Cantabio Pharmaceuticals (CTBO) 10-Q 17 Jun 19 2019 Q3 Quarterly report Financial data

Document and Entity Information

Document and Entity Information - shares	9 Months Ended
	Dec. 31, 2018	Jun. 17, 2019
Details
Registrant Name	Cantabio Pharmaceuticals Inc.
Registrant CIK	0001550518
SEC Form	10-Q
Period End date	Dec. 31, 2018
Fiscal Year End	--03-31
Tax Identification Number (TIN)	99-0373067
Number of common stock shares outstanding		112,724,148
Filer Category	Non-accelerated Filer
Current with reporting	Yes
Interactive Data Current	Yes
Small Business	true
Emerging Growth Company	false
Amendment Flag	false
Document Fiscal Year Focus	2019
Document Fiscal Period Focus	Q3
Document Quarterly Report	true
Document Transition Report	false

CONDENSED CONSOLIDATED BALANCE

CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($)	Dec. 31, 2018	Mar. 31, 2018
Current Assets:
Cash	$ 283,371	$ 109,426
Prepaid expenses	42,500	0
Total Current Assets	325,871	109,426
Total Assets	325,871	109,426
Current Liabilities:
Accounts payable and accrued expenses	642,006	606,751
Accrued technology access fee	163,990	171,105
Secured convertible debentures	0	947,160
Convertible debt-related party	1,408,789	257,614
Total Current Liabilities	2,214,785	1,982,630
Total Liabilities	2,214,785	1,982,630
Stockholders' Deficiency:
Common stock, $0.001 par value; 250,000,000 shares authorized, 96.6 million and 51.9 million shares issued and outstanding as of December 31, 2018 and March 31, 2018, respectively	96,590	51,857
Stock subscriptions	1,060,000	1,060,000
Additional paid-in capital	1,766,832	1,134,763
Accumulated deficit	(4,812,336)	(4,119,824)
Total Stockholders' Deficiency	(1,888,914)	(1,873,204)
Total Liabilities and Stockholders' Deficiency	$ 325,871	$ 109,426

CONDENSED CONSOLIDATED BALANC_2

CONDENSED CONSOLIDATED BALANCE SHEETS - Parenthetical - $ / shares	Dec. 31, 2018	Mar. 31, 2018
Details
Common Stock, Par or Stated Value Per Share	$ 0.001	$ 0.001
Common Stock, Shares Authorized	250,000,000	250,000,000
Common Stock, Shares, Issued	96,600,000	51,900,000
Common Stock, Shares, Outstanding	96,600,000	51,900,000

CONDENSED CONSOLIDATED STATEMEN

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($)	3 Months Ended		9 Months Ended
	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2018	Dec. 31, 2017
Operating expenses:
Research and development	$ 80,219	$ 58,480	$ 270,442	$ 254,576
General and administrative	159,973	107,549	439,753	475,718
Total operating expenses	240,192	166,029	710,195	730,294
Loss from operations	(240,192)	(166,029)	(710,195)	(730,294)
Other (expense) income:
Interest expense	(347,200)	(204,962)	(984,884)	(392,386)
Change in fair value of embedded derivatives	420,275	77,000	540,275	131,000
Gain (loss) on extinguishment of debt, related party	43,020	(169,492)	(48,601)	(169,492)
Gain on extinguishment of debentures	467,064	0	510,893	0
Total other income (expense)	583,159	(297,454)	17,683	(430,878)
Net income (loss)	$ 342,967	$ (463,483)	$ (692,512)	$ (1,161,172)
Earnings (loss) per share:
Earnings (loss) per share, basic	$ 0	$ (0.02)	$ (0.01)	$ (0.04)
Earnings (loss) per share, diluted	$ 0	$ (0.02)	$ (0.01)	$ (0.04)
Weighted average shares outstanding:
Weighted average shares outstanding, basic	87,367,000	28,700,000	66,324,000	27,667,000
Weighted average shares outstanding, diluted	87,367,000	28,700,000	66,324,000	27,667,000

CONDENSED CONSOLIDATED STATEM_2

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($)	9 Months Ended
	Dec. 31, 2018	Dec. 31, 2017
CASH FLOWS FROM OPERATING ACTIVITIES
Net income (loss)	$ (692,512)	$ (1,161,172)
Adjustments to reconcile net loss to net cash used in operating activities:
Gain (loss) on extinguishment of debt, related party	48,601	169,492
Gain on extinguishment of debentures	(510,893)	0
Loss on extinguishment of obligation	17,500	0
Amortization of debt discount	871,967	293,210
Change in fair value of embedded derivatives	(540,275)	(131,000)
Share based compensation for services	10,000	39,549
Changes in operating assets and liabilities:
Increase (decrease) in Prepaid Expenses	(42,500)	1,248
Increase (decrease) in Accounts Payable and Accrued Expenses	163,656	294,390
Increase (decrease) in Accrued Technology Access Fee	(7,115)	23,561
Increase (decrease) in Accrued Debenture Interest	70,516	34,721
Net cash used in operating activities	(611,055)	(436,001)
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from issuance of convertible debt, related party	1,415,000	175,000
Proceeds from issuance of convertible debenture	265,000	255,500
Repayments of secured convertible debentures	(895,000)	0
Net cash provided by financing activities	785,000	430,500
Net increase (decrease) in cash	173,945	(5,501)
Cash at beginning of period	109,426	32,275
Cash at end of period	283,371	26,774
Supplemental disclosures of cash flow information:
Interest paid	32,220	0
Conversion of secured convertible debentures into common shares	164,784	139,000
Conversion of convertible debt, related party, into common shares	414,517	0
Issuance of shares for settlement of accounts payable	70,000	0
Beneficial conversion feature associated with convertible debentures	$ 0	$ 35,000

ORGANIZATION, OPERATIONS AND BA

ORGANIZATION, OPERATIONS AND BASIS OF PRESENTATION	9 Months Ended
	Dec. 31, 2018
Notes
ORGANIZATION, OPERATIONS AND BASIS OF PRESENTATION	NOTE 1 - ORGANIZATION, OPERATIONS AND BASIS OF PRESENTATION Organization and Operations Cantabio Pharmaceuticals Inc. (the “Company” or “Cantabio”) is a preclinical stage biotechnology company focusing on commercializing novel therapies and the intellectual property generated from research and development activities for Parkinson’s disease (PD) and Alzheimer’s disease (AD). The Company’s strategy involves integration of therapeutic focus, the targeting of family biophysics, drug discovery technology and expertise into an innovative drug discovery approach, which synergizes to identify and develop small molecule pharmacological chaperones for clinical trials. In addition, the Company’s research efforts concentrate on the development of therapeutic proteins that can pass through the blood-brain barrier and supplement in vivo levels of proteins with display loss of function during disease conditions. Basis of Presentation The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, certain information and footnote disclosures normally included in annual financial statements prepared in accordance with U.S. GAAP have been condensed or omitted pursuant to such Securities and Exchange Commission (“SEC”) rules and regulations and accounting principles applicable for interim periods. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included. Events subsequent to the balance sheet date have been evaluated for inclusion in the accompanying unaudited condensed consolidated financial statements through the date of issuance. Operating results for the three and nine months ended December 31, 2018, are not necessarily indicative of the results that may be expected for the year ended March 31, 2019. These unaudited condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and the notes thereto included in the Annual Report on Form 10-K for the fiscal year ended March 31, 2018.

GOING CONCERN AND MANAGEMENT'S

GOING CONCERN AND MANAGEMENT'S PLANS	9 Months Ended
	Dec. 31, 2018
Notes
GOING CONCERN AND MANAGEMENT'S PLANS	NOTE 2 - GOING CONCERN AND MANAGEMENT’S PLANS As of December 31, 2018, the Company had a working capital deficit and continues to have losses from operations due to its research and development activities. The Company typically raises capital which it spends on maintaining its research and corporate operations. At this early stage in the life of the Company, funding is often short-term in nature. While the Company has been proficient in raising funds in the past, the short-term nature of these funding cycles raises substantial doubt about the Company's ability to continue as a going concern within one year from the date of this filing. Management is addressing going concern risk by seeking new sources of capital and is continuing initiatives to raise capital through private placements, related party loans and other institutional sources to meet future working capital requirements. Furthermore, strategic partnerships, most likely with larger pharmaceutical industry companies, will be needed to continue to fund research and development costs as our projects expand. These measures, if successful, may contribute to reduce the risk of going concern uncertainties for the Company for at least twelve months from issuance of these condensed consolidated financial statements. The ability of the Company to continue as a going concern is dependent upon its ability to raise additional capital and achieve profitable operations. The accompanying condensed consolidated financial statements do not include any adjustments that might be necessary if the Company is unable to continue as a going concern.

SUMMARY OF SIGNIFICANT ACCOUNTI

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES	9 Months Ended
	Dec. 31, 2018
Notes
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES	NOTE 3 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Since the date of the Annual Report on Form 10-K for the year ended March 31, 2018, there have been no material changes to the Company’s significant accounting policies, except as disclosed in this note. Reclassification Certain amounts in prior periods have been reclassified to conform to the current period presentation. These reclassifications had no effect on previously reported net loss. Subsequent Events The Company evaluates events that have occurred after the balance sheet date but before the financial statements are issued. Based upon the evaluation, the Company did not identify any recognized or non-recognized subsequent events that would have required adjustment or disclosure in the consolidated financial statements, except as disclosed. Earnings (Loss) Per Common Share Basic earnings (loss) per share data for each period presented is computed using the weighted average number of shares of common stock outstanding during each such period. Diluted earnings (loss) per share data is computed using the weighted average number of common and dilutive common equivalent shares outstanding during each period. The following securities were excluded from the calculation of diluted earnings per share because their inclusion would have been anti-dilutive: December 31, 2018 December 31, 2017 Convertible debentures (Note 5) -- 26,375,000 Convertible debt related party (Note 6) 20,156,000 10,577,000 Stock subscriptions 530,000 530,000 Total potentially dilutive shares 20,686,000 37,482,000 Recent Accounting Standards Fiscal 2019 Accounting Standards Adoptions In August 2016, the Financial Accounting Standard Board (“FASB”) issued Accounting Standard Update (“ASU”) No. 2016-15, Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments. This new standard clarifies certain aspects of the statement of cash flows, including the classification of debt prepayment or debt extinguishment costs or other debt instruments with coupon interest rates that are insignificant in relation to the effective interest rate of the borrowing, contingent consideration payments made after a business combination, proceeds from the settlement of insurance claims, proceeds from the settlement of corporate-owned life insurance policies, distributions received from equity method investees and beneficial interests in securitization transactions. This new standard also clarifies that an entity should determine each separately identifiable source of use within the cash receipts and payments on the basis of the nature of the underlying cash flows. In situations in which cash receipts and payments have aspects of more than one class of cash flows and cannot be separated by source or use, the appropriate classification should depend on the activity that is likely to be the predominant source or use of cash flows for the item. This new standard became effective for the Company on April 1, 2018. The new standard does not have a material impact on the Company’s unaudited condensed consolidated financial statements and financial statement disclosures. Recently Issued Accounting Standards In February 2016, the FASB issued ASU No. 2016-02, Leases (Topic 842) (“ASU 2016-02”). ASU 2016-02 increases the transparency and comparability among organizations by recognizing lease assets and lease liabilities on the balance sheet and disclosing key information about leasing arrangements. Certain qualitative and quantitative disclosures are required, as well as a retrospective recognition and measurement of impacted leases. The new ASU is effective for fiscal years and interim periods within those years beginning after December 15, 2018, with early adoption permitted. The Company is currently evaluating the impact of this new standard and does not expect it to have a material impact on its unaudited condensed consolidated financial statements and financial statement disclosures. In June 2018, the FASB issued ASU No. 2018-07, “Compensation - Stock Compensation (Topic 718)” (“ASU 2018-07”). ASU 2018-07 is intended to reduce cost and complexity and to improve financial reporting for nonemployee share-based payments. Currently, the accounting requirements for nonemployee and employee share-based payment transactions are significantly different. This ASU expands the scope of Topic 718, Compensation-Stock Compensation (which currently only includes share-based payments to employees) to include share-based payments issued to nonemployees for goods or services. Consequently, the accounting for share-based payments to nonemployees and employees will be substantially aligned. This ASU supersedes Subtopic 505-50, Equity-Equity-Based Payments to Nonemployees. The amendments in this ASU are effective for public companies for fiscal years beginning after December 15, 2018, including interim periods within that fiscal year. For all other companies, the amendments are effective for fiscal years beginning after December 15, 2019, and interim periods within fiscal years beginning after December 15, 2020. Early adoption is permitted, but no earlier than a company's adoption date of Topic 606, Revenue from Contracts with Customers. The Company is currently evaluating the impact of this new standard and does not expect it to have a material impact on its unaudited condensed consolidated financial statements and financial statement disclosures. In March 2019, the FASB issued ASU 2019-01, “Leases (Topic 842): Codification Improvements” (“Topic 842”) (“ASU 2019-01”). These amendments align the guidance for fair value of the underlying asset by lessors that are not manufacturers or dealers in Topic 842 with that of existing guidance. As a result, the fair value of the underlying asset at lease commencement is its cost, reflecting any volume or trade discounts that may apply. However, if there has been a significant lapse of time between when the underlying asset is acquired and when the lease commences, the definition of fair value (in Topic 820, Fair Value Measurement) should be applied. (Issue 1). The ASU also requires lessors within the scope of Topic 942, Financial Services-Depository and Lending, to present all “principal payments received under leases” within investing activities. (Issue 2). Finally, the ASU exempts both lessees and lessors from having to provide certain interim disclosures in the fiscal year in which a company adopts the new leases standard. (Issue 3). The transition and effective date provisions apply to Issue 1 and Issue 2. They do not apply to Issue 3 because the amendments for that Issue are to the original transition requirements in Topic 842. The effective date of those amendments is for fiscal years beginning after December 15, 2019. The Company is currently evaluating ASU 2019-01 and its impact on its unaudited condensed consolidated financial statements.

RELATED PARTY TRANSACTIONS DISC

RELATED PARTY TRANSACTIONS DISCLOSURE	9 Months Ended
	Dec. 31, 2018
Notes
RELATED PARTY TRANSACTIONS DISCLOSURE	NOTE 4 - RELATED PARTY TRANSACTIONS There have been no changes to the Company’s related party consulting arrangements as they have been disclosed in the Company’s most recently filed Form 10-K. Costs incurred associated with related party transactions included in general and administrative in the unaudited condensed consolidated statements of operations are as follows For the three months ended December 31, For the nine months ended December 31, 2018 2017 2018 2017 Operating expenses: Toth and Associates LTD $ 44,000 $ 40,000 $ 130,000 $ 120,000 Capro LTD 25,000 18,000 72,000 84,000 Eden Professional LTD 23,000 21,000 68,000 63,000 Max Zhu Consulting 6,000 3,000 12,000 12,000 Total related party transactions $ 98,000 $ 82,000 $ 282,000 $ 279,000 Accounts payable and accrued expenses include amounts payable to related parties in the aggregate amount of $0.4 million and $0.6 million as of December 31, 2018 and March 31, 2018, respectively. Additional related-party transactions are discussed in Note 6 - Convertible-Debt Related Party.

SECURED CONVERTIBLE DEBENTURES,

SECURED CONVERTIBLE DEBENTURES, DISCLOSURE	9 Months Ended
	Dec. 31, 2018
Notes
SECURED CONVERTIBLE DEBENTURES, DISCLOSURE	NOTE 5 - SECURED CONVERTIBLE DEBENTURES Overview The carrying value of outstanding secured convertible debentures, as of December 31, 2018 and March 31, 2018, are comprised of the following: December 31, 2018 March 31, 2018 Principal value $ -- $ 750,000 Fair value of embedded derivatives -- 736,000 Accrued interest -- 22,264 Debt discount -- (561,104) Carrying value of secured convertible debentures $ -- $ 947,160 New issuance On June 5, 2018, the Company entered into a securities purchase agreement (the “SPA”) with an accredited investor to place convertible debentures (as amended the “Debentures”) in the aggregate principal amount of up to $300,000 net of issuance costs of $35,000 265,000 . The Debentures bear interest at the rate of 5% per annum with a maturity date of June 5, 2019, as may be extended at the option of the note holder. In addition, the Company must pay to the holder an annual fee equal to 7% of the amount of the Debentures to assist in their monitoring costs for the Debentures. The net proceeds of the financing were used for general corporate matters and for other expenses. The Debentures may be converted at any time on or prior to maturity at the lower of $0.05 or 93% of the average of the three lowest daily volume weighted average price (“VWAP”) during the 10 consecutive trading days immediately preceding the conversion date, provided that as long as we are not in default under the Debenture and the conversion price is never lower than a stated floor price. Amendments Concurrent with the issuance of the aforementioned convertible debentures, all outstanding debentures were amended to align with the new agreement. All the Debentures may be converted at any time on or prior to maturity at the lower of $0.05 (rather than $0.10 as previously) or 93% of the average of the three lowest daily volume weighted average price (“VWAP”) during the 10 consecutive trading days immediately preceding the conversion date, provided that as long as we are not in default under the Debenture and the conversion price is never lower than a stated floor price. The Company accounted for the amendment as a debt modification which resulted in a $76,000 impact that was recorded in the change in fair value of embedded derivatives in the Company’s unaudited condensed statements of operations. Conversions During the nine months ended December 31, 2018, certain holders of secured convertible debentures of approximately $0.21 million in principal and accrued interest exercised their conversion option and converted into an aggregate of 10.5 million shares of common stock of the Company. The aggregate fair market value of the shares issued of $0.16 million was less than the net carrying value of the convertible notes by $0.05 million and a gain on extinguishment of debentures was recorded. Secured Convertible Debenture Repayments During the nine months ended December 31, 2018, the Company repaid secured convertible debentures in the aggregate amount of $0.93 million 895,000 of principal and accrued interest. As a result of the repayments, the Company extinguished the associated bifurcated embedded derivatives and debt discount in the aggregate amount of $0.54 million and $0.08 million, respectively, and recorded a gain on extinguishment of debentures of $0.46 million 510,893 . See below within Note 5 - Convertible Debentures as Amended - Embedded Derivatives for additional details regarding the embedded derivatives. Embedded Derivatives The following table sets forth a summary of the changes in the fair value of Level 3 embedded derivatives that are measured at fair value on a recurring basis for the nine months ended December 31, 2018: Balance at March 31, 2018 Issuance of embedded derivatives Change due to modification Change in fair value of embedded derivatives Extinguishment of derivatives due to conversions and repayments Balance at December 31, 2018 $ 736,000 $ 281,000 $ 76,000 $ (529,000) $ (564,000) $ -- Monthly Payment Provision During the nine months ended December 31, 2018, the Debentures had monthly payment provisions that were deemed to be contingent put options and were required to be separately measured at fair value, with subsequent changes in fair value recognized in the unaudited condensed consolidated statements of operations. The Company estimated the fair value of the monthly payment provisions at each reporting period commencing on the “Triggering Date”, as defined, through December 31, 2018, using a discount to the respective maximum redemption premium for any given payment, pursuant to the Debentures. In applying a probability analysis to the contingent put options, the Company used the following key inputs: For the Three Months Ended December 31, For the Nine Months Ended December 31, 2018 2017 2018 2017 Stock price N/A $0.030 $0.017-$0.060 $0.030-$0.230 Probability of triggering date N/A 100% 100% 4%-100% Volatility N/A 282% 300% 207%-282% Risk-free rate N/A 1% 1% 1% Discount rate N/A 0% 0% 0% Embedded Conversion Features The Company analyzes the Embedded Conversion Features (“ECFs”) of its convertible notes at issuance to determine whether the ECF should be bifurcated and accounted for as a derivative liability or if the ECF contains a beneficial conversion feature. During the nine month’s ended December 31, 2018, the Company determined that the ECFs of the Debentures were derivative liabilities and, as a result, were recorded as debt discount and are being amortized over the respective terms of the Debentures. The analysis used in calculating the value of issued and outstanding ECFs during the three and nine months ended December 31, 2018 and 2017 was calculated using the following assumptions: For the Three Months Ended December 31, For the Nine Months Ended December 31, 2018 2017 2018 2017 Stock price $0.007-$0.017 $0.030 $0.007-$0.060 $0.030 Exercise price $0.007-$0.016 $0.030 $0.007-$0.060 $0.030 Volatility 220%-395% 282% 220%-400% 282% Contractual term (years) 0.00-0.48 1.00 0.00-1.00 1.00 Risk-free rate 2%-3% 1% 1%-3% 1% Discount rate 0% 0% 0% 0%

CONVERTIBLE DEBT RELATED PARTY

CONVERTIBLE DEBT RELATED PARTY DISCLOSURE	9 Months Ended
	Dec. 31, 2018
Notes
CONVERTIBLE DEBT RELATED PARTY DISCLOSURE	NOTE 6 - CONVERTIBLE DEBT RELATED PARTY Overview The carrying value of convertible related party debentures are comprised of the following as of December 31, 2018 and March 31, 2018: December 31, 2018 March 31, 2018 Principal value (CDRP) $ 1,415,000 $ 220,000 Fair value of embedded derivatives (CDRP) 57,000 156,000 Accrued interest (CDRP) 26,541 15,204 Debt discount (CDRP) (89,752) (133,590) Carrying value of convertible debt related party $ 1,408,789 $ 257,614 New Issuances During the nine months ended December 31, 2018, the Company issued one of our directors convertible debentures in the aggregate principal amount of $1.615 million. The Company received proceeds of $1.415 million 1,415,000 during the nine months ended December 31, 2018, which bear interest at the rate of 24% per annum and provide for maturity dates between April 2019 and August 2019. The difference of $0.20 million was subsequently funded to the Company in January 2019. The proceeds of the financing shall be used for general corporate matters, repayment of certain outstanding debentures, research and development and for other expenses. In connection with the issuance of a certain convertible debenture, the Company granted the lender a board seat for at least one-year, effective October 2018. See Note 8 - Subsequent Events for details regarding a certain related party debenture in technical default. The convertible debentures are convertible into shares of common stock of the Company at the option of the lender as follows: (i) at any time on or prior to maturity at 80% of the Company’s share price providing a $6 million or $9 million valuation, depending on the note, or (ii) at any time on or prior to maturity following an equity investment of over $1.5 million or $3.5 million, depending on the note, at a conversion price generally equal to 80% of the share price of such equity investment. The Company analyzes the ECFs of its convertible notes at issuance to determine whether the ECF should be bifurcated and accounted for as a derivative liability or if the ECF contains a beneficial conversion feature. See below within Note 6 - Convertible Debt - Related Party - Embedded Conversion Features for additional details regarding the embedded derivatives. The notes have forced redemption provisions, whereby, the holder may demand redemption of the loan, either: (i) in cash at the then-outstanding principal and accrued interest balance or (ii) in common stock of the Company, pursuant to the conversion terms, provided the Company either receives an equity investment of over $1.5 million or accumulated revenue in an amount equal to or greater than $3.5 million, depending on the note. The notes also provide for redemption provisions, whereby, the Company may elect to prepay the notes at any time, in cash, at a premium of up to 10% of the then outstanding principal and accrued interest, depending on the note. Conversions During the nine months ended December 31, 2018, a certain holder converted an aggregate of $0.22 million of principal and $0.05 million 0.27 of the respective interest into approximately 25.3 million shares of common stock of the Company with an aggregate fair market value of $0.42 million. As a result of the conversion, the Company extinguished the associated bifurcated embedded derivatives and debt discount in the aggregate amount of $0.13 million and $0.03 million, respectively, and recorded a loss on extinguishment of related party debentures of $0.05 million 48,601 . See below within Note 6 - Convertible Debt - Related Party - Embedded Conversion Features for additional details regarding the embedded derivatives. Technical Default A debenture held by one of our directors was due in April 2019 and is now in technical default. The obligation had not been called by such director. Embedded Conversion Features The following table sets forth a summary of the changes in the fair value of Level 3 embedded derivatives that are measured at fair value on a recurring basis for the nine months ended December 31, 2018: Balance at March 31, 2018 Issuance of embedded derivatives Change in fair value of embedded derivatives Extinguishment of derivatives due to conversions Balance at December 31, 2018 $ 156,000 $ 113,000 $ (87,000) $ (125,000) $ 57,000 The Company analyzes the ECFs of its convertible related party notes at issuance to determine whether the ECF should be bifurcated and accounted for as a derivative liability or if the ECF contains a beneficial conversion feature. During the nine month’s ended December 31, 2018, the Company determined that the ECFs of convertible related party notes were derivative liabilities and, as a result, were recorded as debt discount and are being amortized over the respective terms of the Debentures. The analysis used in calculating the value of issued and outstanding ECFs during the three and nine months ended December 31, 2018 and 2017 was calculated using the following assumptions: For the Three Months Ended December 31, For the Nine Months Ended December 31, 2018 2017 2018 2017 Stock price $0.009-$0.019 $0.010-$0.030 $0.009-$0.07 $0.030 Volatility 261%-368% 125%-159% 261%-400% 282% Contractual term (years) 0.13-0.50 0.10-0.50 0.10-1.00 1.00 Risk-free rate 2%-3% 1% 1%-3% 1% Discount rate 0% 0% 0% 0%

CAPITAL STOCK DISCLOSURE

CAPITAL STOCK DISCLOSURE	9 Months Ended
	Dec. 31, 2018
Notes
CAPITAL STOCK DISCLOSURE	NOTE 7 - CAPITAL STOCK Issuance of shares for consulting services. During the nine months ended December 31, 2018 the Company issued approximately 0.4 million shares of common stock of the Company with a fair value of approximately $10,000 as compensation for services performed and issued approximately 8.6 million shares of common stock of the Company to directors of the Company in lieu of $70,000 of unpaid fees. See Note 5 - Secured Convertible Debentures and Note 6 - Convertible Debt - Related Party for details regarding the issuance of common stock of the Company in connection with conversions of certain debentures.

SUBSEQUENT EVENTS DISCLOSURE

SUBSEQUENT EVENTS DISCLOSURE	9 Months Ended
	Dec. 31, 2018
Notes
SUBSEQUENT EVENTS DISCLOSURE	NOTE 8 - SUBSEQUENT EVENTS Compensatory Common Stock Issuance Subsequent to December 31, 2018, the Company issued an aggregate of approximately 16.1 million shares of common stock of the Company to certain employees and consultants of the Company as compensation for services performed with an aggregate fair value of approximately $0.2 million. Reverse Stock Split Subsequent to December 31, 2018, the shareholders of the Company approved an amendment to the Certificate of Incorporation of the Company to effect a reverse split of the Company’s common stock at a ratio of 1-for-5,000, with the Chief Executive Officer having the discretion as to the timing of when the reverse stock split is to be effected. For each fractional share resulting from the reverse stock split, the Company will pay, in cash, an amount equal to $0.01296 per share prior to the reverse stock split. As of the date of this filing, the Company has not effected the reverse stock split. Technical Default A debenture held by one of our directors was due in April 2019 and is now in technical default. The obligation had not been called by such director.

SUMMARY OF SIGNIFICANT ACCOUN_2

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES: Reclassification, Policy (Policies)	9 Months Ended
	Dec. 31, 2018
Policies
Reclassification, Policy	Reclassification Certain amounts in prior periods have been reclassified to conform to the current period presentation. These reclassifications had no effect on previously reported net loss.

SUMMARY OF SIGNIFICANT ACCOUN_3

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES: Subsequent Events, Policy (Policies)	9 Months Ended
	Dec. 31, 2018
Policies
Subsequent Events, Policy	Subsequent Events The Company evaluates events that have occurred after the balance sheet date but before the financial statements are issued. Based upon the evaluation, the Company did not identify any recognized or non-recognized subsequent events that would have required adjustment or disclosure in the consolidated financial statements, except as disclosed.

SUMMARY OF SIGNIFICANT ACCOUN_4

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES: Earnings (Loss) Per Common Share, Policy (Policies)	9 Months Ended
	Dec. 31, 2018
Policies
Earnings (Loss) Per Common Share, Policy	Earnings (Loss) Per Common Share Basic earnings (loss) per share data for each period presented is computed using the weighted average number of shares of common stock outstanding during each such period. Diluted earnings (loss) per share data is computed using the weighted average number of common and dilutive common equivalent shares outstanding during each period. The following securities were excluded from the calculation of diluted earnings per share because their inclusion would have been anti-dilutive: December 31, 2018 December 31, 2017 Convertible debentures (Note 5) -- 26,375,000 Convertible debt related party (Note 6) 20,156,000 10,577,000 Stock subscriptions 530,000 530,000 Total potentially dilutive shares 20,686,000 37,482,000

SUMMARY OF SIGNIFICANT ACCOUN_5

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES: Recent Accounting Standards (Policies)	9 Months Ended
	Dec. 31, 2018
Policies
Recent Accounting Standards	Recent Accounting Standards Fiscal 2019 Accounting Standards Adoptions In August 2016, the Financial Accounting Standard Board (“FASB”) issued Accounting Standard Update (“ASU”) No. 2016-15, Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments. This new standard clarifies certain aspects of the statement of cash flows, including the classification of debt prepayment or debt extinguishment costs or other debt instruments with coupon interest rates that are insignificant in relation to the effective interest rate of the borrowing, contingent consideration payments made after a business combination, proceeds from the settlement of insurance claims, proceeds from the settlement of corporate-owned life insurance policies, distributions received from equity method investees and beneficial interests in securitization transactions. This new standard also clarifies that an entity should determine each separately identifiable source of use within the cash receipts and payments on the basis of the nature of the underlying cash flows. In situations in which cash receipts and payments have aspects of more than one class of cash flows and cannot be separated by source or use, the appropriate classification should depend on the activity that is likely to be the predominant source or use of cash flows for the item. This new standard became effective for the Company on April 1, 2018. The new standard does not have a material impact on the Company’s unaudited condensed consolidated financial statements and financial statement disclosures. Recently Issued Accounting Standards In February 2016, the FASB issued ASU No. 2016-02, Leases (Topic 842) (“ASU 2016-02”). ASU 2016-02 increases the transparency and comparability among organizations by recognizing lease assets and lease liabilities on the balance sheet and disclosing key information about leasing arrangements. Certain qualitative and quantitative disclosures are required, as well as a retrospective recognition and measurement of impacted leases. The new ASU is effective for fiscal years and interim periods within those years beginning after December 15, 2018, with early adoption permitted. The Company is currently evaluating the impact of this new standard and does not expect it to have a material impact on its unaudited condensed consolidated financial statements and financial statement disclosures. In June 2018, the FASB issued ASU No. 2018-07, “Compensation - Stock Compensation (Topic 718)” (“ASU 2018-07”). ASU 2018-07 is intended to reduce cost and complexity and to improve financial reporting for nonemployee share-based payments. Currently, the accounting requirements for nonemployee and employee share-based payment transactions are significantly different. This ASU expands the scope of Topic 718, Compensation-Stock Compensation (which currently only includes share-based payments to employees) to include share-based payments issued to nonemployees for goods or services. Consequently, the accounting for share-based payments to nonemployees and employees will be substantially aligned. This ASU supersedes Subtopic 505-50, Equity-Equity-Based Payments to Nonemployees. The amendments in this ASU are effective for public companies for fiscal years beginning after December 15, 2018, including interim periods within that fiscal year. For all other companies, the amendments are effective for fiscal years beginning after December 15, 2019, and interim periods within fiscal years beginning after December 15, 2020. Early adoption is permitted, but no earlier than a company's adoption date of Topic 606, Revenue from Contracts with Customers. The Company is currently evaluating the impact of this new standard and does not expect it to have a material impact on its unaudited condensed consolidated financial statements and financial statement disclosures. In March 2019, the FASB issued ASU 2019-01, “Leases (Topic 842): Codification Improvements” (“Topic 842”) (“ASU 2019-01”). These amendments align the guidance for fair value of the underlying asset by lessors that are not manufacturers or dealers in Topic 842 with that of existing guidance. As a result, the fair value of the underlying asset at lease commencement is its cost, reflecting any volume or trade discounts that may apply. However, if there has been a significant lapse of time between when the underlying asset is acquired and when the lease commences, the definition of fair value (in Topic 820, Fair Value Measurement) should be applied. (Issue 1). The ASU also requires lessors within the scope of Topic 942, Financial Services-Depository and Lending, to present all “principal payments received under leases” within investing activities. (Issue 2). Finally, the ASU exempts both lessees and lessors from having to provide certain interim disclosures in the fiscal year in which a company adopts the new leases standard. (Issue 3). The transition and effective date provisions apply to Issue 1 and Issue 2. They do not apply to Issue 3 because the amendments for that Issue are to the original transition requirements in Topic 842. The effective date of those amendments is for fiscal years beginning after December 15, 2019. The Company is currently evaluating ASU 2019-01 and its impact on its unaudited condensed consolidated financial statements.

SUMMARY OF SIGNIFICANT ACCOUN_6

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES: Earnings (Loss) Per Common Share, Policy: Schedule of Antidilutive Securities Excluded from Computation of Earnings Per Share (Tables)	9 Months Ended
	Dec. 31, 2018
Tables/Schedules
Schedule of Antidilutive Securities Excluded from Computation of Earnings Per Share	December 31, 2018 December 31, 2017 Convertible debentures (Note 5) -- 26,375,000 Convertible debt related party (Note 6) 20,156,000 10,577,000 Stock subscriptions 530,000 530,000 Total potentially dilutive shares 20,686,000 37,482,000

RELATED PARTY TRANSACTIONS DI_2

RELATED PARTY TRANSACTIONS DISCLOSURE: Schedule of Related Party Transaction Costs (Tables)	9 Months Ended
	Dec. 31, 2018
Tables/Schedules
Schedule of Related Party Transaction Costs	For the three months ended December 31, For the nine months ended December 31, 2018 2017 2018 2017 Operating expenses: Toth and Associates LTD $ 44,000 $ 40,000 $ 130,000 $ 120,000 Capro LTD 25,000 18,000 72,000 84,000 Eden Professional LTD 23,000 21,000 68,000 63,000 Max Zhu Consulting 6,000 3,000 12,000 12,000 Total related party transactions $ 98,000 $ 82,000 $ 282,000 $ 279,000

SECURED CONVERTIBLE DEBENTURE_2

SECURED CONVERTIBLE DEBENTURES, DISCLOSURE: Schedule of Carrying Values of Convertible Debt Instruments (Tables)	9 Months Ended
	Dec. 31, 2018
Tables/Schedules
Schedule of Carrying Values of Convertible Debt Instruments	December 31, 2018 March 31, 2018 Principal value $ -- $ 750,000 Fair value of embedded derivatives -- 736,000 Accrued interest -- 22,264 Debt discount -- (561,104) Carrying value of secured convertible debentures $ -- $ 947,160

SECURED CONVERTIBLE DEBENTURE_3

SECURED CONVERTIBLE DEBENTURES, DISCLOSURE: Fair Value Measured on Embedded Derivative (Tables)	9 Months Ended
	Dec. 31, 2018
Tables/Schedules
Fair Value Measured on Embedded Derivative	Balance at March 31, 2018 Issuance of embedded derivatives Change due to modification Change in fair value of embedded derivatives Extinguishment of derivatives due to conversions and repayments Balance at December 31, 2018 $ 736,000 $ 281,000 $ 76,000 $ (529,000) $ (564,000) $ --

SECURED CONVERTIBLE DEBENTURE_4

SECURED CONVERTIBLE DEBENTURES, DISCLOSURE: Convertible Debt, Embedded Derivative - Monthly payment provision (Tables)	9 Months Ended
	Dec. 31, 2018
Tables/Schedules
Convertible Debt, Embedded Derivative - Monthly payment provision	For the Three Months Ended December 31, For the Nine Months Ended December 31, 2018 2017 2018 2017 Stock price N/A $0.030 $0.017-$0.060 $0.030-$0.230 Probability of triggering date N/A 100% 100% 4%-100% Volatility N/A 282% 300% 207%-282% Risk-free rate N/A 1% 1% 1% Discount rate N/A 0% 0% 0%

SECURED CONVERTIBLE DEBENTURE_5

SECURED CONVERTIBLE DEBENTURES, DISCLOSURE: Convertible Debt, Beneficial Conversion Feature (Tables)	9 Months Ended
	Dec. 31, 2018
Tables/Schedules
Convertible Debt, Beneficial Conversion Feature	For the Three Months Ended December 31, For the Nine Months Ended December 31, 2018 2017 2018 2017 Stock price $0.007-$0.017 $0.030 $0.007-$0.060 $0.030 Exercise price $0.007-$0.016 $0.030 $0.007-$0.060 $0.030 Volatility 220%-395% 282% 220%-400% 282% Contractual term (years) 0.00-0.48 1.00 0.00-1.00 1.00 Risk-free rate 2%-3% 1% 1%-3% 1% Discount rate 0% 0% 0% 0%

CONVERTIBLE DEBT RELATED PART_2

CONVERTIBLE DEBT RELATED PARTY DISCLOSURE: Schedule of Carrying Values of Convertible Debt Instruments (related party) (Tables)	9 Months Ended
	Dec. 31, 2018
Tables/Schedules
Schedule of Carrying Values of Convertible Debt Instruments (related party)	December 31, 2018 March 31, 2018 Principal value (CDRP) $ 1,415,000 $ 220,000 Fair value of embedded derivatives (CDRP) 57,000 156,000 Accrued interest (CDRP) 26,541 15,204 Debt discount (CDRP) (89,752) (133,590) Carrying value of convertible debt related party $ 1,408,789 $ 257,614

CONVERTIBLE DEBT RELATED PART_3

CONVERTIBLE DEBT RELATED PARTY DISCLOSURE: Schedule of fair value of related party debt embedded derivatives (Tables)	9 Months Ended
	Dec. 31, 2018
Tables/Schedules
Schedule of fair value of related party debt embedded derivatives	Balance at March 31, 2018 Issuance of embedded derivatives Change in fair value of embedded derivatives Extinguishment of derivatives due to conversions Balance at December 31, 2018 $ 156,000 $ 113,000 $ (87,000) $ (125,000) $ 57,000

CONVERTIBLE DEBT RELATED PART_4

CONVERTIBLE DEBT RELATED PARTY DISCLOSURE: Schedule of assumptions used in calculating the value of ECFs (Tables)	9 Months Ended
	Dec. 31, 2018
Tables/Schedules
Schedule of assumptions used in calculating the value of ECFs	For the Three Months Ended December 31, For the Nine Months Ended December 31, 2018 2017 2018 2017 Stock price $0.009-$0.019 $0.010-$0.030 $0.009-$0.07 $0.030 Volatility 261%-368% 125%-159% 261%-400% 282% Contractual term (years) 0.13-0.50 0.10-0.50 0.10-1.00 1.00 Risk-free rate 2%-3% 1% 1%-3% 1% Discount rate 0% 0% 0% 0%

SUMMARY OF SIGNIFICANT ACCOUN_7

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES: Earnings (Loss) Per Common Share, Policy: Schedule of Antidilutive Securities Excluded from Computation of Earnings Per Share (Details) - shares	9 Months Ended
	Dec. 31, 2018	Dec. 31, 2017
Potentially dilutive securities	20,686,000	37,482,000
Convertible Debt Securities
Potentially dilutive securities	0	26,375,000
Convertible debt securities, related party
Potentially dilutive securities	20,156,000	10,577,000
Stock subscription shares
Potentially dilutive securities	530,000	530,000

RELATED PARTY TRANSACTIONS DI_3

RELATED PARTY TRANSACTIONS DISCLOSURE: Schedule of Related Party Transaction Costs (Details) - USD ($)	3 Months Ended		9 Months Ended
	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2018	Dec. 31, 2017
Toth and Associates LTD
Related party consulting fees incurred	$ 44,000	$ 40,000	$ 130,000	$ 120,000
Capro LTD
Related party consulting fees incurred	25,000	18,000	72,000	84,000
Eden Professional LTD
Related party consulting fees incurred	23,000	21,000	68,000	63,000
Max Zhu Consulting
Related party consulting fees incurred	6,000	3,000	12,000	12,000
Related party consulting fees incurred	$ 98,000	$ 82,000	$ 282,000	$ 279,000

RELATED PARTY TRANSACTIONS DI_4

RELATED PARTY TRANSACTIONS DISCLOSURE (Details) - USD ($) $ in Millions	Dec. 31, 2018	Mar. 31, 2018
Details
Accounts payable and accrued expenses - related party	$ 0.4	$ 0.6

SECURED CONVERTIBLE DEBENTURE_6

SECURED CONVERTIBLE DEBENTURES, DISCLOSURE: Schedule of Carrying Values of Convertible Debt Instruments (Details) - USD ($)	Dec. 31, 2018	Mar. 31, 2018
Principal value (SCD)
Secured convertible debentures	$ 0	$ 750,000
Fair value of embedded derivatives (SCD)
Secured convertible debentures	0	736,000
Accrued interest (SCD)
Secured convertible debentures	0	22,264
Debt discount (SCD)
Secured convertible debentures	0	(561,104)
Secured convertible debentures	$ 0	$ 947,160

SECURED CONVERTIBLE DEBENTURE_7

SECURED CONVERTIBLE DEBENTURES, DISCLOSURE (Details) - USD ($) shares in Millions	3 Months Ended		9 Months Ended
	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2018	Dec. 31, 2017
Proceeds from issuance of convertible debenture			$ 265,000	$ 255,500
Change in fair value of embedded derivatives	$ 420,275	$ 77,000	540,275	131,000
Repayments of secured convertible debentures			895,000	0
Gain on extinguishment of debentures	$ 467,064	$ 0	510,893	$ 0
Secured Convertible Debenture Conversions
Amount of debt being converted			$ 210,000
Number of common shares issued for converted debt			10.5
SPA Debt modification
Change in fair value of embedded derivatives			$ 76,000

CONVERTIBLE DEBT RELATED PART_5

CONVERTIBLE DEBT RELATED PARTY DISCLOSURE: Schedule of Carrying Values of Convertible Debt Instruments (related party) (Details) - USD ($)	Dec. 31, 2018	Mar. 31, 2018
Principal value (CDRP)
Convertible debt-related party	$ 1,415,000	$ 220,000
Fair value of embedded derivatives (CDRP)
Convertible debt-related party	57,000	156,000
Accrued interest (CDRP)
Convertible debt-related party	26,541	15,204
Debt discount (CDRP)
Convertible debt-related party	(89,752)	(133,590)
Convertible debt-related party	$ 1,408,789	$ 257,614

CONVERTIBLE DEBT RELATED PART_6

CONVERTIBLE DEBT RELATED PARTY DISCLOSURE (Details) - USD ($) shares in Millions	3 Months Ended		9 Months Ended
	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2018	Dec. 31, 2017
Proceeds from issuance of convertible debt, related party			$ 1,415,000	$ 175,000
Gain (loss) on extinguishment of debt, related party	$ (43,020)	$ 169,492	48,601	$ 169,492
Convertible Related Party Debenture Conversions
Amount of debt being converted			$ 270,000
Number of common shares issued for converted debt			25.3

CAPITAL STOCK DISCLOSURE (Detai

CAPITAL STOCK DISCLOSURE (Details) shares in Millions	9 Months Ended
	Dec. 31, 2018USD ($)shares
Issuance of shares for consulting services.
Common stock issued for services | shares	0.4
Fair value of services performed | $	$ 10,000
Issuance of shares to Directors in lieu of unpaid fees
Common stock issued for services | shares	8.6
Fair value of services performed | $	$ 70,000

SUBSEQUENT EVENTS DISCLOSURE (D

SUBSEQUENT EVENTS DISCLOSURE (Details) - Compensatory Common Stock Issuance shares in Millions, $ in Millions	5 Months Ended
	Jun. 14, 2019USD ($)shares
Common stock issued for services | shares	16.1
Fair value of services performed | $	$ 0.2