Derivatives and Fair Value Instruments

6 Months Ended

Sep. 30, 2018

Investments, All Other Investments [Abstract]

Derivatives and Fair Value Instruments

Note 6 – Derivatives and Fair Value Instruments

The Company applied paragraph 815-10-05-4 of the FASB Accounting Standards Codification to the Convertible Notes Payable issued September 28, 2017. Based on the guidance in paragraph 815-10-05-4 of the FASB Accounting Standards Codification the Company concluded these instruments were required to be accounted for as derivatives on issuance date. The Company records the fair value of the Convertible Notes Payable and certain warrants that are classified as derivatives on issuance date and the fair value changes on each reporting date reflected in the consolidated statements of operations as “Change in Fair Value - derivatives.” These derivative instruments are not designated as hedging instruments under paragraph 815-10-05-4 of the FASB Accounting Standards Codification and are disclosed on the balance sheet under Derivative Liabilities.

The Company follows paragraph 820-10-35-37 of the FASB Accounting Standards Codification (“Paragraph 820- 10-35-37”) to measure the fair value of its financial instruments and paragraph 825-10-50-10 of the FASB Accounting Standards Codification for disclosures about fair value of its financial instruments. Paragraph 820-10- 35-37 establishes a framework for measuring fair value in accounting principles generally accepted in the United States of America (U.S. GAAP), and expands disclosures about fair value measurements. To increase consistency and comparability in fair value measurements and related disclosures, Paragraph 820-10-35-37 establishes a fair value hierarchy which prioritizes the inputs to valuation techniques used to measure fair value into three (3) broad levels. The three (3) levels of fair value hierarchy defined by Paragraph 820-10-35-37 are described below:

Level 1 Quoted market prices available in active markets for identical assets or liabilities as of the reporting date.

Level 2 Pricing inputs other than quoted prices in active markets included in Level 1, which are either directly or indirectly observable as of the reporting date.

Level 3 Pricing inputs that are generally unobservable inputs and not corroborated by market data.

Financial assets are considered Level 3 when their fair values are determined using pricing models, discounted cash flow methodologies or similar techniques and at least one significant model assumption or input is unobservable.

The fair value hierarchy gives the highest priority to quoted prices (unadjusted) in active markets for identical assets or liabilities and the lowest priority to unobservable inputs. If the inputs used to measure the financial assets and liabilities fall within more than one level described above, the categorization is based on the lowest level input that is significant to the fair value measurement of the instrument.

The carrying amounts of the Company’s financial assets and liabilities, such as cash, prepayments and other current assets, accounts payable and accrued expenses, approximate their fair values because of the short maturity of these instruments.

The Company’s Level 3 financial liabilities consist of the Convertible Notes Payable issued September 28, 2017, for which there is no current market for these securities such that the determination of fair value requires significant judgment or estimation. We have valued the automatic conditional conversion, re-pricing/down-round, change of control; default and follow-on offering provisions using a lattice model, for which management understands the methodologies. These models incorporate transaction details such as Company stock price, contractual terms, maturity, risk free rates, as well as assumptions about future financings, volatility, and holder behavior as of issuance and September 30, 2018.

As of September 30, 2018 The Company’s Derivative Liability on the above Convertible Notes Payable was $12,857. The note contains a $10,000 Derivative Note Discount- which recorded amortization expense of $2,500 for the quarter ended September 30, 2018 resulting in the total amortization of $10,000 derivative discount at September 30, 2018.

As of September 30, 2018 The Company’s Derivative Liability on the above Convertible Notes Payable was $12,857. The following table shows the derivative liability valuation and change in fair-market value of the derivatives on all outstanding notes as of September 30, 2018:

Valuation March 31,	Issuances during the	Conversions during the	September 30, 2018 Mark-to-	Valuation September 30,
2017	period	period	Market	2018
$12,857	$-0-	$-0-	$-0-	$12,857