Quarterly report pursuant to Section 13 or 15(d)

Convertible Promissory Notes and Other Notes Payable (Tables)

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Convertible Promissory Notes and Other Notes Payable (Tables)
6 Months Ended
Sep. 30, 2012
Convertible Promissory Notes And Other Notes Payable Tables  
Convertible Promissory Notes and Other Notes Payable

The following table summarizes the components of the company’s secured and unsecured promissory notes and other notes payable at September 30, 2012 and March 31, 2012 (amounts in 100’s).

 

    30-Sep-12   31-Mar-12
    Principal   Accrued       Principal   Accrued    
    Balance   Interest   Total   Balance   Interest   Total
Senior Secured 10% Convertible                    
Promissory Notes:                                        
Issued to Platinum on July 2, 2012   $ 500,000     $ 12,400     $ 512,400     $ —       $ —       $ —    
Issued to Platinum on August 30, 2012     750,000       6,300       756,300       —         —         —    
Total Senior notes (non-current)   $ 1,250,000     $ 18,700     $ 1,268,700     $ —       $ —       $ —    
                                                 
                                                 
Convertible Promissory Notes:                                        
February 2012 12% convertible promissory notes   $ 500,000     $ 35,400     $ 535,400     $ 500,000     $ 5,300     $ 505,300  
Note discount     (481,300 )     —         (481,300 )     (499,300 )     —         (499,300)  
Total 12% convertible notes, net (non-current)   $ 18,700     $ 35,400     $ 54,100     $ 700     $ 5,300     $ 6,000  
                                                 
                                                 
Notes Payable to unrelated parties:                                        
7.0% Notes payable (April 2011)   $ 38,500     $ 200     $ 38,700     $ 63,800     $ 400     $ 64,200  
7.0% Notes payable (August 2012)     60,000       400       60,400       —         —         —    
      98,500     $ 600     $ 99,100       63,800     $ 400     $ 64,200  
less: current portion     (43,000 )     (600 )     (43,600 )     (63,800 )     (400 )     (64,200)  
7.0% Notes payable - non-current portion   $ 55,500     $ —       $ 55,500     $ —       $ —       $ —    
                                                 
7.5% Notes payable to vendors for accounts                                
payable converted to notes payable:                                
Burr, Pilger, Mayer   $ 91,800     $ 1,200     $ 93,000     $ 93,400     $ 1,100     $ 94,500  
Desjardins     214,500       10,700       225,200       224,300       2,800       227,100  
McCarthy Tetrault     441,700       22,000       463,700       459,400       5,700       465,100  
May 2011 Morrison Foerster     —         —         —         2,420,100       37,900       2,458,000  
August 2012 Morrison & Foerster Note A     991,200       —         991,200       —         —         —    
August 2012 Morrison & Foerster Note B     1,379,400       8,300       1,387,700       —         —         —    
Note discount     (1,600,400 )     —         (1,600,400 )     (228,900 )     —         (228,900)  
      1,518,200       42,200       1,560,400       2,968,300       47,500       3,015,800  
less: current portion     (531,000 )     (33,900 )     (564,900 )     (367,700 )     —         (367,700)  
non-current portion and discount   $ 987,200     $ 8,300     $ 995,500     $ 2,600,600     $ 47,500     $ 2,648,100  
                                                 
5.8% and 8% Notes payable to insurance                                
premium financing company (current)   $ 40,300     $ —       $ 40,300     $ 4,600     $ —       $ 4,600  
                                                 
10% Notes payable to vendors for accounts                                
payable converted to notes payable   $ 158,900     $ 20,800     $ 179,700     $ 165,400     $ 16,800     $ 182,200  
less: current portion     (145,400 )     (20,800 )     (166,200 )     (146,000 )     —         (146,000)  
non-current portion   $ 13,500     $ —       $ 13,500     $ 19,400     $ 16,800     $ 36,200  
                                                 
Total notes payable to unrelated parties   $ 1,815,900     $ 63,600     $ 1,879,500     $ 3,202,100     $ 64,700     $ 3,266,800  
less: current portion     (759,700 )     (55,300 )     (815,000 )     (582,100 )     (400 )     (582,500)  
non-current portion and discount   $ 1,056,200     $ 8,300     $ 1,064,500     $ 2,620,000     $ 64,300     $ 2,684,300  
                                                 
                                                 
Notes payable to related parties:                                        
7 % Note payable to Cato Holding Co.   $ 293,400     $ 17,200     $ 310,600     $ 293,300     $ 6,900     $ 300,200  
Note discount     (18,000 )     —         (18,000 )     (24,300 )     —         (24,300)  
Total notes payable to related parties   $ 275,400     $ 17,200     $ 292,600     $ 269,000     $ 6,900     $ 275,900  
less: current portion     (237,200 )     (17,200 )     (254,400 )     (168,200 )     —         (168,200)  
non-current portion and discount   $ 38,200     $ —       $ 38,200     $ 100,800     $ 6,900     $ 107,700  

 

Incremental value of the Amended M&F Warrant

The Company determined that the incremental value of the Amended M&F Warrant was $121,650 at the modification date using the Black-Scholes Option Pricing Model and the following assumptions:

 

Assumption:  

Pre-

modification

   

Post-

modification

 
                 
Market price per share   $ 0.94     $ 0.94  
Exercise price per share   $ 2.00     $ 2.00  
Risk-free interest rate     0.25 %     0.60 %
Expected term (years)     2.33       5.04  
Volatility     77.9 %     88.8 %
Dividend rate     0.0 %     0.0 %
                 
Fair Value per share   $ 0.24     $ 0.52