Notes Receivable

12 Months Ended

Dec. 31, 2019

9. Notes Receivable

The following table sets forth the carrying value of the Company’s notes receivable:


	December 31, 2019		December 31, 2018
AdvisorEngine—Unsecured non-convertible note	$	26,046	$	28,722
AdvisorEngine—Unsecured convertible notes		2,126		—

Subtotal	$	28,172	$	28,722

The Company recognized interest income of $2,498 and $1,974, during the years ended December 31, 2019 and 2018, respectively. Interest income included original issue discount (“OID”) amortization and accrued

paid-in-kind

(“PIK”) interest.

Unsecured

Non-Convertible

Note

The Company has an outstanding unsecured promissory note from AdvisorEngine. All principal amounts under the note bear interest from the date such amounts are advanced until repaid at a rate of 5% per annum, provided that immediately upon the occurrence and during the continuance of an event of default (as defined), interest will be increased to 10% per annum. All accrued and unpaid interest is treated as PIK by capitalizing such amount and adding it to the principal amount of the original note. AdvisorEngine has the option to prepay the note, in whole or in part, at any time without premium or penalty. All borrowings under the promissory note mature on December 29, 2021.

The following is a summary of the outstanding unsecured

non-convertible

note receivable balance:


	December 31, 2019			December 31, 2018
Note receivable (face value)	$	30,000		$	30,000
Less: OID, unamortized		(1,744	)		(2,582	)
Plus: PIK interest		2,928			1,304

Subtotal	$	31,184		$	28,722
Impairment (1) (Note 8)		(5,138	)		—

Total note receivable, net	$	26,046		$	28,722

(1)	Includes PIK interest which has been determined to be uncollectible.

Unsecured Convertible Notes

The Company participated in private convertible note financing rounds of AdvisorEngine by advancing $2,090 during the year ended December 31, 2019, in consideration for convertible notes, which were issued as part of a series of convertible notes pursuant to a Convertible Note Purchase Agreement entered into among AdvisorEngine, the Company and the other purchasers thereto. The convertible notes bear interest at a rate of 3% per annum

(

with all or any unpaid portion being treated as PIK by capitalizing such amount and adding it to the principal amount outstanding

)

, is unsecured, and matures on April 11, 2021. All principal

and

(

at the option of AdvisorEngine if not paid in cash

)

accrued interest under the convertible notes will automatically convert into a class or series of preferred stock substantially identical to that issued in a qualified financing (as defined therein), but at a price per share equal to 80% of the price per share sold in such transaction. In the event of a corporate transaction (as defined therein) the convertible notes would be repaid in cash from the proceeds of such transaction in the amount of 1.5 times the outstanding principal amount, plus any accrued and unpaid interest. If neither a qualified financing nor a corporate transaction occurs prior to the maturity date, the convertible notes are repaid at a rate of 1.25 times the outstanding principal amount, plus accrued and unpaid interest. The convertible notes may not be prepaid by AdvisorEngine without the prior consent of the requisite holders (which includes the Company).

The following is a summary of the outstanding unsecured convertible notes receivable balance:


	December 31, 2019
Notes receivable (face value)	$	2,090
Plus: PIK interest		36

Total notes receivable, net	$	2,126