|
NOTE 9 - Long-Term Debt
|
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
|
Mar. 31, 2012
|
|||||||||||||||||||||||||||||||||||||||||
| Debt Disclosure [Text Block] |
On
August 29, 2009, the Company entered into a note agreement
for principal amounting to $100,000 with an interest rate of
2.90% per annum. This instrument was issued in connection
with financing an automobile. The note is payable in monthly
installments of $1,800 through August 29,
2014. During the year ended March 31, 2012 and
2011, the Company made principal payments on this note in the
amount of $20,000 and $19,000,
respectively. During the years ended March 31,
2012 and 2011, the Company made interest payments related to
this note in the amounts of $2,000. The remaining balance of
this note amounted to $50,000 at March 31, 2012, of which
$20,000 is included in the current portion of long-term debt
in the accompanying consolidated balance sheet.
On
October 7, 2009, the Company entered into a note agreement
for principal amounting to $57,000 with an interest rate of
1.0% per annum. This instrument was issued in connection with
financing an automobile. The note is payable in monthly
installments of $900 through October 26,
2014. During the years ended March 31, 2012 and
2011, the Company made principal payments on this note in the
amount $11,000, respectively. During the years
ended March 31, 2012 and 2011, the Company made interest
payments related to this note in the amounts of $300 and
$400, respectively. The remaining balance of this note
amounted to $29,000 at March 31, 2012, of which $11,000 is
included in the current portion of long-term debt in the
accompanying consolidated balance sheet.
On
May 1, 2010, the Company entered into a Loan and Security
Agreement and a Supplement to the Loan and Security Agreement
with Venture Lending & Leasing V, Inc. to borrow up to an
aggregate of $3,000,000 (collectively, the
“Agreements”). The Agreements provide for a
first tranche of $2,000,000 and, upon meeting certain
financial milestones, a second tranche of $1,000,000. On
May 3, 2010, the Company borrowed $2,000,000 on the first
tranche and on November 17, 2010, the Company borrowed
$1,000,000 on the second tranche. The loan is
secured by all assets of the Company excluding intellectual
property under certain circumstances. Related to the first
tranche, the Company made eight monthly interest-only
payments of $16,660 through December 1, 2010. Thereafter, the
Company began making interest and principal payments of
$75,000 per month through June 1, 2013. Related to the second
tranche, the Company paid monthly interest only payments of
$8,330 through May 1, 2011. Thereafter, the Company began
making interest and principal payments of $37,500 per month
through November 1, 2013. Additionally, the Company will make
a final balloon payment related to the first tranche of
$132,000 on June 1, 2013, and will make a final balloon
payment related to the second tranche of $66,000 on November
1, 2013. The effective interest rate on the first and second
tranche is 13.3%. During the years ended March 31, 2012
and 2011, the Company made interest payments of $317,000 and
$160,000, respectively. During the years ended
March 31, 2012 and 2011, the Company made principal payments
of $974,000 and $236,000, respectively.
Additionally,
in connection with the Agreements, the Company issued
warrants to Venture Lending & Leasing, Inc. for the
purchase of 250,000 shares of the Company’s common
stock (the “Warrants”). The Warrants may be
exercised for a cash payment of $2.00 per share of common
stock. The Warrants are subject to adjustment for
stock splits, dividends, a change in control or similar
transactions. The Warrants also have a cashless
exercise feature. The Warrants expire on November 30,
2017. The Warrants may be put back to the Company for
$750,000 in cash. The put feature is available to the
holder for 60 days after the first of the following to occur:
i) a change of control of the Company, ii) the closing of at
least $15,000,000 of additional equity financing, or iii)
March 31, 2014. The $750,000 cash value of the Warrants
was recorded as a put warrant liability and a corresponding
amount of $750,000 was recorded as a discount on the note
payable. The discount will be accreted to non-cash
interest expense over the term of the loan using the
effective interest method. During the years ended March
31, 2012 and 2011, the Company recorded $237,000 and
$159,000, respectively, of non-cash interest expense related
to these notes. The remaining balance of the discount
on the note amounted to $354,000 at March 31, 2012. The
remaining balance of the notes amounted to $1,864,000 at
March 31, 2012, of which $1,171,000 is included in the
current portion of long-term debt, net of debt discount in
the accompanying consolidated balance sheet.
On
August 12, 2010, the Company entered into a note agreement
for $40,000 with an interest rate of 11.99% per year. This
instrument was issued in connection with the financing of an
automobile. During the years ended March 31, 2012 and 2011,
the Company made interest payments related to this note in
the amounts of $3,500 and $3,000, respectively. During the
years ended March 31, 2012 and 2011, the Company made
principal payments related to this note in the amounts of
$6,000 and $8,000, respectively. The remaining balance of
this note amounted to $26,000 at March 31, 2012, of which
$7,000 is included in the current portion of long-term debt
in the accompanying consolidated balance sheet.
On
November 30, 2010, the Company entered into a note agreement
for $27,000 with an interest rate of 8.90% per year. This
instrument was issued in connection with the financing of an
automobile. During the years ended March 31, 2012 and 2011,
the Company made interest payments related to this note in
the amount of $2,000 and $700, respectively. During the years
ended March 31, 2012 and 2011, the Company made principal and
interest payments related to this note in the amount of
$5,000 and $1,000, respectively. The remaining balance of
this note amounted to $22,000 at March 31, 2012, of which
$5,000 is included in the current portion of long-term debt
in the accompanying consolidated balance sheet.
On
February 25, 2011, the Company entered into a note agreement
for $165,000 with an interest rate of 4.24% per annum. This
instrument was issued in connection with financing insurance
premiums. The note was payable in monthly installments of
$18,700 with the final payment on October 25, 2011. During
the years ended March 31, 2012 and 2011, the Company
made interest payments of $2,000, respectively, on this
note. During the years ended March 31, 2012
and 2011, the Company made principal payments of $129,000 and
$36,000, respectively. The final payment on this
note was made in October 2011.
On
June 29, 2011, the Company entered into a loan and security
agreement and a supplement to the loan and security agreement
with Venture Lending & Leasing VI, Inc. to borrow up to
an aggregate of $2,500,000 (collectively, the “VLL6
Agreements”). The VLL6 Agreements provided
for a first tranche of $1,500,000 and, upon meeting certain
milestones, the Company would become eligible to borrow an
additional $1,000,000. The loan is secured by all assets
of the Company. On June 29, 2011, the Company borrowed
$1,500,000 on the first tranche. On November 10, 2011,
the Company borrowed $1,000,000 on the second tranche. The
cash interest or “streaming” rate on the loan is
10%. In connection with the first tranche, for the first
nine months, the Company made monthly interest-only payments
of $12,500 through March 1, 2012. Going forth, the
Company began making principal and interest payments of
$56,250 per month for thirty months. Additionally, the
Company will make a final balloon payment of $116,505 on
September 1, 2014. In connection with the second tranche, for
the first nine months, the Company makes monthly
interest-only payments of $8,333 through August 1, 2012.
Thereafter, the Company will make principal and interest
payments of $37,500 per month for thirty
months. Additionally, the Company will make a
final balloon payment of $77,670 on February 1, 2015,
resulting in an effective interest rate of 13%. During the
year ended March 31, 2012, the Company made interest payments
of $155,000.
In
connection with the VLL6 Agreements, the Company issued a
warrant to Venture Lending & Leasing VI, LLC for the
purchase of 226,325 shares of the Company’s common
stock at a purchase price per share equal to $1.657. Once the
Company became eligible to draw the second tranche of the
loan, it was required to issue a second warrant to Venture
Lending & Leasing VI, LLC with coverage equal to $62,500
for the purchase of additional shares of the Company’s
common stock at a strike price equal to the 10-day
volume-weighted average price (“VWAP”) ending on
the trading day prior to the date the Company satisfied the
second tranche milestones. On September 30, 2011, the
Company met the second tranche milestones and it issued the
second warrant for the purchase of 39,100 shares of the
Company’s common stock at a purchase price per share
equal to $1.5985. On November 10, 2011, the Company borrowed
the second tranche and therefore the Company became obligated
to issue a third warrant to Venture Lending & Leasing VI,
LLC with coverage equal to $62,500 for the purchase of
additional shares of the Company’s common stock at a
strike price equal to the 10-day VWAP ending on the trading
day prior to the borrowing date of the second tranche. In
connection with borrowing the second tranche, the Company
issued the third warrant for the purchase of 41,187 shares of
the Company’s common stock at a purchase price per
share equal to $1.5175. The three warrants issued to Venture
Lending & Leasing VI, LLC are hereinafter collectively
referred to as the “Warrants”. The Warrants have
a cashless exercise feature. The Warrants expire on
November 30, 2018. Additionally, the Warrants include a
put option. The warrant related to the first tranche may be
put back to the Company for $937,500 cash. On September 30,
2011, when the Company became eligible to draw the second
tranche and issued the second warrant, the second warrant
included a put option in an amount equal to $156,250, which
increased the total cash payment to $1,093,750. On November
10, 2011, when the Company borrowed the additional $1,000,000
on the second tranche and issued the third and final warrant,
the third warrant included a put option in an amount equal to
$156,250, which increased the total cash payment under the
Warrants to $1,250,000. The put feature is available to
the holder of the Warrants for 60 days after the first of the
following to occur: (i) a change in control of the Company,
(ii) the closing of at least $20,000,000 of a round of
additional equity financing, or (iii) July 31, 2015.
The
Company recorded the $1,250,000 cash value of the Warrants as
a put warrant liability and a corresponding amount of
$1,250,000 was recorded as a discount on the note payable.
The discount will be accreted to non-cash interest expense
over the term of the loan using the effective interest
method. For the year ended March 31, 2012, the Company
recorded $211,000 of non-cash interest related to the note.
The remaining balance of the discount on the note amounted to
$1,039,000 at March 31, 2012. The remaining
balance of the note amounted to $2,500,000 at March 31, 2012,
of which $684,000 is included in the current portion of
long-term debt in the accompanying consolidated balance
sheet.
On
February 25, 2012, the Company entered into a note agreement
for $160,000 with an interest rate of 4.76% per annum. This
instrument was issued in connection with financing insurance
premiums. The note is payable in monthly installments of
$20,400 with the final payment on October 25, 2012. During
the year ended March 31, 2012, the Company made
principal and interest payments of $19,000 and $1,000,
respectively. The remaining balance of this note
amounted to $141,000 at March 31, 2012 and is included in the
current portion of long-term debt in the accompanying
consolidated balance sheet.
A
summary of principal payments due in years subsequent to
March 31, 2012 is as follows (in thousands):
|
||||||||||||||||||||||||||||||||||||||||