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FAIR VALUE MEASUREMENTS AND DERIVATIVE LIABILITIES
 12 Months Ended
Apr. 30, 2025
FAIR VALUE MEASUREMENTS AND DERIVATIVE LIABILITIES  
FAIR VALUE MEASUREMENTS AND DERIVATIVE LIABILITIES

NOTE 7: FAIR VALUE MEASUREMENTS AND DERIVATIVE LIABILITIES

 

As defined in (Financial Accounting Standards Board ASC 820), fair value is 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 (exit price). The Company utilized the market data of similar entities in its industry or assumptions that market participants would use in pricing the asset or liability, including assumptions about risk and the risks inherent in the inputs to the valuation technique. These inputs can be readily observable, market corroborated, or generally unobservable. The Company classifies fair value balances based on the observability of those inputs. FASB ASC 820 establishes a fair value hierarchy that prioritizes the inputs 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 measurement).

 

The three levels of the fair value hierarchy are as follows:

 

Level 1    –

 

Quoted prices are available in active markets for identical assets or liabilities as of the reporting date. Active markets are those in which transactions for the asset or liability occur in sufficient frequency and volume to provide pricing information on an ongoing basis. Level 1 primarily consists of financial instruments such as exchange-traded derivatives, marketable securities and listed equities.

 

 

 

Level 2    –

 

Pricing inputs are other than quoted prices in active markets included in level 1, which are either directly or indirectly observable as of the reported date and includes those financial instruments that are valued using models or other valuation methodologies. These models are primarily industry-standard models that consider various assumptions, including quoted forward prices for commodities, time value, volatility factors, and current market and contractual prices for the underlying instruments, as well as other relevant economic measures. Substantially all of these assumptions are observable in the marketplace throughout the full term of the instrument, can be derived from observable data or are supported by observable levels at which transactions are executed in the marketplace. Instruments in this category generally include non-exchange-traded derivatives such as commodity swaps, interest rate swaps, options and collars.

 

 

 

Level 3     –

 

Pricing inputs include significant inputs that are generally less observable from objective sources. These inputs may be used with internally developed methodologies that result in management’s best estimate of fair value.

 

As of April 30, 2025, the Company believes the amounts reported for cash, payables, accrued liabilities and amounts due to related parties approximate their fair values due to the nature or duration of these instruments. 

 

The following table represents the change in the fair value of the derivative liabilities during the year ended April 30, 2025

 

 

 

Level 1

 

 

Level 2

 

 

Level 3

 

Balance at April 30, 2024

 

$-

 

 

$-

 

 

$37,211

 

Change in fair value of derivative liability

 

 

-

 

 

 

-

 

 

 

(5,345 )

 

 

 

 

 

 

 

 

 

 

 

 

 

Balance at April 30, 2025

 

$-

 

 

$-

 

 

$31,866

 

 

The estimated fair value of the derivative liabilities at April 30, 2025 was calculated using the Binomial Lattice pricing model with the following assumptions:

 

Risk-free interest rate

 

 

4.00%

Expected life in years

 

 

0.10

 

Dividend yield

 

 

0%

Expected volatility

 

 

228.00%