|6 Months Ended|
Sep. 30, 2019
|Note 7 - DERIVATIVE LIABILITY||
In accordance with the FASB authoritative guidance, the conversion feature of the Note was separated from the host contract and recognized as a derivative instrument with a fair value of $199,081, which will be re-measured at the end of every reporting period with the change in value reported in the condensed statement of operations. The initial derivative liability was valued using a weighted-average Black-Scholes-Merton model with the following assumptions: risk-free interest rate of 1.69%; expected volatility of 189%; expected life of 1 year; and expected dividend yield of 0%. The derivative liability was re-measured to be $194,827 as of September 30, 2019 using a weighted-average Black-Scholes-Merton model with the following assumptions: risk-free interest rate of 1.69%; expected volatility of 189%; expected life of .93 years; and expected dividend yield of 0%. This resulted a decrease in the initial value of the derivative of $4,254, which was recognized as other income in the Company’s Condensed Statement of Operations for the six months ended September 30, 2019.
The Company used a risk-free interest rate based on rates established by the Federal Reserve Bank and used its own stock’s volatility as the estimated volatility. In addition, the expected life of the conversion feature of the notes was based on the remaining terms of the Note. Further, the expected dividend yield was based on the fact that the Company has not customarily paid dividends to its holders of Common Stock in the past and does not expect to pay dividends to holders of its Common Stock in the future.
The entire disclosure for derivatives and fair value of assets and liabilities.
Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef