Derivative Liabilities

6 Months Ended

Sep. 30, 2011

Derivative Instruments and Hedging Activities Disclosure [Abstract]

Derivative Instruments and Hedging Activities Disclosure [Text Block]

Note 6.  Derivative Liabilities:

The following table summarizes the components of derivative liabilities as of September 30, 2011 and March 31, 2011:

Financing arrangement giving rise to			September 30,		March 31,
derivated financial instruments				2011		2011
$	600,000	Face Value Convertible Note Financing	$	1,017	$	22,250
$	500,000	Face Value Convertible Note Financing		771		16,855
$	100,000	Face Value Convertible Note Financing		154		3,372
$	120,000	Face Value Short Term Bridge Loan Financing		-		113
$	120,000	Face Value Short Term Bridge Loan Financing		-		113
$	60,000	Face Value Short Term Bridge Loan Financing		11		56
$	33,000	Face Value Short Term Bridge Loan Financing		-		31
$	55,000	Face Value Short Term Bridge Loan Financing		-		6
$	120,000	Face Value Convertible Note Financing		68		1,427
$	60,000	Face Value Convertible Note Financing		34		714
$	200,000	Face Value Convertible Note Financing		238		4,956
$	161,111	Face Value Convertible Note Financing		192		3,992
$	50,000	Face Value Convertible Note Financing		59		1,239
$	55,000	Face Value Convertible Note Financing		59		1,239
$	137,500	Face Value Convertible Note Financing		164		3,407
$	55,000	Face Value Convertible Note Financing		65		1,363
$	900,000	Face Value Convertible Note Financing		32,344		673,958
$	400,000	Face Value Convertible Note Financing		9,679		188,173
$	600,000	Face Value Convertible Note Financing		28,125		545,724
$	221,937	Face Value Convertible Note Financing		14,165		-
$	500,000	Face Value Convertible Note Financing		4,467		-
		Total derivative liabilities	$	91,612	$	1,468,988

We estimate fair values of derivative financial instruments using various techniques (and combinations thereof) that are considered to be consistent with the objective measuring fair values. In selecting the appropriate technique, we consider, among other factors, the nature of the instrument, the market risks that it embodies and the expected means of settlement. For less complex derivative instruments, such as free-standing warrants, we generally use the Black-Scholes-Merton option valuation technique because it embodies all of the requisite assumptions (including trading volatility, estimated terms, dilution and risk free rates) necessary to fair value these instruments. For complex hybrid instruments, such as convertible promissory notes that include embedded conversion options, puts and redemption features embedded in, we generally use techniques that embody all of the requisite assumptions (including credit risk, interest-rate risk, dilution and exercise/conversion behaviors) that are necessary to fair value these more complex instruments. For forward contracts that contingently require net-cash settlement as the principal means of settlement, we project and discount future cash flows applying probability-weightage to multiple possible outcomes. Estimating fair values of derivative financial instruments requires the development of significant and subjective estimates that may, and are likely to, change over the duration of the instrument with related changes in internal and external market factors. In addition, option-based techniques are highly volatile and sensitive to changes in the trading market price of our common stock, which has a high-historical volatility.Since derivative financial instruments are initially and subsequently carried at fair values, our income will reflect the volatility in these estimate and assumption changes.

The following table summarizes the effects on our income (expense) associated with changes in the fair values of our financial instruments that are carried at fair value from inception through September 30, 2011:

Total day-one derivative losses	(a)	$	(9,276,238	)
Total income arising from fair value adjustments	(b)		9,007,743
Derivative income (expense) inception (June 18, 2007)
through September 30, 2011	(a) + (b)	$	(268,495	)

The following tables summarize the effects on our income (expense) associated with changes in the fair values of our financial instruments that are carried at fair value from the six months ended September 30, 2011 and 2010:

			Six Months			Six Months
Our financing arrangements giving rise to			Ended			Ended
derivated financial instrumentsand the income effects:			September 30, 2011			September 30, 2010
Derivative income (expense):
$	600,000	Face Value Convertible Note Financing	$	21,233		$	1,826,075
$	500,000	Face Value Convertible Note Financing		16,084			1,383,297
$	100,000	Face Value Convertible Note Financing		3,218			276,727
$	120,000	Face Value Short Term Bridge Loan Financing		70			24,727
$	120,000	Face Value Short Term Bridge Loan Financing		70			54,010
$	60,000	Face Value Short Term Bridge Loan Financing		160			12,413
$	33,000	Face Value Short Term Bridge Loan Financing		1			10,083
$	55,000	Face Value Short Term Bridge Loan Financing		6			17,887
$	120,000	Face Value Convertible Note Financing		1,359			103,740
$	60,000	Face Value Convertible Note Financing		680			51,870
$	200,000	Face Value Convertible Note Financing		4,718			360,208
$	161,111	Face Value Convertible Note Financing		3,800			290,168
$	50,000	Face Value Convertible Note Financing		1,180			90,052
$	55,000	Face Value Convertible Note Financing		1,180			90,052
$	137,500	Face Value Convertible Note Financing		3,243			247,644
$	55,000	Face Value Convertible Note Financing		1,298			(53,739	)
$	900,000	Face Value Convertible Note Financing		641,614			(191,400	)
$	400,000	Face Value Convertible Note Financing		178,494			-
$	600,000	Face Value Convertible Note Financing		517,597			-
$	221,937	Face Value Convertible Note Financing		(187,038	)		-
$	500,000	Face Value Convertible Note Financing		(170,935	)		-
Total derivative income (expense) arising from fair value adjustments			$	1,038,032		$	4,593,814

			Six Months			Six Months
			Ended			Ended
			September 30, 2011			September 30, 2010
Interest income (expense) from instruments recorded at fair value:
$	600,000	Face Value Convertible Note Financing	$	58,342		$	1,730,879
$	500,000	Face Value Convertible Note Financing		411,142			2,266,274
$	100,000	Face Value Convertible Note Financing		-			235,342
$	312,000	Face Value Convertible Note Financing		6,456			942,499
$	120,000	Face Value Convertible Note Financing		160,182			579,825
$	5,000	Face Value Convertible Note Financing		6,674			23,671
$	5,000	Face Value Convertible Note Financing		6,674			24,159
$	60,000	Face Value Convertible Note Financing		80,091			289,912
$	70,834	Face Value Convertible Note Financing		94,553			342,260
$	27,778	Face Value Convertible Note Financing		32,931			135,031
$	200,000	Face Value Convertible Note Financing		154,106			972,220
$	111,112	Face Value Convertible Note Financing		30,468			531,306
$	161,111	Face Value Convertible Note Financing		314,906			780,426
$	507,500	Face Value Convertible Note Financing		122,723			2,254,114
$	50,000	Face Value Convertible Note Financing		114,936			241,160
$	55,000	Face Value Convertible Note Financing		137,529			265,933
$	137,500	Face Value Convertible Note Financing		128,732			666,359
$	100,000	Face Value Convertible Note Financing		117,695			493,424
$	55,000	Face Value Convertible Note Financing		137,529			13,289
$	900,000	Face Value Convertible Note Financing		(42,547	)		-
$	400,000	Face Value Convertible Note Financing		412,201			-
$	600,000	Face Value Convertible Note Financing		146,535			-
$	221,937	Face Value Convertible Note Financing		201,924			-
$	500,000	Face Value Convertible Note Financing		420,095			-
Total interest income (expense) arising from fair value adjustments				3,253,877			12,788,083
Other interest expense				(144,737	)		(15,717	)
Interest income (expense) and other financing costs			$	3,109,140		$	12,772,366

Our derivative liabilities as of September 30, 2011, and our derivative income and expense during the six months ended September 30, 2011 and from inception through September 30, 2011 are significant to our consolidated financial statements. The magnitude of derivative income (expense) reflects the following:

In connection with our accounting for the $600,000, $500,000, $100,000 face value convertible promissory notes and warrant financings for the October 23, 2007 financing arrangement, the $55,000 face value short term bridge loan and warrant financing dated August 5, 2008, the $120,000 face value convertible note and warrant financing dated January 27, 2009, the $60,000 face value convertible note and warrant financing dated February 17, 2009, the $200,000 face value convertible note and warrant financing dated March 30, 2009, the $161,111 face value convertible note and warrant financing dated July 15, 2009, the $27,778 face value convertible note and warrant financing dated October 1, 2009, the $111,112 face value convertible note issuance dated November 13, 2009, the $50,000 face value convertible note issuance dated January 28, 2010, the $50,000 face value convertible note and warrant financing dated January 28, 2010, the $55,000 face value convertible note and warrant financing  dated February 19, 2010, the $137,500 face value convertible note and warrant financing dated March 26, 2010, the $55,000 face value convertible note and warrant financing dated May 13, 2010, the $900,000 face value convertible note and warrant financing dated July 15, 2010, the $400,000 face value convertible note and warrant financing dated January 21, 2011, the $600,000 face value convertible note and warrant financing dated March 17, 2011, the $221,937 face value convertible note and warrant financing dated June 30, 2011 and the $500,000 face value convertible note and warrant financing dated July 15, 2011, we encountered the unusual circumstance of a day-one derivative loss related to the recognition of (i) the hybrid notes and (ii) the derivative instruments arising from the arrangement at fair values.  That means that the fair value of the hybrid notes and warrants exceeded the proceeds that we received from the arrangement, and we were required to record a loss to record the derivative financial instruments at fair value.  In addition, our financial instruments that are recorded at fair value will change in future periods based upon changes in our trading market price and changes in other assumptions and market indicators used in the valuation techniques.

Generally the FASB Accounting Standards Codification provides for the exclusion of registration payment arrangements, such as the liquidated damage provisions that are included in the financing contracts underlying the convertible debt financing arrangements, from the consideration of classification of financial instruments. Rather, such registration payments will require recognition when they are both probable and reasonably estimable. As of September 30, 2011, our management concluded that registration payments are not probable.