6. Derivative Liabilities

6 Months Ended

Mar. 31, 2020

Notes

6. Derivative Liabilities

6. Derivative Liabilities 

The Company records the fair value of the conversion price of the convertible debentures as disclosed in Note 4 in accordance with ASC 815, Derivatives and Hedging. The fair value of the derivatives was calculated using a multi-nominal lattice 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. For the six months ended March 31, 2020, the Company recorded a loss on the change in the fair value of derivative liability of $3,623,387 (2019 - $944,008). As at March 31, 2020, the Company recorded a derivative liability of $3,776,294 (September 30, 2019 - $$3,437,200).

The following inputs and assumptions were used to value the derivative liabilities outstanding during the periods ended March 31, 2020 and September 30, 2019:

	March 31, 2020	September 30, 2019
Expected volatility	70-319%	75-151%
Risk free rate	1.41%	1.75%
Expected life (in years)	0.2-1.0	0.2-1.0

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

	$
Balance, September 30, 2019	3,437,200
Derivative additions associated with convertible notes	2,029,525
Adjustment for conversion/repayment	(5,313,818)
Mark to market adjustment at March 31, 2020	3,623,387
Balance, March 31, 2020	3,776,294