Loans Payable

6 Months Ended

Sep. 30, 2011

6. Loans Payable

Loans payable consist of the following:


	September 30, 2011			March 31, 2011
Growth capital term loan	$	635,298		$	1,166,268
Unamortized discount on growth capital term loan		(19,175	)		(38,189	)
Financing term loan		607,136			1,214,482
Unamortized discount on financing term loan		(19,255	)		(39,792	)
Private placement notes		128,783			590,432
Unamortized discount on notes payable		(3,049	)		(20,615	)

Total loans payable, net of debt discount	$	1,329,738		$	2,872,586

At September 30, 2011, future maturities due on all loans payable were as follows:


Fiscal year ending March 31,
2012	$	1,001,722
2013		369,495

		1,371,217
Less amount representing debt discount		(41,479	)

Total loans payable	$	1,329,738

Amended and restated term loan — August 2009

Effective August 3, 2009, we consolidated our growth capital term loan, financing term loan and May 2009 term loan into two loan agreements by executing an amended and restated growth capital term loan and an amended and restated financing term loan. The terms of these two amended and restated agreements include that we continue to secure our borrowings by a blanket lien on substantially all of our assets, except for our intellectual property rights, certain deposit accounts, and payments we receive on Member Loans that are financed by Notes, maintain combined certificates of deposit in the amount of $700,000 as collateral until repayment and maintain a minimum collateral ratio. At September 30, 2011, we do not have any remaining capacity under these agreements as we have fully drawn the entire $13,000,000 of the combined non-revolving availability under the amended and restated growth capital term loan and the amended and restated financing term loan. As of September 30, 2011 and March 31, 2011, the outstanding principal balances under these agreements totaled $1,242,434 and $2,380,750, respectively.

In connection with the growth capital term loan and its subsequent amendments, we issued fully exercisable warrants to purchase 164,320 shares of Series A convertible preferred stock at an exercise price of $1.065 per share, for which we recorded debt discounts of $105,913. Amortization of the debt discounts recorded for this loan, as amended, was $9,507, $16,529, $19,013 and $33,058 for the three and six months ended September 30, 2011 and 2010, respectively, and were recorded as interest expense.

In connection with the financing term loan agreement, we issued fully exercisable warrants to purchase an aggregate of 328,637 shares of Series A convertible preferred stock at a price of $1.065 per share and recorded total debt discounts of $277,962. Amortization of the debt discounts recorded for this loan was $10,269, $30,866, $20,537 and $61,732 for the three and six months ended September 30, 2011 and 2010, respectively, and was recorded as interest expense.

In connection with the May 2009 term loan facility, we issued fully exercisable warrants to purchase 187,090 shares of Series B convertible preferred stock with an exercise price of $0.7483 per share and recorded total debt discounts of $184,860. Amortization of these debt discounts is included in the amortization amounts of debt discounts presented above for the growth capital term loan and the financing term loan.

Private placement notes

During the year ended March 31, 2009, we entered into a series of loan and security agreements with accredited investors providing for loans evidenced by notes payable totaling $4,707,964. Each private placement note is repayable over three years and bears interest at the rate of 12% per annum. In June and July 2009, we issued an additional $200,000 of private placement notes which bear interest at the rate of 8% per annum. The balance of the private placement notes at September 30, 2011 and March 31, 2011 is $125,734 and $569,817, respectively.

We used the proceeds of these private placement notes to fund Member Loans. In connection with origination of these private placement notes, we issued fully exercisable warrants to purchase an aggregate of 514,817 shares of Series A convertible preferred stock (see Note 8 — Preferred Stock). Upon issuance of the warrants, we recorded a debt discount of $329,271, and amortization of the debt discount was recorded as interest expense of $3,359 and $27,439 and $17,566 and $54,878, respectively, for the three and six months ended September 30, 2011 and 2010.