Derivative Liabilities

6 Months Ended

Dec. 31, 2020

Derivative Instruments and Hedging Activities Disclosure [Abstract]

Derivative Liabilities

7. Derivative Liabilities

The Company records the fair value of the conversion price of the convertible debentures 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 December 31, 2020, the Company recorded a loss on the change in the fair value of derivative liability of $7,018,171 (2019 - $939,514). As at December 31, 2020, the Company recorded a derivative liability of $6,669,330 (June 30, 2020 - $4,519,654).

The following inputs and assumptions were used to value the derivative liabilities outstanding at December 31, 2020 and June 30, 2020:

	December 31, 2020			June 30, 2020
Expected volatility		158-208	%		158-240	%
Risk free rate		0.12-0.14	%		0.16	%
Expected life (in years)		0.25-1.0			0.5-1.0

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

	$
Balance, June 30, 2020		4,519,654
Derivative additions associated with convertible notes		275,000
Adjustment for conversion/prepayment		(5,143,495	)
Mark-to-market adjustment		7,018,171
Balance, December 31, 2020		6,669,330