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Fair Value of Financial Instruments
 6 Months Ended
Sep. 30, 2025
Fair Value of Financial Instruments  
Fair Value of Financial Instruments

Fair Value of Financial Instruments

The accounting standards regarding the fair value of financial instruments and related fair value measurements defines financial instruments and requires disclosure of the fair value of financial instruments held by the Company. The Company considers the carrying amount of cash and other current assets and liabilities to approximate their fair values because of the short period of time between the origination of such instruments and their expected realization. The Company has also adopted ASC 820-10, “Fair Value Measurements” which defines fair value, establishes a three-level valuation hierarchy for disclosures of fair value measurement and enhances disclosure requirements for fair value measures. The three levels are defined as follows:

●Level 1 – Inputs to the valuation methodology are quoted prices (unadjusted) for identical assets or liabilities in active markets.
●Level 2 – Inputs to the valuation methodology include quoted prices for similar assets and liabilities in active markets, and inputs that are observable for the assets or liability, either directly or indirectly, for substantially the full term of the financial instruments.
●Level 3 – Inputs to valuation methodology are unobservable and significant to the fair value.

The carrying amounts of our financial instruments, including cash, cash investments, accounts payable, and accrued expenses approximate fair value because of their generally short maturities.

We measured the fair value of the convertible notes by using the Binomial Valuation model. As of September 30, 2025, the assumptions used to measure fair value of the liability embedded in our outstanding notes included an exercise price of $3.32 per share, a common share market price of $3.99, a discount rate of 20%, and a volatility of 50%.

The following table sets forth, by level within the fair value hierarchy, our financial instrument liabilities as of September 30, 2025.

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Description

    

Level 1

    

Level 2

    

Level 3

    

Total

Convertible Notes Payable

 

—

 

—

 

2,576,355

 

2,576,355

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The following table sets forth a summary of changes in the fair value of our Level 3 financial instrument liability for the three and six month periods ended September 30, 2025.

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Balance March 31, 2025

    

$

—

Additions to derivative liabilities

 

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767,000

Other expense included in earnings

 

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47,000

Conversions to equity

 

​

—

Balance September 30, 2025

 

$

814,000

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