DERIVATIVE LIABILITY

9 Months Ended

Apr. 30, 2022

Derivative Instruments and Hedging Activities Disclosure [Abstract]

9. DERIVATIVE LIABILITY

The exercise price of the Company's share purchase warrants is fixed in Canadian dollars and the functional currency of the Company is the USD. These warrants are considered to be a derivative as a variable amount of cash in the Company's functional currency will be received on exercise of the warrants. Accordingly, the share purchase warrants issued as part of past financings, are classified and accounted for as a derivative liability.

The following table shows a continuity of the Company's derivative liability:

		Warrant derivative		Number of warrants accounted for as derivative liability
Balance, July 31, 2020	$	2,218,107		11,159,919
Expiry		-		(5,679,836	)
Fair value adjustment		(1,776,341	)	-
Balance, July 31, 2021	$	441,766		5,480,083
Expiry		-		(488,438	)
Fair value adjustment		(252,324	)	-
Balance, April 30, 2022	$	189,442		4,991,645

For the nine-month period ended April 30, 2022, the Company recorded a total gain on fair value of derivative liability of $252,324 during the period (April 30, 2021 -$1,560,945).

The following weighted average assumptions were used for the Black-Scholes pricing model valuation of warrants as at April 30, 2022 and July 31, 2021:

	April 30, 2022	July 31, 2021

Risk-free interest rate	1.52%	1.52%
Expected life of warrants	0.18 to 0.30 years	0.08 to 1.14 years
Expected annualized volatility	74.54% to 103.60%	83.6% to 118.2%
Dividend	Nil	Nil
Forfeiture rate	0%	0%