuant to a Registration Statement, which certificates shall be free, to the extent permitted by the Purchase Agreement, of all restrictive legends, and to enable such Registrable Securities to be in such denominations and registered in such names as any such Holder may request.

(j) Upon the occurrence of any event contemplated by Section 3(d), as promptly as reasonably possible under the circumstances taking into account the Company’s good faith assessment of any adverse consequences to the Company and its stockholders of the premature disclosure of such event, prepare a supplement or amendment, including a post-effective amendment, to a Registration Statement or a supplement to the related Prospectus or any document incorporated or deemed to be incorporated therein by reference, and file any other required document so that, as thereafter delivered, neither a Registration Statement nor such Prospectus will contain an untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances under which they were made, not misleading. If the Company notifies the Holders in accordance with clauses (iii) through (vi) of Section 3(d) above to suspend the use of any Prospectus until the requisite changes to such Prospectus have been made, then the Holders shall suspend use of such Prospectus. The Company will use its best efforts to ensure that the use of the Prospectus may be resumed as promptly as is practicable. The Company shall be entitled to exercise its right under this Section 3(j) to suspend the availability of a Registration Statement and Prospectus, subject to the payment of partial liquidated damages otherwise required pursuant to Section 2(d), for a period not to exceed 60 calendar days (which need not be consecutive days) in any 12-month period.

(k) Otherwise use commercially reasonable efforts to comply with all applicable rules and regulations of the Commission under the Securities Act and the Exchange Act, including, without limitation, Rule 172 under the Securities Act, file any final Prospectus, including any supplement or amendment thereof, with the Commission pursuant to Rule 424 under the Securities Act, promptly inform the Holders in writing if, at any time during the Effectiveness Period, the Company does not satisfy the conditions specified in Rule 172 and, as a result thereof, the Holders are required to deliver a Prospectus in connection with any disposition of Registrable Securities and take such other actions as may be reasonably necessary to facilitate the registration of the Registrable Securities hereunder.

(1) The Company shall use its best efforts to maintain eligibility for use of Form S-1 (or any successor form thereto) for the registration of the resale of Registrable Securities.

(m) The Company may require each selling Holder to furnish to the Company a certified statement as to the number of shares of Common Stock beneficially owned by such Holder and, if required by the Commission, the natural persons thereof that have voting and dispositive control over the shares. During any periods that the Company is unable to meet its obligations hereunder with respect to the registration of the Registrable Securities solely because any Holder fails to furnish such information within three Trading Days of the Company’s request, any liquidated damages that are accruing at such time as to such Holder only shall be tolled and any Event that may otherwise occur solely because of such delay shall be suspended as to such Holder only, until such information is delivered to the Company and an amendment to the Registration Statement is filed to incorporate Holder's information, provided that such filing is made within two (2) days of receipt of such information from Holder.

4. Registration Expenses. All fees and expenses incident to the performance of or compliance with, this Agreement by the Company shall be borne by the Company whether or not any Registrable Securities are sold pursuant to a Registration Statement. The fees and expenses referred to in the foregoing sentence shall include, without limitation, (i) all registration and filing fees (including, without limitation, fees and expenses of the Company's counsel and independent registered public accountants) (A) with respect to filings made with the Commission, (B) with respect to filings required to be made with any Trading Market on which the Common Stock is then listed for trading, and (C) in compliance with applicable state securities or Blue Sky laws reasonably agreed to by the Company in writing (including, without limitation, fees and disbursements of counsel for the Company in connection with Blue Sky qualifications or exemptions of the Registrable Securities), (ii) printing expenses (including, without limitation, expenses of printing certificates for Registrable Securities), (iii) messenger, telephone and delivery expenses, (iv) fees and disbursements of counsel for the Company, (v) Securities Act liability insurance, if the Company so desires such insurance, and (vi) fees and expenses of all other Persons retained by the Company in connection with the consummation of the transactions contemplated by this Agreement. In addition, the Company shall be responsible for all of its internal expenses incurred in connection with the consummation of the transactions contemplated by this Agreement (including, without limitation, all salaries and expenses of its officers and employees performing legal or accounting duties), the expense of any annual audit and the fees and expenses incurred in connection with the listing of the Registrable Securities on any securities exchange as required hereunder. In no event shall the Company be responsible for any broker or similar commissions of any Holder or, except to the extent provided for in the Transaction Documents, any legal fees or other costs of the Holders.

5. Indemnification.

(a) Indemnification by the Company. The Company shall, notwithstanding any termination of this Agreement, indemnify and hold harmless Holder, the officers, directors, members, partners, agents, brokers (including brokers who offer and sell Registrable Securities as principal as a result of a pledge or any failure to perform under a margin call of Common Stock), investment advisors and employees (and any other Persons with a functionally equivalent role of a Person holding such titles, notwithstanding a lack of such title or any other title) of each of them, each Person who controls any such Holder (within the meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act) and the officers, directors, members, stockholders, partners, agents and employees (and any other Persons with a functionally equivalent role of a Person holding such titles, notwithstanding a lack of such title or any other title) of each such controlling Person, to the fullest extent permitted by applicable law, from and against any and all losses, claims, damages, liabilities, costs (including, without limitation, reasonable attorneys' fees) and expenses (collectively, “Losses"), as incurred, arising out of or relating to (1) any untrue or alleged untrue statement of a material fact contained in a Registration Statement, any Prospectus or any form of prospectus or in any amendment or supplement thereto or in any preliminary prospectus, or arising out of or relating to any omission or alleged omission of a material fact required to be stated therein or necessary to make the statements therein (in the case of any Prospectus or supplement thereto, in light of the circumstances under which they were made) not misleading or (2) any violation or alleged violation by the Company of the Securities Act, the Exchange Act or any state securities law, or any rule or regulation thereunder, in connection with the performance of its obligations under this Agreement, except to the extent, but only to the extent, that (i) such untrue statements or omissions are based solely upon information regarding such Holder furnished in writing to the Company by such Holder expressly for use therein, or to the extent that such information relates to such Holder or such Holder's proposed method of distribution of Registrable Securities and was reviewed and expressly approved in writing by such Holder expressly for use in a Registration Statement, such Prospectus or in any amendment or supplement thereto (it being understood that the Holder has approved Annex A hereto for this purpose) or (ii) in the case of an occurrence of an event of the type specified in Section 3(d)(iii)-(vi), the use by such Holder of an outdated, defective or otherwise unavailable Prospectus after the Company has notified such Holder in writing that the Prospectus is outdated, defective or otherwise unavailable for use by such Holder and prior to the receipt by such Holder of the Advice contemplated in Section 6(d). The Company shall notify the Holders promptly of the institution, threat or assertion of any Proceeding arising from or in connection with the transactions contemplated by this Agreement of which the Company is aware. Such indemnity shall remain in full force and effect regardless of any investigation made by or on behalf of such indemnified person and shall survive the transfer of any Registrable Securities by any of the Holders in accordance with Section 6(h).

(b) Indemnification by Holder. Holder shall, severally and not jointly, indemnify and hold harmless the Company, its directors, officers, agents and employees, each Person who controls the Company (within the meaning of Section 15 of the Securities Act and Section 20 of the Exchange Act), and the directors, officers, agents or employees of such controlling Persons, to the fullest extent permitted by applicable law, from and against all Losses, as incurred, to the extent arising out of or based solely upon: any untrue or alleged untrue statement of a material fact contained in any Registration Statement, any Prospectus, or in any amendment or supplement thereto or in any preliminary prospectus, or arising out of or relating to any omission or alleged omission of a material fact required to be stated therein or necessary to make the statements therein (in the case of any Prospectus or supplement thereto, in light of the circumstances under which they were made). In no event shall the liability of a selling Holder be greater in amount than the dollar amount of the proceeds (net of all expenses paid by such Holder in connection with any claim relating to this Section 5 and the amount of any damages such Holder has otherwise been required to pay by reason of such untrue statement or omission) received by such Holder upon the sale of the Registrable Securities included in the Registration Statement giving rise to such indemnification obligation.

(c) Conduct of Indemnification Proceedings. If any Proceeding shall be brought or asserted against any Person entitled to indemnity hereunder (an "Indemnified Party"), such Indemnified Party shall promptly notify the Person from whom indemnity is sought (the "Indemnifying Party") in writing, and the Indemnifying Party shall have the right to assume the defense thereof, including the employment of counsel reasonably satisfactory to the Indemnified Party and the payment of all fees and expenses incurred in connection with defense thereof; provided, that, the failure of any Indemnified Party to give such notice shall not relieve the Indemnifying Party of its obligations or liabilities pursuant to this Agreement, except (and only) to the extent that it shall be finally determined by a court of competent jurisdiction (which determination is not subject to appeal or further review) that such failure shall have materially and adversely prejudiced the Indemnifying Party.

An Indemnified Party shall have the right to employ separate counsel in any such Proceeding and to participate in the defense thereof, but the fees and expenses of such counsel shall be at the expense of such Indemnified Party or Parties unless: (1) the Indemnifying Party has agreed in writing to pay such fees and expenses, (2) the Indemnifying Party shall have failed promptly to assume the defense of such Proceeding and to employ counsel reasonably satisfactory to such Indemnified Party in any such Proceeding, or (3) the named parties to any such Proceeding (including any impleaded parties) include both such Indemnified Party and the Indemnifying Party, and counsel to the Indemnified Party shall reasonably believe that a material conflict of interest is likely to exist if the same counsel were to represent such Indemnified Party and the Indemnifying Party (in which case, if such Indemnified Party notifies the Indemnifying Party in writing that it elects to employ separate counsel at the expense of the Indemnifying Party, the Indemnifying Party shall not have the right to assume the defense thereof and the reasonable fees and expenses of no more than one separate counsel shall be at the expense of the Indemnifying Party). The Indemnifying Party shall not be liable for any settlement of any such Proceeding effected without its written consent, which consent shall not be unreasonably withheld or delayed. No Indemnifying Party shall, without the prior written consent of the Indemnified Party, effect any settlement of any pending Proceeding in respect of which any Indemnified Party is a party, unless such settlement includes an unconditional release of such Indemnified Party from all liability on claims that are the subject matter of such Proceeding.

Subject to the terms of this Agreement, all reasonable fees and expenses of the Indemnified Party (including reasonable fees and expenses to the extent incurred in connection with investigating or preparing to defend such Proceeding in a manner not inconsistent with this Section) shall be paid to the Indemnified Party, as incurred, within ten Trading Days of written notice thereof to the Indemnifying Party; provided, that, the Indemnified Party shall promptly reimburse the Indemnifying Party for that portion of such fees and expenses applicable to such actions for which such Indemnified Party is finally determined by a court of competent jurisdiction (which determination is not subject to appeal or further review) not to be entitled to indemnification hereunder.

(d) Contribution. If the indemnification under Section 5(a) or 5(b) is unavailable to an Indemnified Party or insufficient to hold an Indemnified Party harmless for any Losses, then each Indemnifying Party shall contribute to the amount paid or payable by such Indemnified Party, in such proportion as is appropriate to reflect the relative fault of the Indemnifying Party and Indemnified Party in connection with the actions, statements or omissions that resulted in such Losses as well as any other relevant equitable considerations. The relative fault of such Indemnifying Party and Indemnified Party shall be determined by reference to, among other things, whether any action in question, including any untrue or alleged untrue statement of a material fact or omission or alleged omission of a material fact, has been taken or made by, or relates to information supplied by, such Indemnifying Party or Indemnified Party, and the parties' relative intent, knowledge, access to information and opportunity to correct or prevent such action, statement or omission. The amount paid or payable by a party as a result of any Losses shall be deemed to include, subject to the limitations set forth in this Agreement, any reasonable attorneys' or other fees or expenses incurred by such party in connection with any Proceeding to the extent such party would have been indemnified for such fees or expenses if the indemnification provided for in this Section was available to such party in accordance with its terms.

The parties hereto agree that it would not be just and equitable if contribution pursuant to this Section 5(d) were determined by pro rata allocation or by any other method of allocation that does not take into account the equitable considerations referred to in the immediately preceding paragraph. In no event shall the contribution obligation of a Holder of Registrable Securities be greater in amount than the dollar amount of the proceeds (net of all expenses paid by such Holder in connection with any claim relating to this Section 5 and the amount of any damages such Holder has otherwise been required to pay by reason of such untrue or alleged untrue statement or omission or alleged omission) received by it upon the sale of the Registrable Securities giving rise to such contribution obligation.

The indemnity and contribution agreements contained in this Section are in addition to any liability that the Indemnifying Parties may have to the Indemnified Parties.

Miscellaneous.

(a) Remedies. In the event of a breach by the Company of their respective obligations under this Agreement, Holder, as the case may be, in addition to being entitled to exercise all rights granted by law and under this Agreement, including recovery of damages, shall be entitled to specific performance of its rights under this Agreement. Each of the Company and Holder agrees that monetary damages would not provide adequate compensation for any losses incurred by reason of a breach by it of any of the provisions of this Agreement and hereby further agrees that, in the event of any action for specific performance in respect of such breach, it shall not assert or shall waive the defense that a remedy at law would be adequate.

(b) No Piggyback on Registrations; Prohibition on Filing Other Registration Statements. Neither the Company nor any of its security holders (other than the Holders in such capacity pursuant hereto) may include securities of the Company in any Registration Statements other than the Registrable Securities. The Company shall not file any other registration statements until all Registrable Securities are registered pursuant to a Registration Statement that is declared effective by the Commission, provided that this Section 6(b) shall not prohibit the Company from filing amendments to registration statements filed prior to the date of this Agreement.

(d) Discontinued Disposition. By its acquisition of Registrable Securities, Holder agrees that, upon receipt of a notice from the Company of the occurrence of any event of the kind described in Section 3(d)(iii) through (vi), such Holder will forthwith discontinue disposition of such Registrable Securities under a Registration Statement until it is advised in writing (the "Advice") by the Company that the use of the applicable Prospectus (as it may have been supplemented or amended) may be resumed. The Company will use its best efforts to ensure that the use of the Prospectus may be resumed as promptly as is practicable. The Company agrees and acknowledges that any periods during which the Holder is required to discontinue the disposition of the Registrable Securities hereunder shall be subject to the provisions of Section 2(d).

(e) Piggy-Back Registrations. If, at any time during the Effectiveness Period, there is not an effective Registration Statement covering all of the Registrable Securities and the Company shall determine to prepare and file with the Commission a registration statement relating to an offering for its own account or the account of others under the Securities Act of any of its equity securities, other than on Form S-4 or Form S-8 (each as promulgated under the Securities Act) or their then equivalents relating to equity securities to be issued solely in connection with any acquisition of any entity or business or equity securities issuable in connection with the Company's stock option or other employee benefit plans, then the Company shall deliver to Holder a written notice of such determination and, if within fifteen days after the date of the delivery of such notice, any such Holder shall so request in writing, the Company shall include in such registration statement all or any part of such Registrable Securities such Holder requests to be registered; provided, however, that, following the date on which no Warrants remain outstanding, the Company shall not be required to register any Registrable Securities pursuant to this Section 6(e) that are eligible for resale pursuant to Rule 144 (without volume restrictions or current public information requirements) promulgated by the Commission pursuant to the Securities Act or that are the subject of a then effective Registration Statement that is available for resales or other dispositions by such Holder.

(f) Amendments and Waivers. The provisions of this Agreement, including the provisions of this sentence, may not be amended, modified or supplemented, and waivers or consents to departures from the provisions hereof may not be given, unless the same shall be in writing and signed by the Company and the Holders of 50.1% or more of the then outstanding Registrable Securities (for purposes of clarification, this includes any Registrable Securities issuable upon exercise or conversion of any Security), provided that, if any amendment, modification or waiver disproportionately and adversely impacts a Holder (or group of Holders), the consent of such disproportionately impacted Holder (or group of Holders) shall be required. If a Registration Statement does not register all of the Registrable Securities pursuant to a waiver or amendment done in compliance with the previous sentence, then the number of Registrable Securities to be registered for Holder shall be reduced pro rata among all Holders and Holder shall have the right to designate which of its Registrable Securities shall be omitted from such Registration Statement. Notwithstanding the foregoing, a waiver or consent to depart from the provisions hereof with respect to a matter that relates exclusively to the rights of a Holder or some Holders and that does not directly or indirectly affect the rights of other Holders may be given only by such Holder or Holders of all of the Registrable Securities to which such waiver or consent relates; provided, however, that the provisions of this sentence may not be amended, modified, or supplemented except in accordance with the provisions of the first sentence of this Section 6(f). No consideration shall be offered or paid to any Person to amend or consent to a waiver or modification of any provision of this Agreement unless the same consideration also is offered to all of the parties to this Agreement.

(g) Notices. Any and all notices or other communications or deliveries required or permitted to be provided hereunder shall be delivered as set forth in the Purchase Agreement.

(h) Successors and Assigns. This Agreement shall inure to the benefit of and be binding upon the successors and permitted assigns of each of the parties and shall inure to the benefit of Holder. The Company may not assign (except by merger) its rights or obligations hereunder without the prior written consent of all of the Holders of the then outstanding Registrable Securities. Holder may assign their respective rights hereunder in the manner and to the Persons as permitted under Section 5.7 of the Purchase Agreement.

(i) No Inconsistent Agreements. Neither the Company nor any of its Subsidiaries has entered, as of the date hereof, nor shall the Company or any of its Subsidiaries, on or after the date of this Agreement, enter into any agreement with respect to its securities, that would have the effect of impairing the rights granted to the Holders in this Agreement or otherwise conflicts with the provisions hereof. Except as set forth on Schedule 6(i), neither the Company nor any of its Subsidiaries has previously entered into any agreement granting any registration rights with respect to any of its securities to any Person that have not been satisfied in full.

(j) Execution and Counterparts. This Agreement may be executed in two or more counterparts, all of which when taken together shall be considered one and the same agreement and shall become effective when counterparts have been signed by each party and delivered to the other party, it being understood that both parties need not sign the same counterpart. In the event that any signature is delivered by facsimile transmission or by e-mail delivery of a ".pdf" format data file, such signature shall create a valid and binding obligation of the party executing (or on whose behalf such signature is executed) with the same force and effect as if such facsimile or ".pdf" signature page were an original thereof.

(k) Governing Law. All questions concerning the construction, validity, enforcement and interpretation of this Agreement shall be determined in accordance with the provisions of the Purchase Agreement.

(1) Cumulative Remedies. The remedies provided herein are cumulative and not exclusive of any other remedies provided by law.

(m) Severability. If any term, provision, covenant or restriction of this Agreement is held by a court of competent jurisdiction to be invalid, illegal, void or unenforceable, the remainder of the terms, provisions, covenants and restrictions set forth herein shall remain in full force and effect and shall in no way be affected, impaired or invalidated, and the parties hereto shall use their commercially reasonable efforts to find and employ an alternative means to achieve the same or substantially the same result as that contemplated by such term, provision, covenant or restriction. It is hereby stipulated and declared to be the intention of the parties that they would have executed the remaining terms, provisions, covenants and restrictions without including any of such that may be hereafter declared invalid, illegal, void or unenforceable.

(n) Headings. The headings in this Agreement are for convenience only, do not constitute a part of the Agreement and shall not be deemed to limit or affect any of the provisions hereof.

(o) Independent Nature of Holders' Obligations and Rights. The obligations of Holder hereunder are several and not joint with the obligations of any other Holder hereunder, and no Holder shall be responsible in any way for the performance of the obligations of any other Holder hereunder. Nothing contained herein or in any other agreement or document delivered at any closing, and no action taken by any Holder pursuant hereto or thereto, shall be deemed to constitute the Holders as a partnership, an association, a joint venture or any other kind of group or entity, or create a presumption that the Holders are in any way acting in concert or as a group or entity with respect to such obligations or the transactions contemplated by this Agreement or any other matters, and the Company acknowledges that the Holders are not acting in concert or as a group, and the Company shall not assert any such claim, with respect to such obligations or transactions. Holder shall be entitled to protect and enforce its rights, including without limitation the rights arising out of this Agreement, and it shall not be necessary for any other Holder to be joined as an additional party in any proceeding for such purpose. The use of a single agreement with respect to the obligations of the Company contained was solely in the control of the Company, not the action or decision of any Holder, and was done solely for the convenience of the Company and not because it was required or requested to do so by any Holder. It is expressly understood and agreed that each provision contained in this Agreement is between the Company and a Holder, solely, and not between the Company and the Holders collectively and not between and among Holders.

(Signature Pages Follow)

IN WITNESS WHEREOF, the parties have executed this Registration Rights Agreement as of the date first written above.

	EDISON NATION INC.

	By:	/s/ Chris Ferguson
		Name: Chris Ferguson
		Title: Chief Executive Officer

[SIGNATURE PAGE OF HOLDERS FOLLOWS]

[SIGNATURE PAGE OF HOLDERS TO EDISON NATION INC RRA]

Name of Holder:

32 Entertainment LLC

Signature of Authorized Signatory of Holder:

/s/ Robert Wolf

Name of Authorized Signatory:

Robert Wolf

Title of Authorized Signatory:

Founder

[SIGNATURE PAGES CONTINUE]

Annex A

Plan of Distribution

Selling Stockholder (the "Selling Stockholder") of the securities and any of their pledgees, assignees and successors-in-interest may, from time to time, sell any or all of their securities covered hereby on OTCQB or the principal Trading Market or any other stock exchange, market or trading facility on which the securities are traded or in private transactions. These sales may be at fixed or negotiated prices. A Selling Stockholder may use any one or more of the following methods when selling securities:

	·	ordinary brokerage transactions and transactions in which the broker-dealer solicits purchasers;

	·	block trades in which the broker-dealer will attempt to sell the securities as agent but may position and resell a portion of the block as principal to facilitate the transaction;

	·	purchases by a broker-dealer as principal and resale by the broker-dealer for its account;

	·	an exchange distribution in accordance with the rules of the applicable exchange;

privately negotiated transactions;

	·	settlement of short sales;

	·	in transactions through broker-dealers that agree with the Selling Stockholders to sell a specified number of such securities at a stipulated price per security;

	·	through the writing or settlement of options or other hedging transactions, whether through an options exchange or otherwise;

	·	a combination of any such methods of sale; or

any other method permitted pursuant to applicable law.

The Selling Stockholder may also sell securities under Rule 144 or any other exemption from registration under the Securities Act of 1933, as amended (the "Securities Act"), if available, rather than under this prospectus.

Broker-dealers engaged by the Selling Stockholders may arrange for other brokers-dealers to participate in sales. Broker-dealers may receive commissions or discounts from the Selling Stockholders (or, if any broker-dealer acts as agent for the purchaser of securities, from the purchaser) in amounts to be negotiated, but, except as set forth in a supplement to this Prospectus, in the case of an agency transaction not in excess of a customary brokerage commission in compliance with FINRA Rule 2440; and in the case of a principal transaction a markup or markdown in compliance with FINRA IM-2440.

In connection with the sale of the securities or interests therein, the Selling Stockholders may enter into hedging transactions with broker-dealers or other financial institutions, which may in turn engage in short sales of the securities in the course of hedging the positions they assume. The Selling Stockholders may also sell securities short and deliver these securities to close out their short positions, or loan or pledge the securities to broker-dealers that in turn may sell these securities. The Selling Stockholders may also enter into option or other transactions with broker-dealers or other financial institutions or create one or more derivative securities which require the delivery to such broker-dealer or other financial institution of securities offered by this prospectus, which securities such broker-dealer or other financial institution may resell pursuant to this ^-prospectus (as supplemented or amended to reflect such transaction).

The Selling Stockholders and any broker-dealers or agents that are involved in selling the securities may be deemed to be "underwriters" within the meaning of the Securities Act in connection with such sales. In such event, any commissions received by such broker-dealers or agents and any profit on the resale of the securities purchased by them may be deemed to be underwriting commissions or discounts under the Securities Act. Each Selling Stockholder has informed the Company that it does not have any written or oral agreement or understanding, directly or indirectly, with any person to distribute the securities.

The Company is required to pay certain fees and expenses incurred by the Company incident to the registration of the securities. The Company has agreed to indemnify the Selling Stockholders against certain losses, claims, damages and liabilities, including liabilities under the Securities Act.

We agreed to keep this prospectus effective until the earlier of (i) the date on which the securities may be resold by the Selling Stockholders without registration and without regard to any volume or manner-of-sale limitations by reason of Rule 144, without the requirement for the Company to be in compliance with the current public information under Rule 144 under the Securities Act or any other rule of similar effect or (ii) all of the securities have been sold pursuant to this prospectus or Rule 144 under the Securities Act or any other rule of similar effect. The resale securities will be sold only through registered or licensed brokers or dealers if required under applicable state securities laws. In addition, in certain states, the resale securities covered hereby may not be sold unless they have been registered or qualified for sale in the applicable state or an exemption from the registration or qualification requirement is available and is complied with.

Under applicable rules and regulations under the Exchange Act, any person engaged in the distribution of the resale securities may not simultaneously engage in market making activities with respect to the common stock for the applicable restricted period, as defined in Regulation M, prior to the commencement of the distribution. In addition, the Selling Stockholders will be subject to applicable provisions of the Exchange Act and the rules and regulations thereunder, including Regulation M, which may limit the timing of purchases and sales of the common stock by the Selling Stockholders or any other person. We will make copies of this prospectus available to the Selling Stockholders and have informed them of the need to deliver a copy of this prospectus to each purchaser at or prior to the time of the sale (including by compliance with Rule 172 under the Securities Act).

Annex C

EDISON NATION, INC.

Selling Stockholder Notice and Questionnaire

The undersigned beneficial owner of common stock (the "Registrable Securities") of Edison Nation, Inc., a Nevada corporation (the "Company"),understands that the Company has filed or intends to file with the Securities and Exchange Commission (the "Commission") a registration statement (the "Registration Statement") for the registration and resale under Rule 415 of the Securities Act of 1933, as amended (the "Securities Act"), of the Registrable Securities, in accordance with the terms of the Registration Rights Agreement (the "Registration Rights Agreement") to which this document is annexed. A copy of the Registration Rights Agreement is available from the Company upon request at the address set forth below. All capitalized terms not otherwise defined herein shall have the meanings ascribed thereto in the Registration Rights Agreement.

Certain legal consequences arise from being named as a selling stockholder in the Registration Statement and the related prospectus. Accordingly, holders and beneficial owners of Registrable Securities are advised to consult their own securities law counsel regarding the consequences of being named or not being named as a selling stockholder in the Registration Statement and the related prospectus.

NOTICE

The undersigned beneficial owner (the "Selling Stockholder") of Registrable Securities hereby elects to include the Registrable Securities owned by it in the Registration Statement.

The undersigned hereby provides the following information to the Company and represents and warrants that such information is accurate:

Exhibit 10.29

LOAN AGREEMENT

THIS LOAN AGREEMENT (this "Agreement") dated and effective this 2nd day of January 2020

BETWEEN:

Lender Name:	TIBURON OPPORTUNITY FUND
Lender Address:	13313 Point Richmond Beach Road NW, Gig Harbor, WA 98332

OF THE FIRST PART and:

EDISON NATION, INC (the "Corporation")

909 New Brunswick Ave

Alpha, NJ 08865

OF THE SECOND PART

BACKGROUND:

The Corporation is duly incorporated in the State of Nevada.

IN CONSIDERATION OF the Lender providing the Loan to the Corporation, and the Corporation repaying the Loan to the Lender, both parties agree to keep, perform, and fulfill the promises, conditions and agreements below:

Loan Amount & Interest

1. The Lender promises to loan Four Hundred Thousand Dollars ($400,000), to the Corporation and the Corporation promises to repay this principal amount to the Lender, at such address as may be provided in writing. The loan will be interest bearing at the rate of 1.5% per month through the term of the loan. The amount stated herein represents the total amount owed by Corporation to the Lender.

Payment & Collateral

2. The Corporation shall pay Lender the entire unpaid principal and all accrued interest upon thirty days written notice from Lender but no sooner than June 1, 2020. The loan proceeds are being used to fund general working capital needs of the Corporation. The Lender shall have a collateral interest in the accounts receivables of SRM Entertainment Ltd including but not limited to the Disney and Universal receivables.

Default

3. Notwithstanding anything to the contrary in this Agreement, if the Corporation defaults in the performance of any obligation under this Agreement, then the Lender may declare the principal amount owing under this Agreement at that time to be immediately due and payable.

Governing Law, Venue

4. This Agreement will be construed in accordance with and governed by the laws of the State of Nevada.

Costs

5. All costs, expenses and expenditures including, and without limitation, the complete legal costs incurred by enforcing this Agreement as a result of any default by the Corporation, will be added to the principal then outstanding and will immediately be paid by the Corporation.

Assignment

6. This Agreement will pass to the benefit of and be binding upon the respective heirs, executors, administrators, successors and assigns of the Corporation.

Amendment

7. This Agreement may only be amended or modified by a written instrument executed by both the Corporation and the Lender.

Severability

8. The clauses and paragraphs contained in this Agreement are intended to be read and construed independently of each other. If any part of this Agreement is held to be invalid, this invalidity will not affect the operation of any other part of this Agreement.

General Provisions

9. Headings are inserted for the convenience of the parties only and are not to be considered when interpreting this Agreement. Words in the singular mean and include the plural and vice versa. Words in the masculine mean and include the feminine and vice versa.

Entire Agreement

10. This Agreement constitutes the entire agreement of the parties and no other documents or understandings are considered a part of this agreement other than what is contained herein.

The parties have duly affixed their signatures under hand and seal

on this 2^nd day of January , 2020.

/s/ Chris Ferguson
Corporation
Chris Ferguson, CEO of Edison Nation, Inc

/s/ Peter Bortel
Lender(s)

Exhibit 10.30

NOTE AGREEMENT

$267,000

December 31, 2019

FOR VALUE RECEIVED, the undersigned, EDISON NATION, INC., a Nevada corporation (“Maker” or “Company”), hereby promises to pay to the order of Equity Trust Company, Custodian FBO: Rawleigh H. Ralls, 200324899, IRA, P. O. Box 451340, Westlake, Ohio 44145, (“Lender” or “Payee”), the principal amount of 267,000, together with interest on the unpaid principal balance, payable in accordance with the terms and condition of this Note Agreement (“Note”) entered into by and between the Company and Lender.

The terms and conditions of this Note are set forth below in Sections A and B.

Terms of Loan.

Loan amount: $267,000

OID: $17,000

Incentive Shares: 33,000 shares of restricted common shares of stock of Edison Nation pursuant to SEC Rule 144.

Term: 6 months

Closing date of Loan: January 10, 2020

Interest: Interest shall accrue beginning on the date hereof on the outstanding principal amount of this Note at a fixed rate equal to 5.0% per annum calculated on the basis of a 360-day year, as simple interest.

Payment of Principal and Interest: The outstanding principal amount all accrued unpaid interest thereon and any other amounts owed under each Note, shall be due and payable on the Maturity Date.

Prepayments or Redemptions: The Maker, at its sole discretion, reserves the right to prepay, prior to the Maturity Date, all or any part of the principal of the Notes without penalty.

Maturity Date means July 10, 2020

10.

Manner of Payment upon Maturity: On the Maturity Date, payment of principal and accrued and unpaid interest on this Note will be made by delivery of a check to Payee at Payee’s address set out in the Note Agreement or by wire transfer pursuant to instructions from Payee. If the date upon which the payment of principal and interest is required to be made pursuant to this Note occurs other than on a Business Day, then such payment of principal and interest shall be made on the next occurring Business Day following said payment date and shall include interest through the next occurring Business Day.

11.

Default:

Any one or more of the following events: (a) failure to pay any principal amount or interest when due; (b) Maker (i) files any petition seeking a discharge, rearrangement, or reorganization of its debts pursuant to the bankruptcy laws or any other debtor relief laws of the United States or any state or any other competent jurisdiction, (ii) makes a general assignment for the benefit of its creditors, or (iii) admits in writing its inability to pay its debts as they mature; or (c) a petition is filed against Maker seeking to rearrange, reorganize, or extinguish its debts under the provisions of any bankruptcy or other debtor relief law of the United States or any state or other competent jurisdiction, and such petition is not dismissed within 45 days, or (d) a court of competent jurisdiction enters an order, judgment, or decree appointing a receiver or trustee for it or for all or any part of its property.

If a Default occurs, and Maker does not cure such Default within thirty (30) days of receiving notice of the Default from Payee, Payee may, at its option, declare the principal of and the accrued and unpaid interest on, this Note due and payable by written notice to Maker. Notwithstanding the immediately preceding sentence, if a Default is in respect of a bankruptcy or insolvency proceeding the principal of this Note, and all accrued and unpaid interest, shall automatically become immediately due and payable. In addition, Payee may institute judicial proceedings for the collection of the amounts due and may prosecute such proceeding to judgment or final decree, and may enforce the same against Maker and collect the amount due (together with reasonable costs of collection, including reasonable attorney’s fees and expenses) adjudged or decreed to be payable in the manner provided by law out of the property of Maker. Payee may also exercise the rights of a secured party under the Uniform Commercial Code then in effect in Nevada and under the terms of the other transaction documents, and may exercise any and all other rights Payee may have at law or in equity.

Default rate of interest: 18% per annum.

Other terms and conditions of this Note:

Maximum Rate: Regardless of any provision in this Note or the Note Agreement it is the intention of Maker and Payee that Payee not (a) contract for, charge, take, reserve, receive or apply, as interest on all or any part of the principal amount of this Note any amount in excess of the Maximum Rate or the Maximum Amount or (b) receive any unearned interest in violation of any applicable law. If any acceleration of the maturity of this Note produces a rate in excess of the Maximum Rate or if the Payee shall for any reason receive any such unearned interest or if any transaction contemplated hereby would otherwise be usurious under applicable law, then (i) the aggregate of all interest under applicable usury laws that is contracted for, charged, taken, reserved, received or applied under this Note, or otherwise, shall under no circumstances exceed the Maximum Amount, (ii) neither Maker nor any other Person shall be obligated to pay the amount of such interest to the extent that it is in excess of the Maximum Amount, (iii) any excess or unearned interest shall be deemed to be and shall be treated as a partial prepayment or repayment of principal and any remaining excess or unearned interest will be refunded to Maker, and (iv) the provisions of this Note immediately shall be deemed reformed, without the necessity of the execution of any new document or instrument, so as to comply with all applicable usury laws.

Successors and Assigns: All covenants and agreements in this Note by or on behalf of Maker and the Payee shall bind and inure to the benefit of the Maker’s and Payee’s respective successors and assigns.

Notices: All notices, requests, waivers and other communications made pursuant to this Agreement shall be in writing and shall be deemed delivered, given and received when delivered (by hand, by registered mail, by courier or express delivery service, by e-mail or by facsimile) to the address, e-mail address or facsimile telephone number set forth beneath the name of such party on its signature page to this Agreement (or to such other address, e-mail address or facsimile telephone number as such party will have specified in a written notice given to the other parties hereto).

Severability Clause: In case any provision in this Note shall be invalid, illegal or unenforceable in any jurisdiction, the validity, legality and enforceability of the remaining provisions in such jurisdiction shall not in any way be affected or impaired thereby; provided that such construction does not destroy the essence of the bargain provided for under this Note or the Note Agreement.

Governing Law: This Note shall be governed by and construed in accordance with the internal laws of the State of Nevada (without regard to principles of choice of law).

Waivers: Maker and all sureties, endorsers and guarantors of this Note waive and right to notice of default or demand, presentment for payment, notice of non-payment, protest, notice of protest, notice of intent to accelerate, notice of acceleration, and any other notice not specifically required under this note. Failure to exercise any remedy under this Note does not constitute a waiver of such remedy.

Dispute Resolution: All claims, disputes, and controversies arising out of or in relation to the performance, interpretation, application, or enforcement of this Agreement, including but not limited to breach thereof, shall be referred to mediation before, and as a condition precedent to the initiation of any adjudicative action or proceeding, including arbitration. In the event the parties are unable to settle any dispute through mediation within thirty (30) days of one party notifying the other party of the dispute, such dispute shall be settled by arbitration before the American Arbitration Association under its then applicable rules. The arbitration proceeding will take place in Phillipsburg, New Jersey and such proceeding shall be before a single arbitrator who is mutually agreeable to the Maker and the Payee. If the Maker and the Payee are unable to agree on an arbitrator within thirty (30) days after either party first proposes an arbitrator to conduct the proceeding, then each party shall select an arbitrator and the two arbitrators shall select a third arbitrator, which third arbitrator shall conduct the proceeding. The decision of the arbitrator shall be final and binding upon the parties. The arbitrator shall render his award not later than thirty (30) days after the conclusion of the hearing. The decision and award shall be in writing, and counterpart copies shall be delivered to each of the parties. In rendering an award, the arbitrator shall have no power to modify any of the provisions of this Agreement, and the jurisdiction of the arbitrator is expressly limited accordingly. Judgment may be entered on the award of the arbitrator and may be enforced in any competent court having jurisdiction.

Transaction Documents: The parties agree to execute other agreements or documents to effectuate the terms and conditions of this Note.

THIS NOTE AND OTHER RELATED DOCUMENTS REPRESENT THE FINAL AGREEMENT BETWEEN MAKER AND PAYEE AND MAY NOT BE CONSTRUED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS OR SUBSEQUENT ORAL AGREEMENTS BY THE PARTIES.

THERE ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES.

[SIGNATURE PAGE FOLLOWS]

BY SIGNING BELOW, THE PARTIES AGREE TO THE TERMS AND CONDITIOS OF THIS NOTE.

	MAKER – THE COMPANY

	EDISON NATION, INC.

	/s/ Chris Ferguson
	By:	Chris Ferguson, CEO
		Address:
		909 New Brunswick Ave
		Phillipsburg, NJ 08865
		E-Mail:
		cferguson@edisonnation.com


	LENDER – PAYEE

	/s/ Rawleigh H. Ralls
	Rawleigh H. Ralls

		Address:
		744 Spruce Street
		Boulder, CO 80302

		E-Mail:
		rawleigh@ralls.com

Exhibit 10.31

THIS WARRANT AND THE SECURITIES ISSUABLE UPON EXERCISE OF THIS WARRANT HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"), OR QUALIFIED UNDER ANY STATE OR FOREIGN SECURITIES LAWS AND MAY NOT BE OFFERED FOR SALE, SOLD, PLEDGED, HYPOTHECATED OR OTHERWISE TRANSFERRED OR ASSIGNED UNLESS (I) A REGISTRATION STATEMENT COVERING SUCH SHARES IS EFFECTIVE UNDER THE ACT AND IS QUALIFIED UNDER APPLICABLE STATE AND FOREIGN LAW OR (II) THE TRANSACTION IS EXEMPT FROM THE REGISTRATION AND PROSPECTUS DELIVERY REQUIREMENTS UNDER THE ACT AND THE QUALIFICATION REQUIREMENTS UNDER APPLICABLE STATE AND FOREIGN LAW AND, IF THE CORPORATION REQUESTS, AN OPINION SATISFACTORY TO THE CORPORATION TO SUCH EFFECT HAS BEEN RENDERED BY COUNSEL.

COMMON STOCK PURCHASE WARRANT

For the Purchase of 125,000 Shares of Common Stock
of
EDISON NATION, INC.

1. Purchase Warrant. THIS CERTIFIES THAT, in consideration of funds duly paid by or on behalf of Equity Trust Company Custodian, FBO: Rawleigh Hazen Ralls IRA (“Holder”), as registered owner of this Purchase Warrant, to Edison Nation, Inc., a Nevada corporation (the “Company”), Holder is entitled, at any time or from time to time from the date hereof (the “Commencement Date”), and at or before 5:00 p.m., Eastern time, December 31, 2020 (the “Expiration Date”), but not thereafter, to subscribe for, purchase and receive, in whole or in part, up to 125,000 shares of common stock of the Company, par value $0.001 per share (the “Shares”), subject to adjustment as provided in Section 5 hereof. If the Expiration Date is a day on which banking institutions are authorized by law to close, then this Purchase Warrant may be exercised on the next succeeding day which is not such a day in accordance with the terms herein. During the period ending on the Expiration Date, the Company agrees not to take any action that would terminate this Purchase Warrant. This Purchase Warrant is exercisable at a fixed amount of $2.00 per Share; provided, however, that upon the occurrence of any of the events specified in Section 5 hereof, the rights granted by this Purchase Warrant, including the exercise price per Share and the number of Shares to be received upon such exercise, shall be adjusted as therein specified. The term “Exercise Price” shall mean the initial exercise price or the adjusted exercise price, depending on the context.

2. Exercise. In order to exercise this Purchase Warrant, the exercise form attached hereto must be duly executed and completed and delivered to the Company, together with this Purchase Warrant and payment of the Exercise Price for the Shares being purchased payable in cash by wire transfer of immediately available funds to an account designated by the Company or by certified check or official bank check. If the subscription rights represented hereby shall not be exercised at or before 5:00 p.m., Eastern time, on the Expiration Date, this Purchase Warrant shall become and be void without further force or effect, and all rights represented hereby shall cease and expire.

3. Compliance with the Securities Act.

3.1 Agreement to Comply with the Securities Act; Legend. The Holder, by acceptance of this Warrant, agrees to comply in all respects with the provisions of this Section 3 and the restrictive legend requirements set forth on the face of this Warrant and further agrees that such Holder shall not offer, sell or otherwise dispose of this Warrant or any Warrant Shares to be issued upon exercise hereof except under circumstances that will not result in a violation of the Securities Act of 1933, as amended (the "Securities Act"). This Warrant and all Warrant Shares issued upon exercise of this Warrant (unless registered under the Securities Act) shall be stamped or imprinted with a legend in substantially the following form:

"THIS WARRANT AND THE SECURITIES ISSUABLE UPON EXERCISE OF THIS WARRANT HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"), OR QUALIFIED UNDER ANY STATE OR FOREIGN SECURITIES LAWS AND MAY NOT BE OFFERED FOR SALE, SOLD, PLEDGED, HYPOTHECATED OR OTHERWISE TRANSFERRED OR ASSIGNED UNLESS (I) A REGISTRATION STATEMENT COVERING SUCH SHARES IS EFFECTIVE UNDER THE ACT AND IS QUALIFIED UNDER APPLICABLE STATE AND FOREIGN LAW OR (II) THE TRANSACTION IS EXEMPT FROM THE REGISTRATION AND PROSPECTUS DELIVERY REQUIREMENTS UNDER THE ACT AND THE QUALIFICATION REQUIREMENTS UNDER APPLICABLE STATE AND FOREIGN LAW AND, IF THE CORPORATION REQUESTS, AN OPINION SATISFACTORY TO THE CORPORATION TO SUCH EFFECT HAS BEEN RENDERED BY COUNSEL."

3.2 Representations of the Holder. In connection with the issuance of this Warrant, the Holder specifically represents, as of the date hereof, to the Company by acceptance of this Warrant as follows:

3.2.1 The Holder is an "accredited investor" as defined in Rule 501(a) of Regulation D promulgated under the Securities Act. The Holder is acquiring this Warrant and the Warrant Shares to be issued upon exercise hereof for investment for its own account and not with a view towards, or for resale in connection with, the public sale or distribution of this Warrant or the Warrant Shares, except pursuant to sales registered or exempted under the Securities Act.

3.2.2 The Holder understands and acknowledges that this Warrant and the Warrant Shares to be issued upon exercise hereof are "restricted securities" under the federal securities laws inasmuch as they are being acquired from the Company in a transaction not involving a public offering and that, under such laws and applicable regulations, such securities may be resold without registration under the Securities Act only in certain limited circumstances. In addition, the Holder represents that it is familiar with Rule 144 under the Securities Act, as presently in effect, and understands the resale limitations imposed thereby and by the Securities Act.

3.2.3 The Holder acknowledges that it can bear the economic and financial risk of its investment for an indefinite period, and has such knowledge and experience in financial or business matters that it is capable of evaluating the merits and risks of the investment in the Warrant and the Warrant Shares. The Holder has had an opportunity to ask questions and receive answers from the Company regarding the terms and conditions of the offering of the Warrant and the business, properties, prospects and financial condition of the Company.

3.3 General Terms.

3.3.1 Indemnification. The Company shall indemnify the Holder(s) of the Registrable Securities to be sold pursuant to any registration statement hereunder and each person, if any, who controls such Holders within the meaning of Section 15 of the Securities Act or Section 20(a) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), against all loss, claim, damage, expense or liability (including all reasonable attorneys’ fees and other expenses reasonably incurred in investigating, preparing or defending against any claim whatsoever) to which any of them may become subject under the Securities Act, the Exchange Act or otherwise, arising from such registration statement. The Holder(s) of the Registrable Securities to be sold pursuant to such registration statement, and their successors and assigns, shall severally, and not jointly, indemnify the Company and its affiliates, against all loss, claim, damage, expense or liability (including all reasonable attorneys’ fees and other expenses reasonably incurred in investigating, preparing or defending against any claim whatsoever) to which they may become subject under the Securities Act, the Exchange Act or otherwise, arising from information furnished by or on behalf of such Holders, or their successors or assigns, in writing, for specific inclusion in such registration statement.

3.3.2 Exercise of Purchase Warrants. Nothing contained in this Purchase Warrant shall be construed as requiring the Holder(s) to exercise their Purchase Warrants prior to or after the initial filing of any registration statement or the effectiveness thereof.

3.3.3 Documents to be Delivered by Holder(s). Each of the Holder(s) participating in any of the foregoing offerings shall furnish to the Company a completed and executed questionnaire provided by the Company requesting information customarily sought of selling security holders.

3.3.4 Damages. Should the registration or the effectiveness thereof required by Section 3.1 hereof be delayed by the Company or the Company otherwise fails to comply with such provisions, the Holder(s) shall, in addition to any other legal or other relief available to the Holder(s), be entitled to seek specific performance or other equitable (including injunctive) relief against the threatened breach of such provisions or the continuation of any such breach, without the necessity of proving actual damages and without the necessity of posting bond or other security.

4. New Purchase Warrants to be Issued.

4.1 Partial Exercise or Transfer. Subject to the restrictions in Section 2 hereof, this Purchase Warrant may be exercised or assigned in whole or in part. In the event of the exercise or assignment hereof in part only, upon surrender of this Purchase Warrant for cancellation, together with the duly executed exercise or assignment form and funds sufficient to pay any Exercise Price and/or transfer tax if exercised pursuant to Section 4.1 hereto, the Company shall cause to be delivered to the Holder without charge a new Purchase Warrant of like tenor to this Purchase Warrant in the name of the Holder evidencing the right of the Holder to purchase the number of Shares purchasable hereunder as to which this Purchase Warrant has not been exercised or assigned.

4.2 Lost Certificate. Upon receipt by the Company of evidence satisfactory to it of the loss, theft, destruction or mutilation of this Purchase Warrant and of reasonably satisfactory indemnification or the posting of a bond, the Company shall execute and deliver a new Purchase Warrant of like tenor and date. Any such new Purchase Warrant executed and delivered as a result of such loss, theft, mutilation or destruction shall constitute a substitute contractual obligation on the part of the Company.

5. Adjustments.

5.1 Adjustments to Exercise Price and Number of Securities. The Exercise Price and the number of Shares underlying the Purchase Warrant shall be subject to adjustment from time to time as hereinafter set forth:

5.1.1 Share Dividends; Split Ups. If, after the date hereof, and subject to the provisions of Section 5.3 below, the number of outstanding Shares is increased by a stock dividend payable in Shares or by a split up of Shares or other similar event, then, on the effective day thereof, the number of Shares purchasable hereunder shall be increased in proportion to such increase in outstanding Shares, and the Exercise Price shall be proportionately decreased.

5.1.2 Aggregation of Shares. If, after the date hereof, and subject to the provisions of Section 5.3 below, the number of outstanding Shares is decreased by a consolidation, combination or reclassification of Shares or other similar event, then, on the effective date thereof, the number of Shares purchasable hereunder shall be decreased in proportion to such decrease in outstanding Shares, and the Exercise Price shall be proportionately increased.

5.1.3 Replacement of Securities upon Reorganization, etc. In case of any reclassification or reorganization of the outstanding Shares other than a change covered by Section 5.1.1 or 5.1.2 hereof or that solely affects the par value of such Shares, or in the case of any share reconstruction or amalgamation or consolidation of the Company with or into another corporation or other entity (other than a consolidation or share reconstruction or amalgamation in which the Company is the continuing corporation and that does not result in any reclassification or reorganization of the outstanding Shares), or in the case of any sale or conveyance to another corporation or entity of the property of the Company as an entirety or substantially as an entirety in connection with which the Company is dissolved, the Holder of this Purchase Warrant shall have the right thereafter (until the expiration of the right of exercise of this Purchase Warrant) to receive upon the exercise hereof, for the same aggregate Exercise Price payable hereunder immediately prior to such event, the kind and amount of shares of stock or other securities or property (including cash) receivable upon such reclassification, reorganization, share reconstruction or amalgamation, or consolidation, or upon a dissolution following any such sale or transfer, by a Holder of the number of Shares of the Company obtainable upon exercise of this Purchase Warrant immediately prior to such event; and if any reclassification also results in a change in Shares covered by Section 5.1.1 or 5.1.2, then such adjustment shall be made pursuant to Sections 5.1.1, 5.1.2 and this Section 5.1.3. The provisions of this Section 5.1.3 shall similarly apply to successive reclassifications, reorganizations, share reconstructions or amalgamations, or consolidations, sales or other transfers.

5.1.4 Changes in Form of Purchase Warrant. This form of Purchase Warrant need not be changed because of any change pursuant to this Section 5.1, and Purchase Warrants issued after such change may state the same Exercise Price and the same number of Shares as are stated in [the Purchase Warrants initially issued pursuant to this Agreement]. The acceptance by any Holder of the issuance of new Purchase Warrants reflecting a required or permissive change shall not be deemed to waive any rights to an adjustment occurring after the Commencement Date or the computation thereof.

5.2 Substitute Purchase Warrant. In case of any consolidation of the Company with, or share reconstruction or amalgamation of the Company with or into, another corporation or other entity (other than a consolidation or share reconstruction or amalgamation which does not result in any reclassification or change of the outstanding Shares), the corporation or other entity formed by such consolidation or share reconstruction or amalgamation shall execute and deliver to the Holder a supplemental Purchase Warrant providing that the holder of each Purchase Warrant then outstanding or to be outstanding shall have the right thereafter (until the stated expiration of such Purchase Warrant) to receive, upon exercise of such Purchase Warrant, the kind and amount of shares of stock and other securities and property receivable upon such consolidation or share reconstruction or amalgamation, by a holder of the number of Shares of the Company for which such Purchase Warrant might have been exercised immediately prior to such consolidation, share reconstruction or amalgamation, sale or transfer. Such supplemental Purchase Warrant shall provide for adjustments which shall be identical to the adjustments provided for in this Section 5. The above provision of this Section shall similarly apply to successive consolidations or share reconstructions or amalgamations.

5.3 Elimination of Fractional Interests. The Company shall not be required to issue certificates representing fractions of Shares upon the exercise of the Purchase Warrant, nor shall it be required to issue scrip or pay cash in lieu of any fractional interests, it being the intent of the parties that all fractional interests shall be eliminated by rounding any fraction up or down, as the case may be, to the nearest whole number of Shares or other securities, properties or rights.

6. Reservation and Listing. The Company shall at all times keep available out of its authorized Shares, such number of Shares or other securities, properties or rights as shall be issuable upon the exercise thereof. The Company covenants and agrees that, upon exercise of the Purchase Warrants and payment of the Exercise Price therefor, in accordance with the terms hereby, all Shares and other securities issuable upon such exercise shall be duly and validly issued, fully paid and non-assessable and not subject to preemptive rights of any shareholder. The Company further covenants and agrees that upon exercise of the Purchase Warrants and payment of the exercise price therefor, all Shares and other securities issuable upon such exercise shall be duly and validly issued, fully paid and non-assessable and not subject to preemptive rights of any shareholder. As long as the Purchase Warrants shall be outstanding, the Company shall use its commercially reasonable efforts to cause all Shares issuable upon exercise of the Purchase Warrants to be listed (subject to official notice of issuance) on all national securities exchanges (or, if applicable, on the OTC Bulletin Board or any successor trading market) on which the Shares may then be listed and/or quoted.

7. Certain Notice Requirements.

7.1 Holder’s Right to Receive Notice. Nothing herein shall be construed as conferring upon the Holders the right to vote or consent or to receive notice as a shareholder for the election of directors or any other matter, or as having any rights whatsoever as a shareholder of the Company. If, however, at any time prior to the expiration of the Purchase Warrants and their exercise, any of the events described in Section 7.2 shall occur, then, in one or more of said events, the Company shall give written notice of such event at least fifteen (15) days prior to the date fixed as a record date or the date of closing the transfer books for the determination of the shareholders entitled to such dividend, distribution, conversion or exchange of securities or subscription rights, or entitled to vote on such proposed dissolution, liquidation, winding up or sale. Such notice shall specify such record date or the date of the closing of the transfer books, as the case may be. Notwithstanding the foregoing, the Company shall deliver to each Holder a copy of each notice given to the other shareholders of the Company at the same time and in the same manner that such notice is given to the shareholders.

7.2 Events Requiring Notice. The Company shall be required to give the notice described in this Section 7 upon one or more of the following events: (i) if the Company shall take a record of the holders of its Shares for the purpose of entitling them to receive a dividend or distribution payable otherwise than in cash, or a cash dividend or distribution payable otherwise than out of retained earnings, as indicated by the accounting treatment of such dividend or distribution on the books of the Company, (ii) the Company shall offer to all the holders of its Shares any additional shares of capital stock of the Company or securities convertible into or exchangeable for shares of capital stock of the Company, or any option, right or warrant to subscribe therefor, or (iii) a dissolution, liquidation or winding up of the Company (other than in connection with a consolidation or share reconstruction or amalgamation) or a sale of all or substantially all of its property, assets and business shall be proposed.

7.3 Notice of Change in Exercise Price. The Company shall, promptly after an event requiring a change in the Exercise Price pursuant to Section 5 hereof, send notice to the Holders of such event and change (“Price Notice”). The Price Notice shall describe the event causing the change and the method of calculating same and shall be certified as being true and accurate by the Company’s Chief Financial Officer.

7.4 Transmittal of Notices. All notices, requests, consents and other communications under this Purchase Warrant shall be in writing and shall be deemed to have been duly made when hand delivered, or mailed by express mail or private courier service: (i) if to the registered Holder of the Purchase Warrant, to the address of such Holder as shown on the books of the Company, or (ii) if to the Company, to following address or to such other address as the Company may designate by notice to the Holders:

If to the Holder:

Rawleigh H. Ralls

Address:

744 Spruce Street

Boulder, CO 80302

E-Mail:

rawleigh@ralls.com

with a copy (which shall not constitute notice) to:

___________________________

If to the Company:

Edison Nation, Inc.
909 New Brunswick Avenue
Phillipsburg, New Jersey 08865
Attention: Christopher B. Ferguson, Chief Executive Officer
Email: cferguson@edisonnation.com

with a copy (which shall not constitute notice) to:

8. Miscellaneous.

8.1 Amendments. The Company and Rawleigh H. Ralls may from time to time supplement or amend this Purchase Warrant without the approval of any of the Holders in order to cure any ambiguity, to correct or supplement any provision contained herein that may be defective or inconsistent with any other provisions herein, or to make any other provisions in regard to matters or questions arising hereunder that the Company and Rawleigh H. Ralls may deem necessary or desirable and that the Company and Rawleigh H. Ralls deem shall not adversely affect the interest of the Holders. All other modifications or amendments shall require the written consent of and be signed by the party against whom enforcement of the modification or amendment is sought.

8.2 Headings. The headings contained herein are for the sole purpose of convenience of reference, and shall not in any way limit or affect the meaning or interpretation of any of the terms or provisions of this Purchase Warrant.

8.3 Entire Agreement. This Purchase Warrant (together with the other agreements and documents being delivered pursuant to or in connection with this Purchase Warrant) constitutes the entire agreement of the parties hereto with respect to the subject matter hereof, and supersedes all prior agreements and understandings of the parties, oral and written, with respect to the subject matter hereof.

8.4 Binding Effect. This Purchase Warrant shall inure solely to the benefit of and shall be binding upon, the Holder and the Company and their permitted assignees, respective successors, legal representative and assigns, and no other person shall have or be construed to have any legal or equitable right, remedy or claim under or in respect of or by virtue of this Purchase Warrant or any provisions herein contained.

8.5 Governing Law; Submission to Jurisdiction; Trial by Jury. This Purchase Warrant shall be governed by and construed and enforced in accordance with the laws of the State of Nevada, without giving effect to conflict of laws principles thereof. The Company hereby agrees that any action, proceeding or claim against it arising out of, or relating in any way to this Purchase Warrant shall be brought and enforced in the any court in the State of Nevada, and irrevocably submits to such jurisdiction, which jurisdiction shall be exclusive. The Company hereby waives any objection to such exclusive jurisdiction and that such courts represent an inconvenient forum. Any process or summons to be served upon the Company may be served by transmitting a copy thereof by registered or certified mail, return receipt requested, postage prepaid, addressed to it at the address set forth in Section 7 hereof. Such mailing shall be deemed personal service and shall be legal and binding upon the Company in any action, proceeding or claim. The Company and the Holder agree that the prevailing party(ies) in any such action shall be entitled to recover from the other party(ies) all of its reasonable attorneys’ fees and expenses relating to such action or proceeding and/or incurred in connection with the preparation therefor. The Company (on its behalf and, to the extent permitted by applicable law, on behalf of its stockholders and affiliates) and the Holder hereby irrevocably waive, to the fullest extent permitted by applicable law, any and all right to trial by jury in any legal proceeding arising out of or relating to this Agreement or the transactions contemplated hereby.

8.6 Waiver, etc. The failure of the Company or the Holder to at any time enforce any of the provisions of this Purchase Warrant shall not be deemed or construed to be a waiver of any such provision, nor to in any way affect the validity of this Purchase Warrant or any provision hereof or the right of the Company or any Holder to thereafter enforce each and every provision of this Purchase Warrant. No waiver of any breach, non-compliance or non-fulfillment of any of the provisions of this Purchase Warrant shall be effective unless set forth in a written instrument executed by the party or parties against whom or which enforcement of such waiver is sought; and no waiver of any such breach, non-compliance or non-fulfillment shall be construed or deemed to be a waiver of any other or subsequent breach, non-compliance or non-fulfillment.

8.7 Execution in Counterparts. This Purchase Warrant may be executed in one or more counterparts, and by the different parties hereto in separate counterparts, each of which shall be deemed to be an original, but all of which taken together shall constitute one and the same agreement, and shall become effective when one or more counterparts has been signed by each of the parties hereto and delivered to each of the other parties hereto. Such counterparts may be delivered by facsimile transmission or other electronic transmission.

[Signature Page Follows]

IN WITNESS WHEREOF, the Company has caused this Purchase Warrant to be signed by its duly authorized officer as of the 10^th day of January 2020.

EDISON NATION, INC.

By:	/s/ Chris Ferguson
	Name:	CHRIS FERGUSON
	Title:	CEO

[Form to be used to exercise Purchase Warrant]

Date: _______________, 20___

The undersigned hereby elects irrevocably to exercise the Purchase Warrant for shares of common stock, par value $0.001 per share (the “Shares”), of Edison Nation, Inc., a Nevada corporation (the “Company”), and hereby makes payment of $ (at the rate of $2.00per Share) in payment of the Exercise Price pursuant thereto. Please issue the Shares as to which this Purchase Warrant is exercised in accordance with the instructions given below and, if applicable, a new Purchase Warrant representing the number of Shares for which this Purchase Warrant has not been exercised.

The undersigned agrees and acknowledges that the calculation set forth above is subject to confirmation by the Company and any disagreement with respect to the calculation shall be resolved by the Company in its sole discretion.

Please issue the Shares as to which this Purchase Warrant is exercised in accordance with the instructions given below and, if applicable, a new Purchase Warrant representing the number of Shares for which this Purchase Warrant has not been converted.

Signature

Signature Guaranteed

Exhibit 10.32

NOTE AGREEMENT

$107,000

January 15, 2020

FOR VALUE RECEIVED, the undersigned, EDISON NATION, INC., a Nevada corporation (“Maker” or “Company”), hereby promises to pay to the order of Paul J. Solit & Julie B. Solit, (“Lender” or “Payee”), at Payee’s Address, the principal amount of $107,000, together with interest on the unpaid principal balance, payable in accordance with the terms and condition of this Note Agreement (“Note”) entered into by and between the Company and Lender.

The terms and conditions of this Note are set forth below in Sections A and B.

Terms of Loan.

Loan amount: $107,000

OID: $7,000

Incentive Shares: 13,000 shares of restricted common shares of stock of Edison Nation pursuant to SEC Rule 144.

Term: 6 months

Closing date of Loan: January 15, 2020

Prepayments or Redemptions: The Maker, at its sole discretion, reserves the right to prepay, prior to the Maturity Date, all or any part of the principal of the Notes without penalty.

Maturity Date means July 15, 2020

10.

11.

Default:

Default rate of interest: 10% per annum.

Other terms and conditions of this Note:

Governing Law: This Note shall be governed by and construed in accordance with the internal laws of the State of Nevada (without regard to principles of choice of law).

Transaction Documents: The parties agree to execute other agreements or documents to effectuate the terms and conditions of this Note.

THERE ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES.

[SIGNATURE PAGE FOLLOWS]

BY SIGNING BELOW, THE PARTIES AGREE TO THE TERMS AND CONDITIOS OF THIS NOTE.

	MAKER – THE COMPANY

	EDISON NATION, INC.

	/s/ Chris Ferguson
	By:	Chris Ferguson, CEO
		Address:
		909 New Brunswick Ave
		Phillipsburg, NJ 08865
		E-Mail:
		cferguson@edisonnation.com

	LENDER – PAYEE

	/s/ Paul J. Solit
	Paul J. Solit & Julie B. Solit

		Address:
		c/o Potomac Capital
		299 Park Avenue –21^st Fl
		New York, NY 10171

		E-Mail:
		solit@potomaccap.com

Exhibit 10.33

COMMON STOCK PURCHASE WARRANT

For the Purchase of 50,000 Shares of Common Stock
of
EDISON NATION, INC.

1. Purchase Warrant. THIS CERTIFIES THAT, in consideration of funds duly paid by or on behalf of P.J. Solit (“Holder”), as registered owner of this Purchase Warrant, to Edison Nation, Inc., a Nevada corporation (the “Company”), Holder is entitled, at any time or from time to time from the date hereof (the “Commencement Date”), and at or before 5:00 p.m., Eastern time, December 31, 2020 (the “Expiration Date”), but not thereafter, to subscribe for, purchase and receive, in whole or in part, up to 50,000 shares of common stock of the Company, par value $0.001 per share (the “Shares”), subject to adjustment as provided in Section 5 hereof. If the Expiration Date is a day on which banking institutions are authorized by law to close, then this Purchase Warrant may be exercised on the next succeeding day which is not such a day in accordance with the terms herein. During the period ending on the Expiration Date, the Company agrees not to take any action that would terminate this Purchase Warrant. This Purchase Warrant is exercisable at a fixed amount of $2.00 per Share; provided, however, that upon the occurrence of any of the events specified in Section 5 hereof, the rights granted by this Purchase Warrant, including the exercise price per Share and the number of Shares to be received upon such exercise, shall be adjusted as therein specified. The term “Exercise Price” shall mean the initial exercise price or the adjusted exercise price, depending on the context.

3. Compliance with the Securities Act.

3.2 Representations of the Holder. In connection with the issuance of this Warrant, the Holder specifically represents, as of the date hereof, to the Company by acceptance of this Warrant as follows:

3.3 General Terms.

4. New Purchase Warrants to be Issued.

5. Adjustments.

7. Certain Notice Requirements.

If to the Holder:

P.J.Solit

Address: c/o Potomac Capital

299 Park Avenue – 21^st Fl.

New York, NY 10171

E-Mail:

Solit@potomaccap.com

with a copy (which shall not constitute notice) to:

___________________________

If to the Company:

Edison Nation, Inc.
909 New Brunswick Avenue
Phillipsburg, New Jersey 08865
Attention: Christopher B. Ferguson, Chief Executive Officer
Email: cferguson@edisonnation.com

with a copy (which shall not constitute notice) to:

8. Miscellaneous.

[Signature Page Follows]

IN WITNESS WHEREOF, the Company has caused this Purchase Warrant to be signed by its duly authorized officer as of the 14^th day of January 2020.

EDISON NATION, INC.

By:	/s/ Chris Ferguson
	Name:	CHRIS FERGUSON
	Title:	CEO

[Form to be used to exercise Purchase Warrant]

Date: _______________, 20___

Signature

Signature Guaranteed

Exhibit 10.34

NOTE AGREEMENT


$53,500		January 17, 2020

FOR VALUE RECEIVED, the undersigned, EDISON NATION, INC., a Nevada corporation (“Maker” or “Company”), hereby promises to pay to the order of Richard O’Leary, (“Lender” or “Payee”), at Payee’s Address, the principal amount of $53,500, together with interest on the unpaid principal balance, payable in accordance with the terms and condition of this Note Agreement (“Note”) entered into by and between the Company and Lender.

The terms and conditions of this Note are set forth below in Sections A and B.

Terms of Loan.

Loan amount: $53,500

OID: $3,500

Incentive Shares: 6,500 shares of restricted common shares of stock of Edison Nation pursuant to SEC Rule 144.

Term: 6 months

Closing date of Loan: January 17, 2020

Prepayments or Redemptions: The Maker, at its sole discretion, reserves the right to prepay, prior to the Maturity Date, all or any part of the principal of the Notes without penalty.

Maturity Date means July 17, 2020

10.

11.

Default:

Default rate of interest: 10% per annum.

Other terms and conditions of this Note:

Governing Law: This Note shall be governed by and construed in accordance with the internal laws of the State of Nevada (without regard to principles of choice of law).

Transaction Documents: The parties agree to execute other agreements or documents to effectuate the terms and conditions of this Note.

THERE ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES.

[SIGNATURE PAGE FOLLOWS]

BY SIGNING BELOW, THE PARTIES AGREE TO THE TERMS AND CONDITIOS OF THIS NOTE.

	MAKER – THE COMPANY

	EDISON NATION, INC.

	/s/ Chris Ferguson
	By:	Chris Ferguson, CEO
		Address:
		909 New Brunswick Ave
		Phillipsburg, NJ 08865
		E-Mail:
		cferguson@edisonnation.com


	LENDER – PAYEE

	/s/ Richard O’Leary
	Richard O’Leary

		Address:
		2819 4^th St.
		Boulder, CO 80304

		E-Mail:
		Rich@oleary.net

Exhibit 10.35

COMMON STOCK PURCHASE WARRANT

For the Purchase of 25,000 Shares of Common Stock
of
EDISON NATION, INC.

1. Purchase Warrant. THIS CERTIFIES THAT, in consideration of funds duly paid by or on behalf of Richard O’Leary (“Holder”), as registered owner of this Purchase Warrant, to Edison Nation, Inc., a Nevada corporation (the “Company”), Holder is entitled, at any time or from time to time from the date hereof (the “Commencement Date”), and at or before 5:00 p.m., Eastern time, December 31, 2020 (the “Expiration Date”), but not thereafter, to subscribe for, purchase and receive, in whole or in part, up to 25,000 shares of common stock of the Company, par value $0.001 per share (the “Shares”), subject to adjustment as provided in Section 5 hereof. If the Expiration Date is a day on which banking institutions are authorized by law to close, then this Purchase Warrant may be exercised on the next succeeding day which is not such a day in accordance with the terms herein. During the period ending on the Expiration Date, the Company agrees not to take any action that would terminate this Purchase Warrant. This Purchase Warrant is exercisable at a fixed amount of $2.00 per Share; provided, however, that upon the occurrence of any of the events specified in Section 5 hereof, the rights granted by this Purchase Warrant, including the exercise price per Share and the number of Shares to be received upon such exercise, shall be adjusted as therein specified. The term “Exercise Price” shall mean the initial exercise price or the adjusted exercise price, depending on the context.

3. Compliance with the Securities Act.

3.2 Representations of the Holder. In connection with the issuance of this Warrant, the Holder specifically represents, as of the date hereof, to the Company by acceptance of this Warrant as follows:

3.3 General Terms.

4. New Purchase Warrants to be Issued.

5. Adjustments.

7. Certain Notice Requirements.

If to the Holder:

Richard O’Leary

Address:

2819 4^th St.

Boulder, CO 80304

E-Mail:

Rich@oleary.net

	with a copy (which shall not constitute notice) to:


	If to the Company:

	Edison Nation, Inc.
	909 New Brunswick Avenue
	Phillipsburg, New Jersey 08865
	Attention: Christopher B. Ferguson, Chief Executive Officer
	Email: cferguson@edisonnation.com

	with a copy (which shall not constitute notice) to:

8. Miscellaneous.

[Signature Page Follows]

IN WITNESS WHEREOF, the Company has caused this Purchase Warrant to be signed by its duly authorized officer as of the 15th day of January, 2020.

EDISON NATION, INC.

By:	/s/ Chris Ferguson
	Name:	CHRIS FERGUSON
	Title:	CEO

[Form to be used to exercise Purchase Warrant]

Date: _______________, 20___

Signature

Signature Guaranteed

Exhibit 21.1

Subsidiaries of Edison Nation, Inc.
Subsidiary		State or Jurisdiction
Subsidiary		of Incorporation
Ferguson Containers, Inc.		New Jersey
S.R.M. Entertainment Limited		Hong Kong
Edison Nation Holdings, LLC		North Carolina
Edison Nation, LLC		North Carolina
Safe TV Shop, LLC		North Carolina
Everyday Edisons, LLC		North Carolina
Cloud B, Inc.		California
Cloud B Limited		United Kingdom
Cloud B Party Limited		Australia
Pirasta, LLC		New York
Best Party Concepts, LLC		Delaware
CBAV1, LLC		Nevada
ED Roses, LLC		Nevada
Scalematix, LLC		Nevada

Exhibit 23.1

Independent Registered Public Accounting Firm’s Consent

We consent to the inclusion in this Registration Statement of Edison Nation, Inc. on Form S-1 of our report dated April 16, 2019, with respect to our audits of the consolidated financial statements of Edison Nation, Inc. as of December 31, 2018 and 2017 and for each of the two years in the period ended December 31, 2018, which report appears in the Prospectus, which is part of this Registration Statement. We also consent to the reference to our Firm under the heading “Experts” in such Prospectus.

/s/ Marcum LLP

Marcum llp

New York, NY

February 12, 2020