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11. Related Party Transactions
3 Months Ended
Mar. 31, 2021
Related Party Transactions [Abstract]  
Related Party Transactions

Minim Merger 

On November 12, 2020, the Company entered into the Merger Agreement pursuant to which the Company and Minim merged and combined their businesses. Minim offers a cloud WiFi management platform that enables and secures a better-connected home by providing AI-driven WiFi management and IoT security platform for homes, SMBs, and broadband service providers. Mr. Hitchcock was Chairman and, together with Ms. Hitchcock, a controlling stockholder of Minim. Prior to the Minim Merger, the Company had licensed Minim software products and, upon completion of the Minim Merger, the Company expected to integrate not only the Minim software with the Company’s hardware products but also to combine Minim’s business-to-business sales channels with the Company’s retail channels. Immediately prior to execution of the Merger Agreement, Jeremy Hitchcock, the Company’s Executive Chairman, and his spouse, Elizabeth Hitchcock, who also is a director of the Company, were, through investment vehicles jointly beneficially owned by them, the majority stockholders of both the Company and Minim. 

Minim Relationship

 

On July 25, 2019, the Company entered into a Master Partnership Agreement with Minim, together with a related Statement of Work, License, Collaborative Agreement, Software/Service Availability Agreement and Software/Service Support Level Agreement (collectively, the “Partnership Agreement”). Mr. Hitchcock was the President and Chief Executive Officer of Minim. Under the Partnership Agreement, the Company would integrate Minim software and services into certain hardware products distributed by the Company, and Minim would be entitled to certain fees and a portion of revenue received from the end users of such services and software. The Company and Minim entered into an additional Statement of Work on December 31, 2019 providing for further integration of Minim services, with a monthly minimum payment of $5 thousand payable by the Company to Minim starting in January 2020 for a period of 36 months and a requirement for Minim to purchase at least $90.0 thousand of the Company’s hardware by December 2022. Minimum monthly payments under this agreement increased to $15.0 thousand in July 2020. During the three months ended March 31, 2020, $15.0 thousand of payments were made by the Company to Minim under the Partnership Agreement. The Company recorded $15.0 thousand of expenses for the three months ended March 31, 2020. The Partnership Agreement terminated upon completion of the Minim Merger. During the three months period ended March 31, 2020, $15.0 thousand of payments were made by the Company to Minim under the Partnership Agreement. As of March 31, 2021, no amounts were due from or to the Company under the former Partnership Agreement.

 

The Company’s subsidiary, Minim leases office space located at the 848 Elm Street, Manchester, NH. The landlord is an affiliate entity owned by Mr. Hitchcock. The two-year facility lease agreement is effective from August 1, 2019 to July 31, 2021 and provides for 2,656 square feet at an aggregate annual rental price of $30.0 thousand. For the three-month period ended March 31, 2021, the rent expense was $7.5 thousand.