Material Agreements |
3 Months Ended |
|---|---|
Sep. 30, 2018 | |
| Disclosure of Material Agreements [Abstract] | |
| Material Agreements | Note 10 - Material Agreements:
Manufacturing and Distributorship Agreement
In December 2016, Galaxy executed an agreement with a company in South Korea. Pursuant to such distribution agreement, the manufacturer agreed to manufacture, and the Company agreed to be the sole distributor of the interactive panels in the United States for a term of one year, with automatic annual renewals. The Company must submit a three-month rolling sales forecast (which acts as a purchase order) to the manufacturer, updated monthly. The manufacturer has three days to accept the purchase order and once accepted, the Company must pay the manufacturer 105% of the cost shown on the purchase order, 10% at the time the order is accepted and the remaining 95% within 120 days if the Company has sold the panels and been paid by the end customer. The manufacturer also provides a warranty for any defects in material and workmanship for a period of 26 months from the date of shipment to the Company.
There was a $4 million minimum purchase commitment for the 12-month period ended December 31, 2017. This minimum purchase commitment was not met; however, the manufacturer and the Company extended the agreement for an additional year under the same terms. Because the Company did not meet the minimum purchase commitment, the manufacturer can require the Company to work with their sales representative to establish a performance improvement plan, and the manufacturer has the right to terminate the agreement.
Consulting Agreement
Galaxy entered into a consulting agreement in May 2017 with two consultants for advisory services through July 2019. In exchange for consulting services provided, these consultants are entitled to receive consulting fees of $15,000 per month and a 5.5% combined equity interest in Galaxy. The 5.5% equity interest was converted to common stock upon the commencement of the Common Controlled Merger Agreement of R&G and Galaxy CO (as described in Note 1). The Company paid the consultants $111,000 and $0 in fees and expenses for consulting services provided during the three-month periods ended September 30, 2018 and 2017, respectively.
Consulting Agreement Magellan FIN, LLC
The Company entered into a consulting agreement in May 2018 for advisory services such as maintaining ongoing stock market support such as drafting and delivering press releases and handling investor requests. The program will be predicated on accurate, deliberate and direct disclosure and information flow from the Company and dissemination to the appropriate investor audiences. In exchange for these consulting services provided, the advisor will receive $15,000 paid at contract inception, an additional $4,000 monthly through the term of the agreement, which is April 2019, and 10,000 shares of common stock. The Company paid the consultant $23,000 and $0 in consulting fees during the three-month periods ended September 30, 2018 and 2017, respectively.
Consulting Agreement -RedChip Companies, Inc.
The Company entered into a consulting agreement in April 2018 for a period of six months for investor relations services such as blogs and newsletters, introductions to investment banks and online CEO quarterly conferences. In exchange for these consulting services provided, the advisor will receive $25,000 per month for four months and 25,000 shares of common stock. The Company paid the consultants $35,000 and $0 in fees for the three-month periods ended September 30, 2018 and 2017, respectively.
Letter of Intent to Acquire KLIK Communications, Inc.
On July 20, 2018, FLCR entered into a Letter of Intent (the LOI) with KLIK Communications, Inc. (KLIK), a corporation formed under the laws of the State of Washington. Under the terms of the LOI, the KLIK shareholders will transfer all the outstanding shares of KLIK common stock to FLCR on or before October 31, 2018. In return, FLCR will transfer shares of its common stock in an amount to be determined at a later date by the parties. Upon completion of the proposed transaction, KLIK will become the wholly-owned subsidiary of FLCR. The obligation to close the transaction under the terms of the agreement are subject to the normal terms and conditions contained in such agreements. There has been no extension of the LOI as of the date of the filing.
Upon closing this transaction, the Company will enter into a two-year employment agreement with the former owner of KLIK who will become the Companys Director of Product Management. The Company believes that the technology of KLIK is a natural fit in its market and the addition of this technology to its product.
KLIK Distribution Agreement
In September 2018, the Company signed a 1-year distributor agreement with KLIK Communications to be the sole distributor of KLIK products to US educational market. The agreement will automatically renew annually, unless three months notice is given by either party. The agreement will end upon successful acquisition of KLIK by Galaxy, per the Letter of Intent signed in July 2018. Payment terms are 45 days after invoice. Delivery terms are FOB Deliver location. The KLIK product will replace the VIVI product (specialized interactive router) previously sold with the Galaxy panels. KLIK will provide a 2-year manufacturers warranty from the date of shipment, and free software updates. The agreement provides KLIK with the option of storing the manufacturers inventory at the Galaxy warehouse.
Distribution Agreement
Effective September 15, 2018, the Company signed a 2-year distribution agreement for Galaxys SLIM series of interactive panels, a new Galaxy product. Galaxy outsourced the manufacturing to a vendor as manufacturing costs are less, and customers prefer an Android operating system. The agreement includes a commitment by Galaxy to purchase $2 million of product during the first year beginning September 2018. The manufacturer will provide Galaxy with the product, including a three-year manufacturers warranty from the date of shipment. The agreement renews automatically in two-year increments unless three months notice is given by either party. |