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Unsecured Convertible Notes

6 Months Ended

Sep. 30, 2019

Long-term Debt, Unclassified [Abstract]

Unsecured Convertible Notes

Note 9 — Unsecured Convertible Notes

The Company's unsecured convertible notes payable at September 30, 2019 and March 31, 2019 were as follows (in thousands):

		September 30,				March 31,
		2019				2019
Unsecured Convertible Notes - Related Party
(A) 7.5% Unsecured Convertible Note - Due May 31, 2021		$	3,985			$	3,850
(B) 7.5% Unsecured Convertible Notes - Due May 31, 2021			1,002				967
Less: Discount			(59	)			(76	)
Net			4,928				4,741
Less: Unsecured Convertible Note Payable - Related Party, current			-				-
Unsecured Convertible Notes Payable - Related Party, long-term		$	4,928			$	4,741

Total principal maturities of the Company's long-term borrowings, including the Debentures, unsecured convertible notes, and note payable are $0.3 million for the year ending March 31, 2020, $0 for the year ending March 31, 2021 and $16.8 million for the year ending March 31, 2022.

As of September 30, 2019 and March 31, 2019, the Company had outstanding 7.5% (effective as of April 1, 2018, previously 6%) unsecured convertible notes payable (the "Trinad Notes") issued to Trinad Capital Master Fund Ltd. ("Trinad Capital"), a fund controlled by Mr. Ellin, the Company's Chief Executive Officer, Chairman, director and principal stockholder as follows: 

(A) The first Trinad Note was issued on February 21, 2017, to convert aggregate principal and interest of $3.6 million under the first senior promissory note and second senior promissory note with Trinad Capital previously issued on December 31, 2014 and April 8, 2015, respectively. The first Trinad Note was due on March 31, 2018 and was extended to May 31, 2019 and further extended to May 31, 2021 (as discussed below). At September 30, 2019, the balance due of $4.0 million, which included $0.4 million of accrued interest, was outstanding under the first Trinad Note.  At March 31, 2019, the balance due of $3.8 million, which included $0.2 million of accrued interest, was outstanding under the first Trinad Note.

(B) Between October 27, 2017 and December 18, 2017, the Company issued six unsecured convertible notes payable to Trinad Capital for aggregate total principal amount of $0.9 million. The notes were due on various dates through December 31, 2018 and were extended to May 31, 2019 and further extended to May 31, 2021 (as discussed below). For the three months ended September 30, 2019, the Company amortized less than $0.1 million of discount to interest expense, and the unamortized discount as of September 30, 2019 was $0.1 million. As of September 30, 2019, $0.1 million of accrued interest was added to the principal balance. 

On March 30, 2018, the Company entered into an Amendment of Notes Agreement (the "Amendment Agreement") with Trinad Capital pursuant to which the maturity date of all of the Company's 6% unsecured convertible notes was extended to May 31, 2019. In consideration of the maturity date extension, the interest rate payable under the notes was increased from 6.0% to 7.5% beginning on April 1, 2018, and the aggregate amount of accrued interest due under all of the Trinad Notes as of March 31, 2018 of $0.3 million was paid. The Company evaluated the Amendment Agreement and the modification was not required to be accounted for as an extinguishment as the instruments are not considered substantially different under ASC 470-50, Debt – Modifications and Extinguishment.

On March 31, 2019, the Company entered into a further Amendment of Notes Agreement (the "Second Amendment Agreement") with Trinad Capital in which the maturity dates of all of the Trinad Notes were all extended to May 31, 2021. The Company evaluated the Second Amendment Agreement and the modification was required to be accounted for as Troubled Debt Restructuring under ASC 470-50, Debt – Modifications and Extinguishment as it has been determined that there is substantial doubt about the Company's ability to continue as a going concern (see Note 1— Organization and Basis of Presentation) and Trinad Capital granted the Company a concession, as the effective interest rate of the amended Note is less than that of the original Trinad Notes.

The Company may not redeem the any of the Trinad Notes prior to May 31, 2021 without Trinad Capital's consent.

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- Definition

The entire disclosure for information about short-term and long-term debt arrangements, which includes amounts of borrowings under each line of credit, note payable, commercial paper issue, bonds indenture, debenture issue, own-share lending arrangements and any other contractual agreement to repay funds, and about the underlying arrangements, rationale for a classification as long-term, including repayment terms, interest rates, collateral provided, restrictions on use of assets and activities, whether or not in compliance with debt covenants, and other matters important to users of the financial statements, such as the effects of refinancing and noncompliance with debt covenants.

+ References

Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 470
-URI http://asc.fasb.org/topic&trid=2208564

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- References

No definition available.

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