5. Notes Payable

From September 2018 to February 2019, the Company entered into convertible note agreements with investors. The aggregate principal amount of the convertible notes was $850,000 and were due one to two years from issuance, no later February 2021, with simple interest at the rate of 6% per annum. 

The outstanding principal and accrued interest of each note automatically converted into shares of Private NeuBase common stock, upon the issuance of Private NeuBase common stock in connection with the pre-acquisition financing, by dividing the then-outstanding balance of each convertible note by 90% of the purchase price per share paid by investors in the pre- acquisition financing, or $1.6145.  In connection with the closing of the pre-acquisition financing, the convertible notes plus unpaid interest were converted into 598,472 shares of Private NeuBase common stock at a price of $1.6145 per share.  Upon the consummation of the Ohr Acquisition, the convertible note shares were converted pursuant to the Exchange Ratio in the Acquisition Agreement into the right to receive 609,874 shares of common stock.

During the year ended September 30, 2019, the Company recognized cumulative interest expense of $124,000, which includes approximately $94,000 related to the amortization of the discount on the convertible note agreements.

During the year ended September 30, 2019, the Company entered into short-term notes payable for an aggregate of $213,000, bearing interest at 5.75% per year to finance certain insurance policies. Principal and interest payments related to these notes are being be repaid over a 10-month period with the final payment due on February 28, 2020. As of September 30, 2019, the Company’s insurance note payable balance was approximately $123,000.