F. NOTES PAYABLE	3 Months Ended
Dec. 31, 2017
F. Notes Payable
F. NOTES PAYABLE	On October 30, 2017, the Company extended the due dates of the Series MM and Series NN Notes (the “Notes”) from December 22, 2017 to September 2l, 20l8, and issued the note holders an additional 583,057 of Series RR Warrants. The Series RR warrants expire on October 30, 2022 and are priced at $ 1.65 per share, the closing price on October 27, 2017. These Series RR warrants are classified as equity warrants and are recorded at approximately $0.7 million, the fair value on the date of issuance. Because the Company is experiencing financial difficulties and the creditors granted the Company a concession they would not have otherwise considered in the form of a lower effective interest rate, this modification was accounted for under ASC 470-60, “Troubled Debt Restructuring.” The Company calculated the future cash flows of the restructured debt to be greater than the carrying value of the debt and accounted for the change in debt prospectively, using the effective interest rate that equated the carrying amount to the future cash flows. The carrying value of the debt on the date of restructuring was approximately $0.7 million, which was net of a discount of approximately $1.6 million. The discount is being amortized to interest expense over the life of the Notes using the effective interest method. The Company recorded approximately $0.6 million in interest expense, relating to the amortization of the debt discount. As of December 31, 2017, after conversions, the carrying value of the Notes is approximately $0.9 million, net of a discount of approximately $1.3 million. The Notes bear interest at 4% and are convertible in shares of common stock. At the option of the note holders, the Notes can be converted into shares of the Company’s common stock at a fixed conversion rate of $1.69 for the Series MM Notes and $2.29 for the Series NN Notes. During the quarter ended December 31, 2017, a note holder converted a Series NN note, in the principal amount of $75,000, into 32,751 shares of common stock. The unamortized debt discount relating to the converted Note was charged to interest expense. The Series MM and Series NN Notes are secured by a first lien on all of the Company’s assets.

F. NOTES PAYABLE

3 Months Ended

Dec. 31, 2017

On October 30, 2017, the Company extended the due dates of the Series MM and Series NN Notes (the “Notes”) from December 22, 2017 to September 2l, 20l8, and issued the note holders an additional 583,057 of Series RR Warrants. The Series RR warrants expire on October 30, 2022 and are priced at $ 1.65 per share, the closing price on October 27, 2017. These Series RR warrants are classified as equity warrants and are recorded at approximately $0.7 million, the fair value on the date of issuance.

Because the Company is experiencing financial difficulties and the creditors granted the Company a concession they would not have otherwise considered in the form of a lower effective interest rate, this modification was accounted for under ASC 470-60, “Troubled Debt Restructuring.” The Company calculated the future cash flows of the restructured debt to be greater than the carrying value of the debt and accounted for the change in debt prospectively, using the effective interest rate that equated the carrying amount to the future cash flows. The carrying value of the debt on the date of restructuring was approximately $0.7 million, which was net of a discount of approximately $1.6 million. The discount is being amortized to interest expense over the life of the Notes using the effective interest method. The Company recorded approximately $0.6 million in interest expense, relating to the amortization of the debt discount. As of December 31, 2017, after conversions, the carrying value of the Notes is approximately $0.9 million, net of a discount of approximately $1.3 million. The Notes bear interest at 4% and are convertible in shares of common stock. At the option of the note holders, the Notes can be converted into shares of the Company’s common stock at a fixed conversion rate of $1.69 for the Series MM Notes and $2.29 for the Series NN Notes.

During the quarter ended December 31, 2017, a note holder converted a Series NN note, in the principal amount of $75,000, into 32,751 shares of common stock. The unamortized debt discount relating to the converted Note was charged to interest expense.

The Series MM and Series NN Notes are secured by a first lien on all of the Company’s assets.