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Annual report pursuant to Section 13 and 15(d)

Fair Value Measurements - Warrant Derivative liability

v3.10.0.1
Fair Value Measurements - Warrant Derivative liability
 12 Months Ended
Apr. 30, 2018
Fair Value Disclosures [Abstract]  
Fair Value Measurements - Warrant Derivative liability

Note 16. Fair Value Measurements – Warrant Derivative liability


The accounting standard for fair value measurements provides a framework for measuring fair value and requires expanded disclosures regarding fair value measurements. Fair value is defined as the price that would be received for an asset or the exit price that would be paid to transfer a liability in the principal or most advantageous market in an orderly transaction between market participants on the measurement date. The accounting standard established a fair value hierarchy which requires an entity to maximize the use of observable inputs, where available. This hierarchy prioritizes the inputs into three broad levels as follows. Level 1 input are quoted prices (unadjusted) in active markets for identical assets or liabilities. Level 2 inputs are quoted prices for similar assets and liabilities in active markets or inputs that are observable for the asset or liability, either directly or indirectly through market corroboration, for substantially the full term of the financial instrument. Level 3 inputs are unobservable inputs based on the Company’s own assumptions used to measure assets and liabilities at fair value. An asset or liability’s classification within the hierarchy is determined based on the lowest level input that is significant to the fair value measurement.


Assets and liabilities measured at fair value on a recurring and non-recurring basis consisted of the following at April 30, 2017 which related to 62,500 warrants which contained price protection:


 

 

Carrying

 

 

 

 

 

 

 

 

 

 

 

 

Value at

 

 

 

 

 

 

 

 

 

 

 

 

April 30,

 

 

Fair value Measurements at April 30, 2017

 

 

 

2017

 

 

(Level 1)

 

 

(Level 2)

 

 

(Level 3)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Warrant derivative liability

 

$

52,500

 

 

$

—

 

 

$

—

 

 

$

52,500

 


The following is a summary of activity of Level 3 liabilities for the years ended April 30, 2017 and 2018:


Balance April 30, 2016

 

$

—

 

Initial valuation of warrant derivative liability

 

 

52,500

 

Change in valuation of warrant derivative liability

 

 

—

 

Balance April 30, 2017

 

$

52,500

 

Gain on extinguishment of warrant liability

 

 

(52,500

)

Balance April 30, 2018

 

$

—

 


Changes in fair value of the warrant derivative liability are included in other income (expense) in the accompanying consolidated statements of operations.


There were no changes in the valuation techniques during years ended April 30, 2018 and 2017.