Quarterly report pursuant to Section 13 or 15(d)

5. CONVERTIBLE NOTES PAYABLE, NET

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5. CONVERTIBLE NOTES PAYABLE, NET
3 Months Ended
Jun. 30, 2019
Convertible Notes Payable [Abstract]  
CONVERTIBLE NOTES PAYABLE, NET

5. CONVERTIBLE NOTES PAYABLE, NET

 

Convertible Notes Payable, Net consisted of the following at June 30, 2019:

 

    Principal     Unamortized
Discount
    Net
Amount
    Accrued
Interest
 
Convertible Notes Payable, Net:                                
November 2014 10% Convertible Notes (due July 1, 2019)   $ 512,811     $     $ 512,811     $ 6,604  
December 2016 10% Convertible Notes (due July 1, 2019)     379,780             379,780       4,748  
Total Convertible Notes Payable, Net   $ 892,591     $     $ 892,591     $ 11,352  

 

During the three months ended June 30, 2019, we recorded interest expense of $23,759 related to the contractual interest rates of our convertible notes and interest expense of $30,287 related to the amortization of the note discount for a total interest expense of $54,046 related to our convertible notes in the three month period ended June 30, 2019. Accrued interest is included in other current liabilities (see Note 8).

 

During the three months ended June 30, 2019, we reduced the conversion price on the convertible notes from $3.00 per share to $0.68 per share. The modification of the convertible notes was evaluated under ASC 470-50-40 and the instruments were determined to be substantially different, and the transaction qualified for extinguishment accounting. Under the extinguishment accounting we recorded a loss on debt extinguishment of $447,011.

 

Also during the three months ended June 30, 2019, we paid down $100,000 of the principal balances of the convertible notes and paid the accrued interest through May 2019. In July 2019, we paid off the remaining principal balance and accrued interest shown in the above table (see Note 14).

 

Convertible Notes Payable, Net consisted of the following at March 31, 2019:

 

    Principal     Unamortized
Discount
    Net
Amount
    Accrued
Interest
 
Convertible Notes Payable, Net:                                
November 2014 10% Convertible Notes (due July 1, 2019)   $ 612,811     $ (18,701 )   $ 594,110     $ 37,309  
December 2016 10% Convertible Notes (due July 1, 2019)     379,780       (11,589 )     368,191       22,264  
Total Convertible Notes Payable, Net   $ 992,591     $ (30,290 )   $ 962,301     $ 59,573  

 

During the three months ended June 30, 2018, we recorded interest expense of $24,817 related to the contractual interest rates of our convertible notes and interest expense of $30,287 related to the amortization of the note discount for a total interest expense of $55,104 related to our convertible notes in the three months ended June 30, 2018.