Quarterly report pursuant to Section 13 or 15(d)

Derivative Liability

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Derivative Liability
9 Months Ended
Dec. 31, 2018
Derivative Instruments and Hedging Activities Disclosure [Abstract]  
Derivative Liability
8. Derivative Liability

 

The Company records the fair value of the conversion price of the convertible debenture disclosed in Note7 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 nine months ended December 31, 2018, the Company recorded a loss on the change in fair value of derivative liability of $299,102 (2017 – $187,735). As at December 31, 2018, the Company recorded derivative liability of $374,607 (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 December 31, 2018, assuming no expected dividends:

 

      As at
December 31,
2018
 
         
  Estimated common stock issuable upon conversion     178,297  
  Estimated exercise price per common share     0.40  
  Risk-free interest rate     2.45 %
  Expected volatility     160 %
  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     299,102  
  Balance, December 31, 2018     374,607