Convertible Promissory Notes and Other Notes Payable

12 Months Ended

Mar. 31, 2016

Debt Disclosure [Abstract]

Convertible Promissory Notes and Other Notes Payable

8.  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, 2016									March 31, 2015
	Principal			Accrued						Principal			Accrued
	Balance			Interest			Total			Balance			Interest			Total
Senior Secured 10% Convertible Promissory Notes issued to PLTG:
Exchange Note issued on October 11, 2012	$	-		$	-		$	-		$	1,272,600		$	360,200		$	1,632,800
Investment Note issued on October 11, 2012		-			-			-			500,000			141,500			641,500
Investment Note issued on October 19, 2012		-			-			-			500,000			140,100			640,100
Investment Note issued on February 22, 2013		-			-			-			250,000			59,100			309,100
Investment Note issued on March 12, 2013		-			-			-			750,000			172,600			922,600
		-			-			-			3,272,600			873,500			4,146,100
Convertible promissory note issued on July 26, 2013		-			-			-			250,000			46,200			296,200
Total Senior notes		-			-			-			3,522,600			919,700			4,442,300
Aggregate note discount		-			-			-			-			-			-
Net Senior notes		-			-			-			3,522,600			919,700			4,442,300
less: current portion		-			-			-			(3,272,600	)		(873,500	)		(4,146,100	)
Senior notes - non-current portion and discount	$	-		$	-		$	-		$	250,000		$	46,200		$	296,200
10% Convertible Promissory Notes (Unit Notes)
2014 Unit Notes, including amended notes, due 3/31/15	$	-		$	-		$	-		$	4,066,900		$	270,700		$	4,337,600
Note discounts		-			-			-			(180,000	)		-			(180,000	)
Net convertible notes (all current)	$	-		$	-		$	-		$	3,886,900		$	270,700		$	4,157,600
Notes Payable to unrelated parties:
7.5% Notes payable to service providers for accounts payable converted to notes payable:
Burr, Pilger, Mayer	$	-		$	-		$	-		$	90,400		$	13,100		$	103,500
Desjardins		-			-			-			156,300			24,100			180,400
McCarthy Tetrault		-			-			-			319,700			46,000			365,700
August 2012 Morrison & Foerster Note A		-			-			-			918,200			193,200			1,111,400
August 2012 Morrison & Foerster Note B		-			-			-			1,379,400			333,100			1,712,500
University Health Network		-			-			-			549,500			101,800			651,300
		-			-			-			3,413,500			711,300			4,124,800
Note discount		-			-			-			(474,500	)		-			(474,500	)
		-			-			-			2,939,000			711,300			3,650,300
less: current portion (and discount at March 31, 2015)		-			-			-			(2,939,000	)		(711,300	)		(3,650,300	)
non-current portion and discount	$	-		$	-		$	-		$	-		$	-		$	-
5.75% and 10.25% Notes payable to insurance premium financing company (current)	$	-		$	-		$	-		$	5,800		$	-		$	5,800
10% Notes payable to vendors for accounts payable converted to notes payable	$	-		$	-		$	-		$	378,300		$	51,500		$	429,800
less: current portion		-			-			-			(378,300	)		(51,500	)		(429,800	)
non-current portion	$	-		$	-		$	-		$	-		$	-		$	-
7.0% Note payable (August 2012)	$	58,800		$	12,000		$	70,800		$	58,800		$	7,900		$	66,700
less: current portion		(31,600	)		(12,000	)		(43,600	)		(23,200	)		(7,900	)		(31,100	)
7.0% Notes payable - non-current portion	$	27,200		$	-		$	27,200		$	35,600		$	-		$	35,600
Total notes payable to unrelated parties	$	58,800		$	12,000		$	70,800		$	3,381,900		$	770,700		$	4,152,600
less: current portion (and discount at March 31, 2015)		(31,600	)		(12,000	)		(43,600	)		(3,346,300	)		(770,700	)		(4,117,000	)
Net non-current portion	$	27,200		$	-		$	27,200		$	35,600		$	-		$	35,600
Notes payable to related parties:
October 2012 7.5% Note to Cato Holding Co.	$	-		$	-		$	-		$	293,600		$	55,900		$	349,500
October 2012 7.5% Note to Cato Research Ltd.		-			-			-			1,009,000			204,800			1,213,800
		-			-			-			1,302,600			260,700			1,563,300
Note discount		-			-			-			(54,500	)		-			(54,500	)
Total notes payable to related parties		-			-			-			1,248,100			260,700			1,508,800
less: current portion		-			-			-			(1,248,100	)		(260,700	)		(1,508,800	)
non-current portion and discount	$	-		$	-		$	-		$	-		$	-		$	-

With the exception of the 10% convertible promissory notes issued in connection with our 2014 Unit Private Placement, described below, and a $300,000 promissory note issued in April 2014 to Icahn School of Medicine at Mount Sinai in satisfaction of certain stem cell technology license maintenance fees and reimbursable patent prosecution costs, all of our outstanding secured and unsecured promissory notes were issued prior to the beginning of our fiscal year ended March 31, 2015 and either no payments were required under the terms of such notes or, for strategic purposes, we did not make any principal or interest payments on them during our fiscal year ended March 31, 2015. As disclosed below, between May 2015 and September 2015, we reached agreements with the holders of essentially all of our outstanding notes to convert the outstanding balance of principal and interest into shares of our Series B Preferred.  New promissory note issuances during fiscal years 2015 and 2016 and conversions of our secured and unsecured convertible promissory notes and other promissory notes into shares of our Series B Preferred during the fiscal year ended March 31, 2016 are described below. 

10% Convertible Notes Issued in Connection with 2014 Unit Private Placement 

As described more completely under the caption 2014 Unit Private Placement in Note 9, Capital Stock, between April 1, 2015 and May 14, 2015, we issued to accredited investors in self-placed private placement transactions 10% convertible notes (the 2014 Unit Notes) in the aggregate face amount of $280,000. The 2014 Unit Notes issued in April and May 2015 represented a continuation of the 2014 Unit Private Placement pursuant to which we had issued in self-placed private placement transactions to accredited investors an aggregate of $3,113,500 principal amount of substantially similar notes between late-March 2014 and March 31, 2015. The 2014 Unit Notes matured between April 30, 2015 and May 15, 2015 (Maturity) and the outstanding principal of the 2014 Unit Notes and their related accrued interest (the Outstanding Balance) was convertible into shares of our common stock at a conversion price of $10.00 per share at or prior to Maturity, at the option of the accredited investor. In addition, upon our consummation of either (i) an equity or equity-based public financing registered with the SEC, or (ii) an equity or equity-based private placement, or series of private placements, not registered with the SEC, in either case resulting in gross cash proceeds to us of at least $10.0 million prior to Maturity (a Qualified Financing), the Outstanding Balance of the 2014 Unit Notes would automatically convert into securities substantially similar to those sold in the Qualified Financing, based on the following formula: (the Outstanding Balance as of the closing of the Qualified Financing) x 1.25 / (the per security price of the securities sold in the Qualified Financing). 

We allocated the proceeds from the self-placed private placement of the units to the 2014 Unit Notes, the common stock and the warrants comprising the units based on the relative fair value of the individual securities in the unit on the date of the unit sale. Based on the short-duration of the 2014 Unit Notes and their other terms, we determined that the fair value of the 2014 Unit Notes at the date of issuance was equal to their face value. Accordingly, we recorded an initial discount attributable to each 2014 Unit Note for an amount representing the difference between the face value of the 2014 Unit Note and its allocated relative value. Additionally, the 2014 Unit Notes contained an embedded conversion feature having intrinsic value at the issuance date, which value we treated as an additional discount attributable to those 2014 Unit Notes, subject to limitations on the absolute amount of discount attributable to each 2014 Unit Note. We recorded a corresponding credit to additional paid-in capital, an equity account, attributable to the beneficial conversion feature. We amortized the discounts attributable to the 2014 Unit Notes issued in April and May 2015, an aggregate of $277,200, using the effective interest method over the respective term of each 2014 Unit Note. Because the discount on each of these 2014 Unit Notes represented 99% of its initial face value, and because we were required to amortize such discount over the period from issuance to maturity, which was no more than two months for these notes, the calculated effective interest rate is extremely high. Based on the amounts of their respective discounts and the term between issuance and maturity, the effective interest rates attributable to the 2014 Unit Notes issued in April and May 2015 are in excess of 10,000%.

Issuance of Securities in Satisfaction of Technology License and Maintenance Fees and Patent Expenses 

As described more completely in Note 9, Capital Stock, in April 2014, we entered into an agreement with Icahn School of Medicine at Mount Sinai (ISMMS), one of our technology licensors, pursuant to which we issued to ISMMS (i) a 10% promissory note in the face amount of $300,000 due on the earlier of December 31, 2014, or the completion of a qualified financing, as defined, (ii) 15,000 restricted shares of our common stock and (iii) a warrant exercisable through March 31, 2019 to purchase 15,000 restricted shares of our common stock at an exercise price of $10.00 per share in satisfaction of $288,400 of stem cell technology license maintenance fees and reimbursable patent prosecution costs (the Agreement). Under the terms of the Agreement, an additional $35,800 of license maintenance fees and reimbursable patent prosecution costs was added to the principal amount of the promissory note through March 31, 2015. We made payments aggregating $100,000 on the note during the fiscal year ended March 31, 2015, prior to its conversion into shares of our Series B Preferred in June 2015. 

Accounting for Notes and Other Indebtedness Converted into Series B Preferred 

Between May 2015 and September 2015, we extinguished the outstanding balances of approximately $17.2 million of indebtedness, including all of our senior secured promissory notes, all except $58,800 principal of our unsecured promissory notes, and a substantial portion of other indebtedness, and certain adjustments thereto, that were either due and payable or would have become due and payable prior to March 31, 2016, by converting all such indebtedness into shares of our Series B Preferred (which is described more completely below under the caption Creation of Series B Preferred Stock in Note 9, Capital Stock). Evaluating each note or debt class separately, we determined that the conversion of each of the notes or other debt instruments into Series B Preferred should be accounted for as an extinguishment of debt. Further, considering the direct exchangeability of the Series B Preferred shares into shares of our common stock, the 10% dividend applicable to the Series B Preferred prior to such exchange, and other factors, we determined that the fair value of a share of Series B Preferred issued pursuant to the conversion of each of the notes or other debt instruments was equal to the market value of a share of our common stock on the conversion date. Because the fair value of the Series B Preferred into which the debt instruments were converted in all cases exceeded the carrying value of the debt, we recorded an aggregate loss on extinguishment of debt of $26,700,200, in the first and second quarters of the fiscal year ended March 31, 2016, as reflected in the accompanying Consolidated Statement of Operations and Comprehensive Loss for that period. 

Conversion of Senior Secured 10% Convertible Promissory Notes issued to PLTG into Series B Preferred

As described more completely in Note 9, Capital Stock, effective on May 12, 2015, we entered in to a broad strategic agreement with PLTG (PLTG Agreement) pursuant to which PLTG, among other things, converted all of the $4,489,300 outstanding balance (principal and accrued interest) of the Senior Secured Notes having maturity dates between October 2015 and July 2016 into 641,335 shares of our Series B Preferred. Based on the $10.00 per share fair value of the Series B Preferred at the date the Senior Secured Notes were converted, we issued Series B Preferred having an aggregate fair value of $6,413,300 to PLTG. Accordingly, we recognized a non-cash loss on the extinguishment of the Senior Secured Notes in the amount of $1,924,000 in the quarter ended June 30, 2015.

Conversion of 2014 Unit Notes into Series B Preferred

Pursuant to the PLTG Agreement, PLTG also converted the $1,345,700 outstanding balance of the 2014 Unit Notes originally issued by us to PLTG that had matured on March 31, 2015 (PLTG Unit Notes) into shares of our Series B Preferred. PLTG additionally agreed to acquire and convert into our Series B Preferred other 2014 Unit Notes that had matured on March 31, 2015 originally issued to other investors having an aggregate outstanding balance of $1,487,900 (Acquired Unit Notes). Further, effective May 20, 2015, the holders of other 2014 Unit Notes that had matured on March 31, 2015 or shortly thereafter, having an aggregate outstanding balance of $1,831,200 (Investor Unit Notes) individually converted such notes into our Series B Preferred. Consequently, the aggregate outstanding balance totaling $4,664,800 of all 2014 Unit Notes, including those issued in April and May 2015, was converted into shares of our Series B Preferred. We determined that the Series B Preferred Unit Offering, as described in Note 9, Capital Stock, would be treated as a Qualified Financing applicable to the 2014 Unit Notes, entitling the 2014 Unit Note holders at the time of conversion to the 25% Qualified Financing conversion premium under the terms of the 2014 Unit Notes. Accordingly, we issued an aggregate of 833,020 shares of our Series B Preferred and warrants to purchase an aggregate of 833,020 shares of our common stock upon the conversion of the outstanding balance of all 2014 Unit Notes, including an aggregate conversion premium of $1,166,200.

Based on the $10.00 per share fair value of the Series B Preferred at the date the PLTG Unit Notes and Acquired Unit Notes were converted and the $8.00 per share fair value of the Series B Preferred at the date the Investor Unit Notes were converted, we issued Series B Preferred having an aggregate fair value of $7,676,200 upon the conversions. We valued the warrants issued in connection with the 2014 Unit Note conversions at an aggregate of $5,168,400 using the Black Scholes option pricing model and the following assumptions:  

Assumption:	PLTG Unit Notes and Acquired Unit Notes			Investor Unit Notes
Market price per share at conversion date	$	10.00		$	8.00
Exercise price per share	$	7.00		$	7.00
Risk-free interest rate		1.58			1.57
Contractual term in years		5.00			5.00
Volatility		76.5	%		75.7	%
Dividend rate		0.0	%		0.0	%
Warrant shares		506,004			327,016
Fair Value per share	$	6.89		$	5.15

Nearly all of the 2014 Unit Notes contained a beneficial conversion feature at the time they were originally issued. We have accounted for the repurchase of the beneficial conversion feature at the time of the extinguishment and conversion, an aggregate of $2,237,100, as a reduction to the loss on extinguishment of debt in the accompanying Consolidated Statements of Operations and Comprehensive Loss, with a corresponding reduction to additional paid-in capital. In aggregate, we recognized a non-cash loss on extinguishment of debt attributable to the conversion of the 2014 Unit Notes in the amount of $5,942,700 in the quarter ended June 30, 2015.  

Conversion of Promissory Note issued to University Health Network into Series B Preferred 

On May 29, 2015, University Health Network (UHN) converted the entire $656,400 outstanding balance (principal and accrued interest) of our promissory note maturing on March 31, 2016 into 93,775 shares of our Series B Preferred. Based on the $10.00 per share fair value of the Series B Preferred at the date the UHN note was converted, we issued Series B Preferred having an aggregate fair value of $937,800 to UHN. After eliminating the remaining $27,500 of unamortized discount on the UHN note, we recognized a non-cash loss on the extinguishment of debt attributable to the conversion of the UHN Note of $308,900 in the quarter ended June 30, 2015. 

Conversion of Promissory Notes and Accounts Payable issued to Cato Holding Company (CHC) and Cato Research Ltd. (CRL) into Series B Preferred 

On June 10, 2015, CHC, the parent company of CRL and a related party, converted the entire aggregate outstanding balance (principal and accrued interest) of $1,583,000 of our outstanding promissory notes issued to CHC and CRL and maturing on March 31, 2016 (together, the Cato Notes), plus an additional $171,300 of past due accounts payable to CRL and a strategic adjustment thereto (CRL Payables) into a total of 328,571 shares of our Series B Preferred. Based on the $10.00 per share fair value of the Series B Preferred at the date the Cato Notes and CRL Payables were converted, we issued Series B Preferred having an aggregate fair value of $3,285,700 to CHC. 

As additional consideration for the conversion of the Cato Notes and the CRL Payables, we amended certain outstanding warrants held by CHC and CRL to purchase 12,500 and 60,691 restricted shares of our common stock, respectively, to reduce the exercise price thereof from $30.00 and $20.00 per share, respectively, to $7.00 per share. We calculated the fair value of the warrants immediately before and after the modifications and determined that the fair value of the warrants increased by $222,700. The warrants subject to the exercise price modifications were valued using the Black-Scholes Option Pricing Model and the following assumptions:

Assumption:	Pre-modification			Post-modification
Market price per share at modification date	$	10.00		$	10.00
Exercise price per share	$	20.00 and $30.00		$	7.00
Risk-free interest rate		0.87	%		0.87	%
Contractual term in years		2.31			2.31
Volatility		73.9	%		73.9	%
Dividend rate		0.0	%		0.0	%
Weighted Average Fair Value per share	$	2.44 and $1.57		$	5.33

After eliminating the remaining unamortized discount of $46,000 attributable to the Cato Notes, we recognized a non-cash loss on the extinguishment of debt attributable to the conversion of the Cato Notes and CRL Payables of $1,800,100 in the quarter ended June 30, 2015.

Conversion of Promissory Note B issued to Morrison & Foerster into Series B Preferred 

On June 12, 2015, Morrison & Foerster (M&F) converted the entire aggregate outstanding balance (principal and accrued interest) of $1,735,500 of our August 2012 promissory Note B maturing on March 31, 2016 (M&F Note B), plus an agreed strategic adjustment thereto into a total of 257,143 shares of our Series B Preferred. Based on the $10.00 per share fair value of the Series B Preferred at the date M&F Note B was converted, we issued Series B Preferred having an aggregate fair value of $2,571,400 to M&F. 

As additional consideration for the conversion of M&F Note B, we amended two outstanding warrants held by M&F to purchase an aggregate of 110,448 restricted shares of our common stock to reduce the exercise price of one of the warrants from $40.00 per share to $20.00 per share and to extend the term of both warrants from September 15, 2017 to September 15, 2019. We calculated the fair value of the warrants immediately before and after the modifications and determined that the fair value of the warrants increased by $244,200. The warrants subject to the exercise price and term modifications were valued using the Black-Scholes Option Pricing Model and the following assumptions: 

Assumption:	Pre-modification			Post-modification
Market price per share at modification date	$	10.00		$	10.00
Exercise price per share	$	20.00 and $40.00		$	20.00
Risk-free interest rate		0.86	%		1.57	%
Contractual term in years		2.27			4.27
Volatility		73.8	%		76.7	%
Dividend rate		0.0	%		0.0	%
Weighted Average Fair Value per share	$	2.39 and $1.04		$	4.35

After eliminating the remaining unamortized discount of $225,500 attributable to M&F Note B, we recognized a non-cash loss on the extinguishment of debt attributable to the conversion of M&F Note B of $1,305,600 in the quarter ended June 30, 2015. 

In addition to its agreement to convert M&F Note B into Series B Preferred, M&F also agreed to withhold, through the later of (i) December 31, 2016 or (ii) our consummation of a registered public offering or a strategic transaction involving AV-101 in which, in either case, we received gross proceeds of at least $20.0 million, any and all action to collect amounts due under our August 2012 promissory Note A maturing on March 31, 2016 (M&F Note A) and all past due amounts owed by us to M&F in connection with professional services previously rendered by M&F (M&F Payables). 

Conversion of Morrison & Foerster Note A and Morrison & Foerster Payables into Series B Preferred

In a transaction to which we were not a party, M&F sold M&F Note A, which, at the time of the sale, had an outstanding balance (principal and accrued interest) of $1,149,000, as well as the M&F Payables in the amount of $165,100, to two third-party accredited investors (the M&F Note A Investors). On August 10, 2015, the M&F Note A Investors converted M&F Note A and the M&F Payables into 192,628 shares of our Series B Preferred. Based on the $12.25 per share fair value of the Series B Preferred at the date M&F Note A and the M&F Payables were converted, we issued Series B Preferred having an aggregate fair value of $2,359,700 to the M&F Note A Investors. After eliminating the remaining unamortized discount of $122,400 attributable to M&F Note A, we recognized a non-cash loss on extinguishment of debt attributable to the conversion of M&F Note A and the M&F Payables of $1,168,000 in the quarter ended September 30, 2015. 

Conversion of Promissory Note issued to McCarthy Tetrault into Series B Preferred 

On June 18, 2015, McCarthy Tetrault (McCarthy) converted the entire $379,600 outstanding balance (principal and accrued interest) of our past due promissory note issued in May 2011, plus an additional $2,100 of past due accounts payable (together, the McCarthy Note), into 59,230 shares of our Series B Preferred. Based on the $14.00 per share fair value of the Series B Preferred at the date the McCarthy Note was converted, we issued Series B Preferred having an aggregate fair value of $829,200 to McCarthy. Accordingly, we recognized a non-cash loss on extinguishment of debt attributable to the conversion of the McCarthy Note of $447,500 in the quarter ended June 30, 2015. 

Conversion of Promissory Note issued to Burr Pilger & Mayer into Series B Preferred 

On June 24, 2015, Burr Pilger & Mayer (Burr) converted the entire $105,200 outstanding balance (principal and accrued interest) of our past due promissory note issued in May 2011, plus an additional $17,900 of past due accounts payable (together, the Burr Note), into 21,429 shares of our Series B Preferred. Based on the $16.50 per share fair value of the Series B Preferred at the date the Burr Note was converted, we issued Series B Preferred having an aggregate fair value of $353,600 to Burr. Accordingly, we recognized a non-cash loss on the extinguishment of debt attributable to the conversion of the Burr Note of $230,500 in the quarter ended June 30, 2015. 

Conversion of Promissory Note and Accounts Payable Issued to Icahn School of Medicine at Mount Sinai into Series B Preferred 

On June 26, 2015, Icahn School of Medicine at Mount Sinai (ISMMS) converted the entire $270,400 outstanding balance (principal and accrued interest) of our past due April 2014 promissory note into a total of 40,000 shares of our Series B Preferred. Based on the $16.00 per share fair value of the Series B Preferred at the date the note was converted, we issued Series B Preferred having an aggregate fair value of $640,000 to ISMMS. 

As additional consideration for the conversion of the ISMMS note, we amended an outstanding warrant held by ISMMS to purchase 15,000 restricted shares of our common stock to reduce the exercise price from $10.00 per share to $7.00 per share. We calculated the fair value of the warrant immediately before and after the modification and determined that the fair value of the warrant increased by $16,600. The warrant subject to the exercise price modification was valued using the Black-Scholes Option Pricing Model and the following assumptions:

Assumption:	Pre-modification			Post-modification
Market price per share at modification date	$	16.00		$	16.00
Exercise price per share	$	10.00		$	7.00
Risk-free interest rate		1.34	%		1.34%	%
Contractual term in years		3.76			3.76
Volatility		76.3	%		76.3	%
Dividend rate		0.0	%		0.0	%
Weighted Average Fair Value per share	$	10.48		$	11.60

We recognized a non-cash loss on extinguishment of debt attributable to the conversion of ISMMS note of $386,200 in the quarter ended June 30, 2015. 

On July 13, 2015, ISMMS also converted accounts payable in the amount of $19,100 (ISMMS Payables) into an additional 3,000 shares of our Series B Preferred. Based on the $12.00 per share fair value of the Series B Preferred at the date the ISMMS Payables were converted, we issued Series B Preferred having an aggregate fair value of $36,000 to ISMMS. Accordingly, we recognized a non-cash loss on the extinguishment of debt attributable to the conversion of the ISMMS Payables of $16,900 in the quarter ended September 30, 2015. 

Conversion of Promissory Note issued to National Jewish Health into Series B Preferred 

On June 29, 2015, National Jewish Health (NJH) converted the entire $115,000 outstanding balance (principal and accrued interest) of our past due promissory note into 17,857 shares of our Series B Preferred. Based on the $15.00 per share fair value of the Series B Preferred at the date the NJH note was converted, we issued Series B Preferred having an aggregate fair value of $267,900 to NJH. Accordingly, we recognized a non-cash loss on the extinguishment of debt attributable to the conversion of the NJH note of $152,900 in the quarter ended June 30, 2015. 

Conversion of Promissory Note issued to Desjardins Securities into Series B Preferred 

On July 2, 2015, Desjardins Securities (Desjardins) converted the entire $187,400 outstanding balance (principal and accrued interest) of our past due promissory note into 32,143 shares of our Series B Preferred. Based on the $14.00 per share fair value of the Series B Preferred at the date the Desjardins note was converted, we issued Series B Preferred having an aggregate fair value of $450,000 to Desjardins. Accordingly, we recognized a non-cash loss on extinguishment of the debt attributable to the conversion of the Desjardins note of $262,600 in the quarter ended September 30, 2015. 

Conversion of Promissory Note and Accounts Payable issued to MicroConstants into Series B Preferred 

On July 6, 2015, MicroConstants, Inc. (MicroConstants) converted the $22,000 outstanding balance (principal and accrued interest) of our past due promissory note and outstanding accounts payable in the amount of $70,400 into an aggregate of 17,857 shares of our Series B Preferred. Based on the $14.00 per share fair value of the Series B Preferred at the date the MicroConstants note and accounts payable were converted, we issued Series B Preferred having an aggregate fair value of $250,000. Accordingly, we recognized a non-cash loss on extinguishment of debt attributable to the conversion of the MicroConstants note and payables of $157,600 in the quarter ended September 30, 2015.

Conversion of Accounts Payable to Professional Services Providers and Other Debt into Series B Preferred 

During June and July 2015, two of our professional service providers and a former employee to whom we were contractually obligated for certain accrued compensation amounts converted an aggregate of $497,900 past due amounts for prior services (Service Provider Payables) into an aggregate of 80,929 shares of our Series B Preferred. Based on the per share fair value of the Series B Preferred on the respective dates that each Service Provider Payable was converted, which ranged from $10.00 per share to $12.00 per share, we issued Series B Preferred having an aggregate fair value of $823,800 to the Service Providers. Accordingly, we recognized an aggregate non-cash loss on the extinguishment of debt attributable to the conversion of the Service Provider Payables in the amounts of $281,800 and $44,100 in the quarters ended June 30, 2015 and September 30, 2015, respectively.