Derivative Liabilities

9 Months Ended

Dec. 31, 2014

Derivative Liabilities [Abstract]

Derivative Liabilities

6. Derivative Liabilities

The Company records the fair value of the of the conversion price of the convertible debentures disclosed in Note 5 in accordance with ASC 815, Derivatives and Hedging. The fair value of the derivative 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 period ended December 31, 2014, the Company recorded a gain on the change in fair value of derivative liability of $4,959 (2013 - $nil). As at December 31, 2014, the Company recorded a derivative liability of $38,756 (March 31, 2014 - $nil).

The following inputs and assumptions were used to value the convertible debentures outstanding during the period ended December 31, 2014:

	May 27, 2014  Convertible Debenture						June 12, 2014  Convertible Debenture
	As at December 31, 2014			As at November 27, 2014			As at December 31, 2014			As at December 12, 2014
Estimated common stock issuable upon conversion		468,560			286,606			221,076			173,195
Estimated exercise price		0.45			0.73			0.45			0.61
Risk-free interest rate		12	%		7	%		12	%		9	%
Expected dividend yield		–			–			–			–
Expected volatility		170	%		179	%		176	%		179	%
Expected life (in years)		0.4			0.5			0.46			0.5

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

	$
Balance, March 31, 2014		–
Debt discount due to derivative		43,715
Mark to market adjustment at December 31, 2014		(4,959	)
Balance, December 31, 2014		38,756