v3.25.2
NOTES PAYABLE AND DERIVATIVES
 3 Months Ended
Jul. 31, 2025
Debt Disclosure [Abstract]  
NOTES PAYABLE AND DERIVATIVES

NOTE C – NOTES PAYABLE AND DERIVATIVES

 

The Company has outstanding numerous notes payable to various parties. The notes bear interest at rates of 5% - 20% per year and are summarized as follows:

 

Notes Payable  July 31, 2025   April 30, 2025 
Notes convertible at holder’s option  $

2,667,644

   $2,667,644 
Notes convertible at Company’s option   

335,700

    335,700 
Non-convertible notes payable   

3,321,378

    3,063,012 
Accrued interest   

2,069,331

    1,907,406 
Notes payable current   

8,394,053

    7,973,762 
Add non-current portion   

302,315

    396,614 
Total  $

8,696,368

   $8,370,376 

 

Certain notes payable contains variable conversion rates, and the conversion features are classified as derivative liabilities. The conversion prices are based on the market price of the Company’s common stock, at discounts of 60% to market value.

 

The Company’s derivative financial instruments are embedded derivatives related to the outstanding short-term Convertible Notes Payable. These embedded derivatives included certain conversion features indexed to the Company’s common stock. The accounting treatment of derivative financial instruments requires that the Company record the derivatives and related items at their fair values as of the inception date of the Convertible Notes Payable and at fair value as of each subsequent balance sheet date. In addition, under the provisions of Accounting Standards Codification subtopic 815-40, Derivatives and Hedging; Contracts in Entity’s Own Equity (“ASC 815-40”), as a result of entering into the Convertible Notes Payable, the Company is required to classify all other non-employee stock options and warrants as derivative liabilities and mark them to market at each reporting date. Any change in fair value, including modifications of terms, will be recorded as non-operating, non-cash income, or expense at each reporting date. If the fair value of the derivatives is higher at the subsequent balance sheet date, the Company will record a non-operating, non-cash charge. If the fair value of the products is lower at the subsequent balance sheet date, the Company will record non-operating, non-cash income. These Notes are subject to a six-year Statute of Limitations in which to bring any potential claims.

 

The change in fair value of the derivative liabilities of convertible notes outstanding at July 31, 2025, was calculated with the following average assumptions, using a Binomial option-pricing model are as follows:

 

Significant Assumptions:     
Risk free interest rate   3.9%
Expected stock price volatility   199%
Expected dividend payout   0 
Expected options life in years   2 years 

 

 

Changes in derivative liability during the three months ended July 31, 2025, and 2024 were:

 

   July 31,   July 31, 
   2025   2024 
Balance, beginning of year  $

1,007,598

   $740,940 
           
Fair value adjustments   

36,686

    378,292 
Balance, end of period  $

1,044,284

   $1,119,232