Related Party Transactions

3 Months Ended

Jun. 30, 2013

Related Party Transactions [Abstract]

Related Party Transactions

Note 3. Related Party Transactions

Related Party Notes Payable

As of June 30, 2013 and March 31, 2013, the Company had aggregate principal balances of $627,500 and $651,500, respectively, in outstanding unsecured indebtedness owed to four related parties, including former members of the Company’s board of directors, representing working capital advances made to the Company from February 2001 through March 2005. These notes bear interest at the rate of 6% per annum and provide for aggregate monthly principal payments which began April 1, 2006 of $2,500, and which increased by an aggregate of $2,500 every nine months to a maximum of $10,000 per month. As of June 30, 2013, the aggregate principal payments totaled $8,000 per month. Any remaining unpaid principal and accrued interest is due at maturity on various dates through March 1, 2015. 

Related-party interest expense under these notes was $9,654 and $11,094 for the three months ended June 30, 2013 and 2012, respectively. Accrued interest, which is included in related party notes payable in the accompanying condensed consolidated balance sheets, amounted to $775,818 and $766,164 as of June 30, 2013 and March 31, 2013, respectively.

During the quarter ended June 30, 2013, the Company issued to certain accredited investors unsecured promissory notes with the terms as described under Note 4. These unsecured promissory notes included $100,000 from one of our Board Members, Richard Rathmann. Also see Note 8 for additional investments received from GBR Investments, LLC subsequent to the quarter ended June 30, 2013 in which Richard Rathmann is the Manager of GBR Investments, LLC.