Quarterly report pursuant to Section 13 or 15(d)

Derivative Liability

v3.19.3
Derivative Liability
6 Months Ended
Sep. 30, 2019
Derivative Instruments and Hedging Activities Disclosure [Abstract]  
Derivative Liability

11. Derivative Liability

 

The Company records the fair value of the conversion feature of the convertible debenture disclosed in Note 10 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 three and six month periods ended September 30, 2019, the Company recorded a gain (loss) on the change in fair value of derivative liability of $65,547 (September 30, 2018- ($35,719) and ($71,407) (September 30, 2018 – ($180,866). As at September 30, 2019, the Company recorded a derivative liability of $502,993 (March 31, 2019 - $431,586).

 

The following inputs and assumptions were used to calculate the fair value of the conversion feature of the convertible debenture outstanding as at September 30, 2019 and March 31, 2019, assuming no expected dividends:

 

    As at
September 30,
2019
    As at
March 31,
2019
 
             
Estimated common stock issuable upon conversion     173,342       165,843  
Estimated exercise price per common share     0.40       0.40  
Risk-free interest rate     1.9 %     2.4 %
Expected volatility     101 %     62 %
Expected life (in years)     0.25       0.25  

 

A summary of the changes in derivative liabilities for the three and six month periods is shown below:

 

    Three Months Ended
September 30, 2019
$
    Three Months Ended
September 30, 2018
$
    Six Months Ended
September 30,
2019
    Six Months Ended
September 30,
2018
 
                         
Balance, beginning of period     (568,540 )     (220,652 )     (431,586 )     (75,505 )
Mark to market adjustment     65,547       (35,719 )     (71,407 )     (180,866 )
                                 
Balance, end of period     (502,993 )     (256,371 )     (502,993 )     (256,371 )