Convertible Notes Payable - Related Party, Net of Unamortized Discount
|6 Months Ended|
Jun. 30, 2017
|Convertible Notes Payable - Related Party, Net of Unamortized Discount||
NOTE 9 - CONVERTIBLE NOTES PAYABLE - RELATED PARTY, NET OF UNAMORTIZED DISCOUNT
On March 3, 2017, we entered into a $100,000 Bridge Note Agreement with a 7% stockholder of the Company. The Bridge Note was secured by the Companys assets, was convertible to shares of the Companys restricted stock at $0.10 per share and included warrants to purchase two shares of the Companys common stock, at a price of $0.15, for each dollar loaned to Spindle. This Bridge Note had no stated maturity date. The total discount attributable to this transaction was $100,000. The Bridge Note was converted to Spindle stock on March 3, 2017, and the entire interest expense related to the warrants and the beneficial conversion feature totaling $100,000 was recorded during the three months ended March 31, 2017. At June 30, 2017, the warrants related to the Bridge Loan had not been exercised.
In December 2016, we entered into a $10,500 Bridge Note Agreement with one of our directors. The Bridge Note was secured by the Companys assets and included warrants to purchase two shares of the Companys common stock for each dollar loaned to Spindle. The total discount attributable to this transaction was $1,102. During the three and six months ended June 30, 2017, interest expense related to the warrants and the beneficial conversion factor totaled $0 and $1,102, respectively. At June 30, 2017, the $10,500 Bridge Note was paid in full. No warrants related to this Bridge Note have been exercised.
On March 25, 2016, we entered into an agreement with a 12% stockholder of the Company. This agreement is for a $100,000 promissory note, convertible to stock under certain circumstances. The note bears an interest rate of 6% per annum and has a maturity date of March 25, 2018. The total value of the note, if converted to stock, would be $133,333 and therefore a discount in the amount of $33,333 was recorded. This amount is amortized to interest expense - related party over the term of the note. During the three and six months ended June 30, 2017, interest expense of $1,496 and $2,975, and interest expense related to amortization of the discount on the unpaid note of $4,155 and $8,265 was recorded, respectively. The balance of the unamortized discount at June 30, 2017 was $12,237.
The entire disclosure for related party transactions. Examples of related party transactions include transactions between (a) a parent company and its subsidiary; (b) subsidiaries of a common parent; (c) and entity and its principal owners; and (d) affiliates.
Reference 1: http://www.xbrl.org/2003/role/presentationRef