Quarterly report pursuant to Section 13 or 15(d)

Derivative Liability

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Derivative Liability
6 Months Ended
Sep. 30, 2018
Derivative Liability [Abstract]  
Derivative Liability
7. Derivative Liability

 

The Company records the fair value of the conversion price of the convertible debenture disclosed in Note 6 in accordance with ASC 815. The fair value of the derivative liability was calculated using a binomial option pricing model. The fair value of the derivative liability is revalued on each balance sheet date with corresponding gains and losses recorded in the consolidated statement of operations. During the six months ended September 30, 2018, the Company recorded a loss on the change in fair value of derivative liability of $180,866 (2017 – $284,368). As at September 30, 2018, the Company recorded derivative liability of $256,371 (March 31, 2018 - $75,505).

   

The following inputs and assumptions were used to calculate the fair value of the beneficial conversion feature of the convertible debenture outstanding as at September 30, 2018, assuming no expected dividends:

 

      As at
September 30,
2018
 
         
  Estimated common stock issuable upon conversion     170,797  
  Estimated exercise price per common share     0.40  
  Risk-free interest rate     2.19 %
  Expected volatility     87 %
  Expected life (in years)     0.25  

 

A summary of the activity of the derivative liability is shown below:

 

      $  
         
  Balance, March 31, 2018     75,505  
           
  Mark to market adjustment     180,866  
           
  Balance, September 30, 2018     256,371