FINANCIAL INSTRUMENTS |
12 Months Ended | ||||||||||||
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Mar. 31, 2026 | |||||||||||||
| FINANCIAL INSTRUMENTS | |||||||||||||
| FINANCIAL INSTRUMENTS | NOTE 14. FINANCIAL INSTRUMENTS The Company is exposed to the following risks related to its financial instruments:
Credit risk arises from the possibility that the Company’s debtors may be unable to fulfill their financial obligations. Revenues earned from publishing and distribution companies are concentrated in the music and entertainment industry. The Company monitors its exposure to credit risk on a regular basis.
The Company is exposed to market risk from changes in interest rates on its secured line of credit. As described in Note 7, “Secured Line of Credit,” the Company entered into interest rate swap agreements to partially reduce its exposure to fluctuations in interest rates on its Credit Facilities. The fair value of the outstanding interest rate swaps consisted of a $1,356,878 asset and a $289,543 liability as of March 31, 2026 and a $1,828,303 asset and a $410,008 liability as of March 31, 2025. Fair value is determined using Level 2 inputs, which are based on quoted prices and market observable data of similar instruments. The change in the unrealized fair value of the swaps during the fiscal year ended March 31, 2026 of $350,960 was recorded as a Loss on fair value of swaps. The change in the unrealized fair value of the swaps during the fiscal year ended March 31, 2025 of $4,213,819 was driven primarily by the September 2024 decrease in SOFR, as well as the time value of the swaps that expired on September 30, 2024, partially offset by marking to market our current interest rate swap hedges and was recorded as a Loss on fair value of swaps.
The Company is exposed to foreign exchange risk in fluctuations of currency rates on its revenue from royalties, writers’ fees and its subsidiaries’ operations.
Financial instruments not described elsewhere include cash, accounts receivable, accounts payable, accrued liabilities and borrowing under its secured line of credit. The carrying values of these instruments as of March 31, 2026 and 2025 do not differ materially from their respective fair values due to the immediate or short-term duration of these items or their bearing market-related rates of interest. |