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4. NOTES PAYABLE
12 Months Ended
Mar. 31, 2012
Debt Disclosure [Text Block]
4. NOTES PAYABLE

Notes payable consist of the following:

   
March 31, 2012
   
March 31, 2011
 
   
Principal Balance
   
Accrued Interest
   
Principal Balance
   
Accrued Interest
 
12% Notes payable, past due
  $ 185,000     $ 298,312     $ 185,000     $ 270,562  
10% Note payable, past due
    5,000       5,375       5,000       4,875  
IP Law Firm Note, past due
    29,610       986       --       --  
Law Firm Note
    75,000       104       --       --  
Tonaquint Note
    360,186       1,835       --       --  
Total
  $ 654,796     $ 306,612     $ 190,000     $ 275,437  

During the fiscal year ended March 31, 2012, we recorded interest expense of $45,648 related to the contractual interest rates of our notes payable.

12% NOTES

From August 1999 through May 2005, we entered into various borrowing arrangements for the issuance of notes payable from private placement offerings (the "12% Notes"). On April 21, 2010, a holder of $100,000 of the 12% Notes converted his principal balance and $71,758 of accrued interest into 687,033 shares of common stock at an agreed conversion price of $0.25 per share. We incurred a loss upon this conversion of $68,703 since the closing price of our common stock was $0.35 at the date of conversion. At March 31, 2012, 12% Notes with a principal balance of $185,000 are outstanding, all of which are past due, in default, and bearing interest at the default rate of 15%. At March 31, 2012, interest payable on the 12% Notes totaled $298,312.

10% NOTES

At March 31, 2012, one 10% Note in the amount of $5,000, which is past due and in default, remained outstanding. At March 31, 2012, interest payable on this note totaled $5,375.

Management's plans to satisfy the remaining outstanding balance on these 12% and 10% Notes include converting the notes to common stock at market value or repayment with available funds.

IP LAW FIRM NOTE

On August 2, 2011, we entered into a Promissory Note with our intellectual property law firm for the amount of $49,610, which represented the amount we owed to that firm. The Promissory Note calls for monthly payments of $5,000 from August 2011 through December 2011. From the period August 2 through March 31, 2012, we made four $5,000 payments, and as a result, have reduced the note balance to $29,610 as of March 31, 2012.  The note bears interest at 10% per annum and at March 31, 2012, interest payable on this note totaled $986.  We subsequently paid off this note with cash in April 2012 (See Note 16).

LAW FIRM NOTE

On March 22, 2012, we entered into a Promissory Note with our corporate law firm for the amount of $75,000, which represented the majority of the amount we owed to that firm. The Promissory Note has a maturity date of December 31, 2012 and bears interest at five percent per annum.  The note is convertible at the option of the holder into shares of our common stock at a 10% discount to the market price of the common stock on the date prior to conversion with a floor price on such conversions of $0.08 per share.  This ability of the holder to convert shall become exercisable upon the next amendment of the Articles of Incorporation increasing the authorized shares of our common stock to a number greater than 250,000,000.  That increase in the authorized number of shares of our common stock was approved by our stockholders at a Special Stockholders Meeting on June 4, 2012 (See Note 16).   At March 31, 2012, the balance of this note was $75,000 and accrued interest totaled $104.

TONAQUINT NOTE

On June 28, 2011, we entered into a Termination Agreement with Tonaquint, Inc. (See Note 5) under which both parties agreed that in consideration of the termination of a warrant, the waiving of all fees, penalties, the creation of the selling program and other factors, we agreed to issue an unsecured non-convertible promissory note (the "New Note") in the principal amount of $360,186, which provides for annual interest at a rate of 6%, payable monthly in either cash or our stock, at our option. The New Note had a maturity date of April 30, 2012.  At March 31, 2012, the balance of this note was $360,186 and accrued interest totaled $1,835.We subsequently extended this note and converted $60,186 of the note into common stock (See Note 16).