Quarterly report pursuant to Section 13 or 15(d)

Commitments and Contingencies Disclosure

v3.10.0.1
Commitments and Contingencies Disclosure
9 Months Ended
Sep. 30, 2018
Notes  
Commitments and Contingencies Disclosure

NOTE 16 - COMMITMENTS AND CONTINGENCIES

 

On June 4, 2018, the “Company received service of a complaint in a lawsuit captioned Michael Kelly and iOT Broadband, LLC vs. Jack Scott and Spindle, Inc., No. DC-18-06656 (Dist. Ct. Dallas County, TX). The complaint purports to assert a claim of breach of contract against Spindle, claims of fraud against Jack Scott, the Interim CEO of the Company, and a claim of breach of fiduciary duty against both Dr. Scott and the Company in connection with an Amended and Restated Senior Unsecured Convertible Promissory Note (the “Note”) owned by Mr. Kelly who purports to have assigned his interest and rights in the note to iOT.

 

The Company believes that it will successfully defend against the actions described above, and it intends to pursue counterclaims against the plaintiffs which may, if successful, result in an award of damages in favor of the Company.  However, the Company does anticipate that it will incur significant additional legal expenses as it pursues a vigorous defense against each of these actions.  The parties to the lawsuit are currently in the discovery process.  While the Company believes that it will successfully defend against these actions, no assurances can be given as to: (i) the outcome of these or legal proceedings and (ii) the related impact of an unanticipated adverse outcome of these proceedings on the Company's financial condition, results of operations or near-term liquidity.