| SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | NOTE
2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Basis
of Presentation Management acknowledges its responsibility for the preparation of the accompanying unaudited financial statements which reflect all adjustments, consisting of normal recurring adjustments, considered necessary in its opinion for a fair statement of its financial position and the results of its operations for the periods presented. The accompanying unaudited financial statements of the Company have been prepared in accordance with accounting principles generally accepted in the United States of America (the “U.S. GAAP”) for interim financial information and with the instructions Article 8-03 of Regulation S-X. Operating results for interim periods are not necessarily indicative of results that may be expected for the fiscal year as a whole. Certain information and note disclosure normally included in financial statements prepared in accordance with U.S. GAAP has been omitted from these statements pursuant to such accounting principles and, accordingly, they do not include all the information and notes necessary for comprehensive financial statements. These unaudited financial statements should be read in conjunction with the summary of significant accounting policies and notes to the financial statements for the year ended March 31, 2019 of the Company which were included in the Company’s annual report on Form 10-K as filed with the Securities and Exchange Commission on January 19, 2021. Going
Concern The
unaudited financial statements have been prepared on a going concern basis, which contemplates the realization of assets and the
settlement of liabilities and commitments in the normal course of business. As reflected in our accompanying unaudited financial
statements, the Company had net loss of $30,790 for the three months ended June 30, 2019. The Company had accumulated deficit,
stockholders’ deficit and working capital deficit of $10,591,448, $1,346,302 and $1,346,302, respectively, at June 30, 2019.
The Company had no revenues for the three months ended June 30, 2019. The Company’s loans and convertible notes are currently
in default. Management believes that these matters raise substantial doubt about the Company’s ability to continue as a
going concern for twelve months from the issuance date of this report. Management
cannot provide assurance that we will ultimately achieve profitable operations or become cash flow positive, or raise additional
debt and/or equity capital. Management believes that our capital resources are not currently adequate to continue operating and
maintaining its business strategy for a period of twelve months from the issuance date of this report. The Company will seek to
raise capital through additional debt and/or equity financings to fund its operations in the future. Although
the Company has historically raised capital from sales of equity and from the issuance of promissory notes, there is no assurance
that it will be able to continue to do so. If the Company is unable to raise additional capital or secure additional lending in
the near future, management expects that the Company will need to curtail or cease operations. These unaudited financial statements
do not include any adjustments related to the recoverability and classification of recorded asset amounts and classification of
liabilities that might be necessary should the Company be unable to continue as a going concern. Use
of Estimates The
preparation of the unaudited financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions
that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of
the unaudited financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results
could differ from these estimates. Fair
Value of Financial Instruments and Fair Value Measurements FASB
ASC 820 - Fair Value Measurements and Disclosures, defines fair value as the price that would be received to sell an asset or
paid to transfer a liability in an orderly transaction between market participants at the measurement date. FASB ASC 820 requires
disclosures about the fair value of all financial instruments, whether or not recognized, for financial statement purposes. Disclosures
about the fair value of financial instruments are based on pertinent information available to the Company on June 30, 2019. Accordingly,
the estimates presented in these financial statements are not necessarily indicative of the amounts that could be realized on
disposition of the financial instruments. FASB ASC 820 specifies a hierarchy of valuation techniques based on whether the inputs
to those valuation techniques are observable or unobservable. Observable inputs reflect market data obtained from independent
sources, while unobservable inputs reflect market assumptions. The hierarchy gives the highest priority to unadjusted quoted prices
in active markets for identical assets or liabilities (Level 1 measurement) and the lowest priority to unobservable inputs (Level
3 measurement). The
three levels of the fair value hierarchy are as follows:
Level 1—Inputs
are unadjusted quoted prices in active markets for identical assets or liabilities available at the measurement date.
Level 2—Inputs
are unadjusted quoted prices for similar assets and liabilities in active markets, quoted prices for identical or similar
assets and liabilities in markets that are not active, inputs other than quoted prices that are observable, and inputs derived
from or corroborated by observable market data.
Level 3—Inputs
are unobservable inputs which reflect the reporting entity’s own assumptions on what assumptions the market participants
would use in pricing the asset or liability based on the best available information. The
carrying amounts reported in the balance sheets for cash, due from and to related parties, prepaid expenses, accounts payable
and accrued liabilities approximate their fair market value based on the short-term maturity of these instruments. Assets
or liabilities measured at fair value on a recurring basis included conversion options in convertible notes and warrants with
their exercise price containing a down-round provision (see Note 5) and were as follows at June 30, 2019 and March 31, 2019:
At June 30, 2019 (Unaudited) At March 31, 2019
Description Level 1 Level 2 Level 3 Level 1 Level 2 Level 3
Derivative liabilities — — $ — — — $ 2,326 A
roll forward of the level 3 valuation financial instruments is as follows:
Derivative Liabilities
Balance at March 31, 2019 $ 2,326
Cumulative effect adjustment of derivative liability related to adoption of ASU 2017-11 (2,326 )
Balance at June 30, 2019 $ — ASC
825-10 “Financial Instruments”, allows entities to voluntarily choose to measure certain financial assets and liabilities
at fair value (fair value option). The fair value option may be elected on an instrument-by-instrument basis and is irrevocable,
unless a new election date occurs. If the fair value option is elected for an instrument, unrealized gains and losses for that
instrument should be reported in earnings at each subsequent reporting date. The Company did not elect to apply the fair value
option to any outstanding financial instruments. Cash The
Company maintains its cash in bank and financial institution deposits that at times may exceed federally insured limits. There
were no balances in excess of FDIC insured levels as of June 30, 2019 and March 31, 2019. The Company has not experienced any
losses in such accounts through June 30, 2019. Derivative
Liabilities The
Company has certain financial instruments that are embedded derivatives associated with capital raises and certain warrants. The
Company evaluates all its financial instruments to determine if those contracts or any potential embedded components of those
contracts qualify as derivatives to be separately accounted for in accordance with ASC 815-10 – Derivative and Hedging
– Contract in Entity’s Own Equity In
July 2017, FASB issued ASU No. 2017-11, Earnings Per Share (Topic 260); Distinguishing Liabilities from Equity (Topic 480); Derivatives
and Hedging (Topic 815): (Part I) Accounting for Certain Financial Instruments with Down Round Features. These amendments simplify
the accounting for certain financial instruments with down-round features. The amendments require companies to disregard the down-round
feature when assessing whether the instrument is indexed to its own stock, for purposes of determining liability or equity classification.
The guidance was adopted as of April 1, 2019 and the Company elected to record the effect of this adoption retrospectively to
outstanding financial instruments with a down round feature by means of a cumulative-effect adjustment to the balance sheet as
of June 30, 2019, the period which the amendment is effective. The Company adopted ASU No. 2017-11 in the period ended June 30,
2019, and the adoption resulted in a cumulative-effect adjustment of $2,326 on its financial statements and at June 30, 2019,
there was no derivative liability recorded. Revenue
Recognition In
May 2014, FASB issued an update Accounting Standards Update, ASU 2014-09, establishing ASC 606 - Revenue from Contracts with Customers.
ASU 2014-09, as amended by subsequent ASUs on the topic, establishes a single comprehensive model for entities to use in accounting
for revenue arising from contracts with customers and supersedes most of the existing revenue recognition guidance. This standard,
which is effective for interim and annual reporting periods in fiscal years that begin after December 15, 2017, requires an entity
to recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration
to which the entity expects to be entitled in exchange for those goods or services and also requires certain additional disclosures.
The Company adopted ASU 2014-09 during the three months ended June 30, 2018. The adoption of ASU 2014-09 did not have any material
impact on the Company’s financial statements. The Company did not have revenues from operations for the three months ended
June 30, 2019. Stock-Based
Compensation Stock-based
compensation is accounted for based on the requirements of the Share-Based Payment Topic of ASC 718 which requires recognition
in the financial statements of the cost of employee and director services received in exchange for an award of equity instruments
over the period the employee or director is required to perform the services in exchange for the award (presumptively, the vesting
period). The ASC also requires measurement of the cost of employee and director services received in exchange for an award based
on the grant-date fair value of the award. In
June 2014, the FASB issued Accounting Standards Update No. 2014-12, Compensation — Stock Compensation (Topic 718), Accounting
for Share-Based Payments When the Terms of an Award Provide That a Performance Target Could Be Achieved after the Requisite Service
Period (a consensus of the FASB Emerging Issues Task Force) (ASU 2014-12). The guidance applies to all reporting entities that
grant their employees share-based payments in which the terms of the award provide that a performance target that affects vesting
could be achieved after the requisite service period. The amendments require that a performance target that affects vesting and
that could be achieved after the requisite service period is treated as a performance condition. For all entities, the amendments
in this Update are effective for annual periods and interim periods within those annual periods beginning after December 15, 2015.
Earlier adoption is permitted. The effective date is the same for both public business entities and all other entities. The Company
early adopted ASU 2014-12 during the three months ended June 30, 2016. The adoption of ASU 2014-12 did not have any material impact
on the Company’s financial statements. Pursuant
to ASC 505-50 - Equity-Based Payments to Non-Employees, all share-based payments to non-employees, including grants of stock options,
were recognized in the financial statements as compensation expense over the service period of the consulting arrangement or until
performance conditions are expected to be met. Using a Black Scholes valuation model, the Company periodically reassessed the
fair value of non-employee options until service conditions are met, which generally aligns with the vesting period of the options,
and the Company adjusts the expense recognized in the financial statements accordingly. In June 2018, the FASB issued ASU No.
2018-07, Improvements to Nonemployee Share-Based Payment Accounting, which simplifies several aspects of the accounting for nonemployee
share-based payment transactions by expanding the scope of the stock-based compensation guidance in ASC 718 to include share-based
payment transactions for acquiring goods and services from non-employees. ASU No. 2018-07 is effective for annual periods beginning
after December 15, 2018, including interim periods within those annual periods. The Company early adopted ASU No. 2018-07 during
the three months ended March 31, 2018. The adoption ASU No. 2018-07 did not have a material impact on the Company’s financial
statements. Income
Taxes The
Company accounts for income tax using the liability method prescribed by ASC 740 - Income Taxes. Under this method, deferred tax
assets and liabilities are determined based on the difference between the financial reporting and tax bases of assets and liabilities
using enacted tax rates that will be in effect in the year in which the differences are expected to reverse. The Company records
a valuation allowance to offset net deferred tax assets if based on the weight of available evidence, it is more-likely-than-not
that some portion, or all, of the deferred tax assets will not be realized. The effect on deferred taxes of a change in tax rates
is recognized as income or loss in the period that includes the enactment date. The
Company follows the accounting guidance for uncertainty in income taxes using the provisions of ASC 740 “Income Taxes Basic
and Diluted Loss Per Share Pursuant
to ASC 260-10-45, basic loss per common share is computed by dividing net loss by the weighted average number of shares of common
stock outstanding for the periods presented. Diluted loss per share is computed by dividing net loss by the weighted average number
of shares of common stock, common stock equivalents and potentially dilutive securities outstanding during the period. Potentially
dilutive common shares consist of common stock issuable for stock options and warrants (using the treasury stock method), convertible
notes and common stock issuable. These common stock equivalents may be dilutive in the future. The following potentially dilutive
equity securities outstanding as of June 30, 2019 and 2018 were not included in the computation of dilutive loss per common share
because the effect would have been anti-dilutive:
June 30,
2019 2018
Stock warrants 4,226,875 4,539,706
Convertible notes 69,459,027 64,584,857
Total 73,685,902 69,124,563 Related
Parties Parties
are considered to be related to the Company if the parties, directly or indirectly, through one or more intermediaries, control,
are controlled by, or are under common control with the Company. Related parties also include principal owners of the Company,
its management, members of the immediate families of principal owners of the Company and its management and other parties with
which the Company may deal with if one party controls or can significantly influence the management or operating policies of the
other to an extent that one of the transacting parties might be prevented from fully pursuing its own separate interests. Recent
Accounting Pronouncements In
August 2018, the FASB issued ASU 2018-13 —Fair Value Measurement (Topic 820): Disclosure Framework Changes to the Disclosure
Requirements for Fair Value Measurement Management
does not believe that any other recently issued, but not yet effective accounting pronouncements, if adopted, would have a material
effect on the Company’s financial statements. |
