Convertible Promissory Notes and Other Notes Payable (Tables)

12 Months Ended

Mar. 31, 2013

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 convertible promissory notes and other notes payable:

	March 31, 2013									March 31, 2012
	Principal			Accrued						Principal			Accrued
	Balance			Interest			Total			Balance			Interest			Total
Senior Secured 10% Convertible Promissory Notes
issued to Platinum:
Exchange Note issued on October 11, 2012	$	1,272,600		$	61,700		$	1,334,300		$	-		$	-		$	-
Investment Note issued on October 11, 2012		500,000			24,200			524,200			-			-			-
Investment Note issued on October 19, 2012		500,000			23,000			523,000			-			-			-
Investment Note issued on February 22, 2013		250,000			2,600			252,600			-			-			-
Investment Note issued on March 12, 2013		750,000			4,700			754,700			-			-			-
		3,272,600			116,200			3,388,800			-			-			-
Aggregate note discount		(1,963,100	)		-			(1,963,100	)		-			-			-
Total Senior notes (non-current)	$	1,309,500		$	116,200		$	1,425,700		$	-		$	-		$	-
Convertible Promissory Notes:
February 2012 12% convertible promissory notes	$	-		$	-		$	-		$	500,000		$	5,300		$	505,300
Note discount		-			-			-			(499,300	)		-			(499,300	)
Total 12% convertible notes, net (non-current)	$	-		$	-		$	-		$	700		$	5,300		$	6,000
Notes Payable to unrelated parties:
7.0% Notes payable (April 2011)	$	-		$	-		$	-		$	63,800		$	400		$	64,200
7.0% Notes payable (August 2012)		59,400			-			59,400			-			-			-
		59,400		$	-		$	59,400			63,800		$	400		$	64,200
less: current portion		(8,100	)		-			(8,100	)		(63,800	)		(400	)		(64,200	)
7.0% Notes payable - non-current portion	$	51,300		$	-		$	51,300		$	-		$	-		$	-
7.5% Notes payable to service providers for
accounts payable converted to notes payable:
Burr, Pilger, Mayer	$	90,400		$	-		$	90,400		$	93,400		$	1,100		$	94,500
Desjardins		194,100			800			194,900			224,300			2,800			227,100
McCarthy Tetrault		403,100			1,700			404,800			459,400			5,700			465,100
May 2011 Morrison Foerster		-			-			-			2,420,100			37,900			2,458,000
August 2012 Morrison & Foerster Note A		937,400			-			937,400			-			-			-
August 2012 Morrison & Foerster Note B, payable solely in restricted shares of the Company's common stock (1)		1,379,400			60,100			1,439,500			-			-			-
University Health Network, payable solely in restricted shares of the Company's common stock (1)		549,500			19,400			568,900			-			-			-
		3,553,900			82,000			3,635,900			3,197,200			47,500			3,244,700
Note discount		(1,142,600	)		-			(1,142,600	)		(228,900	)		-			(228,900	)
		2,411,300			82,000			2,493,300			2,968,300			47,500			3,015,800
less: current portion		(450,300	)		(2,500	)		(452,800	)		(367,700	)		-			(367,700	)
non-current portion and discount	$	1,961,000		$	79,500		$	2,040,500		$	2,600,600		$	47,500		$	2,648,100
5.8%  and 8% Notes payable to insurance
premium financing company (current)	$	4,200		$	-		$	4,200		$	4,600		$	-		$	4,600
10% Notes payable to vendors for accounts
payable converted to notes payable	$	128,800		$	23,300		$	152,100		$	165,400		$	16,800		$	182,200
less: current portion		(128,800	)		(23,300	)		(152,100	)		(146,000	)		-			(146,000	)
non-current portion	$	-		$	-		$	-		$	19,400		$	16,800		$	36,200
Total notes payable to unrelated parties	$	2,603,700		$	105,300		$	2,709,000		$	3,202,100		$	64,700		$	3,266,800
less: current portion		(591,400	)		(25,800	)		(617,200	)		(582,100	)		(400	)		(582,500	)
non-current portion and discount	$	2,012,300		$	79,500		$	2,091,800		$	2,620,000		$	64,300		$	2,684,300
Notes payable to related parties:
April 2011 7 % Note to Cato Holding Co.	$	-		$	-		$	-		$	293,300		$	6,900		$	300,200
October 2012 7.5% Note to Cato Holding Co.		293,600			7,400			301,000			-			-			-
October 2012 7.5% Note to Cato Research Ltd., payable solely in restricted shares of the Company's common stock (1)		1,009,000			36,200			1,045,200			-			-			-
		1,302,600			43,600			1,346,200			293,300			6,900			300,200
Note discount		(147,200	)		-			(147,200	)		(24,300	)		-			(24,300	)
Total notes payable to related parties		1,155,400			43,600			1,199,000			269,000			6,900			275,900
less: current portion		(85,600	)		(7,400	)		(93,000	)		(168,200	)		-			(168,200	)
non-current portion and discount	$	1,069,800		$	36,200		$	1,106,000		$	100,800		$	6,900		$	107,700

(1) See description of debt restructuring in Note 8.

Exchange Warrant and Investment Warrants

	Exchange			Investment Warrants Issued on:
	Warrant			10/11/2012			10/19/2012			2/22/2013			3/12/2013
Market price of common stock	$	0.75		$	0.75		$	0.75		$	0.60		$	0.80
Exercise price	$	1.50		$	1.50		$	1.50		$	1.50		$	1.50
Risk-free interest rate		0.67	%		0.67	%		0.67	%		0.84	%		0.88	%
Volatility		85.0	%		85.0	%		85.0	%		85.0	%		85.0	%
Term (years)		5.0			5.0			5.0			5.0			5.0
Dividend rate		0	%		0	%		0	%		0	%		0	%
Fair value per share	$	0.53		$	0.53		$	0.53		$	0.39		$	0.52
Number of shares		1,272,577			500,000			500,000			250,000			750,000
Fair value at date of issuance	$	672,000		$	264,000		$	264,000		$	97,000		$	393,000

Components of note discount and effective interest rate

	Inception Date Carrying Value of
	Exchange			Investment Notes Issued on:
	Note			10/11/2012			10/19/2012			2/22/2013			3/12/2013
Face value	$	1,272,600		$	500,000		$	500,000		$	250,000		$	750,000
Discount attributable to:
Fair value of warrant		-			(264,000	)		(264,000	)		(97,000	)		(393,000	)
Beneficial conversion feature		-			(231,000	)		(231,000	)		(147,000	)		(349,500	)
Inception date carrying value	$	1,272,600		$	5,000		$	5,000		$	6,000		$	7,500
Effective Interest Rate		10.00	%		159.05	%		159.05	%		127.27	%		159.05	%

Amended M&F Warrant

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 in years		2.33			5.04
Volatility		77.9	%		88.8	%
Dividend rate		0.0	%		0.0	%
Weighted Average Fair Value per share	$	0.24		$	0.52