Quarterly report pursuant to Section 13 or 15(d)

DERIVATIVE LIABILITY

v3.10.0.1
DERIVATIVE LIABILITY
6 Months Ended
Sep. 30, 2018
Derivative Instruments and Hedging Activities Disclosure [Abstract]  
DERIVATIVE LIABILITY

NOTE 7 – DERIVATIVE LIABILITY 

The Company has determined that certain warrants the Company has issued contain provisions that protect holders from future issuances of the Company’s common stock at prices below such warrants’ respective exercise prices and these provisions could result in modification of the warrants’ exercise price based on a variable that is not an input to the fair value of a “fixed-for-fixed” option as defined under FASB ASC Topic No. 815 – 40. The warrants granted in April 2014 contain anti-dilution provisions that provide for a reduction in the exercise price of such warrants in the event that future common stock (or securities convertible into or exercisable for common stock) is issued (or becomes contractually issuable) at a price per share (a “Lower Price”) that is less than the exercise price of such warrant at the time. The amount of any such adjustment is determined in accordance with the provisions of the warrant agreement and depends upon the number of shares of common stock issued (or deemed issued) at the Lower Price and the extent to which the Lower Price is less than the exercise price of the warrant at the time.

 

Activities for derivative warrant instruments during the six months ended September 30, 2018 and 2017 were as follows:

 

    2018     2017  
Carrying amount at beginning of period   $ 5     $ 21,662  
Change in fair value                (20,891 )
Carrying amount at end of period   $ 5     $ 771  

 

The fair value of the derivative warrants was calculated using the Black-Scholes pricing model. Variables used in the Black Scholes pricing model as of September 30, 2018 include (1) discount rate of 2.59%, (2) expected term of 0.56 years, (3) expected volatility of 227.10%, and (4) zero expected dividends. Variables used in the Black-Scholes pricing model as of September 30, 2017 include (1) discount rate of 1.47%, (2) expected term of 2 years, (3) expected volatility of 162.52%, and (4) zero expected dividends.

 

As of September 30, 2018, the significant inputs to the Company’s derivative liability calculation were Level 3 inputs.