Convertible Notes Payable

9 Months Ended

Sep. 30, 2014

Debt Disclosure [Abstract]

Convertible Notes Payable

NOTE 6 – CONVERTIBLE NOTES PAYABLE

In connection with the reverse merger, the Company assumed certain 8% convertible notes payable dated from April 2014 to August 2014, with an aggregate principal amount of $50,000, which are due on July 15, 2015. These Notes will automatically convert into shares of Class A Common Stock of PEN Inc. on the later of (i) the day 180 days after the Note dates which range from April to August 2014, (ii) the day 60 days after the closing under the Merger & Exchange Agreement which closed effective August 27, 2014, or (iii) October 15, 2014. Principal and accrued interest will be converted into shares using a conversion price equal to 75% of the average closing price of the Company’s Class A Common Stock for the twenty trading days immediately preceding the conversion date.

Pursuant to ASC Topic 470-20-525 (Debt with conversion and other options), since these convertible notes had fixed conversion percentages of 75% of the stock price, the Company determined it had a fixed maximum amounts that can be settled for the debt. Accordingly, the Company accrued a put premium amount aggregating $16,666 since these convertible notes are convertible for the conversion premium. At September 30, 2014, principal amount due under these convertible notes amounted to $50,000.

At September 30, 2014 and December 31, 2013, aggregate convertible notes payable consisted of the following:

	September 30,2014		December 31,2013
Convertible notes payable	$	50,000	$	-
Put premium		16,666		-
Total	$	66,666	$	-