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Convertible Notes Payable - Related Party
6 Months Ended
Sep. 30, 2015
Debt Disclosure [Abstract]  
Convertible Note Payable - Related Party

8. CONVERTIBLE NOTES PAYABLE – RELATED PARTY

 

In the fiscal year 2015, the Company and related parties executed loan conversion agreements. Pursuant to the agreements, the related parties exchange certain non-convertible notes and related accrued interest for convertible notes with total principal of $1,452,393. The convertible notes are convertible to the Company’s common stock at a conversion rate of $0.0065217 per share. Of this amount, $811,268 has a maturity date at the discretion of the Company’s board of directors and $641,125 has a maturity date of August 31, 2015.

 

The Company analyzed the loan conversion agreement executed on November 12, 2014 for derivative accounting consideration under FASB ASC 470 and determined that the embedded conversion feature, with issuance date fair values of $2,017,595 qualified for accounting treatment as a financial derivative. As a result, these notes were fully discounted and the fair value of the conversion feature in excess of the principal amount of the notes of $565,203 was expensed immediately as additional interest expense. The remaining discount will be amortized by the Company through interest expense over the life of these related party convertible notes. As of September 30, 2015, unamortized debt discount related to the convertible notes to related parties was $0 and the principal balance on these convertible notes was $1,452,392. As of March 31, 2015, unamortized debt discount related to the convertible notes to related parties was $337,434 and the principal balance on these convertible notes was $1,114,958.