Quarterly report pursuant to Section 13 or 15(d)

FAIR VALUE MEASUREMENTS

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FAIR VALUE MEASUREMENTS
6 Months Ended
Sep. 30, 2019
Fair Value Disclosures [Abstract]  
FAIR VALUE MEASUREMENTS

NOTE 19   – FAIR VALUE MEASUREMENTS

 

When applying fair value principles in the valuation of assets and liabilities, the Company is required to maximize the use of quoted market prices and minimize the use of unobservable inputs. The Company has not changed its valuation techniques used in measuring the fair value of any financial assets or liabilities during the fiscal years presented. The fair value estimates take into consideration the credit risk of both the Company and its counterparties.

 

When active market quotes are not available for financial assets and liabilities, the Company uses industry standard valuation models. Where applicable, these models project future cash flows and discount the future amounts to a present value using market-based observable inputs including credit risk, interest rate curves, foreign currency rates and forward and spot prices for currencies. In circumstances where market-based observable inputs are not available, management judgment is used to develop assumptions to estimate fair value. Generally, the fair value of our Level 3 instruments are estimated as the net present value of expected future cash flows based on internal and external inputs, including an estimate of the probability of the various scenarios that could occur under each outcome of the Shareholder Approval vote. 

 

Fair Value Measurements

 

The liabilities and mezzanine equity carried at fair value as of September 30, 2019 and March 31, 2019 were as follows:

 

    September 30, 2019  
    Total     Level 1     Level 2     Level 3  
Liabilities:                        
Derivative liability   $     $     $     $  
                                 
Mezzanine Equity:                                
Series E Preferred Stock     18,701,000                   18,701,000  
Series F Preferred Stock     1,417,000                   1,417,000  
Total liabilities and mezzanine equity at fair value   $ 20,118,000     $     $     $ 20,118,000  

 

    March 31, 2019  
    Total     Level 1     Level 2     Level 3  
Liabilities:                        
Derivative liability   $ 5     $     $     $ 5  
Total liabilities at fair value   $ 5     $     $     $ 5  

 

There were no transfers in or out of Level 3 for the six months ended September 30, 2019.

 

Assets and Liabilities Measured at Fair Value on a Non-recurring Basis

 

In addition to the financial instruments that are recorded at fair value on a recurring basis, the Company records assets and liabilities at fair value on a non-recurring basis as required by U.S. GAAP. Generally, assets are recorded at fair value on a non-recurring basis as a result of impairment charges or as part of a business combination. As discussed in “NOTE 11 – Merger Agreement”, during the six months ended September 30, 2019, the Company recorded non-recurring fair value measurements related to the Plan of Merger. These fair value measurements were classified as Level 3 within the fair value hierarchy.

 

Additionally, the Series E Preferred Stock and Series F Preferred Stock are considered contingently redeemable preferred stock and are classified as mezzanine equity. The fair value of these instruments was estimated as part of the accounting for the Plan of Merger described in “NOTE 11 – Merger Agreement”. As these instruments are not currently redeemable due to the contingencies not being met, the fair value of the instruments will not be adjusted until it is considered probable that those contingencies will be resolved and that the instruments would be redeemed.