| SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | NOTE
3 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Use of estimates The preparation of consolidated
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 consolidated financial
statements and the reported amounts of revenues and expenses during the periods presented. Significant estimates include the
assumptions used in the accrual for potential liabilities, the net realizable value of inventory, the valuation of debt and equity
instruments, the fair value of derivative liabilities, valuation of stock options issued for services, and deferred tax valuation
allowances. Actual results may differ from those estimates. Revenue recognition The Company recognizes revenue in accordance
with Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 606, Revenue from
Contracts with Customers (“ASC 606”). The underlying principle of ASC 606 is to recognize revenue to depict the transfer of
goods or services to customers at the amount expected to be collected. ASC 606 creates a five-step model that requires entities to exercise
judgment when considering the terms of contract(s), which include (1) identifying the contract or agreement with a customer, (2) identifying
our performance obligations in the contract or agreement, (3) determining the transaction price, (4) allocating the transaction price
to the separate performance obligations, and (5) recognizing revenue as each performance obligation is satisfied. The Company only applies the five-step model to contracts when
it is probable that the entity will collect the consideration it is entitled to in exchange for the goods or services it transfers to
the customer. At contract inception, once the contract is determined to be within the scope of ASC 606, the Company assesses the goods
or services promised within each contract and determines those that are performance obligations and assesses whether each promised good
or service is distinct. The Company then recognizes as revenue the amount of the transaction price that is allocated to the respective
performance obligation when (or as) the performance obligation is satisfied. The Company may enter into product development
and other agreements with collaborative partners. The terms of the agreements may include non-refundable signing and licensing fees, milestone
payments and royalties on any product sales derived from collaborations. Royalty revenue will be recognized upon
the sale of the related products provided the Company has no remaining performance obligations under the agreement. Deferred revenue The Company has entered into license agreements
and recognizes up front license payments as revenue upon delivery of the license only if the license has stand-alone value to the customer.
However, where further performance criteria must be met, revenue is deferred and recognized on a basis that is considered to be appropriate
to the conditions associated with the license and over the period the Company is expected to complete these performance obligations. Research and development expenses The Company charges research and development expenses to operations
as incurred. Research and development expenses primarily consist of salaries and related expenses for personnel and outside contractor
and consulting services. Other research and development expenses include the costs of materials and supplies used in research and development,
prototype manufacturing, clinical studies, related information technology and an allocation of facilities costs. Cash and cash equivalents Cash and cash equivalents consists primarily
of cash deposits maintained in the UK. We maintain cash balances in U.S. Dollar (“USD”),
Great Britain Pound Sterling (“GBP”), and the Euro. The following table, reported in USD, disaggregates our cash balances
by currency denomination:
Schedule of disaggregates cash
balances by currency denomination
March
31, March 31,
Cash denominated in:
USD $ 5,606,972 $ 14,769,720
GBP 4,446,720 2,911,117
Euro 51,443 68,396
Total $ 10,105,135 $ 17,749,233 Inventory Inventory is stated at the lower of cost or net realizable
value, with cost determined on a first-in, first-out (“FIFO”) basis. The Company records adjustments to its inventory based
on an estimated forecast of the inventory demand, taking into consideration, among others, inventory turnover, inventory quantities on
hand, unfilled customer order quantities, and forecasted demand. If the estimated net realizable value is determined to be less than the
recorded cost of the inventory, the difference is recognized as a loss in the period in which it occurs. Once inventory has been written
down, it creates a new cost basis for inventory that may not be subsequently written up. Property and equipment Property and equipment is stated at cost and depreciated
using the straight-line method over the estimated useful lives of the assets, generally four to five years. Depreciation is charged
to operating expenses. Intangible assets Intangible assets consist of licenses and patents
associated primarily with the sugarBEAT® device and are amortized on a straight-line basis, generally over the shorter of their estimated
useful lives or legal lives. Costs capitalized relate to invoices received from third parties and not any internal costs. The Company
evaluates its intangible assets (all have finite lives) and other long-lived assets for impairment whenever events or circumstances indicate
that they may not be recoverable, or at least annually. Recoverability of finite life intangibles and other long-lived assets is measured
by comparing the carrying amount of an asset group to the future undiscounted net cash flows expected to be generated by that asset group.
The Company groups assets for purposes of such review at the lowest level for which identifiable cash flows of the asset group are largely
independent of the cash flows of the other groups of assets and liabilities. The amount of impairment to be recognized for finite life
intangibles and other long-lived assets is calculated as the difference between the carrying value and the fair value of the asset group,
generally measured by discounting estimated future cash flows. Software development costs The Company capitalizes costs incurred to
implement software for its internal use, including hosted applications costs to support the Company’s planned services. During the
year ended March 31, 2023, the Company determined that software development costs were impaired and recorded an impairment of $ 655,641 Income taxes Income taxes are accounted for under the
asset and liability method. Deferred income tax assets and liabilities are recognized for the future tax consequences attributable to
differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases, and operating
loss carry forwards. Deferred income tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income
in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred income tax assets and
liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. A valuation allowance is
provided to reduce the carrying amount of deferred income tax assets if it is considered more likely than not that some portion, or all,
of the deferred income tax assets will not be realized. The Company recognizes the effect of income
tax positions only if those positions are more likely than not of being sustained. Recognized income tax positions are measured at the
largest amount that is greater than 50% likely of being realized. Changes in recognition or measurement are reflected in the period in
which the change in judgment occurs. The Company has elected to classify interest and penalties related to unrecognized tax benefits as
part of income tax expense in the consolidated statements of comprehensive loss. The Company does no Earnings (loss) per share Basic loss per share
is computed by dividing the loss available to common shareholders by the weighted-average number of common shares outstanding during the
period. Diluted loss per share is computed similar to basic loss per share except that the denominator is increased to include the number
of additional common shares that would have been outstanding if the potential common shares had been issued and if the additional common
shares were dilutive. Diluted loss per common share reflects the potential dilution that could occur if convertible debentures, options
and warrants were to be exercised or converted or otherwise resulted in the issuance of common stock that then shared in the earnings
of the entity. Since the effects of outstanding options
and warrants are anti-dilutive for the years ended March 31, 2023 and 2022, shares of common stock underlying these instruments have been
excluded from the computation of loss per common share. The following sets forth the number of shares
of common stock underlying outstanding options and warrants as of March 31, 2023 and 2022:
Schedule of common stock underlying outstanding options
March 31,
2023 2022
Warrants 6,369,304 1,573,098
Stock options 40,000 40,000
6,409,304 1,613,098 Foreign currency translation The functional currency of the Company is the GBP,
while the reporting currency is the USD. Assets and liabilities are translated into USD using the exchange rate on the balance sheet
date, and the amounts of revenue and expense are translated at the average exchange rate prevailing during the period. Stockholders'
equity is translated at historical exchange rates. The gains and losses resulting from translation of financial statement amounts into
USD are recorded as a separate component of accumulated other comprehensive loss within stockholders’ deficit. We used the exchange
rates in the following table to translate amounts denominated in non-USD currencies as of and for the periods noted:
Schedule of exchange rates translate amounts
As
of
2023 2022
Exchange rates at March 31:
GBP:USD 1.236 1.316
EURO:USD 1.138 1.184
For the Years Ended
2023 2022
Average exchange rate during the year ended March 31:
GBP:USD 1.215 1.342 Derivative Financial Instruments The Company evaluates its financial instruments to
determine if such instruments are derivatives or contain features that qualify as embedded derivatives in accordance with ASC Topic 815,
"Derivatives and Hedging" (“ASC 815”). For derivative financial instruments that are accounted for as liabilities,
the derivative instrument is initially recorded at its fair value and is then re-valued at each reporting date, with changes in the fair
value reported in the statements of operations. The Company’s use of derivative financial instruments is generally limited to managing
foreign exchange rate risks. In addition, warrants issued by the Company that do not meet the criteria for equity treatment are recorded
as liabilities. We do not use financial instruments or derivatives for any trading purposes. Fair value of financial instruments In accordance with ASC 820, “Fair Value
Measurements and Disclosures,” the Company determines the fair value of financial instruments with the use of observable inputs
and minimize the use of unobservable inputs when measuring fair value. ASC 820 establishes a fair value hierarchy based on the level of
independent, objective evidence surrounding the inputs used to measure fair value. A financial instrument’s categorization within
the fair value hierarchy is based upon the lowest level of input that is significant to the fair value measurement. ASC 820 prioritizes
the inputs into three levels that may be used to measure fair value: Level 1 Level 2 Level 3 The Company determines the
level in the fair value hierarchy within which each fair value measurement falls in its entirety, based on the lowest level input that
is significant to the fair value measurement in its entirety. In determining the appropriate levels, the Company performs an analysis
of the assets and liabilities at each reporting period end. The following table sets
forth by level, within the fair value hierarchy, the Company’s assets and liabilities at fair value as of March 31, 2023 and 2022:
Schedule of assets and liabilities at fair value
March
31, 2023
Level
1 Level
2 Level
3 Total
Assets $ — $ — $ — $ —
Total assets $ — $ — $ — $ —
Liabilities
Foreign exchange contract derivative
liability $ — $ 731,730 $ — $ 731,730
Warrant derivative liability — — 3,092,000 3,092,000
Total liabilities $ — $ 731,730 $ 3,092,000 $ 3,823,730
March
31, 2022
Level
1 Level
2 Level
3 Total
Assets $ — $ — $ — $ —
Total assets $ — $ — $ — $ —
Liabilities
Foreign exchange contract derivative
liability $ — $ 440,196 $ — $ 440,196
Total liabilities $ — $ 440,196 $ — $ 440,196 As of March 31, 2022, there
was no warrant derivative liability. The following table provides a roll-forward of the warrant derivative liability measured at fair
value on a recurring basis using unobservable level 3 inputs for the year ended March 31, 2023 as follows:
Schedule of warrant derivative liability measured at fair value on a recurring basis
March
31, 2023
Warrant liability
Balance as of beginning of period – March 31, 2022 $ —
Fair value of warrant liability recognized upon issuance of warrants in January 2023 4,956,000
Change in fair value of warrant derivative liability (1,864,000 )
Balance as of end of period – March 31, 2023 $ 3,092,000 The Company believes the
carrying amount of its financial instruments (consisting of cash, accounts receivable, and accounts payable and accrued liabilities) approximates
fair value due to the short-term nature of such instruments. Retirement benefit plan The Company operates a retirement plan which
covers most of our regular employees in the UK and allows them to make contributions. The Company also provides a matching contribution
on a portion of the employee contributions. Total expenses incurred under this plan for the fiscal years ended March 31, 2023 and 2022,
were $ 37,645 24,300 Stock-based
compensation The Company
periodically issues stock options and restricted stock awards to employees and non-employees in non-capital raising transactions for services
and for financing costs. The Company accounts for such grants issued and vesting based on ASC 718, Compensation-Stock Compensation
The fair value
of the Company’s stock options is estimated using the Black-Scholes Option Pricing model, which uses certain assumptions
related to risk-free interest rates, expected volatility, expected life of the stock options or restricted stock, and future dividends.
Compensation expense is recorded based upon the value derived from the Black-Scholes Option Pricing model and based on actual experience.
The assumptions used in the Black-Scholes Option Pricing model could materially affect compensation expense recorded in future
periods. Direct costs incurred for equity
offerings The Company includes all direct costs incurred in connection
with successful equity offerings as a component of additional paid-in capital. Direct costs incurred for equity offerings that are
unsuccessful are expensed. Reclassifications Certain prior year balances have been reclassified to conform
with the current year presentation. In presenting the Company’s consolidated balance sheet at March 31, 2022, the Company presented
$ 255,112 750,167 255,112 495,055 Recent accounting pronouncements The Company continually assesses any new
accounting pronouncements to determine their applicability. When it is determined that a new accounting pronouncement affects the Company's
financial reporting, the Company undertakes a study to determine the consequences of the change to its consolidated financial statements
and assures that there are proper controls in place to ascertain that the Company's consolidated financial statements properly reflect
the change. |
