Subsequent Events

3 Months Ended

Mar. 31, 2018

Subsequent Events [Abstract]

SUBSEQUENT EVENTS

NOTE 19– SUBSEQUENT EVENTS 

Shares issued or to be issued for services

From April 1, 2018 to May 10, 2018, the Company or its subsidiaries signed the consultancy service agreements with 27 consultants respectively. Each consultancy period was around six months to two years. the Company agreed to pay these consultants $4,518,117 to be paid by cash of $212,053.47 and the issuance of an aggregate of 1,260,412 shares as follows: 1,203,007 shares during the period between April 2018 & December 2018; 57,405 shares during Year 2019.

The initial log of shares for each service agreements was valued at the fair market value on the grant date using the reported closing share price on the date of grant. Total number of the initial log of shares for these serviced agreements is 873,085. Total value of the initial log of share is $3,071,224. In connection with the issuance of these shares, the Company shall record stock-based professional fees of $3,071,224 over the service period.

Additionally, pursuant to this consulting agreement, the Company will issue an additional 387,327 shares of common stock to these consultants, provided that these Agreement are not terminated prior to date of the issuance of these shares. The initial fair value of these shares was valued at the fair market value on the contract date using the reported closing share price on the date of grant. The Company will recognize stock-based professional fees over the period during which the services are rendered by such consultant. At the end of each financial reporting period prior to issuance of these shares, the fair value of these shares is remeasured using the then-current fair value of the Company’s common stock.

For part of the consultancy agreements, if, on the first date when the restrictive legend on the certificate of each lot of the Shares issued to the Consultants pursuant these agreement are removed and such lot of Shares becomes freely tradeable in the NASDAQ Capital Market without restriction, the closing price of the shares drops below the issue price, the Company will compensate the consultants for the drop in value of such lot of shares, which will be calculated by multiplying the number of shares by the difference between the closing price and the issue price ("Shortfall"). The total maximum number of shares issued for the Shortfall of these consultancy agreements shall not exceed 91,458 Shares.

Securities purchase agreement and related convertible note and warrants

On May 2, 2018, pursuant to a securities purchase agreement, the Company closed a private placement of securities with Iliad Research and Trading, L.P. (the “Investor”) pursuant to which the Investor purchased a Convertible Promissory Note (the “Note”) in the original principal amount of $900,000, convertible into shares of common stock of the Company (the “Common Stock”), upon the terms and subject to the limitations and conditions set forth in the Note, and a two year Warrant to purchase 134,328 shares of Common Stock at an exercise price of $7.18 per share (the “Warrant”). In connection with the Note, the Company paid an original issue discount of $150,000 and paid issuance costs of $15,000 which will be reflected as a debt discount and amortized over the Note term. The Note bears interest at 10% per annum, is unsecured, and is due on the date that is fifteen months from May 2, 2018. The warrants shall expire on the last calendar day of the month in which the second anniversary of the Issue Date occurs.

If the Company exercises its right to prepay this Note, the Company shall make payment to Investor of an amount in cash equal to 125% multiplied by the then Outstanding Balance of this Note.

The Investor has the right at any time after May 2, 2018 until the Outstanding Balance has been paid in full to convert (each instance of conversion is referred to herein as a (“Lender Conversion”) all or any part of the Outstanding Balance into shares (“Lender Conversion Shares”) of fully paid and non-assessable common stock, $0.001 par value per share (“Common Stock”), of the Company as per the following conversion formula:

● the number of Lender Conversion Shares equals the amount being converted (the “Conversion Amount”) divided by the Lender Conversion Price (as defined below). All Investor Conversions shall be cashless and not require further payment from the Investor. Subject to adjustment as set forth in this Note, the price at which Investor has the right to convert all or any portion of the Outstanding Balance into Common Stock is $6.70 per share of Common Stock (the “Lender Conversion Price”).

Beginning on the date that is six months after May 2, 2018, (the “Redemption Start Date”), Investor shall have the right, exercisable at any time in its sole and absolute discretion, to redeem all or any portion of the Note (such amount, the “Redemption Amount”) by providing the Company with a redemption notice, and each date on which Lender delivers a redemption notice. Payments of each Redemption Amount may be made (a) in cash, or (b) by converting such Redemption Amount into shares of Common Stock (“Redemption Conversion Shares”, and together with the Lender Conversion Shares, the “Conversion Shares”) (each, a “Redemption Conversion”) per the following formula: the number of Redemption Conversion Shares equals the portion of the applicable Redemption Amount being converted divided by the Redemption Conversion Price (as defined below), or (c) by any combination of the foregoing. Notwithstanding the foregoing, Borrower will not be entitled to elect a Redemption Conversion with respect to any portion of any applicable Redemption Amount and shall be required to pay the entire amount of such Redemption Amount in cash within thirty days, if (a) on the applicable Redemption Date there is an Equity Conditions Failure as defined in the Note, and such failure is not waived in writing by the Investor; or (b) the Redemption Conversion Price is below the Conversion Price Floor and the Company does not agree to waive the Conversion Price Floor. The Investor agrees to redeem at least the Minimum Redemption Amount in each thirty-day period following the Redemption Start Date. The Investor also agrees not to redeem more than the Minimum Redemption Amount in any thirty-day period following the Redemption Start Date in which the Redemption Conversion Price is less than the Conversion Floor Price.

Subject to the adjustments set forth herein, the conversion price for each Redemption Conversion (the “Redemption Conversion Price”) shall be the lesser of (a) the Lender Conversion Price, and (b) the Market Price; provided, however, in no event shall the Redemption Conversion Price be less than $2.00 per share (“Conversion Price Floor”).

License Agreement with ECrent Capital Holdings Limited

On June 11, 2017, the Company entered into an Exclusivity Agreement (the “Exclusivity Agreement”) with ECrent Capital Holdings Limited (“ECrent”) the terms of which became effective on the same day. Pursuant to the Exclusivity Agreement, the Company and ECrent agreed to engage in exclusive discussions regarding a potential acquisition by the Company of ECrent and/or any of its subsidiaries or otherwise all or part of ECrent’s business and potential business cooperation between the two companies (collectively, the “Potential Transactions”) for a period of three months commencing from the date of the Exclusivity Agreement (the “Exclusive Period”). Ms. Deborah Yuen, an affiliate of YSK 1860 Co., Limited, which is a principal shareholder of the Company, controls ECrent. ECrent agreed that, during the Exclusive Period, neither ECrent nor its agents, representatives or advisors will contact, solicit, discuss or negotiate with any third party with respect to any transaction relating to a transfer or pledge of securities of ECrent and/or its subsidiaries, a sale of ECrent’s business, a business cooperation or any other matters that may adversely affect the Potential Transactions or the parties’ discussion related thereto. The exclusivity period has been further extended to June 10, 2018 pursuant to two amendment agreements dated September 11, 2017 and January 23, 2018.

On May 8, 2018, Sharing Economy Investment Limited (“Sharing Economy”), a wholly owned subsidiary of the Company, entered into a License Agreement (the “Agreement”) with ECrent. Pursuant to the Agreement, ECrent shall grant Sharing Economy an exclusive license to utilize certain software and trademarks in order to develop, launch, operate, commercialize, and maintain an online website platform in Taiwan, Thailand, India, Indonesia, Singapore, Malaysia, Philippines, Vietnam, Cambodia, Japan, and Korea until December 31, 2019.

In consideration for the license, the Company shall grant ECrent 530,000 shares of common stock on the closing date of the Agreement, whereas ECrent guarantees that the business will generate revenue of US$15,000,000 (the “Guaranteed Revenue”) and gross profit of US$2,910,000 (the “Guaranteed Gross Profit”) from the closing date of the Agreement until December 31, 2019.