Derivative Liabilities

3 Months Ended

Jun. 30, 2016

Derivative Liabilities [Abstract]

Derivative Liabilities

6. Derivative Liabilities

The Company records the fair value of the conversion price of the convertible debentures disclosed in Note 5 in accordance with ASC 815. The fair value of the derivative liabilities was calculated using a binomial option pricing model. The fair value of the derivative liabilities is revalued on each balance sheet date with corresponding gains and losses recorded in the consolidated statement of operations. During the three months ended June 30, 2016, the Company recorded a gain on the change in fair value of derivative liabilities of $257,237 (2015 - loss of $1,057,818). As at June 30, 2016, the Company recorded derivative liabilities of $558,979 (March 31, 2016 - $816,216).

The following inputs and assumptions were used to fair value the convertible debenture outstanding during the three months ended June 30, 2016:

	November 10, 2015  Convertible Debenture
	As at  June 30, 2016			As at  March 31, 2016
Estimated common stock issuable upon extinguishment		302,500			302,500
Estimated exercise price per common share		0.40			0.40
Risk-free interest rate		0.0	%		0.1	%
Expected dividend yield		–			–
Expected volatility		301	%		250	%
Expected life (in years)		0.36			0.61

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

	$
Balance, March 31, 2016		816,216
Mark-to-market adjustment		(257,237	)
Balance, June 30, 2016		558,979