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Unsecured Convertible Notes
 12 Months Ended
Mar. 31, 2021
Debt Disclosure [Abstract]  
Unsecured Convertible Notes

Note 10 — Unsecured Convertible Notes


The Company’s unsecured convertible notes payable at March 31, 2021 and 2020 were as follows (in thousands): 


   March 31,   March 31, 
   2021   2020 
Unsecured Convertible Notes - Related Party        
(A) 8.5% Unsecured Convertible Note - Due May 31, 2022  $4,397   $4,120 
(B) 8.5% Unsecured Convertible Notes - Due May 31, 2022   1,104    1,035 
Less: Discount   -    (41)
Net   5,501    5,114 
           
Unsecured Convertible Promissory Note  $2,000   $2,000 
Accrued interest   186    24 
Less: Discount   (223)   (485)
Fair Value of Embedded Derivatives   13    141 
Net   1,976    1,680 
Unsecured Convertible Promissory Notes, Net  $7,477   $6,794 
Unsecured Convertible Promissory Notes, Net, Current   1,976    - 
Unsecured Convertible Promissory Notes, Net, Long-Term  $5,501   $6,794 

Total principal maturities of the Company’s long-term borrowings, including the Debentures, unsecured convertible notes, and note payable are $4.7 million for the year ending March 31, 2022, $19.9 million for the year ending March 31, 2023, and $0.6 million thereafter.


Unsecured Convertible Notes – Related Party


As of March 31, 2020 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 below. The Trinad Notes are convertible into shares of the Company’s common stock at a fixed conversion price of $3.00 per share. 


(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 March 31, 2021, the balance due of $4.4 million, which included $1.0 million of accrued interest, was outstanding under the first Trinad Note. At March 31, 2020, the balance due of $4.1 million, which included $0.5 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 $1.1 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, 2022 (as discussed below). For the year ended March 31, 2021, the Company amortized less than $0.1 million of discount to interest expense, and the unamortized discount was fully amortized as of March 31, 2021. As of March 31, 2020, $0.1 million of accrued interest was added to the principal balance. 


On January 11, 2021, the Company entered into an Amendment of Notes Agreement (the “Amendment Agreement”) with Trinad Capital Master Fund Ltd. (“TCMF”), a related party, pursuant to which the maturity date of all of the Company’s Unsecured Convertible Notes issued to TCMF was extended to May 31, 2022, and in consideration of such extension, the interest rate payable under such notes increased to 8.5% and the Company issued to TCMF 280,000 shares of its common stock. The Company evaluated the Amendment Agreement and the modification was required to be accounted for as an extinguishment under ASC 470-50, Debt – Modifications and Extinguishment. As a result, we determined that the amendment should be accounted for as an extinguishment and we recorded the amended debt instrument at fair value which included the consideration in common stock transferred. The resulting loss on extinguishment recorded of $3.7 million is included in “Loss on extinguishment of debt” in the accompanying consolidated statement of operations.


The Company may not redeem the any of the Trinad Notes prior to May 31, 2022 without Trinad Capital’s consent. 


Unsecured Convertible Promissory Note


On February 5, 2020, React Presents issued a two-year $2 million Convertible Promissory Note (the “Note”), bearing annual interest at 8%. The purpose of the Note was to fund the acquisition of React Presents. All unpaid and outstanding principal and any unpaid and accrued interest are due on February 5, 2022. The Note is convertible by the holder at any time prior to maturity in part or in whole with the unpaid interest and principal convertible at a conversion price equal to $4.50 per share of the Company’s common stock, subject to certain protective adjustments. The Note may be prepaid in whole or in part in cash without penalty at any time prior to maturity. Any such prepayment will be applied to accrued interest first and then the principal.


The Company has evaluated the Note and has determined that it includes two derivative instruments which are bifurcated from the underlying Debentures relating to provisions around an event of default and change of control. The Company has performed a fair value analysis using a binomial lattice calculation on the event of default derivative instrument using the following assumptions. Coupon Rate: 8.0%, Term: 2.0 years, Volatility: 100.0%, Market Rate: 27.7% and Probability of Default: 33.1%. The Company determined that at issuance, the fair value of the instruments was $0.1 million. The Company has recorded the fair value of the derivatives and corresponding debt discount within the unsecured convertible notes payable on the Company’s consolidated balance sheet.


At March 31, 2021, the Company performed a fair value analysis using a binomial lattice calculation on the derivative instruments using the following assumptions: Coupon Rate: 8.0%, Term: 0.85 years, Volatility: 90.2%, Market Rate: 26.5% and Probability of Default: 31.63%. The Company determined that as of the assessment date, the fair value is less than $0.1 million. The change in fair value of less than $0.1 million is recorded in other income (expense) on the Company’s consolidated statements of operations for the year ended March 31, 2021.