Derivative Liabilities

12 Months Ended

Jun. 30, 2021

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 as disclosed in Note 2 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 twelve months ended June 30, 2021, the Company recorded a loss on the change in the fair value of derivative liability of $19,655,296 (nine months ended June 30, 2020 - $5,863,127).

As at June 30, 2021, the Company recorded a derivative liability of $nil (2020 - $4,519,654). The following inputs and assumptions were used to value the derivative liabilities outstanding during the periods ended June 30, 2021 and 2020:

	June 30, 2021			June 30, 2020
Expected volatility		136-286	%		158-240	%
Risk free rate		0.04-0.16	%		0.16	%
Expected life (in years)		0.2-1.0			0.5-1.0

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		2,591,119
Adjustment for conversion/prepayment		(7,371,792	)
Mark to market adjustment		5,863,127
Balance, June 30, 2020		4,519,654
Derivative additions associated with convertible notes		403,378
Adjustment for conversion/prepayment		(24,578,328	)
Mark to market adjustment		19,655,296
Balance, June 30, 2021		–