We conduct our business through our executive office, located in Provo, Utah, with approximately 1,600 square feet of office space. We also lease approximately 1,000 square feet of office space located in Irvine, California. We believe that the leases to which we are subject are generally on terms consistent with prevailing market terms, and none of the leases are with our affiliates. We believe that our facilities are in good condition and are adequate to meet our operating needs for the foreseeable future.
During the fiscal years ended March 31, 2016, the Company recorded a net loss before income taxes and had no income tax expense or benefit as a result of a full valuation allowance on the net deferred tax asset.
On December 22, 2017, the Tax Cuts and Jobs Act (“Tax Reform Act”) was signed into law by the President of the United States. The Tax Reform Act significantly revised the U.S. corporate income tax regime by, among other things, lowering the U.S. federal corporate tax rate from 35% to 21% effective for our calendar year ending March 31, 2018. U.S. GAAP requires that the impact of tax legislation be recognized in the period in which the law was enacted.
During the year ended March 31, 2017, the Company changed its Consolidated Balance Sheet presentation from “classified” (distinguishing between short-term and long-term accounts) to “unclassified” (no such distinction) due to a desire to conform the Company’s Consolidated Balance Sheet presentation to trends of other companies within the industry. Such a change is a presentation election made by management; the March 31, 2016 Consolidated Balance Sheet has also been presented in an unclassified format comparable to the March 31, 2017 presentation.
On June 7, 2013, the Company entered into an Asset Transfer Agreement (the “Del Mar ATA”) with Del Mar Financial, S.a.r.l. (“Del Mar”). As part of the Del Mar ATA, the Company entered into a Structuring and Consulting Agreement with Europa Settlement Advisors Ltd. (respectively, the “Europa Agreement” and “Europa”).
The Company has entered into an 8% convertible debenture agreement with Satco International, Ltd., that allows for borrowings of up to $3,000,000. The holder originally had the option to convert the outstanding principal and accrued interest to unregistered, restricted common stock of the Company on June 2, 2016. Per the agreement, the number of shares issuable at conversion shall be determined by the quotient obtained by dividing the outstanding principal and accrued and unpaid interest by 90% of the 90 day average closing price of the Company’s common stock from the date the notice of conversion is received; and the price at which the Debenture may be converted will be no lower than $1.00 per share. The original maturity date was June 2, 2016, but was later extended to August 31, 2017. On October 25, 2016, the Company agreed to amend the 8% Convertible Debenture Agreement that extended the due date and conversion rights to February 28, 2018, and then on March 15, 2017, the Company agreed again to amend the agreement to extend the due date and conversion rights to August 31, 2018. As of March 31, 2017 and 2016, the Company owed $700,000 under the agreement, excluding accrued interest. The associated interest of $102,487 and $46,488 at March 31, 2017 and 2016, respectively, is recorded on the balance sheet as an Accrued Expense obligation.