Fair Value of Financial Instruments |
14. |
Fair Value of
Financial Instruments |
Cash and Equivalents, Receivables,
Other Current Assets, Short-Term Debt, Accounts Payable, Accrued and Other Current Liabilities.
The carrying amounts of these items
approximated fair value.
Fair value is defined 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. To increase the comparability of fair value measures, Financial Accounting Standards Board (“FASB”) ASC
Topic 820-10-35 establishes a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value. 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 measurements).
Level 1—Valuations
based on quoted prices for identical assets and liabilities in active markets.
Level 2—Valuations
based on observable inputs other than quoted prices included in Level 1, such as 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, or other inputs that are
observable or can be corroborated by observable market data.
Level 3—Valuations
based on unobservable inputs reflecting our own assumptions, consistent with reasonably available assumptions made by other market participants.
These valuations require significant judgment.
The application of the three levels
of the fair value hierarchy under Topic 820-10-35 to our assets and liabilities are described below:
|
|
March,
31, 2021 Fair Value Measurements |
|
|
|
Level
1 |
|
|
Level
2 |
|
|
Level
3 |
|
|
Total
Fair
Value |
|
Assets |
|
|
|
|
|
|
|
|
|
|
|
|
Other
assets |
|
$ |
-
|
|
|
$ |
-
|
|
|
$ |
- |
|
|
$ |
- |
|
Total |
|
$ |
- |
|
|
$ |
- |
|
|
$ |
- |
|
|
$ |
- |
|
Liabilities |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Derivative
Liabilities |
|
$ |
|
|
|
$ |
- |
|
|
$ |
1,312,178 |
|
|
$ |
1,312,178 |
|
Total |
|
$ |
|
|
|
$ |
- |
|
|
$ |
1,312,178 |
|
|
$ |
1,312,178 |
|
|
|
June
30, 2020 Fair Value Measurements |
|
|
|
Level
1 |
|
|
Level
2 |
|
|
Level
3 |
|
|
Total
Fair
Value |
|
Assets |
|
|
|
|
|
|
|
|
|
|
|
|
Other
assets |
|
$ |
-
|
|
|
$ |
-
|
|
|
$ |
- |
|
|
$ |
- |
|
Total |
|
$ |
- |
|
|
$ |
- |
|
|
$ |
- |
|
|
$ |
- |
|
Liabilities |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Derivative
Liabilities |
|
$ |
|
|
|
$ |
- |
|
|
$ |
1,590,638 |
|
|
$ |
1,590,638 |
|
Total |
|
$ |
|
|
|
$ |
- |
|
|
$ |
1,590,638 |
|
|
$ |
1,590,638 |
|
Management
considers all of its derivative liabilities to be Level 3 liabilities. At March 31, 2021 and June 30, 2020, respectively the Company
had outstanding derivative liabilities, including those from related parties of $1,312,178 and $1,590,638, respectively.
|
16. |
Fair Value of Financial
Instruments |
Cash
and Equivalents, Receivables, Other Current Assets, Short-Term Debt, Accounts Payable, Accrued and Other Current Liabilities. |
|
|
|
|
|
The carrying
amounts of these items approximated fair value. |
|
|
|
|
|
Fair value is defined
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. To increase the comparability of fair value measures, Financial Accounting Standards
Board (“FASB”) ASC Topic 820-10-35 establishes a fair value hierarchy that prioritizes the inputs to valuation
techniques used to measure fair value. 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 measurements). |
|
|
|
|
|
Level 1—Valuations
based on quoted prices for identical assets and liabilities in active markets. |
|
|
|
|
|
Level 2—Valuations
based on observable inputs other than quoted prices included in Level 1, such as 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, or other
inputs that are observable or can be corroborated by observable market data. |
|
|
|
|
|
Level 3—Valuations
based on unobservable inputs reflecting our own assumptions, consistent with reasonably available assumptions made by other
market participants. These valuations require significant judgment. |
|
|
|
|
|
The application
of the three levels of the fair value hierarchy under Topic 820-10-35 to our assets and liabilities are described below: |
|
|
Fiscal
2020 Fair Value Measurements |
|
|
|
Level
1 |
|
|
Level
2 |
|
|
Level
3 |
|
|
Total
Fair Value |
|
Assets |
|
|
|
|
|
|
|
|
|
|
|
|
Other
assets |
|
$ |
- |
|
|
$ |
- |
|
|
$ |
- |
|
|
$ |
- |
|
Total |
|
$ |
- |
|
|
$ |
- |
|
|
$ |
- |
|
|
$ |
- |
|
Liabilities |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Short
and long-term debt |
|
$ |
|
|
|
$ |
- |
|
|
$ |
2,935,400 |
|
|
$ |
2,935,400 |
|
Total |
|
$ |
|
|
|
$ |
- |
|
|
$ |
2,935,400 |
|
|
$ |
2,935,400 |
|
|
|
Fiscal
2019 Fair Value Measurements |
|
|
|
Level
1 |
|
|
Level
2 |
|
|
Level
3 |
|
|
Total
Fair Value |
|
Assets |
|
|
|
|
|
|
|
|
|
|
|
|
Other
assets |
|
$ |
- |
|
|
$ |
- |
|
|
$ |
- |
|
|
$ |
- |
|
Total |
|
$ |
- |
|
|
$ |
- |
|
|
$ |
- |
|
|
$ |
- |
|
Liabilities |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Short
and long-term debt |
|
$ |
|
|
|
$ |
- |
|
|
$ |
1,748,000 |
|
|
$ |
1,748,000 |
|
Total |
|
$ |
|
|
|
$ |
- |
|
|
$ |
1,748,000 |
|
|
$ |
1,748,000 |
|
|
|
Fiscal
2020 Fair Value Measurements |
|
|
|
Level
1 |
|
|
Level
2 |
|
|
Level
3 |
|
|
Total
Fair
Value |
|
Assets |
|
|
|
|
|
|
|
|
|
|
|
|
Other
assets |
|
$ |
- |
|
|
$ |
- |
|
|
$ |
- |
|
|
$ |
- |
|
Total |
|
$ |
- |
|
|
$ |
- |
|
|
$ |
- |
|
|
$ |
- |
|
Liabilities |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Derivative
Liabilities |
|
$ |
|
|
|
$ |
- |
|
|
$ |
1,590,638 |
|
|
$ |
1,590,638 |
|
Total |
|
$ |
|
|
|
$ |
- |
|
|
$ |
1,590,638 |
|
|
$ |
1,590,638 |
|
|
|
Fiscal
2019 Fair Value Measurements |
|
|
|
Level
1 |
|
|
Level
2 |
|
|
Level
3 |
|
|
Total
Fair
Value |
|
Assets |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other
assets |
|
$ |
- |
|
|
$ |
- |
|
|
$ |
- |
|
|
$ |
- |
|
Total |
|
$ |
- |
|
|
$ |
- |
|
|
$ |
- |
|
|
$ |
- |
|
Liabilities |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Derivative
Liabilities |
|
$ |
|
|
|
$ |
- |
|
|
$ |
1,306,748 |
|
|
$ |
1,306,748 |
|
Total |
|
$ |
|
|
|
$ |
- |
|
|
$ |
1,306,748 |
|
|
$ |
1,306,748 |
|
Management
considers all of its derivative liabilities to be Level 3 liabilities. At June 30, 2020 and 2019, respectively the Company
had outstanding derivative liabilities, including those from related parties of $1,590,638 and $1,306,748, respectively.
|