NOTE 6 – CONVERTIBLE NOTES PAYABLE

The Company’s convertible promissory notes consisted of the following as of September 30, 2021 and March 31, 2022.

Bridge Financing Notes

Between June and November 2016, the Company issued eleven convertible promissory notes (“Bridge Financing Notes”) with associated warrants in a private placement to accredited investors for total gross proceeds of $837,000, including $222,000 from related parties. These notes and associated warrants had a maturity of one year (which has been extended at maturity to April 30, 2022), an annual interest rate of 8% and can be converted at the option of the holder at a conversion price of $0.025 per share. In addition, the convertible notes will automatically convert if a qualified equity financing of at least $3 million occurs before maturity and such mandatory conversion price will equal the effective price per share paid in the qualified equity financing. The note balances as of March 31, 2022 and September 30, 2021 were $277,000, with unamortized debt discounts of approximately $7,000 and $50,000, respectively. Debt discount amortization for the three months ended March 31, 2022 and 2021 was approximately $21,000 and $5,000, respectively. Debt discount amortization for the six months ended March 31, 2022 and 2021 was approximately $43,000 and $10,000, respectively. The maturity date related to these notes and associated warrants was extended to April 30, 2022. 

June 2019 Convertible Debenture

In November 2020, the Company made a $300,000 payment in full to satisfy the remaining balance of the convertible debenture and a gain on extinguishment of debt was recognized in the amount of $35,678. Debt discount amortization for the six months ended March 31, 2021 was approximately $43,000.