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Unsecured Convertible Notes

12 Months Ended

Mar. 31, 2022

Unsecured Convertible Notes [Abstract]

Note 9 — Unsecured Convertible Notes

The Company’s unsecured convertible notes payable at March 31, 2022 and 2021 were as follows (in thousands):

	March 31,		March 31,
	2022		2021
Unsecured Convertible Notes - Related Party
(A) 8.5% Unsecured Convertible Note - Due May 31, 2023	$	4,702	$	4,397
(B) 8.5% Unsecured Convertible Notes - Due May 31, 2023		1,177		1,104
Net		5,879		5,501

Unsecured Convertible Promissory Note	$	-	$	2,000
Accrued interest		-		186
Less: Discount		-		(223	)
Fair Value of Embedded Derivatives		-		13
Net		-		1,976
Unsecured Convertible Promissory Notes, Net	$	5,879	$	7,477
Unsecured Convertible Promissory Notes, Net, Current		-		1,976
Unsecured Convertible Promissory Notes, Net, Long-Term	$	5,879	$	5,501

The Company incurred interest expense of $0.5 million and $0.7 million attributed to its unsecured convertible notes for the year ended March 31, 2022 and 2021, respectively. Total principal maturities of the Company’s unsecured convertible notes are $5.9 million for the year ending March 31, 2024.

Unsecured Convertible Notes – Related Party

As of March 31, 2022 and March 31, 2021, the Company had outstanding 8.5% 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 discussed below. The Trinad Notes are convertible into shares of the Company’s common stock at a fixed conversion price of $3.00 per share.

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, 2023 (as discussed below). At March 31, 2022, the balance due of $5.9 million, which included $1.4 million of accrued interest, was outstanding under the first Trinad Note. 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.

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, 2023 (as discussed below). As of March 31, 2022 and 2021, $0.3 million and $0.1 million of accrued interest was included in the principal balance, respectively.

On August 11, 2021, 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 Trinad Notes was extended to May 31, 2023, and in consideration of such extension, the Company issued to Trinad Capital 33,654 shares of its common stock. The Company evaluated the Amendment Agreement and the amendment 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 $4.3 million is included in loss on extinguishment of debt in the accompanying consolidated statement of operations for the year ended March 31, 2022. In addition, the Company recorded a $4.2 million benefit to additional paid in capital as a result of the excess of the deemed fair value of the Trinad Notes over the principal and accrued interest outstanding at the time of extinguishment.

The Company may not redeem any of the Trinad Notes prior to May 31, 2023 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 was due on February 5, 2022. At issuance, the Note was 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.

Effective December 31, 2021, the Note holder converted the Note in whole pursuant to an exchange agreement entered into during the year ended March 31, 2022, which provided for an exchange of the Note into shares of the Company’s common stock at a price of $2.10 per share, resulting in 1,155,143 shares issued upon the exchange. As a result of the effective exchange incentives offered to the Note holder, the Company recorded a $0.8 million expense to Other Income (expense) in the accompanying consolidated statement of operations for the year ended March 31, 2022.

The Company was in compliance with all debt covenants associated with their unsecured convertible debt as of Mach 31, 2022.