8-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or Section 15(d) of the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): February 16, 2018 (February 12, 2018) 

SMG INDIUM RESOURCES LTD.

(Exact name of registrant as specified in its charter)

Delaware	000-54391	51-0662991
(State or other jurisdiction of incorporation)	(Commission File Number)	(IRS Employer Identification No.)

710 N. Post Oak Road, Suite 400 Houston, Texas	77024
(Address of principal executive offices)	(Zip Code)

Registrant’s telephone number, including area code:

 (713-821-3153) 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation to the registrant under any of the following provisions:

¨ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

¨ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

¨ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

¨ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act (17 CFR 230.405) or Rule 12b-2 of the Exchange Act (17 CFR 240.12b 2).

Emerging growth company ¨

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 13(a) of the Exchange Act. ¨

ITEM 8.01 OTHER EVENTS

On February 12, 2018, the Company’s wholly-owned subsidiary, MG Cleaners LLC (“MG”) entered into an Intellectual Property Sale Agreement (“Agreement”) with Stephen Christian, MG’s President, for the purchase of RigHands™ an industrial strength hand cleaner product line. RigHands™ is a trademarked branded product which is focused on the oilfield and industrial markets. MG issued a promissory note to Mr. Christian for the purchase price in the amount of $150,000. In connection with the Agreement, Mr. Christian agreed that he shall promptly, from time to time, fully inform and disclose to MG in writing all inventions, copyrightable material, designs, improvements and discoveries of any kind which Mr. Christian now has made, conceived or developed (including prior to the date of this Agreement), or which Mr. Christian may later make, conceive or develop, during the period of Mr. Christian’s employment with MG, which pertain to or relate to MG’s business or any of the work or business carried on by MG. In addition to the foregoing, the Agreement sets forth that all Inventions shall be the sole and exclusive property of MG, whether or not fixed in a tangible medium of expression. Mr. Christian also assigned all rights in all Inventions and in all related patents, copyrights and trademarks, trade secrets and other proprietary rights therein to MG. Mr. Christian further agreed that any copyrightable material shall be deemed to be “works made for hire” and that MG shall be deemed the author of such works under the United States Copyright Act, provided that in the event and to the extent such works are determined not to constitute “works made for hire”, Mr. Christian has irrevocably assigned and transferred to MG all right, title and interest in such works.

A copy of the press release issued by the Company on February 15, 2018 with respect to these matters is attached hereto as Exhibit 99.3 and incorporated herein by reference. The information in the press release and in this Item 8.01 is “furnished” and not “filed” for purposes of Section 18 of the Securities and Exchange Act of 1934, or otherwise subject to the liabilities of that section. Such information may be incorporated by reference in another filing under the Securities and Exchange Act of 1934 or the Securities Act of 1933 only if, and to the extent that, such subsequent filing specifically references such information.

ITEM 9.01 FINANCIAL STATEMENTS AND EXHIBITS

(a)	None.
(b)	None
(c)	The following documents are filed herewith as exhibits to this Form 8-K:

99.1	Intellectual Property Sale Agreement dated February 12, 2018
99.2	Promissory note issued by MG Cleaners LLC to Stephen Christian dated February 12, 2018
99.2	Press release dated February 15, 2018

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this Current Report to be signed on its behalf by the undersigned hereunto duly authorized.

Dated:  February 16, 2018	SMG Indium Resources LTD.
	By:	/s/ Matthew Flemming
	Name:	Matthew Flemming
	Title:	Chief Executive Officer and President

EX-99.1

Exhibit 99.1

INTELLECTUAL PROPERTY SALE AGREEMENT

This Intellectual Property Sale Agreement (the “Agreement”) is made and effective February 12, 2018:

BETWEEN:	MG Cleaners LLC (the “Buyer”), a limited liability company organized and existing under the laws of the state of Texas with its principal corporate office located at:
	710 N. Post Oak Road, Suite 400 Houston, Texas 77024
AND:	Stephen Christian (the “Seller”), an individual resident of the United States:
	1785 CR 207 Carthage, Texas 75633

WHEREAS, Seller is the owner of certain Intellectual Property identified in detail in Schedule A attached to this Agreement;

WHEREAS, Seller is an employee of Buyer; and

WHEREAS, Buyer, wishes to irrevocably acquire the entire rights, title, and interest in the identified Intellectual Property and exploit such property.

NOW, the Parties intent to be legally bound and agree as follows:

1. DEFINITIONS

“Intellectual Property Rights” means all Patents, Trademarks, Copyrights, System Designs, and other intellectual property rights whether registered or not, owned by Seller and sold to the Buyer, relating to the Intellectual Property described in Schedule A.

“Documents” includes all information fixed in any tangible medium of expression in whatever form or format, and copies thereof.

“Technical Information” means all know-how and related technical knowledge of the Seller, relating to the Intellectual Property described in Schedule A including, without limitation:

(a) All trade secrets and other proprietary know-how, formulations, public information, non-proprietary know-how and invention disclosures;

(b) Any information of a technical or business nature regardless of its form;

(c) All documented research, developmental, demonstration or engineering work;

(d) All information that can be or is used to define a design or process or procedure, produce, support or operate material and equipment;

(e) All other drawings, blueprints, patterns, plans, flow charts, equipment, parts lists, software and procedures, specifications, formulas, designs, technical data, descriptions, related instructions, manuals, records and procedures.

2. SALE AND ASSIGNMENT OF INTELLECTUAL PROPERTY

Seller hereby irrevocably sells and transfers to Buyer all rights, title, and interest (including but not limited to, all registration rights, all rights to prepare derivative works, all goodwill and all other rights), in and to the Intellectual Property.

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3. CONSIDERATION

In consideration for the sale of rights and assignment set forth in Article 2, Buyer shall pay Seller the sum of $150,000 (“Purchase Price”). The Purchase Price shall be paid to Seller through the Buyer’s issuance of a promissory note in the principal amount of the Purchase Price, payable in equal monthly installments over a period of 36 months.

4.  INVENTIONS.

(a) Seller shall promptly, from time to time, fully inform and disclose to Buyer and MG in writing all inventions, copyrightable material, designs, improvements and discoveries of any kind which Seller now has made, conceived or developed (including prior to the date of this Agreement), or which Seller may later make, conceive or develop, during the period of Seller’s employment with MG, which pertain to or relate to MG’s businesses or any of the work or businesses carried on by MG (“Inventions”). This covenant applies to all such Inventions, whether or not they are eligible for patent, copyright, trademark, trade secret or other legal protection; and whether or not they are conceived and/or developed by Seller alone or with others; and whether or not they are conceived and/or developed during regular working hours; and whether or not they are conceived and/or developed at MG’s facilities or not.

(b) All Inventions shall be the sole and exclusive property of MG, whether or not fixed in a tangible medium of expression. Seller hereby assigns all Seller’s rights in all Inventions and in all related patents, copyrights and trademarks, trade secrets and other proprietary rights therein to MG. Without limiting the foregoing, Seller agrees that any copyrightable material shall be deemed to be “works made for hire” and that MG shall be deemed the author of such works under the United States Copyright Act, provided that in the event and to the extent such works are determined not to constitute “works made for hire”, Seller hereby irrevocably assigns and transfers to MG all right, title and interest in such works.

(c) Seller shall assist and cooperate with MG, both during and after the period of Seller’s employment with MG, at MG’s sole expense, to allow MG to obtain, maintain and enforce patent, copyright, trademark, trade secret and other legal protection for the Inventions. Seller shall sign such documents, and do such things necessary, to obtain such protection and to vest MG with full and exclusive title in all Inventions against infringement by others.

(d) Other than in connection with this Agreement, Seller shall not be entitled to any additional compensation for any and all Inventions made during the period of Seller’s employment with MG.

5. REPRESENTATIONS AND WARRANTIES

Seller represents and warrants to Buyer:

(a) Seller has the right, power and authority to enter into this Agreement;

(b) Seller is the exclusive owners of all right, title and interest in the Intellectual Property free of any security interest, charge or encumbrance;

(c) Seller warrants that all documents, computer records, disks and other materials of any nature or kind relating to the Intellectual Property or any portion thereof have been turned over to Buyer, and that Seller will not retain the Intellectual Property, or any portion thereof, in any form whatsoever after the closing of this transaction;

(d) The Intellectual Property does not infringe the rights of any person or entity;

(e) There are no claims, pending or threatened, with respect to Seller’s rights in the Intellectual Property;

(f) This Agreement is valid, binding and enforceable in accordance with its terms;

(g) Seller is not subject to any agreement, judgment or order inconsistent with the terms of this Agreement.

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6. ATTORNEY’S FEES

Should either party hereto, or any heir, personal representative, successor or assign of either party hereto, resort to litigation to enforce this Agreement, the party prevailing in such litigation shall be entitled, in addition to such other relief as may be granted, to recover its or their reasonable attorneys’ fees and costs in such litigation from the party against whom enforcement was sought.

7. ENTIRE AGREEMENT

This Agreement, contains the entire understanding and agreement between the parties hereto with respect to its subject matter and supersedes any prior or contemporaneous written or oral agreements, representations or warranties between them respecting the subject matter hereof.

8. AMENDMENT

This Agreement may be amended only by a writing signed by both parties.

9. SEVERABILITY

If any term, provision, covenant or condition of this Agreement, or the application thereof to any person, place or circumstance, shall be held by a court of competent jurisdiction to be invalid, unenforceable or void, the remainder of this Agreement and such term, provision, covenant or condition as applied to other persons, places and circumstances shall remain in full force and effect.

10. NO WAIVER

No waiver of a breach, failure of any condition, or any right or remedy contained in or granted by the provisions of this Agreement shall be effective unless it is in writing and signed by the party waiving the breach, failure, right, or remedy. No waiver of any breach, failure, right, or remedy, whether or not similar, nor shall any waiver constitute a continuing waiver unless the writing so specifies.

11. AGREEMENT TO PERFORM NECESSARY ACTS

Buyer agrees to perform any further acts and execute and deliver any documents that may be reasonably necessary to carry out the provisions of this Agreement.

12. REPRESENTATION ON AUTHORITY OF PARTIES/SIGNATORIES

Each person signing this Agreement represents and warrants that he or she is duly authorized and has legal capacity to execute and deliver this Agreement. Each party represents and warrants to the other that the execution and delivery of the Agreement and the performance of such party’s obligations hereunder have been duly authorized and that the Agreement is a valid and legal agreement binding on such party and enforceable in accordance with its terms.

13. HEADINGS

The headings in this Agreement are included for convenience only and shall neither affect the construction or interpretation of any provision in this Agreement nor affect any of the rights or obligations of the parties to this Agreement.

14. SURVIVAL

Except as otherwise expressly provided in this Agreement, representations, warranties, and covenants contained in this Agreement, or in any instrument, certificate, exhibit, or other writing intended by the parties to be a part of this Agreement, shall survive for ten years after the date of this Agreement.

15. AMBIGUITIES

Each party and its counsel have participated fully in the review and revision of this Agreement. Any rule of construction to the effect that ambiguities are to be resolved against the drafting party shall not apply in interpreting this Agreement. The language in this Agreement shall be interpreted as to its fair meaning and not strictly for or against any party.

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16. GOVERNING LAW

This Agreement shall be construed in accordance with, and all actions arising hereunder shall be governed by, the laws of the state of Texas.

IN WITNESS WHEREOF, the parties have executed this Agreement on February 12, 2018 with full knowledge of its content and significance and intending to be legally bound by the terms hereof.

SELLER: STEPHEN CHRISTIAN	BUYER: MG CLEANERS LLC
/s/ Stephen Christian	/s/ Matthew C. Flemming
Authorized Signature	Authorized Signature
Stephen Christian, Individually	Matthew C. Flemming, CEO
Print Name and Title	Print Name and Title

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SCHEDULE A

- RigHands™ Proprietary branded oilfield hand cleaner product

- Filed trademark application for RigHands™ with the US Patent and Trademark Office (Serial Number of Trademark application: 87697980)

- All formulations related to the RigHands™ product

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EX-99.2

Exhibit 99.2

THE SECURITIES HAVE NOT BEEN REGISTERED WITH THE UNITED STATES SECURITIES AND EXCHANGE COMMISSION OR THE SECURITIES COMMISSION OF ANY STATE OR UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “ACT”). THE SECURITIES ARE RESTRICTED AND MAY NOT BE OFFERED, RESOLD, PLEDGED OR TRANSFERRED EXCEPT AS PERMITTED UNDER THE ACT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT OR AN EXEMPTION FROM SUCH REGISTRATION REQUIREMENTS.

MG CLEANERS LLC

5% PROMISSORY NOTE

THIS PROMISSORY NOTE is issued by MG Cleaners LLC, a Texas limited liability company (the “Company”) and is designated as its 5% Promissory Note Due on the date that is thirty-six (36) months from the date hereof (“Maturity Date”). This Note is issued pursuant to the Intellectual Property Sale Agreement entered into by and between the Company and Holder (defined below) on February 12, 2018 (“IP Sale Agreement”).

FOR VALUE RECEIVED, the Company hereby promises to pay to Stephen Christian, or permitted assigns (the “Holder”), the principal sum of One Hundred Fifty Thousand DOLLARS (US $150,000) Dollars and to pay interest on the principal sum at a rate of 5% per annum, simple interest, accruing from the date of initial issuance. Accrual of interest shall commence on the first business day to occur after the date of initial issuance and continue until payment in full of the principal sum has been made or duly provided for. The Note shall be repaid in accordance with Section 2 below. All unpaid principal and accrued but unpaid interest shall be due and payable on January 15, 2021 (the “Maturity Date”), except as otherwise provided herein. If the Installment Payment Date (defined below) or Maturity Date is not a business day in the State of Texas, then such payment shall be made on the next succeeding business day. The Company will pay the principal of, and any accrued but unpaid interest due upon, this Note on each Payment Date or the Maturity Date, by check or wire transfer to the person who is the registered holder of this Note. The forwarding of such check or money order shall constitute a payment of principal and interest hereunder and shall satisfy and discharge the liability for principal and interest on this Note to the extent of the sum represented by such check or wire transfer plus any amounts so deducted.

          This Note is subject to the following additional provisions:

1.       This Note was issued by the Company pursuant to the IP Sale Agreement.

2.       Principal and Interest Repayment. Principal and Interest shall be repaid in thirty-six (36) equal monthly payments of $4,496.00 (“Installment Payments”). Each Installment Payment shall be due and payable to Holder on the 15^th day of each month (“Installment Payment Date”).

3.       The Company shall be entitled to withhold from all payments of interest on this Note any amounts required to be withheld under the applicable provisions of the United States income tax laws or other applicable laws at the time of such payments, and Holder shall execute and deliver all required documentation in connection therewith.

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4.       This Note may be transferred or exchanged only in compliance with the Securities Act of 1933, as amended (the “Act”), and other applicable state and foreign securities laws. The Holder shall deliver written notice to the Company of any proposed transfer of this Note. In the event of any proposed transfer of this Note, the Company may require, prior to issuance of a new Note in the name of such other person, that it receive reasonable transfer documentation including legal opinions that the issuance of the Note in such other name does not and will not cause a violation of the Act or any applicable state or foreign securities laws. Prior to due presentment for transfer of this Note, the Company and any agent of the Company may treat the person in whose name this Note is duly registered on the Company’s Note Register as the owner hereof for the purpose of receiving payment as herein provided and for all other purposes, whether or not this Note may be overdue, and neither the Company nor any such agent shall be affected by notice to the contrary.

5.       On the Maturity Date, the Company will pay any remaining principal and all accrued but unpaid interest due on this Note, less any amounts required by law to be deducted, to the registered holder of this Note and addressed to such holder at the last address appearing on the Note Register. The Company can prepay the Note, in whole or in part, without penalty at any time prior to the Maturity Date in its sole discretion, without the prior written consent of Holder.

6.       No provision of this Note shall alter or impair the obligation of the Company, which is absolute and unconditional, to pay the principal of, and interest on, this Note at the time, place, and rate, and in the coin or currency herein prescribed. This Note is a direct obligation of the Company.

7.       No recourse shall be had for the payment of the principal of, or the interest on, this Note, or for any claim based hereon, or otherwise in respect hereof, against any incorporator, shareholder, employee, officer or director, as such, past, present or future, of the Company or any successor corporation, whether by virtue of any constitution, statute or rule of law, or by the enforcement of any assessment or penalty or otherwise, all such liability being, by the acceptance hereof and as part of the consideration for the issue hereof, expressly waived and released.

8.       The Holder of the Note, by acceptance hereof, agrees that this Note is being acquired for investment and that such Holder will not offer, sell or otherwise dispose of this Note except under circumstances which will not result in a violation of the Act or any applicable state Blue Sky or foreign laws or similar laws relating to the sale of securities.

9.       Governing Law. This Note shall be construed and enforced in accordance with, and all questions concerning the construction, validity, interpretation and performance of this Note shall be governed by, the laws of the State of Texas, without giving effect to provisions thereof regarding conflict of laws. Each party hereby irrevocably submits to the non-exclusive jurisdiction of the state and federal courts sitting in Texas for the adjudication of any dispute hereunder or in connection herewith or with any transaction contemplated hereby or discussed herein, and hereby irrevocably waives, and agrees not to assert in any suit, action or proceeding, any claim that it is not personally subject to the jurisdiction of any such court, that such suit, action or proceeding is brought in an inconvenient forum or that the venue of such suit, action or proceeding is improper. Each party hereby irrevocably waives personal service of process and consents to process being served in any such suit, action or proceeding by sending, through certified mail or overnight courier, a copy thereof to such party at the address for such notices to it under this Agreement and agrees that such service shall constitute good and sufficient service of process and notice thereof. Nothing contained herein shall be deemed to limit in any way any right to serve process in any manner permitted by law. EACH PARTY HEREBY IRREVOCABLY WAIVES ANY RIGHT IT MAY HAVE, AND AGREES NOT TO REQUEST, A JURY TRIAL FOR THE ADJUDICATION OF ANY DISPUTE HEREUNDER OR IN CONNECTION HEREWITH OR ARISING OUT OF THIS NOTE OR ANY TRANSACTION CONTEMPLATED HEREBY.

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10. The following shall constitute an “Event of Default”:

a. The Company shall default in the payment of principal or interest on this Note when due and such failure shall continue uncured for a period of fifteen (15) days after written notice from the Holder of such failure; or

b. The Company shall fail to perform or observe, in any material respect, any other covenant, term, provision, condition, agreement or obligation of the Company under this Note, and such failure shall continue uncured for a period of fifteen (15) days after written notice from the Holder of such failure; or

c. The Company shall (1) make an assignment for the benefit of creditors or commence proceedings for its dissolution; or (2) apply for or consent to the appointment of a trustee, liquidator or receiver for its or for a substantial part of its property or business; or

d. A trustee, liquidator or receiver shall be appointed for the Company or for a substantial part of its property or business without its consent and shall not be discharged within sixty (60) days after such appointment; or

e. Bankruptcy, reorganization, insolvency or liquidation proceedings or other proceedings for relief under any bankruptcy law or any law for the relief of debtors shall be instituted by or against the Company and, if instituted against the Company, shall not be dismissed within sixty (60) days after such institution or the Company shall by any action or answer approve of, consent to, or acquiesce in any such proceedings or admit the material allegations of, or default in answering a petition filed in any such proceeding;

Then, or at any time thereafter, and in each and every such case, unless such Event of Default shall have been waived in writing by the Holder (which waiver shall not be deemed to be a waiver of any subsequent default) at the option of the Holder and in the Holder's sole discretion, the Holder may consider this Note immediately due and payable, without presentment, demand, protest or notice of any kind, all of which are hereby expressly waived, anything herein or in any note or other instruments contained to the contrary notwithstanding, and the Holder may immediately enforce any and all of the Holder's rights and remedies provided herein or any other rights or remedies afforded by law. Upon the occurrence of any Event of Default and during the continuance thereof, the then outstanding principal amount of this Note shall bear interest at a rate per annum (based on the actual number of days that principal is outstanding over a year of 360 days) of ten percent (10%) (the “Default Rate”). The Default Rate shall continue to apply whether or not judgment shall be entered on this Note. The Default Rate is imposed as liquidated damages for the purpose of defraying the Holder’s expenses incident to the handling of delinquent payments, but are in addition to, and not in lieu of, the Holder’s exercise of any rights and remedies hereunder, under the other Transaction Documents or under applicable law, and any fees and expenses of any agents or attorneys which the Holder may employ. In addition, the Default Rate reflects the increased credit risk to the Holder of carrying a loan that is in default. The Company agrees that the Default Rate is a reasonable forecast of just compensation for anticipated and actual harm incurred by the Holder, and that the actual harm incurred by the Holder cannot be estimated with certainty and without difficulty.

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IN WITNESS WHEREOF, the Company has caused this instrument to be duly executed by an officer thereunto duly authorized as of the date written below.

Dated: February 12, 2018

MG CLEANERS LLC
By:	/s/ Matthew C. Flemming
	Name:	Matthew C. Flemming
	Title:	President

[SIGNATURE PAGE TO PROMISSORY NOTE DATED FEBRUARY 12, 2018]

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EX-99.3

Exhibit 99.3

SMG Indium Resources Announces the Purchase of RigHands™ product line

Proprietary Industrial Strength Hand Cleaner Product fits existing distribution channels

HOUSTON, TX. February 15, 2018 (GLOBE NEWSWIRE) - SMG Indium Resources Ltd. (the "Company") (OTCQB:SMGI), an oilfield services company headquartered in Houston, Texas, focused in selling products and services to drilling rig operators, E&P companies and other oilfield companies today announced the acquisition of RigHands™, an industrial strength hand cleaner product line, and its intellectual property through its wholly-owned subsidiary MG Cleaners LLC. RigHands™ is a trademarked branded product which is focused on the oilfield and industrial markets.

Mr. Matt Flemming, CEO of SMG, stated: "We are excited to add RigHands™ to our existing product lines and related distribution channels. We currently anticipate RigHands™ will generate at least $150,000 of revenue within the first year post-acquisition which should accelerate the Company’s growth. RigHands™ will be sold through the Company's wholly-owned subsidiary MG Cleaners LLC’s sales force and its existing distribution partners." Mr. Flemming continued, “We believe RigHands™ will provide an entrance into another sales channel in the industrial cleaning market for MG Cleaners.”

The consideration paid for the product line and its intellectual property was $150,000, effected through the issuance of a promissory note by MG Cleaners LLC, bearing five percent interest and payable in equal monthly installments over 36 months.

About SMG Indium Resources Ltd.: SMGI is an oilfield services company that operates throughout Texas. The Company, through its wholly-owned subsidiary MG Cleaners LLC, is focused on selling proprietary branded products including detergents, surfactants and degreasers (such as Miracle Blue™) to oilfield drilling rig contractors and oilfield companies. In addition to the Company's proprietary products, SMGI sells equipment and parts and has service crews that perform on-site repairs, maintenance and drilling rig wash services for customers such as Nabors Industries, Patterson-UTI, Helmrich & Payne, Cactus Drilling and others. SMG Indium Resources Ltd's headquarters are located in Houston, Texas with facilities in Carthage, Texas and Odessa, Texas. Read more at www.smg-indium.com and www.mgcleansersllc.com.

Source: Matthew Flemming, SMG Indium Resources Ltd. +1-713-821-3153